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EXHIBIT 10.8
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AMERIPATH, INC.
CREDIT AGREEMENT
Dated as of May 29, 1996
THE FIRST NATIONAL BANK OF BOSTON, Agent
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TABLE OF CONTENTS
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1. Definitions; Certain Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. The Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1. Revolving Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1.1. Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1.2. Maximum Amount of Revolving Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1.3. Borrowing Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1.4. Loan Accounts; Revolving Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2.1. Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2.2. Requests for Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2.3. Form and Expiration of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.2.4. Lenders' Participation in Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . 23
2.2.5. Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.2.6. Payment of Drafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.2.7. Uniform Customs and Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.2.8. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.2.9. Modification, Consent, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.3. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.3.1. Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.3.2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.3.3. Specifically Prohibited Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.4. Nature of Obligations of Lenders to Make Extensions of Credit . . . . . . . . . . . . . . . . . . . 26
3. Interest; Eurodollar Pricing Options; Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.2. Eurodollar Pricing Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2.1. Election of Eurodollar Pricing Options . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2.2. Notice to Lenders and the Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2.3. Selection of Eurodollar Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.2.4. Additional Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.2.5. Violation of Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.2.6. Funding Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.3. Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4. Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.5. Reserve Requirements, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.7. Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.8. Regulatory Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.9. Computations of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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4.1. Payment at Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.2. Contingent Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.2.1. Excess Credit Exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.2.2. Letter of Credit Exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3. Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.4. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.5. Reborrowing; Application of Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.5.1. Reborrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.5.2. Order of Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.5.3. Payments for Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5. Conditions to Extending Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.1. Conditions on Initial Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.1.1. Revolving Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.1.2. Perfection of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.1.3. Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.1.4. Subordination Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.1.5. Payment of Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.1.6. ▇▇▇▇▇▇▇ Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.1.7. Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.2. Conditions to Making Each Permitted Acquisition Advance. . . . . . . . . . . . . . . . . . . . . . 36
5.2.1. Permitted Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.2.2. Notes and Credit Documents; Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.2.3. Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.3. Conditions to Each Extension of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.3.1. Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.3.2. Legality, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.3.3. Proper Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.3.4. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6. General Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.1. Taxes and Other Charges; Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.1.1. Taxes and Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.1.2. Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.2. Conduct of Business, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.2.1. Types of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.2.2. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.2.3. Statutory Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.2.4. No Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.2.5. Compliance with Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.3. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.3.1. Business Interruption Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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6.3.2. Property Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.3.3. Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.3.5. Flood Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.4. Financial Statements and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.4.1. Annual Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.4.2. Quarterly Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.4.3. Monthly Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.4.4. Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.4.5. Notice of Litigation, Defaults, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.4.6. ERISA Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.4.7. Other Information; Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.5. Certain Financial Tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.5.1. Minimum Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.5.2. Consolidated Senior Debt Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.5.3. Consolidated Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.5.4. Consolidated Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.6. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.7. Guarantees; Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.8. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.9. Investments and Permitted Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.10. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.11. Asset Dispositions and Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.12. Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.13. Issuance of Stock by Subsidiaries; Subsidiary Distributions . . . . . . . . . . . . . . . . . . . . 52
6.13.1. Issuance of Stock by Subsidiaries of the Company . . . . . . . . . . . . . . . . . . . . . 52
6.13.2. No Restrictions on Subsidiary Distributions . . . . . . . . . . . . . . . . . . . . . . . 52
6.14. Voluntary Prepayments of Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.15. Derivative Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.16. Negative Pledge Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.17. ERISA, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.18. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.19. Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.19.1. Compliance with Law and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.19.2. Notice of Claims, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.20. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.1. Organization and Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.1.1. The Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.1.2. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.2. Financial Statements and Other Information; Material Agreements . . . . . . . . . . . . . . . . . . 54
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7.2.1. Financial Statements and Other Information . . . . . . . . . . . . . . . . . . . . . . . . 54
7.2.2. Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.3. Agreements Relating to Financing Debt, Investments, etc. . . . . . . . . . . . . . . . . . . . . . . 55
7.4. Changes in Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.5. Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.6. Operations in Conformity With Law, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.7. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.8. Authorization and Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.9. No Legal Obstacle to Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.10. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.11. Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.12. Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.13. Certain Business Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.13.1. Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.13.2. Antitrust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.13.3. Consumer Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.13.4. Burdensome Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.13.5. Future Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.14. Environmental Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.14.1. Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.14.2. Environmental Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.14.3. Environmental Condition of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.15. Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.16. Acquisition Agreement, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.17. Foreign Trade Regulations; Government Regulation; Margin Stock . . . . . . . . . . . . . . . . . . . 60
7.17.1. Foreign Trade Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.17.2. Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.17.3. Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.18. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.1.1. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.1.2. Specified Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.1.3. Other Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.1.4. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.1.5. Cross Default, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.1.6. Ownership; Liquidation; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.1.7. Enforceability, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.1.8. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.1.9. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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8.1.10. Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.2. Certain Actions Following an Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.2.1. Terminate Obligation to Extend Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.2.2. Specific Performance; Exercise of Rights . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.2.3. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.2.4. Enforcement of Payment; Credit Security; Setoff . . . . . . . . . . . . . . . . . . . . . . 65
8.2.5. Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.3. Annulment of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.4. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9. Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.1. Guarantees of Credit Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.2. Continuing Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.3. Waivers with Respect to Credit Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.4. Lenders' Power to Waive, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.5. Information Regarding the Borrowers, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.6. Certain Guarantor Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.7. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.8. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.9. Future Subsidiaries; Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.1. Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.1.1. Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.1.2. Rights to Payment of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.1.3. Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.1.4. Pledged Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.1.5. Pledged Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.1.6. Pledged Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.1.7. Chattel Paper, Instruments and Documents . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.1.8. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.1.9. Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.1.10. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.1.11. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.1.12. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.1.13. All Other Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.1.14. Proceeds and Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.1.15. Excluded Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.2. Additional Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.2.1. Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.2.2. Motor Vehicles and Aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.3. Representations, Warranties and Covenants with Respect to Credit Security . . . . . . . . . . . . . 74
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10.3.1. Pledged Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.3.2. Accounts and Pledged Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.3.3. No Liens or Restrictions on Transfer or Change of Control . . . . . . . . . . . . . . . . 75
10.3.4. Location of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.3.5. Trade Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.3.6. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.3.7. Modifications to Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.3.8. Delivery of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.3.9. Perfection of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.4. Administration of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.4.1. Use of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.4.2. Deposits; Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.4.3. Pledged Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.5. Right to Realize upon Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.5.1. Assembly of Credit Security; Receiver . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.5.2. General Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.5.3. Marshaling, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.5.4. Sales of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.5.5. Sale without Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.5.6. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.6. Custody of Credit Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11. Expenses; Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.1. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.2. General Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.3. Indemnity With Respect to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
12. Operations; Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
12.1. Interests in Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
12.2. Agent's Authority to Act, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
12.3. Borrowers to Pay Agent, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
12.4. Lender Operations for Advances, Letters of Credit, etc . . . . . . . . . . . . . . . . . . . . . . . 84
12.4.1. Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
12.4.2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
12.4.3. Agent to Allocate Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
12.4.4. Delinquent Lenders; Nonperforming Lenders . . . . . . . . . . . . . . . . . . . . . . . . 85
12.5. Sharing of Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.6. Amendments, Consents, Waivers, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
12.7. Agent's Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
12.8. Concerning the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
12.8.1. Action in Good Faith, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
12.8.2. No Implied Duties, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
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12.8.3. Validity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
12.8.4. Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
12.8.5. Employment of Agents and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
12.8.6. Reliance on Documents and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
12.8.7. Agent's Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
12.9. Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
12.10. Independent Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
12.11. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
13. Successors and Assigns; Lender Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . 91
13.1. Assignments by Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
13.1.1. Assignees and Assignment Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
13.1.2. Terms of Assignment and Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
13.1.3. Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
13.1.4. Acceptance of Assignment and Assumption . . . . . . . . . . . . . . . . . . . . . . . . . 94
13.1.5. Federal Reserve Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
13.1.6. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
13.2. Credit Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
13.3. Replacement of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
14. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
15. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
16. Course of Dealing; Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
17. Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
18. Venue; Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
19. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
20. No Strict Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
21. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
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EXHIBITS
2.1.4 - Revolving Note
5.1.5 - Subordination Agreement
5.2.2 - Joinder Agreement
5.3.1 - Officer's Certificate
6.6 - Existing Indebtedness
6.8 - Existing Liens
6.11 - Asset Dispositions and Mergers
6.18 - Transactions with Affiliates
7.1.1 - Company and its Subsidiaries
7.1.2 - Stockholders of the Company
7.2.2 - Material Agreements
7.3 - Financing Debt, Certain Investments, etc.
7.4 - Changes in Condition
7.7 - Litigation
7.14 - Environmental
7.15 - Multi-employer and Defined Benefit Plans
8.1.6 - Certain Stockholders of the Company
10.4.2 - Depository Institutions
13.1.1 - Assignment and Acceptance
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AMERIPATH, INC.
CREDIT AGREEMENT
This Agreement, dated as of May 29, 1996, is among Ameripath, Inc., a
Delaware corporation, the Subsidiaries of Ameripath, Inc. from time to time
party hereto, the Lenders from time to time party hereto and The First National
Bank of Boston, both in its capacity as a Lender and in its capacity as agent
for itself and the other Lenders. The parties agree as follows:
1. Definitions; Certain Rules of Construction. Certain capitalized
terms are used in this Agreement and in the other Credit Documents with the
specific meanings defined below in this Section 1. Except as otherwise
explicitly specified to the contrary or unless the context clearly requires
otherwise, (a) the capitalized term "Section" refers to sections of this
Agreement, (b) the capitalized term "Exhibit" refers to exhibits to this
Agreement, (c) references to a particular Section include all subsections
thereof, (d) the word "including" shall be construed as "including without
limitation", (e) accounting terms not otherwise defined herein have the meaning
provided under GAAP, (f) terms defined in the UCC and not otherwise defined
herein have the meaning provided under the UCC, (g) references to a particular
statute or regulation include all rules and regulations thereunder and any
successor statute, regulation or rules, in each case as from time to time in
effect and (h) references to a particular Person include such Person's
successors and assigns to the extent not prohibited by this Agreement and the
other Credit Documents. References to "the date hereof" mean the date first
set forth above.
1.1. "Accounts" is defined in Section 10.1.2.
1.2. "Accumulated Benefit Obligations" means the actuarial
present value of the accumulated benefit obligations under any Plan, calculated
in accordance with Statement No. 87 of the Financial Accounting Standards
Board.
1.3. "Acquired Party" shall mean any Person, 100% of the
outstanding capital stock or beneficial interests or substantially all of the
assets of which are acquired by any Borrower in connection with a Permitted
Acquisition.
1.4. "Acquired Party EBITDA Adjustment" means (a) for any
calculation made with respect to Sections 6.5 or 6.9.5 of this Agreement for
which less than six months of the Net Income of an Acquired Party has been
included in, and only to the extent not already included in, Consolidated Net
Income, an amount equal to the product of (i) the number of months in the
applicable period in which none of the Net Income of such Acquired Party was
included in Consolidated Net Income, multiplied by (ii) one-twelfth of Pro
Forma EBITDA of such Acquired Party as of the date of the Acquisition of such
Acquired Party or (b) for any calculation made with respect to Section 6.5 or
6.9.5 of this Agreement for which at least six
11
but less than twelve months of the Net Income of an Acquired Party has been
included in, and only to the extent not already included in, Consolidated Net
Income, an amount equal to the product of (X) the number of months in the
applicable period in which none of the Net Income of such Acquired Party was
included in Consolidated Net Income, multiplied by (i) the amount of actual
EBITDA of such Acquired Party for each full month following its Acquisition by a
Borrower, divided by (ii) the number of full months for which EBITDA of the
Acquired Party was included in Consolidated Net Income.
1.5. "Acquisition Agreement" means the documentation pursuant to
which any Borrower commits itself to make a Permitted Acquisition.
1.6. "Affected Lender" is defined in Section 13.3.
1.7. "Affiliate" means, with respect to any Borrower (or any
other specified Person), any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with such Borrower,
and shall include (a) any officer or director or general partner of such
Borrower and (b) any Person of which such Borrower or any Affiliate (as defined
in clause (a) above) of such Borrower shall, directly or indirectly,
beneficially own either (i) at least 5% of the outstanding equity securities
having the general power to vote or (ii) at least 5% of all equity interests.
1.8. "Agent" means Bank of Boston in its capacity as agent for
the Lenders hereunder, as well as its successors and assigns in such capacity
pursuant to Section 12.7.
1.9. "Agreement" means this Agreement as from time to time
amended, modified and in effect.
1.10. "American Labs" is defined in Section 7.2.1.
1.11. "Applicable Rate" means, at any date, the sum of:
(a) (i) with respect to each portion of the Revolving
Loan subject to a Eurodollar Pricing Option, the sum of the
2.50% plus the Eurodollar Rate with respect to such
Eurodollar Pricing Option;
(ii) with respect to each other portion of the
Revolving Loan, the Base Rate;
plus (b) an additional 3.00% effective on the day the Agent
notifies the Company that the interest rates hereunder are
increasing as a result of the occurrence and continuance of
an Event of Default until the earlier of such time as (i)
such Event of Default is no longer continuing or (ii) such
Event of Default is deemed no longer to exist, in each case
pursuant to Section 8.3.
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1.12. "Assignee" is defined in Section 13.1.1.
1.13. "Assignment and Acceptance" is defined in Section 13.1.1.
1.14. "Bank of Boston" means The First National Bank of Boston.
1.15. "Banking Day" means any day other than Saturday, Sunday or a
day on which banks in Boston, Massachusetts are authorized or required by law
or other governmental action to close and, if such term is used with reference
to a Eurodollar Pricing Option, any day on which dealings are effected in the
Eurodollars in question by first-class banks in the inter-bank Eurodollar
markets in New York, New York.
1.16. "Bankruptcy Code" means Title 11 of the United States Code.
1.17. "Bankruptcy Default" means an Event of Default referred to
in Section 8.1.10.
1.18. "Base Rate" means, on any date, the greater of (a) the rate
of interest announced by Bank of Boston at the Boston Office as its Base Rate
or (b) the sum of 1/2% plus the Federal Funds Rate.
1.19. "Borrowers" means, collectively, the Company, American
Laboratory Associates, Inc., a Delaware corporation, Ameripath Florida, Inc., a
Florida corporation, and such other Acquired Parties as shall become Borrowers
hereunder in accordance with Section 5.2.2.
1.20. "Borrowing Base" means, on any date, 80% of the aggregate
amount carried as accounts receivable (reduced appropriately for doubtful
accounts) on the most recent Consolidated balance sheet of the Company and its
Subsidiaries delivered in accordance with Section 6.4.3, minus the aggregate
amount of any such accounts receivable that are more than 120 days past due;
provided, however, that the Borrowing Base shall be reduced to $1.00 at any
time where the Borrowers have failed to furnish the computation of the
Borrowing Base required by Section 6.4.3(b) within five days after such
computation was originally due.
1.21. "Boston Office" means the principal banking office of Bank
of Boston in Boston, Massachusetts.
1.22. "By-laws" means all written by-laws, rules, regulations and
all other documents relating to the management, governance or internal
regulation of any Person other than an individual, or interpretive of the
Charter of such Person, all as from time to time in effect.
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13
1.23. "Capital Expenditures" means, for any period, amounts added
or required to be added to the property, plant and equipment or other fixed
assets account on the Consolidated balance sheet of the Company and its
Subsidiaries, prepared in accordance with GAAP, in respect of (a) the
acquisition, construction, improvement or replacement of land, buildings,
machinery, equipment, leaseholds and any other real or personal property, (b)
to the extent not included in clause (a) above, materials, contract labor and
direct labor relating thereto (excluding amounts properly expensed as repairs
and maintenance in accordance with GAAP) and (c) software development costs to
the extent not expensed.
1.24. "Capitalized Lease" means any lease which is required to be
capitalized on the balance sheet of the lessee in accordance with GAAP,
including Statement Nos. 13 and 98 of the Financial Accounting Standards Board.
1.25. "Capitalized Lease Obligations" means the amount of the
liability reflecting the aggregate discounted amount of future payments under
all Capitalized Leases calculated in accordance with GAAP, including Statement
Nos. 13 and 98 of the Financial Accounting Standards Board.
1.26. "Cash Equivalents" means:
(a) negotiable certificates of deposit, time deposits
(including sweep accounts), demand deposits and bankers' acceptances
having a maturity of nine months or less and issued by any United
States financial institution having capital and surplus and undivided
profits aggregating at least $100,000,000 and rated at least Prime-1
by ▇▇▇▇▇'▇ Investors Service, Inc. or A-1 by Standard & Poor's Ratings
Group or issued by any Lender;
(b) corporate obligations having a maturity of nine
months or less and rated at least Prime-1 by ▇▇▇▇▇'▇ Investors
Service, Inc. or A-1 by Standard & Poor's Ratings Group or issued by
any Lender;
(c) any direct obligation of the United States of America
or any agency or instrumentality thereof, or of any state or
municipality thereof, (i) which has a remaining maturity at the time
of purchase of not more than one year or which is subject to a
repurchase agreement with any Lender (or any other financial
institution referred to in clause (a) above) exercisable within one
year from the time of purchase and (ii) which, in the case of
obligations of any state or municipality, is rated at least Aa by
▇▇▇▇▇'▇ Investors Service, Inc. or AA by Standard & Poor's Ratings
Group; and
(d) any mutual fund or other pooled investment vehicle
rated at least Aa by ▇▇▇▇▇'▇ Investors Service, Inc. or AA by Standard
& Poor's Ratings Group which invests principally in obligations
described above.
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1.27. "CERCLA" means the federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980.
1.28. "CERCLIS" means the federal Comprehensive Environmental
Response Compensation Liability Information System List (or any successor
document) promulgated under CERCLA.
1.29. "Charter" means the articles of organization, certificate of
incorporation, statute, constitution, joint venture agreement, partnership
agreement, trust indenture, limited liability company agreement or other
charter document of any Person other than an individual, each as from time to
time in effect.
1.30. "Closing Date" means the Initial Closing Date and each other
date on which any extension of credit is made pursuant to Sections 2.1, 2.2 or
2.3.
1.31. "Code" means the federal Internal Revenue Code of 1986, as
amended from time to time.
1.32. "Commitment" means, with respect to any Lender, such
Lender's obligations to extend the credits contemplated by Section 2. The
original Commitments are set forth in Section 12.1 and the current Commitments
are recorded from time to time in the Register.
1.33. "Company" means Ameripath, Inc., a Delaware corporation.
1.34. "Computation Covenants" means Sections 6.5, 6.6.7, 6.6.11,
6.9.5, 6.10, 6.11, 6.12, 6.17 and 6.20.
1.35. "Consolidated" and "Consolidating", when used with reference
to any term, mean that term as applied to the accounts of the Company (or other
specified Person) and all of its Subsidiaries (or other specified group of
Persons), or such of its Subsidiaries as may be specified, consolidated (or
combined) or consolidating (or combining), as the case may be, in accordance
with GAAP and with appropriate deductions for minority interests in
Subsidiaries.
1.36. "Consolidated Adjusted EBITDA" means, for any period, an
amount equal to the sum of (a) Consolidated Net Income of the Company and its
Subsidiaries for such period plus (b) all amounts deducted in computing such
Consolidated Net Income in respect of (i) taxes based upon or measured by
income, (ii) Consolidated Interest Expense and (iii) depreciation and
amortization plus (c) any Acquired Party EBITDA Adjustment.
1.37. "Consolidated EBIT" means, for any period, an amount equal
to Consolidated Adjusted EBITDA minus any and all amounts added in computing
such Consolidated Adjusted EBITDA in respect of depreciation and amortization.
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1.38. "Consolidated Interest Expense" means, for any period, the
Interest Expense paid or accrued by the Company and its Subsidiaries on a
Consolidated basis.
1.39. "Consolidated Net Income" means, for any period, the net
income (or loss) of the Company and its Subsidiaries, determined in accordance
with GAAP on a Consolidated basis; provided, however, that Consolidated Net
Income shall not include the net amount after taxes of:
(a) the income (or loss) of any other Person accrued
prior to the date such other Person becomes a Subsidiary or is merged
into or consolidated with such Person;
(b) the income (or loss) of any other Person (other than
a Subsidiary) in which such Person has an ownership interest;
provided, however, that (i) Net Income shall include amounts in
respect of the income of such other Person when actually received in
cash by such Person in the form of dividends or similar Distributions
and (ii) Net Income shall be reduced by the aggregate amount of all
Investments, regardless of the form thereof, made by such Person in
such other Person for the purpose of funding any deficit or loss of
such other Person;
(c) all amounts included in computing such net income (or
loss) in respect of the write-up of any asset or the retirement of any
Indebtedness or equity at less than face value after any acquisition;
(d) extraordinary and nonrecurring gains;
(e) the income of any Subsidiary to the extent the
payment of such income in the form of a Distribution or repayment of
Indebtedness to such Person is not permitted, whether on account of
any Charter or By-law restriction, any agreement, instrument, deed or
lease or any law, statute, judgment, decree or governmental order,
rule or regulation applicable to such Subsidiary; and
(f) any after-tax gains or losses attributable to
returned surplus assets of any Plan.
1.40. "Consolidated Senior Debt" means all Financing Debt of the
Company and the Subsidiaries on a Consolidated basis other than in respect of
Subordinated Indebtedness.
1.41. "Consolidated Senior Interest Expense" means, for any
period, the aggregate amount of interest, including commitment fees and
payments in the nature of interest under Capitalized Leases and Interest Rate
Protection Agreements, accrued by the Company and its Subsidiaries on a
Consolidated basis (whether such interest is reflected as an item of expense or
capitalized) on Consolidated Senior Debt.
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1.42. "Consolidated Total Debt" means, at any date, all Financing
Debt of the Company and its Subsidiaries on a Consolidated basis.
1.43. "Consolidated Total Liabilities" means, at any date, all
Indebtedness of the Company and its Subsidiaries on a Consolidated basis.
1.44. "Contingent Notes" means (a) the 7% subordinated contingent
promissory notes issued by the Company pursuant to the Acquisition Agreement
relating to the ▇▇▇▇▇▇▇ Acquisition dated as of the closing of the ▇▇▇▇▇▇▇
Acquisition, (b) the 8% Non-Negotiable Subordinated Contingent Notes issued
pursuant to the Asset Purchase Agreement of the Company's predecessor dated as
of January 1, 1994 and (c) contingent promissory notes issued to the Sellers in
connection with a Permitted Acquisition constituting Subordinated Indebtedness.
1.45. "Credit Documents" means:
(a) this Agreement, the Revolving Notes, each Letter of
Credit, each draft presented or accepted under a Letter of Credit and
the Subordination Agreement, each as from time to time in effect;
(b) all financial statements, reports, notices,
mortgages, assignments, UCC financing statements or certificates
delivered to the Agent or any of the Lenders by the Company, any of
its Subsidiaries or any other Obligor in connection herewith or
therewith; and
(c) any other present or future agreement or instrument
from time to time entered into among the Company, any of its
Subsidiaries or any other Obligor, on one hand, and the Agent, any
Letter of Credit Issuer or all the Lenders, on the other hand,
relating to, amending or modifying this Agreement or any other Credit
Document referred to above or which is stated to be a Credit Document,
each as from time to time in effect.
1.46. "Credit Obligations" means all present and future
liabilities, obligations and Indebtedness of the Company, any of its
Subsidiaries or any other Obligor owing to the Agent or any Lender under or in
connection with this Agreement or any other Credit Document, including
obligations in respect of principal, interest, reimbursement obligations under
Letters of Credit, commitment fees, Letter of Credit fees, amounts provided for
in Sections 3.2.4, 3.5, 3.6, 3.7, 3.8 and 11 and other fees, charges,
indemnities and expenses from time to time owing hereunder or under any other
Credit Document (whether accruing before or after a Bankruptcy Default).
1.47. "Credit Participant" is defined in Section 13.2.
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1.48. "Credit Security" means all assets now or from time to time
hereafter subjected to a security interest, mortgage or charge (or intended or
required so to be subjected pursuant to this Agreement or any other Credit
Document) to secure the payment or performance of any of the Credit
Obligations, including the assets described in Section 10.1.
1.49. "Default" means any Event of Default and any event or
condition which with the passage of time or giving of notice, or both, would
become an Event of Default and the filing against the Company, any of its
Subsidiaries or any other Obligor of a petition commencing an involuntary case
under the Bankruptcy Code.
1.50. "Delinquency Period" is defined in Section 12.4.4.
1.51. "Delinquent Lender" is defined in Section 12.4.4.
1.52. "Delinquent Payment" is defined in Section 12.4.4.
1.53. "▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ & Associates Pathology, P.A., a
Florida professional services corporation.
1.54. "▇▇▇▇▇▇▇ Acquisition" means a Permitted Acquisition of
▇▇▇▇▇▇▇ by the Company or one of its subsidiaries.
1.55. "▇▇▇▇▇▇▇ Management Investors" means each of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, E. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇-▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
1.56. "Distribution" means, with respect to the Company (or other
specified Person):
(a) the declaration or payment of any dividend or
distribution, including dividends payable in shares of capital stock
of or other equity interests in the Company (or such specified
Person), on or in respect of any shares of any class of capital stock
of or other equity interests in the Company (or such specified
Person);
(b) the purchase or redemption of any shares of any class
of capital stock of or other equity interest in the Company (or such
specified Person) or of options, warrants or other rights for the
purchase of such shares, directly, indirectly through a Subsidiary or
otherwise;
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18
(c) any other distribution on or in respect of any shares
of any class of capital stock of or equity or other beneficial
interest in the Company (or such specified Person);
(d) any payment of principal or interest with respect to,
or any purchase, redemption or defeasance of, any Indebtedness of the
Company (or such specified Person) which by its terms or the terms of
any agreement is subordinated to the payment of the Credit
Obligations; and
(e) any payment, loan or advance by the Company (or such
specified Person) to, or any other Investment by the Company (or such
specified Person) in, the holder of any shares of any class of capital
stock of or equity interest in the Company (or such specified Person),
or any Affiliate of such holder;
provided, however, that the term "Distribution" shall not include (i) dividends
payable in perpetual common stock of or other similar equity interests in the
Company (or such specified Person) or (ii) payments in the ordinary course of
business in respect of (A) reasonable compensation paid to employees, officers
and directors, (B) advances to employees for travel expenses, drawing accounts
and similar expenditures, or (C) rent paid to, or accounts payable for services
rendered or goods sold by, non-Affiliates that own capital stock of or other
equity interests in the Company (or such specified Person).
1.57. "EBIT" means, for any period, an amount equal to the sum of
(a) the Net Income (or loss) of any Person for such period plus (b) all amounts
deducted in computing such Net Income in respect of (i) taxes based upon or
measured by income and (ii) Interest Expense.
1.58. "EBITDA" means, for any period, an amount equal to the sum
of (a) the Net Income (or loss) of any Person for such period plus (b) all
amounts deducted in computing such Net Income in respect of (i) taxes based
upon or measured by income, (ii) Interest Expense and (iii) depreciation and
amortization.
1.59. "Environmental Laws" means all applicable federal, state or
local statutes, laws, ordinances, codes, rules, regulations and guidelines
(including consent decrees and administrative orders) relating to public health
and safety and protection of the environment, including OSHA.
1.60. "ERISA" means the federal Employee Retirement Income
Security Act of 1974.
1.61. "ERISA Group Person" means the Company, any Subsidiary of
the Company and any Person which is a member of the controlled group or under
common control with the
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19
Company or any Subsidiary within the meaning of section 414 of the Code or
section 4001(a)(14) of ERISA.
1.62. "Eurodollars" means, with respect to any Lender, deposits of
United States Funds in a non-United States office or an international banking
facility of such Lender.
1.63. "Eurodollar Basic Rate" means, for any Eurodollar Interest
Period, the rate of interest at which Eurodollar deposits in an amount
comparable to the portion of the Revolving Loan as to which a Eurodollar
Pricing Option has been elected and which have a term corresponding to such
Eurodollar Interest Period are offered to the Agent by first class banks in the
inter-bank Eurodollar market for delivery in immediately available funds at a
Eurodollar Office on the first day of such Eurodollar Interest Period as
determined by the Agent at approximately 10:00 a.m. (Boston time) two Banking
Days prior to the date upon which such Eurodollar Interest Period is to
commence (which determination by the Agent shall, in the absence of manifest
error, be conclusive).
1.64. "Eurodollar Interest Period" means any period, selected as
provided in Section 3.2.1, of one, two, three or six months, commencing on any
Banking Day and ending on the corresponding date in the subsequent calendar
month so indicated (or, if such subsequent calendar month has no corresponding
date, on the last day of such subsequent calendar month); provided, however,
that subject to Section 3.2.3, if any Eurodollar Interest Period so selected
would otherwise begin or end on a date which is not a Banking Day, such
Eurodollar Interest Period shall instead begin or end, as the case may be, on
the immediately preceding or succeeding Banking Day as determined by the Agent
in accordance with the then current banking practice in the inter-bank
Eurodollar market with respect to Eurodollar deposits at the applicable
Eurodollar Office, which determination by the Agent shall, in the absence of
manifest error, be conclusive.
1.65. "Eurodollar Office" means such non-United States office or
international banking facility of the Agent as the Agent may from time to time
select.
1.66. "Eurodollar Pricing Options" means the options granted
pursuant to Section 3.2.1 to have the interest on any portion of the Revolving
Loan computed on the basis of a Eurodollar Rate.
1.67. "Eurodollar Rate" for any Eurodollar Interest Period means
the rate, rounded upward to the nearest 1/100%, obtained by dividing (a) the
Eurodollar Basic Rate for such Eurodollar Interest Period by (b) an amount
equal to 1 minus the Eurodollar Reserve Rate; provided, however, that if at any
time during such Eurodollar Interest Period the Eurodollar Reserve Rate
applicable to any outstanding Eurodollar Pricing Option changes, the Eurodollar
Rate for such Eurodollar Interest Period shall automatically be adjusted to
reflect such change, effective as of the date of such change.
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1.68. "Eurodollar Reserve Rate" means the stated maximum rate
(expressed as a decimal) of all reserves (including any basic, supplemental,
marginal or emergency reserve or any reserve asset), if any, as from time to
time in effect, required by any Legal Requirement to be maintained by any
Lender against (a) "Eurocurrency liabilities" as specified in Regulation D of
the Board of Governors of the Federal Reserve System applicable to Eurodollar
Pricing Options, (b) any other category of liabilities that includes Eurodollar
deposits by reference to which the interest rate on portions of the Revolving
Loan subject to Eurodollar Pricing Options is determined, (c) the principal
amount of or interest on any portion of the Revolving Loan subject to a
Eurodollar Pricing Option or (d) any other category of extensions of credit, or
other assets, that includes loans subject to a Eurodollar Pricing Option by a
non-United States office of any of the Lenders to United States residents, in
each case without the benefits of credits for prorations, exceptions or offsets
that may be available to a Lender.
1.69. "Event of Default" is defined in Section 8.1.
1.70. "Exchange Act" means the federal Securities Exchange Act of
1934.
1.71. "FACA" means the Federal Assignment of Claims Act as set
forth in 31 U.S.C. Section 3727 and 41 U.S.C. Section 15.
1.72. "Federal Funds Rate" means, for any day, the rate equal to
the weighted average (rounded upward to the nearest 1/8%) of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, (a) as such weighted average is published
for such day (or, if such day is not a Banking Day, for the immediately
preceding Banking Day) by the Federal Reserve Bank of New York or (b) if such
rate is not so published for such Banking Day, as determined by the Agent using
any reasonable means of determination. Each determination by the Agent of the
Federal Funds Rate shall, in the absence of manifest error, be conclusive.
1.73. "Final Maturity Date" means December 31, 1998.
1.74. "Financial Officer" of the Company (or other specified
Person) means its chief executive officer, chief financial officer, chief
operating officer, chairman, president, treasurer or any of its vice presidents
whose primary responsibility is for its financial affairs, all of whose
incumbency and signatures have been certified to the Agent by the secretary or
other appropriate attesting officer of the Company (or such specified Person).
1.75. "Financing Debt" means each of the items described in
clauses (a) through (e) of the definition of the term "Indebtedness".
1.76. "Foreign Trade Regulations" means (a) any act that prohibits
or restricts, or empowers the President or any executive agency of the United
States of America to prohibit or
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21
restrict, exports to or financial transactions with any foreign country or
foreign national, (b) the regulations with respect to certain prohibited foreign
trade transactions set forth at 22 C.F.R. Parts 120-130 and 31 C.F.R. Part 500
and (c) any order, regulation, ruling, interpretation, direction, instruction or
notice relating to any of the foregoing.
1.77. "Funding Liability" means (a) any Eurodollar deposit which
was used (or deemed by Section 3.2.6 to have been used) to fund any portion of
the Revolving Loan subject to a Eurodollar Pricing Option, and (b) any portion
of the Revolving Loan subject to a Eurodollar Pricing Option funded (or deemed
by Section 3.2.6 to have been funded) with the proceeds of any such Eurodollar
deposit.
1.78. "GAAP" means generally accepted accounting principles as
from time to time in effect, including the statements and interpretations of
the United States Financial Accounting Standards Board.
1.79. "Government Receivables" means any Accounts as to which the
United States of America or any agency or department thereof is the obligor.
1.80. "Guarantee" means, with respect to the Company (or other
specified Person):
(a) any guarantee by the Company (or such specified
Person) of the payment or performance of, or any contingent obligation
by the Company (or such specified Person) in respect of, any
Indebtedness or other obligation of any primary obligor;
(b) any other arrangement whereby credit is extended to a
primary obligor on the basis of any promise or undertaking of the
Company (or such specified Person), including any binding "comfort
letter" or "keep well agreement" written by the Company (or such
specified Person), to a creditor or prospective creditor of such
primary obligor, to (i) pay the Indebtedness of such primary obligor,
(ii) purchase an obligation owed by such primary obligor, (iii) pay
for the purchase or lease of assets or services regardless of the
actual delivery thereof or (iv) maintain the capital, working capital,
solvency or general financial condition of such primary obligor;
(c) any liability of the Company (or such specified
Person), as a general partner of a partnership in respect of
Indebtedness or other obligations of such partnership;
(d) any liability of the Company (or such specified
Person) as a joint venturer of a joint venture in respect of
Indebtedness or other obligations of such joint venture;
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22
(e) any liability of the Company (or such specified
Person) with respect to the tax liability of others as a member of a
group that is consolidated for tax purposes; and
(f) reimbursement obligations, whether contingent or
matured, of the Company (or such specified Person) with respect to
letters of credit, bankers acceptances, surety bonds, other financial
guarantees and Interest Rate Protection Agreements,
whether or not any of the foregoing are reflected on the balance sheet of the
Company (or such specified Person) or in a footnote thereto; provided, however,
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The amount of any Guarantee and
the amount of Indebtedness resulting from such Guarantee shall be the maximum
amount that the guarantor may become obligated to pay in respect of the
obligations (whether or not such obligations are outstanding at the time of
computation).
1.81. "Guarantor" means each Borrower, each Subsidiary of the
respective Borrowers and each Subsidiary which subsequently becomes party to
this Agreement as a Guarantor.
1.82. "Hazardous Material" means any pollutant, toxic or hazardous
material or waste, including any "hazardous substance" or "pollutant" or
"contaminant" as defined in section 101(14) of CERCLA or any other
Environmental Law or regulated as toxic or hazardous under RCRA or any other
Environmental Law.
1.83. "Impermissible Reference" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of any Obligor, any qualification or exception to such opinion or
certification
(a) which expresses concern about whether or not such
Obligor will be able to meet its obligations as such become due, or
otherwise will be able to operate or conduct its business in the
future;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement;
(c) which relates to the treatment or classification of
any item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause there to be a Default under Sections 6.5 through
6.20; or
(d) which, in the reasonable judgment of the Required
Lenders, is not acceptable.
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1.84. "Indebtedness" means all obligations, contingent or
otherwise, which in accordance with GAAP are required to be classified upon the
balance sheet of the Company (or other specified Person) as liabilities, but in
any event including (without duplication):
(a) borrowed money;
(b) indebtedness evidenced by notes, debentures or
similar instruments;
(c) Capitalized Lease Obligations;
(d) reimbursement obligations, whether contingent or
matured, with respect to letters of credit, bankers acceptances,
surety bonds, other financial guarantees and Interest Rate Protection
Agreements (without duplication of other Indebtedness supported or
guaranteed thereby);
(e) unfunded pension liabilities;
(f) mandatory redemption or dividend rights on capital
stock (or other equity);
(g) obligations that are immediately and directly due and
payable out of the proceeds of or production from property;
(h) liabilities secured by any Lien existing on property
owned or acquired by the Company (or such specified Person), whether
or not the liability secured thereby shall have been assumed; and
(i) all Guarantees in respect of Indebtedness of others.
1.85. "Indemnified Party" is defined in Section 11.2.
1.86. "Initial Closing Date" means the first date on or prior to
September 30, 1996 on which all the conditions set forth in Section 5.1 and 5.3
have been satisfied.
1.87. "Interest Expense" means, for any period, the aggregate
amount of interest, including commitment fees and payments in the nature of
interest under Capitalized Leases and Interest Rate Protection Agreements
(whether such interest is reflected as an item of expense or capitalized), paid
or accrued by any Person in accordance with GAAP.
1.88. "Interest Rate Protection Agreement" means any interest rate
swap, interest rate cap, interest rate hedge or other contractual arrangement
that converts variable interest
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rates into fixed interest rates, fixed interest rates into variable interest
rates or other similar arrangements.
1.89. "Investment" means, with respect to any Borrower (or other
specified Person):
(a) any share of capital stock, partnership or other
equity interest, evidence of Indebtedness or other security issued by
any other Person;
(b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person;
(c) any Guarantee of the Indebtedness of any other
Person;
(d) any acquisition of all or any part of the business of
any other Person or the assets comprising such business or part
thereof; and
(e) any other similar investment.
The investments described in the foregoing clauses (a) through (e)
shall be included in the term "Investment" whether they are made or acquired by
purchase, exchange, issuance of stock or other securities, merger,
reorganization or any other method; provided, however, that the term
"Investment" shall not include (i) trade and customer accounts receivable for
property leased, goods furnished or services rendered in the ordinary course of
business and payable in accordance with customary trade terms, (ii) advances
and prepayments to suppliers for property leased, goods furnished and services
rendered in the ordinary course of business, (iii) advances to employees for
travel expenses, drawing accounts and similar expenditures, (iv) stock or other
securities acquired in connection with the satisfaction or enforcement of
Indebtedness or claims due to the Company (or such specified Person) or as
security for any such Indebtedness or claim or (v) demand deposits in banks or
similar financial institutions.
In determining the amount of outstanding Investments:
(A) the amount of any Investment shall be the cost thereof
minus any returns of capital in cash on such Investment (determined in
accordance with GAAP without regard to amounts realized as income on
such Investment);
(B) the amount of any Investment in respect of a purchase
described in clause (d) above shall include the amount of any
Financing Debt assumed in connection with such purchase or secured by
any asset acquired in such purchase (whether or not any Financing Debt
is assumed) or for which any Person that becomes a Subsidiary is
liable on the date on which the securities of such Person are
acquired; and
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(C) no Investment shall be increased as the result of an
increase in the undistributed retained earnings of the Person in which
the Investment was made or decreased as a result of an equity interest
in the losses of such Person.
1.90. "Legal Requirement" means any present or future requirement
imposed upon any of the Lenders or the Company and its Subsidiaries by any law,
statute, rule, regulation, directive, order, decree, guideline (or any
interpretation thereof by courts or of administrative bodies) of the United
States of America, or any jurisdiction in which any Eurodollar Office is
located or any state or political subdivision of any of the foregoing, or by
any board, governmental or administrative agency, central bank or monetary
authority of the United States of America, any jurisdiction in which any
Eurodollar Office is located, or any political subdivision of any of the
foregoing. Any such requirement imposed on any of the Lenders which such
Lender reasonably believes has the force of law shall be deemed to be a Legal
Requirement.
1.91. "Lender" means each of the Persons listed as lenders on the
signature page hereto, including Bank of Boston in its capacity as a Lender and
such other Persons who may from time to time own a Percentage Interest in the
Credit Obligations, but the term "Lender" shall not include any Credit
Participant.
1.92. "Lending Officer" means such individuals whom the Agent may
designate by notice to the Company from time to time as an officer who may
receive telephone requests for borrowings under Section 2.1.3.
1.93. "Letter of Credit" is defined in Section 2.3.1.
1.94. "Letter of Credit Exposure" means, at any date, the sum of
(a) the aggregate face amount of all drafts that may then or thereafter be
presented by beneficiaries under all Letters of Credit then outstanding, plus
(b) the aggregate face amount of all drafts that the Letter of Credit Issuer
has previously accepted under Letters of Credit but has not paid.
1.95. "Letter of Credit Issuer" means, for any Letter of Credit,
Bank of Boston or, in the event Bank of Boston does not for any reason issue a
requested Letter of Credit, another Lender willing to issue such Letter of
Credit in accordance with Section 2.3 reasonably acceptable to the Agent.
1.96. "Lien" means, with respect to the Company (or any other
specified Person):
(a) any lien, encumbrance, mortgage, pledge, charge or
security interest of any kind upon any property or assets of the
Company (or such specified Person), whether now owned or hereafter
acquired, or upon the income or profits therefrom;
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(b) the acquisition of, or the agreement to acquire, any
property or asset upon conditional sale or subject to any other title
retention agreement, device or arrangement (including a Capitalized
Lease);
(c) the sale, assignment, pledge or transfer for security
of any accounts, general intangibles or chattel paper of the Company
(or such specified Person), with or without recourse;
(d) the transfer of any tangible property or assets for
the purpose of subjecting such items to the payment of previously
outstanding Indebtedness in priority to payment of the general
creditors of the Company (or such specified Person); and
(e) the existence for a period of more than 120
consecutive days of any Indebtedness against the Company (or such
specified Person) which if unpaid would by law or upon a Bankruptcy
Default be given any priority over general creditors.
1.97. "Loan Accounts" is defined in Section 2.1.4.
1.98. "Margin Stock" means "margin stock" within the meaning of
Regulations G, T, U or X of the Board of Governors of the Federal Reserve
System.
1.99. "Material Adverse Change" means, since any specified date or
from the circumstances existing immediately prior to the happening of any
specified event, a material adverse change in (a) the business, assets,
financial condition, income or prospects of the Company (on an individual
basis) or the Company and its Subsidiaries (on a Consolidated basis), whether
as a result of (i) general economic conditions affecting the industry in which
the Company and its Subsidiaries are engaged, (ii) difficulties in obtaining
supplies and raw materials, (iii) fire, flood or other natural calamities, (iv)
environmental pollution, (v) regulatory changes, judicial decisions, war or
other governmental action or (vi) any other event or development, whether or
not related to those enumerated above or (b) the ability of the Obligors to
perform their obligations under the Credit Documents or (c) the rights and
remedies of the Agent and the Lenders under the Credit Documents.
1.100. "Material Agreements" is defined in Section 7.2.2.
1.101. "Material Plan" means any Plan or Plans, collectively, as to
which (a) the excess of (i) the aggregate Accumulated Benefit Obligations under
such Plan or Plans over (ii) the aggregate fair market value of the assets of
such Plan or Plans allocable to such benefits, all determined as of the then
most recent valuation date or dates for such Plan or Plans, is greater than (b)
$500,000.
1.102. "Maximum Amount of Revolving Credit" is defined in Section
2.1.2.
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1.103. "Multiemployer Plan" means any Plan that is a "multiemployer
plan" as defined in section 4001(a)(3) of ERISA.
1.104. "Net Income" means, for any period, the net income (or loss)
of any Person, determined in accordance with GAAP; provided, however, that Net
Income shall not include:
(a) all amounts included in computing such net income (or
loss) in respect of the write-up of any asset or the retirement of any
Indebtedness or equity at less than face value after any acquisition;
(b) extraordinary and nonrecurring gains;
(c) any after-tax gains or losses attributable to
returned surplus assets of any Plan.
1.105. "Nonperforming Lender" is defined in Section 12.4.4.
1.106. "Obligor" means the Company, each other Borrower, each
Guarantor and each Person guaranteeing, providing collateral for or
subordinating obligations to, the Credit Obligations.
1.107. "OSHA" means the federal Occupational Health and Safety Act.
1.108. "Overdue Reimbursement Rate" means, at any date, the highest
Applicable Rate then in effect.
1.109. "Payment Date" means the first Banking Day of each month,
commencing with the first such date after the Initial Closing Date.
1.110. "PBGC" means the Pension Benefit Guaranty Corporation or any
successor entity.
1.111. "Percentage Interest" is defined in Section 12.1.
1.112. "Performing Lender" is defined in Section 12.4.4.
1.113. "Permitted Acquisition" means an Investment by any Borrower
permitted under Section 6.9.5.
1.114. "Person" means any present or future natural person or any
corporation, association, partnership, joint venture, limited liability, joint
stock or other company, business trust, trust, organization, business or
government or any governmental agency or political subdivision thereof.
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1.115. "Plan" means, at any date, any pension benefit plan subject
to Title IV of ERISA maintained, or to which contributions have been made or
are required to be made, by any ERISA Group Person within six years prior to
such date.
1.116. "Pledged Indebtedness" is defined in Section 10.1.6.
1.117. "Pledged Rights" is defined in Section 10.1.5.
1.118. "Pledged Securities" means the Pledged Stock, the Pledged
Rights and the Pledged Indebtedness, collectively.
1.119. "Pledged Stock" is defined in Section 10.1.4.
1.120. "Pro Forma EBITDA" shall mean, for any period, an amount
calculated on a pro forma basis taking into account the Permitted Acquisition
equal to (a) the historical EBITDA of the Acquired Party and (b) any non-GAAP
adjustment to Net Income to the extent that such adjustment is approved by the
Required Lenders.
1.121. "Purchase Price" means the amount of the consideration,
including, but not limited to, cash or Cash Equivalents, capital stock, assets,
debt, including contingent or other promissory notes, and any other form of
payment, for any Permitted Acquisition; provided, however, that (a) the amount
of any Contingent Note included in this definition of Purchase Price shall be
the lesser of (i) the maximum principal amount of such Contingent Note or (ii)
the principal amount of such Contingent Note that becomes payable by a Borrower
at the time that such Borrower attains the level of Pro Forma EBITDA previously
determined by the Required Lenders and (b) the amount of any contingent capital
stock included in this definition of Purchase Price shall only include that
portion of such capital stock of a Borrower that must be issued by a Borrower
at the time that such Borrower attains the level of Pro Forma EBITDA previously
determined by the Required Lenders.
1.122. "RCRA" means the federal Resource Conservation and Recovery
Act, 42 U.S.C. Section 690, et seq.
1.123. "Register" is defined in Section 13.1.3.
1.124. "Replacement Lender" is defined in Section 13.3.
1.125. "Required Lenders" means, with respect to any approval,
consent, modification, waiver or other action to be taken by the Agent or the
Lenders under the Credit Documents which require action by the Required
Lenders, such Lenders as own at least a two-thirds of the Percentage Interests;
provided, however, that with respect to any matters referred
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to in the proviso to Section 12.6, Required Lenders means such Lenders as own
at least the respective portions of the Percentage Interests required by
Section 12.6.
1.126. "Revolving Loan" is defined in Section 2.1.4.
1.127. "Revolving Notes" is defined in Section 2.1.4.
1.128. "Securities Act" means the federal Securities Act of 1933.
1.129. "Sellers" means the Person or Persons selling or otherwise
transferring the capital stock, partnership or other equity interest or assets
of the Acquired Party to a Borrower pursuant to a Permitted Acquisition.
1.130. "Subordinated Indebtedness" means Indebtedness of the
Borrower which is subordinated to the Credit Obligations pursuant to the
Subordination Agreement or on terms approved by the Required Lenders in
writing.
1.131. "Subordination Agreement" is defined in Section 5.1.4.
1.132. "Subsidiary" means any Person of which the Company (or other
specified Person) shall at the time, directly or indirectly through one or more
of its Subsidiaries, (a) own at least 50% of the outstanding capital stock (or
other shares of beneficial interest) entitled to vote generally, (b) hold at
least 50% of the partnership, joint venture or similar interests or (c) be a
general partner or joint venturer.
1.133. "Summit Partners" means collectively, Summit Ventures III,
L.P., Summit Investors II, L.P. and Summit Subordinated Debt Fund, L.P.
1.134. "Tax" means any present or future tax, levy, duty, impost,
deduction, withholding or other charges of whatever nature at any time required
by any Legal Requirement (a) to be paid by any Lender or (b) to be withheld or
deducted from any payment otherwise required hereby to be made to any Lender,
in each case on or with respect to its obligations hereunder, the Revolving
Loan, any payment in respect of the Credit Obligations or any Funding Liability
not included in the foregoing; provided, however, that the term "Tax" shall not
include taxes imposed upon or measured by the net income of such Lender (other
than withholding taxes) or franchise taxes.
1.135. "UCC" means the Uniform Commercial Code as in effect in
Massachusetts on the date hereof; provided, however, that with respect to the
perfection of the Agent's Lien in the Credit Security and the effect of
nonperfection thereof, the term "UCC" means the Uniform Commercial Code as in
effect in any jurisdiction the laws of which are made applicable by Section
9-103 of the Uniform Commercial Code as in effect in Massachusetts.
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1.136. "Uniform Customs and Practice" is defined in Section 2.2.7.
1.137. "United States Funds" means such coin or currency of the
United States of America as at the time shall be legal tender therein for the
payment of public and private debts.
1.138. "Wholly Owned Subsidiary" means any Subsidiary of which all
of the outstanding capital stock (or other shares of beneficial interest)
entitled to vote generally (other than directors' qualifying shares) is owned
by the Company (or other specified Person) directly, or indirectly through one
or more Wholly Owned Subsidiaries.
2. The Credits.
2.1. Revolving Credit.
2.1.1. Revolving Loan. Subject to all the terms and
conditions of this Agreement and so long as no Default then exists,
from time to time on and after the Initial Closing Date and prior to
the Final Maturity Date the Lenders will, severally in accordance with
their respective Percentage Interests, make loans to any Borrower in
such amounts as may be requested by such Borrower in accordance with
Section 2.1.3. The sum of the aggregate principal amount of loans made
under this Section 2.1.1 at any one time outstanding plus the Letter of
Credit Exposure shall in no event exceed the Maximum Amount of
Revolving Credit and the sum of the aggregate principal amount of loans
made to and the face amount of Letters of Credit issued on behalf of
the Borrowers for the purposes of working capital shall in no event
exceed the Borrowing Base. In no event will the principal amount of
loans at any one time outstanding made by any Lender pursuant to this
Section 2.1 exceed such Lender's Commitment.
2.1.2. Maximum Amount of Revolving Credit. The term
"Maximum Amount of Revolving Credit" means, on any date, the lesser of
(a) $40,000,000 or (b) the amount (in an integral multiple of
$1,000,000) to which the then applicable amount shall have been
irrevocably reduced from time to time by notice from the Company to
the Agent.
2.1.3. Borrowing Requests. Any Borrower may from time
to time request a loan under Section 2.1.1 by providing to the Agent a
notice (which may be given by a telephone call received by a Lending
Officer if promptly confirmed in writing). Such notice must be not
later than noon (Boston time) on the first Banking Day (third Banking
Day if any portion of such loan will be subject to a Eurodollar
Pricing Option on the requested Closing Date) prior to the requested
Closing Date for such loan. If such notice requested that a loan, or
any portion thereof, be made subject to a Eurodollar Pricing Option,
and the Agent shall have notified the Borrower pursuant to
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Section 3.2.2 that such election did not become effective, the notice
shall be deemed to have been made for a loan at the Base Rate. The
notice must specify (a) the amount of the requested loan (which shall
be not less than $100,000 and an integral multiple of $50,000), (b)
the requested Closing Date therefor (which shall be a Banking Day) and
(c) the portion of the requested loan that is to be used for working
capital. Upon receipt of such notice, the Agent will promptly inform
each other Lender (by telephone or otherwise). Each such loan will be
made at the Boston Office by depositing the amount thereof to the
general account of such Borrower with the Agent. In connection with
each such loan, such Borrower shall furnish to the Agent a certificate
in substantially the form of Exhibit 5.3.1.
2.1.4. Loan Accounts; Revolving Notes. The Agent will
establish on its books separate loan accounts for each Borrower
(collectively the "Loan Accounts") each of which the Agent shall
administer as follows: (a) the Agent shall add to each Loan Account,
and each Loan Account shall evidence, the principal amount of all
loans from time to time made by the Lenders to such Borrower pursuant
to Section 2.1.1 and (b) the Agent shall reduce each Borrower's Loan
Account by the amount of all payments made on account of the
Indebtedness evidenced by the Loan Account of such Borrower. The
aggregate principal amount of the Indebtedness evidenced by the Loan
Accounts is referred to as the "Revolving Loan". The Revolving Loan
shall be deemed owed to each Lender severally in accordance with such
Lender's Percentage Interest, and all payments credited to the Loan
Accounts shall be for the account of each Lender in accordance with
its Percentage Interest. Each Borrower's obligations to pay each
Lender's Percentage Interest in the Revolving Loan shall be evidenced
by a separate note of such Borrower in substantially the form of
Exhibit 2.1.4 (the "Revolving Notes"), payable to each Lender in
maximum principal amount equal to such Lender's Percentage Interest in
the Revolving Loan.
2.2. Letters of Credit.
2.2.1. Issuance of Letters of Credit. Subject to all
the terms and conditions of this Agreement and so long as no Default
then exists, from time to time on and after the Initial Closing Date
and prior to the Final Maturity Date, the Letter of Credit Issuer will
issue for the account of any Borrower one or more irrevocable
documentary or standby letters of credit (the "Letters of Credit").
Letter of Credit Exposure plus the Revolving Loan shall in no event
exceed the Maximum Amount of Revolving Credit. Letter of Credit
Exposure shall in no event exceed $2,000,000.
2.2.2. Requests for Letters of Credit. Any Borrower
may from time to time request a Letter of Credit to be issued by
providing to the Letter of Credit Issuer (and the Agent if the Letter
of Credit Issuer is not the Agent) a notice which is actually received
not less than five Banking Days prior to the requested Closing Date
for such Letter of Credit specifying (a) the amount of the requested
Letter of Credit, (b) the
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beneficiary thereof, (c) the requested Closing Date and (d) the
principal terms of the text for such Letter of Credit. Each Letter of
Credit will be issued by forwarding it to such Borrower or to such
other Person as directed in writing by such Borrower. In connection
with the issuance of any Letter of Credit, such Borrower shall furnish
to the Letter of Credit Issuer (and the Agent if the Letter of Credit
Issuer is not the Agent) a certificate in substantially the form of
Exhibit 5.3.1 and any customary application forms required by the
Letter of Credit Issuer.
2.2.3. Form and Expiration of Letters of Credit. Each
Letter of Credit issued under this Section 2.2 and each draft accepted
or paid under such a Letter of Credit shall be issued, accepted or
paid, as the case may be, by the Letter of Credit Issuer at its
principal office. No Letter of Credit shall provide for the payment
of drafts drawn thereunder, and no draft shall be payable, at a date
which is later than the earlier of (a) the date 12 months after the
date of issuance of such Letter of Credit or (b) the Final Maturity
Date. Each Letter of Credit and each draft accepted under a Letter of
Credit shall be in such form and minimum amount, and shall contain
such terms, as the Letter of Credit Issuer and such Borrower may agree
upon at the time such Letter of Credit is issued, including a
requirement of not less than three Banking Days after presentation of
a draft before payment must be made thereunder.
2.2.4. Lenders' Participation in Letters of Credit.
Upon the issuance of any Letter of Credit, a participation therein, in
an amount equal to each Lender's Percentage Interest, shall
automatically be deemed granted by the Letter of Credit Issuer to each
Lender on the date of such issuance and the Lenders shall
automatically be obligated, as set forth in Section 12.4, to reimburse
the Letter of Credit Issuer to the extent of their respective
Percentage Interests for all obligations incurred by the Letter of
Credit Issuer to third parties in respect of such Letter of Credit not
reimbursed by the Company. The Letter of Credit Issuer will send to
each Lender (and the Agent if the Letter of Credit Issuer is not the
Agent) a confirmation regarding the participations in Letters of
Credit outstanding during such month.
2.2.5. Presentation. The Letter of Credit Issuer may
accept or pay any draft presented to it, regardless of when drawn and
whether or not negotiated, if such draft, the other required documents
and any transmittal advice are presented to the Letter of Credit
Issuer and dated on or before the expiration date of the Letter of
Credit under which such draft is drawn. Except insofar as
instructions actually received may be given by such Borrower in
writing expressly to the contrary with regard to, and prior to, the
Letter of Credit Issuer's issuance of any Letter of Credit for the
account of such Borrower and such contrary instructions are reflected
in such Letter of Credit, the Letter of Credit Issuer may honor as
complying with the terms of the Letter of Credit and with this
Agreement any drafts or other documents otherwise in order signed or
issued by an administrator, executor, conservator, trustee in
bankruptcy, debtor in possession, assignee for benefit of creditors,
liquidator, receiver or other legal
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representative of the party authorized under such Letter of Credit to
draw or issue such drafts or other documents.
2.2.6. Payment of Drafts. At such time as a Letter of
Credit Issuer makes any payment on a draft presented or accepted under
a Letter of Credit, such Borrower will on demand pay to such Letter of
Credit Issuer in immediately available funds the amount of such
payment. Unless such Borrower shall otherwise pay to the Letter of
Credit Issuer the amount required by the foregoing sentence, such
amount shall be considered a loan under Section 2.1.1 to such Borrower
and part of the Revolving Loan.
2.2.7. Uniform Customs and Practice. The Uniform
Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, and any
subsequent revisions thereof approved by a Congress of the
International Chamber of Commerce and adhered to by the Letter of
Credit Issuer (the "Uniform Customs and Practice"), shall be binding
on the Company and the Letter of Credit Issuer except to the extent
otherwise provided herein, in any Letter of Credit or in any other
Credit Document. Anything in the Uniform Customs and Practice to the
contrary notwithstanding:
(a) None of the Borrowers nor any beneficiary of any
Letter of Credit shall be deemed an agent of any Letter of Credit
Issuer.
(b) With respect to each Letter of Credit, neither the
Letter of Credit Issuer nor its correspondents shall be responsible
for or shall have any duty to ascertain:
(i) the genuineness of any signature;
(ii) the validity, form, sufficiency,
accuracy, genuineness or legal effect of any endorsements;
(iii) delay in giving, or failure to give,
notice of arrival, notice of refusal of documents or of
discrepancies in respect of which any Letter of Credit
Issuer refuses the documents or any other notice, demand or
protest;
(iv) the performance by any beneficiary under
any Letter of Credit of such beneficiary's obligations to
such Borrower;
(v) inaccuracy in any notice received by the
Letter of Credit Issuer;
or
(vi) the validity, form, sufficiency,
accuracy, genuineness or legal effect of any instrument,
draft, certificate or other document required by such
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Letter of Credit to be presented before payment of a draft,
or the office held by or the authority of any Person signing
any of the same.
(c) The occurrence of any of the events referred to in
the Uniform Customs and Practice or in the preceding clauses of this
Section 2.2.7 shall not affect or prevent the vesting of any of the
Letter of Credit Issuer's rights or powers hereunder or such
Borrower's obligation to make reimbursement of amounts paid under any
Letter of Credit or any draft accepted thereunder.
(d) Such Borrower will promptly examine (i) each Letter
of Credit (and any amendments thereof) sent to it by the Letter of
Credit Issuer and (ii) all instruments and documents delivered to it
from time to time by the Letter of Credit Issuer. Such Borrower will
notify the Letter of Credit Issuer of any claim of noncompliance by
notice actually received within three Banking Days after receipt of
any of the foregoing documents, such Borrower being conclusively
deemed to have waived any such claim against such Letter of Credit
Issuer and its correspondents unless such notice is given. The Letter
of Credit Issuer shall have no obligation or responsibility to send
any such Letter of Credit or any such instrument or document to such
Borrower.
(e) In the event of any conflict between the provisions
of this Agreement and the Uniform Customs and Practice, the provisions
of this Agreement shall govern.
2.2.8. Subrogation. Upon any payment by a Letter of
Credit Issuer under any Letter of Credit and until the reimbursement
of such Letter of Credit Issuer by such Borrower with respect to such
payment, the Letter of Credit Issuer shall be entitled to be
subrogated to, and to acquire and retain, the rights which the Person
to whom such payment is made may have against such Borrower, all for
the benefit of the Lenders.
2.2.9. Modification, Consent, etc. If such Borrower
requests or consents in writing to any modification or extension of
any Letter of Credit, or waives any failure of any draft, certificate
or other document to comply with the terms of such Letter of Credit,
and if the Letter of Credit Issuer consents thereto, the Letter of
Credit Issuer shall be entitled to rely on such request, consent or
waiver. This Agreement shall be binding upon such Borrower with
respect to such Letter of Credit as so modified or extended, and with
respect to any action taken or omitted by such Letter of Credit Issuer
pursuant to any such request, consent or waiver.
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2.3. Application of Proceeds.
2.3.1. Revolving Loan. Subject to Section 2.3.3, the
Borrowers will apply the proceeds of the Revolving Loan (a) to fund
Permitted Acquisitions, (b) to refinance $1,700,000 of Indebtedness
previously incurred pursuant to a credit facility with The First
National Bank of Boston and (c) for working capital to the extent of
the Borrowing Base.
2.3.2. Letters of Credit. Letters of Credit shall be
issued only for such lawful corporate purposes as the Borrowers have
requested in writing and to which the Letter of Credit Issuer agrees.
2.3.3. Specifically Prohibited Applications. The Borrowers
will not, directly or indirectly, apply any part of the proceeds of
any extension of credit made pursuant to the Credit Documents to
purchase or to carry Margin Stock or to any transaction prohibited by
the Foreign Trade Regulations, by other Legal Requirements applicable
to the Lenders or by the Credit Documents.
2.4. Nature of Obligations of Lenders to Make Extensions of Credit.
The Lenders' obligations to extend credit under this Agreement are several and
are not joint or joint and several. If on any Closing Date any Lender shall
fail to perform its obligations under this Agreement, the aggregate amount of
Commitments to make the extensions of credit under this Agreement shall be
reduced by the amount of unborrowed Commitment of the Lender so failing to
perform and the Percentage Interests shall be appropriately adjusted. Lenders
that have not failed to perform their obligations to make the extensions of
credit contemplated by Section 2 may, if any such Lender so desires, assume,
in such proportions as such Lenders may agree, the obligations of any Lender
who has so failed and the Percentage Interests shall be appropriately adjusted.
The provisions of this Section 2.4 shall not affect the rights of the Borrowers
against any Lender failing to perform its obligations hereunder.
3. Interest; Eurodollar Pricing Options; Fees.
3.1. Interest. The Revolving Loan shall accrue and bear interest
at a rate per annum which shall at all times equal the Applicable Rate. Prior
to any stated or accelerated maturity of the Revolving Loan, each Borrower
will, on each Payment Date, pay the accrued and unpaid interest on the portion
of the Revolving Loan evidenced by its Loan Account which was not subject to a
Eurodollar Pricing Option. On the last day of each Eurodollar Interest Period
or on any earlier termination of any Eurodollar Pricing Option, each Borrower
will pay the accrued and unpaid interest on the portion of the Revolving Loan
evidenced by its Loan Account which was subject to the Eurodollar Pricing
Option which expired or terminated on such date. In the case of any
Eurodollar Interest Period longer than three months, each Borrower will also
pay the accrued and unpaid interest on the portion of the Revolving Loan
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evidenced by its Loan Account subject to the Eurodollar Pricing Option having
such Eurodollar Interest Period at three-month intervals, the first such
payment to be made on the last Banking Day of the three-month period which
begins on the first day of such Eurodollar Interest Period. On the stated or
any accelerated maturity of the Revolving Loan, each Borrower will pay all
accrued and unpaid interest on the portion of the Revolving Loan evidenced by
its Loan Account, including any accrued and unpaid interest on any portion of
such Revolving Loan which is subject to a Eurodollar Pricing Option. Upon the
occurrence and during the continuance of an Event of Default, the Lenders may
require accrued interest to be payable on demand or at regular intervals more
frequent than each Payment Date. All payments of interest hereunder shall be
made to the Agent for the account of each Lender in accordance with such
Lender's Percentage Interest.
3.2. Eurodollar Pricing Options.
3.2.1. Election of Eurodollar Pricing Options. Subject to
all of the terms and conditions hereof and so long as no Default
exists, any Borrower may from time to time, by irrevocable notice to
the Agent actually received not less than three Banking Days prior to
the commencement of the Eurodollar Interest Period selected in such
notice, elect to have such portion of the Revolving Loan as such
Borrower may specify in such notice accrue and bear interest during
the Eurodollar Interest Period so selected at the Applicable Rate
computed on the basis of the Eurodollar Rate. No such election shall
become effective:
(a) if, prior to the commencement of any such
Eurodollar Interest Period, the Agent determines that (i) the electing
or granting of the Eurodollar Pricing Option in question would violate
a Legal Requirement, (ii) Eurodollar deposits in an amount comparable
to the principal amount of the Revolving Loan as to which such
Eurodollar Pricing Option has been elected and which have a term
corresponding to the proposed Eurodollar Interest Period are not
readily available in the inter-bank Eurodollar market, or (iii) by
reason of circumstances affecting the inter-bank Eurodollar market,
adequate and reasonable methods do not exist for ascertaining the
interest rate applicable to such deposits for the proposed Eurodollar
Interest Period; or
(b) if any Lender shall have advised the Agent by
telephone or otherwise at or prior to noon (Boston time) on the second
Banking Day prior to the commencement of such proposed Eurodollar
Interest Period (and shall have subsequently confirmed in writing)
that, after reasonable efforts to determine the availability of such
Eurodollar deposits, such Lender reasonably anticipates that
Eurodollar deposits in an amount equal to the Percentage Interest of
such Lender in the portion of the Revolving Loan as to which such
Eurodollar Pricing Option has been elected and which have a term
corresponding to the Eurodollar Interest Period in question will not
be offered in the Eurodollar market to such Lender at a rate of
interest that does not exceed the anticipated Eurodollar Basic Rate.
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3.2.2. Notice to Lenders and the Borrowers. The Agent
will promptly inform each Lender (by telephone or otherwise) of each
notice received by it from a Borrower pursuant to Section 3.2.1 and of
the Eurodollar Interest Period specified in such notice. Upon
determination by the Agent of the Eurodollar Rate for such Eurodollar
Interest Period or in the event such election shall not become
effective, the Agent will promptly notify such Borrower and each
Lender (by telephone or otherwise) of the Eurodollar Rate so
determined or why such election did not become effective, as the case
may be.
3.2.3. Selection of Eurodollar Interest Periods.
Eurodollar Interest Periods shall be selected so that:
(a) the minimum portion of the Revolving Loan subject to
any Eurodollar Pricing Option shall be $500,000 and an integral
multiple of $100,000;
(b) no more than 6 Eurodollar Pricing Options shall be
outstanding at any one time; and
(c) no Eurodollar Interest Period with respect to any part
of the Revolving Loan subject to a Eurodollar Pricing Option shall
expire later than the Final Maturity Date.
3.2.4. Additional Interest. If any portion of the
Revolving Loan subject to a Eurodollar Pricing Option is repaid, or
any Eurodollar Pricing Option is terminated for any reason (including
acceleration of maturity), on a date which is prior to the last
Banking Day of the Eurodollar Interest Period applicable to such
Eurodollar Pricing Option, the Borrowers will pay to the Agent for the
account of each Lender in accordance with such Lender's Percentage
Interest, in addition to any amounts of interest otherwise payable
hereunder, an amount equal to the present value (calculated in
accordance with this Section 3.2.4) of interest for the unexpired
portion of such Eurodollar Interest Period on the portion of the
Revolving Loan so repaid, or as to which a Eurodollar Pricing Option
was so terminated, at a per annum rate equal to the excess, if any, of
(a) the rate applicable to such Eurodollar Pricing Option minus (b)
the lowest rate of interest obtainable by the Agent upon the purchase
of debt securities customarily issued by the Treasury of the United
States of America which have a maturity date approximating the last
Banking Day of such Eurodollar Interest Period. The present value of
such additional interest shall be calculated by discounting the amount
of such interest for each day in the unexpired portion of such
Eurodollar Interest Period from such day to the date of such repayment
or termination at a per annum interest rate equal to the interest rate
determined pursuant to clause (b) of the preceding sentence, and by
adding all such amounts for all such days during such period. The
determination by the Agent of such amount of interest shall, in the
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absence of manifest error, be conclusive. For purposes of this
Section 3.2.4, if any portion of the Revolving Loan which was to have
been subject to a Eurodollar Pricing Option is not outstanding on the
first day of the Eurodollar Interest Period applicable to such
Eurodollar Pricing Option other than for reasons described in Section
3.2.1, the Borrowers shall be deemed to have terminated such
Eurodollar Pricing Option.
3.2.5. Violation of Legal Requirements. If any Legal
Requirement shall prevent any Lender from funding or maintaining
through the purchase of deposits in the interbank Eurodollar market
any portion of the Revolving Loan subject to a Eurodollar Pricing
Option or otherwise from giving effect to such Lender's obligations as
contemplated by Section 3.2, (a) the Agent may by notice to the
Borrowers terminate all of the affected Eurodollar Pricing Options,
(b) the portion of the Revolving Loan subject to such terminated
Eurodollar Pricing Options shall immediately bear interest thereafter
at the Applicable Rate computed on the basis of the Base Rate and (c)
the Borrowers shall make any payment required by Section 3.2.4.
3.2.6. Funding Procedure. The Lenders may fund any
portion of the Revolving Loan subject to a Eurodollar Pricing Option
out of any funds available to the Lenders. Regardless of the source
of the funds actually used by any of the Lenders to fund any portion
of the Revolving Loan subject to a Eurodollar Pricing Option, however,
all amounts payable hereunder, including the interest rate applicable
to any such portion of the Revolving Loan and the amounts payable
under Sections 3.2.4, 3.5, 3.6, 3.7 and 3.8, shall be computed as if
each Lender had actually funded such Lender's Percentage Interest in
such portion of the Revolving Loan through the purchase of deposits in
such amount of the type by which the Eurodollar Basic Rate was
determined with a maturity the same as the applicable Eurodollar
Interest Period relating thereto and through the transfer of such
deposits from an office of the Lender having the same location as the
applicable Eurodollar Office to one of such Lender's offices in the
United States of America.
3.3. Commitment Fees. In consideration of the Lenders' commitments
to make the extensions of credit provided for in Section 2.1, while such
commitments are outstanding, the Borrowers will pay to the Agent for the
account of the Lenders in accordance with the Lenders' respective Percentage
Interests, on the first Banking Day of each fiscal quarter, an amount equal to
interest computed at the rate of 0.375% per annum on the amount by which (a)
the average daily Maximum Amount of Revolving Credit during the three-month
period or portion thereof ending on such Payment Date exceeded (b) the sum of
(i) the average daily Revolving Loan during such period or portion thereof
plus (ii) the average daily Letter of Credit Exposure during such period or
portion thereof; provided, however, that the first such payment shall be for
the period beginning on the Initial Closing Date and ending on the first
Payment Date.
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3.4. Letter of Credit Fees. The Borrowers will pay to the
Agent for the account of each of the Lenders, in accordance with the Lenders'
respective Percentage Interests, on the date any Letter of Credit is issued by
the Letter of Credit Issuer, a Letter of Credit fee equal to interest at the
rate of 1.50% per annum on the face amount of such Letter of Credit for the
term of such Letter of Credit. The Company will pay to the Letter of Credit
Issuer customary service charges and expenses for its services in connection
with the Letters of Credit at the times and in the amounts from time to time in
effect in accordance with its general rate structure, including fees and
expenses relating to issuance, amendment, negotiation, cancellation and similar
operations.
3.5. Reserve Requirements, etc. If any Legal Requirement
shall (a) impose, modify, increase or deem applicable any insurance assessment,
reserve, special deposit or similar requirement against any Funding Liability
or the Letters of Credit, (b) impose, modify, increase or deem applicable any
other requirement or condition with respect to any Funding Liability or the
Letters of Credit, or (c) change the basis of taxation of Funding Liabilities
or payments in respect of any Letter of Credit (other than changes in the rate
of taxes measured by the overall net income of such Lender) and the effect of
any of the foregoing shall be to increase the cost to any Lender of issuing,
making, funding or maintaining its respective Percentage Interest in any
portion of the Revolving Loan subject to a Eurodollar Pricing Option or any
Letter of Credit, to reduce the amounts received or receivable by such Lender
under this Agreement or to require such Lender to make any payment or forego
any amounts otherwise payable to such Lender under this Agreement, then, the
Lender shall, promptly after it has made such determination, give notice
thereof to the Company. Promptly after the receipt by the Company of any such
notice, the Company and the Lender shall attempt to negotiate in good faith an
adjustment to the amount payable by the Borrowers to the Lender under this
Section 3.5, which amount shall be sufficient to compensate the Lender for such
increased cost or reduced return. If the Company and the Lender are unable to
agree to such adjustment within thirty days of the date upon which the Company
receives such notice, then the Borrowers will, on demand by the Lender, pay to
the Lender such additional amount as shall be sufficient, in the Lender's
reasonable determination, to compensate the Lender for such increased cost or
such reduced return, together with interest at the Overdue Reimbursement Rate
from the 30th day after receipt of such certificate until payment in full
thereof; provided, however, that the foregoing provisions shall not apply to
any Tax or to any reserves which are included in computing the Eurodollar
Reserve Rate. The determination by such Lender of the amount of such costs
shall, in the absence of manifest error, be conclusive. The Borrowers shall be
entitled to replace any such Lender in accordance with Section 13.3.
3.6. Taxes. All payments of the Credit Obligations shall be made
without set-off or counterclaim and free and clear of any deductions, including
deductions for Taxes, unless the Borrowers are required by law to make such
deductions. If (a) any Lender shall be subject to any Tax with respect to any
payment of the Credit Obligations or its obligations hereunder or (b) any
Borrower shall be required to withhold or deduct any Tax on any payment on the
Credit Obligations, then, the Lender shall, promptly give notice of its claim
for compensation
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under this Section 3.6 to the Company. Promptly after the receipt by the
Company of any such notice, the Company and the Lender shall attempt to
negotiate in good faith an adjustment to the amount payable by the Borrowers to
the Lender under this Section 3.6, which amount shall be sufficient to
compensate the Lender for the amount of the Tax so imposed or the full amount
of all payments which would have been received on the Credit Obligations in the
absence of such Tax. If the Company and the Lender are unable to agree to such
adjustment within thirty days of the date upon which the Company receives such
notice, then the Borrowers will, on demand by the Lender, pay to the Lender
such additional amount as shall be sufficient, in the Lender's reasonable
determination, to enable such Lender to receive the amount of Tax so imposed on
the Lender's obligations hereunder or the full amount of all payments which it
would have received on the Credit Obligations (including amounts required to be
paid under Sections 3.5, 3.7, 3.8 and this Section 3.6) in the absence of such
Tax, as the case may be, together with interest at the Overdue Reimbursement
Rate on such amount from the 30th day after receipt of such certificate until
payment in full thereof. Whenever Taxes must be withheld by any Borrower with
respect to any payments of the Credit Obligations, the Borrowers shall promptly
furnish to the Agent for the account of the applicable Lender official receipts
(to the extent that the relevant governmental authority delivers such receipts)
evidencing payment of any such Taxes so withheld. If the Borrowers fail to pay
any such Taxes when due or fails to remit to the Agent for the account of the
applicable Lender the required receipts evidencing payment of any such Taxes so
withheld or deducted, the Borrowers shall indemnify the affected Lender for any
incremental Taxes and interest or penalties that may become payable by such
Lender as a result of any such failure. The determination by such Lender of
the amount of such Tax and the basis therefor shall, in the absence of manifest
error, be conclusive. The Borrowers shall be entitled to replace any such
Lender in accordance with Section 13.3.
3.7. Capital Adequacy. If any Lender shall determine that
compliance by such Lender with any Legal Requirement regarding capital
adequacy of banks or bank holding companies has or would have the effect of
reducing the rate of return on the capital of such Lender and its Affiliates as
a consequence of such Lender's commitment to make the extensions of credit
contemplated hereby, or such Lender's maintenance of the extensions of credit
contemplated hereby, to a level below that which such Lender could have
achieved but for such compliance (taking into consideration the policies of
such Lender and its Affiliates with respect to capital adequacy immediately
before such compliance and assuming that the capital of such Lender and its
Affiliates was fully utilized prior to such compliance) by an amount deemed by
such Lender to be material, then, the Lender shall, promptly after it has made
such determination, give notice thereof to the Company. Promptly after the
receipt by the Company of any such notice, the Company and the Lender shall
attempt to negotiate in good faith an adjustment to the amount payable by the
Borrowers to the Lender under this Section 3.7, which amount shall be
sufficient to compensate the Lender for such reduced return. If the Company
and the Lender are unable to agree to such adjustment within thirty days of the
date upon which the Company receives such notice, then the Borrowers will, on
demand by the Lender, pay to the Lender such additional amount as shall be
sufficient, in the
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Lender's reasonable determination, to compensate the Lender for such reduced
return, together with interest at the Overdue Reimbursement Rate from the 30th
day until payment in full thereof. The determination by such Lender of the
amount to be paid to it and the basis for computation thereof shall, in the
absence of manifest error, be conclusive. In determining such amount, such
Lender may use any reasonable averaging, allocation and attribution methods.
The Borrowers shall be entitled to replace any such Lender in accordance with
Section 13.3.
3.8. Regulatory Changes. If any Lender shall determine that (a) any
change in any Legal Requirement (including any new Legal Requirement) after the
date hereof shall directly or indirectly (i) reduce the amount of any sum
received or receivable by such Lender with respect to the Revolving Loan or
the Letters of Credit or the return to be earned by such Lender on the
Revolving Loan or the Letters of Credit, (ii) impose a cost on such Lender or
any Affiliate of such Lender that is attributable to the making or maintaining
of, or such Lender's commitment to make, its portion of the Revolving Loan or
the Letters of Credit, or (iii) require such Lender or any Affiliate of such
Lender to make any payment on, or calculated by reference to, the gross amount
of any amount received by such Lender under any Credit Document, and (b) such
reduction, increased cost or payment shall not be fully compensated for by an
adjustment in the Applicable Rate or the Letter of Credit fees, then, the
Lender shall, promptly after it has made such determination, give notice
thereof to the Company. Promptly after the receipt by the Company of any such
notice, the Company and the Lender shall attempt to negotiate in good faith an
adjustment to the amount payable by the Borrowers to the Lender under this
Section 3.8, which amount, together with any adjustment in the Applicable Rate,
shall be sufficient to fully compensate the Lender for such reduction,
increased cost or payment taking into account any compensation for such
reduction, increased cost or payment received by the Lender pursuant to the
provisions of Section 3.5, 3.6 or 3.7 hereof. If the Company and the Lender
are unable to agree to such adjustment within thirty days of the date upon
which the Company receives such notice, then the Borrowers will, on demand by
the Lender, pay to the Lender such additional amount, together with any
adjustment in the Applicable Rate, as shall be sufficient to fully compensate
the Lender for such reduction, increased cost or payment, together with
interest on such amount from the 30th day after receipt of such certificate
until payment in full thereof at the Overdue Reimbursement Rate. The
determination by such Lender of the amount to be paid to it and the basis for
computation thereof hereunder shall, in the absence of manifest error, be
conclusive. In determining such amount, such Lender may use any reasonable
averaging and attribution methods. The Borrowers shall be entitled to replace
any such Lender in accordance with Section 13.3.
3.9. Computations of Interest and Fees. For purposes of this
Agreement, interest, commitment fees and Letter of Credit fees (and any other
amount expressed as interest or such fees) shall be computed on the basis of a
360-day year for actual days elapsed. If any payment required by this
Agreement becomes due on any day that is not a Banking Day, such payment shall,
except as otherwise provided in the Eurodollar Interest Period, be made on the
next
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succeeding Banking Day. If the due date for any payment of principal is
extended as a result of the immediately preceding sentence, interest shall be
payable for the time during which payment is extended at the Applicable Rate.
4. Payment.
4.1. Payment at Maturity. On the Final Maturity
Date or any accelerated maturity of the Revolving Loan, each Borrower will pay
to the Agent for the account of the Lenders an amount equal to its portion of
the Revolving Loan then due, as evidenced by its Loan Account, together with
all accrued and unpaid interest thereon and all other Credit Obligations then
outstanding.
4.2. Contingent Required Prepayments.
4.2.1. Excess Credit Exposure. If at any time the
Revolving Loan exceeds the limits set forth in Section 2.1, the
Borrowers shall within three Banking Days pay the amount of such
excess to the Agent for the account of the Lenders.
4.2.2. Letter of Credit Exposure. If at any time the
Letter of Credit Exposure exceeds the limits set forth in Section 2.2,
the Borrowers shall within three Banking Days pay the amount of such
excess to the Agent for the account of the Lenders to be applied as
provided in Section 4.5.
4.3. Voluntary Prepayments. In addition to the prepayments required
by Sections 4.2, any Borrower may from time to time prepay all or any
portion of the Revolving Loan (in a minimum amount of $100,000 and an integral
multiple of $100,000), without premium or penalty of any type (except as
provided in Section 3.2.4 with respect to the early termination of Eurodollar
Pricing Options). Such Borrower shall give the Agent at least one Banking Day
prior notice of its intention to prepay, specifying the date of payment, the
total amount of the Revolving Loan to be paid on such date and the amount of
interest to be paid with such prepayment.
4.4. Letters of Credit. If on the stated or any accelerated
maturity of the Credit Obligations the Lenders shall be obligated in respect
of a Letter of Credit or a draft accepted under a Letter of Credit, the
Borrowers will either:
(a) prepay such obligation by depositing with the Agent an
amount of cash, or
(b) deliver to the Agent a standby letter of credit
(designating the Agent as beneficiary and issued by a bank and on terms
reasonably acceptable to the Agent),
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in each case in an amount equal to the portion of the then Letter of Credit
Exposure issued for the account of the Borrowers. Any such cash so deposited
and the cash proceeds of any draw under any standby letter of credit so
furnished, including any interest thereon, shall be returned by the Agent to
the Borrowers only when, and to the extent that, the amount of such cash held
by the Agent exceeds the Letter of Credit Exposure at a time when no Default
exists; provided, however, that if an Event of Default occurs and the Credit
Obligations become or are declared immediately due and payable, the Agent may
apply such cash, including any interest thereon, to the payment of any of the
Credit Obligations as provided in Section 10.5.6.
4.5. Reborrowing; Application of Payments, etc.
4.5.1. Reborrowing. The amounts of the Revolving Loan
prepaid pursuant to Section 4.3 may be reborrowed from time to time
prior to the Final Maturity Date in accordance with Section 2.1,
subject to the limits set forth therein.
4.5.2. Order of Application. Any prepayment of the
Revolving Loan shall be applied first to the portion of the Revolving
Loan not then subject to Eurodollar Pricing Options, then the balance
of any such prepayment shall be applied to the portion of the
Revolving Loan then subject to Eurodollar Pricing Options, in the
chronological order of the respective maturities thereof, together
with any payments required by Section 3.2.4.
4.5.3. Payments for Lenders. All payments of principal
hereunder shall be made to the Agent for the account of the Lenders in
accordance with the Lenders' respective Percentage Interests.
5. Conditions to Extending Credit.
5.1. Conditions on Initial Closing Date. The obligations of the
Lenders to make any extension of credit pursuant to Section 2 shall be subject
to the satisfaction, on or before the Initial Closing Date, of the conditions
set forth in this Section 5.1 as well as the further conditions in Section 5.3.
If the conditions set forth in this Section 5.1 and 5.3 are not met on or prior
to the Initial Closing Date, the Lenders shall have no obligation to make any
extensions of credit hereunder.
5.1.1. Revolving Notes. Each Borrower shall have duly
executed and delivered to the Agent a Revolving Note for each Lender.
5.1.2. Perfection of Security. Each Obligor shall have
duly authorized, executed, acknowledged, delivered, filed, registered
and recorded such security agreements, notices, financing statements
and other instruments as the Agent may have requested in order to
perfect the Liens contemplated pursuant to the Credit Documents to be
created in the Credit Security. Each Obligor shall have duly
authorized,
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executed, acknowledged and delivered to the Agent a mortgage on each
real property owned by such Obligor and a leasehold mortgage on each
real property leased by such Obligor, in each case in form and
substance satisfactory to the Agent, together with, for each such real
property: (a) mortgage title insurance with such insurer, in such
amount, in such form and with such exceptions as are reasonably
satisfactory to the Agent and (b) an environmental site assessment
report in such form, with such conclusions and from such environmental
engineering firm as are reasonably satisfactory to the Agent.
5.1.3. Legal Opinions. On the Initial Closing Date, the
Lenders shall have received from the following counsel their
respective opinions with respect to the transactions contemplated by
the Credit Documents, which opinions shall be in form and substance
satisfactory to the Required Lenders:
(a) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
P.A., special counsel for the Obligors.
(b) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a Professional
Corporation, special counsel for Summit Partners.
(c) Ropes & ▇▇▇▇, special counsel for the Agent.
The Obligors authorize and direct its counsel to furnish the
foregoing opinions.
5.1.4. Subordination Agreement. Each of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Summit Partners, Schroders
Incorporated, Schroders Ventures Limited Partnership, Schroders
Ventures U.S. Trust, the ▇▇▇▇▇▇▇ Management Investors and the
Borrowers shall have duly authorized, executed and delivered to the
Agent a Subordination Agreement in substantially the form of Exhibit
5.1.5 (the "Subordination Agreement").
5.1.5. Payment of Fee. The Borrower shall have paid to
the Agent for the accounts of the Lenders in accordance with their
respective Percentage Interests a closing fee of $200,000.
5.1.6. ▇▇▇▇▇▇▇ Acquisition. Other than as consented to by
the Required Lenders in writing:
(a) The provisions of the Acquisition Agreement relating
to the ▇▇▇▇▇▇▇ Acquisition shall not have been materially amended,
modified, waived or terminated.
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(b) All of the representations and warranties of the
Sellers set forth in such Acquisition Agreement shall be complete and
correct in all material respects on and as of the Closing Date with
the same force and effect as though made on and as of such date.
(c) All of the other conditions to the obligations of the
Borrowers set forth in such Acquisition Agreement shall have been
satisfied or waived by each of the other parties to such Acquisition
Agreement.
(d) Any material consent, authorization, order or approval
of any Person required in connection with the transactions
contemplated by such Acquisition Agreement shall have been obtained
and shall be in full force and effect.
(e) All of the items required to be delivered under such
Acquisition Agreement shall have been so delivered.
(f) Contemporaneously with or immediately after the
▇▇▇▇▇▇▇ Acquisition, ▇▇▇▇▇▇▇ shall be merged with and into Ameripath
Florida, Inc.
(g) The Borrowers shall furnish to the Required Lenders
computations demonstrating compliance with Section 6.9.5, certified by
a Financial Officer of the Borrowers.
(h) Contemporaneously with or immediately after the making
by the Lenders of the initial extension of credit hereunder, the
Lenders shall have received a certificate of a Financial Officer of
the Company to the effect that (A) the initial closing has occurred
under such Acquisition Agreement, (B) the merger of ▇▇▇▇▇▇▇ with and
into Ameripath Florida, Inc. has been consummated and (C) each of the
conditions set forth in this Section 5.1.6 has been satisfied.
5.1.7. Legal Opinions. On the date of the ▇▇▇▇▇▇▇
Acquisition, the Lenders shall have received from counsel reasonably
satisfactory to the Agent an opinion with respect to the transactions
contemplated by the Acquisition Agreement, which opinions shall be in
a form and substance reasonably satisfactory to the Agent.
5.2. Conditions to Making Each Permitted Acquisition Advance. The
Lenders' several obligations to make any loan contemplated by Section 2.1 or
2.2, the proceeds of which will be applied to a Permitted Acquisition, shall
be subject to the satisfaction, on or before the date of consummation of the
proposed Permitted Acquisition, of the following conditions, as well as the
further conditions set forth in Section 5.3:
5.2.1. Permitted Acquisition. Other than as consented to
by the Required Lenders in writing:
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(a) The Acquisition Agreement relating to such Permitted
Acquisition shall have been delivered to the Required Lenders.
(b) The provisions of the Acquisition Agreement relating
to such Permitted Acquisition shall not have been amended, modified,
waived or terminated in any material respect from the form of such
Agreement delivered to the Required Lenders pursuant to clause (a) and
any amendment, modification or waiver shall have been delivered to the
Required Lenders.
(c) All of the representations and warranties of the
Sellers set forth in such Acquisition Agreement shall be complete and
correct in all material respects on and as of the Closing Date with
the same force and effect as though made on and as of such date.
(d) All of the other conditions to the obligations of the
Borrowers set forth in such Acquisition Agreement shall have been
satisfied or waived by each of the other parties to such Acquisition
Agreement.
(e) Any material consent, authorization, order or approval
of any Person required in connection with the transactions
contemplated by such Acquisition Agreement shall have been obtained
and shall be in full force and effect.
(f) All of the items required to be delivered under such
Acquisition Agreement shall have been so delivered.
(g) The Borrowers shall furnish to the Required Lenders
computations demonstrating compliance with Section 6.9.5, certified by
a Financial Officer of the Borrowers.
(h) Contemporaneously with or immediately after the making
by the Lenders of the extension of credit hereunder, the Lenders shall
have received a certificate of a Financial Officer of the Borrower to
the effect that (A) the initial closing has occurred under such
Acquisition Agreement and (B) each of the conditions set forth in this
Section 5.2.1 has been satisfied.
5.2.2. Notes and Credit Documents; Merger.
Contemporaneously with or immediately after such Permitted
Acquisition, such Acquired Party shall either (a) execute and deliver
to the Agent a Revolving Note for each Lender and a Joinder Agreement
to the Credit Agreement and each other Lender Agreement in the form of
Exhibit 5.2.2 or (b) be merged with and into an existing Borrower, in
which case the Company shall have received a certificate of a
Financial Officer of the Company to the
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effect that the merger of such Acquired Party with and into an
existing Borrower has been consummated.
5.2.3. Legal Opinions. On the date of such Permitted
Acquisition, the Lenders shall have received from counsel reasonably
satisfactory to the Agent (a) an opinion with respect to the addition
of the Acquired Party as a Borrower and a Guarantor under this
Agreement and the other Credit Documents and (b) an opinion with
respect to the transactions contemplated by the Acquisition Agreement,
which opinions shall be in a form and substance reasonably
satisfactory to the Agent.
5.3. Conditions to Each Extension of Credit. The obligations of the
Lenders to make any extension of credit pursuant to Section 2 shall be subject
to the satisfaction, on or before the Closing Date for such extension of
credit, of the following conditions:
5.3.1. Officer's Certificate. The representations and
warranties contained in Sections 7 and 10.3 shall be true and correct
on and as of such Closing Date with the same force and effect as
though made on and as of such date (except as to any representation or
warranty which refers to a specific earlier date); no Default shall
exist on such Closing Date prior to or immediately after giving effect
to the requested extension of credit; no Material Adverse Change shall
have occurred since December 31, 1995; and the Borrower that is
requesting an extension of credit shall have furnished to the Agent in
connection with the requested extension of credit a certificate to
these effects, in substantially the form of Exhibit 5.3.1, signed by a
Financial Officer.
5.3.2. Legality, etc. The making of the requested
extension of credit shall not (a) subject any Lender to any penalty or
special tax (other than a Tax for which the Borrowers are required to
reimburse the Lenders under Section 3.6), (b) be prohibited by any
Legal Requirement or (c) violate any credit restraint program of the
executive branch of the government of the United States of America,
the Board of Governors of the Federal Reserve System or any other
governmental or administrative agency so long as any Lender reasonably
believes that compliance is required by law.
5.3.3. Proper Proceedings. This Agreement, each other
Credit Document and the transactions contemplated hereby and thereby
shall have been authorized by all necessary corporate or other
proceedings of the Obligors. All necessary consents, approvals and
authorizations of any governmental or administrative agency or any
other Person of any of the transactions contemplated hereby or by any
other Credit Document shall have been obtained and shall be in full
force and effect.
5.3.4. General. All legal and corporate proceedings in
connection with the transactions contemplated by this Agreement shall
be satisfactory in form and substance to the Agent and the Agent shall
have received copies of all documents, including
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certified copies of the Charter and By-Laws of the Borrowers and the
other Obligors, records of corporate proceedings, certificates as to
signatures and incumbency of officers and opinions of counsel, which
the Agent may have reasonably requested in connection therewith, such
documents where appropriate to be certified by proper corporate or
governmental authorities.
6. General Covenants. Each of the Obligors covenants that, until all of
the Credit Obligations shall have been paid in full and until the Lenders'
commitments to extend credit under this Agreement and any other Credit Document
shall have been irrevocably terminated, it will comply, and will cause its
Subsidiaries to comply with the following provisions:
6.1. Taxes and Other Charges; Accounts Payable.
6.1.1. Taxes and Other Charges. Each of the Obligors
shall duly pay and discharge, or cause to be paid and discharged,
before the same become in arrears, all taxes, assessments and other
governmental charges imposed upon such Person and its properties,
sales or activities, or upon the income or profits therefrom, as well
as all claims for labor, materials or supplies which if unpaid might
by law become a Lien upon any of its property; provided, however, that
any such tax, assessment, charge or claim need not be paid if the
validity or amount thereof shall at the time be contested in good
faith by appropriate proceedings and if such Person shall, in
accordance with GAAP, have set aside on its books adequate reserves
with respect thereto; and provided, further, that each of the Obligors
shall pay or bond, or cause to be paid or bonded, all such taxes,
assessments, charges or other governmental claims immediately upon the
commencement of proceedings to foreclose any Lien which may have
attached as security therefor (except to the extent such proceedings
have been dismissed or stayed).
6.1.2. Accounts Payable. Each of the Obligors shall
promptly pay when due, or in conformity with customary trade terms,
all other Indebtedness, including accounts payable, incident to the
operations of such Person not referred to in Section 6.1.1; provided,
however, that any such Indebtedness need not be paid if the validity
or amount thereof shall at the time be contested in good faith and if
such Person shall, in accordance with GAAP, have set aside on its
books adequate reserves with respect thereto.
6.2. Conduct of Business, etc.
6.2.1. Types of Business. The Obligors shall engage only
in the business of (a) providing pathology services, laboratory
services (including full service clinical and anatomical pathology
laboratory services) and (b) other activities and services related
thereto.
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6.2.2. Maintenance of Properties. Each of the Obligors:
(a) shall keep its properties in such repair, working
order and condition, and shall from time to time make such repairs,
replacements, additions and improvements thereto as are necessary for
the efficient operation of its businesses and shall comply at all
times in all material respects with all franchises, licenses, leases
and other material agreements to which it is party so as to prevent
any loss or forfeiture thereof or thereunder, except where (i)
compliance is at the time being contested in good faith by appropriate
proceedings or (ii) failure to comply with the provisions being
contested has not resulted, or does not create a material risk of
resulting, in the aggregate in any Material Adverse Change; provided,
however, that this Section 6.2.2(a) shall not apply to assets or
entities disposed of in transactions permitted by Section 6.11; and
(b) shall do all things necessary to preserve, renew and
keep in full force and effect and in good standing its legal existence
and authority necessary to continue its business; provided, however,
that this Section 6.2.2(b) shall not prevent the merger, consolidation
or liquidation of Subsidiaries permitted by Section 6.11.
6.2.3. Statutory Compliance. Each of the Obligors shall
comply in all material respects with all valid and applicable
statutes, laws, ordinances, zoning and building codes and other rules
and regulations of the United States of America, of the states and
territories thereof and their counties, municipalities and other
subdivisions and of any foreign country or other jurisdictions
applicable to such Person, except where (a) compliance therewith shall
at the time be contested in good faith by appropriate proceedings or
(b) failure so to comply with the provisions being contested has not
resulted, or does not create a material risk of resulting, in the
aggregate in any Material Adverse Change.
6.2.4. No Subsidiaries. No Borrower shall form or suffer
to exist any Subsidiary, except for such Subsidiaries as shall have
executed and delivered to the Agent either (a) this Agreement and each
other Credit Document as of the Initial Closing Date or (b) a Joinder
Agreement in the form of Exhibit 5.2.2 pursuant to which such
Subsidiary shall have become a Borrower and a Guarantor hereunder.
6.2.5. Compliance with Material Agreements. Each of the
Obligors shall comply in all material respects with the Material
Agreements (to the extent not in violation of the other provisions of
this Agreement or any other Credit Document). Without the prior
written consent of the Required Lenders, which consent shall not be
unreasonably withheld, no Material Agreement shall be amended,
modified, waived or terminated in any manner that would have in any
material respect an adverse effect on the interests of the Lenders.
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6.3. Insurance.
6.3.1. Business Interruption Insurance. Each of the
Obligors shall maintain with financially sound and reputable insurers
insurance related to interruption of business, either for loss of
revenues or for extra expense, in the manner customary for businesses
of similar size engaged in similar activities in similar localities.
6.3.2. Property Insurance. Each of the Obligors shall
keep its assets which are of an insurable character insured by
financially sound and reputable insurers against theft and fraud and
against loss or damage by fire, explosion and hazards and such other
extended coverage risks insured against by extended coverage to the
extent, in amounts and with deductibles at least as favorable as those
generally maintained by businesses of similar size engaged in similar
activities in similar localities.
6.3.3. Liability Insurance. Each of the Obligors shall
maintain with financially sound and reputable insurers insurance
against liability for hazards, risks and liability to persons (for
both death and bodily injury) and property, including product
liability insurance and medical malpractice insurance, to the extent,
in amounts and with deductibles at least as favorable as those
generally maintained by businesses of similar size engaged in similar
activities in similar localities; provided, however, that it may
effect workers' compensation insurance or similar coverage with
respect to operations in any particular state or other jurisdiction
through an insurance fund operated by such state or jurisdiction or by
meeting the self-insurance requirements of such state or jurisdiction.
6.3.4. Key Executive Life Insurance. The Borrowers
shall maintain with financially sound and reputable insurers life
insurance policies on each of E.G. ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇ and ▇.▇.
▇▇▇▇▇▇▇▇▇ in an amount of at least $2,000,000 each in form
satisfactory to the Agent and on any doctors employed by ▇▇▇▇▇▇▇ in an
amount not less than and in the form of any life insurance policies
maintained by ▇▇▇▇▇▇▇ as of or immediately prior to the Initial
Closing Date.
6.3.5. Flood Insurance. Each of the Obligors shall at all
times keep each parcel of real property owned or leased by it which is
(a) included in the Credit Security, (b) in an area determined by the
Director of the Federal Emergency Management Agency to be subject to
special flood hazard and (c) in a community participating in the
National Flood Insurance Program, insured against such special flood
hazards in an amount equal to the maximum limit of coverage available
for the particular type of property under the federal National Flood
Insurance Act of 1968.
6.4. Financial Statements and Reports. Each of the Obligors shall
maintain a system of accounting in which correct entries shall be made of all
transactions in relation to their business and affairs in accordance with
generally accepted accounting practice. The
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fiscal year of the Obligors shall end on December 31 in each year and the
fiscal quarters of the Obligors shall end on March 31, June 30, September 30
and December 31 in each year.
6.4.1. Annual Reports. The Borrowers shall furnish to the
Lenders as soon as available, and in any event within 120 days after
the end of each fiscal year, the Consolidated and Consolidating
balance sheets of the Borrowers and their respective Subsidiaries as
at the end of such fiscal year, the Consolidated and Consolidating
statements of income and Consolidated statements of changes in
shareholders' equity and of cash flows of the Borrowers and their
respective Subsidiaries for such fiscal year (all in reasonable
detail) and together, in the case of Consolidated financial
statements, with comparative figures for the immediately preceding
fiscal year, all accompanied by:
(a) Unqualified reports of independent certified public
accountants of recognized national standing reasonably satisfactory to
the Required Lenders, containing no material uncertainty and without
any Impermissible Reference, to the effect that they have audited the
foregoing Consolidated financial statements in accordance with
generally accepted auditing standards and that such Consolidated
financial statements present fairly, in all material respects, the
financial position of the Borrowers and their respective Subsidiaries
covered thereby at the dates thereof and the results of their
operations for the periods covered thereby in conformity with GAAP.
(b) The statement of such accountants that they have
caused this Agreement to be reviewed and that in the course of their
audit of the Borrowers and their respective Subsidiaries no facts have
come to their attention that cause them to believe that any Default
exists and in particular that they have no knowledge of any Default
under Sections 6.5 through 6.20 or, if such is not the case,
specifying such Default and the nature thereof. This statement is
furnished by such accountants with the understanding that the
examination of such accountants cannot be relied upon to give such
accountants knowledge of any such Default except as it relates to
accounting or auditing matters within the scope of their audit.
(c) A certificate of each of the Borrowers signed by a
Financial Officer to the effect that such officer has caused this
Agreement to be reviewed and has no knowledge of any Default, or if
such officer has such knowledge, specifying such Default and the
nature thereof, and what action such Borrower has taken, is taking or
proposes to take with respect thereto.
(d) Computations by each of the Borrowers comparing the
financial statements referred to above with the most recent budget for
such fiscal year furnished to the Lenders in accordance with Section
6.4.4.
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(e) Computations by each of the Borrowers demonstrating,
as of the end of such fiscal year, compliance with the Computation
Covenants, certified by a Financial Officer.
(f) Calculations, as at the end of such fiscal year, of
(i) the Accumulated Benefit Obligations for each Plan covered by Title
IV of ERISA (other than Multiemployer Plans) and (ii) the fair market
value of the assets of such Plan allocable to such benefits.
(g) Supplements to Exhibits 7.1, 7.3 and 10.4.2 showing
any changes in the information set forth in such Exhibits not
previously furnished to the Lenders in writing, as well as any changes
in the Charter, Bylaws or incumbency of officers of any of the
Borrowers or their respective Subsidiaries from those previously
certified to the Agent.
(h) In the event of a change in GAAP after the Initial
Closing Date, computations by each of the Borrowers, certified by a
Financial Officer, reconciling the financial statements referred to
above with financial statements prepared in accordance with GAAP as
applied to the other covenants in Section 6 and related definitions.
6.4.2. Quarterly Reports. The Borrowers shall furnish to
the Lenders as soon as available and, in any event, within 45 days
after the end of each of the first three fiscal quarters of the
Borrowers, the internally prepared Consolidated and Consolidating
balance sheets of the Borrowers and their respective Subsidiaries as
of the end of such fiscal quarter, the Consolidated and Consolidating
statements of income and Consolidated statements of changes in
shareholders' equity and of cash flows of the Borrowers and their
respective Subsidiaries for such fiscal quarter and for the portion of
the fiscal year then ended (all in reasonable detail) and together, in
the case of Consolidated statements, with comparative figures for the
same period in the preceding fiscal year, all accompanied by:
(a) A certificate of each of the Borrowers signed by a
Financial Officer to the effect that such financial statements have
been prepared in accordance with GAAP and present fairly, in all
material respects, the financial position of the Borrowers and their
respective Subsidiaries covered thereby at the dates thereof and the
results of their operations for the periods covered thereby, subject
only to normal year-end audit adjustments and the addition of
footnotes.
(b) A certificate of each of the Borrowers signed by a
Financial Officer to the effect that such officer has caused this
Agreement to be reviewed and has no knowledge of any Default, or if
such officer has such knowledge, specifying such
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Default and the nature thereof and what action such Borrower has
taken, is taking or proposes to take with respect thereto.
(c) Computations by the Borrowers comparing the financial
statements referred to above with the most recent budget for the
period covered thereby furnished to the Lenders in accordance with
Section 6.4.4.
(d) Computations by the each of Borrowers demonstrating,
as of the end of such quarter, compliance with the Computation
Covenants, certified by a Financial Officer.
(e) Supplements to Exhibits 7.1, 7.3 and 10.4.2 showing
any changes in the information set forth in such Exhibits not
previously furnished to the Lenders in writing, as well as any changes
in the Charter, Bylaws or incumbency of officers of any of the
Borrowers or their respective Subsidiaries from those previously
certified to the Agent.
(f) In the event of a change in GAAP after the Initial
Closing Date, computations by each of the Borrowers, certified by a
Financial Officer, reconciling the financial statements referred to
above with financial statements prepared in accordance with GAAP as
applied to the other covenants in Section 6 and related definitions.
6.4.3. Monthly Reports. Each of the Borrowers shall
furnish to the Lenders as soon as available and, in any event, within
30 days after the end of each month, a certificate of a Financial
Officer of the Borrowers supplying computations of the Borrowing Base
at the beginning of such month and certifying that such computations
were based on the monthly reports prepared in accordance with GAAP.
6.4.4. Other Reports. Each of the Borrowers shall
promptly furnish to the Lenders:
(a) As soon as prepared and in any event prior to the
beginning of each fiscal year, an annual budget and operating
projections for such fiscal year of such Borrower and its respective
Subsidiaries, prepared in a manner consistent with the manner in which
the financial projections described in Section 7.2.1 were prepared.
(b) Before May 31, 1996, the audited Consolidating
balance sheets, statements of income, changes in shareholders' equity
and of cash flows of ▇▇▇▇▇▇▇ for the fiscal years ended on December 31
of 1993, 1994 and 1995, accompanied by the report of Deloitte &
Touche.
(c) Any material updates of such budget and projections.
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(d) Any management letters furnished to such Borrower or
any of its Subsidiaries by the Company's auditors.
(e) All budgets, projections, statements of operations and
other reports furnished generally to the shareholders of such
Borrower.
(f) As soon as practicable but, in any event, within 20
Banking Days after the filing thereof, such registration statements,
proxy statements and reports, including, to the extent applicable,
Forms ▇-▇, ▇-▇, ▇-▇, ▇-▇, 10-K, 10-Q and 8-K, as may be filed by such
Borrower or any of its Subsidiaries with the Securities and Exchange
Commission.
(g) Any 90-day letter or 30-day letter from the federal
Internal Revenue Service (or the equivalent notice received from state
or other taxing authorities) asserting tax deficiencies against such
Borrower or any of its Subsidiaries.
(h) Any material information relating to a material audit
or investigation of any Borrower in its capacity as a Medicare or
Medicaid provider by a governmental or administrative agency.
(i) The financial and operational projections for each of
▇▇▇▇▇▇▇ and the Company and the other Borrowers on a Consolidated and
consolidating basis prior to June 30, 1996.
6.4.5. Notice of Litigation, Defaults, etc. Each of the
Borrowers shall promptly furnish to the Lenders notice of any
litigation or any administrative or arbitration proceeding (a) which
creates a material risk of resulting, after giving effect to any
applicable insurance, in the payment by any Borrower or any of its
Subsidiaries of more than $100,000 or (b) which results, or creates a
material risk of resulting, in a Material Adverse Change. Within five
Banking Days after acquiring knowledge thereof, such Borrower shall
notify the Lenders of the existence of any Default or Material Adverse
Change, specifying the nature thereof and what action such Borrower or
such Subsidiary has taken, is taking or proposes to take with respect
thereto.
6.4.6. ERISA Reports. Each of the Borrowers shall furnish
to the Lenders promptly after the same shall become available the
following items with respect to any Plan:
(a) any request for a waiver of the funding standards or
an extension of the amortization period,
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(b) any reportable event (as defined in section 4043 of
ERISA), unless the notice requirement with respect thereto has been
waived by regulation,
(c) any notice received by any ERISA Group Person that the
PBGC has instituted or intends to institute proceedings to terminate
any Plan, or that any Multiemployer Plan is insolvent or in
reorganization,
(d) notice of the possibility of the termination of any
Plan by its administrator pursuant to section 4041 of ERISA, and
(e) notice of the intention of any ERISA Group Person to
withdraw, in whole or in part, from any Multiemployer Plan.
6.4.7. Other Information; Audit. From time to time at
reasonable intervals upon request of any authorized officer of any
Lender, each of the Obligors shall furnish to the Lenders such other
information regarding the business, assets, financial condition,
income or prospects of the Obligors as such officer may reasonably
request, including copies of all tax returns, licenses, agreements,
leases and instruments to which any of the Obligors is party. The
Lenders' authorized officers and representatives shall have the right
during normal business hours upon reasonable notice and at reasonable
intervals to examine the books and records of the Obligors, to make
copies and notes therefrom for the purpose of ascertaining compliance
with or obtaining enforcement of this Agreement or any other Credit
Document. The Agent, upon reasonable advance notice, may undertake to
have any Obligor reviewed by the Agent's commercial financial
examiners and fixed asset appraisers, The Borrowers shall bear the
reasonable expenses related to one such review annually unless an
Event of Default has occurred and is continuing in which event the
Borrowers shall bear all reasonable expenses of any reasonable number
of reviews.
6.5. Certain Financial Tests.
6.5.1. Minimum Net Income. On the last day of each fiscal
quarter of the Borrowers, Consolidated Net Income shall be at least
$1.00.
6.5.2. Consolidated Senior Debt Coverage. At all times,
Consolidated Senior Debt shall not exceed 300% of Consolidated
Adjusted EBITDA for the most recently completed period of four
consecutive fiscal quarters.
6.5.3. Consolidated Total Debt. At all times, the amount
of (a) Consolidated Total Debt minus (b) that portion of the
outstanding principal amount of any Contingent Notes to the extent
that such portion is not required to be reflected on the financial
statements of any Borrower in accordance with GAAP, shall not exceed
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400% of Consolidated Adjusted EBITDA for the most recently completed
period of four consecutive fiscal quarters.
6.5.4. Consolidated Interest Expense. On the last day of
each fiscal quarter of the Borrowers, Consolidated EBIT shall be at
least 300% of Consolidated Interest Expense for the period of four
consecutive fiscal quarters then ended.
6.6. Indebtedness. None of the Obligors shall create, incur,
assume or otherwise become or remain liable with respect to any Indebtedness
except the following:
6.6.1. Indebtedness in respect of the Credit Obligations.
6.6.2. Guarantees permitted by Section 6.7.
6.6.3. Current liabilities, other than Financing Debt,
incurred in the ordinary course of business.
6.6.4. To the extent that payment thereof shall not at the
time be required by Section 6.1, Indebtedness in respect of taxes,
assessments, governmental charges and claims for labor, materials and
supplies.
6.6.5. Indebtedness secured by Liens of carriers,
warehouses, mechanics and landlords permitted by Sections 6.8.5 and
6.8.6.
6.6.6. Indebtedness in respect of judgments or awards (a)
which have been in force for less than the applicable appeal period or
(b) in respect of which the Obligor shall at the time in good faith be
prosecuting an appeal or proceedings for review and, in the case of
each of clauses (a) and (b), such Obligor shall have taken appropriate
reserves therefor in accordance with GAAP and execution of such
judgment or award shall not be levied.
6.6.7. To the extent permitted by Section 6.8.9,
Indebtedness in respect of Capitalized Lease Obligations or secured by
purchase money security interests; provided, however, that the
aggregate principal amount of all Indebtedness permitted by this
Section 6.6.7 at any one time outstanding shall not exceed $500,000.
6.6.8. Indebtedness with respect to deferred
compensation in the ordinary course of business and Indebtedness with
respect to employee benefit programs (including liabilities in respect
of deferred compensation, pension or severance benefits, early
termination benefits, disability benefits, vacation benefits and
tuition benefits) incurred in the ordinary course of business so long
as the Obligor is in compliance with Section 6.17.
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6.6.9. Indebtedness in respect of customer advances and
deposits, deferred income, deferred taxes and other deferred credits
arising in the ordinary course of business.
6.6.10. Indebtedness relating to deferred gains and
deferred taxes arising in connection with sale of assets permitted
under Section 6.11.
6.6.11. Indebtedness in respect of inter-company loans and
advances among the Borrowers which are not prohibited by Section 6.9.
6.6.12. Indebtedness that is not payable before the Final
Maturity Date with respect to mandatory redemption or dividend rights
relating to the Company's Series A Preferred Stock.
6.6.13. Contingent Notes.
6.6.14. Indebtedness to the extent set forth on Exhibit
6.6.
6.7. Guarantees; Letters of Credit. None of the Obligors shall
become or remain liable with respect to any Guarantee, including reimbursement
obligations, whether contingent or matured, under letters of credit or other
financial guarantees by third parties, except the following:
6.7.1. Letters of Credit and Guarantees of the Credit
Obligations.
6.7.2. Guarantees by an Obligor of Indebtedness incurred
by a Borrower and permitted by Section 6.6.
6.7.3. Guarantees by any Obligor of the obligations of its
Subsidiaries under employment agreements between such Subsidiary and
its employees.
6.8. Liens. None of the Obligors shall create, incur or enter into,
or suffer to be created or incurred or to exist, any Lien, except the
following:
6.8.1. Liens on the Credit Security that secure the Credit
Obligations.
6.8.2. Liens to secure taxes, assessments and other
governmental charges, to the extent that payment thereof shall not at
the time be required by Section 6.1.
6.8.3. Deposits or pledges made (a) in connection with, or
to secure payment of, workers' compensation, unemployment insurance,
old age pensions or other social security, (b) in connection with
casualty insurance maintained in accordance with Section 6.3, (c) to
secure the performance of bids, tenders, contracts
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(other than contracts relating to Financing Debt) or leases, (d) to
secure statutory obligations or surety or appeal bonds, (e) to secure
indemnity, performance or other similar bonds in the ordinary course
of business or (f) in connection with contested amounts to the extent
that payment thereof shall not at that time be required by Section
6.1.
6.8.4. Liens in respect of judgments or awards, to the
extent that such judgments or awards are permitted by Section 6.6.6.
6.8.5. Liens of carriers, warehouses, mechanics and
similar Liens, in each case (a) in existence less than 120 days from
the date of creation thereof or (b) being contested in good faith by
the Obligor in appropriate proceedings (so long as such Obligor shall,
in accordance with GAAP, have set aside on its books adequate reserves
with respect thereto).
6.8.6. Encumbrances in the nature of (a) zoning
restrictions, (b) easements, (c) restrictions of record on the use of
real property, (d) landlords' and lessors' Liens on rented premises
and (e) restrictions on transfers or assignment of leases, which in
each case do not materially detract from the value of the encumbered
property or impair the use thereof in the business of any Obligor.
6.8.7. Restrictions under federal and state securities
laws on the transfer of securities.
6.8.8. Restrictions under Foreign Trade Regulations on the
transfer or licensing of certain assets of the Obligors.
6.8.9. Liens constituting (a) purchase money security
interests (including mortgages, conditional sales, Capitalized Leases
and any other title retention or deferred purchase devices) in real
property, interests in leases or tangible personal property (other
than inventory) existing or created on the date on which such property
is acquired, and (b) the renewal, extension or refunding of any
security interest referred to in the foregoing clause (a) in an amount
not to exceed the amount thereof remaining unpaid immediately prior to
such renewal, extension or refunding; provided, however, that (i) each
such security interest shall attach solely to the particular item of
property so acquired, and the principal amount of Indebtedness
(including Indebtedness in respect of Capitalized Lease Obligations)
secured thereby shall not exceed the cost (including all such
Indebtedness secured thereby, whether or not assumed) of such item of
property; and (ii) the aggregate principal amount of all Indebtedness
secured by Liens permitted by this Section 6.8.9 shall not exceed the
amount permitted by Section 6.6.7.
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6.8.10. Other Liens and Capitalized Lease Obligations on
the property secured by such Liens or the subject of such Capitalized
Lease as set forth on Exhibit 6.8 and any renewals thereof, but not
any increase in the amount thereof.
6.9. Investments and Permitted Acquisitions. None of the Obligors
shall have outstanding, acquire, commit itself to acquire or hold any
Investment (including any Investment consisting of the Permitted Acquisition of
any business) except for the following:
6.9.1. Cash Investments of the Borrowers in other
Borrowers.
6.9.2. Intercompany loans and advances from any Borrower
to any other Borrower but in each case only to the extent reasonably
necessary for Consolidated tax planning and working capital
management.
6.9.3. Investments in Cash Equivalents.
6.9.4. Guarantees permitted by Section 6.7.
6.9.5. Investments constituting the acquisition of all of
the capital stock, equity, partnership or other beneficial interests
in, or substantially all the assets of, any Person that derives
substantially all of its revenues from a business that the Borrowers
would be permitted to engage in under Section 6.2.1; provided,
however, that:
(a) not less than 10 days prior to the consummation of
such acquisition, the Required Lenders shall have received any report,
analysis and other documentation with respect to such acquisition,
produced by such independent due diligence firm as approved by the
Agent.
(b) immediately before and after giving effect to such
acquisition, no Default shall exist;
(c) the Purchase Price for such acquisition does not
exceed $10,000,000, unless the terms and the documentation relating to
such acquisition is satisfactory to the Required Lenders; and
(d) before such acquisition, the Lenders shall have
received computations, certified by a Financial Officer of the
Borrowers, showing
(i) pro forma compliance as of the date of such
acquisition with the financial tests set forth in Section 6.5,
after giving effect to any increases in Financing Debt incurred
in connection with such acquisition and adding to the financial
statements most recently delivered to the Lenders the Pro Forma
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EBITDA of the Acquired Party for the most recently completed
period of four consecutive fiscal quarters, and
(ii) that the Financing Debt component of the
consideration for such acquisition does not exceed the sum of
450% of the Pro Forma EBITDA of the Acquired Party for the most
recently completed period of four consecutive fiscal quarters
plus the cash and Cash Equivalents of the Acquired Party.
6.9.6. A loan to ▇▇▇▇▇ ▇. New to be used to purchase
common stock of the Company; provided, however, that the principal
amount of such loan does not exceed $300,000.
6.9.7. Investments representing Indebtedness of any Person
owing as a result of the sale by any Borrower in the ordinary course
of business to such Person of products, services or tangible property
no longer required in such Borrower's business.
6.10. Distributions. None of the Obligors shall make any
Distribution except for the following:
6.10.1. Any Borrower may make Distributions to any other
Borrower.
6.10.2. Distributions consisting of Investments permitted
by Sections 6.9.1 and 6.9.2 .
6.10.3. Distributions in respect of the redemption of
capital stock of the Company from employees of any Borrower; provided,
however, that the amount of all such Distributions shall not exceed
$50,000 in the aggregate in any fiscal year.
6.10.4. Distributions on Subordinated Indebtedness to the
extent permitted by the Subordination Agreement or such other
documentation relating to Subordinated Indebtedness that has been
approved by the Agent.
6.10.5. Distributions of accrued and unpaid dividends on up
to 120,004 shares of the Company's capital stock upon the conversion
of such shares from preferred to common stock in connection with the
consummation of the transaction permitted by Section 6.9.6.
6.11. Asset Dispositions and Mergers. Except as otherwise set forth
in Exhibit 6.11, none of the Obligors shall merge or enter into a consolidation
or sell, lease, sell and lease back, sublease or otherwise dispose of any of
its assets, except the following:
6.11.1. So long as immediately prior to and after giving
effect thereto there shall exist no Default, the Obligors may sell or
otherwise dispose of (a) inventory in
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the ordinary course of business, (b) tangible assets to be replaced in
the ordinary course of business within 12 months by other assets of
equal or greater value, (c) tangible assets no longer used or useful
in the business of such Obligor; provided, however, that the
aggregate fair market value (or book value, if greater) of the assets
sold or disposed of pursuant to this clause (c) shall not exceed
$100,000 in any fiscal year.
6.11.2. Any Borrower may merge or be liquidated into any
other Borrower.
6.12. Lease Obligations. None of the Obligors shall be or
become obligated as lessee under any lease except:
6.12.1. Capitalized Leases permitted by Sections 6.6.7 and
6.8.9.
6.12.2. Leases other than Capitalized Leases; provided,
however, that the aggregate fixed rental obligations for any year
(excluding payments required to be made by the lessee in respect of
taxes and insurance whether or not denominated as rent) shall not
exceed $1,000,000.
6.13. Issuance of Stock by Subsidiaries; Subsidiary Distributions.
6.13.1. Issuance of Stock by Subsidiaries of the Company.
No Borrower, other than the Company, shall issue or sell any shares of
its capital stock or other evidence of beneficial ownership to any
Person other than the other Borrowers, which shares shall have been
pledged to the Agent as part of the Credit Security.
6.13.2. No Restrictions on Subsidiary Distributions.
Except for this Agreement and the Credit Documents, none of the
Borrowers shall enter into or be bound by any agreement (including
covenants requiring the maintenance of specified amounts of net worth
or working capital) restricting the right of any Borrower to make
Distributions or extensions of credit to any other Borrower (directly
or indirectly through another Borrower).
6.14. Voluntary Prepayments of Other Indebtedness. None of the
Obligors shall make any voluntary prepayment of principal of or interest on any
Financing Debt (other than the Credit Obligations) or make any voluntary
redemptions or repurchases of Financing Debt (other tObligations) without the
prior written consent of the Required Lenders.
6.15. Derivative Contracts. None of the Obligors shall enter
into any Interest Rate Protection Agreement, foreign currency exchange contract
or other financial or commodity derivative contracts except to provide hedge
protection for an underlying economic transaction in the ordinary course of
business.
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6.16. Negative Pledge Clauses. None of the Obligors shall enter into
any agreement, instrument, deed or lease which prohibits or limits the ability
of such Obligor to create, incur, assume or suffer to exist any Lien upon any
of their respective properties, assets or revenues, whether now owned or
hereafter acquired, or which requires the grant of any collateral for such
obligation if collateral is granted for another obligation, except the
following:
6.16.1. This Agreement and the other Credit Documents.
6.16.2. Covenants in documents creating Liens permitted by
Section 6.8 prohibiting further Liens on the assets encumbered
thereby.
6.17. ERISA, etc. Each of the Obligors shall comply, and shall
cause all ERISA Group Persons to comply, in all material respects, with the
provisions of ERISA and the Code applicable to each Plan. Each of the
Obligors shall meet, and shall cause all ERISA Group Persons to meet, all
minimum funding requirements applicable to them with respect to any Plan
pursuant to section 302 of ERISA or section 412 of the Code, without giving
effect to any waivers of such requirements or extensions of the related
amortization periods which may be granted. At no time shall the Accumulated
Benefit Obligations under any Plan that is not a Multiemployer Plan exceed the
fair market value of the assets of such Plan allocable to such benefits by more
than $250,000. The Obligors shall not withdraw, and shall cause all other
ERISA Group Persons not to withdraw, in whole or in part, from any
Multiemployer Plan so as to give rise to withdrawal liability exceeding
$250,000 in the aggregate. At no time shall the actuarial present value of
unfunded liabilities for post-employment health care benefits, whether or not
provided under a Plan, calculated in a manner consistent with Statement No. 106
of the Financial Accounting Standards Board, exceed $250,000.
6.18. Transactions with Affiliates. Except with respect to
transactions set forth on Exhibit 6.18, none of the Obligors shall effect any
transaction with any of their respective Affiliates (except for other Obligors)
on a basis less favorable to such Obligor than would be the case if such
transaction had been effected with a non-Affiliate.
6.19. Environmental Laws.
6.19.1. Compliance with Law and Permits. Each of the
Obligors shall use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws.
6.19.2. Notice of Claims, etc. Each of the Obligors shall
immediately notify the Agent, and provide copies upon receipt, of all
written claims, complaints, notices
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or inquiries from governmental authorities relating to the condition
of its facilities and properties or compliance with Environmental
Laws, and shall promptly cure and have dismissed with prejudice to the
satisfaction of the Agent any actions and proceedings relating to
compliance with Environmental Laws.
6.20. Capital Expenditures. The Obligors will not make Capital
Expenditures in any fiscal year in an amount that in the aggregate exceeds 4%
of the net revenues of such Obligor, as determined in accordance with GAAP,
for such fiscal year, other than with respect to the purchase of the assets in
connection with a Permitted Acquisition.
7. Representations and Warranties. In order to induce the Lenders to
extend credit to the Company hereunder, each of the Obligors as are party
hereto from time to time jointly and severally represents and warrants as
follows:
7.1. Organization and Business.
7.1.1. The Borrowers. Each of the Borrowers is a duly
organized and validly existing corporation, in good standing under the
laws of the jurisdiction in which it is organized with all power and
authority, corporate or otherwise, necessary to (a) enter into and
perform this Agreement and each other Credit Document to which it is
party, (b) guarantee the Credit Obligations, (c) grant the Agent for
the benefit of the Lenders the security interests in the Credit
Security owned by it to secure the Credit Obligations and (d) own its
properties and carry on the business now conducted or proposed to be
conducted by it. Certified copies of the Charter and By-laws of each
Borrower have been previously delivered to the Agent and are correct
and complete. Exhibit 7.1, as from time to time hereafter
supplemented in accordance with Sections 6.4.1 and 6.4.2, sets forth,
as of the later of the date hereof or as of the end of the most recent
fiscal quarter for which financial statements are required to be
furnished in accordance with such Sections, (i) the jurisdiction of
incorporation of each Borrower, (ii) the address of each Borrower's
principal executive office and chief place of business, (iii) each
name, including any trade name, under which each Borrower conducts its
business and (iv) the jurisdictions in which each Borrower keeps
tangible personal property.
7.1.2. Capitalization. No options, warrants, conversion
rights, preemptive rights or other statutory or contractual rights to
purchase shares of capital stock or other securities of any Borrower,
other than the Company, now exist, nor has any Borrower, other than
the Company, authorized any such right, nor is any Borrower, other
than the Company, obligated in any other manner to issue shares of its
capital stock or other securities. Attached as Exhibit 7.1.2. is a
list of the holders of all the outstanding capital stock of the
Company together with the number of shares so held.
7.2. Financial Statements and Other Information; Material Agreements.
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7.2.1. Financial Statements and Other Information. The
Borrowers have previously furnished to the Lenders copies of the
following:
(a) The audited and unaudited balance sheets of American
Laboratory Associates, Inc. a Delaware corporation, ("American Labs")
as at December 31, 1995 and the audited and unaudited statements of
income and the audited statements of changes in shareholders' equity
and of cash flows of American Labs for its fiscal year then ended.
(b) The unaudited balance sheets of the Company and its
Subsidiaries on a Consolidated basis and of ▇▇▇▇▇▇▇ as at March 31,
1996 and the unaudited statements of income, of changes in
shareholders' equity and of cash flows of the Company and its
Subsidiaries on a Consolidated basis and of ▇▇▇▇▇▇▇ for the portion of
the fiscal year then ended.
(c) Calculations demonstrating pro forma compliance with
the Computation Covenants as of the end of the most recent quarter, as
applicable, preceding the date hereof.
The audited financial statements (including the notes thereto)
referred to in clause (a) above were prepared in accordance with GAAP
and fairly present the financial position of American Labs at the date
thereof and the results of its operations for the periods covered
thereby. The unaudited financial statements referred to in clause (a)
above and the unaudited financial statements referred to in clause (b)
above were prepared in accordance with GAAP and fairly present the
financial position of American Labs at the respective dates thereof
and the results of its operations for the periods covered thereby,
subject to normal year-end audit adjustment and the addition of
footnotes in the case of interim financial statements. American Labs
has no known contingent liability material to it which is not
reflected in the balance sheets referred to in clauses (a) or (b)
above (or delivered pursuant to Sections 6.4.1 or 6.4.2) or in the
notes thereto.
In the Company's judgment, the financial and operational
projections referred to in clause (c) above constitute a reasonable
basis as of the Initial Closing Date for the assessment of the future
performance of the Company and its Subsidiaries during the periods
indicated therein, it being understood that any projected financial
information represents an estimate, based on various assumptions, of
future results of operations which may or may not in fact occur.
7.2.2. Material Agreements. The Borrowers have
previously furnished to the Lenders correct and complete copies,
including all exhibits, schedules and
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amendments thereto, of the agreements, each as in effect on the date
hereof, listed in Exhibit 7.2.2 (the "Material Agreements").
7.3. Agreements Relating to Financing Debt, Investments, etc.
Exhibit 7.3, as from time to time hereafter supplemented in accordance with
Sections 6.4.1 and 6.4.2, sets forth (a) the amounts (as of the dates indicated
in Exhibit 7.3, as so supplemented) of all Financing Debt of the Obligors and
all agreements which relate to such Financing Debt, (b) all Liens and
Guarantees with respect to such Financing Debt and (c) all agreements which
directly or indirectly require the Obligors to make any Investment. The
Obligors have furnished the Lenders with correct and complete copies of any
agreements described in clauses (a), (b) and (c) above requested by the
Required Lenders.
7.4. Changes in Condition. Since December 31, 1995 no Material
Adverse Change has occurred and between December 31, 1995 and the date hereof,
except as set forth in Exhibit 7.4, none of the Obligors has entered into any
material transaction outside the ordinary course of business except for the
transactions contemplated by or otherwise permitted or authorized pursuant to
this Agreement and the Material Agreements.
7.5. Title to Assets. Each of the Obligors have good and marketable
title to or rights to use under leases all assets necessary for or used in the
operations of their business as now conducted by them and reflected in the most
recent balance sheet referred to in Section 7.2.1 (or the balance sheet most
recently furnished to the Lenders pursuant to Sections 6.4.1 or 6.4.2), and to
all assets acquired subsequent to the date of such balance sheet, subject to
no Liens except for Liens permitted by Section 6.8 and except for assets
disposed of as permitted by Section 6.11.
7.6. Operations in Conformity With Law, etc. The operations of the
Obligors as now conducted or proposed to be conducted are not in violation of,
nor is any Obligor in default under, any Legal Requirement presently in effect,
except for such violations and defaults as do not and will not, in the
aggregate, result, or create a material risk of resulting, in any Material
Adverse Change. No Obligor has received notice of any such violation or
default or has knowledge of any basis on which the operations of the Obligors,
as now conducted and as currently proposed to be conducted after the date
hereof, would be held so as to violate or to give rise to any such violation
or default.
7.7. Litigation. Except as otherwise set forth in Exhibit 7.7, no
litigation, at law or in equity, or any proceeding before any court, board or
other governmental or administrative agency or any arbitrator is pending or,
to the knowledge of any Obligor, threatened which may involve any material risk
of any final judgment, order or liability which, after giving effect to any
applicable insurance, has resulted, or creates a material risk of resulting,
in any Material Adverse Change or which seeks to enjoin the consummation, or
which questions the validity, of any of the transactions contemplated by this
Agreement or any other Credit Document. No judgment, decree or order of any
court, board or other
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governmental or administrative agency or any arbitrator has been issued against
or binds any Obligor which has resulted, or creates a material risk of
resulting, in any Material Adverse Change.
7.8. Authorization and Enforceability. Each of the Obligors has
taken all corporate action required to execute, deliver and perform this
Agreement and each other Credit Document to which it is party. No consent of
stockholders of any Obligor is necessary in order to authorize the execution,
delivery or performance of this Agreement or any other Credit Document to which
such Obligor is party. Each of this Agreement and each other Credit Document
constitutes the legal, valid and binding obligation of each Obligor party
thereto and is enforceable against such Obligor in accordance with its terms.
7.9. No Legal Obstacle to Agreements. Neither the execution and
delivery of this Agreement or any other Credit Document, nor the making of any
borrowings hereunder, nor the guaranteeing of the Credit Obligations, nor the
securing of the Credit Obligations with the Credit Security, nor the
consummation of any transaction referred to in or contemplated by this
Agreement or any other Credit Document, nor the fulfillment of the terms
hereof or thereof or of any other agreement, instrument, deed or lease
contemplated by this Agreement or any other Credit Document, has constituted
or resulted in or will constitute or result in:
(a) any breach or termination of the provisions of any
agreement, instrument, deed or lease to which any Obligor is a party
or by which it is bound, or of the Charter or By-laws of any Obligor;
(b) the violation of any law, statute, judgment, decree
or governmental order, rule or regulation applicable to any Obligor;
(c) the creation under any agreement, instrument, deed or
lease of any Lien (other than Liens on the Credit Security which
secure the Credit Obligations) upon any of the assets of any Obligor;
or
(d) any redemption, retirement or other repurchase
obligation of any Obligor under any Charter, By-law, agreement,
instrument, deed or lease.
No approval, authorization or other action by, or declaration to or filing
with, any governmental or administrative authority or any other Person is
required to be obtained or made by any Obligor in connection with the
execution, delivery and performance of this Agreement, the Revolving Notes or
any other Credit Document, the transactions contemplated hereby or thereby, the
making of any borrowing hereunder, the guaranteeing of the Credit Obligations
or the securing of the Credit Obligations with the Credit Security.
7.10. Defaults. None of the Obligors is in default under any
provision of its Charter or By-laws or of this Agreement or any other Credit
Document. None of the Obligors
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is in default under any provision of any agreement, instrument, deed or lease
to which it is party or by which it or its property is bound. None of the
Obligors has violated any law, judgment, decree or governmental order, rule or
regulation, in each case so as to result, or create a material risk of
resulting, in any Material Adverse Change.
7.11. Licenses, etc. The Obligors have all patents, patent
applications, patent licenses, patent rights, trademarks, trademark rights,
trade names, trade name rights, copyrights, licenses, franchises, permits,
authorizations and other rights as are necessary for the conduct of the
business of the Obligors as now conducted by them. All of the foregoing are
in full force and effect in all material respects, and each of the Obligors is
in substantial compliance with the foregoing without any known conflict with
the valid rights of others which has resulted, or creates a material risk of
resulting, in any Material Adverse Change. No event has occurred which
permits, or after notice or lapse of time or both would permit, the revocation
or termination of any such license, franchise or other right or which affects
the rights of any of the Obligors thereunder so as to result, or to create a
material risk of resulting, in any Material Adverse Change. No litigation or
other proceeding or dispute exists with respect to the validity or, where
applicable, the extension or renewal, of any of the foregoing which has
resulted, or creates a material risk of resulting, in any Material Adverse
Change.
7.12. Tax Returns. Each of the Obligors has filed all material tax
and information returns which are required to be filed by it and has paid, or
made adequate provision for the payment of, all taxes which have or may become
due pursuant to such returns or to any assessment received by it. None of the
Obligors knows of any material additional assessments or any basis therefor.
Each of the Obligors reasonably believes that the charges, accruals and
reserves on the books of the Obligors in respect of taxes or other governmental
charges are adequate.
7.13. Certain Business Representations.
7.13.1. Labor Relations. No dispute or controversy
between any Obligor and any of their respective employees has
resulted, or is reasonably likely to result, in any Material Adverse
Change, and none of the Obligors anticipates that its relationships
with its unions or employees will result, or are reasonably likely to
result, in any Material Adverse Change. Each of the Obligors is in
compliance in all material respects with all federal and state laws
with respect to (a) non-discrimination in employment with which the
failure to comply, in the aggregate, has resulted, or creates a
material risk of resulting, in a Material Adverse Change and (b) the
payment of wages.
7.13.2. Antitrust. Each of the Obligors is in compliance
in all material respects with all federal and state antitrust laws
relating to its business and the geographic concentration of its
business.
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7.13.3. Consumer Protection. None of the Obligors is in
violation of any rule, regulation, order, or interpretation of any
rule, regulation or order of the Federal Trade Commission (including
truth-in-lending), with which the failure to comply, in the aggregate,
has resulted, or creates a material risk of resulting, in a Material
Adverse Change.
7.13.4. Burdensome Obligations. None of the Obligors is
party to or bound by any agreement, instrument, deed or lease or is
subject to any Charter, By-law or other restriction, commitment or
requirement which, in the opinion of the management of such Person, is
so unusual or burdensome as in the foreseeable future to result, or
create a material risk of resulting, in a Material Adverse Change.
7.13.5. Future Expenditures. None of the Obligors
anticipate that the future expenditures, if any, by the Obligors
needed to meet the provisions of any federal, state or foreign
governmental statutes, orders, rules or regulations will be so
burdensome as to result, or create a material risk of resulting, in
any Material Adverse Change.
7.14. Environmental Regulations.
7.14.1. Environmental Compliance. Each of the Obligors is
in compliance in all material respects with the Clean Air Act, the
Federal Water Pollution Control Act, the Marine Protection Research
and Sanctuaries Act, RCRA, CERCLA and any other Environmental Law in
effect in any jurisdiction in which any properties of the Obligors are
located or where any of them conducts its business, and with all
applicable published rules and regulations (and applicable standards
and requirements) of the federal Environmental Protection Agency and
of any similar agencies in states or foreign countries in which the
Obligors conduct their businesses other than those which in the
aggregate have not resulted, and do not create a material risk of
resulting, in a Material Adverse Change.
7.14.2. Environmental Litigation. No suit, claim, action
or proceeding of which any Obligor has been given notice or otherwise
has knowledge is now pending before any court, governmental agency or
board or other forum, or to any Obligor's knowledge, threatened by any
Person (nor to any Obligor's knowledge, does any factual basis exist
therefor) for, and none of the Obligors have received written
correspondence from any federal, state or local governmental authority
with respect to:
(a) noncompliance by any Obligor with any Environmental
Law;
(b) personal injury, wrongful death or other tortious
conduct relating to materials, commodities or products used,
generated, sold, transferred or manufactured
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by any Obligor (including products made of, containing or
incorporating asbestos, lead or other hazardous materials, commodities
or toxic substances); or
(c) the release into the environment by any Obligor of any
Hazardous Material generated by any Obligor whether or not occurring
at or on a site owned, leased or operated by any Obligor.
7.14.3. Environmental Condition of Properties. None of
the properties owned or leased by any Obligor has been used as a
treatment, storage or disposal site, other than as disclosed in
Exhibit 7.14. No Hazardous Material is present in any real property
currently or formerly owned or operated by any Obligor except that
which has not resulted, and does not create a material risk of
resulting, in a Material Adverse Change.
7.15. Pension Plans. Each Plan (other than a Multiemployer Plan)
and, to the knowledge of each of the Obligors, each Multiemployer Plan is in
material compliance with the applicable provisions of ERISA and the Code.
Each Multiemployer Plan and each Plan that constitutes a "defined benefit plan"
(as defined in ERISA) are set forth in Exhibit 7.15. Each ERISA Group Person
has met all of the funding standards applicable to all Plans that are not
Multiemployer Plans, and no condition exists which would permit the institution
of proceedings to terminate any Plan that is not a Multiemployer Plan under
section 4042 of ERISA. To the best knowledge of each of the Obligors, no Plan
that is a Multiemployer Plan is currently insolvent or in reorganization or
has been terminated within the meaning of ERISA.
7.16. Acquisition Agreement, etc. Each Acquisition Agreement is a
valid and binding contract as to the Borrower party thereto and, to the best of
such Borrower's knowledge, as to the Sellers party thereto. Such Borrower is
not in default in any material respect of its obligations under any Acquisition
Agreement and, to the best of such Borrower's knowledge, the Sellers party
thereto are not in default in any material respect of any of their obligations
thereunder. The representations and warranties of such Borrower set forth in
each Acquisition Agreement are true and correct in all material respect as of
the date hereof with the same force and effect as though made on and as of the
date hereof. To the best of such Borrower's knowledge all of the
representations and warranties of the Sellers set forth in each Acquisition
Agreement are true and correct in all material respects as of the date hereof
with the same force and effect as though made on and as of the date hereof.
7.17. Foreign Trade Regulations; Government Regulation; Margin Stock.
7.17.1. Foreign Trade Regulations. Neither the execution
and delivery of this Agreement or any other Credit Document, nor the
making by any Borrower of any borrowings hereunder, nor the
guaranteeing of the Credit Obligations by any Guarantor, nor the
securing of the Credit Obligations with the Credit Security, has
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constituted or resulted in or will constitute or result in the
violation of any Foreign Trade Regulation.
7.17.2. Government Regulation. None of the Obligors, nor
any Person controlling any Obligor or under common control with any
Obligor, is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company
Act, the Interstate Commerce Act or any statute or regulation which
regulates the incurring by any Obligor of Financing Debt as
contemplated by this Agreement and the other Credit Documents.
7.17.3. Margin Stock. None of the Obligors owns any Margin Stock.
7.18. Disclosure. Neither this Agreement nor any other Credit
Document to be furnished to the Lenders by or on behalf of any Obligor in
connection with the transactions contemplated hereby or by such Credit Document
contains any untrue statement of material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made. No fact
is actually known to any Obligor which has resulted, or in the future (so far
as any Obligor can reasonably foresee) will result, or creates a material risk
of resulting, in any Material Adverse Change, except to the extent that present
or future general economic conditions may result in a Material Adverse Change.
8. Defaults.
8.1. Events of Default. The following events are referred to as
"Events of Default":
8.1.1. Payment. Any Borrower shall fail to make any
payment in respect of: (a) interest or any fee on or in respect of
any of the Credit Obligations owed by it as the same shall become due
and payable, and such failure shall continue for a period of three
Banking Days, or (b) any Credit Obligation with respect to payments
made by any Letter of Credit Issuer under any Letter of Credit or any
draft drawn thereunder within three Banking Days after demand therefor
by such Letter of Credit Issuer or (c) principal of any of the Credit
Obligations owed by it as the same shall become due, whether at
maturity or by acceleration or otherwise.
8.1.2. Specified Covenants. Any Obligor shall fail to
perform or observe any of the provisions of Section 6.4.5 or Sections
6.5 through 6.20.
8.1.3. Other Covenants. Any Obligor shall fail to perform
or observe any other covenant, agreement or provision to be performed
or observed by it under this Agreement or any other Credit Document,
and such failure shall not be rectified or cured to the written
satisfaction of the Required Lenders within 30 days after the earlier
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of (a) notice thereof by the Agent to the Borrowers or (b) a Financial
Officer shall have actual knowledge thereof.
8.1.4. Representations and Warranties. Any representation
or warranty of or with respect to any Obligor made to the Lenders or
the Agent in, pursuant to or in connection with this Agreement or any
other Credit Document shall be materially false on the date as of
which it was made.
8.1.5. Cross Default, etc.
(a) Any Obligor shall fail to make any payment when due
(after giving effect to any applicable grace periods) in respect of
any Capitalized Lease or in respect of any Financing Debt (other than
the Credit Obligations) outstanding in an aggregate amount of
principal (whether or not due) and accrued interest exceeding
$250,000;
(b) any Obligor shall fail to perform or observe the terms
of any agreement or instrument relating to any Capitalized Lease or
any Financing Debt (other than the Credit Obligations) outstanding in
an aggregate amount of principal (whether or not due) and accrued
interest exceeding $250,000, and such failure shall continue, without
having been duly cured, waived or consented to, beyond the period of
grace, if any, specified in such agreement or instrument, and such
failure shall permit the acceleration of such Financing Debt or
Capitalized Lease;
(c) all or any part of any Financing Debt (other than the
Credit Obligations) outstanding in an aggregate amount of principal
(whether or not due) and accrued interest exceeding $250,000 of any
Obligor shall be accelerated or shall become due or payable prior to
its stated maturity (except with respect to voluntary prepayments
thereof) for any reason whatsoever;
(d) any Lien on any property of any Obligor securing any
Financing Debt (other than the Credit Obligations) outstanding in an
aggregate amount of principal (whether or not due) and accrued
interest exceeding $250,000 shall be enforced by foreclosure or
similar action; or
(e) any holder of any Financing Debt (other than the
Credit Obligations) outstanding in an aggregate amount of principal
(whether or not due) and accrued interest exceeding $250,000 shall
exercise any right of rescission or put right with respect thereto.
8.1.6. Ownership; Liquidation; etc. Except as permitted
by Section 6.11:
(a) the Company shall cease to own, directly or
indirectly, all the capital stock of each of the Borrowers;
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(b) any transaction or series of transactions shall occur
as a result of which the Persons listed on Exhibit 8.1.6 as of the
date of this Agreement as the stockholders of the Company shall
collectively cease to own, in the aggregate, (i) preferred stock
and/or (ii) common stock representing or convertible into at least 51%
of the fully diluted equity of the Company.
(c) any Obligor shall initiate any action to dissolve,
liquidate or otherwise terminate its existence.
8.1.7. Enforceability, etc. Any Credit Document shall
cease for any reason (other than the scheduled termination thereof in
accordance with its terms) to be enforceable in accordance with its
terms or in full force and effect; or any Obligor in respect of any
Credit Document shall so assert in a judicial or similar proceeding;
or the security interests created by this Agreement or any other
Credit Documents shall cease to be enforceable and of the same effect
and priority purported to be created hereby.
8.1.8. Judgments. A final judgment (a) which, with other
outstanding final judgments against the Obligors, exceeds an aggregate
of $100,000 in excess of applicable insurance coverage shall be
rendered against any Obligor, or (b) which grants injunctive relief
that results, or creates a material risk of resulting, in a Material
Adverse Change and in either case if, (i) within 60 days after entry
thereof, such judgment shall not have been discharged or execution
thereof stayed pending appeal or (ii) within 60 days after the
expiration of any such stay, such judgment shall not have been
discharged.
8.1.9. ERISA. Any "reportable event" (as defined in
section 4043 of ERISA) shall have occurred that reasonably could be
expected to result in termination of a Material Plan or the
appointment by the appropriate United States District Court of a
trustee to administer any Material Plan or the imposition of a Lien in
favor of a Material Plan; or any ERISA Group Person shall fail to pay
when due amounts aggregating in excess of $100,000 which it shall have
become liable to pay to the PBGC or to a Material Plan under Title IV
of ERISA; or notice of intent to terminate a Material Plan shall be
filed under Title IV of ERISA by any ERISA Group Person or
administrator; or the PBGC shall institute proceedings under Title IV
of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a
fiduciary of any Material Plan against any ERISA Group Person to
enforce section 515 or 4219(c)(5) of ERISA and such proceeding shall
not have been dismissed within 30 days thereafter; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated.
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8.1.10. Bankruptcy, etc. Any Obligor shall:
(a) commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of directors or
other governing body, the commencement of such a voluntary case;
(b) (i) have filed against it a petition commencing an
involuntary case under the Bankruptcy Code that shall not have been
dismissed within 60 days after the date on which such petition is
filed, or (ii) file an answer or other pleading within such 60-day
period admitting or failing to deny the material allegations of such a
petition or seeking, consenting to or acquiescing in the relief
therein provided, or (iii) have entered against it an order for relief
in any involuntary case commenced under the Bankruptcy Code;
(c) seek relief as a debtor under any applicable law,
other than the Bankruptcy Code, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors, or consent to or acquiesce in
such relief;
(d) have entered against it an order by a court of
competent jurisdiction (i) finding it to be bankrupt or insolvent,
(ii) ordering or approving its liquidation or reorganization as a
debtor or any modification or alteration of the rights of its
creditors or (iii) assuming custody of, or appointing a receiver or
other custodian for, all or a substantial portion of its property; or
(e) make an assignment for the benefit of, or enter into
a composition with, its creditors, or appoint, or consent to the
appointment of, or suffer to exist a receiver or other custodian for,
all or a substantial portion of its property.
8.2. Certain Actions Following an Event of Default. If any one or
more Events of Default shall occur and be continuing, then in each and every
such case:
8.2.1. Terminate Obligation to Extend Credit. The Agent
on behalf of the Lenders may (and upon written request of the Lenders
holding at least one-third of the Percentage Interests the Agent
shall) terminate the obligations of the Lenders to make any further
extensions of credit under the Credit Documents by furnishing notice
of such termination to the Borrowers.
8.2.2. Specific Performance; Exercise of Rights. The
Agent on behalf of the Lenders may (and upon written request of the
Lenders holding at least one-third of the Percentage Interests the
Agent shall) proceed to protect and enforce the Lenders' rights by
suit in equity, action at law and/or other appropriate proceeding,
either for specific performance of any covenant or condition contained
in this Agreement or any other
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Credit Document or in any instrument or assignment delivered to the
Lenders pursuant to this Agreement or any other Credit Document, or in
aid of the exercise of any power granted in this Agreement or any
other Credit Document or any such instrument or assignment.
8.2.3. Acceleration. The Agent on behalf of the Lenders
may (and upon written request of the Lenders holding at least
one-third of the Percentage Interests the Agent shall) by notice in
writing to the Borrowers (a) declare all or any part of the unpaid
balance of the Credit Obligations then outstanding to be immediately
due and payable, and (b) require the Borrowers immediately to deposit
with the Agent in cash an amount equal to the then Letter of Credit
Exposure (which cash shall be held and applied as provided in Section
4.5), and thereupon such unpaid balance or part thereof and such
amount equal to the Letter of Credit Exposure shall become so due and
payable without presentation, protest or further demand or notice of
any kind, all of which are hereby expressly waived; provided, however,
that if a Bankruptcy Default shall have occurred, the unpaid balance
of the Credit Obligations shall automatically become immediately due
and payable.
8.2.4. Enforcement of Payment; Credit Security; Setoff.
The Agent on behalf of the Lenders may (and upon written request of
the Lenders holding at least one-third of the Percentage Interests the
Agent shall) proceed to enforce payment of the Credit Obligations in
such manner as it may elect, to cancel, or instruct other Letter of
Credit Issuers to cancel, any outstanding Letters of Credit which
permit the cancellation thereof and to realize upon any and all rights
in the Credit Security. The Lenders may offset and apply toward the
payment of the Credit Obligations (and/or toward the curing of any
Event of Default) any Indebtedness from the Lenders to the respective
Obligors, including any Indebtedness represented by deposits in any
account maintained with the Lenders, regardless of the adequacy of any
security for the Credit Obligations. The Lenders shall have no duty
to determine the adequacy of any such security in connection with any
such offset.
8.2.5. Cumulative Remedies. To the extent not prohibited
by applicable law which cannot be waived, all of the Lenders' rights
hereunder and under each other Credit Document shall be cumulative.
8.3. Annulment of Defaults. Any Default or Event of Default shall
be deemed not to exist or to have occurred for any purpose of the Credit
Documents if the Required Lenders or the Agent (with the consent of the
Required Lenders) shall have waived such Default or Event of Default in
writing, stated in writing that the same has been cured to such Lenders'
reasonable satisfaction or entered into an amendment to this Agreement which by
its express terms cures such Event of Default, at which time such Event of
Default shall no longer be deemed to exist or to have continued. No such
action by the Lenders or the Agent shall extend to or affect any subsequent
Event of Default or impair any rights of the Lenders upon
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the occurrence thereof. The making of any extension of credit during the
existence of any Default or Event of Default shall not constitute a waiver
thereof.
8.4. Waivers. To the extent that such waiver is not prohibited by
the provisions of applicable law that cannot be waived, each of the Obligors
waives:
(a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by this Agreement or any
other Credit Document), protests, notices of protest and notices of
dishonor;
(b) any requirement of diligence or promptness on the part
of any Lender in the enforcement of its rights under this Agreement,
the Revolving Notes or any other Credit Document;
(c) any and all notices of every kind and description
which may be required to be given by any statute or rule of law; and
(d) any defense (other than indefeasible payment in full)
which it may now or hereafter have with respect to its liability under
this Agreement, the Revolving Notes or any other Credit Document or
with respect to the Credit Obligations.
9. Guarantees.
9.1. Guarantees of Credit Obligations. Each Guarantor
unconditionally jointly and severally guarantees that the Credit Obligations
will be performed and will be paid in full in immediately available funds when
due and payable, whether at the stated or accelerated maturity thereof or
otherwise, this guarantee being a guarantee of payment and not of
collectability and being absolute and in no way conditional or contingent. In
the event any part of the Credit Obligations shall not have been so paid in
full when due and payable, each Guarantor will, immediately upon notice by the
Agent or, without notice, immediately upon the occurrence of a Bankruptcy
Default, pay or cause to be paid to the Agent for the account of each Lender in
accordance with the Lenders' respective Percentage Interests the amount of such
Credit Obligations which are then due and payable and unpaid. The obligations
of each Guarantor hereunder shall not be affected by the invalidity,
unenforceability or irrecoverability of any of the Credit Obligations as
against any other Obligor, any other guarantor thereof or any other Person.
For purposes hereof, the Credit Obligations shall be due and payable when and
as the same shall be due and payable under the terms of this Agreement or any
other Credit Document notwithstanding the fact that the collection or
enforcement thereof may be stayed or enjoined under the Bankruptcy Code or
other applicable law.
9.2. Continuing Obligation. Each Guarantor acknowledges that the
Lenders and the Agent have entered into this Agreement (and, to the extent that
the Lenders or the Agent may enter into any future Credit Document, will have
entered into such agreement) in reliance
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on this Section 9 being a continuing irrevocable agreement, and such Guarantor
agrees that its guarantee may not be revoked in whole or in part. The
obligations of the Guarantors hereunder shall terminate when the commitment
of the Lenders to extend credit under this Agreement shall have terminated and
all of the Credit Obligations have been indefeasibly paid in full in
immediately available funds and discharged; provided, however , that:
(a) if a claim is made upon the Lenders at any time for
repayment or recovery of any amounts or any property received by the
Lenders from any source on account of any of the Credit Obligations
and the Lenders repay or return any amounts or property so received
(including interest thereon to the extent required to be paid by the
Lenders) or
(b) if the Lenders become liable for any part of such
claim by reason of (i) any judgment or order of any court or
administrative authority having competent jurisdiction, or (ii) any
settlement or compromise of any such claim,
then the Guarantors shall remain liable under this Agreement for the amounts so
repaid or property so returned or the amounts for which the Lenders become
liable (such amounts being deemed part of the Credit Obligations) to the same
extent as if such amounts or property had never been received by the Lenders,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any of the Credit Obligations. Not later than five days
after receipt of notice from the Agent, the Guarantors shall jointly and
severally pay to the Agent an amount equal to the amount of such repayment or
return for which the Lenders have so become liable. Payments hereunder by a
Guarantor may be required by the Agent on any number of occasions.
9.3. Waivers with Respect to Credit Obligations. Except to the
extent expressly required by this Agreement or any other Credit Document, each
Guarantor waives, to the fullest extent permitted by the provisions of
applicable law, all of the following (including all defenses, counterclaims and
other rights of any nature based upon any of the following):
(a) presentment, demand for payment and protest of
nonpayment of any of the Credit Obligations, and notice of protest,
dishonor or nonperformance;
(b) notice of acceptance of this guarantee and notice that
credit has been extended in reliance on the Guarantor's guarantee of
the Credit Obligations;
(c) notice of any Default or of any inability to enforce
performance of the obligations of the Company or any other Person with
respect to any Credit Document, or notice of any acceleration of
maturity of any Credit Obligations;
(d) demand for performance or observance of, and any
enforcement of any provision of, the Credit Obligations, this
Agreement or any other Credit Document or
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any pursuit or exhaustion of rights or remedies with respect to any
Credit Security or against the Company or any other Person in respect
of the Credit Obligations or any requirement of diligence or
promptness on the part of the Agent or the Lenders in connection with
any of the foregoing;
(e) any act or omission on the part of the Agent or the
Lenders which may impair or prejudice the rights of the Guarantor,
including rights to obtain subrogation, exoneration, contribution,
indemnification or any other reimbursement from the Company or any
other Person, or otherwise operate as a deemed release or discharge;
(f) failure or delay to perfect or continue the
perfection of any security interest in any Credit Security or any
other action which ▇▇▇▇▇ or impairs the value of, or any failure to
preserve or protect the value of, any Credit Security;
(g) any statute of limitations or any statute or rule of
law which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than the
obligation of the principal;
(h) any "single action" or "anti-deficiency" law which
would otherwise prevent the Lenders from bringing any action,
including any claim for a deficiency, against the Guarantor before or
after the Agent's or the Lenders' commencement or completion of any
foreclosure action, whether judicially, by exercise of power of sale
or otherwise, or any other law which would otherwise require any
election of remedies by the Agent or the Lenders;
(i) all demands and notices of every kind with respect to
the foregoing; and
(j) to the extent not referred to above, all defenses
(other than payment) which the Company may now or hereafter have to
the payment of the Credit Obligations, together with all suretyship
defenses, which could otherwise be asserted by such Guarantor.
Each Guarantor represents that it has obtained the advice of counsel as to the
extent to which suretyship and other defenses may be available to it with
respect to its obligations hereunder in the absence of the waivers contained in
this Section 9.3.
No delay or omission on the part of the Agent or the Lenders in
exercising any right under this Agreement or any other Credit Document or under
any guarantee of the Credit Obligations or with respect to the Credit Security
shall operate as a waiver or relinquishment of such right. No action which the
Agent or the Lenders or the Company may take or refrain from taking with
respect to the Credit Obligations, including any amendments thereto or
modifications thereof or waivers with respect thereto, shall affect the
provisions of this Agreement or the obligations of the Guarantor hereunder.
None of the Lenders' or the
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Agent's rights shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of any Obligor, or by any noncompliance by
the Company with the terms, provisions and covenants of this Agreement,
regardless of any knowledge thereof which the Agent or the Lenders may have or
otherwise be charged with.
9.4. Lenders' Power to Waive, etc. Each Guarantor grants to the
Lenders full power in their discretion, without notice to or consent of such
Guarantor, such notice and consent being expressly waived to the fullest
extent permitted by applicable law, and without in any way affecting the
liability of the Guarantor under its guarantee hereunder:
(a) To waive compliance with, and any Default under, and
to consent to any amendment to or modification or termination of any
terms or provisions of, or to give any waiver in respect of, this
Agreement, any other Credit Document, the Credit Security, the Credit
Obligations or any guarantee thereof (each as from time to time in
effect);
(b) To grant any extensions of the Credit Obligations (for
any duration), and any other indulgence with respect thereto, and to
effect any total or partial release (by operation of law or
otherwise), discharge, compromise or settlement with respect to the
obligations of the Obligors or any other Person in respect of the
Credit Obligations, whether or not rights against the Guarantor under
this Agreement are reserved in connection therewith;
(c) To take security in any form for the Credit
Obligations, and to consent to the addition to or the substitution,
exchange, release or other disposition of, or to deal in any other
manner with, any part of any property contained in the Credit Security
whether or not the property, if any, received upon the exercise of
such power shall be of a character or value the same as or different
from the character or value of any property disposed of, and to
obtain, modify or release any present or future guarantees of the
Credit Obligations and to proceed against any of the Credit Security
or such guarantees in any order;
(d) To collect or liquidate or realize upon any of the
Credit Obligations or the Credit Security in any manner or to refrain
from collecting or liquidating or realizing upon any of the Credit
Obligations or the Credit Security; and
(e) To extend credit under this Agreement, any other
Credit Document or otherwise in such amount as the Lenders may
determine, including increasing the amount of credit and the interest
rate and fees with respect thereto, even though the condition of the
Obligors (financial or otherwise on an individual or Consolidated
basis) may have deteriorated since the date hereof.
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9.5. Information Regarding the Borrowers, etc. Each Guarantor has
made such investigation as it deems desirable of the risks undertaken by it in
entering into this Agreement and is fully satisfied that it understands all
such risks. Each Guarantor waives any obligation which may now or hereafter
exist on the part of the Agent or the Lenders to inform it of the risks being
undertaken by entering into this Agreement or of any changes in such risks and,
from and after the date hereof, each Guarantor undertakes to keep itself
informed of such risks and any changes therein. Each Guarantor expressly
waives any duty which may now or hereafter exist on the part of the Agent or
the Lenders to disclose to the Guarantor any matter related to the business,
operations, character, collateral, credit, condition (financial or otherwise),
income or prospects of the Borrowers or their respective Affiliates or their
properties or management, whether now or hereafter known by the Agent or the
Lenders. Each Guarantor represents, warrants and agrees that it assumes sole
responsibility for obtaining from the Borrowers all information concerning
this Agreement and all other Credit Documents and all other information as to
the Borrowers and their respective Affiliates or their properties or management
as such Guarantor deems necessary or desirable.
9.6. Certain Guarantor Representations. Each Guarantor represents
that:
(a) it is in its best interest and in pursuit of the
purposes for which it was organized as an integral part of the
business conducted and proposed to be conducted by the Borrowers and
their respective Subsidiaries, and reasonably necessary and convenient
in connection with the conduct of the business conducted and proposed
to be conducted by them, to induce the Lenders to enter into this
Agreement and to extend credit to the Borrowers by making the
Guarantees contemplated by this Section 9,
(b) the credit available hereunder will directly or
indirectly inure to its benefit,
(c) by virtue of the foregoing it is receiving at least
reasonably equivalent value from the Lenders for its Guarantee,
(d) it will not be rendered insolvent as a result of
entering into this Agreement,
(e) after giving effect to the transactions contemplated
by this Agreement, it will have assets having a fair saleable value in
excess of the amount required to pay its probable liability on its
existing debts as they become absolute and matured,
(f) it has, and will have, access to adequate capital for
the conduct of its business,
(g) it has the ability to pay its debts from time to time
incurred in connection with its business as such debts mature, and
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(h) it has been advised by the Agent that the Lenders are
unwilling to enter into this Agreement unless the Guarantees
contemplated by this Section 9 are given by it.
9.7. Subrogation. Each Guarantor agrees that, until the Credit
Obligations are paid in full, it will not exercise any right of reimbursement,
subrogation, contribution, offset or other claims against the other Obligors
arising by contract or operation of law in connection with any payment made or
required to be made by such Guarantor under this Agreement. After the payment
in full of the Credit Obligations, each Guarantor shall be entitled to
exercise against the Borrowers and the other Obligors all such rights of
reimbursement, subrogation, contribution and offset, and all such other claims,
to the fullest extent permitted by law.
9.8. Subordination. Each Guarantor covenants and agrees that, after
the occurrence of an Event of Default, all Indebtedness, claims and liabilities
then or thereafter owing by the Borrowers or any other Obligor to such
Guarantor whether arising hereunder or otherwise are subordinated to the prior
payment in full of the Credit Obligations and are so subordinated as a claim
against such Obligor or any of its assets, whether such claim be in the
ordinary course of business or in the event of voluntary or involuntary
liquidation, dissolution, insolvency or bankruptcy, so that no payment with
respect to any such Indebtedness, claim or liability will be made or received
while any Event of Default exists.
9.9. Future Subsidiaries; Further Assurances. On Each Borrower will
from time to time cause (a) any present Wholly Owned Subsidiary that is not a
Guarantor within 30 days after notice from the Agent or (b) any future Wholly
Owned Subsidiary within 30 days after any such Person becomes a Wholly Owned
Subsidiary, to join this Agreement as a Borrower and a Guarantor pursuant to a
joinder agreement in the form attached hereto as Exhibit 5.2.2. Each Guarantor
will, promptly upon the request of the Agent from time to time, execute,
acknowledge and deliver, and file and record, all such instruments, and take
all such action, as the Agent deems necessary or advisable to carry out the
intent and purposes of this Section 9.
10. Security.
10.1. Credit Security. As security for the payment and performance
of the Credit Obligations, each Obligor mortgages, pledges and collaterally
grants and assigns to the Agent for the benefit of the Lenders and the holders
from time to time of any Credit Obligation, and creates a security interest in
favor of the Agent for the benefit of the Lenders and such holders in, all of
such Obligor's right, title and interest in and to (but none of its obligations
or liabilities with respect to) the items and types of present and future
property described in Sections 10.1.1 through 10.1.14 (subject, however, to
Section 10.1.15), whether now owned or hereafter acquired, all of which shall
be included in the term "Credit Security":
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10.1.1. Tangible Personal Property. All goods, machinery,
equipment, inventory and all other tangible personal property of any
nature whatsoever, wherever located, including raw materials, work in
process, finished parts and products, supplies, spare parts,
replacement parts, merchandise for resale, computers, tapes, disks and
computer equipment.
10.1.2. Rights to Payment of Money. All rights to receive
the payment of money, including accounts (as defined in the UCC) and
receivables, rights to receive the payment of money under contracts,
franchises, licenses, permits, subscriptions or other agreements
(whether or not earned by performance), and rights to receive payments
from any other source (all such rights, other than Financing Debt,
being referred to herein as "Accounts").
10.1.3. Intangibles. All of the following (to the extent
not included in Section 10.1.2): (a) contracts, franchises, licenses,
permits, subscriptions and other agreements and all rights thereunder;
(b) rights granted by others which permit the Obligor to sell or
market items of personal property; (c) United States and foreign
common law and statutory copyrights and rights in literary property
and rights and licenses thereunder; (d) trade names, United States and
foreign trademarks, service marks, any registrations thereof and any
related good will; (e) United States and foreign patents and patent
applications; (f) computer software, designs, models, know-how, trade
secrets, rights in proprietary information, formulae, customer lists,
backlog, orders, subscriptions, royalties, catalogues, sales material,
documents, good will, inventions and processes; (g) judgments, causes
in action and claims, whether or not inchoate, and (h) all other
general intangibles (as defined in the UCC) and intangible property
and all rights thereunder.
10.1.4. Pledged Stock. (a) All shares of capital stock or
other evidence of beneficial interest in any corporation, business
trust or limited liability company, (b) all limited partnership
interests in any limited partnership, (c) all general partnership
interests in any general partnership, (d) all joint venture interests
in any joint venture and (e) all options, warrants and similar rights
to acquire such capital stock or such interests. All such capital
stock, interests, options, warrants and other rights are collectively
referred to as the "Pledged Stock".
10.1.5. Pledged Rights. All rights to receive profits or
surplus of, or other Distributions (including income, return of
capital and liquidating distributions) from, any partnership or joint
venture, including any distributions by any such Person to partners or
joint venturers. All such rights are collectively referred to as the
"Pledged Rights".
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10.1.6. Pledged Indebtedness. All Financing Debt from
time to time owing to such Obligor from any Person (all such Financing
Debt being referred to as the "Pledged Indebtedness").
10.1.7. Chattel Paper, Instruments and Documents. All
chattel paper (as defined in the UCC), non-negotiable instruments,
negotiable instruments (as defined in the UCC) and documents (as
defined in the UCC).
10.1.8. Leases. All leases of personal property, whether
the Obligor is the lessor or the lessee thereunder.
10.1.9. Deposit Accounts. All general or special deposit
accounts, including any demand, time, savings, passbook or similar
account maintained by the Obligor with any bank, trust company,
savings and loan association, credit union or similar organization,
and all money, cash and cash equivalents of the Obligor, whether or
not deposited in any such deposit account.
10.1.10. Collateral. All collateral granted by third
party obligors to, or held by, the Obligor with respect to the
Accounts, Pledged Securities, chattel paper, instruments, leases and
other items of Credit Security.
10.1.11. Books and Records. All books and records,
including books of account and ledgers of every kind and nature, all
electronically recorded data (including all computer programs, disks,
tapes, electronic data processing media and software used in
connection with maintaining the Obligor's books and records), all
files and correspondence and all receptacles and containers for the
foregoing.
10.1.12. Insurance. All insurance policies which insure
against any loss or damage to any other Credit Security and each of
the key executive life insurance policies set forth in Section 6.3.4.
10.1.13. All Other Property. All other property, assets
and items of value of every kind and nature, tangible, or intangible,
absolute or contingent, legal or equitable, including the rights of
any Obligors under the Material Agreements set forth in Exhibit 7.2.2.
10.1.14. Proceeds and Products. All proceeds,
including insurance proceeds, and products of the items of Credit
Security described or referred to in Sections 10.1.1 through 10.1.13
and, to the extent not included in the foregoing, all Distributions
with respect to the Pledged Securities.
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10.1.15. Excluded Property. Notwithstanding Sections
10.1.1 through 10.1.14, the payment and performance of the Credit
Obligations shall not be secured by:
(a) any rights arising under, and any property, tangible
or intangible, acquired under, any agreement which validly prohibits
the creation by such Obligor of a security interest in such rights or
property;
(b) any rights or property to the extent that any valid
and enforceable law or regulation applicable to such rights or
property prohibits the creation of a security interest therein;
(c) more than 66% of the outstanding stock or other equity
in any foreign Subsidiary; or
(d) the items described in Section 10.2 (but only in the
event and to the extent the Agent has not specified that such items be
included in the Credit Security pursuant thereto).
In addition, in the event an Obligor disposes of assets to third
parties in a transaction permitted by Section 6.11, such assets, but not the
proceeds or products thereof, shall automatically be released from the Lien of
the Credit Security.
10.2. Additional Credit Security. As additional Credit Security,
each Obligor covenants that it will mortgage, pledge and collaterally grant and
assign to the Agent for the benefit of the Lenders and the holders from time
to time of any Credit Obligation, and will create a security interest in favor
of the Agent for the benefit of the Lenders and such holders in, all of its
right, title and interest in and to (but none of its obligations with respect
to) such of the following present or future items as the Agent may from time
to time specify by notice to the Borrowers, whether now owned or hereafter
acquired, and the proceeds and products thereof, except to the extent
consisting of rights or property of the types referred to in Section 10.1.15(a)
through (d), subject only to Liens permitted by Section 10.3.4, all of which
shall thereupon be included in the term "Credit Security":
10.2.1. Real Property. All real property and immovable
property and fixtures, leasehold interests and easements wherever
located, together with any and all estates and interests of the
Obligor therein, including lands, buildings, stores, manufacturing
facilities and other structures erected on such property, fixed plant,
fixed equipment and all permits, rights, licenses, benefits and other
interests of any kind or nature whatsoever in respect of such real and
immovable property.
10.2.2. Motor Vehicles and Aircraft. All motor vehicles
and aircraft.
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10.3. Representations, Warranties and Covenants with Respect to
Credit Security. Each Obligor represents, warrants and covenants that:
10.3.1. Pledged Stock. All shares of capital stock,
limited partnership interests and similar securities included in the
Pledged Stock are and shall be at all times duly authorized, validly
issued, fully paid and (in the case of capital stock and limited
partnership interests) nonassessable. Each Obligor will deliver to
the Agent certificates representing the Pledged Stock, registered, if
the Agent so requests, in the name of the Agent or its nominee, as
pledgee, or accompanied by a stock transfer power executed in blank
and, if the Agent so requests, with the signature guaranteed, all in
form and manner satisfactory to the Agent. Pledged Stock that is not
evidenced by a certificate will be registered in the Agent's name as
pledgee on the issuer's records, all in form and substance
satisfactory to the Agent. The Agent may at any time following and
during the continuation of the occurrence of an Event of Default
transfer into its name or the name of its nominee, as pledgee, any
Pledged Securities. In the event the Pledged Stock includes any
Margin Stock, the Obligors will furnish to the Lenders Federal Reserve
Form U-1 and take such other action as the Agent may request to ensure
compliance with applicable laws.
10.3.2. Accounts and Pledged Indebtedness. All Accounts
and Pledged Indebtedness owed by any Affiliate of the Obligors shall
be on open account and shall not be evidenced by any note or other
instrument; provided, however, that all Pledged Indebtedness owed by
any Affiliate of any Obligor shall, if the Agent requests, be
evidenced by a promissory note, which note shall be delivered to the
Agent after having been endorsed in blank. Each Obligor will,
immediately upon the receipt thereof, deliver to the Agent any
promissory note or similar instrument representing any Pledged
Indebtedness, after having endorsed such promissory note or instrument
in blank.
10.3.3. No Liens or Restrictions on Transfer or Change of
Control. All Credit Security shall be free and clear of any Liens and
restrictions on the transfer thereof, including contractual provisions
which prohibit the assignment of rights under contracts, except for
Liens permitted by Section 6.8 and except for restrictions on transfer
under the Securities Act and under applicable state securities laws.
Without limiting the generality of the foregoing, each Obligor will
exclude from contracts to which it becomes a party after the date
hereof provisions that would prevent such Obligor from creating a
security interest in such contract or any property acquired thereunder
as contemplated hereby. None of the Pledged Stock is subject to any
option to purchase or similar rights of any Person. Except with the
written consent of the Agent, no Obligor is, and none of them will be,
party to or bound by any agreement, instrument, deed or lease that
restricts the change of control or ownership, or the creation of a
security interest in the ownership, of the Company or any of its
Subsidiaries.
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10.3.4. Location of Credit Security. Each Obligor shall at
all times keep its records concerning the Accounts at its chief
executive office and principal place of business, which office and
place of business shall be set forth in Exhibit 7.1, or, so long as
such Obligor shall have taken all steps reasonably necessary to
perfect the Lenders' security interest in the Credit Security with
respect to such new address, at such other address as such Obligor may
specify by notice actually received by the Agent not less than 10
Banking Days prior to such change of address. No Obligor shall at any
time keep tangible personal property of the type referred to in
Section 10.1.1 in any jurisdiction other than the jurisdictions
specified in Exhibit 7.1, or, so long as such Obligor shall have taken
all steps reasonably necessary to perfect the Lenders' security
interest in the Credit Security with respect to such other
jurisdiction, other jurisdictions as such Obligor may specify by
notice actually received by the Agent not less than 10 days prior to
moving such tangible personal property into such other jurisdiction.
10.3.5. Trade Names. No Obligor will adopt or do
business under any name other than its name or names designated in
Exhibit 7.1 or any other name specified by notice actually received by
the Agent not less than 10 days prior to the conduct of business under
such additional name. Since its incorporation, no Obligor has changed
its corporate name or adopted or conducted business under any trade
name other than a name specified on Exhibit 7.1.
10.3.6. Insurance. Each insurance policy included in, or
insuring against loss or damage to, the Credit Security shall name the
Agent as additional insured party or as loss payee. No such insurance
policy shall be cancelable or subject to termination or reduction in
amount or scope of coverage until after at least 30 days' prior
written notice from the insurer to the Agent. At least 10 days prior
to the expiration of any such insurance policy for any reason, each
Obligor shall furnish the Agent with a renewal or replacement policy
and evidence of payment of the premiums therefor when due. Each
Obligor grants to the Agent full power and authority as its
attorney-in-fact, effective upon notice to such Obligor after the
occurrence of an Event of Default to obtain, cancel, transfer, adjust
and settle any such insurance policy and to endorse any drafts
thereon. Any amounts that the Agent receives under any such policy
(including return of unearned premiums) insuring against loss or
damage to the Credit Security prior to the occurrence of an Event of
Default shall be delivered to the Obligors for the replacement,
restoration and maintenance of the Credit Security. Any such amounts
that the Agent receives after the occurrence of an Event of Default
shall, at the Agent's option, be applied to payment of the Credit
Obligations or to the replacement, restoration and maintenance of the
Credit Security. If any Obligor fails to provide insurance as
required by this Agreement, the Agent may, at its option, purchase
such insurance, and such Obligor will on demand pay to the Agent the
amount of any payments made by the Agent or the Lenders for such
purpose, together with interest on
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the amounts so disbursed from five Banking Days after the date
demanded until payment in full thereof at the Overdue Reimbursement
Rate.
10.3.7. Modifications to Credit Security. Except with the
prior written consent of the Required Lenders, no Obligor shall amend
or modify, or waive any of its rights under or with respect to, any
material Accounts, general intangibles, Pledged Securities or leases
if the effect of such amendment, modification or waiver would be to
reduce the amount of any such items or to extend the time of payment
thereof, to waive any default by any other party thereto, or to waive
or impair any remedies of the Obligors or the Lenders under or with
respect to any such Accounts, general intangibles, Pledged Securities
or leases, in each case other than consistent with past practice in
the ordinary course of business and on an arm's-length basis. Each
Obligor will promptly give the Agent written notice of any request by
any Person for any material credit or adjustment with respect to any
Account, general intangible, Pledged Securities or leases.
10.3.8. Delivery of Documents. At the Agent's request,
each Obligor shall deliver to the Agent, promptly upon such Obligor's
receipt thereof, copies of any agreements, instruments, documents or
invoices comprising or relating to the Credit Security. Pending such
request, such Obligor shall keep such items at its chief executive
office and principal place of business (as specified pursuant to
Section 10.3.5).
10.3.9. Perfection of Credit Security. Upon the Agent's
request from time to time, the Obligors will execute and deliver, and
file and record in the proper filing and recording places, all such
instruments, including financing statements, collateral assignments of
copyrights, trademarks and patents, mortgages or deeds of trust, and
notations on certificates of title and will take all such other
action, as the Agent deems advisable for confirming to it the Credit
Security or to carry out any other purposes of this Agreement or any
other Credit Document.
10.4. Administration of Credit Security. The Credit Security shall
be administered as follows, and if an Event of Default shall have occurred,
Section 10.5 shall also apply.
10.4.1. Use of Credit Security. Until the Agent provides
written notice to the contrary, each Obligor may use, commingle and
dispose of any part of the Credit Security in the ordinary course of
its business, all subject to Section 6.11.
10.4.2. Deposits; Accounts. Unless the Agent shall
otherwise consent in writing, which consent shall not be unreasonably
withheld, each Obligor shall keep all its bank and deposit accounts
only with the Agent, other Lenders or the financial institutions
approved by the Required Lenders. To the extent specified by prior
written notice from the Agent, whether prior to or after the
occurrence of an Event of Default,
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all sums collected or received and all property recovered or
possessed by any Obligor in connection with any Credit Security shall
be received and held by such Obligor in trust for and on the Lenders'
behalf, shall be segregated from the assets and funds of such
Obligor, and shall be delivered to the Agent for the benefit of the
Lenders. In addition, the Borrowers shall direct that all Accounts
payable by Medicare or Medicaid and all Accounts payable in an amount
greater than $50 be paid directly into a locked-box account with
NationsBank, N.A. (South) or such other locked-box account as
approved by the Required Lenders.
10.4.3. Pledged Securities.
(a) Distributions. (i) Until an Event of Default
shall occur, and thereafter once such Event of Default has
ceased to exist, the respective Obligors shall be entitled, to
the extent permitted by the Credit Documents, to receive all
Distributions on or with respect to the Pledged Securities
(other than Distributions constituting additional Pledged
Securities). All Distributions constituting additional Pledged
Securities will be retained by the Agent (or if received by any
Obligor shall be held by such Person in trust and shall be
immediately delivered by such Person to the Agent in the
original form received, endorsed in blank) and held by the
Agent as part of the Credit Security.
(ii) If an Event of Default shall have occurred and be
continuing, all Distributions on or with respect to the Pledged
Securities shall be retained by the Agent (or if received by
any Obligor shall be held by such Person in trust and shall be
immediately delivered by it to the Agent in the original form
received, endorsed in blank) and held by the Agent as part of
the Credit Security or applied by the Agent to the payment of
the Credit Obligations in accordance with Section 10.5.6.
(b) Voting. (i) Until an Event of Default shall
occur, the respective Obligors shall be entitled to vote or
consent with respect to the Pledged Securities in any manner
not inconsistent with the terms of any Credit Document, and the
Agent will, if so requested, execute appropriate revocable
proxies therefor.
(ii) If an Event of Default shall have occurred, if
and to the extent that the Agent shall so notify in writing the
Obligor pledging the Pledged Securities in question, only the
Agent shall be entitled to vote or consent or take any other
action with respect to the Pledged Securities (and any Obligor
will, if so requested, execute or cause to be executed
appropriate proxies therefor).
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10.5. Right to Realize upon Credit Security. Except to the extent
prohibited by applicable law that cannot be waived, this Section 10.5 shall
govern the Lenders' right to realize upon the Credit Security if any Event of
Default shall have occurred and be continuing. The provisions of this Section
10.5 are in addition to any rights and remedies available at law or in equity
and in addition to the provisions of any other Credit Document. In the case of
a conflict between this Section 10.5 and any other Credit Document, this
Section 10.5 shall govern. If any Event of Default shall have occurred and be
continuing:
10.5.1. Assembly of Credit Security; Receiver. Each of
the Obligors shall, upon the Agent's request, assemble the Credit
Security and otherwise make it available to the Agent. The Agent may
have a receiver appointed for all or any portion of the Obligor's
assets or business which constitutes the Credit Security in order to
manage, protect, preserve, sell and otherwise dispose of all or any
portion of the Credit Security in accordance with the terms of the
Credit Documents, to continue the operations of the Obligors and to
collect all revenues and profits therefrom to be applied to the
payment of the Credit Obligations, including the compensation and
expenses of such receiver.
10.5.2. General Authority. To the extent specified in
written notice from the Agent to the Obligor in question, each Obligor
grants the Agent full and exclusive power and authority, subject to
the other terms hereof and applicable law, to take any of the
following actions (for the sole benefit of the Agent on behalf of the
Lenders and the holders from time to time of any Credit Obligations,
but at the Obligor's expense):
(a) To ask for, demand, take, collect, ▇▇▇ for and receive
all payments in respect of any Accounts, general intangibles, Pledged
Securities or leases which the Obligor could otherwise ask for,
demand, take, collect, ▇▇▇ for and receive for its own use.
(b) To extend the time of payment of any Accounts, general
intangibles, Pledged Securities or leases and to make any allowance or
other adjustment with respect thereto.
(c) To settle, compromise, prosecute or defend any action
or proceeding with respect to any Accounts, general intangibles,
Pledged Securities or leases and to enforce all rights and remedies
thereunder which the Obligor could otherwise enforce.
(d) To enforce the payment of any Accounts, general
intangibles, Pledged Securities or leases, either in the name of the
Obligor or in its own name, and to endorse the name of the Obligor on
all checks, drafts, money orders and other instruments tendered to or
received in payment of any Credit Security.
(e) To notify the third party payor with respect to any
Accounts, general intangibles, Pledged Securities or leases of the
existence of the security interest created
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hereby and to cause all payments in respect thereof thereafter to be
made directly to the Agent; provided, however, that whether or not
the Agent shall have so notified such payor, the Obligors will
at their expense render all reasonable assistance to the Agent in
collecting such items and in enforcing claims thereon.
(f) To sell, transfer, assign or otherwise deal in or with
any Credit Security or the proceeds thereof, as fully as any Obligor
otherwise could do.
10.5.3. Marshaling, etc. Neither the Agent nor the
Lenders shall be required to make any demand upon, or pursue or
exhaust any of their rights or remedies against, any Obligor or any
other guarantor, pledgor or any other Person with respect to the
payment of the Credit Obligations or to pursue or exhaust any of their
rights or remedies with respect to any collateral therefor or any
direct or indirect guarantee thereof. Neither the Agent nor the
Lenders shall be required to marshal the Credit Security or any
guarantee of the Credit Obligations or to resort to the Credit
Security or any such guarantee in any particular order, and all of its
and their rights hereunder or under any other Credit Document shall be
cumulative. To the extent it may lawfully do so, each of the Obligors
absolutely and irrevocably waives and relinquishes the benefit and
advantage of, and covenants not to assert against the Agent or the
Lenders, any valuation, stay, appraisement, extension, redemption or
similar laws now or hereafter existing which, but for this provision,
might be applicable to the sale of any Credit Security made under the
judgment, order or decree of any court, or privately under the power
of sale conferred by this Agreement, or otherwise. Without limiting
the generality of the foregoing, each of the Obligors (a) agrees that
it will not invoke or utilize any law which might prevent, cause a
delay in or otherwise impede the enforcement of the rights of the
Agent or any Lender in the Credit Security, (b) waives all such laws,
and (c) agrees that it will not invoke or raise as a defense to any
enforcement by the Agent or any Lender of any rights and remedies
relating to the Credit Security or the Credit Obligations any legal or
contractual requirement with which the Agent or any Lender may have in
good faith failed to comply. In addition, each of the Obligors waives
any right to prior notice (except to the extent expressly required by
this Agreement) or judicial hearing in connection with foreclosure on
or disposition of any Credit Security, including any such right which
such Obligor would otherwise have under the Constitution of the United
States of America, any state or territory thereof or any other
jurisdiction.
10.5.4. Sales of Credit Security. All or any part of the
Credit Security may be sold for cash or other value in any number of
lots at public or private sale, without demand, advertisement or
notice; provided, however, that unless the Credit Security to be sold
threatens to decline speedily in value or is of a type customarily
sold on a recognized market, the Agent shall give the Obligor granting
the security interest in such Credit Security 10 days' prior written
notice of the time and place of any public sale, or the time after
which a private sale may be made, which notice each of the
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Obligors and the Lenders hereby agrees to be reasonable. At
any sale or sales of Credit Security, any Lender or any of its
respective officers acting on its behalf, or such Lender's assigns, may
bid for and purchase all or any part of the property and rights so
sold, may use all or any portion of the Credit Obligations owed to such
Lender as payment for the property or rights so purchased, and upon
compliance with the terms of such sale may hold and dispose of such
property and rights without further accountability to the respective
Obligor, except for the proceeds of such sale or sales pursuant to
Section 10.5.6. The Obligors acknowledge that any such sale will be
made by the Agent on an "as is" basis with disclaimers of all
warranties, whether express or implied. The respective Obligors will
execute and deliver or cause to be executed and delivered such
instruments, documents, assignments, waivers, certificates and
affidavits, will supply or cause to be supplied such further
information and will take such further action as the Agent shall
request in connection with any such sale.
10.5.5. Sale without Registration. If, at any time when the
Agent shall determine to exercise its rights hereunder to sell all or
part of the securities included in the Credit Security, the securities
in question shall not be effectively registered under the Securities
Act (or other applicable law), the Agent may, in its sole discretion,
sell such securities by private or other sale not requiring such
registration in such manner and in such circumstances as the Agent may
deem necessary or advisable in order that such sale may be effected in
accordance with applicable securities laws without such registration
and the related delays, uncertainty and expense. Without limiting the
generality of the foregoing, in any event the Agent may, in its sole
discretion, (a) approach and negotiate with a single purchaser or one
or more possible purchasers to effect such sale, (b) restrict such sale
to one or more purchasers each of whom will represent and agree that
such purchaser is purchasing for its own account, for investment and
not with a view to the distribution or sale of such securities and (c)
cause to be placed on certificates representing the securities in
question a legend to the effect that such securities have not been
registered under the Securities Act (or other applicable law) and may
not be disposed of in violation of the provisions thereof. Each of the
Obligors agrees that such manner of disposition is commercially
reasonable, that it will upon the Agent's request give any such
purchaser access to such information regarding the issuer of the
securities in question as the Agent may reasonably request and that the
Agent and the Lenders shall not incur any responsibility for selling
all or part of the securities included in the Credit Security at any
private or other sale not requiring such registration, notwithstanding
the possibility that a substantially higher price might be realized if
the sale were deferred until after registration under the Securities
Act (or other applicable law) or until made in compliance with certain
other rules or exemptions from the registration provisions under the
Securities Act (or other applicable law). Each of the Obligors
acknowledges that no adequate remedy at law exists for breach by it of
this Section 10.5.5 and that such breach would not be adequately
compensable in damages and therefore agrees that this Section 10.5.5
may be specifically enforced.
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10.5.6. Application of Proceeds. The proceeds of all sales
and collections in respect of any Credit Security or other assets of
any Obligor, all funds collected from the Obligors and any cash
contained in the Credit Security, the application of which is not
otherwise specifically provided for herein, shall be applied as
follows:
First, to the payment of the costs and expenses of such
sales and collections, the reasonable expenses of the Agent and the
reasonable fees and expenses of its special counsel;
Second, any surplus then remaining to the payment of the
Credit Obligations in such order and manner as the Agent may in its
sole discretion determine; provided, however, that any such payment of
Credit Obligations owed to all Lenders shall be pro rata in accordance
with the respective Percentage Interests of the Lenders;
Third, any surplus then remaining shall be paid to the
Obligors, subject, however, to the rights of the holder of any then
existing Lien of which the Agent has actual notice.
10.6. Custody of Credit Security . Except as provided by applicable law
that cannot be waived, the Agent will have no duty as to the custody and
protection of the Credit Security, the collection of any part thereof or of any
income thereon or the preservation or exercise of any rights pertaining thereto,
including rights against prior parties, except for the use of reasonable care in
the custody and physical preservation of any Credit Security in its possession.
The Lenders will not be liable or responsible for any loss or damage to any
Credit Security, or for any diminution in the value thereof, by reason of the
act or omission of any agent selected by the Agent acting in good faith.
11. Expenses; Indemnity.
11.1. Expenses. Whether or not the transactions contemplated
hereby shall be consummated, the Company will pay:
(a) all reasonable expenses of the Agent (including the
out-of-pocket expenses related to forming the group of Lenders and
reasonable fees and disbursements of the counsel to the Agent) in
connection with the preparation and duplication of this Agreement, each
other Credit Document, examinations by, and reports of, the Agent's
commercial financial examiners, the transactions contemplated hereby
and thereby and amendments, waivers, consents and other operations
hereunder and thereunder;
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(b) all recording and filing fees and transfer and documentary
stamp and similar taxes at any time payable in respect of this
Agreement, any other Credit Document, any Credit Security or the
incurrence of the Credit Obligations; and
(c) to the extent not prohibited by applicable law that cannot
be waived, after the occurrence and during the continuance of any
Default or Event of Default, all other reasonable expenses incurred by
the Lenders or the holder of any Credit Obligation in connection with
the enforcement of any rights hereunder or under any other Credit
Document, including costs of collection and reasonable attorneys' fees
(including a reasonable allowance for the hourly cost of attorneys
employed by the Lenders on a salaried basis) and expenses.
11.2. General Indemnity. The Borrowers shall indemnify the Lenders and
the Agent and hold them harmless from any liability, loss or damage resulting
from the violation by the Company of Section 2.3. In addition, the Borrowers
shall indemnify each Lender, the Agent, each of the Lenders' or the Agent's
directors, officers and employees, and each Person, if any, who controls any
Lender or the Agent (each Lender, the Agent and each of such directors,
officers, employees and control Persons is referred to as an "Indemnified
Party") and hold each of them harmless from and against any and all claims,
damages, liabilities and reasonable expenses (including reasonable fees and
disbursements of counsel with whom any Indemnified Party may consult in
connection therewith and all reasonable expenses of litigation or preparation
therefor) which any Indemnified Party may incur or which may be asserted against
any Indemnified Party in connection with (a) the Indemnified Party's compliance
with or contest of any subpoena or other process issued against it in any
proceeding involving any of the Obligors or their Affiliates, (b) any litigation
or investigation involving the Obligors or their Affiliates, or any officer,
director or employee thereof, (c) the existence or exercise of any security
rights with respect to the Credit Security in accordance with the Credit
Documents, or (d) this Agreement, any other Credit Document or any transaction
contemplated hereby or thereby; provided, however, that the foregoing indemnity
shall not apply to litigation commenced by any Borrower or Obligor against the
Lenders or the Agent which seeks enforcement of any of the rights of such
Borrower or Obligor hereunder or under any other Credit Document and is
determined adversely to the Lenders or the Agent in a final nonappealable
judgment or to the extent such claims, damages, liabilities and expenses result
from a Lender's or the Agent's gross negligence or willful misconduct.
11.3. Indemnity With Respect to Letters of Credit. The Borrowers shall
indemnify each Letter of Credit Issuer and its correspondents and hold each of
them harmless from and against any and all claims, losses, liabilities, damages
and reasonable expenses (including reasonable attorneys' fees) arising from or
in connection with any Letter of Credit, including any such claim, loss,
liability, damage or expense arising out of any transfer, sale, delivery,
surrender or endorsement of any invoice, ▇▇▇▇ of lading, warehouse receipt or
other document at any time held by the Agent, any other Letter of Credit Issuer
or held for their respective accounts by any of their correspondents, in
connection with any Letter of Credit, except to the
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extent such claims, losses, liabilities, damages and expenses result from gross
negligence or willful misconduct on the part of the Agent or any other Letter of
Credit Issuer.
12. Operations; Agent.
12.1. Interests in Credits. The percentage interest of each Lender in
the Revolving Loan and Letters of Credit, and the related Commitments, shall be
computed based on the maximum principal amount for each Lender as follows:
Lender Maximum Principal Amount Percentage Interest
The First National Bank of Boston $25,000,000 62.5%
NationsBank, N.A. (South) $15,000,000 37.5%
=========== ====
Total $40,000,000 100%
The foregoing percentage interests, as from time to time in effect and reflected
in the Register, are referred to as the "Percentage Interests" with respect to
all or any portion of the Revolving Loan and Letters of Credit, and the related
Commitments.
12.2. Agent's Authority to Act, etc. Each of the Lenders appoints and
authorizes Bank of Boston to act for the Lenders as the Lenders' Agent in
connection with the transactions contemplated by this Agreement and the other
Credit Documents on the terms set forth herein. In acting hereunder, the Agent
is acting for the account of Bank of Boston to the extent of its Percentage
Interest and for the account of each other Lender to the extent of the Lenders'
respective Percentage Interests, and all action in connection with the
enforcement of, or the exercise of any remedies (other than the Lenders' rights
of set-off as provided in Section 8.2.4 or in any Credit Document) in respect of
the Credit Obligations and Credit Documents shall be taken by the Agent.
12.3. Borrowers to Pay Agent, etc. Each Obligor shall be fully
protected in making all payments in respect of the Credit Obligations to the
Agent, in relying upon consents, modifications and amendments executed by the
Agent purportedly on the Lenders' behalf, and in dealing with the Agent as
herein provided. The Agent may charge the accounts of the Borrowers, on the
dates when the amounts thereof become due and payable, with the amounts of the
principal of and interest on the Revolving Loan, any amounts paid by the Letter
of Credit Issuers to third parties under Letters of Credit or drafts presented
thereunder, commitment fees, Letter of Credit fees and all other fees and
amounts owing under any Credit Document.
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12.4. Lender Operations for Advances, Letters of Credit, etc .
12.4.1. Advances. On each Closing Date, each Lender shall
advance to the Agent in immediately available funds such Lender's
Percentage Interest in the portion of the Revolving Loan advanced on
such Closing Date prior to 12:00 noon (Boston time). If such funds are
not received at such time, but all applicable conditions set forth in
Section 5 have been satisfied, each Lender authorizes and requests the
Agent to advance for the Lender's account, pursuant to the terms
hereof, the Lender's respective Percentage Interest in such portion of
the Revolving Loan and agrees to reimburse the Agent in immediately
available funds for the amount thereof prior to 3:00 p.m. (Boston time)
on the day any portion of the Revolving Loan is advanced hereunder;
provided, however, that the Agent is not authorized to make any such
advance for the account of any Lender who has previously notified the
Agent in writing that such Lender will not be performing its
obligations to make further advances hereunder; and provided, further,
that the Agent shall be under no obligation to make any such advance.
12.4.2. Letters of Credit. Each of the Lenders authorizes
and requests each Letter of Credit Issuer to issue the Letters of
Credit provided for in Section 2.2 and to grant each Lender a
participation in each of such Letters of Credit in an amount equal to
its Percentage Interest in the amount of each such Letter of Credit.
Promptly upon the request of the Letter of Credit Issuer, each Lender
shall reimburse the Letter of Credit Issuer in immediately available
funds for such Lender's Percentage Interest in the amount of all
obligations to third parties incurred by the Letter of Credit Issuer in
respect of each Letter of Credit and each draft accepted under a Letter
of Credit to the extent not reimbursed by the Borrowers. The Letter of
Credit Issuer will notify each Lender of the issuance of any Letter of
Credit, the amount and date of payment of any draft drawn or accepted
under a Letter of Credit and whether in connection with the payment of
any such draft the amount thereof was added to the Revolving Loan or
was reimbursed by the Borrowers.
12.4.3. Agent to Allocate Payments, etc. All payments of
principal and interest in respect of the extensions of credit made
pursuant to this Agreement, reimbursement of amounts paid by any Letter
of Credit Issuer to third parties under Letters of Credit or drafts
presented thereunder, commitment fees, Letter of Credit fees and other
fees under this Agreement shall, as a matter of convenience, be made by
the Borrowers and the Guarantors to the Agent in immediately available
funds. The share of each Lender shall be credited to such Lender by the
Agent in immediately available funds in such manner that the principal
amount of the Credit Obligations to be paid shall be paid
proportionately in accordance with the Lenders' respective Percentage
Interests in such Credit Obligations, except as otherwise provided in
this Agreement. Under no circumstances shall any Lender be required to
produce or present its Revolving Notes as evidence of its interests in
the Credit Obligations in any action or proceeding relating to the
Credit Obligations.
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12.4.4. Delinquent Lenders; Nonperforming Lenders. In the
event that any Lender fails to reimburse the Agent pursuant to Section
12.4.1 for the Percentage Interest of such lender (a "Delinquent
Lender") in any credit advanced by the Agent pursuant hereto, overdue
amounts (the "Delinquent Payment") due from the Delinquent Lender to
the Agent shall bear interest, payable by the Delinquent Lender on
demand, at a per annum rate equal to (a) the Federal Funds Rate for the
first three days overdue and (b) the sum of 2% plus the Federal Funds
Rate for any longer period. Such interest shall be payable to the Agent
for its own account for the period commencing on the date of the
Delinquent Payment and ending on the date the Delinquent Lender
reimburses the Agent on account of the Delinquent Payment (to the
extent not paid by the Company as provided below) and the accrued
interest thereon (the "Delinquency Period"), whether pursuant to the
assignments referred to below or otherwise. Upon notice by the Agent,
the Borrowers will pay to the Agent the principal (but not the
interest) portion of the Delinquent Payment. During the Delinquency
Period, in order to make reimbursements for the Delinquent Payment and
accrued interest thereon, the Delinquent Lender shall be deemed to have
assigned to the Agent all interest, commitment fees and other payments
made by the Borrowers under Section 3 that would have thereafter
otherwise been payable under the Credit Documents to the Delinquent
Lender. During any other period in which any Lender is not performing
its obligations to extend credit under Section 2 (a "Nonperforming
Lender"), the Nonperforming Lender shall be deemed to have assigned to
each Lender that is not a Nonperforming Lender (a "Performing Lender")
all principal and other payments made by the Borrowers under Section 4
that would have thereafter otherwise been payable under the Credit
Documents to the Nonperforming Lender. The Agent shall credit a portion
of such payments to each Performing Lender in an amount equal to the
Percentage Interest of such Performing Lender in an amount equal to the
Percentage Interest of such Performing Lender divided by one minus the
Percentage Interest of the Nonperforming Lender until the respective
portions of the Revolving Loan owed to all the Lenders are the same as
the Percentage Interests of the Lenders immediately prior to the
failure of the Nonperforming Lender to perform its obligations under
Section 2. The foregoing provisions shall be in addition to any other
remedies the Agent, the Performing Lenders or the Borrowers may have
under law or equity against the Delinquent Lender as a result of the
Delinquent Payment or against the Nonperforming Lender as a result of
its failure to perform its obligations under Section 2.
12.5. Sharing of Payments, etc. Each Lender agrees that (a) if by
exercising any right of set-off or counterclaim or otherwise, it shall receive
payment of (i) a proportion of the aggregate amount due with respect to its
Percentage Interest in the Revolving Loan and Letter of Credit Exposure which is
greater than (ii) the proportion received by any other Lender in respect of the
aggregate amount due with respect to such other Lender's Percentage Interest in
the Revolving Loan and Letter of Credit Exposure and (b) if such inequality
shall continue for more than 10 days, the Lender receiving such proportionately
greater payment shall purchase
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participations in the Percentage Interests in the Revolving Loan and Letter of
Credit Exposure held by the other Lenders, and such other adjustments shall be
made from time to time (including rescission of such purchases of participations
in the event the unequal payment originally received is recovered from such
Lender through bankruptcy proceedings or otherwise), as may be required so that
all such payments of principal and interest with respect to the Revolving Loan
and Letter of Credit Exposure held by the Lenders shall be shared by the Lenders
pro rata in accordance with their respective Percentage Interests; provided,
however, that this Section 12.5 shall not impair the right of any Lender to
exercise any right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of Indebtedness of any Obligor
other than such Obligor's Indebtedness with respect to the Revolving Loan and
Letter of Credit Exposure. Each Lender that grants a participation in the Credit
Obligations to a Credit Participant shall require as a condition to the granting
of such participation that such Credit Participant agree to share payments
received in respect of the Credit Obligations as provided in this Section 12.5.
The provisions of this Section 12.5 are for the sole and exclusive benefit of
the Lenders and no failure of any Lender to comply with the terms hereof shall
be available to any Obligor as a defense to the payment of the Credit
Obligations.
12.6. Amendments, Consents, Waivers, etc. Except as otherwise set
forth herein, the Agent may (and upon the written request of the Required
Lenders the Agent shall) take or refrain from taking any action under this
Agreement or any other Credit Document, including giving its written consent to
any modification of or amendment to and waiving in writing compliance with any
covenant or condition in this Agreement or any other Credit Document or any
Default or Event of Default, all of which actions shall be binding upon all of
the Lenders; provided, however, that:
(a) Without the written consent of Lenders owning at
least two thirds of the Percentage Interests (other than Delinquent
Lenders during the existence of a Delinquency Period so long as such
Delinquent Lender is treated the same as the other Lenders with respect
to any actions enumerated below), no written modification of, amendment
to, consent with respect to, waiver of compliance with or waiver of a
Default under any of the Credit Documents, or under Sections 6.5
through 6.20, the related defined terms or this Section 12.6(b) shall
be made.
(b) Without the written consent of such Lenders as own
100% of the Percentage Interests (other than Delinquent Lenders during
the existence of a Delinquency Period so long as such Delinquent Lender
is treated the same as the other Lenders with respect to any actions
enumerated below):
(i) No reduction shall be made in (A) the
amount of principal of the Revolving Loan or reimbursement
obligations for payments made under Letters of Credit, (B)
the interest rate on the Revolving Loan or (C) the Letter of
Credit fees or commitment fees.
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(ii) No change shall be made in the stated time of
payment of all or any portion of the Revolving Loan or
interest thereon or reimbursement of payments made under
Letters of Credit or fees relating to any of the foregoing
payable to all of the Lenders and no waiver shall be made of
any Default under Section 8.1.1.
(iii) No increase shall be made in the amount, or
extension of the term, of the Commitments beyond that provided
for under Section 2.
(iv) No alteration shall be made of the Lenders'
rights of set-off contained in Section 8.2.4.
(v) No release of any Credit Security or of any
Guarantor shall be made (except that the Agent may release
particular items of Credit Security or particular Guarantors
in dispositions permitted by Section 6.11 and may release all
Credit Security pursuant to Section 18 upon payment in full of
the Credit Obligations and termination of the Commitments
without the written consent of the Lenders).
(vi) No amendment to or modification of this Section
12.6(b) or of the definition of Required Lenders shall be
made.
12.7. Agent's Resignation. The Agent may resign at any time by giving
at least 60 days' prior written notice of its intention to do so to each other
of the Lenders and the Borrowers and upon the appointment by the Required
Lenders of a successor Agent satisfactory to the Borrowers. If no successor
Agent shall have been so appointed and shall have accepted such appointment
within 45 days after the retiring Agent's giving of such notice of resignation,
then the retiring Agent may with the consent of the Borrowers, which shall not
be unreasonably withheld, appoint a successor Agent which shall be a bank or a
trust company organized under the laws of the United States of America or any
state thereof and having a combined capital, surplus and undivided profit of at
least $100,000,000; provided, however, that any successor Agent appointed under
this sentence may be removed upon the written request of the Required Lenders,
which request shall also appoint a successor Agent satisfactory to the
Borrowers. Upon the appointment of a new Agent hereunder, the term "Agent" shall
for all purposes of this Agreement thereafter mean such successor. After any
retiring Agent's resignation hereunder as Agent, or the removal hereunder of any
successor Agent, the provisions of this Agreement shall continue to inure to the
benefit of such Agent as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
12.8. Concerning the Agent.
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12.8.1. Action in Good Faith, etc. The Agent and its
officers, directors, employees and agents shall be under no liability
to any of the Lenders or to any future holder of any interest in the
Credit Obligations for any action or failure to act taken or suffered
in good faith, and any action or failure to act in accordance with an
opinion of its counsel shall conclusively be deemed to be in good
faith. The Agent shall in all cases be entitled to rely, and shall be
fully protected in relying, on instructions given to the Agent by the
required holders of Credit Obligations as provided in this Agreement.
12.8.2. No Implied Duties, etc. The Agent shall have and may
exercise such powers as are specifically delegated to the Agent under
this Agreement or any other Credit Document together with all other
powers incidental thereto. The Agent shall have no implied duties to
any person or any obligation to take any action under this agreement or
any other credit document except for action specifically provided for
in this Agreement or any other Credit Document to be taken by the
agent. Before taking any action under this Agreement or any other
Credit Document, the agent may request an appropriate specific
indemnity satisfactory to it from each Lender in addition to the
general indemnity provided for in Section 12.11. Until the Agent has
received such specific indemnity, the Agent shall not be obligated to
take (although it may in its sole discretion take) any such action
under this Agreement or any other Credit Document. Each Lender confirms
that the agent does not have a fiduciary relationship to it under the
Credit Documents. Each of the Obligors party hereto confirms that
neither the Agent nor any other Lender has a fiduciary relationship to
it under the Credit Documents.
12.8.3. Validity, etc. The Agent shall not be responsible to
any Lender or any future holder of any interest in the Credit
Obligations (a) for the legality, validity, enforceability or
effectiveness of this Agreement or any other Credit Document, (b) for
any recitals, reports, representations, warranties or statements
contained in or made in connection with this Agreement or any other
Credit Document, (c) for the existence or value of any assets included
in any security for the Credit Obligations, (d) for the effectiveness
of any Lien purported to be included in the Credit Security, (e) for
the specification or failure to specify any particular assets to be
included in the Credit Security, or (f) unless the Agent shall have
failed to comply with Section 12.8.1, for the perfection of the
security interests in the Credit SecuritY.
12.8.4. Compliance. The Agent shall not be obligated to
ascertain or inquire as to the performance or observance of any of the
terms of this Agreement or any other Credit Document; and in connection
with any extension of credit under this Agreement or any other Credit
Document, the Agent shall be fully protected in relying on a
certificate of the Borrowers as to the fulfillment by the Borrowers of
any conditions to such extension of credit.
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12.8.5. Employment of Agents and Counsel. The Agent may
execute any of its duties as Agent under this Agreement or any other
Credit Document by or through employees, agents and attorneys-in-fact
and shall not be responsible to any of the Lenders, any Borrower or any
other Obligor for the default or misconduct of any such agents or
attorneys-in-fact selected by the Agent acting in good faith. The Agent
shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder or
under any other Credit Document.
12.8.6. Reliance on Documents and Counsel. The Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
affidavit, certificate, cablegram, consent, instrument, letter, notice,
order, document, statement, telecopy, telegram, telex or teletype
message or writing reasonably believed in good faith by the Agent to be
genuine and correct and to have been signed, sent or made by the Person
in question, including any telephonic or oral statement made by such
Person, and, with respect to legal matters, upon an opinion or the
advice of counsel selected by the Agent.
12.8.7. Agent's Reimbursement. Each of the Lenders
severally agrees to reimburse the Agent, in the amount of such Lender's
Percentage Interest, for any reasonable expenses not reimbursed by the
Borrowers or the Guarantors (without limiting the obligation of the
Borrowers or the Guarantors to make such reimbursement): (a) for which
the Agent is entitled to reimbursement by the Borrowers or the
Guarantors under this Agreement or any other Credit Document, and (b)
after the occurrence of a Default, for any other reasonable expenses
incurred by the Agent on the Lenders' behalf in connection with the
enforcement of the Lenders' rights under this Agreement or any other
Credit Document.
12.9. Rights as a Lender. With respect to any credit extended by it
hereunder, Bank of Boston shall have the same rights, obligations and powers
hereunder as any other Lender and may exercise such rights and powers as though
it were not the Agent, and unless the context otherwise specifies, Bank of
Boston shall be treated in its individual capacity as though it were not the
Agent hereunder. Without limiting the generality of the foregoing, the
Percentage Interest of Bank of Boston shall be included in any computations of
Percentage Interests. Bank of Boston and its Affiliates may accept deposits
from, lend money to, act as trustee for and generally engage in any kind of
banking or trust business with any Borrower, any of their respective
Subsidiaries or any Affiliate of any of them and any Person who may do business
with or own an equity interest in any Borrower, any of their respective
Subsidiaries or any Affiliate of any of them, all as if Bank of Boston were not
the Agent and without any duty to account therefor to the other Lenders.
12.10. Independent Credit Decision. Each of the Lenders acknowledges
that it has independently and without reliance upon the Agent, based on the
financial statements and other documents referred to in Section 7.2, on the
other representations and warranties contained
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herein and on such other information with respect to the Obligors as such Lender
deemed appropriate, made such Lender's own credit analysis and decision to enter
into this Agreement and to make the extensions of credit provided for hereunder.
Each Lender represents to the Agent that such Lender will continue to make its
own independent credit and other decisions in taking or not taking action under
this Agreement or any other Credit Document. Each Lender expressly acknowledges
that neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
such Lender, and no act by the Agent taken under this Agreement or any other
Credit Document, including any review of the affairs of the Obligors, shall be
deemed to constitute any representation or warranty by the Agent. Except for
notices, reports and other documents expressly required to be furnished to each
Lender by the Agent under this Agreement or any other Credit Document, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, condition,
financial or otherwise, or creditworthiness of any Obligor which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
12.11. Indemnification. The holders of the Credit Obligations shall
indemnify the Agent and its officers, directors, employees and agents (to the
extent not reimbursed by the Obligors and without limiting the obligation of any
of the Obligors to do so), pro rata in accordance with their respective
Percentage Interests, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time be imposed on,
incurred by or asserted against the Agent or such Persons relating to or arising
out of this Agreement, any other Credit Document, the transactions contemplated
hereby or thereby, or any action taken or omitted by the Agent in connection
with any of the foregoing; provided, however, that the foregoing shall not
extend to actions or omissions which are taken by the Agent with gross
negligence or willful misconduct.
13. Successors and Assigns; Lender Assignments and Participations. Any reference
in this Agreement to any of the parties hereto shall be deemed to include the
successors and assigns of such party, and all covenants and agreements by or on
behalf of the Obligors, the Guarantors, the Agent or the Lenders that are
contained in this Agreement or any other Credit Documents shall bind and inure
to the benefit of their respective successors and assigns; provided, however,
that (a) the Obligors may not assign their rights or obligations under this
Agreement except for mergers or liquidations permitted by Section 6.11, and (b)
the Lenders shall be not entitled to assign their respective Percentage
Interests in the Revolving Loan hereunder except as set forth below in this
Section 13.
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13.1. Assignments by Lenders.
13.1.1. Assignees and Assignment Procedures . Each Lender
may (a) without the consent of the Agent or the Borrowers if the
proposed assignee is already a Lender hereunder or a Wholly Owned
Subsidiary of the same corporate parent of which the assigning Lender
is a Subsidiary, or (b) otherwise with the consents of the Agent and
(so long as no Event of Default has occurred and is continuing) the
Borrowers (which consents will not be unreasonably withheld), in
compliance with applicable laws in connection with such assignment,
assign to one or more commercial banks or other financial institutions
(each, an "Assignee") all or a portion of its interests, rights and
obligations under this Agreement and the other Credit Documents,
including all or a portion, which need not be pro rata between the
Revolving Loan and the Letter of Credit Exposure, of its Commitment,
the portion of the Revolving Loan and Letter of Credit Exposure at the
time owing to it and the Revolving Notes held by it, but excluding its
rights and obligations as a Letter of Credit Issuer; provided, however,
that:
(i) the aggregate amount of the Commitment of the
assigning Lender subject to each such assignment to any
Assignee other than another Lender (determined as of the date
the Assignment and Acceptance with respect to such assignment
is delivered to the Agent) shall be not less than $5,000,000
and in increments of $1,000,000;
(ii) the parties to each such assignment shall
execute and deliver to the Agent an Assignment and Acceptance
(the "Assignment and Acceptance") substantially in the form of
Exhibit 13.1.1, together with the Note subject to such
assignment and a processing and recordation fee of $3,000
payable to the Agent by the assigning Lender or the Assignee;
and
(iii) no Lender shall assign all or any portion of
its Commitment to an Assignee that is not incorporated or
organized under the laws of the United States of America or a
state thereof.
Upon acceptance and recording pursuant to Section 13.1.4, from and
after the effective date specified in each Assignment and Acceptance
(which effective date shall be at least five Banking Days after the
execution thereof unless waived by the Agent):
(A) the Assignee shall be a party hereto and, to the
extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender under
this Agreement and
(B) the assigning Lender shall, to the extent provided
in such assignment, be released from its
obligations under this Agreement (and, in the
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case of an Assignment and Acceptance
covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of
Sections 3.2.4, 3.5, 3.6, 3.7, 3.8 and 11, as well as
to any fees accrued for its account hereunder and not
yet paid).
13.1.2 Terms of Assignment and Acceptance. By executing
and delivering an Assignment and Acceptance, the assigning Lender and
Assignee shall be deemed to confirm to and agree with each other and
the other parties hereto as follows:
(a) other than the representation and warranty that it
is the legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim, such assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement,
any other Credit Document or any other instrument or document furnished
pursuant hereto;
(b) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Obligors or the performance or observance by any
Obligor of any of its obligations under this Agreement, any other
Credit Document or any other instrument or document furnished pursuant
hereto;
(c) such Assignee confirms that it has received a copy
of this Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 7.2 or Section 6.4 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;
(d) such Assignee will independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Agreement;
(e) such Assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and
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(f) such Assignee agrees that it will perform in accordance
with the terms of this Agreement all the obligations which are required
to be performed by it as a Lender.
13.1.3. Register. The Agent shall maintain at the Boston
Office a register (the "Register") for the recordation of (a) the names
and addresses of the Lenders and the Assignees which assume rights and
obligations pursuant to an assignment under Section 13.1.1, (b) the
Percentage Interest of each such Lender as set forth in Section 12.1
and (c) the amount of the Revolving Loan and Letter of Credit Exposure
owing to each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the
Borrowers, the Agent and the Lenders may treat each Person whose name
is registered therein for all purposes as a party to this Agreement.
The Register shall be available for inspection by any Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
13.1.4. Acceptance of Assignment and Assumption. Upon its
receipt of a completed Assignment and Acceptance executed by an
assigning Lender and an Assignee together with the Revolving Notes
subject to such assignment, and the processing and recordation fee
referred to in Section 13.1.1, the Agent shall (a) accept such
Assignment and Acceptance, (b) record the information contained therein
in the Register and (c) give prompt notice thereof to the Borrower.
Within five Banking Days after receipt of notice, the Borrowers, at
their own expense, shall execute and deliver to the Agent, in exchange
for the surrendered Revolving Notes, new Revolving Notes to the order
of such Assignee in a principal amount equal to the applicable
Commitment and Revolving Loan assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained a Commitment
and Revolving Loan, new Revolving Notes to the order of such assigning
Lender in a principal amount equal to the applicable Commitment and
Revolving Loan retained by it. Such new Revolving Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of
such surrendered Revolving Notes, respectively, and shall be dated the
date of the surrendered Revolving Notes which they replaces.
13.1.5. Federal Reserve Bank. Notwithstanding the foregoing
provisions of this Section 13, any Lender may at any time pledge or
assign all or any portion of such Lender's rights under this Agreement
and the other Credit Documents to a Federal Reserve Bank; provided,
however, that no such pledge or assignment shall release such Lender
from such Lender's obligations hereunder or under any other Credit
Document.
13.1.6. Further Assurances. The Obligors shall sign such
documents and take such other actions from time to time reasonably
requested by an Assignee to enable it to share in the benefits of the
rights created by the Credit Documents.
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13.2. Credit Participants. Each Lender may, without the consent of the
Borrowers or the Agent, in compliance with applicable laws in connection with
such participation, sell to one or more commercial banks or other financial
institutions (each a "Credit Participant") participations in all or a portion of
its interests, rights and obligations under this Agreement and the other Credit
Documents (including all or a portion of its Commitment, the Revolving Loan and
Letter of Credit Exposure owing to it and the Revolving Note held by it);
provided, however, that:
(a) such Lender's obligations under this Agreement shall
remain unchanged;
(b) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(c) the Credit Participant shall be entitled to the benefit of
the cost protection provisions contained in Sections 3.2.4, 3.5, 3.6,
3.7, 3.8 and 11, but shall not be entitled to receive any greater
payment thereunder than the selling Lender would have been entitled to
receive with respect to the interest so sold if such interest had not
been sold; and
(d) the Borrowers, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right as one of the Lenders to vote
with respect to the enforcement of the obligations of the Borrowers
relating to the Revolving Loan and Letter of Credit Exposure and the
approval of any amendment, modification or waiver of any provision of
this Agreement (other than amendments, modifications, consents or
waivers described in clause (c) of the proviso to Section 12.6).
Each Obligor agrees, to the fullest extent permitted by applicable law, that any
Credit Participant and any Lender purchasing a participation from another Lender
pursuant to Section 12.5 may exercise all rights of payment (including the right
of set-off), with respect to its participation as fully as if such Credit
Participant or such Lender were the direct creditor of the Obligors and a Lender
hereunder in the amount of such participation.
13.3. Replacement of Lender. In the event that any Lender or, to the
extent applicable, any Credit Participant (the "Affected Lender"):
(a) fails to perform its obligations to fund any
portion of the Revolving Loan or to issue any Letter of Credit on any
Closing Date when required to do so by the terms of the Credit
Documents, or fails to provide its portion of any Eurodollar Pricing
Option pursuant to Section 3.2.1 or on account of a Legal Requirement
as contemplated by Section 3.2.5;
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(b) demands payment under the Reserve provisions of
Section 3.5, the Tax provisions of Section 3.6, the capital adequacy
provisions of Section 3.7 or the regulatory change provisions in
Section 3.8 in an amount the Company deems materially in excess of the
amounts with respect thereto demanded by the other Lenders; or
(c) refuses to consent to a proposed amendment, modification,
waiver or other action requiring consent of the holders of 100% of the
Percentage Interests under Section 12.6(c) that is consented to by the
other Lenders;
then, so long as no Event of Default exists and is continuing, the Borrowers
shall have the right to seek a replacement lender which is reasonably
satisfactory to the Agent (the "Replacement Lender"). The Replacement Lender
shall purchase the interests of the Affected Lender in the Revolving Loan,
Letters of Credit and its Commitment and shall assume the obligations of the
Affected Lender hereunder and under the other Credit Documents upon execution by
the Replacement Lender of an Assignment and Acceptance and the tender by it to
the Affected Lender of a purchase price agreed between it and the Affected
Lender (or, if they are unable to agree, a purchase price in the amount of the
Affected Lender's Percentage Interest in the Revolving Loan and Letter of Credit
Exposure, or appropriate credit support for contingent amounts included therein,
and all other outstanding Credit Obligations then owed to the Affected Lender).
Such assignment by the Affected Lender shall be deemed an early termination of
any Eurodollar Pricing Option to the extent of the Affected Lender's portion
thereof, and the Borrowers will pay to the Affected Lender any resulting amounts
due under Section 3.2.4. Upon consummation of such assignment, the Replacement
Lender shall become party to this Agreement as a signatory hereto and shall have
all the rights and obligations of the Affected Lender under this Agreement and
the other Credit Documents with a Percentage Interest equal to the Percentage
Interest of the Affected Lender, the Affected Lender shall be released from its
obligations hereunder and under the other Credit Documents, and no further
consent or action by any party shall be required. Upon the consummation of such
assignment, the Borrowers, the Agent and the Affected Lender shall make
appropriate arrangements so that a new Revolving Note is issued to the
Replacement Lender if it has acquired a portion of the Revolving Loan. The
Borrowers and the Guarantors shall sign such documents and take such other
actions reasonably requested by the Replacement Lender to enable it to share in
the benefits of the rights created by the Credit Documents. Until the
consummation of an assignment in accordance with the foregoing provisions of
this Section 13.3, the Borrowers shall continue to pay to the Affected Lender
any Credit Obligations as they become due and payable.
14. Confidentiality. Each Lender will make no disclosure of confidential
information furnished to it by any Obligor unless such information shall have
become public, except:
(a) in connection with operations under or the enforcement of
this Agreement or any other Credit Document;
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(b) pursuant to any statutory or regulatory requirement or any
mandatory court order, subpoena or other legal process;
(c) to any parent or corporate Affiliate of such Lender or to
any Credit Participant, proposed Credit Participant or proposed
Assignee; provided, however, that any such Person shall agree to comply
with the restrictions set forth in this Section 14 with respect to such
information;
(d) to its independent counsel, auditors and other
professional advisors with an instruction to such Person to keep such
information confidential; and
(e) with the prior written consent of the Borrowers, to any
other Person.
15. Notices. Except as otherwise specified in this Agreement, any notice
required to be given pursuant to this Agreement shall be given in writing. Any
notice, consent, approval, demand or other communication in connection with this
Agreement shall be deemed to be given if given in writing (including telex,
telecopy or similar teletransmission) addressed as provided below (or to the
addressee at such other address as the addressee shall have specified by notice
actually received by the addressor), and if either (a) actually delivered in
fully legible form to such address (evidenced in the case of a telex by receipt
of the correct answerback) or (b) in the case of a letter, unless actual receipt
of the notice is required by any Credit Document five days shall have elapsed
after the same shall have been deposited in the United States mails, with
first-class postage prepaid and registered or certified.
If to any of the Borrowers or any of their respective Subsidiaries, to
them at their address set forth in Exhibit 7.1 (as supplemented pursuant to
Sections 6.4.1 and 6.4.2), to the attention of the chief financial officer, with
a copy to:
Summit Partners, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to any Lender or the Agent, to it at its address set forth on the
signature pages of this Agreement or in the Register, with a copy to the Agent.
16. Course of Dealing; Amendments and Waivers. No course of dealing between any
Lender or the Agent, on one hand, and the Borrowers or any other Obligor, on the
other hand, shall operate as a waiver of any of the Lenders' or the Agent's
rights under this Agreement or any other Credit Document or with respect to the
Credit Obligations. Each of the Borrowers and the Guarantors acknowledges that
if the Lenders or the Agent, without being required to do so by this Agreement
or any other Credit Document, give any notice or information to, or
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obtain any consent from, any Borrower or any other Obligor, the Lenders and the
Agent shall not by implication have amended, waived or modified any provision of
this Agreement or any other Credit Document, or created any duty to give any
such notice or information or to obtain any such consent on any future occasion.
No delay or omission on the part of any Lender of the Agent in exercising any
right under this Agreement or any other Credit Document or with respect to the
Credit Obligations shall operate as a waiver of such right or any other right
hereunder or thereunder. A waiver on any one occasion shall not be construed as
a bar to or waiver of any right or remedy on any future occasion. No waiver,
consent or amendment with respect to this Agreement or any other Credit Document
shall be binding unless it is in writing and signed by the Agent or the Required
Lenders.
17. Defeasance. When all Credit Obligations have been paid, performed and
reasonably determined by the Lenders to have been indefeasibly discharged in
full, and if at the time no Lender continues to be committed to extend any
credit to the Borrowers hereunder or under any other Credit Document, this
Agreement shall terminate and, at the Borrowers' written request, accompanied by
such certificates and other items as the Agent shall reasonably deem necessary,
the Credit Security shall revert to the Obligors and the right, title and
interest of the Lenders therein shall terminate. Thereupon, on the Obligor's
demand and at their cost and expense, the Agent shall execute proper
instruments, acknowledging satisfaction of and discharging this Agreement, and
shall redeliver to the Obligors any Credit Security then in its possession;
provided, however, that Sections 3.2.4, 3.5, 3.6, 3.7, 3.8, 11, 12.8.7, 12.11,
14, 18 and 19 shall survive the termination of this Agreement.
18. Venue; Service of Process.Each of the Borrowers and the other Obligors:
(a) Irrevocably submits to the nonexclusive
jurisdiction of the state courts of The Commonwealth of Massachusetts
and to the nonexclusive jurisdiction of the United States District
Court for the District of Massachusetts for the purpose of any suit,
action or other proceeding arising out of or based upon this Agreement
or any other Credit Document or the subject matter hereof or thereof.
(b) Waives to the extent not prohibited by applicable
law that cannot be waived, and agrees not to assert, by way of motion,
as a defense or otherwise, in any such proceeding brought in any of the
above-named courts, any claim that it is not subject personally to the
jurisdiction of such court, that its property is exempt or immune from
attachment or execution, that such proceeding is brought in an
inconvenient forum, that the venue of such proceeding is improper, or
that this Agreement or any other Credit Document, or the subject matter
hereof or thereof, may not be enforced in or by such court.
Each of the Borrowers and the other Obligors consents to service of process in
any such proceeding in any manner at the time permitted by Chapter 223A of the
General Laws of The Commonwealth of Massachusetts and agrees that service of
process by registered or certified
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mail, return receipt requested, at its address specified in or pursuant to
Section 16 is reasonably calculated to give actual notice.
19. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, EACH OF THE BORROWERS, THE OTHER OBLIGORS, THE AGENT AND THE
LENDERS WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT OBLIGATION OR IN
ANY WAY CONNECTED WITH THE DEALINGS OF THE LENDERS, THE AGENT, THE BORROWERS OR
ANY OTHER OBLIGOR IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. Each
of the Borrowers and the other Obligors acknowledges that it has been informed
by the Agent that the provisions of this Section 19 constitute a material
inducement upon which each of the Lenders has relied and will rely in entering
into this Agreement and any other Credit Document, and that it has reviewed the
provisions of this Section 19 with its counsel. Any Lender, the Agent, any
Borrower or any other Obligor may file an original counterpart or a copy of this
Section 19 with any court as written evidence of the consent of the Borrowers,
the other Obligors, the Agent and the Lenders to the waiver of their rights to
trial by jury.
20. No Strict Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement and the other Credit Documents with
counsel sophisticated in financing transactions. In the event an ambiguity or
question of intent or interpretation arises, this Agreement and the other Credit
Documents shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement and the other
Credit Documents.
21. General. All covenants, agreements, representations and warranties made in
this Agreement or any other Credit Document or in certificates delivered
pursuant hereto or thereto shall be deemed to have been relied on by each
Lender, notwithstanding any investigation made by any Lender on its behalf, and
shall survive the execution and delivery to the Lenders hereof and thereof. The
invalidity or unenforceability of any provision hereof shall not affect the
validity or enforceability of any other provision hereof. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. This Agreement and the other Credit Documents
(including any related fee agreements with the Agent or the Lenders) constitute
the entire understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior and contemporaneous understandings
and agreements, whether written or oral. This Agreement may be executed in any
number of counterparts which together shall constitute one instrument. This
Agreement shall be governed by and construed in accordance with the laws (other
than
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the conflict of laws rules) of The Commonwealth of Massachusetts, except as may
be required by the UCC with respect to matters involving the perfection of the
Agent's Lien on the Credit Security.
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Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
AMERIPATH, INC.
By /s/
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Title: Chief Operating Officer
AMERICAN LABORATORY ASSOCIATES, INC.
By /s/
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Title: Chief Operating Officer
AMERIPATH FLORIDA, INC.
By /s/
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THE FIRST NATIONAL BANK OF BOSTON
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Managing Director
The First National Bank of Boston
New England Corporate Banking
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Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telex: 940581
NATIONSBANK, N.A. (South)
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Vice President
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NationsBank, N.A. (South)
Financial Strategies Group
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