Exhibit 10.18
$300,000,000
CREDIT AGREEMENT
Dated as of May 1, 2002
among
TEAM HEALTH, INC.,
as Borrower,
THE BANKS, FINANCIAL INSTITUTIONS AND
OTHER INSTITUTIONAL LENDERS NAMED HEREIN,
as Initial Lenders,
FLEET NATIONAL BANK,
as Issuing Bank,
as Swing Line Bank
and
as Administrative Agent,
BANK OF AMERICA, N.A.,
as Issuing Bank,
and
BANC OF AMERICA SECURITIES LLC,
as Syndication Agent,
as Joint Book Runner
and
as Joint Lead Arranger
FLEET SECURITIES, INC.,
as Joint Book Runner
and
as Joint Lead Arranger
GENERAL ELECTRIC CAPITAL CORPORATION,
as Documentation Agent
TABLE OF CONTENTS
Page No.
CREDIT AGREEMENT.................................................................................. 1
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS....................................................... 2
SECTION 1.1 Certain Defined Terms............................................................. 2
ARTICLE 2 AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT............................ 36
SECTION 2.1 The Advances...................................................................... 36
SECTION 2.2 Making the Advances............................................................... 38
SECTION 2.3 Issuance of and Drawings and Reimbursement Under Letters of Credit................ 41
SECTION 2.4 Repayment of Advances............................................................. 43
SECTION 2.5 Termination or Reduction of the Commitments....................................... 45
SECTION 2.6 Prepayments....................................................................... 46
SECTION 2.7 Interest.......................................................................... 49
SECTION 2.8 Fees.............................................................................. 50
SECTION 2.9 Conversion of Advances............................................................ 51
SECTION 2.10 Increased Costs, Etc............................................................. 52
SECTION 2.11 Payments and Computations........................................................ 54
SECTION 2.12 Taxes............................................................................ 55
SECTION 2.13 Sharing of Payments, Etc......................................................... 58
SECTION 2.14 Use of Proceeds.................................................................. 59
SECTION 2.15 Defaulting Lenders............................................................... 59
SECTION 2.16 Removal of Lender................................................................ 61
ARTICLE 3 CONDITIONS OF LENDING.................................................................. 62
SECTION 3.1 Conditions Precedent to Initial Extension of Credit............................... 62
SECTION 3.2 Conditions Precedent to Each Borrowing and Issuance............................... 69
SECTION 3.3 Determinations Under Section 3.1. ............................................... 70
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE BORROWER......................................... 71
SECTION 4.1 Organization...................................................................... 71
SECTION 4.2 Subsidiaries...................................................................... 71
SECTION 4.3 Corporate Power, Authorization.................................................... 71
SECTION 4.4 Governmental Authorizations, Approvals............................................ 72
SECTION 4.5 Due Execution, Validity, Enforceability........................................... 72
SECTION 4.6 Financial Statements.............................................................. 73
SECTION 4.7 Pro Forma Financial Statements.................................................... 73
SECTION 4.8 True and Complete Disclosure...................................................... 73
SECTION 4.9 Litigation........................................................................ 74
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TABLE OF CONTENTS
Page No.
SECTION 4.10 Regulation U. ................................................................... 74
SECTION 4.11 ERISA............................................................................ 74
SECTION 4.12 Casualty......................................................................... 75
SECTION 4.13 Environmental Matters............................................................ 75
SECTION 4.14 Collateral Documents............................................................. 76
SECTION 4.15 Taxes............................................................................ 77
SECTION 4.16 Compliance with Securities Laws.................................................. 77
SECTION 4.17 Solvency......................................................................... 78
SECTION 4.18 Debt............................................................................. 78
SECTION 4.19 No Defaults, Compliance with Laws................................................ 78
SECTION 4.20 Owned Real Property.............................................................. 78
SECTION 4.21 Leased Real Property............................................................. 79
SECTION 4.22 Material Contracts............................................................... 79
SECTION 4.23 Investments...................................................................... 79
SECTION 4.24 Intellectual Property............................................................ 79
SECTION 4.25 Spectrum Acquisition Documents................................................... 79
SECTION 4.26 Fees............................................................................. 80
SECTION 4.27 Government Consents for Conduct of Business...................................... 80
SECTION 4.28 Labor Disputes; Collective Bargaining Agreement; Employee Grievances............. 81
SECTION 4.29 Senior Debt...................................................................... 81
ARTICLE 5 AFFIRMATIVE COVENANTS.................................................................. 81
SECTION 5.1 Compliance with Law............................................................... 81
SECTION 5.2 Payment of Taxes, Etc............................................................. 82
SECTION 5.3 Compliance with Environmental Laws................................................ 82
SECTION 5.4 Maintenance of Insurance.......................................................... 82
SECTION 5.5 Preservation of Corporate Existence, Etc.......................................... 83
SECTION 5.6 Visitation Rights................................................................. 83
SECTION 5.7 Keeping of Books.................................................................. 83
SECTION 5.8 Maintenance of Properties, Etc.................................................... 83
SECTION 5.9 Performance of Material Contracts................................................. 84
SECTION 5.10 Transactions with Affiliates..................................................... 84
SECTION 5.11 Agreement to Grant Additional Security........................................... 84
SECTION 5.12 Interest Rate Protection......................................................... 86
SECTION 5.13 Performance of Spectrum Acquisition Documents.................................... 87
SECTION 5.14 Assignment of Claims............................................................. 87
ARTICLE 6 NEGATIVE COVENANTS..................................................................... 87
SECTION 6.1 Liens, Etc........................................................................ 87
SECTION 6.2 Debt.............................................................................. 89
SECTION 6.3 Fundamental Changes; Acquisitions................................................. 91
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TABLE OF CONTENTS
Page No.
SECTION 6.4 Sales, Etc........................................................................ 91
SECTION 6.5 Investments....................................................................... 92
SECTION 6.6 Dividends, Etc.................................................................... 94
SECTION 6.7 Change in Nature of Business...................................................... 95
SECTION 6.8 Charter Amendments................................................................ 96
SECTION 6.9 Accounting Changes................................................................ 96
SECTION 6.10 Prepayments, Etc................................................................. 96
SECTION 6.11 Amendment, Etc................................................................... 96
SECTION 6.12 Limitation on Certain Restrictions on Subsidiaries............................... 96
SECTION 6.13 Negative Pledge.................................................................. 97
SECTION 6.14 Partnerships, New Subsidiaries................................................... 97
SECTION 6.15 Speculative Transactions......................................................... 97
SECTION 6.16 Capital Expenditures............................................................. 97
SECTION 6.17 Issuance of Stock................................................................ 98
SECTION 6.18 Guaranteed Obligations........................................................... 98
SECTION 6.19 Management Fees.................................................................. 99
SECTION 6.20 Insurance Subsidiary............................................................. 100
ARTICLE 7 REPORTING REQUIREMENTS................................................................. 100
SECTION 7.1 Default Notice.................................................................... 100
SECTION 7.2 [Intentionally omitted.].......................................................... 100
SECTION 7.3 Quarterly Financials.............................................................. 100
SECTION 7.4 Annual Financials................................................................. 101
SECTION 7.5 Annual Forecasts.................................................................. 102
SECTION 7.6 ERISA Events and ERISA Reports.................................................... 102
SECTION 7.7 Plan Terminations................................................................. 102
SECTION 7.8 Actuarial Reports................................................................. 102
SECTION 7.9 Plan Annual Reports............................................................... 102
SECTION 7.10 Multiemployer Plan Notices....................................................... 102
SECTION 7.11 Litigation....................................................................... 103
SECTION 7.12 Securities Reports............................................................... 103
SECTION 7.13 Creditor Reports................................................................. 103
SECTION 7.14 Agreement Notices................................................................ 103
SECTION 7.15 Environmental Conditions......................................................... 103
SECTION 7.16 Real Property.................................................................... 103
SECTION 7.17 Insurance........................................................................ 104
SECTION 7.18 Management Letters............................................................... 104
SECTION 7.19 Other Information................................................................ 104
ARTICLE 8 FINANCIAL COVENANTS.................................................................... 104
SECTION 8.1 Consolidated Funded Debt to EBITDA Ratio.......................................... 104
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TABLE OF CONTENTS
Page No.
SECTION 8.2 Interest Coverage Ratio........................................................... 105
SECTION 8.3 Fixed Charge Coverage Ratio....................................................... 106
ARTICLE 9 EVENTS OF DEFAULT...................................................................... 107
SECTION 9.1 Payment........................................................................... 107
SECTION 9.2 Representations and Warranties.................................................... 107
SECTION 9.3 Certain Covenants................................................................. 107
SECTION 9.4 Other Covenants................................................................... 107
SECTION 9.5 Other Defaults.................................................................... 107
SECTION 9.6 Bankruptcy, Etc................................................................... 107
SECTION 9.7 Judgments......................................................................... 108
SECTION 9.8 Loan Documents.................................................................... 108
SECTION 9.9 Liens............................................................................. 108
SECTION 9.10 Change of Control................................................................ 108
SECTION 9.11 ERISA Events..................................................................... 108
SECTION 9.12 Subordination Provisions......................................................... 109
SECTION 9.13 Matters Relating to Regulatory Agencies.......................................... 109
SECTION 9.14 Related Professional Corporation Termination..................................... 109
SECTION 9.15 Insurance Subsidiary............................................................. 109
ARTICLE 10 THE ADMINISTRATIVE AGENT.............................................................. 111
SECTION 10.1 Authorization and Action......................................................... 111
SECTION 10.2 Agent's Reliance, Etc............................................................ 111
SECTION 10.3 Fleet and Affiliates............................................................. 112
SECTION 10.4 Lender Party Credit Decision..................................................... 112
SECTION 10.5 Indemnification.................................................................. 112
SECTION 10.6 Successor Administrative Agents.................................................. 113
SECTION 10.7 Events of Default................................................................ 114
SECTION 10.8 Syndication and Documentation Agent.............................................. 115
ARTICLE 11 MISCELLANEOUS......................................................................... 115
SECTION 11.1 Amendments, Etc.................................................................. 115
SECTION 11.2 Notices Etc...................................................................... 116
SECTION 11.3 No Waiver; Remedies.............................................................. 118
SECTION 11.4 Costs and Expenses............................................................... 118
SECTION 11.5 Right of Set-off................................................................. 120
SECTION 11.6 Binding Effect................................................................... 120
SECTION 11.7 Assignments and Participations................................................... 121
SECTION 11.8 Execution in Counterparts........................................................ 124
SECTION 11.9 No Liability of the Issuing Banks................................................ 124
SECTION 11.10 Confidentiality................................................................. 125
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TABLE OF CONTENTS
Page No.
SECTION 11.11 Further Assurances.............................................................. 125
SECTION 11.12 JURISDICTION, ETC............................................................... 125
SECTION 11.13 GOVERNING LAW................................................................... 126
SECTION 11.14 WAIVER OF JURY TRIAL............................................................ 126
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EXHIBITS
--------
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Term A Note
Exhibit D - Form of Term B Note
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Security Agreement
Exhibit G - Form of Intellectual Property Security Agreement
Exhibit H - Form of Holdings Pledge Agreement
Exhibit I - Form of Holdings Guaranty
Exhibit J - Form of Subsidiary Guaranty
SCHEDULES
---------
Organization Schedule
Schedule I Commitments and Applicable Lending Offices
Schedule 1.3 Changes in Accounting Methods
Schedule 2.3(e) Outstanding Letters of Credit
Schedule 3.1(a)(xi) States in which Loan Parties are Qualified to do Business
Schedule 4.2 Subsidiaries
Schedule 4.4 Required Authorizations and Approvals
Schedule 4.9 Disclosed Litigation
Schedule 4.11 Welfare Plans
Schedule 4.13 Environmental Matters
Schedule 4.18(a) Existing Debt
Schedule 4.18(b) Surviving Debt
Schedule 4.18(c) Existing Debt of Target to be Repaid Prior to Closing Date
Schedule 4.19 No Defaults
Schedule 4.20 Owned Real Estate
Schedule 4.21 Leased Real Estate
Schedule 4.22 Material Contracts
Schedule 4.23 Investments
Schedule 4.24 Intellectual Property
Schedule 4.28 Labor Disputes; Collective Bargaining Agreement; Employee Grievances
Schedule 5.10 Transactions with Affiliates
Schedule 6.1(c) Liens
Schedule 6.2(b) Certain Unrestricted Intercompany Debt
Schedule 6.2(c) Debt
Schedule 6.5(a) Investments in Subsidiaries
Schedule 6.5(g) Existing Investments
Schedule 6.17 Existing Issuances, Etc. of Stock
Schedule 6.18 Guaranteed Obligations
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of May 1, 2002 by and among TEAM HEALTH,
INC., a Tennessee corporation (the "Borrower"), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the Initial Lenders (the "Initial Lenders"), FLEET NATIONAL BANK, as
an Issuing Bank (an "Issuing Bank"), as the Swing Line Bank (the "Swing Line
Bank"), and as administrative agent (together with any successor appointed
pursuant to Article 10, the "Administrative Agent") for the Lender Parties (as
hereinafter defined), BANK OF AMERICA, N.A., as an Issuing Bank, BANC OF AMERICA
SECURITIES LLC, as syndication agent (the "Syndication Agent") and GENERAL
ELECTRIC CAPITAL CORPORATION, as documentation agent (the "Documentation
Agent").
PRELIMINARY STATEMENT:
(1) The Borrower, the Administrative Agent and certain financial
institutions are party to a Credit Agreement dated as of March 12, 1999 (as
amended through the date hereof, the "Existing Credit Agreement") and Borrower
has entered into that certain Stock Purchase Agreement dated March 29, 2002 with
Spectrum Healthcare Services, Inc. (the "Target"), the beneficial owners of the
Target (the "Sellers") and Madison Dearborn Capital Partners, L.P., as the
representatives of the Sellers, (as amended by that certain First Amendment to
Stock Purchase Agreement, dated as of May 1, 2002, and as hereafter further
amended or modified as permitted by the terms of this Agreement, the "Spectrum
Acquisition Agreement") and that certain Distribution and Repurchase Agreement
dated March 29, 2002 with Spectrum Holdings of Delaware, LLC, the Sellers and
the Target (as hereafter amended or modified as permitted by the terms of this
Agreement, the "Redemption Agreement") in order to acquire all of the issued and
outstanding capital stock of the Target and to recapitalize the Target
(collectively, the "Spectrum Acquisition").
(2) The Borrower has requested that the Lender Parties (as hereinafter
defined) make loans to the Borrower and issue letters of credit having an
aggregate principal and face amount at any one time outstanding of up to Three
Hundred Million Dollars ($300,000,000), to be used by the Borrower (a) to
refinance the Borrower's obligations under its existing senior secured credit
agreement, (b) to finance the Spectrum Acquisition, (c) to pay fees and expenses
incurred in connection with the Spectrum Acquisition in an aggregate amount not
to exceed $7,000,000, (d) to provide working capital, (e) to finance general
corporate purposes of the Borrower and its Subsidiaries, and (f) to finance
Permitted Acquisitions (as hereinafter defined), and the Lender Parties have
agreed to make such loans and issue such letters of credit all on and subject to
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired EBITDA" means as of any date of determination, an amount
equal to (a) EBITDA (calculated excluding clause (ix) of the definition of
EBITDA) attributable to each Permitted Acquisition consummated by the Borrower
or any of its Subsidiaries during the one (1) year period preceding the date of
determination (but only for a number of full fiscal quarters immediately
preceding the consummation of the applicable Permitted Acquisition equal to four
(4) less the number of fiscal quarters following the consummation of the
applicable Permitted Acquisition for which financial statements of the Borrower
covering one (1) or more full fiscal quarters have been delivered to the
Administrative Agent pursuant to Section 7.3) plus (b) the Pro Forma Cost
Reductions, if any, applicable to each such Permitted Acquisition (but
reductions shall be computed (notwithstanding the definition of Pro Forma Cost
Reduction) only in respect of the same number of fiscal quarters as described in
the parenthetical in clause (a) above).
"Additional Collateral Documents" has the meaning specified in Section
5.11(e).
"Administrative Agent" has the meaning specified in the recitals to
this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Fleet at its
office at Fleet National Bank, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Loan Administration.
"Advance" means a Term A Advance, a Term B Advance, a Revolving Credit
Advance, a Swing Line Advance or a Letter of Credit Advance.
"Affected Lender" has the meaning specified in Section 2.16.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 10% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise. For
purposes of this definition, an Affiliate
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of a Lender which is a fund shall include a fund with the same investment
advisor or that has an Affiliate for an investment advisor.
"Agents" means the Administrative Agent and the Syndication Agent.
"Applicable Lending Office" means, with respect to each Lender Party,
such Lender Party's Domestic Lending Office in the case of a Prime Rate Advance
and such Lender Party's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance.
"Applicable Margin" means at any time and from time to time a
percentage per annum determined pursuant to the last paragraph of this
definition by reference to the ratio of Consolidated Funded Debt to EBITDA at
such time, as set forth below:
Applicable Margin for Eurodollar Rate Advances
----------------------------------------------
Ratio of Consolidated Revolving Credit Advances
Funded Debt to EBITDA and Term A Advances
--------------------- -------------------
Greater than 4.00:1 3.00%
Greater than 3.50:1 2.75%
less than or equal to 4.00:1
Greater than 3.00:1 2.50%
less than or equal to 3.50:1
Greater than 2.50:1 2.25%
less than or equal to 3.00:1
Less than or equal to 2.50:1 2.00%
Applicable Margin for Prime Rate Advances
-----------------------------------------
Ratio of Consolidated Revolving Credit Advances
Funded Debt to EBITDA and Term A Advances
--------------------- -------------------
Greater than 4.00:1 1.00%
Greater than 3.50:1 0.75%
less than or equal to 4.00
Greater than 3.00:1 0.50%
less than or equal to 3.50:1
Greater than 2.50:1 0.25%
less than or equal to 3.00:1
Less than or equal to 2.50:1 0.00%
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Notwithstanding the above rates, prior to the date which is six (6)
months from the date hereof, the Applicable Margin for a Revolving Credit
Advance and a Term A Advance shall be not less than 2.75% for a Eurodollar Rate
Advance and not less than 0.75% for a Prime Rate Advance.
The Applicable Margin for a Term B Advance shall be 3.25% for a
Eurodollar Rate Advance and 1.25% for a Prime Rate Advance.
The Applicable Margin for each Prime Rate Advance and each Eurodollar
Rate Advance (other than, in each instance, a Term B Advance) shall be
determined by reference to the ratio of Consolidated Funded Debt to EBITDA which
shall be determined and adjusted, if applicable, three (3) Business Days after
the date on which the Administrative Agent receives financial statements
pursuant to Section 7.3 or 7.4 and a certificate of the Chief Financial Officer
of the Borrower demonstrating the ratio of Consolidated Funded Debt to EBITDA.
If the Borrower has not submitted to the Administrative Agent the information
described above within ten (10) days following the date required under Section
7.3 or 7.4, as the case may be, the Applicable Margin shall equal the highest
level set forth above, commencing on such tenth day, until the first day of the
first month following the delivery of such financial statements demonstrating a
lower Applicable Margin.
"Asset Disposition" shall mean the disposition (not involving an
Extraordinary Receipt) of any or all of the assets of the Borrower or any of its
Subsidiaries (including the capital stock of any of their Subsidiaries, but
excluding the sale by the Borrower of its own capital stock) whether by sale,
lease, transfer, or otherwise; provided, however, that for purposes of Section
2.6(b)(ii), the term "Asset Disposition" shall not include (a) any sale, lease,
transfer or other disposition permitted pursuant to Section 6.4(a) through (f)
or (b) any sale, lease, transfer or other disposition of Equipment if the Net
Proceeds therefrom are reinvested in replacement Equipment within 180 days of
such disposition; provided, that pending any replacement, any such Net Proceeds
are used to repay Revolving Credit Advances.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent and by the Borrower, in accordance with Section 11.7 and in
substantially the form of Exhibit A hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
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"Bank of America" means Bank of America, N.A., in its capacity as a
Lender or as Issuing Bank.
"Bank Hedge Agreement" means any interest rate Hedge Agreement required
or permitted under Section 5.12 that is entered into by and between the Borrower
and any Hedge Bank.
"Benefit Arrangements" means any deferred compensation, bonus, stock
option, stock purchase or incentive plan, or any other agreement or arrangement,
whether written or oral, other than Plans, Multiemployer Plans, Welfare Plans
and defined contribution plans, that authorizes benefits to employees of the
Borrower or any of its Subsidiaries.
"Borrower" has the meaning specified in the recitals to this Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Fleet National Bank at its office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Borrowing" means a Term A Borrowing, a Term B Borrowing, a Revolving
Credit Borrowing or a Swing Line Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in Boston, Massachusetts, Charlotte, North
Carolina, Knoxville, Tennessee and New York, New York and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the sum of
all expenditures made by such Person or any of its Subsidiaries during such
period for Equipment, fixed assets, real property or improvements, or for
replacements or substitutions therefor or additions thereto, that should be, in
accordance with GAAP, reflected as additions to property, plant or Equipment on
a Consolidated balance sheet of such Person.
"Capitalized Leases" means all leases that should be, in accordance
with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following, to the extent owned by
the Borrower or any of its Subsidiaries, free and clear of all Liens other than
Liens created under the Collateral Documents or as permitted under Section 6.1:
(a) marketable direct obligations of the Government of the United States or any
agency or instrumentality thereof or obligations unconditionally guaranteed by
the full faith and credit of the Government of the United States having a
maturity of not greater than 360 days from the date of issuance thereof, (b)
overnight bank deposits, bankers acceptances, certificates of deposit or time
deposits having a maturity of not greater than 360 days from the date of
issuance thereof with any commercial bank that is a Lender Party or a member of
the Federal Reserve System that issues (or the parent of which
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issues) commercial paper rated as described in clause (c) and is organized under
the laws of the United States, any State thereof or the District of Columbia and
has combined capital and surplus of at least $500,000,000, (c) commercial paper
having a maturity of not greater than 180 days from the date of issuance thereof
in an aggregate amount of no more than $5,000,000 per issuer outstanding at any
time, issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., (d) repurchase obligations and reverse repurchase agreements of any Lender
or of any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than thirty (30) days with respect to
marketable direct obligations issued or unconditionally guaranteed by the United
States of America or any agency or instrumentality thereof, (e) securities with
maturities of one (1) year or less from the date of issuance thereof issued or
fully guaranteed by any state, commonwealth or territory of the United States,
by any political subdivision or taxing authority of any such state, commonwealth
or territory, the securities of which state, commonwealth, territory, political
subdivision or taxing authority (as the case may be) are rated at least AAA (or
the equivalent thereof) by Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or Aaa (or the equivalent thereof) by ▇▇▇▇▇'▇
Investors Service, Inc. or equivalent by another rating agency, (f) securities
with maturities of one (1) year or less from the date of issuance thereof backed
by standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition, or (g) shares of
money market mutual or similar funds which invest only in assets satisfying the
requirements of clause (a) through (f) of this definition.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as amended from time
to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental Protection
Agency.
"Change of Control" means any of the following events: (a) prior to a
Qualified Initial Public Offering, (i) Holdings shall at any time cease to
collectively own a majority of the capital stock of the Borrower, (ii) the
Sponsors or Related Parties are no longer collectively the "beneficial owners"
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, amended
(the "Exchange Act")) of at least fifty-one percent (51%) of the total voting
power of all Voting Stock of Holdings or (iii) the Sponsors or Related Parties
no longer have the right to collectively designate and cause to be elected a
majority of the directors (or their equivalent) of Holdings and thereby control
the management of Holdings, the Borrower and its Subsidiaries; (b) after a
Qualified Initial Public Offering, (i) any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), other than Holdings,
the Sponsors or Related Parties, is or becomes the beneficial owner, directly or
indirectly, of more than the lesser of (x) thirty-five percent (35%) of the
total voting power of all Voting Stock of the Borrower and (y)
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the percentage of the total voting power of all Voting Stock of the Borrower
owned by Holdings, the Sponsors and Related Parties (after giving effect to the
Initial Public Offering) or (ii) Continuing Directors shall cease to constitute
at least a majority of the directors constituting the board of directors of
Borrower; or (c) a Change of Control (as defined in the Subordinated Notes
Indenture) shall have occurred.
"Closing Date" means the date on which all of the conditions precedent
set forth in Section 3.1 to the Initial Extension of Credit shall have been
satisfied or waived.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Collateral Documents" means the Security Agreement, the Intellectual
Property Security Agreement, the Mortgages, the Holdings Pledge Agreement and
any other agreement that creates or purports to create a Lien in favor of the
Administrative Agent for the benefit of the Secured Parties, including the
Additional Collateral Documents delivered pursuant to Section 5.11.
"Commitment" means a Term A Commitment, a Term B Commitment, a
Revolving Credit Commitment or a Letter of Credit Commitment.
"Commitment Letter" means the letter dated March 25, 2002 among Fleet,
Bank of America, BAS, Fleet Securities, Inc., each of the Agents and the
Borrower.
"Confidential Information" means information that the Borrower
furnishes to the Administrative Agent or any Lender Party in a writing
designated as confidential, but does not include any such information that is or
becomes generally available to the public (other than as a result of a breach by
the Administrative Agent or any Lender Party (or any Person to which they
disclosed such information) of its obligations to keep such information
confidential under Section 11.10) or that is or becomes available to the
Administrative Agent or such Lender Party from a source other than the Borrower
that is not, to the best of the Administrative Agent's or such Lender Party's
knowledge, acting in violation of a confidentiality agreement with the Borrower.
"Consolidated" refers to the consolidation of accounts, in accordance
with GAAP, of any Person and all of its Subsidiaries, and if not specified, the
Borrower and all of its Subsidiaries.
"Consolidated Funded Debt to EBITDA" means, for any fiscal quarter of
the Borrower, a ratio of (a) Funded Debt of the Borrower and its Subsidiaries as
at the end of such fiscal quarter to (b) EBITDA for the most recently completed
four fiscal quarters of the Borrower and its Subsidiaries.
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"Conversion," "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.9 or
2.10.
"Continuing Directors" means, as of any date of determination, any
member of the board of directors of the Borrower who (a) was a member of such
board of directors on the date of this Agreement, (b) was nominated for election
or elected to such board of directors with the approval of a majority of the
Continuing Directors who were members of such board of directors at the time of
such nomination or election, or (c) was nominated by the Sponsors pursuant to
the Stockholders Agreement.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets.
"Current Liabilities" of any Person means all indebtedness of such
Person that would, in accordance with GAAP, be classified as current
liabilities, but excluding the current portion of any Funded Debt (including
accrued but unpaid interest).
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (other than trade payables and
other accrued liabilities incurred in the ordinary course of business that are
not overdue by more than ninety (90) days unless being contested in good faith)
which would be shown as a liability on a balance sheet or are required to be set
forth in the footnotes to a year-end balance sheet, each prepared in accordance
with GAAP, (c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all Obligations of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Obligations of
such Person as lessee under Capitalized Leases to the extent classified as a
liability on a balance sheet in accordance with GAAP, (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter of credit or
similar facilities, (g) all Obligations of such Person in respect of Hedge
Agreements, (h) all Debt of others referred to in clauses (a) through (g) above
or clause (i) below guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person through an
agreement (I) to pay or purchase such Debt or to advance or supply funds for the
payment or purchase of such Debt, (II) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of such
Debt against loss, (III) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services irrespective of
whether such property is received or such services are rendered) or (IV)
otherwise to assure a creditor against loss, (i) all Debt referred to in clauses
(a) through (h) above of another Person secured by (or for which the holder of
such Debt has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including, without limitation, accounts,
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contract rights or inventory) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Debt, (j) the principal
balance outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product to which
such Person is a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP and (k) all Earnout Obligations; provided, that
notwithstanding the foregoing, Earnout Obligations up to an aggregate amount of
$20,000,000 outstanding at any time shall not be deemed to be Debt.
"Debt Issuance" means any issuance or sale or other incurrence by the
Borrower or any of its Subsidiaries of any Funded Debt; provided, however, that
for purposes of determination of Net Cash Proceeds under Section 2.6(b)(iii),
the term "Debt Issuance" shall not include the incurrence of Debt permitted
under Section 6.2 (other than as provided in the proviso to Section
6.2(c)(iii)).
"Default" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.
"Defaulted Advance" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party to the
Borrower pursuant to Section 2.1 or 2.2 at or prior to such time which has not
been made by such Lender Party or by the Administrative Agent for the account of
such Lender Party pursuant to Section 2.2(e) as of such time. In the event that
a portion of a Defaulted Advance shall be deemed made pursuant to Section
2.15(a), the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section 2.1 on the
same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender Party at any time,
any amount required to be paid by such Lender Party to the Administrative Agent
or any other Lender Party hereunder or under any other Loan Document at or prior
to such time which has not been so paid as of such time, including, without
limitation, any amount required to be paid by such Lender Party to (a) the Swing
Line Bank pursuant to Section 2.2(b) to purchase a portion of a Swing Line
Advance made by the Swing Line Bank, (b) any Issuing Bank pursuant to Section
2.3(c) to purchase a portion of a Letter of Credit Advance made by such Issuing
Bank, (c) the Administrative Agent pursuant to Section 2.2(e) to reimburse the
Administrative Agent for the amount of any Advance made by the Administrative
Agent for the account of such Lender Party, (d) any other Lender Party pursuant
to Section 2.13 to purchase any participation in Advances owing to such other
Lender Party and (e) the Administrative Agent or an Issuing Bank pursuant to
Section 10.5 to reimburse the Administrative Agent or such Issuing Bank for such
Lender Party's ratable share of any amount required to be paid by the Lender
Parties to the Administrative Agent or such Issuing Bank as provided therein. In
the event that a portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.15(b), the remaining portion of
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such Defaulted Amount shall be considered a Defaulted Amount originally required
to be paid hereunder or under any other Loan Document on the same date as the
Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any
action or be the subject of any action or proceeding of a type described in
Section 9.6.
"Disclosed Litigation" has the meaning specified in Section 4.9.
"Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrower
and the Administrative Agent.
"Domestic Subsidiary" means any Subsidiary organized under the laws of
the United States of America or any State thereof.
"Earnout Obligations" means (a) Existing Earnout Obligations and (b)
those payment obligations of the Borrower and its Subsidiaries to former owners
of businesses which were acquired by the Borrower or one of its Subsidiaries
pursuant to a Permitted Acquisition which are in the nature of deferred purchase
price. The amount of Earnout Obligations shall equal the amount required to be
set forth with respect to such payment obligations on a balance sheet prepared
in accordance with GAAP applied consistent with past practices.
"EBITDA" means, for any period the sum, determined on a Consolidated
basis and without duplication, of (i) Net Income (or Net Loss), (ii) Interest
Expense (without deduction for interest income), (iii) income (and franchise
taxes in the nature of income taxes) and foreign withholding tax expense, (iv)
depreciation expense, (v) extraordinary and nonrecurring non-cash expenses,
charges and losses to the extent that no reserve has been or is required to be
established therefor on a balance sheet prepared in accordance with GAAP, (vi)
amortization expense, (vii) other non-cash charges (including, without
limitation, non-cash charges in connection with the granting of options,
warrants or other equity interests) to the extent that no reserve has been or is
required to be established therefor on a balance sheet prepared in accordance
with GAAP, (viii) expenses of the Borrower related to the Transaction which are
paid, taken or otherwise accounted for within ninety (90) days of the
consummation of the Transaction not to exceed $7,000,000 in the aggregate, (ix)
Acquired EBITDA for such period, (x) Management Fees paid in cash during such
period in accordance with this Agreement in an amount not to exceed $500,000 in
any Fiscal Year, (xi) non-cash losses from asset sales, (xii) expenses incurred
to the extent reimbursed (or reasonably expected to be reimbursed within ninety
(90) days of incurrence thereof) by MedPartners, Inc. pursuant to the
indemnification provisions of the Recapitalization Agreement and (xiii) expenses
incurred to the extent
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reimbursed (or reasonably expected to be reimbursed within ninety (90) days of
incurrence thereof) by the Sellers pursuant to the indemnification provisions of
the Spectrum Acquisition Agreement; provided, that with respect to each of
clauses (ii) through (xiii), such amounts shall be added to Net Income pursuant
to this definition only to the extent such amounts were deducted in determining
Net Income, minus (A) extraordinary and nonrecurring gains (in each case
determined in accordance with GAAP) and (B) amounts added pursuant to clause
(xii) above during this Fiscal Year or any previous Fiscal Year which were not
so reimbursed within the time period set forth in the parenthetical in clause
(xii) above; provided, that EBITDA shall be deemed to be $23,197,281 with
respect to the second quarter of Fiscal Year 2001, $21,015,796 with respect to
the third quarter of Fiscal Year 2001, $19,748,301 with respect to the fourth
quarter of Fiscal Year 2001, and $23,456,000 with respect to the first quarter
of Fiscal Year 2002; provided, further, that for the part of the second fiscal
quarter of Fiscal Year 2002 occurring prior to the Closing Date, EBITDA shall be
calculated for such fiscal quarter on a pro forma adjusted basis consistent with
the adjustments for Fiscal Year 2001 and reasonably acceptable to the
Administrative Agent. In addition, EBITDA shall be calculated without giving
effect to (w) any gains or losses (other than as expressly provided in clause
(xi) above) from sales of assets other than from sales of inventory sold in the
ordinary course of business, (x) purchase accounting adjustments required or
permitted by Accounting Principles Board Opinion Nos. 16 (including non-cash
write-ups and non-cash charges relating to inventory and fixed assets, in each
case arising in connection with any Permitted Acquisition) and 17 (including
non-cash charges relating to intangibles and goodwill arising in connection with
any Permitted Acquisition), (y) any gain or loss recognized in determining
Consolidated Net Income (or Net Loss) for such period in respect of
post-retirement benefits as a result of the application of FASB 106 and (z) any
gain or loss recognized in determining Consolidated Net Income (or Net Loss) for
such period resulting from the payment of Earnout Obligations.
"Eligible Assignee" means with respect to any Facility (other than the
Letter of Credit Facility), (a) a Lender; (b) an Affiliate (or fund with the
same investment advisor or that has an Affiliate of such investment advisor as
its investment advisor) of a Lender; and (c) subject to the prior approval of
the Administrative Agent and the Borrower, such approval by the Borrower not to
be unreasonably withheld or delayed, (i) a commercial bank organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $500,000,000; (ii) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and having
total assets in excess of $500,000,000; (iii) a commercial bank organized under
the laws of any other country that is a member of the OECD or has concluded
special lending arrangements with the International Monetary Fund associated
with its General Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, so long as such bank is acting through a branch or agency located
in the United States; (iv) the central bank of any country that is a member of
the OECD; and (v) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other entity)
that is engaged in making, purchasing or otherwise investing in commercial loans
in the ordinary course of its
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business and, in the case of a Revolving Lender, having total assets in excess
of $500,000,000; and, with respect to the Letter of Credit Facility, a Person
that is an Eligible Assignee under subclause (i) or (iii) of clause (c) of this
definition and is approved by the Administrative Agent and the Borrower, such
approval by the Borrower not to be unreasonably withheld or delayed; provided,
however, that no Loan Party or Affiliate of a Loan Party shall qualify as an
Eligible Assignee under this definition.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to public health and
safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority or third party for enforcement, cleanup,
Removal, Response, Remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any international or transnational law,
federal, state, local or foreign statute, law, ordinance, rule, regulation,
code, order, writ, judgment, injunction, decree or judicial or agency
interpretation, policy or guidance having the force and effect of law, in each
case relating to pollution or protection of the environment or natural
resources, including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, threatened release, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equipment" has the meaning specified in Section 1(a) of the Security
Agreement.
"Equity Issuance" means any sale or issuance by the Borrower or any of
its Subsidiaries of any capital stock or other ownership or profit interest, any
securities convertible or exchangeable for capital stock or other ownership or
profit interest or any warrants, rights or options to acquire capital stock or
other ownership or profit interest; provided, however, that for purposes of
determination of Net Cash Proceeds under Section 2.6(b)(iv), the term "Equity
Issuance" shall not include any issuance or sale of (a) capital stock of the
Borrower issued on or before the Closing Date; (b) capital stock of the Borrower
to any Person as consideration paid or otherwise issued in connection with a
Permitted Acquisition; (c) common stock of the Borrower issued to any director
of the Borrower required by applicable law in connection with such Person acting
in such capacity; (d) common stock and/or Preferred Stock of the Borrower issued
to directors, management and employees of the Borrower whether pursuant to stock
options or otherwise, (e) common stock issued by any Subsidiary of the Borrower
to the Borrower, (f) capital stock of the Borrower to any shareholder of the
Borrower (and their respective Affiliates) on the Closing Date and (g) issuances
of capital stock of the Borrower to any Sponsor or Related
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Party after the date hereof so long as the Net Cash Proceeds from any such
issuance are used in accordance with Section 6.5(s).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of the Borrower, or under common
control with the Borrower, within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following thirty (30) days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any Plan of a
notice of intent to terminate such Plan under ERISA Section 4041(c), pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of the Borrower or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by the
Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan year
for which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (f) the conditions for imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan; (g) the adoption of an amendment
to a Plan requiring the provision of security to such Plan pursuant to Section
307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a
Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per annum
(rounded upward, if necessary, to the nearest 1/32 of one percent) as determined
on the basis of the offered rates for
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deposits in U.S. dollars, for a period of time comparable to such Interest
Period which appears on the Telerate Page 3750 as of 11:00 a.m. (London time)
two (2) Business Days before the first day of such Interest Period; provided,
however, that if the rate described above does not appear on the Telerate System
on any applicable interest determination date, the Eurodollar Rate shall be the
rate (rounded upward as described above, if necessary) for deposits in U.S.
dollars for a period substantially equal to the interest period on the Reuters
Page "LIBO" (or such other page as may replace the LIBO page on that service for
the purpose of displaying such rates), as of 11:00 a.m. (London time) two (2)
Business Days before the first day of such Interest Period.
If both the Telerate and Reuters system are unavailable, then the rate
for that date will be determined on the basis of the offered rates for deposits
in U.S. dollars for a period of time comparable to such Interest Period which
are offered to first class banks by four major banks in the London interbank
market at approximately 11:00 a.m. (New York time) two (2) Business Days before
the first day of such Interest Period as selected by the Administrative Agent.
The principal London office of each of the four major London banks will be
requested to provide a quotation of its U.S. dollar deposit offered rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis of the rates
quoted for loans in U.S. dollars to leading European banks for a period of time
comparable to such Interest Period offered by major banks in New York City at
approximately 11:00 a.m. (New York time) two (2) Business Days before the first
day of such Interest Period. In the event that the Administrative Agent is
unable to obtain any such quotation as provided above, it will be deemed that
the Eurodollar Rate for such Interest Rate cannot be determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a Eurodollar Rate Reserve Percentage with respect to Eurocurrency
Liabilities, the Eurodollar Rate for an Interest Period shall be equal to the
amount determined above for such Interest Period divided by a percentage equal
to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.7(a)(ii).
"Eurodollar Rate Reserve Percentage" means, for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing, the reserve
percentage applicable two (2) Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits
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by reference to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Article 9.
"Excess Cash Flow" means for any period (without duplication) the sum
of (a) EBITDA of the Borrower and its Subsidiaries for such period plus (b) if
there was a net decrease in Working Capital during such period, the amount of
such net decrease less (c) if there was a net increase in Working Capital during
such period the amount of such net increase less (d) the aggregate amount of
mandatory and optional prepayments (other than optional prepayments of the Swing
Line Advances, Letter of Credit Advances or Revolving Credit Advances) or
repayments of principal made by the Borrower and its Subsidiaries on any Debt of
the Borrower and its Subsidiaries during such period less (e) Capital
Expenditures of the Borrower and its Subsidiaries paid in cash within such
period or within ninety (90) days of the end of such period (which, if so
applied, will not constitute a reduction in calculating Excess Cash Flow in the
following period) and not financed during such period less (f) the aggregate net
amount of all federal, state, local and foreign taxes paid by the Borrower and
its Subsidiaries during such period less (g) the aggregate amount of interest
paid on any Debt of the Borrower and its Subsidiaries during such period less
(h) the aggregate amount of all non-cash credits included in arriving at such
EBITDA less (i) dividends or other distributions or redemptions paid by the
Borrower to the holders of its capital stock during such period to the extent
that the Borrower is expressly permitted to pay such dividends or other
distributions or redemptions under this Agreement less (j) extraordinary or
nonrecurring cash charges, expenses and losses during such period less (k) cash
expenses paid during such period in connection with the issuance pursuant to the
Subordinated Note Indenture of Subordinated Notes in exchange for such
Subordinated Notes less (l) the amount of any payments in respect of Earnout
Obligations and other payments made pursuant to the Recapitalization Agreement
and/or the Spectrum Acquisition Agreement less (m) the unfinanced portion of
cash purchase price for Permitted Acquisitions not to exceed $5,000,000 in any
Fiscal Year less (n) Acquired EBITDA less (o) Management Fees paid in cash
during such period in accordance with this Agreement in an amount not to exceed
$500,000 in any Fiscal Year less (p) expenses of the Borrower related to the
Transaction which are not financed and which are paid, taken or otherwise
accounted for within ninety (90) days of the Transaction not to exceed
$7,000,000 in the aggregate. With respect to each of the deductions from EBITDA
set forth above, each shall be made only to the extent such amounts are not
deducted in determining EBITDA.
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Debt" has the meaning specified in Schedule 4.18(a).
"Existing Earnout Obligations" means those payment obligations of the
Borrower, its Subsidiaries and the Related Professional Corporations set forth
on Exhibit B to the
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Recapitalization Agreement to former owners of business which were acquired by
the Borrower, its Subsidiaries and the Related Professional Corporations prior
to the Closing Date which are in the nature of deferred purchase prices for such
businesses and are expressly contingent on the financial or operating
performance of such businesses for periods after the Closing Date.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person from tax refunds received after Fiscal Year 2002 (to
the extent not included in EBITDA for the period of receipt thereof), proceeds
of insurance (other than proceeds of business interruption insurance to the
extent such proceeds constitute compensation for lost earnings), condemnation
awards (and payments in lieu thereof) and indemnity payments; provided, however,
that an Extraordinary Receipt shall not include cash receipts received from
proceeds of insurance, condemnation awards (and payments in lieu thereof) or
indemnity payments to the extent that such proceeds, awards or payments (a) in
respect of loss or damage to Equipment, fixed assets or real property are
applied (or in respect of which expenditures were previously incurred) to
replace or repair the Equipment, fixed assets or real property in respect of
which such proceeds, awards or payments were received in accordance with the
terms of the Loan Documents, so long as such application is made within 180 days
after such Person's receipt of such proceeds, awards or payments; (b) are
received by any Person in respect of any third party claim against such Person
and applied to pay (or to reimburse such Person for its prior payment of) such
claim and the costs and expenses of such Person with respect thereto; or (c) in
respect of indemnity payments have been or are applied within twelve (12) months
of receipt thereof to pay a reasonably anticipated cost or expense of such
Person not in excess of $10,000,000.
"Facility" means the Term A Facility, the Term B Facility, the
Revolving Credit Facility, the Letter of Credit Facility or the Swing Line
Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" means the letter dated March 25, 2002 among the Agents and
the Borrower.
"Fiscal Year" means a fiscal year of the Borrower and its Consolidated
Subsidiaries ending on December 31 in any calendar year.
"Fleet" means Fleet National Bank in its capacity as a Lender, Issuing
Bank or Swing Line Bank.
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"Foreign Subsidiary" means any Subsidiary organized under the laws of
any jurisdiction other than the United States of America or any State thereof.
"Funded Debt" means, with respect to the Borrower, the Advances, and
with respect to the Borrower and the other Loan Parties and any other Person,
all other Debt of such Person that by its terms matures more than one year after
the date of determination or matures within one year from such date but is
renewable or extendible, at the option of such Person, to a date more than one
year after such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period of more
than one year after such date, including the current portion of all such Debt.
"GAAP" has the meaning specified in Section 1.3.
"Guaranteed Obligations" means, as to any Person, any obligation of
such Person guaranteeing any indebtedness, rent or any other payment or
obligation of the lessee under a lease of real or personal property, dividend,
or other obligation ("primary obligations") of any other Person (the "primary
obligor") in any manner, including any obligation or arrangement of such Person
(a) to purchase or repurchase any such primary obligation, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet condition
of the primary obligor, (c) 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 (d) to indemnify the owner of such primary obligation against
loss in respect thereof; provided, that the term Guaranteed Obligations shall
not include endorsements of instruments for deposit or collection or standard
contractual indemnitees entered into in the ordinary course of business. The
amount of any Guaranteed Obligation at any time shall be deemed to be an amount
equal to the lesser at such time of (x) the stated or determinable amount of the
primary obligation in respect of which such Guaranteed Obligation is made and
(y) the maximum amount for which such Person may be liable pursuant to the terms
of the instrument embodying such Guaranteed Obligation; or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.
"Guarantors" means (a) each Subsidiary Guarantor and (b) Holdings.
"Guaranty" means each of the Holdings Guaranty and the Subsidiary
Guaranty.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
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"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"Hedge Bank" means any Lender Party or any of its Affiliates in its
capacity as a party to a Bank Hedge Agreement.
"Holdings" means Team Health Holdings, L.L.C., a Delaware limited
liability company.
"Holdings Guaranty" has the meaning specified in Section 3.1(a).
"Holdings Pledge Agreement" has the meaning specified in Section
3.1(a).
"Immaterial Subsidiary" means each Subsidiary of the Borrower which (a)
for the most recent Fiscal Year of the Borrower had less than $100,000 of
revenues and (b) as of the end of such Fiscal Year was the owner of less than
$100,000 of assets, all as shown on the Consolidated financial statements of the
Borrower for such Fiscal Year.
"Indemnified Party" has the meaning specified in Section 11.4(b).
"Initial Extension of Credit" means the earlier to occur of the initial
Borrowing and the initial issuance of a Letter of Credit.
"Initial Lenders" has the meaning specified in the recitals to this
Agreement.
"Initial Public Offering" means the initial firm commitment Public
Offering of the common stock of the Borrower.
"Insufficiency" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"Insurance Subsidiary" means any Subsidiary of the Borrower engaged
solely in the medical malpractice insurance business, workers compensation and
such other insurance business as may be approved by Fleet and Bank of America,
for the underwriting of insurance policies for the Borrower and its Subsidiaries
and each Related Professional Corporation and each of such Loan Party's or
Related Professional Corporation's respective employees, officers, directors or
contractors who provides professional medical services to patients; provided
that in the event that less then 100% of the capital stock of such Insurance
Subsidiary is pledged to the Administrative Agent, such Insurance Subsidiary
shall be wholly-owned by a special purpose domestic Wholly Owned Subsidiary of
the Borrower organized solely to hold such capital stock.
"Intellectual Property Security Agreement" has the meaning specified in
Section 3.1(a).
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"Interest Expense" means, with respect to any Person for any period,
interest expense on all Debt of such Person for such period net of interest
income for such period, whether paid or accrued, determined on a Consolidated
basis for such Person and its Subsidiaries and in accordance with GAAP, and
including, without limitation, (a) in the case of the Borrower, interest expense
in respect of Debt resulting from Advances, (b) the interest component of all
obligations under Capitalized Leases, (c) commissions, discounts and other fees
and charges payable in connection with letters of credit (including, without
limitation, Letters of Credit), (d) the net payment, if any, payable in
connection with Hedge Agreements less the net credit, if any, received in
connection with Hedge Agreements and (e) all fees paid by the Borrower pursuant
to Section 2.8(a). Interest Expense shall also include, regardless of treatment
of such amounts in accordance with GAAP, lease or other similar payments under
synthetic leases, tax retention operating leases, off-balance sheet loans or
similar off-balance sheet financing products to the extent that such payments
would be considered interest expense for tax purposes. Following any Permitted
Acquisition occurring after the Closing Date, Interest Expense for any period
prior to the closing date of such Permitted Acquisition, shall be calculated on
a pro-forma basis in the manner set forth in the definition of Permitted
Acquisition.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Advance or the date of the Conversion of any Prime Rate Advance into such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months or, if all affected Lenders have agreed, nine or twelve
months, as the Borrower may, upon notice received by the Administrative Agent
not later than 11:00 A.M. (New York time) on the third Business Day prior to the
first day of such Interest Period, select; provided, however, that:
(a) The Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance under a Facility that ends after
any principal repayment installment date for such Facility unless,
after giving effect to such selection, the aggregate principal amount
of Prime Rate Advances and of Eurodollar Rate Advances having Interest
Periods that end on or prior to such principal repayment installment
date for such Facility shall be at least equal to the aggregate
principal amount of Advances under such Facility due and payable on or
prior to such date;
(b) Whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar
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month, the last day of such Interest Period shall occur on the next
preceding Business Day; and
(c) Whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month, such Interest Period shall end on the last Business Day
of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Inventory" of any Person means all of such Person's now owned and
hereafter acquired inventory, goods, merchandise and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, other materials and supplies of any
kind, nature or description which are or might be consumed in such Person's
business or used in connection with the packing, shipping, advertising, selling
or finishing of such goods, merchandise and such other personal property, and
all documents of title or other documents representing them.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership or
profit interest, warrants, rights, options, obligations or other securities of
such Person, any capital contribution to such Person or any other investment in
such Person, including, without limitation, any arrangement pursuant to which
the investor incurs Debt of the types referred to in clause (i) or (j) of the
definition of "Debt" in respect of such Person. The amount of any Investment by
any Person on any date of determination shall be the acquisition price of the
gross assets acquired (including any liability assumed by such Person to the
extent such liability would be reflected on a balance sheet prepared in
accordance with GAAP) plus all additional capital contributions or purchase
price paid in respect thereof, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment minus the amount of all cash returns of principal or capital thereon,
cash dividends thereon and other cash returns on investment thereon or
liabilities expressly assumed by another Person (other than Borrower or another
Subsidiary of Borrower) in connection with the sale of such Investment. Whenever
the term "outstanding" is used in this Agreement with reference to an
Investment, it shall take into account the matters referred to in the preceding
sentence.
"Issuing Bank" means each of Fleet and Bank of America and each
Eligible Assignee to which a Letter of Credit Commitment hereunder has been
assigned pursuant to Section 11.7.
"L/C Cash Collateral Account" has the meaning specified in the
Preliminary Statements to the Security Agreement.
"L/C Related Documents" has the meaning specified in Section
2.4(e)(ii)(A).
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"Lender Party" means any Lender, any Issuing Bank or the Swing Line
Bank.
"Lenders" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 11.7.
"Letter of Credit" means any Letter of Credit issued hereunder (as
specified in Section 2.3(a)).
"Letter of Credit Advance" means an advance made by any Issuing Bank or
any Revolving Credit Lender pursuant to Section 2.3(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.3(a).
"Letter of Credit Commitment" means, with respect to any Issuing Bank,
the amount set forth opposite such Issuing Bank's name on Schedule I hereto
under the caption "Letter of Credit Commitment" or, if such Issuing Bank has
entered into one or more Assignments and Acceptances, set forth for such Issuing
Bank in the Register maintained by the Administrative Agent pursuant to Section
11.7(d) as such Issuing Bank's "Letter of Credit Commitment", as such amount may
be reduced at or prior to such time pursuant to Section 2.5.
"Letter of Credit Facility" means, at any time, an amount equal to the
amount of the Issuing Banks' Letter of Credit Commitments at such time, as such
amount may be reduced pursuant to Section 2.5.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"Loan Documents" means (a) this Agreement, (b) the Notes, (c) each
Guaranty, (d) the Collateral Documents, (e) each Letter of Credit Agreement, (f)
each Additional Collateral Document, and all other agreements, instruments and
documents executed in connection therewith, in each case as the same may at any
time be amended, supplemented, restated or otherwise modified and in effect.
"Loan Parties" means the Borrower and each Guarantor.
"Majority Lenders" of any Facility shall mean those Lenders (other than
Defaulting Lenders) which would constitute the Required Lenders under, and as
defined in, this Agreement if all outstanding Obligations of other Facilities
under this Agreement were repaid in full and all Commitments with respect
thereto were terminated.
-21-
"Management Fees" means for any period, all management fees, emoluments
or similar compensation paid to or incurred with respect to any Person (other
than any such fees, emoluments or similar compensation paid to or incurred and
payable to any Loan Party in respect of services rendered in connection with the
management or supervision of the management of any Loan Party), other than (a)
salaries, bonuses and other compensation paid to any full-time employee in
respect of such full-time employment and (b) fees, emoluments or similar
compensation paid or incurred in the ordinary course of business by any Loan
Party to any Person who is not an Affiliate thereof or to any Related
Professional Corporation in accordance with its contractual requirements.
"Management Services Agreement" means the Management Services Agreement
dated March 12, 1999 between the Borrower and each of the Sponsors as in effect
on the date hereof, as amended to the extent permitted under this Agreement.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change (including
any event which, in the opinion of the Agents, is reasonably likely to result in
such a material adverse change) in (a) the business, assets, liabilities (actual
or contingent), operations, condition (financial or otherwise) or management of
the Borrower and its Subsidiaries (taken as a whole), or (b) the ability of any
Loan Party to perform its obligations under the Loan Documents to which it is a
party.
"Material Adverse Effect" has the meaning specified in Section 3.1(e).
"Material Contract" means, with respect to any Person, each contract or
group of similar contracts with the same or affiliated parties which account for
greater than 5% of the Consolidated revenue of the Borrower and its
Subsidiaries, each contract which is a replacement or a substitute for any
contract listed on such Schedule and each other contract to which such Person is
a party which is material to the business, condition (financial or otherwise),
operations, performance, properties or prospects of such Person.
"Mortgage" means each mortgage, deed of trust or other similar document
executed and delivered by the appropriate Loan Party, in form and substance
acceptable to the Administrative Agent and the Lenders in order (a) to provide
that such Loan Party is the mortgagor or grantor, (b) to comply with and/or
provide for specific laws of the jurisdictions in which the property to be
encumbered is located, and (c) to assure that the Administrative Agent for the
benefit of the Secured Parties has a perfected Lien on the Mortgaged Property.
"Mortgage Policies" has the meaning assigned to that term in Section
3.1(a)(iii)(B).
-22-
"Mortgaged Property" means any parcel (or adjoining parcels) of real
property acquired by the Borrower or any of is Subsidiaries after the Closing
Date which has a fair market value in excess of $1,000,000.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and at least one Person other than the Borrower
and the ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069
of ERISA in the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any Asset Disposition or any
Debt Issuance or Equity Issuance by any Person, or any Extraordinary Receipt
received by or paid to or for the account of any Person, the aggregate amount of
cash received from time to time (whether as initial consideration or through
payment or disposition of deferred consideration) by or on behalf of such Person
in connection with such transaction after deducting therefrom only (without
duplication) (a) reasonable commissions, underwriting fees and discounts, legal
fees, accountants' fees, investment banker's fees, finder's fees and other
out-of-pocket fees and expenses incurred in connection therewith, (b) the amount
of taxes payable in connection with or as a result of such transaction and (c)
with respect to any asset, the amount of any Debt secured by a Lien on such
asset that, by the terms of such transaction, is required to be repaid upon such
disposition, in the case of (a) or (c) above to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of such cash,
actually paid to a Person that is not an Affiliate of such Person or the
Borrower or any Affiliate of the Borrower and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Income" and "Net Loss" mean, respectively, with respect to any
period, the aggregate of the net income (loss) of the Person in question for
such period, determined in accordance with GAAP on a consolidated basis;
provided that (i) the net income (loss) of any Person which is not a
consolidated Subsidiary shall be included only to the extent of the amount of
cash dividends or distributions paid to the Person in question or to a
consolidated Subsidiary of such Person and (ii) the net income (loss) of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded.
"Note" means a Term A Note, a Term B Note or a Revolving Credit Note.
"Notice of Borrowing" has the meaning specified in Section 2.2(a).
"Notice of Issuance" has the meaning specified in Section 2.3(a).
-23-
"Notice of Renewal" has the meaning specified in Section 2.1(e).
"Notice of Swing Line Borrowing" has the meaning specified in Section
2.2(b).
"Notice of Termination" has the meaning specified in Section 2.1(e).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 9.4. Without limiting the generality of the foregoing, the Obligations
of the Loan Parties under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts payable by any
Loan Party under any Loan Document, (b) the obligation of any Loan Party to
reimburse any amount in respect of any of the foregoing that any Lender Party
may, after the occurrence and during the continuance of an Event of Default,
elect to pay or advance on behalf of such Loan Party in accordance with the
terms of this Agreement, and (c) any other obligations arising out of or under
the Loan Documents.
"OECD" means the Organization for Economic Cooperation and Development.
"Other Taxes" has the meaning specified in Section 2.12(b).
"Outstanding Letters of Credit" has the meaning specified in Section
2.3(e).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Acquisitions" means any acquisition by the Borrower or any
Subsidiary Guarantor of all or substantially all of the assets or the capital
stock of any Person or a division or branch of any Person which either (a) has
been consented to in writing by the Agents and the Required Lenders, or (b)
complies with each of the following: (i) such Person is engaged in substantially
the same or similar line of business as one or more businesses of the Borrower
or any of its Subsidiaries, (ii) the aggregate consideration (including for
purposes hereof, any Debt (including for purposes of this definition, Earnout
Obligations) assumed by the Borrower or any of its Subsidiaries in connection
with such acquisition, but excluding for purposes hereof, (A) any common stock
of the Borrower or Preferred Stock and (B) Qualified Debt Securities which do
not require payment of interest in cash until after the Termination Date, in
each case issued in connection with such acquisition) payable in respect of any
individual acquisition shall not exceed $20,000,000; (iii) the aggregate
consideration (including for purposes hereof, any Debt
-24-
(including for purposes of this definition, Earnout Obligations) assumed by the
Borrower or any of its Subsidiaries in connection with such acquisition, but
excluding for purposes hereof, (A) any common stock of the Borrower or Preferred
Stock and (B) Qualified Debt Securities which do not require payment of interest
in cash until after the Termination Date, in each case issued in connection with
such acquisition) payable in respect of acquisitions contemplated by this
definition shall not exceed for all such acquisitions $40,000,000 in any twelve
(12) month period ending on the last day of the calendar month immediately
preceding the closing of the proposed acquisition; (iv) after giving effect to
the proposed acquisition on a pro forma basis for the period (the "Pro Forma
Period") of four fiscal quarters of the Borrower ending with the fiscal quarter
for which financial statements have most recently been delivered (or were
required to be delivered) under Section 7.3 or 7.4, as applicable (on the basis
that (A) any Debt incurred or assumed in connection with such acquisition was
incurred or assumed at the beginning of the Pro Forma Period, (B) if such Debt
bears a floating interest rate, such interest shall be paid over the Pro Forma
Period at the rate in effect on the date of such acquisition and (C) all income
and expense associated with the assets or entity acquired in connection with
such acquisition for the most recently ended four fiscal quarter period for
which such income and expense amounts are available (with good faith estimates
thereof being permitted if financial statements indicating such amounts are not
available) shall be treated as being earned or incurred by the Borrower over the
Pro Forma Period on a pro forma basis), the Borrower is in compliance with the
financial covenants set forth in Sections 8.2 and 8.3 and the Borrower shall
deliver a certificate setting forth in reasonable detail the basis for
calculation of such financial covenants; provided, that the Borrower shall not
be required to deliver such certificate for any individual acquisition the
aggregate consideration (calculated as set forth above) for which is less than
$10,000,000 unless and until the aggregate amount of acquisitions in any Fiscal
Year exceeds $20,000,000, (v) after giving effect to the proposed acquisition
and payment of all costs and expenses in connection therewith, the Revolving
Credit Commitments of all Lenders minus the sum of Revolving Advances plus
Letter of Credit Advances plus Swing Line Advances plus the aggregate Available
Amount of all Letters of Credit then outstanding shall equal at least
$7,500,000, (vi) the Borrower shall give the Agents and the Lenders not less
than ten (10) Business Days prior written notice of its intention to make a
Permitted Acquisition, such notice to include the proposed amounts, date and
form of the proposed transaction, a reasonable description of the stock or
assets to be acquired and the location of all assets, a description and
calculation in reasonable detail of the pro forma effect of such acquisition on
the financial covenants contained in Sections 8.2 and 8.3, (vii) concurrently
with the making of a Permitted Acquisition consisting of assets, the Borrower
shall, as additional collateral security for the Obligations, grant, or cause to
be granted, to the Administrative Agent for the ratable benefit of the Lenders,
prior Liens (subject to Liens permitted pursuant to Section 6.1) on and security
interests in any of the acquired assets by the execution and delivery to the
Administrative Agent of such agreements, instruments and documents as shall be
reasonably satisfactory in form and substance to the Administrative Agent,
(viii) such acquisition has not been preceded by an unsolicited tender offer for
such Person by the Borrower or any of its Affiliates, (ix) the assets or Person
to be acquired are located in the United States except to the extent that the
purchase price therefor is or
-25-
would be permitted as an Investment in a Foreign Subsidiary under Section
6.5(a), and (x) the Borrower shall not make any acquisition at any time during
which a Default or an Event of Default shall exist and be continuing or would
exist after giving effect to such acquisition. For purposes hereof, the Spectrum
Acquisition shall be deemed to be a "Permitted Acquisition" and shall not be
counted towards any of the limitation amounts set forth in this definition.
"Permitted Investment" has the meaning specified in Section 6.5.
"Permitted Liens" means the following (as to which any proceeding
commenced for the enforcement of any such Liens shall have been stayed or
suspended within thirty (30) days of the commencement thereof and only to the
extent that provisions for the payment of such Liens has been made on the books
of such Person to the extent required by GAAP): (a) Liens for taxes, assessments
and governmental charges or levies not yet due and payable or Liens for taxes,
assessments and governmental charges or levies which are being contested in good
faith or are overdue less than ninety (90) days; (b) Liens imposed by law, such
as lessor's, materialmen's, mechanics', carriers', workmen's, landlord's and
repairmen's Liens and other similar Liens arising in the ordinary course of
business which do not materially detract from the property or which are being
contested in good faith or securing obligations that are not overdue for a
period of more than sixty (60) days; (c) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation, to secure
public or statutory obligations or to secure the performance of tenders, bids,
trade contracts, leases, surety and appeal bonds, performance and
return-of-money bonds and other obligations of a like nature; and (d) Permitted
Real Property Encumbrances.
"Permitted Real Property Encumbrances" means, with respect to any
particular Mortgaged Property, (i) those liens, encumbrances and other matters
affecting title to any Mortgaged Property listed in the Mortgage Policies in
respect thereof and as of the date of delivery of such Mortgage Policies to the
Administrative Agent in accordance with the terms hereof, reasonably acceptable
to the Lenders, (ii) such easements, encroachments, covenants, rights of way,
minor defects, irregularities or encumbrances on title which do not arise out of
the incurrence of any Debt and which do not materially impair the use of such
Mortgaged Property for the purpose for which it is held by the mortgagor
thereof, or the Lien granted to the Administrative Agent for the benefit of the
Secured Parties, and (iii) municipal and zoning ordinances; provided that no
violation exists thereunder that could materially impair the use of the existing
improvements and the present use made by the mortgagor thereof of the Premises
(as defined in the respective Mortgage).
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
-26-
"Post-Default Rate" means (a) in respect of any Advances a rate per
annum equal to: (i) if such Advances are Prime Rate Advances, 2% above the Prime
Rate as in effect from time to time plus the Applicable Margin for Prime Rate
Advances (but in no event less than the interest rate in effect on the due
date), or (ii) if such Advances are Eurodollar Rate Advances, 2% above the rate
of interest in effect thereon at the time of the Event of Default that resulted
in the Post-Default Rate being instituted until the end of the then current
Interest Period therefor and, thereafter, 2% above the Prime Rate as in effect
from time to time plus the Applicable Margin for Prime Rate Advances (but in no
event less than the interest rate in effect on the due date); and (b) in respect
of other amounts payable by the Borrower hereunder (other than legal fees and
other expenses) not paid when due (whether at stated maturity, by acceleration
or otherwise), a rate per annum during the period commencing on the due date
until such other amounts are paid in full equal to 2% above the Prime Rate as in
effect from time to time plus the Applicable Margin for Prime Rate Advances (but
in no event less than the interest rate in effect on the due date).
"Preferred Stock" means class A preferred stock of Borrower, par value
$.01 per share.
"Prime Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by Fleet in
Boston, Massachusetts, from time to time, as Fleet's prime rate, which
is not necessarily the lowest rate made available by Fleet; or
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"Prime Rate Advance" means an Advance that bears interest as provided
in Section 2.7(a)(i).
"Pro Forma Cost Reduction" means with respect to any Permitted
Acquisition, if requested by the Borrower pursuant to the succeeding sentence,
the amount of factually supportable and identifiable pro forma cost savings
directly attributable to operational efficiencies expected to be created by the
Borrower with respect to such Permitted Acquisition which efficiencies can be
reasonably computed (based on the four (4) fiscal quarters immediately preceding
the date of such proposed acquisition) and are approved by the Administrative
Agent in its sole discretion acting in good faith; provided, that cost savings
in connection with a Permitted Acquisition (together with cost savings in
connection with other Permitted Acquisitions consummated during the prior twelve
(12) months) shall not exceed six percent (6%) of EBITDA of the Borrower and its
Subsidiaries for the most recently ended four (4) fiscal quarters of the
Borrower (inclusive of Pro Forma Cost Reductions) without the consent of the
Required Lenders. If the Borrower desires to have, with respect to any Permitted
Acquisition, the amount of pro forma cost savings directly attributable to the
aforementioned operational efficiencies treated as part of the term Pro Forma
Cost Reduction, then the Borrower shall so
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notify the Administrative Agent and provide written detail with respect thereto
not less than five (5) Business Days prior to the proposed date of consummation
of such Permitted Acquisition.
"Pro Forma Period" has the meaning specified in the definition of
"Permitted Acquisitions".
"Pro Rata Share" of any amount means, with respect to any Revolving
Credit Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Revolving Credit Commitment at
such time and the denominator of which is the Revolving Credit Facility at such
time.
"Public Offering" shall mean an underwritten public offering of common
stock of the Borrower (or its successors) pursuant to a registration statement
filed under the Securities Act and declared effective by the U.S. Securities and
Exchange Commission.
"Qualified Debt Securities" means unsecured notes issued by the
Borrower or any of its Subsidiaries in connection with a Permitted Acquisition
so long as the terms of any such note (i) do not provide any collateral
security, (ii) do not provide any guaranty or other support by the Borrower (if
such securities are issued by a Subsidiary of the Borrower) or any Subsidiaries
of the Borrower (if such securities are issued by the Borrower), (iii) do not
contain any mandatory put, redemption, sinking fund or other similar provision
occurring prior to the Termination Date, (iv) are no less favorable (including
the subordination provisions contained therein) to the Borrower or the Lenders
than the provisions of the Subordinated Notes and (v) do not provide for the
payment of principal prior to the date which is one (1) year following the
Termination Date.
"Qualified Initial Public Offering" means an Initial Public Offering in
which (a) the aggregate gross offering proceeds at the public offering price
equals or exceeds $100,000,000 and (b) following which the common stock are
listed for trading on The Nasdaq National Market, the New York Stock Exchange or
the American Stock Exchange.
"Recapitalization Agreement" means that certain Recapitalization
Agreement dated as of January 25, 1999 by and among the Borrower, Pacific
Physician Services, Inc., MedPartners, Inc. and Holdings as amended, modified
and supplemented from time to time.
"Recapitalization Documents" means the Recapitalization Agreement and
all other agreements, instruments, certificates and other documents to be
entered into or delivered by any party to the Recapitalization Agreement in
connection with the consummation of the transactions contemplated by the
Recapitalization Agreement.
"Redemption Agreement" has the meaning specified in the Preliminary
Statements.
"Reduction Amount" has the meaning specified in Section 2.6(b)(vi).
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"Register" has the meaning specified in Section 11.7(d).
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulatory Agency" means any federal, state, local or other U.S. or
foreign governmental authority, bureau or agency (including, without limitation,
any board of insurance, insurance department or insurance commissioner and any
taxing authority or political subdivision).
"Related Parties" means, with respect to any Sponsor, (i) any
controlling stockholder or partner, eighty percent (80%) (or more) owned
Subsidiary, or spouse or immediate family member (in the case of an individual)
of such Sponsor, or (ii) any trust, corporation, partnership or other entity,
the beneficiaries, stockholders, partners, owners or Persons beneficially
holding a fifty-one percent (51%) or more controlling interest of which consist
of such Sponsor and/or such other Persons referred to in the immediately
preceding clause (i).
"Related Professional Corporation" means each professional corporation
which has entered into a management agreement with the Borrower, any of its
Subsidiaries or any other Related Professional Corporation, other than a
professional corporation with respect to which (i) the Borrower does not have
the right to designate or replace the sole shareholder (or a majority of the
shareholders, if applicable) pursuant to an agreement between such professional
corporation and the Borrower, any of its Subsidiaries or any Related
Professional Corporation and (ii) the Borrower does not have the right to
participate, directly or indirectly, in the profits or losses of such
professional corporation in accordance with the applicable management agreement,
provided, that in any event, it includes as of the date hereof the entities
listed as a "Related Professional Corporation" on the Organization Schedule
attached hereto.
"Remedial" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(24) and/or any other applicable Environmental Laws.
"Removal" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(23) and/or any other applicable Environmental Laws.
"Required Lenders" means at any time Lenders (other than Defaulting
Lenders) the sum of whose outstanding Term A Advances, Term B Advances and
Revolving Credit Commitments (or, if after the Revolving Credit Facility has
been terminated, outstanding Revolving Credit
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Advances) constitute greater than 50% of the sum of (a) the aggregate principal
amount of the Term A Advances and Term B Advances (in each case owing to Lenders
which are not Defaulting Lenders) outstanding at such time and (b) the Revolving
Credit Facility less the aggregate Revolving Credit Commitments of Defaulting
Lenders (or, if after the Revolving Credit Facility has been terminated,
outstanding Revolving Credit Advances of Revolving Credit Lenders (other than
Defaulting Lenders)). For purposes of this definition, the aggregate principal
amount of Swing Line Advances owing to the Swing Line Bank, Letter of Credit
Advances owing to the Issuing Banks and the Available Amount of each Letter of
Credit shall be considered to be owed to the Revolving Credit Lenders ratably in
accordance with their respective Revolving Credit Commitments.
"Response" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(25) and/or any other applicable Environmental Laws.
"Responsible Officer" means, with respect to any Loan Party, the Chief
Executive Officer, the President, the Chief Financial Officer, the Chief
Operating Officer, any Executive Vice President, any Vice President, the
Controller or the Treasurer of such Loan Party.
"Revolving Credit Advance" has the meaning specified in Section 2.1(c).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Revolving
Credit Lenders.
"Revolving Credit Commitment" means, with respect to any Revolving
Credit Lender at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Revolving Credit Commitment" or, if such
Lender has entered into one or more Assignments and Acceptances, set forth for
such Lender in the Register maintained by the Administrative Agent pursuant to
Section 11.7(d) as such Lender's "Revolving Credit Commitment," as such amount
may be reduced at or prior to such time pursuant to this Agreement.
"Revolving Credit Facility" means, at any time, the aggregate amount of
the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Lender" means any Lender that has a Revolving Credit
Commitment.
"Revolving Credit Note" means a promissory note of the Borrower payable
to the order of any Revolving Credit Lender, in substantially the form of
Exhibit B hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the Revolving Credit Advances made by such Lender.
"Revolving Credit Termination Date" means the earlier of (a) the fifth
anniversary of the Closing Date, and (b) the Termination Date.
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"Secured Parties" means the Administrative Agent, the Lender Parties,
and the Hedge Banks and the other Persons the Obligations owing to which are or
are purported to be secured by the Collateral under the terms of the Collateral
Documents.
"Security Agreement" has the meaning specified in Section 3.1(a).
"Sellers" has the meaning specified in the Preliminary Statements.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and no Person other than the Loan Parties and
the ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4069 of ERISA
in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
saleable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay such debts and liabilities as they mature and (d) such Person is
not engaged in business or a transaction, and is not about to engage in business
or a transaction, for which such Person's property would constitute an
unreasonably small capital as then presently conducted. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Spectrum Acquisition" has the meaning specified in the Preliminary
Statements.
"Spectrum Acquisition Agreement" has the meaning specified in the
Preliminary Statements.
"Spectrum Acquisition Documents" means the Spectrum Acquisition
Agreement, the Redemption Agreement and all other agreements, instruments,
certificates and other documents to be entered into or delivered by any party to
the Spectrum Acquisition Agreement or the Redemption Agreement in connection
with the consummation of the transactions contemplated by the Spectrum
Acquisition Agreement and the Redemption Agreement.
"Sponsor" or "Sponsors" means any or all (as the context may require)
of Madison Dearborn Capital Partners II, LP, Cornerstone Equity Investors IV,
L.P., Healthcare Equity Partners, LP and each of their respective Related
Parties.
"Standby Letter of Credit" means any Letter of Credit other than a
Trade Letter of Credit.
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"Stockholders Agreement" means the stockholders agreement dated March
12, 1999 among the Borrower, MedPartners, Inc., Holdings and Pacific Physician
Services, Inc. and other parties thereto from time to time, as amended, modified
and supplemented from time to time to the extent permitted under this Agreement.
"Subordinated Debt" means (i) any Debt of the Borrower that is
subordinated to the Obligations of the Borrower under the Loan Documents on, and
that otherwise contains, terms and conditions substantially similar to that of
the Subordinated Notes and satisfactory to the Administrative Agent and (ii) the
Subordinated Notes.
"Subordinated Debt Financing" means Subordinated Debt of the Borrower
in an amount of not less than $100,000,000 evidenced by the Subordinated Notes.
"Subordinated Notes" means (i) the subordinated notes, if any, issued
by the Borrower pursuant to the Subordinated Notes Indenture and (ii) the
subordinated notes, if any, issued in exchange for such subordinated notes in an
exchange offer pursuant to the Subordinated Notes Indenture and on terms and
conditions reasonably satisfactory to the Administrative Agent.
"Subordinated Notes Indenture" means the Indenture dated as of March
12, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company of New York, as
trustee, as amended, modified and supplemented from time to time in accordance
with the terms hereof.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate, is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries. Unless otherwise specified
herein, the term Subsidiary shall mean a Subsidiary of the Borrower.
"Subsidiary Guarantor" means each Domestic Subsidiary (other than
Immaterial Subsidiaries and the Insurance Subsidiary) of the Borrower and each
Person who shall have executed and delivered or become party to a Subsidiary
Guaranty.
"Subsidiary Guaranty" has the meaning specified Section 3.1(a).
"Surviving Debt" shall have the meaning specified in Section 4.18(b).
"Swing Line Advance" means an advance made by (a) the Swing Line Bank
pursuant to Section 2.1(d) or (b) any Revolving Credit Lender pursuant to
Section 2.2(b).
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"Swing Line Bank" has the meaning specified in the recital of parties to
this Agreement.
"Swing Line Borrowing" means a borrowing consisting of a Swing Line
Advance made by the Swing Line Bank.
"Swing Line Facility" has the meaning specified in Section 2.1(d).
"Syndication Agent" has the meaning specified in the recitals to this
Agreement.
"Target" has the meaning specified in the Preliminary Statements.
"Taxes" has the meaning specified in Section 2.12(a).
"Term A Advance" has the meaning specified in Section 2.1(a).
"Term A Borrowing" means a borrowing consisting of simultaneous Term A
Advances of the same Type made by the Term A Lenders.
"Term A Commitment" means, with respect to any Term A Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term A Commitment" or, if such Lender has entered into one or
more Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 11.7(d) as such
Lender's "Term A Commitment," as such amount may be reduced at or prior to such
time pursuant to Section 2.5.
"Term A Facility" means, at any time, the aggregate amount of the Term A
Lenders' Term A Commitments at such time.
"Term A Lender" means any Lender that has a Term A Commitment.
"Term A Note" means a promissory note of the Borrower payable to the
order of any Term A Lender, in substantially the form of Exhibit C hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term A Advance made by such Lender.
"Term Advances" means the Term A Advance and the Term B Advance.
"Term B Advance" has the meaning specified in Section 2.1(b).
"Term B Borrowing" means a borrowing consisting of simultaneous Term B
Advances of the same Type made by the Term B Lenders.
"Term B Commitment" means, with respect to any Term B Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term B Commitment" or, if such Lender has entered into one or
more Assignments and Acceptances, set
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forth for such Lender in the Register maintained by the Administrative Agent
pursuant to Section 11.7 as such Lender's "Term B Commitment", as such amount
may be reduced at or prior to such time pursuant to Section 2.5.
"Term B Facility" means, at any time, the aggregate amount of the Term B
Lenders' Term B Commitments at such time.
"Term B Lender" means any Lender that has a Term B Commitment.
"Term B Note" means a promissory note of the Borrower payable to the
order of any Term B Lender, in substantially the form of Exhibit D hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term B Advance made by such Lender.
"Term Facilities" means the Term A Facility and the Term B Facility.
"Termination Date" means the date of termination in whole of the
Commitments pursuant to Section 2.5 or Article 9.
"Trade Letter of Credit" means any Letter of Credit that is issued for
the benefit of a supplier of Inventory or Equipment to the Borrower or any of
its Subsidiaries to effect payment for such Inventory or Equipment, the
conditions to drawing under which include the presentation to the applicable
Issuing Bank of negotiable bills of lading, invoices and related documents
sufficient, in the judgment of such Issuing Bank, to create a valid and
perfected Lien on or security interest in such Inventory, bills of lading,
invoices and related documents in favor of such Issuing Bank.
"Transaction" means the transactions contemplated by the Spectrum
Acquisition Documents, and the Loan Documents.
"Type" refers to the distinction between Advances bearing interest at
the Prime Rate and Advances bearing interest at the Eurodollar Rate.
"Unused Revolving Credit Availability" means, as of any date, the amount
by which the Revolving Credit Facility exceeds the sum of the aggregate
principal amount of all Revolving Credit Advances plus Swing Line Advances plus
Letter of Credit Advances plus the aggregate Available Amount of all Letters of
Credit, in each case outstanding at such time.
"Unused Revolving Credit Commitment" means, with respect to any
Revolving Credit Lender, at any time, (a) such Lender's Revolving Credit
Commitment at such time minus (without duplication) (b) the sum of (i) the
aggregate principal amount of all Revolving Credit Advances and Letter of Credit
Advances made by such Lender (in its capacity as a Lender) and outstanding at
such time, plus (ii) such Lender's Pro Rata Share of (A) the aggregate Available
Amount of all Letters of Credit outstanding at such time and (B) the aggregate
principal amount
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of all Letter of Credit Advances made by the Issuing Banks pursuant to Section
2.3(c) and outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of the Borrower or in respect of which
any Loan Party could have liability.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person of which securities (except for directors' or other qualifying shares) or
other ownership interests representing 100% of the equity or 100% of the
ordinary voting power or 100% of the general partnership interests are, at the
time any determination is being made, owned, controlled or held by such Person
or one or more wholly owned Subsidiaries of such Person or by such Person and
one or more wholly owned Subsidiaries of such Person.
"Working Capital" means, for any period, Consolidated Current Assets
(excluding cash, Cash Equivalents and the current portion of any deferred income
taxes included in Consolidated Current Assets) of the Borrower and its
Subsidiaries during such period minus Consolidated Current Liabilities of the
Borrower and its Subsidiaries (excluding Consolidated Current Liabilities
arising out of Debt permitted pursuant to Section 6.2, the current portion of
any deferred income taxes included in Consolidated Current Liabilities,
Consolidated Current Liabilities relating to the purchase of an insurance policy
covering tail insurance from a third party insurer and Consolidated Current
Liabilities relating to the reserves of any Insurance Subsidiary, if
applicable).
"Withdrawal Liabilities" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
SECTION 1.2 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.3 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.6 or changes thereto described on
Schedule 1.3 ("GAAP"). Except as otherwise expressly provided herein, all
computations and determinations for purposes of determining compliance with the
financial requirements of this Agreement shall be made in accordance with GAAP
in effect in the United States of America on a basis consistent with the
presentation of the financial statements delivered
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pursuant to Section 4.6. It being understood that all financial statements
delivered pursuant to Section 7 shall be prepared in accordance with GAAP as in
effect on the date of their respective preparation. In the event that any
"Accounting Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or terms
in this Agreement, then the Borrower and the Administrative Agent agree to enter
into negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors thereto or
agencies with similar functions).
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.1 The Advances.
(a) The Term A Advances. Each Term A Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "Term A
Advance") to the Borrower on the Closing Date in an amount not to exceed such
Lender's Term A Commitment at such time. The Term A Borrowing shall consist of
Term A Advances made simultaneously by the Term A Lenders ratably according to
their Term A Commitments. Amounts borrowed under this Section 2.1(a) and repaid
or prepaid may not be reborrowed.
(b) The Term B Advances. Each Term B Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "Term B
Advance") to the Borrower on the Closing Date in an amount not to exceed such
Lender's Term B Commitment at such time. The Term B Borrowing shall consist of
Term B Advances made simultaneously by the Term B Lenders ratably according to
their Term B Commitments. Amounts borrowed under this Section 2.1(b) and repaid
or prepaid may not be reborrowed.
(c) The Revolving Credit Advances. Each Revolving Credit Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "Revolving Credit Advance") to the Borrower from time to time
on any Business Day during the period from the date hereof (other than on the
Closing Date) until the Revolving Credit Termination Date in an amount for each
such Advance not to exceed such Lender's Unused Revolving Credit
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Commitment at such time; provided, however, that no Revolving Credit Lender
shall have any obligation to make a Revolving Credit Advance under this Section
2.1(c) to the extent such Revolving Credit Advance would (combined with all
other Revolving Credit Advances and after giving effect to any immediate
application of the proceeds thereof) exceed the Unused Revolving Credit
Availability at such time. Each Revolving Credit Borrowing shall be in an
aggregate amount of $1,000,000 or an integral multiple of $100,000 (other than,
in each case, a Borrowing the proceeds of which shall be used solely to repay or
prepay in full outstanding Swing Line Advances, outstanding Letter of Credit
Advances or Advances requested by the Administrative Agent to cover fees or
other amounts due under this Agreement) and shall consist of Revolving Credit
Advances made simultaneously by the Revolving Credit Lenders ratably according
to their Revolving Credit Commitments. Within the limits of each Revolving
Credit Lender's Unused Revolving Credit Commitment in effect from time to time,
the Borrower may borrow, repay and reborrow Revolving Credit Advances. No
Revolving Credit Advances shall be made to the Borrower on the Closing Date.
(d) The Swing Line Advances. The Borrower may request the Swing Line
Bank to make, and the Swing Line Bank agrees to make, on the terms and
conditions hereinafter set forth, Swing Line Advances to the Borrower from time
to time on any Business Day during the period from the date hereof until the
Revolving Credit Termination Date (i) in an aggregate amount not to exceed at
any time outstanding $10,000,000 (the "Swing Line Facility") and (ii) in an
amount for each such Swing Line Borrowing not to exceed (after giving effect to
any immediate application of the proceeds thereof) the Unused Revolving Credit
Availability at such time. No Swing Line Advance shall be used for the purpose
of funding the payment of principal of any other Swing Line Advance. Each Swing
Line Borrowing shall be made as a Prime Rate Advance. Within the limits of the
Swing Line Facility and within the limits referred to in clause (ii) above, the
Borrower may borrow and reborrow under this Section 2.1(d) and may repay or
prepay the Swing Line Advances at such times prior to the Termination Date, and
in such integral multiples, as the Borrower may elect.
(e) Letters of Credit. Each Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit for the account of
the Borrower from time to time on any Business Day during the period from the
Closing Date until thirty (30) days before the Revolving Credit Termination Date
(i) in an aggregate Available Amount for all Letters of Credit not to exceed at
any time the Issuing Banks' Letter of Credit Commitments at such time and (ii)
in an Available Amount for each such Letter of Credit not to exceed (after
giving effect to any immediate application of the proceeds thereof) the Unused
Revolving Credit Availability at such time. No Letter of Credit shall have an
expiration date (including all rights of the Borrower or the beneficiary to
require renewal) later than the earlier of (A) thirty (30) days before the
Revolving Credit Termination Date, (B) in the case of a Standby Letter of
Credit, 365 days after the date of issuance thereof and (C) in the case of a
Trade Letter of Credit, 365 days after the date of issuance thereof. The
foregoing notwithstanding, any Standby Letter of Credit may, by its terms, be
renewable annually upon notice (a "Notice of Renewal") given to the applicable
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Issuing Bank and the Administrative Agent on or prior to any date for notice of
renewal set forth in such Letter of Credit (but in any event at least five (5)
Business Days prior to the date of the proposed renewal of such Standby Letter
of Credit) and upon fulfillment of the applicable conditions set forth in
Article 3 unless such Issuing Bank shall have notified the Borrower (with a copy
to the Administrative Agent) on or prior to the date for notice of termination
set forth in such Letter of Credit (but in any event at least thirty (30)
Business Days prior to the date of automatic renewal) of its election not to
renew such Standby Letter of Credit (a "Notice of Termination"); provided that
the terms of each Standby Letter of Credit that is automatically renewable
annually shall not permit the expiration date (after giving effect to any
renewal) of such Standby Letter of Credit in any event to be extended to a date
later than thirty (30) days before the Revolving Credit Termination Date. If
either a Notice of Renewal is not given by the Borrower or a Notice of
Termination is given by the applicable Issuing Bank pursuant to the immediately
preceding sentence, such Standby Letter of Credit shall expire on the date on
which it otherwise would have been automatically renewed; provided, however,
that even in the absence of receipt of a Notice of Renewal, the applicable
Issuing Bank may, in its discretion unless instructed to the contrary by the
Administrative Agent or the Borrower, deem that a Notice of Renewal had been
timely delivered and, in such case, a Notice of Renewal shall be deemed to have
been so delivered for all purposes under this Agreement. Within the limits of
the Letter of Credit Facility, and subject to the limits referred to above, the
Borrower may request the issuance of Letters of Credit under this Section
2.1(e), repay any Letter of Credit Advances resulting from drawings under
Letters of Credit pursuant to Section 2.3(c) and request the issuance of
additional Letters of Credit under this Section 2.1(e).
SECTION 2.2 Making the Advances. (a) Except as otherwise provided in
Section 2.3 or, with respect to Swing Line Advances, in Section 2.2(b), each
Borrowing shall be made on notice, given not later than 2:00 P.M. (New York
time) on the third Business Day prior to the date of the proposed Borrowing in
the case of Eurodollar Rate Advances and on the first Business Day prior to the
date of the proposed Borrowing in the case of Prime Rate Advances by the
Borrower to the Administrative Agent, which shall give to each appropriate
Lender prompt notice thereof by telex or telecopier. Each such notice of a
Borrowing (a "Notice of Borrowing") may be by telephone, confirmed promptly in
writing, or telex or telecopier in substantially the form of Exhibit E hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Facility under
which such Borrowing is to be made, (iii) Type of Advances comprising such
Borrowing, (iv) aggregate amount of such Borrowing and (v) in the case of a
Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for
each such Advance. Following timely notice by the Administrative Agent, each
appropriate Lender shall, no later than 1:00 P.M. (New York time) on the date of
such Borrowing, make available for the account of its Applicable Lending Office
to the Administrative Agent at the Administrative Agent's Account, in same day
funds, such Lender's ratable portion of such Borrowing in accordance with the
respective Commitments under the applicable Facility of such Lender and the
other appropriate Lenders. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article 3,
the Administrative Agent will make such funds available to the
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Borrower by crediting the Borrower's Account; provided, however, that in the
case of any Revolving Credit Borrowing, the Administrative Agent shall first
make a portion of such funds equal to the aggregate principal amount of Letter
of Credit Advances made by the applicable Issuing Bank and by any other
Revolving Credit Lender and outstanding on the date of such Revolving Credit
Borrowing, plus interest accrued and unpaid thereon to and as of such date,
available to the applicable Issuing Bank and such other Revolving Credit Lenders
for repayment of Letter of Credit Advances.
(b) Each Swing Line Borrowing shall be made either (x) on notice, given
not later than 2:00 P.M. (New York time) on the date of the proposed Swing Line
Borrowing, by the Borrower to the Swing Line Bank and the Administrative Agent
or (y) pursuant to other arrangements, including, by way of example and not of
limitation, arrangements for daily repayments and borrowings on each Business
Day, which are satisfactory in form and substance to the Swing Line Bank, the
Administrative Agent and the Borrower. Each notice of a Swing Line Borrowing
pursuant to clause (x) in the immediately preceding sentence (a "Notice of Swing
Line Borrowing") may be by telephone, confirmed promptly in writing, or telex or
telecopier, specifying therein the requested (i) date of such Borrowing, (ii)
amount of such Borrowing and (iii) maturity of such Borrowing (which maturity
shall be no later than the seventh day after the requested date of such
Borrowing). The Swing Line Bank will make the amount of a requested Swing Line
Advance available to the Administrative Agent at the Administrative Agent's
Account, in same day funds. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article 3,
the Administrative Agent will make such funds available to the Borrower by
crediting the Borrower's Account. Upon written demand by the Swing Line Bank,
with a copy of such demand to the Administrative Agent, each other Revolving
Credit Lender shall purchase from the Swing Line Bank, and the Swing Line Bank
shall sell and assign to each such other Revolving Credit Lender, such other
Lender's Pro Rata Share of all outstanding Swing Line Advances as of the date of
such demand, by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
Swing Line Advances to be purchased by such Lender. The Borrower hereby agrees
to each such sale and assignment. Each Revolving Credit Lender agrees to
purchase its Pro Rata Share of outstanding Swing Line Advances on (i) the
Business Day on which demand therefor is made by the Swing Line Bank; provided
that notice of such demand is given not later than 12:00 P.M. (New York time) on
such Business Day, or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by the
Swing Line Bank to any other Revolving Credit Lender of a portion of a Swing
Line Advance, the Swing Line Bank represents and warrants to such other Lender
that the Swing Line Bank is the legal and beneficial owner of such interest
being assigned by it, but makes no other representation or warranty and assumes
no responsibility with respect to such Swing Line Advance, the Loan Documents or
any Loan Party. If and to the extent that any Revolving Credit Lender shall not
have so made the amount of such Swing Line Advance available to the
Administrative Agent, such Revolving Credit Lender agrees to pay to the
Administrative Agent,
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for the account of the Swing Line Bank, forthwith on demand such amount together
with interest thereon, for each day from the date of demand by the Swing Line
Bank until the date such amount is paid to the Administrative Agent, at the
Federal Funds Rate. If such Lender shall pay to the Administrative Agent such
amount for the account of the Swing Line Bank on any Business Day, such amount
so paid in respect of principal shall constitute a Swing Line Advance made by
such Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of the Swing Line Advance made by the Swing Line
Bank shall be reduced by such amount on such Business Day.
(c) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances if the obligation of
the appropriate Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.9 or Section 2.10, and (ii) the Eurodollar Rate Advances
made on any date may not be outstanding as part of more than twelve (12)
separate Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line Borrowing shall be
irrevocable and binding on the Borrower. In the case of any Borrowing that the
related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each appropriate Lender against any loss,
cost or expense incurred by such Lender as a result of any failure to fulfill on
or before the date specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article 3, including, without limitation, any
loss (including, without limitation, a return on such liquidation or deployment
that would result in such Lender receiving less than it would have received had
such Advances remained outstanding until the last day of the Interest Period),
cost or expense incurred by reason of the liquidation or redeployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Unless the Administrative Agent shall have received notice from an
appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) or (b) of this Section 2.2 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable at such time under Section
2.7 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall
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pay to the Administrative Agent such corresponding amount, such amount so paid
shall constitute such Lender's Advance as part of such Borrowing for all
purposes.
(f) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
SECTION 2.3 Issuance of and Drawings and Reimbursement Under Letters of
Credit.
(a) Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 3:00 P.M. (New York time) on the fifth Business Day
prior to the date of the proposed issuance of such Letter of Credit, by the
Borrower to an Issuing Bank, which shall give to the Administrative Agent and
each Revolving Credit Lender prompt notice thereof by telex or telecopier. Each
such notice of issuance of a Letter of Credit (a "Notice of Issuance") may be by
telephone, confirmed promptly in writing, or telex or telecopier, specifying
therein the requested (i) date of such issuance (which shall be a Business Day),
(ii) Available Amount of such Letter of Credit, (iii) expiration date of such
Letter of Credit, (iv) name and address of the beneficiary of such Letter of
Credit and (v) form of such Letter of Credit, and shall be accompanied by such
application and agreement for letter of credit as such Issuing Bank may specify
to the Borrower for use in connection with such requested Letter of Credit (a
"Letter of Credit Agreement"). If the requested form of such Letter of Credit is
acceptable to such Issuing Bank, in its sole discretion, such Issuing Bank will,
upon fulfillment of the applicable conditions set forth in Article 3, make such
Letter of Credit available to the Borrower at its office referred to in Section
11.2 or as otherwise agreed with the Borrower in connection with such issuance.
In the event and to the extent that the provisions of any such Letter of Credit
Agreement shall conflict with this Agreement or any other Loan Document, the
provisions of this Agreement shall govern.
(b) Letter of Credit Reports. Each Issuing Bank shall furnish (i) to the
Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (ii) to
the Administrative Agent, the Borrower and each Revolving Credit Lender on the
first Business Day of each month a written report summarizing issuance and
expiration dates of Letters of Credit issued during the preceding month and
drawings during such month under all Letters of Credit and (iii) to the
Administrative Agent, the Borrower and each Revolving Credit Lender on the first
Business Day of each calendar quarter a written report setting forth the average
daily aggregate Available Amount during the preceding calendar quarter of all
Letters of Credit.
(c) Drawing and Reimbursement. The payment by an Issuing Bank of a draft
drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by such Issuing Bank of a Letter of Credit Advance which
shall be a Prime Rate Advance in the amount
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of such draft. Each of the Borrower, the Administrative Agent and each Revolving
Credit Lender hereby acknowledges and agrees that Letter of Credit Advances may
be made, or deemed made, by any Issuing Bank in respect of any Letter of Credit
and to participate in all Letter of Credit Advances made hereunder as provided
herein. The Borrower shall reimburse the applicable Issuing Bank for each Letter
of Credit Advance, using its own funds or the proceeds of a Revolving Credit
Borrowing or Swing Line Borrowing on the same Business Day on which such Letter
of Credit is drawn. To the extent the Borrower does not so reimburse the
applicable Issuing Bank, upon written demand by such Issuing Bank, with a copy
of such demand to the Administrative Agent, each Revolving Credit Lender shall
purchase from such Issuing Bank, and such Issuing Bank shall sell and assign to
each such Revolving Credit Lender, such Lender's Pro Rata Share of such
outstanding Letter of Credit Advance as of the date of such purchase, by making
available (for the account of its Applicable Lending Office) to the
Administrative Agent (for the account of such Issuing Bank), by deposit to the
Administrative Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of Credit Advance to
be purchased by such Lender. Promptly after receipt thereof, the Administrative
Agent shall transfer such funds to the applicable Issuing Bank. The Borrower
hereby agrees to each such sale and assignment. Each Revolving Credit Lender
agrees to purchase its Pro Rata Share of an outstanding Letter of Credit Advance
on (i) the Business Day on which demand therefor is made by the applicable
Issuing Bank; provided that notice of such demand is given not later than 11:00
A.M. (New York time) on such Business Day or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time. Upon
any such assignment by the applicable Issuing Bank to any other Revolving Credit
Lender of a portion of a Letter of Credit Advance, such Issuing Bank represents
and warrants to such other Lender that such Issuing Bank is the legal and
beneficial owner of such interest being assigned by it, free and clear of any
Liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan Documents
or any Loan Party. If and to the extent that any Revolving Credit Lender shall
not have so made the amount of such Letter of Credit Advance available to the
Administrative Agent, such Revolving Credit Lender agrees to pay to the
Administrative Agent forthwith on demand such amount together with interest
thereon, for each day from the date of demand by the applicable Issuing Bank
until the date such amount is paid to the Administrative Agent, at the Federal
Funds Rate for its account or the account of such Issuing Bank, as applicable.
If such Lender shall pay to the Administrative Agent such amount for the account
of the applicable Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Letter of Credit Advance made by such
Lender on such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Letter of Credit Advance made by such Issuing Bank shall
be reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any Lender
to make any Letter of Credit Advance to be made by it on the date specified in
Section 2.3(c) shall not relieve any other Lender of its obligation hereunder to
make its Letter of Credit Advance on such
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date, but no Lender shall be responsible for the failure of any other Lender to
make the Letter of Credit Advance to be made by such other Lender on such date.
(e) Outstanding Letters of Credit. The letters of credit set forth under
the caption "Letters of Credit Outstanding on the Closing Date" on Schedule
2.3(e) annexed hereto and made a part hereof were issued pursuant to the
Existing Credit Agreement and which remain outstanding as of the Closing Date
(the "Outstanding Letters of Credit"). The Borrower, each Issuing Bank and each
of the Lenders hereby agree with respect to the Outstanding Letters of Credit
that such Outstanding Letters of Credit, for all purposes under this Agreement
shall be deemed to be Letters of Credit governed by the terms and conditions of
this Agreement. Each Lender agrees to participate in each Outstanding Letter of
Credit issued by any Issuing Bank in an amount equal to its Pro Rata Share of
the face amount of such Outstanding Letter of Credit.
SECTION 2.4 Repayment of Advances.
(a) Term A Advances. The Borrower shall repay to the Administrative
Agent for the ratable account of the Term A Lenders the aggregate outstanding
principal amount of the Term A Advances on the following dates in the amounts
indicated (which amounts shall be reduced as a result of the application of
prepayments in accordance with the order of priority set forth in Section 2.6):
Date Amount
---- ------
September 30, 2002 $2,250,000
December 31, 2002 $2,250,000
March 31, 2003 $2,250,000
June 30, 2003 $3,125,000
September 30, 2003 $3,125,000
December 31, 2003 $3,125,000
March 31, 2004 $3,125,000
June 30, 2004 $3,875,000
September 30, 2004 $3,875,000
December 31, 2004 $3,875,000
March 31, 2005 $3,875,000
June 30, 2005 $5,000,000
September 30, 2005 $5,000,000
December 31, 2005 $5,000,000
March 31, 2006 $5,000,000
June 30, 2006 $5,062,500
September 30, 2006 $5,062,500
December 31, 2006 $5,062,500
March 31, 2007 $5,062,500
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provided, however, that the final principal installment shall be in an amount
equal to the aggregate principal amount of the Term A Advances outstanding on
such date.
(b) Term B Advances. The Borrower shall repay to the Administrative
Agent for the ratable account of the Term B Lenders the aggregate outstanding
principal amount of the Term B Advances on the following dates in the amounts
indicated (which amounts shall be reduced as a result of the application of
prepayments in accordance with the order of priority set forth in Section 2.6):
Date Amount
---- ------
April 30, 2003 $1,500,000
April 30, 2004 $1,500,000
April 30, 2005 $1,500,000
April 30, 2006 $1,500,000
April 30, 2007 $1,500,000
April 30, 2008 $67,500,000
October 31, 2008 $75,000,000
provided, however, that the final principal installment shall be equal to the
aggregate principal amount of the Term B Advances outstanding on such date.
(c) Revolving Credit Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Revolving Credit Termination Date the aggregate principal amount of the
Revolving Credit Advances then outstanding.
(d) Swing Line Advances. The Borrower shall repay to the Administrative
Agent for the account of the Swing Line Bank and each other Revolving Credit
Lender that has made a Swing Line Advance the outstanding principal amount of
each Swing Line Advance made by each of them on the earlier of the maturity date
for such Swing Line Advance (which maturity date shall be no later than the
seventh day after the requested date of such Swing Line Advance) and the
Revolving Credit Termination Date.
(e) Letter of Credit Advances. (i) The Borrower shall repay to the
Administrative Agent for the account of the applicable Issuing Bank and each
other Revolving Credit Lender that has made a Letter of Credit Advance on the
earlier of demand and the Revolving Credit Termination Date the outstanding
principal amount of each Letter of Credit Advance made by each of them.
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(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating to any of the foregoing (all of
the foregoing being, collectively, the "L/C Related Documents");
(B) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations of the Borrower
in respect of any L/C Related Document or any other amendment or waiver
of or any consent to departure from all or any of the L/C Related
Documents;
(C) the existence of any claim, set-off, defense (other
than payment) or other right that the Borrower may have at any time
against any beneficiary or any transferee of a Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), any Issuing Bank, or any other Person, whether in connection
with the transactions contemplated by the L/C Related Documents or any
unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or
(E) any exchange, release or non-perfection of any
Collateral or other collateral, or any release or amendment or waiver of
or consent to departure from any Guaranty or any other guarantee, for
all or any of the Obligations of the Borrower in respect of the L/C
Related Documents;
provided, however, that the Borrower (or any other Loan Party) or any other
Lender Party shall not be obligated to reimburse any Issuing Bank or other
Lender Party for any wrongful payment or indemnify any Issuing Bank or other
Lender Party for any wrongful dishonor or any other matter to the extent
resulting from acts or omissions constituting gross negligence, bad faith or
willful misconduct or an intentional violation of law by such Issuing Bank or
any other Lender Party.
SECTION 2.5 Termination or Reduction of the Commitments.
(a) Optional. The Borrower may, upon at least three (3) Business Days'
notice to the Administrative Agent, terminate in whole or reduce in part the
unused portion of the Unused
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Revolving Credit Commitments; provided, however, that each partial reduction of
such Facility (i) shall be in an aggregate amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof, and (ii) shall be made ratably among
the appropriate Lenders in accordance with their Commitments with respect to
such Facility. The Administrative Agent shall promptly notify each of the
Revolving Lenders of any termination or reduction in the Unused Revolving Credit
Commitments pursuant to the preceding sentence.
(b) Mandatory. (i) The Term A Commitments of the Term A Lenders shall
automatically and permanently terminate and shall be of no further force and
effect on the Closing Date after the Term A Borrowing has been made by the Term
A Lenders.
(ii) The Term B Commitments of the Term B Lenders shall
automatically and permanently terminate and shall be of no further force and
effect on the Closing Date after the Term B Borrowing has been made by the Term
B Lenders.
(iii) On and after the date that all Term A Advances and Term B
Advances shall have been repaid in full, the Revolving Credit Facility shall be
automatically and permanently reduced on each date on which prepayment thereof
is required to be made pursuant to Section 2.6(b)(ii), (iii), or (v) in an
amount equal to the applicable Reduction Amount, provided that each such
reduction of the Revolving Credit Facility shall be made ratably among the
Revolving Credit Lenders in accordance with their Revolving Credit Commitments.
(iv) The Letter of Credit Facility shall be permanently reduced
from time to time on the date of each reduction in the Revolving Credit Facility
by the amount, if any, by which the amount of the Letter of Credit Facility
exceeds the Revolving Credit Facility after giving effect to such reduction of
the Revolving Credit Facility.
(v) In the event the Closing Date shall not have occurred by the
close of business on May 31, 2002 then all of the Commitments shall be
automatically terminated and this Agreement shall be of no further force or
effect.
SECTION 2.6 Prepayments.
(a) Optional. The Borrower may, without premium or penalty, upon at
least one (1) Business Day's notice in the case of Prime Rate Advances and three
(3) Business Days' notice in the case of Eurodollar Rate Advances, in each case
to the Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given, the Borrower shall,
prepay the outstanding aggregate principal amount of the Advances, in whole or
ratably in part, together, in the case of Term A Advances and Term B Advances,
with accrued interest to the date of such prepayment on the aggregate principal
amount prepaid; provided, however, that (i) each partial prepayment shall be in
an aggregate principal amount of $1,000,000 or an integral multiple of $100,000
in excess thereof and (ii) no such prepayment of a Eurodollar Rate Advance shall
be made other than on the last day of an Interest Period therefor
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without payment by the Borrower of the amounts provided for in Section 11.4(c).
Each prepayment made pursuant to this Section 2.6(a) shall be applied to repay
those Facilities designated by the Borrower and unless otherwise designated by
the Borrower with respect to such Facilities, such prepayment shall be applied
first to the payment of Prime Rate Advances and second to the payment of
Eurodollar Rate Advances; provided, that if the Borrower designates that any
prepayment made pursuant to this Section 2.6(a) is to be applied to the Term
Facilities, such prepayment shall be applied ratably to the Term A Facility and
the Term B Facility, and ratably to each unpaid installment of principal of each
of the Term Facilities. Upon the drawing of any Letter of Credit for which funds
are on deposit in the L/C Cash Collateral Account, such funds shall be applied
to reimburse the applicable Issuing Bank or the Revolving Credit Lenders, as
applicable.
(b) Mandatory. (i) Within one hundred twenty (120) days following the
end of each Fiscal Year, the Borrower shall execute and deliver to the
Administrative Agent a certificate of the Borrower's Chief Executive Officer or
Chief Financial Officer demonstrating its calculation of Excess Cash Flow for
such Fiscal Year (except that in the case of Fiscal Year 2002, such calculation
shall be made for the period from the Business Day immediately following the
Closing Date through the end of such Fiscal Year) along with a prepayment of the
then outstanding Advances equal to fifty percent (50%) of the annual Excess Cash
Flow if the ratio of Consolidated Funded Debt to EBITDA at the end of such
Fiscal Year equals or is greater than 2.50:1; provided, however, that if the
ratio of Consolidated Funded Debt to EBITDA, measured at the end of such Fiscal
Year of the Borrower (after giving pro forma effect to making of such
prepayment), for such Fiscal Year of the Borrower, is less than 2.50:1, then the
required prepayment of the then outstanding Advances shall be in the amount of
twenty-five percent (25%) of the annual Excess Cash Flow.
(ii) Within five (5) days after receipt by the Borrower or any of
its Subsidiaries of Net Cash Proceeds from Asset Dispositions, unless such
proceeds may be reinvested in accordance with the definition of "Asset
Disposition," the Borrower shall prepay the then outstanding Advances in an
amount equal to one-hundred percent (100%) of such Net Cash Proceeds in excess
of $2,000,000 in any Fiscal Year. In the event that such Net Cash Proceeds have
been reinvested in accordance with the definition of "Asset Disposition" and
were not used within such one hundred eighty (180) day period as required
thereby, then Borrower shall, on the first Business Day after such one hundred
eighty (180) day period, prepay the then outstanding Advances in an amount equal
to the amount of such Net Cash Proceeds which have not been so reinvested.
(iii) Within five (5) days after receipt by the Borrower or any
of its Subsidiaries of Net Cash Proceeds from any Debt Issuance, the Borrower
shall prepay the then outstanding Advances in an amount equal to one hundred
percent (100%) of such Net Cash Proceeds.
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(iv) Within five (5) days after receipt by the Borrower or any of
its Subsidiaries of Net Cash Proceeds from any Equity Issuance, fifty percent
(50%), of such Net Cash Proceeds; provided, that the Borrower may retain an
amount up to one hundred percent (100%) of such Net Cash Proceeds to the extent
that (x) such Net Cash Proceeds are derived from a Qualified Initial Public
Offering or from a subsequent Public Offering of common shares by the Borrower
to redeem its series B redeemable preferred stock (including accrued and unpaid
dividends thereon) and (y) after giving effect to such transaction, the ratio of
Consolidated Funded Debt to EBITDA is equal to or less than 3.00 to 1.00.
Concurrently with the consummation of such transaction the proviso set forth in
Section 8.1 shall be in effect.
(v) Within five (5) days after receipt of Net Cash Proceeds by
the Borrower or any of its Subsidiaries from any Extraordinary Receipt received
by or paid to or for the account of the Borrower or any of its Subsidiaries and
not otherwise included in clause (i), (ii) or (iii) above, unless the Borrower
or such Subsidiary intends in good faith to reinvest such proceeds in accordance
with the definition of "Extraordinary Receipt," the Borrower shall prepay the
then outstanding Advances in an amount equal to one hundred percent (100%) of
such Net Cash Proceeds in excess of $2,000,000 in any Fiscal Year.
(vi) Each prepayment made pursuant to clause (ii), (iii) or (v) shall be
subject to the provisions of Section 11.4(c) and shall be applied to prepay the
Facilities in the following manner: first, ratably to the Term A Facility and
the Term B Facility, and ratably to each unpaid installment of principal of each
of the Term Facilities until such installments are paid in full; second, to
prepay Swing Line Advances then outstanding until such Advances are paid in
full; third, to prepay Revolving Credit Advances and Letter of Credit Advances
then outstanding (whereupon the Revolving Credit Facility shall be permanently
reduced as set forth in Section 2.5(b)(iv) in the amount of such prepayment)
until such Revolving Credit Advances are paid in full; and fourth, deposited in
the L/C Cash Collateral Account to cash collateralize 100% of the Available
Amount of the Letters of Credit then outstanding and within any of the foregoing
Facilities, unless otherwise designated by the Borrower, such prepayments shall
be applied first to the payment of Prime Rate Advances and second to the payment
of Eurodollar Rate Advances. Each prepayment made pursuant to clause (i) or (iv)
shall be subject to the provisions of Section 11.4(c) and shall be applied to
prepay the Term A Facility and the Term B Facility on a ratable basis, and
ratably to each unpaid installment of principal of each of the Term Facilities
until such installments are paid in full. Upon the drawing of any Letter of
Credit for which funds are on deposit in the L/C Cash Collateral Account, such
funds shall be applied to reimburse the applicable Issuing Bank or the Revolving
Credit Lenders, as applicable. The amount remaining (if any) after the required
prepayment of the Advances then outstanding and the 100% cash collateralization
of the aggregate Available Amount of Letters of Credit then outstanding (the sum
of such prepayment amounts, cash collateralization amounts and remaining amount
being referred to herein as the "Reduction Amount") may be retained by the
Borrower. Upon the termination of all of the Commitments and the final payment
in full of all Obligations, including, without limitation, termination or
expiration of all Letters of Credit and the final
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payment in full of all Obligations in respect of all Letters of Credit, then all
amounts remaining on deposit in the L/C Cash Collateral Account shall be
returned to the Borrower.
(vii) The Borrower shall, within fifteen (15) days following the
end of each month in each Fiscal Year, pay to the Administrative Agent for
deposit in the L/C Cash Collateral Account an amount sufficient to cause the
aggregate amount on deposit in such Account to equal the amount by which the
aggregate Available Amount of all Letters of Credit then outstanding exceeds the
Letter of Credit Facility on such Business Day.
(viii) At any time that the aggregate amount of Revolving Credit
Advances, Letter of Credit Advances, Swing Line Advances and the aggregate
Available Amount of all Letters of Credit, in each case outstanding, exceeds the
Revolving Credit Facility, the Borrower shall immediately repay Revolving Credit
Advances to the extent necessary to reduce the principal balance of Revolving
Credit Borrowings to an amount equal to or less than the Revolving Credit
Facility.
(ix) The foregoing notwithstanding, the provisions of this
Section 2.6(b) shall not be construed to permit any Equity Issuance, Debt
Issuance or Asset Disposition otherwise prohibited under the terms of this
Agreement.
(c) Application of Prepayments to the Term A Facility and the Term B
Facility. Upon receipt of any amounts to be applied to the prepayment in respect
of the Term A Facility and the Term B Facility pursuant to this Section 2.6, the
Administrative Agent shall apply such amounts to the prepayment of the Term A
Advances and Term B Advances ratably; provided, however, that the Borrower may,
by providing not less than six (6) Business Days prior notice to the
Administrative Agent, offer the Term B Lenders the option to decline to accept
any prepayments made pursuant to Section 2.6(b), and, if within five (5)
Business Days of receiving a copy of such notice from the Administrative Agent,
any Term B Lender notifies the Administrative Agent that it elects to refuse to
accept the prepayment of its Term B Advances, the Administrative Agent shall
apply the portion of such prepayment that would have been allocated to the
repayment of such Lender's Term B Advances, to the prepayment of the Advances of
the Lenders under the Term A Facility (to the extent that there are Term A
Advances then outstanding) and of the Advances of the Term B Lenders which have
not so refused ratably to each unpaid installment of principal of each such
Facility (and, if all Lenders under the Term B Facility elect to refuse their
ratable share of such prepayment, only to the Advances of the Lenders under the
Term A Facility, to the extent that there are Term A Advances then outstanding).
If any Term B Lender shall not give notice to the Administrative Agent within
such five (5) Business Day period, the Administrative Agent shall assume that
such Lender shall have accepted such prepayment.
SECTION 2.7 Interest.
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(a) Scheduled Interest. The Borrower shall pay to the Administrative
Agent, for the benefit of the Lenders, interest on the unpaid principal amount
of each Advance owing to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(i) Prime Rate Advances. During such periods as such Advance is a
Prime Rate Advance, a rate per annum equal at all times to the sum of (x) the
Prime Rate in effect from time to time plus (y) the Applicable Margin for such
Advance in effect from time to time, payable in arrears quarterly on the last
Business Day of each fiscal quarter during such periods.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (x) the Eurodollar Rate for
such Interest Period for such Advance plus (y) the Applicable Margin for such
Advance in effect on the first day of such Interest Period, payable in arrears
on the last day of such Interest Period and, if such Interest Period has a
duration of more than three months, on each day that occurs during such Interest
Period every three months from the first day of such Interest Period and on the
date such Eurodollar Rate Advance shall be Converted or paid in full.
(b) Default Interest. Notwithstanding the foregoing, the Borrower shall
pay interest on any Advance and all other amounts then outstanding under the
Facilities at the applicable Post-Default Rate (to the extent permitted by law)
whenever an Event of Default has occurred and is continuing (i) under Section
9.1 for the period commencing on the occurrence of such Event of Default until
such Event of Default has been cured or waived as acknowledged in writing by the
Administrative Agent and (ii) under any Section contained in Article 9 (other
than Section 9.1) for the period commencing on the sixty-first day after the
occurrence of such Event of Default (if not then cured or waived) until such
Event of Default has been cured or waived as acknowledged in writing by the
Administrative Agent.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.2(a), the Administrative Agent shall give notice
to the Borrower and each appropriate Lender of the applicable interest rate
determined by the Administrative Agent for purposes of clause (a)(i) or (ii).
SECTION 2.8 Fees.
(a) Commitment Fees. The Borrower shall pay to the Administrative Agent,
for the account of the Lenders (other than Defaulting Lenders), commitment fees,
from the Closing Date in the case of each Initial Lender and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender, until the Revolving Credit Termination
Date payable in arrears quarterly on the last Business Day of each March, June,
September and December, commencing June 28, 2002, and on the Revolving Credit
Termination Date at a rate per annum equal to 0.500% per annum on the average
daily
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Unused Revolving Credit Commitment of such Lender. For purposes of this
subsection (a), Swing Line Advances shall not constitute utilization of the
Revolving Credit Commitments of the Revolving Credit Lenders (other than the
Lender Parties which have made the Swing Line Advances).
(b) Letter of Credit Fees. (i) The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commission, payable in arrears quarterly on the last Business Day of each March,
June, September and December, commencing June 28, 2002 and on the earliest to
occur of the full drawing, expiration, termination or cancellation of any such
Letter of Credit and on the Revolving Credit Termination Date, on such Lender's
Pro Rata Share of the average daily aggregate Available Amount during such
quarter of all Letters of Credit outstanding from time to time at the rate per
annum equal to (x) the Applicable Margin then in effect for Eurodollar Advances
under the Revolving Credit Facility with respect to Standby Letters of Credit
and (y) 50% of the Applicable Margin then in effect for Eurodollar Advances
under the Revolving Credit Facility with respect to Trade Letters of Credit.
(ii) In addition to the foregoing fees described in (i) above,
the Borrower shall pay to the applicable Issuing Bank, for its own account, (x)
on the Available Amount of each Letter of Credit, a fronting fee, for the period
from the date of issuance of such Letter of Credit to and including the
termination thereof, computed at a rate equal to 0.25% thereof, which amount
shall be payable in arrears quarterly on the last Business Day of each March,
June, September and December of each year and on the date of termination thereof
and (y) transfer fees and other customary fees and charges in connection with
the issuance or administration of each Letter of Credit as the Borrower and the
applicable Issuing Bank shall agree.
(c) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Borrower and the Administrative Agent, including pursuant to
the Fee Letter.
SECTION 2.9 Conversion of Advances.
(a) Optional. The Borrower may on any Business Day, upon notice given to
the Administrative Agent not later than 2:00 P.M. (New York time) on the third
Business Day prior to the date of a proposed Conversion of Advances into
Eurodollar Rate Advances and on the Business Day prior to the date of a proposed
conversion of Eurodollar Rate Advances into Prime Rate Advances, and subject to
the provisions of Sections 2.7 and 2.10, Convert all or any portion of the
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that any Conversion of Eurodollar Rate Advances into
Prime Rate Advances shall be made only on the last day of an Interest Period for
such Eurodollar Rate Advances unless the Borrower pays the amounts, if any,
provided for in Section 11.4(c), any Conversion of Prime Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.1(c), no Conversion of any Advances shall result in
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more separate Borrowings than permitted under Section 2.2(c) and each Conversion
of Advances comprising part of the same Borrowing under any Facility shall be
made ratably among the appropriate Lenders in accordance with their Commitments
under such Facility. Each such notice of Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the
Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate
Advances, the duration of the initial Interest Period for such Advances. Each
notice of Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $500,000, such Advances shall
automatically Convert into Prime Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.1, the
Administrative Agent will forthwith so notify the Borrower and the appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance.
(iii) Upon the occurrence and during the continuance of any Event
of Default and the acceleration of the Notes, interest thereon and other amounts
payable by the Borrower under this Agreement and the other Loan Documents
pursuant to Article 9, (x) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance and (y) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10 Increased Costs, Etc.
(a) If, due to either (i) the introduction of or any change in reserve
requirements included in the Eurodollar Rate Reserve Percentage, or in the
interpretation of any law or regulation, or (ii) the compliance 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 any Lender Party of agreeing to make or of making, funding or
maintaining Eurodollar Rate Advances (excluding for purposes of this Section
2.10 any such increased costs resulting from (x) Taxes or Other Taxes (as to
which Section 2.12 shall govern) and (y) changes in the basis of taxation of
overall net income or profit or overall gross income by the United States or by
the foreign jurisdiction or state under the laws of which such Lender Party is
organized or has its Applicable Lending Office or any political subdivision
thereof), then, subject to Section 11.4(f), the Borrower shall from time to
time, within five (5) days after demand by such Lender Party (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender Party additional amounts sufficient to compensate
such Lender Party for such increased cost (except to the extent already
reflected in
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the definition of Eurodollar Rate); provided, however, that a Lender Party
claiming additional amounts under this Section 2.10(a) agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost that may thereafter accrue and would not, in the reasonable
judgment of such Lender Party, be otherwise disadvantageous to such Lender
Party. A certificate as to the amount of such increased cost setting forth in
reasonable detail the basis for calculation of such increased cost, submitted to
the Borrower by such Lender Party, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If, due to the introduction of or any change in or in the
interpretation of any law or regulation or 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 amount of capital required or
reasonably expected to be maintained by any Lender Party or any corporation
controlling such Lender Party as a result of or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder or the
issuance or maintenance of the Letters of Credit (or similar contingent
obligations), then, within five (5) days after demand by such Lender Party (with
a copy of such demand to the Administrative Agent), the Borrower shall pay to
the Administrative Agent for the account of such Lender Party, from time to time
as specified by such Lender Party, additional amounts sufficient to compensate
such Lender Party in the light of such circumstances, to the extent that such
Lender Party reasonably determines such increase in capital to be allocable to
the existence of such Lender Party's commitment to lend or to issue Letters of
Credit hereunder or to the issuance or maintenance of any Letters of Credit. A
certificate as to such amounts setting forth in reasonable detail the basis for
calculation of such amounts submitted to the Borrower by such Lender Party shall
be conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any Facility,
Lenders owed greater than 50% of the then aggregate unpaid principal amount
thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the appropriate Lenders, whereupon (i) each such Eurodollar Rate
Advance under any Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Prime Rate Advance and (ii)
the obligation of the appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its
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Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor by such Lender
to the Borrower through the Administrative Agent, (i) each Eurodollar Rate
Advance under each Facility under which such Lender has a Commitment will
automatically, at the end of such applicable Interest Periods (or sooner if
required by law), Convert into a Prime Rate Advance and (ii) the obligation of
the appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Rate Advances or to continue to find or maintain Eurodollar
Rate Advances and would not, in the judgment of such Lender, result in an
economic, legal or regulatory disadvantage to such Lender.
SECTION 2.11 Payments and Computations.
(a) The Borrower shall make each payment hereunder and under the Notes,
irrespective of any right of counterclaim or set-off (except as otherwise
provided in Section 2.15), not later than 12:00 P.M. (New York time) on the day
when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes to more than one Lender
Party, to such Lender Parties for the account of their respective Applicable
Lending Offices ratably in accordance with the amounts of such respective
Obligations then payable to such Lender Parties and (ii) if such payment by the
Borrower is in respect of any Obligation then payable hereunder to one Lender
Party, to such Lender Party for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 11.7(d), from and after
the effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender Party assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent shall distribute
such funds to each Lender Party ratably in accordance with such Lender Party's
proportionate share of the principal amount of all outstanding Advances and
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the Available Amount of all Letters of Credit then outstanding in repayment or
prepayment of such of the outstanding Advances or other Obligations owed to such
Lender Party, and for application to such principal installments, as the
Administrative Agent shall direct.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder (after
giving effect to applicable grace periods, if any) or, in the case of a Lender,
under the Note held by such Lender, to charge from time to time against any or
all of the Borrower's accounts with such Lender Party any amount so due.
(d) Interest, fees and Letter of Credit commissions shall be computed by
the Administrative Agent on the basis of the actual number of days (including
the first day but excluding the last day) elapsed over a year of 360 days;
provided, that interest on all Prime Rate Advances shall be computed on the
basis of the actual number of days (including the first day but excluding the
last day) elapsed over a year of 365 or 366 days, as the case may be. Each
determination by the Administrative Agent of an interest rate, fee or commission
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(e) Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12 Taxes.
(a) Any and all payments by the Borrower hereunder or under the Notes
shall be made, in accordance with Section 2.11, free and clear of and without
deduction for 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 Lender Party and the Administrative Agent,
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net income taxes that are imposed by the United States and net income taxes (or
franchise taxes imposed in lieu thereof) that are imposed on such Lender Party
or the Administrative Agent by the state or foreign jurisdiction under the laws
of which such Lender Party or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Lender
Party, net income taxes (or franchise taxes imposed in lieu thereof) that are
imposed on such Lender Party by the state or foreign jurisdiction of such Lender
Party's Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender Party or the Administrative Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) such Lender Party or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender Party and the
Administrative Agent for the full amount of Taxes and Other Taxes, and for the
full amount of taxes imposed by any jurisdiction on amounts payable under this
Section 2.12, imposed on or paid by such Lender Party or the Administrative
Agent (as the case may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto, except
with respect to any Lender Party or the Administrative Agent, as the case may
be, for such a liability arising from such Lender Party's or the Administrative
Agent's, as the case may be, willful misconduct or gross negligence. This
indemnification shall be made within thirty (30) days from the date such Lender
Party or the Administrative Agent, as the case may be, makes written demand
specifying in reasonable detail the basis therefor.
(d) Within thirty (30) days after the date of any payment by the
Borrower of Taxes, the Borrower shall furnish to the Administrative Agent, at
its address referred to in Section 11.2, the original receipt of payment thereof
or a certified copy of such receipt.
(e) Each Lender Party that is not a United States Person shall, on or
prior to the date of its execution and delivery of this Agreement in the case of
each Initial Lender or Issuing Bank, as the case may be, and on the date of the
Assignment and Acceptance pursuant to which it became a Lender Party in the case
of each other Lender Party, and from time to time thereafter
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as requested in writing by the Borrower or the Administrative Agent (but only so
long thereafter as such Lender Party remains lawfully able to do so), provide
each of the Administrative Agent and the Borrower with two (2) original Internal
Revenue Service forms ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY, as appropriate, or any successor
or other form prescribed by the Internal Revenue Service, the Internal Revenue
Code or the Treasury Regulations thereunder, certifying that such Lender is
exempt from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement or the Notes. In addition, each Lender Party
shall deliver such forms promptly upon the obsolescence or invalidity of any
form previously delivered by such Lender Party. Each Lender Party shall promptly
notify the Borrower at any time it determines that it is no longer in a position
to provide any previously delivered certificates to the Borrower (or any other
form of certification adopted by the United States taxing authorities for such
purpose). If the forms provided by a Lender Party at the time such Lender Party
first becomes a party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender Party provides the
appropriate form certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such form; provided, however, that, if at the date of the Assignment
and Acceptance pursuant to which a Lender Party becomes a party to this
Agreement, the Lender Party assignor was entitled to payments under subsection
(a) in respect of United States withholding tax with respect to interest paid at
such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender Party assignee on such date. If any form or document
referred to in this subsection (e) requires the disclosure of information, other
than information necessary to compute the tax payable and information required
on the date hereof by Internal Revenue Service form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY,
that the Lender Party reasonably considers to be confidential, the Lender Party
shall give notice thereof to the Borrower and shall not be obligated to include
in such form or document such confidential information. For purposes of this
subsection (e), the terms "United States" and "United States Person" shall have
the meanings specified in Section 7701 of the Internal Revenue Code.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrower with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Lender Party shall not be entitled
to indemnification under subsection (a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should a
Lender Party become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as such Lender Party
shall reasonably request to assist such Lender Party to recover such Taxes.
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(g) Any Lender Party claiming any additional amounts payable pursuant to
this Section 2.12 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender Party, be
otherwise disadvantageous to such Lender Party.
(h) Each Lender Party shall, to the extent it is legally entitled to do
so, deliver to the Borrower or the Administrative Agent (as the case may be)
such other forms or similar documentation as may be required from time to time
by any applicable law, treaty, rule or regulation in order to establish such
Lender Party's complete exemption from withholding on all payments under this
Agreement or the Notes.
SECTION 2.13 Sharing of Payments, Etc. If any Lender Party shall obtain
at any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) (i) on account of Obligations due and
payable to such Lender Party hereunder or under the Notes at such time in excess
of its ratable share (according to the proportion of (x) the amount of such
Obligations due and payable to such Lender Party at such time to (y) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder or under the Notes
at such time obtained by all the Lender Parties at such time or (ii) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (x) the amount of such Obligations owing to such Lender Party
at such time to (y) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such participations in the Obligations due and payable or
owing to them, as the case may be, as shall be necessary to cause such
purchasing Lender Party to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from each
other Lender Party shall be rescinded and each such other Lender Party shall
repay to the purchasing Lender Party the purchase price to the extent of such
Lender Party's ratable share (according to the proportion of (x) the purchase
price paid to such Lender Party to (y) the aggregate purchase price paid to all
Lender Parties) of such recovery together with an amount equal to such Lender
Party's ratable share (according to the proportion of (x) the amount of such
other Lender Party's required repayment to (y) the total amount of such required
repayments to the purchasing Lender Party) of any interest or other amount paid
or payable by the purchasing Lender Party in respect of the total amount so
recovered.
The Borrower agrees that any Lender Party so purchasing a participation from
another Lender Party pursuant to this Section 2.13 may, to the fullest extent
permitted by law, exercise all its
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rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender Party were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.14 Use of Proceeds. The proceeds of the Advances and issuances
of Letters of Credit shall be available, and the Borrower shall use such
proceeds and Letters of Credit solely (a) with respect to the Term Advances, to
(i) finance the Spectrum Acquisition and to repay existing indebtedness and (ii)
pay fees and expenses incurred in connection with the Spectrum Acquisition in an
amount not to exceed $7,000,000, and (b) with respect to the Revolving Credit
Advances, to finance (i) working capital, (ii) general corporate purposes of the
Borrower and its Subsidiaries and (iii) Permitted Acquisitions.
SECTION 2.15 Defaulting Lenders. (a) In the event that, at any one time,
(i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Advance to the Borrower and (iii) the Borrower shall be
required to make any payment hereunder or under any other Loan Document to or
for the account of such Defaulting Lender, then the Borrower may, so long as no
Default shall occur or be continuing at such time and to the fullest extent
permitted by applicable law, set off and otherwise apply the obligation of the
Borrower to make such payment to or for the account of such Defaulting Lender
against the obligation of such Defaulting Lender to make such Defaulted Advance.
In the event that, on any date, the Borrower shall so set off and otherwise
apply its obligation to make any such payment against the obligation of such
Defaulting Lender to make any such Defaulted Advance on or prior to such date,
the amount so set off and otherwise applied by the Borrower shall constitute for
all purposes of this Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on the date under the Facility pursuant to which such
Defaulted Advance was originally required to have been made pursuant to Section
2.1. Such Advance shall be a Prime Rate Advance and shall be considered, for all
purposes of this Agreement, to comprise part of the Borrowing in connection with
which such Defaulted Advance was originally required to have been made pursuant
to Section 2.1, even if the other Advances comprising such Borrowing shall be
Eurodollar Rate Advances on the date such Advance is deemed to be made pursuant
to this subsection (a). The Borrower shall notify the Administrative Agent at
any time the Borrower exercises its right of set-off pursuant to this subsection
(a) and shall set forth in such notice (i) the name of the Defaulting Lender and
the Defaulted Advance required to be made by such Defaulting Lender and (ii) the
amount set off and otherwise applied in respect of such Defaulted Advance
pursuant to this subsection (a). Any portion of such payment otherwise required
to be made by the Borrower to or for the account of such Defaulting Lender which
is paid by the Borrower, after giving effect to the amount set off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting
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Lender, then the Administrative Agent may, on its behalf or on behalf of such
other Lender Parties and to the fullest extent permitted by applicable law,
apply at such time the amount so paid by the Borrower to or for the account of
such Defaulting Lender to the payment of each such Defaulted Amount to the
extent required to pay such Defaulted Amount. In the event that the
Administrative Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the Administrative Agent
shall constitute for all purposes of this Agreement and the other Loan
Documents, payment, to such extent, of such Defaulted Amount on such date. Any
such amount so applied by the Administrative Agent shall be retained by the
Administrative Agent or distributed by the Administrative Agent to such other
Lender Parties, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent and such
other Lender Parties and, if the amount of such payment made by the Borrower
shall at such time be insufficient to pay all Defaulted Amounts owing at such
time to the Administrative Agent and the other Lender Parties, in the following
order of priority:
(i) first, to the Administrative Agent for any Defaulted Amount
then owing to the Administrative Agent (in its capacity of such); and
(ii) second, to the Lender Parties for any Defaulted Amounts then
owing to such Lender Parties, ratably in accordance with such respective
Defaulted Amounts then owing to such Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower, the Administrative Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrower or such other Lender Party shall pay such amount to
the Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with Fleet, in the name and under the control of the Administrative Agent, but
subject to the provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Fleet's standard terms
applicable to escrow accounts maintained with it. Any interest credited to such
account from time to time shall be held by the Administrative Agent in escrow
under, and applied by the Administrative Agent from time to
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time in accordance with the provisions of, this subsection (c). The
Administrative Agent shall, to the fullest extent permitted by applicable law,
apply all funds so held in escrow from time to time to the extent necessary to
make any Advances required to be made by such Defaulting Lender and to pay any
amount payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Administrative Agent or any other Lender Party, as and when
such Advances or amounts are required to be made or paid and, if the amount so
held in escrow shall at any time be insufficient to make and pay all such
Advances and amounts required to be made or paid at such time, in the following
order of priority:
(i) first, to the Administrative Agent for any amount then due and
payable by such Defaulting Lender to the Administrative Agent (in its capacity
as such) hereunder;
(ii) second, to the Lender Parties for any amount then due and
payable by such Defaulting Lender to such Lender Parties hereunder, ratably in
accordance with such respective amounts then due and payable to such Lender
Parties; and
(iii) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents in such manner as the Administrative
Agent shall reasonably direct.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.16 Removal of Lender. In the event that any Lender Party (an
"Affected Lender") (a) demands payment of costs or additional amounts pursuant
to Section 2.10 or Section 2.12 or (b) asserts, pursuant to Section 2.10(d) that
it is unlawful for such Affected Lender to make Eurodollar Rate Advances, then
(subject to such Affected Lender's right to rescind such demand or assertion
within ten (10) days after the notice from the Borrower referred to below and so
long as no Event of Default exists) the Borrower may, upon twenty (20) days'
prior written notice to such Affected Lender and the Administrative Agent, with
the reasonable assistance of the Administrative Agent, elect to cause such
Affected Lender to assign all of its rights and obligations under the Agreement
(including, without limitation, all of its Commitment or Commitments, the
Advances owing to it and the Note or Notes held by it) to an Eligible Assignee
selected by the Borrower which is reasonably satisfactory to the Administrative
Agent, so long as such Affected Lender receives payment in full in cash of the
outstanding principal
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amount of all Advances made by it and all accrued and unpaid interest thereon
and all other amounts due and payable to such Affected Lender as of the
effective date of such assignment (including, without limitation, amounts owing
to such Affected Lender pursuant to Section 2.3, 2.4, 2.7, 2.8, 2.10 or 2.12)
and in such case such Affected Lender agrees to make such assignment, and such
assignee shall agree to accept such assignment and assume all the obligations of
such Affected Lender hereunder, in accordance with Section 11.7. Until the
consummation of an assignment in accordance with the foregoing provisions of
this Section 2.16, the Borrower shall continue to pay to the Affected Lender any
Obligations as they become due and payable.
ARTICLE 3
CONDITIONS OF LENDING
SECTION 3.1 Conditions Precedent to Initial Extension of Credit. The
obligation of each Lender to make an Advance or of each Issuing Bank to issue a
Letter of Credit on the occasion of the Initial Extension of Credit hereunder is
subject to the satisfaction or waiver of each of the following conditions
precedent before or concurrently with the Initial Extension of Credit:
(a) The Administrative Agent shall have received on or before the day of
the Initial Extension of Credit the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the Administrative
Agent and the Lenders, and in sufficient copies (except for the Notes), for each
Lender Party:
(i) The Notes payable to the order of the Lenders duly executed by
the Borrower.
(ii) A security agreement in substantially the form of Exhibit F
granting to the Administrative Agent, for the ratable benefit of the Lenders, a
first priority security interest (subject only to Liens permitted under Section
6.1) in the Collateral described therein (together with each other security
agreement delivered pursuant to Section 5.11, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms, each a "Security Agreement"), duly executed by the Borrower and each
Subsidiary Guarantor, together with:
(A) proper, duly executed financing statements under the
Uniform Commercial Code of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to perfect and protect
the first priority Liens and security interests created under the
Security Agreement (subject only to Liens permitted under Section 6.1),
covering the Collateral described in the Security Agreement;
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(B) completed requests for information, dated on or before
the date of the Initial Extension of Credit, listing all effective
financing statements filed that name the Borrower or any Subsidiary
Guarantor as debtor, together with copies of such financing statements;
(C) evidence of the completion of (or provision for) all
other recordings and filings of or with respect to the Security
Agreement that the Administrative Agent may deem necessary or desirable
in order to perfect and protect the Liens created thereby;
(D) evidence of the insurance required by the terms of the
Security Agreement;
(E) certificates representing the Pledged Shares referred
to in the Security Agreement, accompanied by undated stock powers
executed in blank and irrevocable proxies;
(F) in the case of the Borrower's Foreign Subsidiaries,
all action necessary to allow the Administrative Agent to obtain a valid
and enforceable, first priority, perfected security interest in (x) 65%
(or such greater percentage which would not result in material adverse
tax consequences) of the Voting Stock and (y) 100% (to the extent it
would not result in material adverse tax consequences) of the non-voting
stock of each Foreign Subsidiary; and
(G) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and protect
the first priority Liens and security interests (subject to Liens
permitted pursuant to Section 6.1) created under the Security Agreement
has been taken.
(iii) (A) Mortgages duly executed by the Borrower or applicable
Subsidiary Guarantor for each parcel of real property listed on Schedule 4.20,
together with evidence that counterparts of the Mortgages have been delivered to
a title insurance company (reasonably acceptable to the Agents) insuring the
Lien of the Mortgages for recording in all places to the extent necessary or
desirable, in the reasonable judgment of the Agents, to create a valid and
enforceable first priority Lien on each parcel of real property listed on
Schedule 4.20 (subject only to Permitted Liens) in favor of the Administrative
Agent (or a trustee acting on behalf of the Administrative Agent required or
desired under local law) for the benefit of the Secured Parties;
(B) Mortgagee title insurance policies (or binding
commitments to issue such title insurance policies) which shall (1) be
issued to the Administrative Agent for the benefit of the Secured
Parties by title insurance companies reasonably satisfactory to the
Administrative Agent (the "Mortgage Policies") in amounts reasonably
satisfactory to the Administrative Agent insuring that the Mortgages are
valid and enforceable first priority mortgage Liens on the respective
parcels of real property, free and clear of all
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defects, encumbrances and other Liens except Permitted Liens, (2) be in
form and substance reasonably satisfactory to the Administrative Agent,
(3) include, as appropriate, and to the extent reasonably available, an
endorsement for future advances under this Agreement, the Notes and the
Mortgages and such other endorsements that the Administrative Agent in
its discretion may reasonably request, and (4) to the extent reasonably
available, provide for affirmative insurance and such reinsurance
(including direct access agreements) as the Administrative Agent in its
discretion may reasonably request; and
(C) Surveys, in form and substance satisfactory to the
Administrative Agent, of each parcel of real property listed on Schedule
4.20, dated a recent date reasonably acceptable to the Administrative
Agent, certified by a licensed professional surveyor in a manner
satisfactory to the Administrative Agent for the benefit of the Lenders.
(iv) An intellectual property security agreement in substantially
the form of Exhibit G hereto granting to the Administrative Agent for the
ratable benefit of the Lenders a first priority security interest (subject to
Liens permitted pursuant to Section 6.1) in all of the Borrower's and each
Subsidiary Guarantor's intellectual property (together with each other
intellectual property security agreement delivered pursuant to Section 5.11, in
each case as amended, supplemented or otherwise modified from time to time in
accordance with its terms, each an "Intellectual Property Security Agreement"),
duly executed by the Borrower and each Subsidiary Guarantor, together with
evidence that all action that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority Liens (subject to
Liens permitted pursuant to Section 6.1) and security interests created under
the Intellectual Property Security Agreement has been taken.
(v) A pledge agreement substantially in the form of Exhibit H
hereto (as hereafter amended, supplemented or otherwise modified from time to
time in accordance with its terms, the "Holdings Pledge Agreement") pursuant to
which all of the issued and outstanding capital stock of the Borrower held by
Holdings shall be pledged to the Administrative Agent as security for the
Obligations, together with the certificates representing all shares pledged
thereunder, undated stock powers executed in blank and proxies with respect
thereto.
(vi) A guaranty in substantially the form of Exhibit I hereto (as
hereafter amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Holdings Guaranty"), duly executed by Holdings.
(vii) A guaranty in substantially the form of Exhibit J hereto
(as hereafter amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Subsidiary Guaranty"), duly executed by each
Subsidiary Guarantor.
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(viii) Certified copies of resolutions of the Board of
Directors of each Loan Party approving the Spectrum Acquisition, this Agreement,
the Notes, and each other Loan Document and Spectrum Acquisition Documents to
which it is or is to be a party, and of all documents evidencing other necessary
corporate action and governmental, shareholder and other third party approvals
and consents, if any, with respect to the Spectrum Acquisition, this Agreement,
the Notes, and each other Loan Document and Spectrum Acquisition Documents.
(ix) A copy of the charter (or equivalent document) of each
Loan Party and each amendment thereto, certified (as of a date reasonably near
the date of the Initial Extension of Credit) by the Secretary of State of the
jurisdiction of its incorporation or organization as being a true and correct
copy thereof.
(x) A copy of a certificate of the Secretary of State of the
jurisdiction of its incorporation or organization, dated within ten (10)
Business Days of the date of the Initial Extension of Credit, listing the
charter (or equivalent document) of each Loan Party and each amendment thereto
on file in its office and certifying that (A) such amendments are the only
amendments to such Loan Party's charter (or equivalent document) on file in its
office, (B) such Loan Party has paid all franchise taxes to the date of such
certificate and (C) such Loan Party is duly incorporated or organized and in
good standing under the laws of the State of the jurisdiction of its
incorporation or organization.
(xi) A copy of a certificate of the Secretary of State of each
State listed on Schedule 3.1(a)(xi), dated reasonably near the date of the
Initial Extension of Credit, stating that the Borrower and each of its
Subsidiaries is duly qualified and in good standing as a foreign corporation or
limited liability company, as applicable, in such State and has filed all annual
reports required to be filed to the date of such certificate.
(xii) A certificate of each Loan Party signed on behalf of
such Loan Party by a Responsible Officer and the Secretary or an Assistant
Secretary of such Loan Party, dated the date of the Initial Extension of Credit
(the statements made in such certificate shall be true on and as of the date of
the Initial Extension of Credit), certifying as to (A) the absence of any
amendments to the charter (or equivalent document) of such Loan Party since the
date of the Secretary of State's certificate referred to in Section 3.1(a)(xi),
(B) a true and correct copy of the bylaws (or equivalent document) of such Loan
Party as in effect on the date of the Initial Extension of Credit, (C) the truth
in all material respects of the representations and warranties made by such Loan
Party contained in the Loan Documents as though made on and as of the date of
the Initial Extension of Credit and (D) the absence of any event occurring and
continuing, or resulting from the Initial Extension of Credit, that constitutes
a Default.
(xiii) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true signatures of the
officers of such Loan Party authorized to sign this
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Agreement, the Notes, each other Loan Document to which they are or are to be
parties and the other documents to be delivered hereunder and thereunder.
(xiv) Such financial, business and other information regarding
Holdings, the Borrower and each Subsidiary Guarantor and each such Person's
Subsidiaries as any of the Lenders shall have reasonably requested, including,
audited financial statements of the Borrower for its most recent three (3)
Fiscal Years, unaudited financial statements dated the end of the most recent
fiscal quarter, if any, for which financial statements are available, an
unaudited pro forma balance sheet of the Borrower and its Subsidiaries which
gives effect to the Transaction as if it had occurred on December 31, 2001, an
unaudited pro forma income statement of the Borrower (including a calculation of
EBITDA) which gives effect to the Transaction for the trailing twelve (12)
months of operations ending on December 31, 2001 and forecasts prepared by
management of the Borrower, all in form and substance reasonably satisfactory to
the Lenders. All pro forma financial statements shall be prepared in accordance
in all material respects with the requirements of Regulation S-X under the
Securities Act of 1933, as amended, applicable to a Registration Statement under
such Act on Form S-1.
(xv) Notices of Borrowing with respect to each of the Term
Facilities pursuant to which the Borrower shall request an Initial Extension of
Credit in an aggregate amount of not more than $225,000,000.
(b) The Agents shall be satisfied with (i) the corporate, ownership and
legal structure and capitalization of the Borrower, each of its Subsidiaries and
each Related Professional Corporation after the Spectrum Acquisition, including,
without limitation, the terms and conditions of the charter, by-laws (or
equivalent documents), stockholder agreements and each class of capital stock or
membership interests of the Borrower, each such Subsidiary and each Related
Professional Corporation and of each agreement or instrument relating to such
structure or capitalization and (ii) the management of the Borrower, each of its
Subsidiaries and each Related Professional Corporation (after giving effect to
the Spectrum Acquisition).
(c) The Agents shall be satisfied that all Existing Debt has been (or,
upon consummation of the Spectrum Acquisition will be) prepaid, redeemed or
defeased in full or otherwise satisfied and extinguished concurrently with the
funding of the Initial Extension of Credit and that all Surviving Debt shall be
on terms and conditions satisfactory to the Agents.
(d) There shall have occurred no Material Adverse Change (including any
event which, in the opinion of the Agents, is reasonably likely to result in a
Material Adverse Change) in the business, assets, liabilities (actual and
contingent), operations, condition (financial or otherwise), management or
prospects of the Borrower, the Target and their respective Subsidiaries, taken
as a whole, since December 31, 2001; and no material inaccuracy in such
financial statements shall exist.
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(e) There shall exist no action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
governmental or Regulatory Agency or authority that (i) could reasonably be
expected to (A) have a material adverse effect on the business, assets,
liabilities (actual or contingent), operations, condition (financial or
otherwise) or management of the Borrower, the Target and their respective
Subsidiaries, taken as a whole, (B) materially and adversely affect the ability
of the Borrower or any Subsidiary Guarantor to perform its obligations under the
Loan Documents to which it is a party or (C) materially and adversely affect the
rights and remedies of the Administrative Agent and the Lender Parties under the
Loan Documents or (ii) purports to materially and adversely affect any aspect of
the Transaction or the Facilities (collectively, a "Material Adverse Effect");
and there shall have been no Material Adverse Change in the status, or financial
effect on the Borrower or any of its Subsidiaries, of the Disclosed Litigation
from that described on Schedule 4.9.
(f) All governmental, shareholder and other third party consents
(except for third party consents with respect to contracts entered into in the
ordinary course of business which are not material) and approvals (including
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended)
necessary in connection with each aspect of the Transaction and the other
transactions contemplated hereby shall have been obtained (without the
imposition of any conditions that are not acceptable to the Agents) and shall
remain in full force and effect; all applicable waiting periods shall have
expired without any action being taken by any authority; and no law or
regulation shall be applicable in the reasonable judgment of the Agents that
could restrain, prevent or impose any materially adverse conditions upon any
aspect of the Transaction or such other transactions or that could seek or
threaten any of the foregoing.
(g) There shall not exist any order, decree, judgment, ruling or
injunction which restrains the consummation of the Transaction in the manner
contemplated by the Spectrum Acquisition Documents.
(h) The Agents and their counsel shall have completed their business,
legal, environmental, tax, pension, regulatory and accounting due diligence
investigation of the Borrower's, the Target's, the other Loan Parties' and their
respective Subsidiaries' business, assets, liabilities (actual and contingent),
operations, condition (financial or otherwise), management and prospects and
shall be satisfied with the results thereof. This condition shall be deemed
satisfied unless any additional information is disclosed to or discovered by the
Agents which the Agents deem materially adverse in respect of the condition
(financial or otherwise), business, assets, liabilities, properties, results of
operations or prospects of the Borrower, Target and their Subsidiaries, taken as
a whole. The Borrower and each of the Guarantors shall have given the
Administrative Agent such access to their respective books and records as the
Administrative Agent may have requested upon reasonable notice in order to carry
out its investigations, appraisals and analyses and the Administrative Agent
shall have received all additional financial, business and other information
regarding the Borrower and its Subsidiaries and properties as they shall have
reasonably requested.
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(i) The Borrower shall have delivered either (i) a certificate, in form
and substance satisfactory to the Agents, attesting to the financial condition
and Solvency of the Borrower and the Subsidiary Guarantors, together with their
Subsidiaries, taken as a whole, immediately before and immediately after giving
effect to the Transaction, from its Chief Financial Officer or (ii) in the event
that the Borrower receives a third party Solvency opinion from an independent
expert in connection with the Transaction, such opinion shall (A) be addressed
to the Agents and (B) provide that the Agents shall be entitled to rely thereon.
(j) The Lenders shall be satisfied that (i) the Borrower and its
Subsidiaries will be able to meet in all material respects their respective
obligations under all employee and retiree welfare plans, (ii) the employee
benefit plans of the Borrower and its Subsidiaries are, in all material
respects, funded in accordance with the minimum statutory requirements, (iii) no
material "reportable event" (as defined in ERISA, but excluding events for which
reporting has been waived) has occurred as to any such employee benefit plan and
(iv) no termination of, or withdrawal from, any such employee benefit plan has
occurred or is contemplated that could reasonably be expected to result in a
material liability.
(k) The Administrative Agent shall be reasonably satisfied with the
amount, types and terms and conditions of all insurance maintained by the
Borrower and its Subsidiaries, and the Administrative Agent shall have received
endorsements naming the Administrative Agent, on behalf of the Lenders, as loss
payee or an additional insured, as applicable, under all insurance policies to
be maintained with respect to the properties of the Borrower and its
Subsidiaries forming any part of the Lenders' Collateral under the Security
Agreement and the other Loan Documents and Collateral Documents.
(l) The Administrative Agent shall have received (i) satisfactory
opinions of counsel to the Borrower and the Guarantors (which shall cover, among
other things, authority, legality, validity, binding effect and enforceability
of the Loan Documents) and local and special counsel to the extent requested by
the Administrative Agent, as to the Transaction, and (ii) reliance letters
permitting the Agent and Lenders to rely on each of the opinions of counsel
delivered in connection with the Spectrum Acquisition, including the opinions of
counsel delivered to the Sellers.
(m) There shall exist no Default or Event of Default under any of the
Loan Documents, and all legal matters incident to the Initial Extension of
Credit shall be reasonably satisfactory to counsel for the Agents.
(n) All fees and expenses due and payable to the Agents, and Initial
Lenders and/or their affiliates pursuant to the Commitment Letter, Fee Letter or
otherwise (including the reasonable fees and expenses of counsel for the Agents
and local counsel for the Agents) shall have been paid in full as contemplated
therein and the Borrower and the Sponsors shall have complied with all of their
obligations under the Commitment Letter and the Fee Letter.
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(o) The Spectrum Acquisition shall have been consummated
(contemporaneously with the Initial Extension of Credit) pursuant to the terms
and conditions of the Spectrum Acquisition Agreement (and none of the material
terms or conditions of the Spectrum Acquisition Agreement or any other material
Spectrum Acquisition Documents) shall have been waived or modified except with
the prior approval of the Agents) and in compliance with all applicable laws and
with all necessary consents and approvals. The final terms and conditions of the
Spectrum Acquisition Documents shall be satisfactory in all respects to the
Agents, and the Administrative Agent shall have received certified copies of
each of the Spectrum Acquisition Documents, each of which shall be satisfactory
to the Agents and in full force and effect. Management or employment agreements
with each of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ shall have been entered into on
terms and conditions satisfactory to the Administrative Agent and the Lenders
and the Borrower shall have delivered to the Administrative Agent certified
copies of each such agreement.
(p) The Administrative Agent shall be satisfied that there are no state
takeover laws and no supermajority charter provisions applicable to the Spectrum
Acquisition, or that any conditions to avoiding such restrictions have been
satisfied.
(q) All Advances made under this Agreement shall be in full compliance
with all applicable requirements of law, including, without limitation,
Regulations T, U, and X.
(r) The Administrative Agent shall also have received such bank consent
agreements, third party consents, intercreditor agreements or other agreements,
as deemed necessary or desirable in the Administrative Agent's sole discretion,
to preserve or otherwise in respect of the Administrative Agent's rights in the
Collateral.
(s) The Agents shall have received evidence satisfactory to them that
the Borrower's ratio of Consolidated Funded Debt to EBITDA (calculated on a
basis satisfactory to the Agents and after giving effect to the Initial
Extensions of Credit hereunder) shall not exceed 3.9:1.0 on the Closing Date.
(t) The Agents shall have received evidence satisfactory to them that
the Borrower's EBITDA (calculated for the four fiscal quarters preceding the
Closing Date and including EBITDA of the Target and its Subsidiaries) shall be
at least $85,000,000 on the Closing Date.
(u) The Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request, and all legal matters incident to such Borrowing shall be
satisfactory to counsel for the Administrative Agent.
SECTION 3.2 Conditions Precedent to Each Borrowing and Issuance. The
obligation of each appropriate Lender to make an Advance (other than a Letter of
Credit Advance made by an Issuing Bank or a Revolving Credit Lender pursuant to
Section 2.3(c) and a Swing Line Advance
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made by a Revolving Credit Lender pursuant to Section 2.2(b)), and the
obligation of an Issuing Bank to issue a Letter of Credit (including the initial
issuance thereof) or renew a Letter of Credit and the right of the Borrower to
request the issuance or renewal of a Letter of Credit, shall each be subject to
the further conditions precedent that on the date of each such Borrowing or
issuance or renewal:
(a) Each of the conditions precedent listed in Section 3.1 shall have
been previously or concurrently satisfied or waived in accordance with this
Agreement.
(b) The following statements shall be true (and each of the giving of
the applicable Notice of Borrowing, Notice of Swing Line Borrowing, or Notice of
Issuance or Notice of Renewal and the acceptance by the Borrower of the proceeds
of a Borrowing or of a Letter of Credit or the renewal of a Letter of Credit
shall constitute a representation and warranty by the Borrower that both on the
date of such notice and on the date of such Borrowing or issuance or renewal
such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date, before and
after giving effect to such Borrowing or issuance or renewal and to the
application of the proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by their terms, refer to
a specific date other than the date of such Borrowing, issuance or renewal, in
which case, as of such specific date;
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or renewal or from the application of the
proceeds therefrom, that constitutes a Default or Event of Default; and
(iii) for each Revolving Credit Advance, Swing Line Advance
made by the Swing Line Bank or issuance or renewal of any Letter of Credit, the
Revolving Credit Facility equals or exceeds the aggregate principal amount of
the Revolving Credit Advances plus Swing Line Advances plus Letter of Credit
Advances plus the aggregate Available Amount of all Letters of Credit then
outstanding after giving effect to such Advances or issuance or renewal,
respectively; and
(c) The Administrative Agent shall have received from the Borrower a
duly executed Notice of Borrowing, Notice of Swing Line Borrowing, Notice of
Issuance or Notice of Renewal as applicable.
SECTION 3.3 Determinations Under Section 3.1. For purposes of
determining compliance with the conditions specified in Section 3.1, each
Initial Lender shall be deemed to have consented to, approved or accepted or to
be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Initial Lenders
unless an officer of the Administrative Agent responsible for the transactions
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contemplated by the Loan Documents shall have received written notice from such
Initial Lender prior to the Initial Extension of Credit specifying its objection
thereto and, if the Initial Extension of Credit consists of a Borrowing, such
Initial Lender shall not have made available to the Administrative Agent such
Initial Lender's ratable portion of such Borrowing.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower represents and warrants as follows:
SECTION 4.1 Organization. The Borrower and each of the Subsidiary
Guarantors (a) is a corporation, partnership or limited liability company, as
applicable, duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, (b) is duly qualified
and in good standing as a foreign corporation, partnership or limited liability
company, as applicable, in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed could not
reasonably be expected to have a Material Adverse Effect and (c) has all
requisite corporate or other power and authority (including, without limitation,
all governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, except where the failure to have such authority could
not reasonably be expected to result in a Material Adverse Effect. As of the
date hereof, Holdings and Pacific Physician Services, Inc. collectively
beneficially own and control, directly or indirectly, one hundred percent (100%)
of the issued and outstanding shares of each class of the capital stock of the
Borrower.
SECTION 4.2 Subsidiaries. As of the date hereof, set forth on Schedule
4.2 hereto is a complete and accurate list of all Subsidiaries of the Borrower
and each Related Professional Corporation, showing as of the date hereof (as to
each such Subsidiary) the jurisdiction of its incorporation or organization, the
number of shares or membership interests of each class of capital stock
authorized, and the number outstanding, on the date hereof and the percentage of
the outstanding shares or membership interests of each such class owned
(directly or indirectly) by the Borrower or one of its Subsidiaries at the date
hereof. All of the outstanding capital stock or membership interests of all of
such Subsidiaries has been validly issued, is fully paid and non-assessable and
is owned by the Borrower or one or more of its Subsidiaries free and clear of
all Liens, except those created under the Collateral Documents or Liens
permitted under Section 6.1.
SECTION 4.3 Corporate Power, Authorization. The execution, delivery and
performance by the Borrower and each Subsidiary Guarantor of this Agreement, the
Notes and each other Loan Document to which it is or is to be a party, and the
consummation of the Transaction, are within such Loan Party's corporate powers,
have been duly authorized by all necessary corporate action, and do not (a)
contravene such Loan Party's charter or bylaws (or
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equivalent documents), (b) violate any law (including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, and the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970), rule, regulation (including, without
limitation, Regulation T, U or X), order, writ, judgment, injunction, decree,
determination or award in each case binding on such Loan Party, (c) conflict
with or result in the breach of, or constitute a default under, any loan
agreement, indenture, mortgage, deed of trust, lease or other material contract,
instrument or agreement binding on or affecting any Loan Party, any of its
Subsidiaries or any of their respective properties, except where such conflict,
breach or default could not reasonably be expected to result in a Material
Adverse Effect or (d) except for the Liens created under the Collateral
Documents, result in or require the creation or imposition of any Lien upon or
with respect to any of the properties of any Loan Party or any of its
Subsidiaries.
SECTION 4.4 Governmental Authorizations, Approvals. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is or was required for (a)
the due execution, delivery, recordation, filing or performance by the Borrower
or any Subsidiary Guarantor of this Agreement, the Notes, any other Loan
Document or any Spectrum Acquisition Document to which it is or is to be a
party, or for the consummation of the Transaction, (b) the grant by any Loan
Party of the Liens granted by it pursuant to the Collateral Documents, (c) the
perfection or maintenance of the Liens created by the Collateral Documents or
(d) the exercise by the Administrative Agent or any Lender Party of its rights
under the Loan Documents or the remedies in respect of the Collateral pursuant
to the Collateral Documents, except for the authorizations, approvals (other
than immaterial third party consents), actions, notices and filings obtained on
or prior to the date hereof listed on Schedule 4.4, all of which have been duly
obtained, taken, given or made (or provision has been provided for in a manner
satisfactory to the Administrative Agent) and are in full force and effect and
except for filings required to be made in connection with the perfection of the
security interests created under the Collateral Documents and compliance with
securities laws and other laws regarding dispositions of collateral. All
applicable waiting periods in connection with the Transaction have expired
without any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
SECTION 4.5 Due Execution, Validity, Enforceability. This Agreement has
been, and each of the Notes and each other Loan Document has been or when
delivered hereunder will have been, duly executed and delivered by each of the
Borrower and each Subsidiary Guarantor party thereto. This Agreement is, and
each of the Notes and each other Loan Document has been or when delivered
hereunder will be, the legal, valid and binding obligation of each of the
Borrower and each Subsidiary Guarantor party thereto, enforceable against the
Borrower or such Subsidiary Guarantor in accordance with its terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
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similar laws affecting creditors' rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law).
SECTION 4.6 Financial Statements. The consolidated balance sheets of
the Borrower and its Subsidiaries as at December 31, 2001 and the related
consolidated statements of income and consolidated statements of cash flows of
the Borrower and its Subsidiaries for the Fiscal Year then ended, accompanied by
(in the case of such Consolidated financial statements) an opinion of Ernst &
Young LLP, independent public accountants, and the Consolidated balance sheet of
the Borrower and its Subsidiaries as at March 31, 2002 and the related
Consolidated statement of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the month then ended, duly certified by the
Chief Financial Officer of the Borrower, copies of which have been furnished to
each Lender Party, fairly present in all material respects, subject, in the case
of said balance sheet as at March 31, 2002 and said statements of income and
cash flows for the months then ended, to normal year-end audit adjustments, the
Consolidated financial condition of the Borrower and its Subsidiaries as at such
dates and the Consolidated results of the operations of the Borrower and its
Subsidiaries for the period ended on such date, all in accordance with GAAP
applied on a consistent basis, and since December 31, 2001, there has been no
Material Adverse Change.
SECTION 4.7 Pro Forma Financial Statements. The Consolidated pro forma
balance sheet of the Borrower and its Subsidiaries as at December 31, 2001, and
the related Consolidated pro forma statement of income and cash flows of the
Borrower and its Subsidiaries for the period then ended, certified by the Chief
Financial Officer of the Borrower, copies of which have been furnished to each
Initial Lender, (a) fairly present in all material respects the Consolidated pro
forma financial condition of the Borrower and its Subsidiaries as at such date
and the Consolidated pro forma results of operations of the Borrower and its
Subsidiaries for the period ended on such date, in each case after giving effect
to the Transaction, (and the financial statements utilized in preparing such pro
forma statements were prepared in accordance with GAAP) and (b) have been
prepared in accordance in all material respects with the requirements of
Regulation S-X under the Securities Act of 1933, as amended, applicable to a
Registration Statement under such Act on Form S-1.
SECTION 4.8 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
Borrower or any of its Subsidiaries in writing to any Lender (other than
projections) for purposes of or in connection with this Agreement or any
transaction contemplated herein or the syndication of the Facilities
contemplated hereby is, (and, solely with respect to any such information
furnished on behalf of Borrower or any Subsidiary by a third party, to the best
of Borrower's knowledge after due inquiry are and will be) true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided.
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SECTION 4.9 Litigation. Other than the litigation disclosed on Schedule
4.9 (the "Disclosed Litigation"), there is no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its Subsidiaries, any
Related Professional Corporation or any professional officer, director, employee
or contractor of any of the foregoing (in so far as related to services provided
in respect of the Borrower, any of its Subsidiaries or any Related Professional
Corporation), including, without limitation, any Environmental Action, pending
or, to the Borrower's knowledge, threatened before any court, governmental
agency or arbitrator that could reasonably be expected to have a Material
Adverse Effect, and there has been no Material Adverse Change in the status, or
financial effect on the Borrower or any of its Subsidiaries, of the Disclosed
Litigation from that described on Schedule 4.9.
SECTION 4.10 Regulation U. No part of the proceeds of any Advance will
be used to purchase or carry any Margin Stock, directly or indirectly, or to
extend credit for the purpose of purchasing or carrying any such Margin Stock
for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the loans or extensions of credit under this Agreement to be
considered a "purpose credit" within the meaning of Regulation T, U or X.
SECTION 4.11 ERISA.
(a) As of the Closing Date, except as set forth on Schedule 4.11
hereto, neither the Borrower nor any of its ERISA Affiliates maintains or has
maintained any Plans or Multiemployer Plans.
(b) As of the Closing Date, set forth on Schedule 4.11 is a complete
and accurate list of all Welfare Plans and all defined contribution plans to
which the Borrower or any of its Subsidiaries is a party, whether written or
oral. Each Welfare Plan, defined contribution plan and Benefit Arrangement
materially complies with, and has been operating in all material respects, in
accordance with, all applicable laws, including, without limitation, the
provisions of ERISA.
(c) Each defined contribution plan that is intended to be qualified
under Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code") has been determined by the Internal Revenue Service to be so qualified,
and each trust related to such plan has been determined to be exempt under
Section 501(a) of the Code, and nothing has occurred or is reasonably expected
to occur that would adversely affect the qualified status of any of the defined
contribution plans or any related trust subsequent to the issuance of such
determination letter.
(d) No event has occurred in connection with any Welfare Plan, defined
contribution plan or Benefit Arrangement which has, or could reasonably be
expected to result in any fine, penalty, assessment or other similar liability
in excess of $7,500,000 for which the Borrower or any of its Subsidiaries may be
responsible, whether by reason of operation of law or contract.
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(e) Except as set forth in the financial statements referred to in
Section 4.6 and in Article 7, neither the Borrower nor any of its Subsidiaries
has any material liability with respect to "expected post retirement benefit
obligations" within the meaning of Statement of Financial Accounting Standards
No. 106.
SECTION 4.12 Casualty. Neither the business nor the properties of the
Borrower or any of its Subsidiaries are affected by any fire, explosion,
accident, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance) that could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.13 Environmental Matters.
(a) The operations and properties of the Borrower and each of its
Subsidiaries comply in all known material respects with all applicable
Environmental Laws and Environmental Permits, all known past non-compliance with
such Environmental Laws and Environmental Permits has been resolved without
ongoing obligations or costs, except to the extent that the failure to so comply
could not reasonably be expected to have a Material Adverse Effect, and no
circumstances exist that could reasonably be expected to (i) form the basis of
an Environmental Action against the Borrower or any of its Subsidiaries or any
of their properties that could reasonably be expected to have a Material Adverse
Effect or (ii) cause any such property to be subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental Law which
could reasonably be expected to have a Material Adverse Effect.
(b) Except as disclosed on Schedule 4.13 hereto, (i) none of the
properties owned or operated as of the date hereof or formerly owned or operated
by the Borrower or any of its Subsidiaries is listed or, to the knowledge of the
Borrower, proposed for listing on the NPL or on the CERCLIS or any analogous
foreign, state or local list or is adjacent to any such property; (ii) to the
best of its knowledge, as of the date hereof, there are no and never have been
any underground or aboveground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are being or, to the
best of its knowledge, have been treated, stored or disposed on any property
currently owned or operated by the Borrower or any of its Subsidiaries or on any
property formerly owned or operated by the Borrower or any of its Subsidiaries;
(iii) to the best of its knowledge, there is no material asbestos or
asbestos-containing material on any property owned or operated on the date
hereof by the Borrower or any of its Subsidiaries; and (iv) Hazardous Materials
have not been released, discharged or disposed of in violation in any material
respect of any Environmental Law on any property currently owned or operated by
the Borrower or any of its Subsidiaries, or any property formerly owned or
operated by the Borrower or any of its Subsidiaries.
(c) As of the date hereof, except as disclosed on Schedule 4.13 hereto,
(i) neither the Borrower nor any of its Subsidiaries is undertaking or has not
completed, either individually or together with other potentially responsible
parties, any investigation or assessment or Remedial, Response or Removal action
relating to any actual or threatened release, discharge or disposal of
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Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any governmental or regulatory authority or the
requirements of any Environmental Law; and (ii) all Hazardous Materials
generated, used, treated, handled or stored at, or transported to or from, any
property currently owned or operated by the Borrower or any of its Subsidiaries
or any property formerly owned or operated by the Borrower or any of its
Subsidiaries have been disposed of in a manner which complies in all material
respects with Environmental Laws or in a manner that could not be reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.14 Collateral Documents.
(a) The provisions of the Collateral Documents are effective
to create in favor of the Administrative Agent for the ratable benefit of the
Lender Parties pursuant to the Security Agreement, a legal, valid and
enforceable security interest in the Collateral owned by such Loan Party, and
the Security Agreement, together with the filings of Form UCC-1 and assignment
of certain of such Form UCC-1's or Form UCC-3 in all relevant jurisdictions
creates a first Lien on, and security interest in all of the Collateral
described therein, subject to no other Liens other than Liens permitted under
Section 6.1. Except for titled vehicles, vessels and other collateral which may
not be perfected through the filing of financing statements under the Uniform
Commercial Code and which have an aggregate fair market value of less than
$1,000,000, all such Liens have been or, upon the filing of the financing
statements delivered on the Closing Date, will be fully perfected Liens except
for Liens permitted under Section 6.1. The Intellectual Property Security
Agreement creates (assuming all necessary filings with the United States Patent
and Trademark Office and the United States Copyright Office have been
appropriately and duly made), as security for the Obligations purported to be
secured thereby, a valid and enforceable, and upon the recordation in the United
States Patent and Trademark Office and in the United States Copyright Office of
assignments for security made pursuant to the Intellectual Property Security
Agreement, perfected security interest in and Lien on the trademarks, patents
and copyrights covered by the Intellectual Property Security Agreement in favor
of the Administrative Agent for the ratable benefit of the Secured Parties,
superior to and prior to the rights of all third Persons. The Borrower and its
Subsidiaries have good and marketable title to all Collateral, free and clear of
all Liens except Liens permitted under Section 6.1.
(b) The security interests created in favor of Administrative
Agent, as pledgee for the benefit of the Lenders under the Security Agreement
and the Holdings Pledge Agreement together with the delivery of the certificates
pursuant thereto and delivery of appropriate endorsements executed in blank,
constitute first perfected security interests in the Pledged Shares and Pledged
Debt (as such terms are defined in the Security Agreement and the Holdings
Pledge Agreement) pledged under such agreements, subject to no security
interests of any other Person other than Permitted Liens and unperfected Liens
permitted under Section 6.1(g). Except as set forth in the Security Agreement
and the Holdings Pledge Agreement, no filings, registrations or recordings which
have not been made or will not have been made (or submitted for recordation)
within ten (10) Business Days after the Closing Date are required in order to
perfect the security
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interests created in the Pledged Shares or Pledged Debt under the Security
Agreement or Holdings Pledge Agreement.
(c) Assuming the Mortgages are appropriately and duly filed
and recorded, the Mortgages create, as security for the obligations purported to
be secured thereby, a valid and enforceable perfected security interest in and
Lien on all of the real property listed on Schedule 4.20 subject to a Mortgage
and the Mortgaged Property (including, without limitation, all fixtures and
improvements relating to such Mortgaged Property and affixed or added thereto on
or after the Closing Date) in favor of the Administrative Agent (or such other
trustees that may be named therein) for the ratable benefit of the Lender
Parties, superior to and prior to the rights of all third Persons (except that
the security interest created in such real property and the Mortgaged Property
may be subject to the Permitted Liens related thereto) and subject to no other
Liens (other than Liens permitted under Section 6.1).
SECTION 4.15 Taxes.
(a) The Borrower and each of its Subsidiaries has filed, has caused to
be filed or has been included in all material tax returns (Federal, state, local
and foreign) required to be filed and has paid (prior to the date on which
penalties attach thereto) all taxes shown thereon to be due, together with
applicable interest and penalties (other than de minimus taxes which are not
overdue more than thirty (30) days and any taxes the amount or validity of which
are being contested in good faith and with respect to which the Borrower or such
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP).
(b) There is no unpaid amount of adjustments to the state, local and
foreign tax liability of the Borrower and each of its Subsidiaries proposed by
any state, local or foreign taxing authorities which could reasonably be
expected to result in a Material Adverse Effect (other than amounts arising from
adjustments to Federal income tax returns and other than adjustments the amount
or validity of which are being contested in good faith and with respect to which
the Borrower or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP).
SECTION 4.16 Compliance with Securities Laws. Neither the Borrower nor
any of its Subsidiaries is an "investment company," or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
Neither the making of any Advances, nor the issuance of any Letters of Credit,
nor the application of the proceeds or repayment thereof by the Borrower, nor
the consummation of the Transaction, will violate any provision of such Act or
any rule, regulation or order of the Securities and Exchange Commission
thereunder or any takeover, disclosure or other federal, state or foreign
securities law or Regulations T, U or X. The Borrower is not subject to
regulation under any federal, state or foreign statute or regulation which
limits its ability to incur Debt.
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SECTION 4.17 Solvency. Each Loan Party is, individually and together
with its Subsidiaries, Solvent.
SECTION 4.18 Debt.
(a) Set forth on Schedule 4.18(a) is a complete and accurate list of
all Debt which will be repaid by the Borrower on or prior to the Closing Date
(together with the Debt set forth on Schedule 4.18(c) the "Existing Debt"), the
principal amount of which is greater than $250,000, showing as of the date
hereof the principal amount outstanding thereunder and the maturity date
thereof.
(b) Set forth on Schedule 4.18(b) is a complete and accurate list of
all Debt which will not be repaid by the Borrower on or prior to the Closing
Date (the "Surviving Debt"), the principal amount of which is greater than
$100,000, showing as of the date hereof the principal amount outstanding
thereunder, the maturity date thereof and the amortization schedule therefor.
(c) Set forth on Schedule 4.18(c) is a complete and accurate list of
all Debt which will be repaid by the Target on or prior to the Closing Date, the
principal amount which is greater than $250,000, showing as of the date hereof
the principal amount outstanding thereunder and the maturity date thereof.
SECTION 4.19 No Defaults, Compliance with Laws.
(a) Except as set forth on Schedule 4.19 hereto, neither the Borrower
nor any of its Subsidiaries is in default under any agreement, ordinance,
resolution, decree, bond, note, indenture, order or judgment to which it is a
party or by which it is bound, or any other agreement or other instrument by
which any of the properties or assets owned by it or used in the conduct of its
business is affected, which default could reasonably be expected to have a
Material Adverse Effect.
(b) The Borrower, each of its Subsidiaries, each Related Professional
Corporation and each professional officer, director, employee or contractor of
any of the foregoing (in so far as related to services provided in respect of
the Borrower or any Subsidiary by any such officer, director, employee or
contractor) has complied and is in compliance in all respects with all
applicable laws, ordinances, regulations, resolutions, decrees and other similar
documents and instruments of all courts and governmental authorities, bureaus
and agencies, domestic and foreign and all applicable Environmental Laws and
Regulations, non-compliance with which could reasonably be expected to have a
Material Adverse Effect.
SECTION 4.20 Owned Real Property. As of the date hereof, set forth on
Schedule 4.20 is a complete and accurate list of all real property owned by any
Loan Party or any of its Subsidiaries, showing as of the date hereof the street
address, county or other relevant jurisdiction, state and record owner thereof.
Such Loan Party or such Subsidiary has good,
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marketable and insurable fee simple title to such real property, free and clear
of all Liens, other than Permitted Liens.
SECTION 4.21 Leased Real Property. As of the date hereof, set forth on
Schedule 4.21 is a complete and accurate list of all leases of real property
with an annual rent in excess of $250,000 under which the Borrower or any of its
Subsidiaries is the lessee, showing as of the date hereof the street address,
county or other relevant jurisdiction, state, lessor, lessee, expiration date
and annual rental cost thereof.
SECTION 4.22 Material Contracts. Set forth on Schedule 4.22 is a
complete and accurate list of all Material Contracts of each Loan Party and its
Subsidiaries, showing as of the date hereof the parties, subject matter and term
thereof. Except as could not reasonably be expected to have a Material Adverse
Effect, each such Material Contract has been duly authorized, executed and
delivered by all parties thereto, as of the date hereof has not been amended or
otherwise modified, is in full force and effect and, to the best knowledge of
the Borrower with respect to all parties other than the Loan Parties, is binding
upon and enforceable against all parties thereto in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law). There exists no material default
under any Material Contract by the Borrower or any of its Subsidiaries party
thereto. To the best knowledge of each Loan Party, there exists no default under
any Material Contract by any other party thereto which could reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.23 Investments. As of the date hereof, set forth on Schedule
4.23 is a complete and accurate list of all Investments in excess of $350,000
held by the Borrower or any of its Subsidiaries, showing as of the date hereof
the amount, obligor or issuer and maturity, if any, thereof.
SECTION 4.24 Intellectual Property. As of the date hereof, set forth on
Schedule 4.24 is a complete and accurate list of all patents, registered
trademarks, service marks and copyrights, and all applications therefor, all
material unregistered trademarks, service marks, trade names and copyrights, and
all licenses of any of the foregoing (except for licenses of commercially
available software), of the Borrower or any of its Subsidiaries. The Borrower
and each of its Subsidiaries owns or has rights to use all patents, trademarks,
trade names, service marks, copyrights and other intellectual property material
to the conduct of its business as now or heretofore conducted by it except to
the extent the failure to so own or have such rights could not reasonably be
expected to result in a Material Adverse Effect. The Borrower and each of its
Subsidiaries conducts its business and affairs without infringement of or
interference with any patent, trademark, trade name, service ▇▇▇▇, copyright or
other intellectual property of any other Person except to the extent that could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 4.25 Spectrum Acquisition Documents. Each Spectrum Acquisition
Document to which the Borrower or any of its respective Subsidiaries is a party
has been duly
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executed and delivered by such Loan Party or such Subsidiary, as the case may
be, and, to the best knowledge of the Borrower, each Spectrum Acquisition
Document has been duly executed and delivered by the parties thereto other than
the Borrower and its Subsidiaries, and is in full force and effect. All
representations and warranties made in the Spectrum Acquisition Documents were
true and correct in all material respects at the time as of which such
representations and warranties were made; provided, however, that any
representation made relating to any party other than any Loan Party is made to
the best knowledge of the Borrower.
SECTION 4.26 Fees. No broker's or finder's fees or commissions or any
similar fees or commissions will be payable by the Borrower or any of its
Subsidiaries with respect to the incurrence and maintenance of the Obligations,
any other transaction contemplated by the Loan Documents or any services
rendered in connection with any such transactions. The Borrower hereby covenants
and agrees to indemnify the Administrative Agent and each Lender Party against
and hold the Administrative Agent and each Lender Party harmless from any claim,
demand or liability for broker's or finder's fees or similar fees or
commissions.
SECTION 4.27 Government Consents for Conduct of Business.
(a) The Borrower and each Subsidiary Guarantor has, and is in good
standing with respect to, all approvals, permits, licenses, consents,
authorizations, franchises, certificates, and inspections of all Regulatory
Agencies and are otherwise necessary for such Loan Party to continue to conduct
business and own, use, operate, and maintain its property and assets as
heretofore conducted, owned, used, operated, and maintained which, if not
obtained (whether directly or by lawful and effective assignment) or not
maintained in good standing, would have a Material Adverse Effect. No such
approval, permit, license, consent, authorization, franchise, or certificate is
conditioned or limited (in any material respect) any more so than as is
generally the case with respect to Persons engaged in the same or similar lines
of business. Each such approval, permit, license, consent, authorization,
franchise, or certificate was duly and validly granted or issued, is in full
force and effect, and neither has been suspended, rescinded, revoked, forfeited,
or assigned to a party other than the Borrower or any of its Subsidiaries.
Further, no conditions exist or events have occurred that, with the giving of
notice or lapse of time or both, could result in the amendment, modification,
suspension, rescission, revocation, forfeiture, or non-renewal of any such
approval, permit, license, consent, authorization, franchise, or certificate.
(b) Each Related Professional Corporation and each of the Borrower's,
each of its Subsidiaries' and the Related Professional Corporations' employees,
officers, directors, and contractors providing professional medical services to
patients is, and has at all times been, while serving in such capacity (i) duly
licensed and certified (as and where required) by each regulatory body having
jurisdiction over services rendered by such Person, and (ii) eligible (as and
where required) to participate in Medicare, Medicaid, and other federal and
state funded health care reimbursement programs, where such failure to be
licensed, certified or eligible, as the case may be, could reasonably be
expected to have a Material Adverse Effect either individually or in the
aggregate.
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SECTION 4.28 Labor Disputes; Collective Bargaining Agreement; Employee
Grievances. Except as set forth on Schedule 4.28 hereto: (a) as of the date
hereof, there are no collective bargaining agreements or other labor contracts
covering the Borrower or any other Loan Party; (b) as of the date hereof, no
such collective bargaining agreement or other labor contract will expire during
the term of this Agreement; (c) as of the date hereof, to the Borrower's
knowledge no union or other labor organization is seeking to organize, or to be
recognized as bargaining representative for, a bargaining unit of employees of
the Borrower or any other Loan Party; (d) to the Borrower's knowledge there is
no pending or threatened strike, work stoppage, material unfair labor practice
claim or charge, arbitration or other material labor dispute against or
affecting the Borrower or any of its Subsidiaries or their respective employees
which could reasonably be expected to have a Material Adverse Effect; (e) there
has not been, during the three (3) year period prior to the date hereof, a
strike, work stoppage, material unfair labor practice claim or charge,
arbitration or other material labor dispute against or affecting the Borrower or
any of its Subsidiaries or any of their respective employees, and (f) there are
no actions, suits, charges, demands, claims, counterclaims or proceedings
pending or, to the Borrower's knowledge, threatened against the Borrower or any
of its Subsidiaries, by or on behalf of, or with, its employees, other than
employee grievances which could not reasonably be expected to have a Material
Adverse Effect.
SECTION 4.29 Senior Debt. All of the Obligations of the Borrower and
the Guarantors to the Agents and the Lenders under this Agreement and the other
Loan Documents constitute "Designated Senior Debt" as defined in the
Subordinated Notes Indenture and are permitted thereunder and there exists no
other "Designated Senior Debt."
The Borrower may, in addition to the reporting requirements set forth
in Section 7.18, at any time and from time to time, supplement or amend any one
or more of the other Schedules referred to in this Agreement (other than
Schedule I), and any representation or warranty contained herein which refers to
any such Schedule shall from and after the date of any such amendment refer to
such Schedule as so supplemented or amended; provided, however, that in no event
shall any such supplemented or amended disclosure cure any existing Default or
Event of Default.
ARTICLE 5
AFFIRMATIVE COVENANTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will:
SECTION 5.1 Compliance with Law. Comply, cause each of its Subsidiaries
to comply and use its best efforts to cause the Related Professional
Corporations to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA.
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SECTION 5.2 Payment of Taxes, Etc. Timely pay and discharge, and cause
each of its Subsidiaries to timely pay and discharge, (a) all taxes, assessments
and governmental charges or levies imposed upon it or upon its property and (b)
all lawful claims that, if unpaid, might by law become a Lien upon its property
(other than a Permitted Lien); provided, however, that the Borrower and its
Subsidiaries shall not be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained, unless and until any
Lien (other than a Permitted Lien) resulting therefrom attaches to its property
and becomes enforceable against the Borrower or any of its Subsidiaries.
SECTION 5.3 Compliance with Environmental Laws. Comply, and cause each
of its Subsidiaries to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause each of
its Subsidiaries to obtain and renew all material Environmental Permits
reasonably necessary for its operations and properties; and conduct, and cause
each of its Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any Removal, Remedial or other Response action necessary
to remove and clean up all Hazardous Materials from any of its properties, in
accordance with the requirements of all Environmental Laws; provided, however,
that the Borrower and its Subsidiaries shall not be required to undertake any
such cleanup, Removal, Remedial or Response action to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and adequate reserves as determined by the Administrative Agent are being
maintained with respect to such circumstances.
SECTION 5.4 Maintenance of Insurance.
(a) Maintain, and cause each of its Subsidiaries to maintain, insurance
with responsible and reputable insurance companies (including, without
limitation, any Insurance Subsidiary, solely as it relates to medical
malpractice insurance, workers compensation and such other insurance as may be
approved by Fleet and Bank of America) or associations in such amounts and
covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates.
(b) In addition to, and without limiting the foregoing, the Borrower
and its Subsidiaries shall maintain or require the maintenance of medical
malpractice insurance with a responsible insurance company (including, without
limitation, any Insurance Subsidiary) for or by and covering each Related
Professional Corporation and each of such Loan Party's or Related Professional
Corporation's respective employees, officers, directors or contractors who
provides professional medical services to patients, and naming the relevant Loan
Party as an additional insured. Such insurance shall cover such casualties,
risks and contingencies, shall be of the type and in amounts, and may be subject
to deductibles as are customarily maintained by Persons employed or serving in
the same or a similar capacity.
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(c) Cause any Insurance Subsidiary to (i) conduct its insurance
business in compliance with all applicable insurance laws, rules, regulations
and orders and using sound actuarial principles and (ii) maintain stop-loss
coverage and excess coverage reinsurance for individual claims, in each case, as
may be reasonably satisfactory to Fleet and Bank of America. The insurance
premiums and other expenses charged by any Insurance Subsidiary to the Borrower
and its Subsidiaries shall be reasonable and customary and reasonably
satisfactory to the Administrative Agent. The Borrower will provide the
Administrative Agent (A) copies of any outside actuarial reports prepared with
respect to any projection, valuation or appraisal of any Insurance Subsidiary
promptly after receipt thereof and (B) once each year promptly after receipt
thereof, an actuarial opinion with respect to any Insurance Subsidiary from (x)
Aon Corporation or (y) an actuarial firm reasonably satisfactory to the
Administrative Agent.
SECTION 5.5 Preservation of Corporate Existence, Etc. Except as
otherwise permitted hereunder, preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its existence, legal structure, legal
name, material rights (charter and statutory), material permits, material
licenses, material approvals, material privileges and material franchises.
SECTION 5.6 Visitation Rights.
(a) At any reasonable time and from time to time during normal business
hours, upon reasonable notice, permit the Administrative Agent, or, during the
continuance of an Event of Default, the Lender Parties, or any agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of and visit the properties of the Borrower and its
Subsidiaries (and to the extent lawful, the Related Professional Corporations),
and to discuss the affairs, finances and accounts of the Borrower and any such
Subsidiaries with any of their officers or directors.
(b) Permit the Administrative Agent and the Lender Parties to conduct
such commercial finance examinations and/or Collateral audits of the Borrower
and its Subsidiaries during each calendar year as the Administrative Agent may
reasonably request; provided, that in the absence of the occurrence and
continuance of an Event of Default, the Administrative Agent and the Lender
Parties may conduct one (1) finance examination and one (1) collateral audit per
annum.
SECTION 5.7 Keeping of Books. Keep, and cause each of its Subsidiaries
and each of the Related Professional Corporations to keep, proper books of
record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower, each
Subsidiary and each Related Professional Corporation in accordance with GAAP.
SECTION 5.8 Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
that are reasonably necessary in the conduct of its business in good working
order and condition, ordinary wear and tear and damage
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by casualty excepted and except where the failure to so maintain and preserve
could not be reasonably expected to result in a Material Adverse Effect.
SECTION 5.9 Performance of Material Contracts. Perform and observe, and
cause each of its Subsidiaries to perform and observe, all of the terms and
provisions of each Material Contract to be performed or observed by it except
where the failure to so perform or observe could not be reasonably expected to
result in a Material Adverse Effect.
SECTION 5.10 Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates (including any Insurance Subsidiary, but
excluding the Borrower or any of its other Wholly Owned Subsidiaries) on terms
that are fair and reasonable to the Borrower and its Subsidiaries (other than
the Insurance Subsidiary) and no less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arms-length transaction with a
Person not an Affiliate; provided, that in any event the following shall be
permitted: (i) the transactions (including the payment of fees and expenses in
connection therewith) contemplated by the Spectrum Acquisition Documents, the
Loan Documents and the documents related to the Subordinated Debt; (ii) the
payment of Management Fees and expenses pursuant to and in accordance with the
Management Services Agreement; (iii) payments under any tax sharing agreement in
form and substance reasonably satisfactory to the Agents or arrangements
reasonably satisfactory to the Agents among the Borrower and other members of
the affiliated group of corporations of which the Borrower is the common parent;
(iv) reasonable and customary directors' fees, indemnification of officers and
directors and similar arrangements and payments thereunder; (v) dividends
permitted to be paid pursuant to and in accordance with Section 6.6; (vi)
transactions pursuant to management contracts with affiliated physicians entered
into in the ordinary course of business consistent with past practice; and (vii)
transactions pursuant to any contract or agreement in effect on the date hereof
and set forth on Schedule 5.10, as amended modified or replaced so long as such
amendment, modification or replacement is not materially less favorable to the
Borrower and its Subsidiaries than the contract or agreement in effect on the
date hereof.
SECTION 5.11 Agreement to Grant Additional Security.
(a) Promptly, and in any event within thirty (30) days after the
acquisition by the Borrower or any Subsidiary Guarantor of (i) assets of the
type that would have constituted Collateral at the date hereof and investments
of the type that would have constituted Collateral on the date hereof (other
than assets with a fair market value of less than $100,000), including the
capital stock of any direct or indirect Subsidiary of the Borrower or (ii) any
Mortgaged Property, notify the Administrative Agent of the acquisition of such
assets or investments or Mortgaged Property and, to the extent not already
Collateral in which the Administrative Agent has a perfected security interest
pursuant to the Collateral Documents, such assets and investments and Mortgaged
Property will become additional Collateral hereunder to the extent the
Administrative Agent deems the pledge of such assets or mortgage of such
Mortgaged Property practicable, and the Borrower will, and will cause each
Subsidiary Guarantor to, take all
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necessary action, including the filing of appropriate financing statements under
the provisions of the Uniform Commercial Code, applicable foreign, domestic or
local laws, rules or regulations in each of the offices where such filing is
necessary or appropriate to grant the Administrative Agent a perfected Lien in
such Collateral (or comparable interest under foreign law in the case of foreign
Collateral) or perfected mortgage on such Mortgaged Property pursuant to and to
the full extent required by the Collateral Documents and this Agreement.
(b) Promptly, and in any event no later than thirty (30) days after a
request with respect thereto, cause each of the Borrower's direct and indirect
Domestic Subsidiaries (other than Immaterial Subsidiaries and Insurance
Subsidiary) as the Administrative Agent shall request to become party to, or to
execute and deliver a Subsidiary Guaranty, guarantying to the Administrative
Agent and the Lenders the prompt payment, when and as due, of all Obligations of
the Borrower and its Subsidiaries under the Loan Documents, including all
obligations under any Bank Hedge Agreements.
(c) Promptly, and in any event no later than thirty (30) days after a
request with respect thereto, cause each Subsidiary Guarantor created or
established after the date hereof to grant to the Administrative Agent, for the
ratable benefit of the Lenders, a first priority Lien (subject to Liens
permitted pursuant to Section 6.1) on all property (tangible and intangible) of
such Subsidiary Guarantor, including, without limitation, all of the capital
stock of any of its Domestic Subsidiaries and (x) 65% (or such greater
percentage which would not result in material adverse tax consequences) of the
Voting Stock and (y) 100% (to the extent it would not result in material adverse
tax consequences) of the non-voting stock of each Foreign Subsidiary, upon terms
similar to those set forth in the Collateral Documents and otherwise reasonably
satisfactory in form and substance to the Administrative Agent. The Borrower
shall cause each Subsidiary Guarantor, at its own expense, to become a party to
a Security Agreement, an Intellectual Property Security Agreement, a Mortgage
(to the extent provided in clause (a) above) and any other Collateral Document
and to execute, acknowledge and deliver, or cause the execution, acknowledgment
and delivery of, and thereafter register, file or record in any appropriate
governmental office, any document or instrument reasonably deemed by the
Administrative Agent to be necessary or desirable for the creation and
perfection of the foregoing Liens (including legal opinion, title insurance,
consents, corporate documents and any additional or substitute security
agreements or mortgages or deeds of trust). The Borrower will cause each such
Subsidiary Guarantor to take all reasonable actions requested by the
Administrative Agent (including, without limitation, the filing of UCC-1's) in
connection with the granting of such security interests.
(d) Promptly, and in any event not later than thirty (30) days after a
request with respect thereto, (i) deliver to the Administrative Agent the
original of all instruments, documents and chattel paper, and all other
Collateral of which the Administrative Agent determines it should have physical
possession in order to perfect and protect its security interest therein, duly
pledged, endorsed or assigned to the Administrative Agent without restriction;
(ii) use reasonable
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efforts obtain landlord waivers, in form and substance satisfactory to the
Administrative Agent, with respect to any material Inventory or other Collateral
located at a location that is not owned by the Borrower or a Subsidiary; (iii)
deliver to the Administrative Agent warehouse receipts covering any portion of
the Inventory or other Collateral located in warehouses and for which warehouse
receipts are issued; (iv) when an Event of Default exists, transfer Inventory to
locations designated by the Administrative Agent; (v) if any Collateral is at
any time in the possession or control of any warehousemen, bailee or the
Borrower's agents or processors, notify the Administrative Agent thereof and
notify such person of the Administrative Agent's security interest in such
Collateral and to the extent requested by the Administrative Agent and to the
extent the value of such Collateral exceeds $1,000,000 and use reasonable
efforts to obtain a landlord waiver or bailee letter, in form and substance
satisfactory to the Administrative Agent, from such person and instruct such
person to hold all such Collateral for the Administrative Agent's account
subject to the Administrative Agent's instructions; (vi) if at any time any
Inventory or other Collateral with a value individually in excess of $250,000
(or $1,000,000 in the aggregate with respect to all such property) is located on
any real property of the Borrower which is subject to a mortgage or other Lien
and to the extent requested by the Administrative Agent, use reasonable efforts
to obtain a mortgagee waiver, in form and substance satisfactory to the
Administrative Agent, from the holder of each mortgage or other Lien on such
real property; and (vii) to the extent not inconsistent with the terms of this
Agreement, take all such other actions and obtain all such other agreements as
the Administrative Agent may reasonably deem necessary or desirable in respect
of any Collateral.
(e) The security interests required to be granted pursuant to this
Section shall be granted pursuant to the Collateral Documents or, in the
Administrative Agent's discretion, such other security documentation (which
shall be substantially similar to the Collateral Documents already executed and
delivered by the Borrower and the Guarantors) as is satisfactory in form and
substance to the Administrative Agent (the "Additional Collateral Documents")
and shall constitute valid and enforceable perfected security interests prior to
the rights of all third Persons and subject to no other Liens except Liens
permitted under Section 6.1. The Additional Collateral Documents and other
instruments related thereto shall be duly recorded or filed in such manner and
in such places and at such times as are required by law to establish, perfect,
preserve and protect the Liens, in favor of the Administrative Agent, for the
benefit of the Lender Parties, granted pursuant to the Additional Collateral
Documents and, all taxes, fees and other charges payable in connection therewith
shall be paid in full by the Borrower. At the time of the execution and delivery
of Additional Collateral Documents, the Borrower shall cause to be delivered to
the Administrative Agent such agreements, opinions of counsel, and other related
documents as may be reasonably requested by the Administrative Agent or the
Required Lenders to assure themselves that this Section has been complied with.
SECTION 5.12 Interest Rate Protection. Within ninety (90) days
following the Closing Date, the Borrower shall obtain and thereafter keep in
effect one or more interest rate Hedge Agreements (the terms and other
provisions of all such Hedge Agreements to be subject to the
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prior written consent of the Administrative Agent) such that not less than 50%
of the principal balance of all Funded Debt outstanding of the Borrower and its
Subsidiaries is either at a fixed rate or is covered by such Hedge Agreements,
for an aggregate period of not less than three (3) years commencing on the
Closing Date.
SECTION 5.13 Performance of Spectrum Acquisition Documents. Perform and
observe, or cause the relevant Subsidiary to perform and observe, all of the
terms and provisions of each Spectrum Acquisition Document to be performed or
observed by it or such Subsidiary, maintain each such Spectrum Acquisition
Document in full force and effect, enforce each such Spectrum Acquisition
Document in accordance with its terms, take all such action to such end as may
be from time to time requested by the Administrative Agent and, upon request of
the Administrative Agent, make such demands and requests for action or for
information and reports as the Borrower or any Subsidiary is entitled to make
under any Spectrum Acquisition Document.
SECTION 5.14 Assignment of Claims. If required by the Administrative
Agent, the Borrower shall, within a reasonable period of time as specified by
the Agent, deliver or cause to be delivered all documents necessary or desirable
in order to comply with all applicable federal and state assignment of claims
acts, statutes or regulations.
ARTICLE 6
NEGATIVE COVENANTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will not, at any time, without the prior consent of the Required
Lenders:
SECTION 6.1 Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character (including,
without limitation, Accounts, Inventory and other Collateral) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial
Code or any other statute of any jurisdiction, a financing statement that names
the Borrower or any of its Subsidiaries as debtor, or sign or suffer to exist,
or permit any of its Subsidiaries to sign or suffer to exist, any security
agreement authorizing any secured party thereunder to file any such financing
statement, or assign, or permit any of its Subsidiaries to assign, any accounts
or other right to receive income, excluding, however, from the operation of the
foregoing restrictions the following:
(a) Liens created under the Loan Documents;
(b) Permitted Liens;
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(c) Liens existing on the date hereof and described on Schedule 6.1(c);
(d) Purchase money Liens securing Debt permitted under Section
6.2(c)(i) upon real property or Equipment acquired or held by the Borrower or
any of its Subsidiaries in the ordinary course of business to secure the
purchase price of such real property or Equipment or to secure Debt incurred
solely for the purpose of financing the acquisition, construction or improvement
of any such real property or Equipment to be subject to such Liens, or Liens
existing on any such real property or Equipment at the time of acquisition
(whether in a stock or asset transaction) (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for the same or a
lesser amount; provided, however, that no such Lien shall extend to or cover any
property other than the real property or Equipment being acquired, constructed
or improved, and no such extension, renewal or replacement shall extend to or
cover any property not theretofore subject to the Lien being extended, renewed
or replaced;
(e) Liens arising in connection with Capitalized Leases permitted under
Section 6.2(c)(i); provided, that no such Lien shall extend to or cover any
Collateral or any assets other than the assets subject to such Capitalized
Leases;
(f) Liens securing Debt permitted under Section 6.2(c)(i) on property
or assets acquired pursuant to a Permitted Acquisition, or on property or assets
of a Subsidiary of the Borrower in existence at the time such Subsidiary is
acquired pursuant to a Permitted Acquisition, provided that such Liens are not
incurred in connection with or in anticipation of such Permitted Acquisition and
do not attach to any other asset of the Borrower or any of its Subsidiaries
(g) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.7;
(h) Licenses, leases or subleases granted to third Persons in the
ordinary course of business not interfering in any material respect with the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary Uniform Commercial Code financing
statements regarding operating leases not constituting Debt or consignments;
(j) Liens on insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto;
(k) Liens consisting of rights of set-off of a customary nature or
bankers' liens on amounts on deposit, whether arising by contract or operation
of law, incurred in the ordinary course of business so long as such deposits are
not intended to be collateral for any obligation;
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(l) Liens incurred in the ordinary course of business of the Borrower
or any Subsidiary of the Borrower with respect to obligations (other than for
Debt for borrowed money) that do not exceed $7,500,000 at any one time
outstanding; and
(m) The replacement, extension or renewal of any Lien permitted by
clauses (b) through (l) above upon or in the same property theretofore subject
thereto in connection with the replacement, extension or renewal (without
increase in the amount or any change in any direct or contingent obligor) of the
Debt secured thereby.
SECTION 6.2 Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt
other than:
(a) Debt incurred pursuant to the Loan Documents;
(b) In the case of any of the Subsidiaries of the Borrower, Debt owed
to the Borrower or to a Subsidiary of the Borrower; provided, that if such Debt
is owed by a Subsidiary of the Borrower which is not a Guarantor such Debt shall
be evidenced by a promissory note, such promissory note shall be pledged to the
Administrative Agent pursuant to the terms of the Security Agreement and, except
as set forth on Schedule 6.2(b) with respect to existing Debt, there shall be no
restrictions whatsoever on the ability of such Subsidiary to repay such Debt;
(c) In the case of the Borrower and any of its Subsidiaries:
(i) Debt (A) secured by Liens permitted by Section 6.1(d), (B)
Capitalized Leases and (C) of the Borrower or any Subsidiary acquired
pursuant to a Permitted Acquisition or Permitted Investment (or Debt
assumed at the time of a Permitted Acquisition or Permitted Investment
of any asset securing such Debt), provided that such Debt was not
incurred in connection with, or in anticipation or contemplation of,
such Permitted Acquisition or Permitted Investment, collectively not to
exceed in the aggregate $7,500,000 at any time outstanding;
(ii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(iii) Subordinated Debt incurred pursuant to the Subordinated
Debt Financing and other Subordinated Debt; provided, that the Net Cash
Proceeds of any such Subordinated Debt issued after the Closing Date
shall be used to prepay the Advances then outstanding in accordance
with Section 2.6(b)(iii), except that up to $25,000,000 of such Net
Cash Proceeds may be used to pay the purchase price of a Permitted
Acquisition;
(iv) Debt existing on the date hereof and described on
Schedule 6.2(c);
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(v) Debt in respect of Hedge Agreements entered into in the
ordinary course of business to protect the Borrower or any of its
Subsidiaries against fluctuations in interest rates or currency values;
(vi) unsecured Debt consisting of promissory notes issued by
the Borrower to officers, directors and employees of the Borrower or
any Subsidiary of the Borrower issued to purchase or redeem capital
stock of the Borrower to the extent that payment of cash on such
promissory notes is permitted hereunder and so long as such promissory
notes are expressly subordinate to the Obligations of the Borrower and
the Subsidiary Guarantors under the Loan Documents on terms reasonably
acceptable to the Administrative Agent;
(vii) Debt consisting of Qualified Debt Securities of the
Borrower or any of its Subsidiaries incurred by it in connection with
Permitted Acquisitions plus the amount of interest on such Qualified
Debt Securities paid in kind or through accretion or capitalization to
the extent that incurrence thereof would not result in an Event of
Default under any of the financial covenants set forth in Article 8;
(viii) Debt incurred in connection with the financing of
insurance premiums (excluding tail medical malpractice insurance) in an
amount not to exceed the lesser of $30,000,000 and the premiums with
respect to the applicable insurance policies;
(ix) Debt constituting Guaranteed Obligations permitted under
Section 6.18;
(x) Debt in respect of any of the Recapitalization Documents
as in effect on the date hereof, including, without limitation, the
Existing Earnout Obligations;
(xi) Obligations in respect of the Preferred Stock;
(xii) refinancings of any Debt originally incurred as
permitted by this Section 6.2(c)(i), (iii), (iv), (vi), (vii) and (x);
provided, that the terms of any such refinancing of such Debt, and of
any agreement entered into and of any instrument issued in connection
therewith, shall be on substantially the same terms as the agreements
and instruments in existence on the date hereof and otherwise permitted
by this Agreement and the other Loan Documents; and, provided, further,
that the principal amount of such Debt shall not be increased above the
principal amount thereof then outstanding, neither the final maturity
date nor average weighted maturity date (calculated from the date of
such refinancing) shall be decreased and the direct and indirect
obligors therefor shall not be changed, as a result of or in connection
with such refinancing and any Debt which is subordinate to the
Obligations shall remain subordinate on the same terms or on such other
terms as may be approved by the Administrative Agent; and
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(xiii) other Debt not expressly permitted above in an
aggregate amount together with the amount of Guaranteed Obligations
incurred pursuant to Section 6.18(k) not to exceed $22,500,000 at any
time outstanding.
SECTION 6.3 Fundamental Changes; Acquisitions.
(a) Merge into or consolidate with any Person or permit any Person to
merge into it, or permit any of its Subsidiaries to do so, except that so long
as no Default or Event of Default shall have occurred and be continuing and so
long as no Default or Event of Default would result therefrom, (i) any
Subsidiary of the Borrower may merge into or consolidate with any other
Subsidiary of the Borrower or the Borrower, as the case may be, provided that in
the case of any such merger or consolidation, the Person resulting from such
merger or consolidation shall be the Borrower or a Wholly Owned Subsidiary of
the Borrower, as the case may be and (ii) Holdings may merge into the Borrower
on the date of a Qualified Initial Public Offering as long as the Borrower is
the surviving Person in such merger;
(b) Liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), convey, sell, assign, lease, transfer or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or substantially all of
its property, business or assets, or permit any of its Subsidiaries to do any of
the foregoing, except that so long as no Default or Event of Default shall have
occurred and be continuing and so long as no Default or Event of Default would
result therefrom, any Subsidiary of the Borrower may liquidate itself into any
other Subsidiary of the Borrower or the Borrower, as the case may be;
(c) Acquire or permit any Subsidiary to acquire all or substantially
all of the assets or any division or line of business of any other Person
(including capital stock), except that the Borrower and Subsidiary Guarantors
may consummate (i) Permitted Acquisitions and (ii) the transfers contemplated by
Sections 6.4(e) and (f).
SECTION 6.4 Sales, Etc. of Assets. Sell, lease (as lessor), transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease (as
lessor), transfer or otherwise dispose of, any assets or grant any option or
other right to purchase, lease or otherwise acquire any assets, except:
(a) Sales of Inventory and Cash Equivalents in the ordinary course of
business;
(b) Sales of obsolete or worn-out Equipment and Intellectual Property
in the ordinary course of business;
(c) Sales or discounts of overdue accounts receivable in the ordinary
course of business on customary terms and conditions;
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(d) Leases or subleases of real property or licenses or sublicenses of
Intellectual Property in each case in the ordinary course of business;
(e) The Borrower may transfer assets to any Subsidiary Guarantor and
may make Investment in other Subsidiaries to the extent permitted by Section
6.5(a);
(f) Any Subsidiary of the Borrower may transfer assets to the Borrower
or to any Subsidiary Guarantor or make an Investment in other Subsidiaries to
the extent permitted under Section 6.5(a);
(g) The sale of any asset by the Borrower or any of its Subsidiaries
(other than an asset included in Section 6.4(a) through (f)) so long as (i) the
purchase price paid to the Borrower or such Subsidiary for such asset shall be
no less than the fair market value of such asset at the time of such sale, (ii)
the purchase price for such asset shall be paid to the Borrower or such
Subsidiary at least seventy-five percent (75%) in cash and (iii) the aggregate
Net Proceeds received by the Borrower and all of its Subsidiaries for such asset
and all other assets sold by the Borrower and its Subsidiaries (other than an
asset included in Section 6.4(a) through (f)) in any Fiscal Year pursuant to
this clause (g) shall not exceed $10,000,000; provided, that the Borrower and
its Subsidiaries may sell or exchange specific items of Equipment, so long as
the purpose of each sale or exchange is to acquire (and results within 180 days
of such sale or exchange in the acquisition of) replacement items of Equipment
which are, in the reasonable business judgment of the Borrower and its
Subsidiaries, the functional equivalent of the item of Equipment so sold or
exchanged;
provided that (i) in the case of sales of assets pursuant to Section 6.4(g), the
Borrower shall apply the Net Cash Proceeds from such sale in accordance with
Section 2.6(b)(ii) and (ii) to the extent the Required Lenders or, if required
pursuant to Section 11.1, all Lenders, waive the provisions of this Section with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or disposed of as permitted by this Section, such Collateral in each case
shall be sold or otherwise disposed of free and clear of the Liens created by
the Loan Documents and the Administrative Agent shall take such actions as are
appropriate in connection therewith.
SECTION 6.5 Investments. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than (each of
the following, a "Permitted Investment"; provided, however, that only clauses
(d), (h) and (i) herein and such other Investments herein provided and approved
in writing by the Administrative Agent shall be a "Permitted Investment" for any
Insurance Subsidiary):
(a) Investments by the Borrower and its Subsidiaries in their
Subsidiaries outstanding on the date hereof and described on Schedule 6.5(a),
and additional investments in new or existing Wholly Owned Subsidiaries of the
Borrower; provided, however, that no more than an aggregate amount equal to
$3,000,000 shall be invested from the date hereof in Foreign Subsidiaries; and,
provided, further, that with respect to Investments in any newly acquired (to
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the extent such acquisition is permitted hereunder) or created Wholly Owned
Subsidiary (other than a Foreign Subsidiary or an Immaterial Subsidiary or the
Insurance Subsidiary), any such Subsidiary shall become a Guarantor pursuant to
the terms of the Subsidiary Guaranty and an additional grantor pursuant to the
terms of the Security Agreement and Intellectual Property Security Agreement and
otherwise comply with Section 5.11;
(b) loans and advances to officers, other employees and independent
contractor physicians in the ordinary course of the business of the Borrower and
its Subsidiaries in an aggregate principal amount not to exceed $3,000,000 at
any time outstanding;
(c) advances of salary to independent contractor physicians in the
ordinary course of business of the Borrower and its Subsidiaries;
(d) Investments by the Borrower and its Subsidiaries in Cash
Equivalents;
(e) Investments by the Borrower and its Subsidiaries in Hedge
Agreements permitted under Section 5.12 and Section 6.2;
(f) Investments consisting of intercompany Debt permitted under Section
6.2(b) or 6.18(i) and (j);
(g) Investments existing on the date hereof and described on Schedule
6.5(g) hereto;
(h) Investments by the Borrower and its Subsidiaries in deposit
accounts opened and maintained in the ordinary course of business;
(i) Investments consisting of accounts receivable in the ordinary
course of business;
(j) Investments in the form of Permitted Acquisitions;
(k) Investments required to be made pursuant to the Spectrum
Acquisition Documents as in effect on the date hereof;
(l) the Borrower and its Subsidiaries may receive and own Investments
acquired as non-cash consideration received in connection with an Asset
Disposition permitted by Section 6.4(g);
(m) the Borrower and its Subsidiaries may make pledges and deposits
permitted under Section 6.1;
(n) the Borrower and its Subsidiaries may acquire and own Investments
(including Debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and
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customers and in good faith settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course of
business and past due accounts;
(o) the Borrower and its Subsidiaries may hold Investments to the
extent such Investments reflect an increase in the value of Investments and
would otherwise exceed the limitations of this Section 6.5;
(p) transfers of assets to Related Professional Corporations to the
extent required under the express contractual terms of applicable management
contracts in the ordinary course of business;
(q) Investments consisting of notes payable from employees for the
purchase price of stock in connection with the issuance of such stock;
(r) Investments in the form of loans by the Borrower or any of its
Subsidiaries to Related Professional Corporations in the ordinary course of
business; provided, that such loans shall be evidenced by promissory notes and
such promissory notes shall be pledged to the Administrative Agent pursuant to
the terms of the Security Agreement;
(s) Investments made by the Borrower or any of its Subsidiaries solely
with the proceeds from issuances of capital stock of the Borrower to any Sponsor
or a Related Party after the date hereof; provided, that the capital
contribution made by such Sponsor or such Related Party in connection with such
issuance was made solely for the purpose of permitting the Borrower to make such
Investment;
(t) Investments made in any Insurance Subsidiary solely to the extent
permitted in Section 6.20(b); and
(u) other Investments not expressly permitted above in an aggregate
amount outstanding at any time not in excess of $7,500,000.
SECTION 6.6 Dividends, Etc. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its capital stock
or any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
securities to its stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit any of its
Subsidiaries to do any of the foregoing or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of the Borrower or any warrants, rights or options to acquire such capital
stock or to issue or sell any such capital stock or any warrants, rights or
options to acquire such capital stock, except:
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(a) the Borrower may declare and pay dividends and distributions
payable solely in common stock of the Borrower;
(b) a Subsidiary of the Borrower may declare and pay dividends and
distributions to its stockholders ratably in accordance with their interests;
(c) for issuances of stock expressly permitted by Section 6.17;
(d) so long as no Default or Event of Default has occurred and is
continuing or would occur after giving effect thereto, the repurchase,
redemption or other acquisition or retirement for value of any capital stock of
the Borrower held by any members or former member of the Borrower's (or any of
its Subsidiaries') management; provided, however, that the aggregate price paid
shall not exceed (x) $4,000,000 in any Fiscal Year and $20,000,000 in the
aggregate during the term of this Agreement, plus (y) the aggregate cash
proceeds received by the Borrower from any issuance or reissuance of capital
stock by the Borrower to members of management of the Borrower and its
Subsidiaries and the net proceeds to the Borrower of any "key-man" life
insurance policies;
(e) repurchases of capital stock deemed to occur upon the exercise of
stock options to the extent the value of such capital stock represents all or a
portion of the exercise price thereof;
(f) the Borrower and its Subsidiaries may pay regularly scheduled
dividends on the Preferred Stock pursuant to the terms thereof solely through
the issuance of additional interests of such Preferred Stock, or by an increase
in the liquidation preference thereof;
(g) the Borrower may issue its common stock to holders of Preferred
Stock upon the conversion thereof in accordance with the terms thereof;
(h) the Borrower may redeem its Preferred Stock (including accrued and
unpaid dividends thereon) from Net Cash Proceeds from any Equity Issuance to the
extent a payment from such proceeds is not required pursuant to Section
2.6(b)(iv); and
(i) on or before September 1, 2002, the Borrower may redeem Preferred
Stock held by MedPartners, Inc. with an aggregate liquidation preference
(including accrued and unpaid dividends thereon) of not more than $1,500,000
solely in exchange for non-cash consideration consisting solely of the
settlement of an existing indemnity claim by the Borrower against MedPartners,
Inc.
SECTION 6.7 Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business (and
businesses reasonably related thereto) as carried on at the date hereof; it
being understood and acknowledged that any Insurance Subsidiary shall be the
only entity conducting insurance business (and business reasonably related
thereto) and that any Insurance Subsidiary shall be engaged solely in the
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medical malpractice business, workers compensation and such other insurance
business as may be approved by Fleet and Bank of America, for the underwriting
of insurance policies for the Borrower and its Subsidiaries and each Related
Professional Corporation and each of such Loan Party's or Related Professional
Corporation's respective employees, officers, directors or contractors who
provides professional medical services to patients.
SECTION 6.8 Charter Amendments. Amend, or permit any of its
Subsidiaries to amend, its certificate or articles of incorporation or bylaws if
such amendment would adversely affect (i) the Borrower's or such Subsidiary's
capacity to perform its obligations under the Loan Documents to which it is a
party or (ii) the interests or rights of the Administrative Agent or any Lender
Party under the Loan Documents.
SECTION 6.9 Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (a) accounting policies or
reporting practices, except as mandated by GAAP, or (b) its Fiscal Year.
SECTION 6.10 Prepayments, Etc. of Debt. (a) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Subordinated Debt or Qualified Debt Securities, other than the exchange of
Subordinated Notes with Subordinated Notes in accordance with the Subordinated
Note Indenture or a refinancing of such Debt expressly permitted by Section
6.2(c)(xii) or (b) amend, modify or change in any manner any term or condition
of any Subordinated Debt or Qualified Debt Securities; provided, the Borrower
may prepay or purchase Subordinated Debt or Qualified Debt Securities with Net
Cash Proceeds received from an Initial Public Offering or a subsequent Public
Offering to the extent such proceeds are not required to be applied to prepay
indebtedness hereunder pursuant to Section 2.6(b)(iv).
SECTION 6.11 Amendment, Etc. of Spectrum Acquisition Documents. Cancel
or terminate (other than in accordance with its terms) any Spectrum Acquisition
Document or consent to or accept any cancellation or termination thereof (other
than in accordance with its terms), amend, modify or change in any materially
adverse manner any term or condition of any Spectrum Acquisition Document or the
Management Services Agreement or give any consent, waiver or approval
thereunder, waive any default under or any breach of any term or condition of
any Spectrum Acquisition Document or take any other action in connection with
any Spectrum Acquisition Document or the Management Services Agreement that
would, in any such case, materially impair the value of the interests or rights
of the Borrower thereunder, or would materially impair the interests or rights
of the Administrative Agent or any Lender Party, or permit any of its
Subsidiaries to do any of the foregoing; provided, that in no event shall the
Borrower or any of its Subsidiaries amend, modify or change the Management
Services Agreement so as to increase the Management Fees payable thereunder.
SECTION 6.12 Limitation on Certain Restrictions on Subsidiaries. Create
or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to (i) pay dividends
or make any other distributions on its capital stock or pay any Debt or other
Obligations owed to the Borrower or any of its other Subsidiaries, (ii)
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make any loans or advances to the Borrower or any of its other Subsidiaries or
(iii) transfer any of its property or assets to the Borrower or any of its other
Subsidiaries, except:
(a) those contained in the Loan Documents or the documents
related to the Subordinated Debt;
(b) any such encumbrance or restriction consisting of
customary non-assignment provisions in contractual obligations and are entered
into in the ordinary course of business to the extent such provisions restrict
the transfer of the lease or license or assignment of such agreement; and
(c) in the case of clause (iii) above, Permitted Liens or
other restrictions contained in security agreements securing Debt permitted by
Section 6.2(c)(i) to the extent such restrictions restrict the transfer of such
asset;
SECTION 6.13 Negative Pledge. Enter into or suffer to exist, or permit
any of the Subsidiaries of the Borrower to enter into or suffer to exist, any
agreement prohibiting or conditioning the creation or assumption of any Lien
upon any of its properties or assets, other than as provided in the Loan
Documents, the documents related to the Subordinated Debt and other than
restrictions contained in security agreements securing Debt permitted by Section
6.2(c)(i) to the extent such restrictions restrict the transfer of such asset.
SECTION 6.14 Partnerships, New Subsidiaries.
(a) Become a general partner in any general or limited partnership or
joint venture (other than as expressly permitted pursuant to Section 6.5(a), (j)
and (u)), or permit any of its Subsidiaries to do so, or
(b) Create any new Subsidiary, unless the Borrower and such Subsidiary
comply with Section 5.11, including, without limitation, by causing such newly
created Domestic Subsidiary (other than Immaterial Subsidiaries and the
Insurance Subsidiary) to become a Guarantor pursuant to the terms of the
Subsidiary Guaranty and an additional grantor pursuant to the terms of the
Security Agreement and Intellectual Property Security Agreement and the shares
of the capital stock of such Subsidiary to be pledged to the Administrative
Agent pursuant to the Security Agreement to the extent required thereunder.
SECTION 6.15 Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or derivatives or any similar speculative transactions, except
for Hedge Agreements expressly permitted under Section 5.12 or Section
6.2(c)(v).
SECTION 6.16 Capital Expenditures. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the aggregate of
all such Capital Expenditures made by the Borrower and its Subsidiaries to
exceed the amount set forth below for such Fiscal Year:
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FISCAL YEAR AMOUNT
----------- ------
2002 $15,000,000
2003 $16,000,000
2004 $17,000,000
2005 $18,000,000
2006 $19,000,000
2007 $19,000,000
; provided, however, that amounts permitted to be expended in a Fiscal Year that
are not expended in such fiscal year, but not in excess of one hundred (100%)
percent of such prior year's unused amount shall be permitted to be expended in
(but only in) the subsequent fiscal year, provided further that the amount of
Capital Expenditures made in any Fiscal Year shall not exceed one hundred forty
percent (140%) of the amount set forth in the table above for such Fiscal Year.
For purposes of this Section 6.16, Capital Expenditures shall not include (i)
expenditures constituting the purchase price for any Permitted Acquisition, (ii)
expenditures from proceeds of insurance settlements, condemnation awards and
other settlements in respect of lost, destroyed, damaged or condemned assets or
property to the extent such proceeds are used within 180 days of receipt to
replace assets or property so lost, destroyed, damages or condemned and (iii)
expenditures to the extent that such expenditures constitute a reinvestment of
Net Cash Proceeds from any Asset Disposition permitted under this Agreement,
which reinvestment is made within 180 days after receipt of such Net Cash
Proceeds.
SECTION 6.17 Issuance of Stock. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, issue, sell, assign,
pledge or otherwise encumber or dispose of any shares of capital stock of the
Borrower or any Subsidiary of the Borrower, except (a) to the Borrower, (b) to
qualify directors if required by applicable law, (c) as set forth in Schedule
6.17, (d) issuances of common stock and/or Preferred Stock of the Borrower to
directors, management and employees of the Borrower, pursuant to a stock option
or grant plan or the exercise of options issued pursuant thereto and (e) other
issuances of common stock or Preferred Stock of the Borrower (i) in connection
with a Permitted Acquisition, (ii) to any other Person so long as such common
stock is pledged to the Administrative Agent for the ratable benefit of the
Lender Parties to secure the Obligations of the Borrower and the Subsidiary
Guarantors under the Loan Documents, provided, however, that common stock issued
in connection with an Initial Public Offering or a subsequent Public Offering
shall not be required to be so pledged, or (iii) to MedPartners, Inc. pursuant
to its preemptive rights existing on the date hereof.
SECTION 6.18 Guaranteed Obligations. Create, incur, assume or permit to
exist, or permit any of its Subsidiaries to create, incur, assume or permit to
exist, any Guaranteed Obligations except
(a) by endorsement of instruments or items of payment for deposit to
the general account of any Loan Party;
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(b) for Guaranteed Obligations existing on the date hereof and set
forth on Schedule 6.18;
(c) guarantees by the Borrower or its Subsidiaries of Debt expressly
permitted under Section 6.2; provided, that guarantees of Subordinated Debt
shall be subordinated on substantially similar terms;
(d) the Borrower and its Subsidiaries may become and remain liable with
respect to contingent obligations in the form of customary indemnifications for
agents, employees, consultants, officers and directors of such Loan Party;
(e) the Borrower and the Subsidiaries may become and remain liable with
respect to contingent obligations in the form of customary and reasonable
indemnification provisions or customary purchase price adjustments (based on
post-closing audit adjustments) incurred in connection with acquisitions or
sales or assets permitted hereunder to be made by the Borrower or any
Subsidiary;
(f) the Borrower and its Subsidiaries may become and remain liable with
respect to guarantees in favor of the Lenders and the Agent executed and
delivered pursuant hereto;
(g) for performance, surety, bid, appeal and other similar bonds as
expressly permitted under Section 6.1 or the definition of Permitted Liens;
(h) the Borrower and Subsidiaries may incur Guaranteed Obligations in
respect of employment arrangements and other compensation arrangements entered
into in connection with Permitted Acquisitions or otherwise in the ordinary
course of business;
(i) the Borrower may incur Guaranteed Obligations in respect of
obligations of Subsidiary Guarantors arising in the ordinary course of business;
(j) Subsidiary Guarantors may incur Guaranteed Obligations in respect
of obligations of the Borrower or other Subsidiary Guarantors arising in the
ordinary course of business;
(k) the Borrower and its Subsidiaries may incur Guaranteed Obligations
in an aggregate amount together with the Debt incurred pursuant to Section
6.2(c)(xiii) not to exceed $22,500,000 at any one time outstanding.
SECTION 6.19 Management Fees. Pay, or be or become obligated to pay,
any Management Fees to any Person, or any interest on any deferred obligation
therefor, including, without limitation, to any shareholder, director, officer
or employee of the Borrower or any Loan Party; provided, however, that so long
as no Event of Default has occurred and is continuing or would occur after
giving effect thereto, the Borrower and its Subsidiaries may make payments
pursuant to and in accordance with the Management Services Agreement; provided,
further, that
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notwithstanding the preceding proviso, the Borrower may pay the out-of-pocket
costs of the Sponsors incurred pursuant to and in accordance with the Management
Services Agreement during the existence and continuance of an Event of Default.
SECTION 6.20 Insurance Subsidiary. (a) Permit the Insurance Subsidiary
to enter into any (or renew, extend or materially modify any existing)
reinsurance or stop-loss insurance arrangements except in the ordinary course of
business with reinsurers rated as least "A" by A.M. Best & Co. or reinsurers
whose obligations to the Insurance Subsidiary are secured by letters of credit
or other collateral reasonably acceptable to the Administrative Agent or (b)
permit any Investment in the Insurance Subsidiary, except for Investment not in
excess of the amounts as may be required by applicable law.
ARTICLE 7
REPORTING REQUIREMENTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will furnish to the Administrative Agent and Lender Parties (for
purposes of this Article 7 and each of the defined terms used herein, references
to "Subsidiaries" and "Loan Parties" shall be deemed to include the Related
Professional Corporations):
SECTION 7.1 Default Notice. As soon as possible and in any event within
two (2) Business Days after a Responsible Officer of the Borrower obtains
knowledge of the occurrence of any Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect, a statement of
the Chief Financial Officer of the Borrower setting forth details of such
Default or event, development or occurrence and the action that the Borrower has
taken and proposes to take with respect thereto.
SECTION 7.2 [Intentionally omitted.]
SECTION 7.3 Quarterly Financials. As soon as available and in any event
within forty-five (45) days after the end of each fiscal quarter of each Fiscal
Year, a Consolidated balance sheet of the Borrower and its Subsidiaries, and
consolidating balance sheets of the Borrower and its Subsidiaries, as of the end
of such quarter and a Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries, and consolidating
statements of income of the Borrower and its Subsidiaries, for the period
commencing at the end of the previous fiscal quarter and ending with the end of
such fiscal quarter and a Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries and consolidating
statements of income of the Borrower and its Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such fiscal quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding Fiscal Year
(provided that with respect to the first four (4)
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quarters following the Closing Date, such comparative financial statements shall
be prepared on a pro forma basis after giving effect to the Transaction) and the
corresponding figures from the budgets for such period and for the Fiscal Year
which includes such period, all in reasonable detail and duly certified by the
Chief Financial Officer of the Borrower as having been prepared (except for the
pro forma comparative financial statements) in accordance with GAAP (subject to
normal year-end audit adjustments and the absence of footnotes), together with
(i) a certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Borrower has taken and proposes to
take with respect thereto and (ii) a schedule in form and detail satisfactory to
the Administrative Agent of the computations used by the Borrower in determining
compliance with the financial covenants contained in Article 8, provided, that
in the event of any change in GAAP used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the determination
of compliance with Article 8, a statement of reconciliation conforming such
financial statements to GAAP.
SECTION 7.4 Annual Financials. As soon as available and in any event
within ninety (90) days after the end of each Fiscal Year, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries, including
therein a Consolidated balance sheet of the Borrower and its Subsidiaries, and
consolidating balance sheets of Borrower and its Subsidiaries, as of the end of
such Fiscal Year and a Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries, and consolidating
statements of income of the Borrower and its Subsidiaries, for such Fiscal Year,
in each case setting forth in comparative form the corresponding figures for the
prior Fiscal Year (provided that with respect to the first Fiscal Year following
the Closing Date, such comparative financial statements shall be prepared on a
pro forma basis after giving effect to the Transaction) and the corresponding
figures from the budget for such Fiscal Year and in each case accompanied (in
the case of such Consolidated financial statements) by an opinion of Ernst &
Young LLP or other independent certified public accountants of recognized
national standing acceptable to the Administrative Agent, (which opinion shall
contain no qualification with respect to the continuance of the Borrower and its
Subsidiaries as going concerns and shall state that such financial statements
fairly present in all material respects the financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated, in each case in conformity
with GAAP), together with (a) a letter of such accounting firm to the
Administrative Agent and Lender Parties stating that in the course of the
regular audit of the business of the Borrower and its Subsidiaries, which audit
was conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such accounting
firm, a Default has occurred and is continuing, a statement as to the nature
thereof; provided, that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with Article 8, a statement of
reconciliation conforming such financial statements to GAAP, (b) a certificate
of the Chief Financial Officer of the Borrower stating that no Default has
occurred and
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is continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Borrower has taken and proposes to
take with respect thereto and (c) a schedule in form and detail satisfactory to
the Administrative Agent of the computations used by the Borrower in determining
compliance with the financial covenants contained in Article 8, provided, that
in the event of any change in GAAP used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the determination
of compliance with Article 8, a statement of reconciliation conforming such
financial statements to GAAP.
SECTION 7.5 Annual Forecasts. As soon as available and in any event no
later than sixty (60) days after the end of each Fiscal Year, (i) forecasts
prepared by management of the Borrower, including balance sheets, income
statements and cash flow statements on a quarterly basis, and (ii) to the extent
prepared, a business plan, in each case for the Fiscal Year following such
Fiscal Year then ended and in form reasonably satisfactory to the Administrative
Agent.
SECTION 7.6 ERISA Events and ERISA Reports. (i) Promptly and in any
event within twenty (20) days after the Borrower or any ERISA Affiliate knows or
has reason to know that any ERISA Event has occurred, a statement of the Chief
Financial Officer of the Borrower describing such ERISA Event and the action, if
any, that the Borrower or such ERISA Affiliate has taken and proposes to take
with respect thereto and (ii) on the date any records, documents or other
information must be furnished to the PBGC with respect to any Plan pursuant to
Section 4010 of ERISA, a copy of such records, documents and information.
SECTION 7.7 Plan Terminations. Promptly and in any event within five
(5) Business Days after receipt thereof by the Borrower or any ERISA Affiliate,
copies of each notice from the PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any Plan or correspondence from the
PBGC indicating it is considering termination of any Plan.
SECTION 7.8 Actuarial Reports. Promptly upon receipt thereof by the
Borrower or any ERISA Affiliate, a copy of the annual actuarial valuation report
for each Plan the funded current liability percentage (as defined in Section
302(d)(8)(B) of ERISA) of which is less than 90% or the unfunded current
liability (as defined in Section 302(d)(8)(A) of ERISA) of which exceeds
$500,000 or the present value of benefit liabilities as of the latest actuarial
valuation date for such Plan (but not prior to 12 months prior to the date
hereof), determined on the basis of a shut down of the company in accordance
with actuarial assumptions used by the PBGC in single-employer plan
terminations, exceeds the market value of assets exclusive of any contributions
due to the Plan by $500,000.
SECTION 7.9 Plan Annual Reports. Upon the request, from time to time,
of the Administrative Agent, promptly and in any event within thirty (30) days
after request, copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Plan.
SECTION 7.10 Multiemployer Plan Notices. Promptly and in any event
within five (5) Business Days after receipt thereof by the Borrower or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning, or other correspondence with respect to,
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(i) the imposition of Withdrawal Liability by any such Multiemployer Plan, (ii)
the reorganization or termination, within the meaning of Title IV of ERISA, of
any such Multiemployer Plan or (iii) the amount of liability incurred, or that
may be incurred, by the Borrower or any ERISA Affiliate in connection with any
event described in clause (i) or (ii) if in excess of $2,500,000.
SECTION 7.11 Litigation. Promptly after the commencement thereof,
notice of all material actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, Federal, state, local or foreign, affecting
the Borrower or any of its Subsidiaries and, promptly after the occurrence
thereof, notice of any Material Adverse Change in the status or the financial
effect on the Borrower or any of its Subsidiaries of the Disclosed Litigation
from that described on Schedule 4.9.
SECTION 7.12 Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports that
the Borrower or any of its Subsidiaries sends to its stockholders generally, and
copies of all regular, periodic and special reports, and all registration
statements, that the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission or with any national securities exchange.
SECTION 7.13 Creditor Reports. Promptly after the furnishing thereof,
copies of any statement, report or notice furnished to all holders of the
Subordinated Debt of the Borrower or of any of its Subsidiaries pursuant to the
terms of any agreement, instrument or other document related to the Subordinated
Debt and not otherwise required to be furnished to the Lender Parties pursuant
to any other clause of this Article 7.
SECTION 7.14 Agreement Notices. Promptly upon the sending or receipt
thereof, copies of all notices, requests and other documents sent or received by
the Borrower or any of its Subsidiaries under or pursuant to any indenture, loan
or credit agreement or similar agreement or instrument, in each case evidencing
indebtedness in excess of $5,000,000, regarding or related to any breach or
default by any party thereto or any event that could materially impair the value
of the interests or the rights of any Loan Party or any of its Subsidiaries or
otherwise have a Material Adverse Effect and, from time to time upon request by
the Administrative Agent, such information and reports regarding the foregoing
as the Administrative Agent may reasonably request.
SECTION 7.15 Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by the Borrower or any of its Subsidiaries with any Environmental
Law or Environmental Permit that could reasonably be expected to have a Material
Adverse Effect.
SECTION 7.16 Real Property. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within sixty (60) days after any
such request, a report supplementing Schedules 4.20 and 4.21 hereto, including
an identification of all real and leased property disposed of by the Borrower or
any of its Subsidiaries during such Fiscal Year, a
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list and description (including the street address, county or other relevant
jurisdiction, state, record owner and, in the case of leases of property,
lessor, lessee, expiration date and annual rental cost thereof) of all real
property acquired or leased during such Fiscal Year and a description of such
other changes in the information included in such Schedules as may be necessary
for such Schedules to remain accurate and complete in all material respects.
SECTION 7.17 Insurance. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within forty-five (45) days
after any such request, a report summarizing the insurance coverage (specifying
type, amount and carrier) in effect for the Borrower and its Subsidiaries and
containing such additional information as the Administrative Agent may
reasonably request.
SECTION 7.18 Management Letters. As soon as available and in any event
within five (5) Business Days after the receipt thereof, copies of any
"management letter" or similar letter received by the Borrower or its Board of
Directors (or any Committee thereof) from its independent public accountants.
SECTION 7.19 Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or any of its Subsidiaries or the
Collateral as the Administrative Agent or any Lender Party (through the
Administrative Agent) may from time to time reasonably request.
ARTICLE 8
FINANCIAL COVENANTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will (for purposes of this Article 8 and each of the defined terms used
herein, references to "Subsidiaries" and "Loan Parties" shall be deemed to
include the Related Professional Corporations):
SECTION 8.1 Consolidated Funded Debt to EBITDA Ratio. Subject to the
proviso below, maintain as of the end of each fiscal quarter of the Borrower a
ratio of Consolidated Funded Debt to EBITDA for the most recently completed four
fiscal quarters of the Borrower of not more than the ratio set forth below:
Four Fiscal Quarters ending on or about: Ratio
---------------------------------------- -----
June 30, 2002 4.50
September 30, 2002 4.50
December 31, 2002 4.25
---------------------------------------------------------------
March 31, 2003 4.25
June 30, 2003 4.25
September 30, 2003 4.10
December 31, 2003 4.00
---------------------------------------------------------------
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March 31, 2004 3.85
June 30, 2004 3.85
September 30, 2004 3.75
December 31, 2004 3.75
---------------------------------------------------------------
March 31, 2005 3.50
June 30, 2005 3.50
September 30, 2005 3.50
December 31, 2005 3.50
---------------------------------------------------------------
March 31, 2006 and thereafter 3.25
; provided, however, that to the extent the Borrower shall be permitted
to retain more than 50% of the Net Cash Proceeds of any Qualified Initial Public
Offering or subsequent Public Offering pursuant to Section 2.6(b)(iv) then,
notwithstanding the foregoing grid, the Borrower shall be required to maintain
as of the end of each fiscal quarter thereafter a ratio of Consolidated Funded
Debt to EBITDA for the most recently completed four fiscal quarters of the
Borrower of not more than 3.75 to 1.00; and provided, further, however, that,
notwithstanding the proceeding proviso, to the extent the level set forth in the
foregoing grid for any fiscal quarter thereafter is less than 3.75 to 1.00, then
the level set forth in the foregoing grid shall govern.
SECTION 8.2 Interest Coverage Ratio. Maintain as of each date set forth
below, a ratio of (i) EBITDA for the most recently completed four fiscal
quarters of the Borrower to (ii) Consolidated cash Interest Expense for such
period (except that in respect of the first three (3) testing periods referred
to below, actual amounts expended for cash Interest Expense, in each case since
April 1, 2002, shall be computed on an annualized basis) of not less than the
ratio set forth below for such period:
Four Fiscal Quarters ending on or about: Ratio
---------------------------------------- -----
June 30, 2002 2.75
September 30, 2002 2.75
December 31, 2002 2.75
---------------------------------------------------------------
March 31, 2003 3.00
June 30, 2003 3.00
September 30, 2003 3.00
December 31, 2003 3.00
---------------------------------------------------------------
March 31, 2004 3.25
June 30, 2004 3.25
September 30, 2004 3.25
December 31, 2004 3.25
---------------------------------------------------------------
March 31, 2005 3.50
June 30, 2005 3.50
September 30, 2005 3.50
December 31, 2005 3.50
March 31, 2006 and thereafter 3.50
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SECTION 8.3 Fixed Charge Coverage Ratio. Maintain as of the end of each
fiscal quarter of the Borrower a ratio of (i) EBITDA for the most recently
completed four fiscal quarters of the Borrower, less Capital Expenditures (other
than Capital Expenditures financed with Debt permitted hereunder) made by the
Borrower and its Subsidiaries during such period, less the aggregate net amount
of federal, state, local and foreign taxes paid by the Borrower and its
Subsidiaries in cash during such period, less the cash purchase price paid by
the Borrower during such period for redemption of its capital stock permitted by
Section 6.6(d), less cash dividends paid by the Borrower to the holders of its
common stock during such period, to the (ii) sum of (x) cash interest payable by
the Borrower and its Subsidiaries on all Debt during such period (except that in
respect of the first three (3) testing periods referred to below, such interest
amounts payable, in each case since April 1, 2002, shall be computed on an
annualized basis) plus (y) scheduled principal amounts of all Debt payable by
the Borrower and its Subsidiaries during such period (other than Debt
representing the cash purchase price paid by the Borrower for the redemption of
its capital stock during the period to the extent deducted from EBITDA above),
of not less than the ratio set forth below for such period:
Four Fiscal Quarters ending on or about: Ratio
---------------------------------------- -----
June 30, 2002 1.35
September 30, 2002 1.35
December 31, 2002 1.35
---------------------------------------------------------------
March 31, 2003 1.35
June 30, 2003 1.35
September 30, 2003 1.35
December 31, 2003 1.35
---------------------------------------------------------------
March 31, 2004 1.20
June 30, 2004 1.20
September 30, 2004 1.20
December 31, 2004 1.20
---------------------------------------------------------------
March 31, 2005 1.15
June 30, 2005 1.15
September 30, 2005 1.15
December 31, 2005 1.15
---------------------------------------------------------------
March 31, 2006 and thereafter 1.20
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ARTICLE 9
EVENTS OF DEFAULT
If any of the following ("Events of Default") shall occur and be
continuing:
SECTION 9.1 Payment. (a) The Borrower shall fail to pay any principal
of any Advance when the same shall become due and payable or (b) the Borrower
shall fail to pay any interest on any Advance, or any Loan Party shall fail to
make any other payment under any Loan Document, in each case under this clause
(b) within five (5) Business Days after the same becomes due and payable; or
SECTION 9.2 Representations and Warranties. Any representation or
warranty made by any Loan Party (or any of its officers) under or in connection
with any Loan Document shall prove to have been incorrect in any material
respect when made or confirmed; or
SECTION 9.3 Certain Covenants. The Borrower shall fail to perform or
observe any term, covenant or agreement contained in Section 2.14, 5.6, or 5.11,
Article 6 or Article 8; or
SECTION 9.4 Other Covenants. Any Loan Party shall fail to perform any
other term, covenant or agreement contained in any Loan Document on its part to
be performed or observed if such failure shall remain unremedied for thirty (30)
days or, in the case of Sections 7.3 and 7.4, five (5) Business Days, after the
date on which written notice thereof shall have been given to the Borrower by
the Administrative Agent; or
SECTION 9.5 Other Defaults. The Borrower or any of its Subsidiaries
shall fail to pay any principal of, premium or interest on or any other amount
payable in respect of any Debt that is outstanding in a principal or notional
amount of at least $7,500,000 either individually or in the aggregate (but
excluding Debt outstanding hereunder) of the Borrower or such Subsidiary (as the
case may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Debt, in each case if the effect of such event or condition
is to accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to prepay, redeem, purchase
or defease such Debt shall be required to be made, in each case prior to the
stated maturity thereof; or
SECTION 9.6 Bankruptcy, Etc. The Borrower or any of its Subsidiaries
(other than Immaterial Subsidiaries) shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower or any of its
Subsidiaries (other than Immaterial Subsidiaries) seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or
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composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official for
it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of forty-five (45)
days or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur, or the Borrower or any of its
Subsidiaries (other than Immaterial Subsidiaries) shall take any corporate
action to authorize any of the actions set forth above in this Section 9.6; or
SECTION 9.7 Judgments. Any judgment or order for the payment of money
in excess of $7,500,000 (other than such a judgment or order which is fully
covered by insurance for which the appropriate insurer has acknowledged
responsibility in writing) shall be rendered against the Borrower or any of its
Subsidiaries and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order or (ii) such judgments or orders shall
not have been vacated, discharged, satisfied or bonded pending appeal within
thirty (30) days of entry thereof; or
SECTION 9.8 Loan Documents. Any material provision of any Loan Document
after delivery thereof shall for any reason cease to be valid and binding on or
enforceable against any Loan Party which is party to it, or any such Loan Party
shall so state in writing; or
SECTION 9.9 Liens. Any Collateral Document after delivery thereof shall
for any reason cease (except in accordance with their terms) to or otherwise not
create a valid and perfected first priority Lien (subject to the Liens permitted
under Section 6.1) on and security interest in a material portion of the
Collateral purported to be covered thereby to the extent previously perfected;
or
SECTION 9.10 Change of Control. Any Change of Control shall occur; or
SECTION 9.11 ERISA Events.
(a) Any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of the last such ERISA Event) of
the Insufficiency of such Plan and the Insufficiency of any and all other Plans
with respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Borrower and the ERISA Affiliates related to such ERISA Events)
exceeds $7,500,000; or
(b) The Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrower and the ERISA
Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $7,500,000; or
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(c) The Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Borrower and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding $7,500,000; or
SECTION 9.12 Subordination Provisions. The subordination provisions
contained in any instrument pursuant to which the Subordinated Debt permitted
under Section 6.2(c)(iii) was created or in any instrument evidencing such
Subordinated Debt shall cease, for any reason, to be in full force and effect or
enforceable in accordance with their terms (other than as the result of payment
or prepayment in accordance with the terms hereof); or
SECTION 9.13 Matters Relating to Regulatory Agencies.
(a) Any Regulatory Agency shall commence a hearing on the renewal of
any material license, consent, authorization, permit, certificate, franchise
held by any the Borrower, any of its Subsidiaries, Related Professional
Corporation, or professional employee, officer, director or contractor of any
the Borrower, any of its Subsidiaries or Related Professional Corporation if
there is a significant probability that result thereof will be the termination,
revocation, suspension or material adverse amendment of any such license,
consent, authorization, permit, certificate, franchise that would have a
Material Adverse Effect; or
(b) Any Regulatory Agency shall commence an action or proceeding
seeking the termination, suspension, revocation or material adverse amendment of
any license, consent, authorization, permit, certificate, franchise held by the
Borrower, any of its Subsidiaries, Related Professional Corporation, or
professional employee, officer, director or contractor of the Borrower, any
Subsidiary of the Borrower or Related Professional Corporation if the result
thereof is likely to be the termination, suspension, revocation or material
adverse amendment of any license, consent, authorization, permit, certificate,
franchise that would have a Material Adverse Effect; or
SECTION 9.14 Related Professional Corporation Termination. The
Borrower's or any of its Subsidiaries' contractual arrangements with a material
portion of the Related Professional Corporations shall be terminated and not
replaced by other similar contractual arrangements unless the Borrower shall
have elected to terminate (or permit to expire) those of the Related
Professional Corporation contracts as being unnecessary to the future conduct of
its business; or
SECTION 9.15 Insurance Subsidiary. Any Insurance Subsidiary shall
become subject to any conservation, rehabilitation, liquidation order, directive
or mandate issued by any Regulatory Agency which could reasonably be expected to
have a Material Adverse Effect;
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then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each appropriate Lender (other than the Commitment in
respect of Letter of Credit Advances by an Issuing Bank or a Revolving Credit
Lender pursuant to Section 2.3(c) and Swing Line Advances by a Revolving Credit
Lender pursuant to Section 2.2(b)) and of each Issuing Bank to issue Letters of
Credit to be terminated, whereupon the same shall forthwith terminate; (ii)
shall at the request, or may with the consent, of the Required Lenders, (A) by
notice to the Borrower, declare the Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower and (B) by notice to each party required
under the terms of any agreement in support of which a Standby Letter of Credit
is issued, request that all Obligations under such agreement be declared to be
due and payable; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower or any of its
Subsidiaries under the Federal Bankruptcy Code, (x) the obligation of each
Lender to make Advances (other than Letter of Credit Advances by an Issuing Bank
or a Revolving Credit Lender pursuant to Section 2.3(c) and Swing Line Advances
by a Revolving Credit Lender pursuant to Section 2.2(b)) and of each Issuing
Bank to issue Letters of Credit shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower; and (iii) exercise any
other remedy available under the Loan Documents or applicable law.
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Article 9
or otherwise, make demand upon the Borrower to, and forthwith upon such demand
the Borrower will, pay to the Administrative Agent on behalf of the Lender
Parties in same day funds at the Administrative Agent's office designated in
such demand, for deposit in the L/C Cash Collateral Account, an amount equal to
the aggregate Available Amount of all Letters of Credit then outstanding. If at
any time the Administrative Agent determines that any funds held in the L/C Cash
Collateral Account are subject to any right or claim of any Person other than
the Administrative Agent and the Lender Parties or that the total amount of such
funds is less than the aggregate Available Amount of all Letters of Credit, the
Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Administrative Agent determines to be free
and clear of any such right and claim.
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ARTICLE 10
THE ADMINISTRATIVE AGENT
SECTION 10.1 Authorization and Action. Each Lender Party (in its
capacities as a Lender, each Issuing Bank, the Swing Line Bank and any Hedge
Bank) hereby appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take
any action that exposes the Administrative Agent to personal liability or that
is contrary to this Agreement, any other Loan Document or applicable law. The
Administrative Agent agrees to give to each Lender Party prompt notice of each
notice given to it by the Borrower pursuant to the terms of this Agreement. The
Administrative Agent shall not be a trustee or fiduciary for any Lender.
SECTION 10.2 Agent's Reliance, Etc. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent: (a) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and Acceptance
entered into by the Lender that is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 11.7; (b) may consult
with legal counsel (including counsel for any Loan Party), independent public
accountants and other experts reasonably selected by it and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (c) makes no warranty
or representation to any Lender Party and shall not be responsible to any Lender
Party for any statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Loan Document on the part of any Loan
Party or to inspect the property (including the books and records) of any Loan
Party; (e) shall not be responsible to any Lender Party for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any Lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument
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or writing (which may be by telegram, telecopy or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 10.3 Fleet and Affiliates. With respect to its Commitments, the
Advances made by it and the Notes issued to it, Fleet shall have the same rights
and powers under the Loan Documents as any other Lender Party and may exercise
the same as though it were not the Administrative Agent; and the term "Lender
Party" or "Lender Parties" shall, unless otherwise expressly indicated, include
Fleet in its individual capacity. Fleet and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with, any
Loan Party, any of its Subsidiaries and any Person who may do business with or
own securities of any Loan Party or any such Subsidiary, all as if Fleet were
not the Administrative Agent and without any duty to account therefor to the
Lender Parties.
SECTION 10.4 Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender Party and based on the financial
statements referred to in Section 4.6 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender Party also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender Party and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 10.5 Indemnification.
(a) Each Lender Party severally agrees to indemnify the Administrative
Agent (to the extent not promptly reimbursed by the Borrower) from and against
such Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by the Administrative Agent under any of the Loan Documents; provided,
however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Administrative Agent promptly upon demand
for its ratable share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by the Borrower under Section 11.4, to the
extent that the Administrative Agent is not promptly reimbursed for such costs
and expenses by the Borrower.
(b) Each Lender Party severally agrees to indemnify each Issuing Bank
(to the extent not promptly reimbursed by the Borrower) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that
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may be imposed on, incurred by, or asserted against such Issuing Bank in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by such Issuing Bank under any of the Loan Documents; provided, however,
that no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Issuing Bank's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse each Issuing Bank promptly upon demand for its ratable share
of any costs and expenses (including, without limitation, fees and expenses of
counsel) payable by the Borrower under Section 11.4, to the extent that such
Issuing Bank is not promptly reimbursed for such costs and expenses by the
Borrower.
(c) For purposes of Sections 10.5(a) and 10.5(b), the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time, (iii) the aggregate unused portions of their
respective Term A Commitments and Term B Commitments at such time, and (iv)
their respective Unused Revolving Credit Commitments at such time; provided,
that the aggregate principal amount of Swing Line Advances owing to the Swing
Line Bank and Letter of Credit Advances owing to the Issuing Banks shall be
considered to be owed to the Revolving Credit Lenders ratably in accordance with
their respective Revolving Credit Commitments. In the event that any Defaulted
Advance shall be owing by any Defaulting Lender at any time, such Lender Party's
Commitment with respect to the Facility under which such Defaulted Advance was
required to have been made shall be considered to be unused for purposes of this
Section 10.5 to the extent of the amount of such Defaulted Advance. The failure
of any Lender Party to reimburse the Administrative Agent or any Issuing Bank,
as the case may be, promptly upon demand for its ratable share of any amount
required to be paid by the Lender Parties to the Administrative Agent or such
Issuing Bank, as the case may be, as provided herein shall not relieve any other
Lender Party of its obligation hereunder to reimburse the Administrative Agent
or such Issuing Bank, as the case may be, for its ratable share of such amount,
but no Lender Party shall be responsible for the failure of any other Lender
Party to reimburse the Administrative Agent or such Issuing Bank, as the case
may be, for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreements of any Lender Party hereunder,
the agreement and obligations of each Lender Party contained in this Section
10.5 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under the other Loan Documents.
SECTION 10.6 Successor Administrative Agents. The Administrative Agent
may resign as to any or all of the Facilities at any time by giving thirty (30)
days prior written notice thereof to the Lender Parties and the Borrower and may
be removed as to all of the Facilities at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent as to such of
- 113 -
the Facilities as to which the Administrative Agent has resigned or been removed
which shall be reasonably acceptable to the Borrower. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lender Parties, appoint a successor Administrative
Agent, which shall be a Lender which shall be reasonably acceptable to the
Borrower and which is a commercial bank organized or licensed under the laws of
the United States or of any State thereof and having a combined capital and
surplus of at least $1,000,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to all of
the Facilities and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Required Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, discretion, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from all of its duties and obligations under this Agreement and
the other Loan Documents. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to less
than all of the Facilities and upon the execution and filing or recording of
such financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Administrative Agent
shall succeed to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Administrative Agent as to such
Facilities, other than with respect to funds transfers and other similar aspects
of the administration of Borrowings under such Facilities, issuances of Letters
of Credit (notwithstanding any resignation as Administrative Agent with respect
to the Letter of Credit Facility) and payments by the Borrower in respect of
such Facilities which functions shall continue to be performed by the
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement as to such Facilities,
other than as aforesaid. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent as to all of the Facilities, the
provisions of this Article 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent as to any
Facilities under this Agreement.
SECTION 10.7 Events of Default. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default (other than the
non-payment of principal of or interest on Loans) unless the Administrative
Agent has received notice from a Lender or the Borrower specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give notice thereof to the Lenders (and shall give
each Lender notice
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of each such non-payment). The Administrative Agent shall (subject to Section
10.1(b) hereof) take such action with respect to such Default as shall be
directed by the Required Lenders.
SECTION 10.8 Syndication and Documentation Agent. Each Lender, the
Administrative Agent, the Syndication Agent and the Documentation Agent
acknowledges that the Syndication Agent and the Documentation Agent, in such
capacity, shall have no duties or responsibilities, and shall incur no
liabilities, under this Agreement or other Loan Documents in their capacities as
such.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 Amendments, Etc. No amendment, modification, supplement,
termination or waiver of or to any provision of this Agreement, nor consent to
any departure by the Borrower or any other Loan Party therefrom, shall be
effective unless the same shall be in writing and signed by or on behalf of the
Required Lenders and the Borrower; provided, however, that no such amendment,
modification, supplement, termination, waiver or consent, as the case may be,
shall, (i) reduce the rate of interest or extend the final scheduled maturity
date or the scheduled date for payment of any principal payment, Advance or Note
(other than any mandatory prepayment), or the stated maturity of any Letter of
Credit beyond the Revolving Credit Termination Date, or the date for payment of
any fees or interest on any Advance, or waive, reduce or excuse any such payment
or any part thereof, or decrease the rate of interest on any Advance, or reduce
the principal amount thereof, without the prior written consent of each affected
Lender affected thereby, (ii) release all or substantially all of the Collateral
(except as expressly provided in the Collateral Documents) under the Collateral
Documents, without the prior written consent of each Lender, (iii) amend, modify
or waive any provision of this Section 11.1, without the prior written consent
of each Lender, (iv) reduce the percentage specified in the definition of
Required Lenders, without the prior written consent of each affected Lender, (v)
consent to the assignment or transfer by Borrower of any of its rights and
obligations under this Agreement without the prior written consent of each
Lender, or (vi) release all or substantially all of the Guarantors from their
respective Guaranty, without the prior written consent of each Lender; provided,
further, that no such amendment, modification, supplement, termination, waiver
or consent shall (1) increase the Commitments of any Lender over the amount
thereof then in effect without the consent of such Lender (it being understood
that waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default shall not constitute an increase of the Commitment of any
Lender, and that an increase in the available portion of any Commitment of any
Lender shall not constitute an increase in the Commitment of such Lender), (2)
amend, modify or waive any provision of this Agreement or any other Loan
Document which affects the rights or obligations of the Swing Line Bank or the
Issuing Banks, as the case may be, without the consent of the Swing Line Bank or
the Issuing Banks, as the case may be, (3) amend, modify or waive any provision
of Article 10 as same applies to the
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Administrative Agent or any other provisions as same relates to the rights or
obligations of the Administrative Agent, without the consent of the
Administrative Agent, (4) amend, modify or waive any provisions relating to the
rights or obligations of the Administrative Agent under the other Loan
Documents, without the consent of the Administrative Agent, (5) alter the
required application of any prepayments or repayments (or commitment reduction),
as between the various Facilities pursuant to Section 2.6(b) (although the
Required Lenders may waive in whole or in part, any such prepayment, repayment
or commitment reduction so long as the application, as amongst the various
Facilities, of any such prepayment, repayment or commitment reduction which is
still required to be made is not altered), without the consent of the Majority
Lenders of each Facility which is being allocated a lesser prepayment, repayment
or commitment reduction, (6) amend the definition of Majority Lenders, without
the consent of the Majority Lenders of each Facility or (7) amend the definition
of Pro Rata Share, without the consent of the Majority Lenders of the Revolving
Facility.
SECTION 11.2 Notices Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered,
(a) if to the Borrower:
Team Health, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Cornerstone Equity Investors
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇'▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Madison Dearborn Partners
Three Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Administrative Agent:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any Initial Lender or any Issuing Bank, at its
Domestic Lending Office specified opposite its name on Schedule I attached
hereto.
(d) if to any other Lender Party, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it became a
Lender Party;
or, as to the Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrower and the Administrative Agent. All such
notices and communications shall, when mailed by certified mail, return receipt
requested, telegraphed, telecopied or telexed, be effective three (3) Business
Days after mailing, upon delivery to the telegraph company, upon transmission by
telecopier or upon confirmation by telex answerback, respectively, except that
notices and communications to the Administrative Agent pursuant to Article 2, 3
or 10 shall not be effective until received by the Administrative Agent.
Delivery by telecopier of an executed counterpart of this Agreement,
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the Notes or any other Loan Document or of any Exhibit hereto or thereto or of
any amendment or waiver of any provision thereof shall be as effective as
delivery of a manually executed counterpart thereof.
SECTION 11.3 No Waiver; Remedies. No failure on the part of any Lender
Party or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note or under any other Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law or in equity.
SECTION 11.4 Costs and Expenses.
(a) The Borrower agrees to pay on demand (i) all reasonable
out-of-pocket costs and expenses of the Agents in connection with the
preparation, execution and delivery of the Loan Documents, and of the
Administrative Agent in connection with modification and amendment of the Loan
Documents (including, without limitation, (A) all reasonable due diligence,
collateral review, syndication (including printing, distribution and bank
meetings), transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses, and (B) the
reasonable fees and out-of-pocket expenses of counsel for the Agents with
respect thereto, with respect to advising the Agents as to their rights and
responsibilities, or the perfection, protection or preservation of rights or
interests under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
reasonable out-of-pocket costs and expenses of the Agents and the Lender Parties
in connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation or any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally or otherwise (including, without
limitation, the reasonable fees and expenses of counsel for the Agents and each
Lender Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless each Agent, each
Lender Party and each of their respective Affiliates and their respective
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of counsel
and settlement costs) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with (i) the Transaction, (ii) any acquisition or proposed
acquisition or similar business combination or proposed business combination by
the Borrower or any of its Subsidiaries of all or any portion of the shares of
capital stock or substantially all of the property and assets of any other
Person, (iii) the Facilities, the actual or
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proposed use of the proceeds of the Advances or the Letters of Credit by the
Borrower or any of its Subsidiaries and any of the other transactions
contemplated by the Loan Documents, or (iv) the actual or alleged presence of
Hazardous Materials on any property of the Borrower or any of its Subsidiaries
or any Environmental Action relating in any way to the Borrower or any of its
Subsidiaries, in each case whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, officers, employees,
stockholders or creditors or an Indemnified Party or any Indemnified Party is
otherwise a party thereto and whether or not the Transaction is consummated,
except to the extent such claim, damage, loss, liability or expense is found in
a final judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence, bad faith or willful misconduct. The
Borrower also agrees not to assert any claim against the Administrative Agent,
any Lender Party or any of their respective Affiliates, or any of their
respective officers, directors, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the Facilities, the actual or proposed use of
the proceeds of the Advances or the Letters of Credit, the Loan Documents or any
of the Transaction, other than claims for direct, as opposed to consequential,
damages.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment or Conversion pursuant to Section 2.9(b)(i) or 2.10(d) or a
prepayment pursuant to Section 2.6(a) or (b), acceleration of the maturity of
the Notes pursuant to Article 9 or for any other reason, the Borrower shall,
upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any loss (including, without
limitation, a return on such liquidation or deployment that would result in such
Lender receiving less than it would have received had such Advances remained
outstanding until the last day of the Interest Period), cost or expense incurred
by reason of the liquidation or re-employment of deposits or other funds
required by any Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent, in its sole
discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
11.4 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
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(f) Notwithstanding anything to the contrary contained in this
Agreement, unless a Lender gives notice to the Borrower that it is obligated to
pay an amount under Section 2.10, 2.12 or 11.4(c) within 180 days after the date
the Lender Party incurs the respective increased costs, taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital, then such Lender Party shall only be entitled to be compensated for
such amount by the Borrower or any other Loan Party pursuant to said Section
2.10, 2.12 or 11.4(c) to the extent the costs, taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital are incurred or suffered on or after the date which occurs 180 days
prior to such Lender giving notice to the Borrower that it is obligated to pay
the respective amounts pursuant to said Section 2.10, 2.12 or 11.4(c). Each
Lender, in determining additional amounts owing under Section 2.10, 2.12 or
11.4(c), will act reasonably and in good faith and to the extent the increased
costs or reductions in amounts receivable or reduction in return on capital
relate to such Lender Party's loans, commitments or letters of credit in general
and not specifically attributable to the Advances or Letters of Credit
hereunder, use averaging and attribution methods which are reasonable and which
cover all advances and letters of credit similar to the Advances and Letters of
Credit made, issued or participated in by such Lender Party whether or not the
documentation for such other advances or letters of credit permit such Lender
Party to receive amounts of the type described in such Section 2.10, 2.12 and
11.4(c).
SECTION 11.5 Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Article 9 to authorize the Administrative
Agent to declare the Notes due and payable pursuant to the provisions of Article
9, each Lender Party and each of its respective Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender Party or such Affiliate to or for the credit or the
account of the Borrower or any of its Subsidiaries against any and all of the
Obligations of the Borrower now or hereafter existing under this Agreement and
the Note or Notes (if any) held by such Lender Party, irrespective of whether
such Lender Party shall have made any demand under this Agreement or such Note
or Notes and although such obligations may be unmatured. Each Lender Party
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off and application; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Lender Party and its respective Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender Party and its respective Affiliates may have
at law, in equity or otherwise.
SECTION 11.6 Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have been notified by each Initial Lender
and each Issuing Bank that each such Initial Lender and each such Issuing Bank
has executed it and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent and each Lender Party and
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their respective successors and assigns, except that the Borrower shall not have
the right to assign any of its rights hereunder or any interest herein without
the prior written consent of the Lender Parties.
SECTION 11.7 Assignments and Participations.
(a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment or Commitments, the Advances
owing to it and the Note or Notes held by it); provided, however, that (i)
except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender (or an Affiliate of a Lender) or an assignment of all
of a Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $1,000,000, (ii) no
such assignments shall be permitted without the prior consent of the
Administrative Agent and, so long as no Event of Default or Default then exists,
the Borrower (in either case, which consents shall not be unreasonably
withheld), (iii) no such assignment shall be permitted if, immediately after
giving effect thereto, the Borrower would be required to make payments to or on
behalf of the assignee Lender Party pursuant to Section 2.10(a) or (b) or 2.12
and the assignor Lender Party was not, at the time of such assignment, entitled
to receive any payment pursuant to Section 2.10(a) or (b) or 2.12, and (iv) the
parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any Note or Notes subject to such assignment and a
processing and recordation fee of $3,500 (other than with respect to an
assignment to one or more of a Lender's Affiliates, in which event such fee
shall be $1,500, and other than with respect to an assignment by or to Bank of
America, in which event such fee shall not apply).
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the
case may be, hereunder and (y) the Lender or Issuing Bank assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's or Issuing Bank's rights and obligations under this Agreement, such
Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility
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with respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, this Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; (ii) such assigning Lender Party makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or any other Loan Party or the performance or observance by any Loan
Party of any of its obligations under any Loan Document or any other instrument
or document furnished pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.6 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such assigning
Lender Party or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the terms
hereof and thereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender or Issuing Bank, as the
case may be.
(d) The Administrative Agent shall maintain at its address referred to
in Section 11.2 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lender Parties and the Commitment under each Facility of, and principal
amount of the Advances owing under each Facility to, each Lender Party from time
to time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable prior
notice. No assignment shall be effective unless and until the Assignment and
Acceptance has been accepted by the Administrative Agent and registered in the
Register. This Section 11.7(d) shall be construed so that the Notes are at all
times maintained in "registered form" for purposes of Internal Revenue Code
Sections 163(f), 871(h)(2) and 881(c)(2) and any related regulations promulgated
thereunder (or any successor provisions of the Internal Revenue Code or such
regulations).
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment and
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the appropriate processing and reconciliation fee, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit A hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. In the case of any assignment
by a Lender, within ten (10) Business Days after its receipt of such notice and
the return of the old Notes (or a customary indemnity with respect to any lost
Notes), the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes a new Note to
the order of such Eligible Assignee in an amount equal to the Commitment assumed
by it under a Facility pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder under such Facility, a new
Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit B, C or D
hereto, as the case may be .
(f) Each Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500 (other than with respect to an
assignment by or to Bank of America).
(g) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes, if any, held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment, waiver or other modification of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Loan Party therefrom, except to the extent that such amendment, waiver,
modification or consent would reduce the rate of interest or extend the final
scheduled maturity of any Advance or Note, or the date for payment of any fees
or other interest on any Advance, or waive or excuse any such payment or any
part thereof, or decrease the rate of interest on any Advance, or reduce the
principal amount thereof, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral (except as
expressly provided in the Collateral Documents) under all of the Collateral
Documents. If a
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Lender Party that is not a United States Person with the meaning of Internal
Revenue Code Section 7701 sells a participating interest pursuant to this
Section 11.7(g) (or otherwise ceases to own a beneficial interest in all or a
portion of its rights and obligations under this Agreement for purposes of
Treasury Regulation Section 1.1441-1(c)(6)) such Lender Party shall provide the
Borrower and the Administrative Agent with revised forms required by Section
2.12(c) reflecting the portion of the rights and obligations under this
Agreement which have been sold on an Internal Revenue Service form W-8IMY
(including the required attachments thereto) and that portion of the rights and
obligations retained on an Internal Revenue Service form W-8BEN or W-8ECI, as
appropriate.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.7, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party in accordance with the terms set forth in
Section 11.10.
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System without notice to, or the consent of, the Borrower or the
Administrative Agent and any Lender which is a fund may pledge all or any
portion of Advances owing to it or the Note or Notes held by it to its trustee
in support of its obligations to its trustee. No such pledge, assignment or
creation of security interest shall release the transferor Lender from its
obligations under this Agreement.
SECTION 11.8 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be as effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 11.9 No Liability of the Issuing Banks. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. No Issuing
Bank nor any of its officers, directors, employees or agents shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by any Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of
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Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against any Issuing Bank, and such Issuing Bank
shall be liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower proves were
caused by (i) such Issuing Bank's willful misconduct or gross negligence or (ii)
such Issuing Bank's willful failure to make lawful payment under a Letter of
Credit after the presentation to it of a draft and certificates strictly
complying with the terms and conditions of the Letter of Credit. In furtherance
and not in limitation of the foregoing, each Issuing Bank may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
SECTION 11.10 Confidentiality. Neither the Administrative Agent nor any
Lender Party shall disclose any Confidential Information to any Person without
the consent of the Borrower, other than (a) to the Administrative Agent's or
such Lender Party's Affiliates and their officers, directors, employees, agents,
auditors and advisors and to actual or prospective Eligible Assignees and
participants, and then only on a confidential basis and subject to such Person's
agreement to be bound by the confidentiality provisions of this Agreement, (b)
as required by any law, rule or regulation or judicial process, (c) as required
by any state, federal or foreign authority or examiner regulating banks or
banking and (d) in any court action between any Loan Party and the
Administrative Agent or any Lender Party arising out of the transactions
contemplated by this Agreement.
SECTION 11.11 Further Assurances. (a) At any time and from time to
time, upon the request of the Administrative Agent, each Loan Party shall
execute, deliver and acknowledge or cause to be executed, delivered or
acknowledged, such further documents and instruments and do such further acts as
the Administrative Agent may reasonably request in order to fully affect the
purposes of this Agreement, the other Loan Documents and any other agreements,
instruments and documents delivered pursuant hereto or in connection with the
Facilities.
(b) Upon receipt of an affidavit of an officer of the
Administrative Agent or any Lender as to the loss, theft, destruction or
mutilation of any Note or Collateral Document which is not of public record and,
in the case of any such mutilation, upon the surrender and cancellation of such
Note or Collateral Document, the Borrower will issue, in lieu thereof, a
replacement Note or Collateral Document in the same principal amount thereof (in
the case of any Note) and otherwise of like tenor.
SECTION 11.12 JURISDICTION, ETC.
(a) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING
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ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
TO WHICH IT IS A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW,
IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY LENDER PARTY MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY JURISDICTION.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
SECTION 11.13 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS (OTHER THAN THE MORTGAGES WHICH SHALL BE GOVERNED BY THE LAW OF
THE JURISDICTION WHERE THE PROPERTY COVERED THEREBY IS LOCATED) SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO ITS RULES PERTAINING TO CONFLICTS OF LAWS
OTHER THAN GENERAL OBLIGATIONS LAW SECTION 5-1401.
SECTION 11.14 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE LOAN
PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE
ADMINISTRATIVE AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
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[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
TEAM HEALTH, INC.
By: ___________________________
Name: ___________________________
Title: ___________________________
SIGNATURE PAGE TO
CREDIT AGREEMENT FOR TEAM HEALTH, INC.
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FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT,
AS LENDER,
AS ISSUING BANK AND
AS SWING LINE BANK
By: __________________________
Name: __________________________
Title: __________________________
SIGNATURE PAGE TO
CREDIT AGREEMENT FOR TEAM HEALTH, INC.
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BANK OF AMERICA, N.A.,
AS LENDER AND
AS ISSUING BANK
By: ___________________________
Name: ___________________________
Title: ___________________________
SIGNATURE PAGE TO
CREDIT AGREEMENT FOR TEAM HEALTH, INC.
- ▇▇▇ -
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC,
AS SYNDICATION AGENT
By: ___________________________
Name: ___________________________
Title: ___________________________
SIGNATURE PAGE TO
CREDIT AGREEMENT FOR TEAM HEALTH, INC.
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[----------------------------]
By: ___________________________
Name: ___________________________
Title: ___________________________
SIGNATURE PAGE TO
CREDIT AGREEMENT FOR TEAM HEALTH, INC.
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