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EXHIBIT 10.37b
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AMENDED AND RESTATED LOAN AGREEMENT
dated as of July 27, 2001,
by and among
HEART HOSPITAL OF BK, LLC,
as Borrower,
the Lenders referred to herein,
BANK OF AMERICA, N.A.,
as Administrative Agent,
BANKERS TRUST COMPANY,
as Syndication Agent,
and
FIRST UNION NATIONAL BANK,
as Documentation Agent
BANC OF AMERICA SECURITIES, LLC and
DEUTSCHE BANC ALEX. ▇▇▇▇▇ INC.,
as Co-Lead Arrangers and Co-Book Managers
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS...........................................................................................1
SECTION 1.1 Definitions.................................................................................1
SECTION 1.2 General....................................................................................17
SECTION 1.3 Other Definitions and Provisions...........................................................17
ARTICLE II TERM LOAN FACILITY..................................................................................18
SECTION 2.1 Term Loan..................................................................................18
SECTION 2.2 Procedure for Advance of Term Loan.........................................................18
SECTION 2.3 Repayment of Term Loan.....................................................................18
SECTION 2.4 Prepayment of Term Loan....................................................................19
SECTION 2.5 Term Notes.................................................................................20
SECTION 2.6 Use of Proceeds............................................................................20
ARTICLE III GENERAL LOAN PROVISIONS............................................................................20
SECTION 3.1 Interest...................................................................................20
SECTION 3.2 Notice and Manner of Conversion or Continuation of Term Loans..............................23
SECTION 3.3 Annual Administrative Fees.................................................................23
SECTION 3.4 Manner of Payment..........................................................................23
SECTION 3.5 Crediting of Payments and Proceeds.........................................................24
SECTION 3.6 Adjustments................................................................................24
SECTION 3.7 Nature of Obligations of the Lenders Regarding Term Loans; Assumption by
the Administrative Agent.................................................................24
SECTION 3.8 Changed Circumstances......................................................................25
SECTION 3.9 Indemnity..................................................................................27
SECTION 3.10 Capital Requirements.......................................................................27
SECTION 3.11 Taxes......................................................................................27
SECTION 3.12 Security...................................................................................29
SECTION 3.13 Replacement of Lenders.....................................................................29
ARTICLE IV CLOSING; CONDITIONS OF CLOSING AND BORROWING........................................................30
SECTION 4.1 Closing....................................................................................30
SECTION 4.2 Conditions to Closing and Term Loan........................................................30
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BORROWER.......................................................37
SECTION 5.1 Representations and Warranties.............................................................37
SECTION 5.2 Survival of Representations and Warranties, Etc............................................47
FINANCIAL INFORMATION AND REPORTS...............................................................................48
SECTION 6.1 Financial Statements.......................................................................48
SECTION 6.2 Officer's Compliance Certificate...........................................................49
SECTION 6.3 Accountant's Certificate...................................................................49
SECTION 6.4 Other Reports..............................................................................50
SECTION 6.5 Notice of Litigation and Other Matters.....................................................50
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SECTION 6.6 Accuracy of Information....................................................................52
ARTICLE VII AFFIRMATIVE COVENANTS..............................................................................52
SECTION 7.1 Preservation of Existence and Related Matters..............................................52
SECTION 7.2 Maintenance of Property....................................................................52
SECTION 7.3 Accounting Methods and Financial Records...................................................52
SECTION 7.4 Payment and Performance of Obligations.....................................................52
SECTION 7.5 Compliance With Laws and Approvals.........................................................53
SECTION 7.6 Environmental Laws.........................................................................53
SECTION 7.7 Compliance with ERISA......................................................................53
SECTION 7.8 Compliance With Agreements.................................................................54
SECTION 7.9 Visits and Inspections.....................................................................54
SECTION 7.10 Interest Rate Contracts....................................................................54
SECTION 7.11 Maintenance of Licenses, Etc...............................................................54
SECTION 7.12 Insurance..................................................................................54
SECTION 7.13 Further Assurances.........................................................................55
ARTICLE VIII FINANCIAL COVENANTS...............................................................................55
SECTION 8.1 Minimum EBITDA.............................................................................55
SECTION 8.2 Debt Service Coverage Ratio................................................................55
ARTICLE IX NEGATIVE COVENANTS..................................................................................56
SECTION 9.1 Limitations on Debt........................................................................56
SECTION 9.2 Limitations on Liens.......................................................................57
SECTION 9.3 Limitations on Loans, Advances, Investments and Acquisitions...............................58
SECTION 9.4 Limitations on Mergers and Liquidation.....................................................59
SECTION 9.5 Limitations on Sale of Assets..............................................................59
SECTION 9.6 Limitation on Distributions................................................................59
SECTION 9.7 Amendments, Payments and Prepayments of Subordinated Debt..................................61
SECTION 9.8 Transactions With Affiliates...............................................................61
SECTION 9.9 Restrictive Agreements.....................................................................62
SECTION 9.10 Certain Accounting Changes; Organizational Documents.......................................62
ARTICLE X DEFAULT AND REMEDIES.................................................................................62
SECTION 10.1 Events of Default..........................................................................62
SECTION 10.2 Remedies...................................................................................66
SECTION 10.3 Rights and Remedies Cumulative; Non-Waiver; etc............................................67
ARTICLE XI THE ADMINISTRATIVE AGENT............................................................................67
SECTION 11.1 Appointment and Authorization of the Administrative Agent..................................67
SECTION 11.2 Delegation of Duties.......................................................................68
SECTION 11.3 Liability of the Administrative Agent......................................................68
SECTION 11.4 Reliance by the Administrative Agent.......................................................68
SECTION 11.5 Notice of Default..........................................................................69
SECTION 11.6 Credit Decision; Disclosure of Information by the Administrative Agent.....................69
SECTION 11.7 Indemnification of the Administrative Agent................................................70
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SECTION 11.8 The Administrative Agent in Its Individual Capacity........................................70
SECTION 11.9 Successor Administrative Agent.............................................................71
SECTION 11.10 Syndication Agent; Documentation Agent; Co-Lead Arranger...................................71
ARTICLE XII MISCELLANEOUS......................................................................................72
SECTION 12.1 Notices....................................................................................72
SECTION 12.2 Expenses; Indemnity........................................................................73
SECTION 12.3 Set-off....................................................................................74
SECTION 12.4 Governing Law..............................................................................75
SECTION 12.5 Jurisdiction and Venue.....................................................................75
SECTION 12.6 Waiver of Right to Trial by Jury...........................................................75
SECTION 12.7 Reversal of Payments.......................................................................76
SECTION 12.8 Injunctive Relief; Punitive Damages........................................................76
SECTION 12.9 Accounting Matters.........................................................................76
SECTION 12.10 Successors and Assigns; Participations.....................................................77
SECTION 12.11 Amendments, Waivers and Consents...........................................................79
SECTION 12.12 Confidentiality............................................................................80
SECTION 12.13 Performance of Duties......................................................................81
SECTION 12.14 All Powers Coupled with Interest...........................................................81
SECTION 12.15 Survival of Indemnities....................................................................81
SECTION 12.16 Titles and Captions........................................................................81
SECTION 12.17 Severability of Provisions.................................................................81
SECTION 12.18 Counterparts...............................................................................81
SECTION 12.19 Term of Agreement..........................................................................81
SECTION 12.20 Advice of Counsel..........................................................................82
SECTION 12.21 No Strict Construction.....................................................................82
SECTION 12.22 Inconsistencies with Other Documents; Independent Effect of Covenants......................82
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A - Land
Exhibit B - Form of Term Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Notice of Account Designation
Exhibit E - Form of Notice of Prepayment
Exhibit F - Form of Notice of Conversion/Continuation
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Guaranty Agreement
Exhibit I - Form of Officer's Compliance Certificate
Exhibit J - Form of Security Agreement
Exhibit K - Form of Pledge Agreement
SCHEDULES
Schedule 1.1(a) - Lenders and Commitments
Schedule 1.1(b) - Guarantors
Schedule 1.1(c) - Related Credit Documents
Schedule 1.1(d) - Related Guaranty Agreements
Schedule 5.1(b) - Capitalization
Schedule 5.1(l) - Material Contracts
Schedule 5.1(t) - Debt and Guaranty Obligations
Schedule 5.1(u) - Litigation
Schedule 9.8 - Permitted Transactions With Affiliates
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AMENDED AND RESTATED LOAN AGREEMENT
AMENDED AND RESTATED LOAN AGREEMENT, dated as of the 27th day of
July, 2001, by and among HEART HOSPITAL OF BK, LLC, a North Carolina limited
liability company, as Borrower, the lenders who are or may become a party to
this Agreement, as Lenders, BANK OF AMERICA, N.A., as Administrative Agent for
the Lenders, BANKERS TRUST COMPANY, as Syndication Agent for the Lenders, and
FIRST UNION NATIONAL BANK, as Documentation Agent.
STATEMENT OF PURPOSE
Pursuant to the Loan Agreement dated as of May 6, 1998 (as amended,
restated, supplemented or otherwise modified as of the date hereof, the
"Existing Loan Agreement"), by and among the Borrower, the guarantors party
thereto, the lenders party thereto (the "Existing Lenders") and the
Administrative Agent, the Existing Lenders extended certain credit facilities to
the Borrower pursuant to the terms thereof.
The Borrower has requested, and, subject to the terms and conditions
hereof, the Administrative Agent, the Documentation Agent and the Lenders have
agreed, to amend and restate the Existing Loan Agreement on the terms and
conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Adjusted Debt Service" means, with respect to the Borrower for any
period, the sum of the following determined, without duplication, in accordance
with GAAP: (i) all Interest Expense due and payable in cash or which was paid
during such period (excluding all Interest Expense paid during such period by
the Borrower to ▇▇▇▇▇) plus (ii) all scheduled principal payments of Debt
(excluding payments of Debt to ▇▇▇▇▇) which were paid during such period.
"Adjusted EBITDA" means, with respect to the Borrower for any period,
(i) EBITDA for such period less (ii) maintenance Capital Expenditures of
$200,000 for each fiscal quarter during such period.
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"Administrative Agent" means Bank of America, N.A. in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 11.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
12.1(c).
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries. The term "control" means (a) the
power to vote five percent (5%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise; provided, however, that the term
"Affiliate" shall not include any owner of the Borrower (other than the Parent
and its Subsidiaries).
"Administrative Agent-Related Persons" means the Administrative Agent
(including any successor administrative agent), together with its Affiliates
(including, in the case of Bank of America in its capacity as the Administrative
Agent, Banc of America Securities LLC as a Co-Lead Arranger), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or modified at any time or
from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be [Twenty Five Million Seven Hundred Sixteen
Thousand Twenty Six and No/100 Dollars ($25,716,026.00)].
"Agreement" means this Amended and Restated Loan Agreement, as amended,
restated, supplemented or otherwise modified from time to time.
"Applicable Law" means, collectively, all international, foreign,
federal, state and local statutes, treaties, rules, guidelines, regulations,
requirements, ordinances, codes, constitutions and administrative or judicial
precedents or authorities, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative
orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having
the force of law.
"Applicable Margin" shall have the meaning assigned thereto in Section
3.1(c).
"Approved Fund" shall have the meaning assigned thereto in Section
12.10(h).
"Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit G attached hereto.
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"Attorney Costs" means and includes all fees and disbursements of any
law firm or other external counsel.
"Bank of America" means Bank of America, N.A., a national banking
association, and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." Such rate is a rate set by Bank of America based
upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means any Term Loan bearing interest at a rate based
upon the Base Rate as provided in Section 3.1(a).
"Benefited Lender" shall have the meaning assigned thereto in Section
3.6.
"Borrower" means Heart Hospital of BK, LLC, a North Carolina limited
liability company, in its capacity as borrower hereunder.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any Eurodollar Rate Loan, any day that is a Business Day described
in clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
"Calculation Date" shall have the meaning assigned thereto in Section
3.1(c).
"Capital Asset" means, with respect to the Borrower, any asset that
should, in accordance with GAAP, be classified and accounted for as a capital
asset on a balance sheet of the Borrower.
"Capital Expenditures" means, with respect to the Borrower for any
period, the aggregate cost of all Capital Assets acquired by the Borrower during
such period, as determined in accordance with GAAP.
"Capital Lease" means any lease of any property by the Borrower, as
lessee, that should, in accordance with GAAP, be classified and accounted for as
a capital lease on a balance sheet of the Borrower.
"Cash Flow Available For Distribution" means, with respect to the
Borrower for any period, the sum of the following determined, without
duplication, in accordance with GAAP: (i)
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EBITDA for such period less (ii) all principal and interest payments required to
be paid with respect to Senior Debt during such period less (iii) all Unfinanced
Capital Expenditures during such period.
"Change in Control" shall have the meaning assigned thereto in Section
10.1(j).
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Section 4.2 shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent, in
its sole discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or modified from time to time.
"Co-Lead Arrangers" means Banc of America Securities LLC and Deutsche
Bank Alex. ▇▇▇▇▇ Inc. in their capacity as lead arrangers and book managers.
"Collateral" means the collateral security for the Obligations pledged
or granted pursuant to the terms of this Agreement and the Security Documents.
"Commitment" means (a) as to any Lender, the obligation of such Lender
to make Term Loans for the account of the Borrower in an aggregate principal
amount not to exceed the amount set forth opposite such Lender's name on
Schedule 1.1(a) hereto, as such amount may be reduced or modified at any time or
from time to time pursuant to the terms hereof and (b) as to all Lenders, the
aggregate commitment to make Term Loans.
"Commitment Agreement" means the Commitment Agreement of even date by
and among MedCath Incorporated, the Lenders who are or may become party thereto
and the Administrative Agent, as amended, restated, supplemented or otherwise
modified in accordance with the terms thereof.
"Commitment Percentage" means, as to any Lender, (a) prior to making
the Term Loan, the ratio of (i) the Commitment of such Lender to (ii) the
Commitments of all Lenders and (b) after the Term Loans are made, the ratio of
(i) the outstanding principal balance of the Term Loans of such Lender to (ii)
the aggregate outstanding principal balance of the Term Loans of all Lenders.
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Parent and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
"Corporate Revolver" means the Credit Agreement dated as of July 31,
1998, as amended, restated, supplemented or otherwise modified from time to
time, by and among MedCath Intermediate Holdings, Inc., as borrower, the Initial
Lenders named therein, as lenders, the Initial Issuing Bank named therein, as
issuing bank, Bank of America, N.A. as administrative agent and collateral
agent, and Banc of America Securities LLC, as arranger and syndication agent.
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"Debt" means, with respect to the Borrower at any date and without
duplication, the sum of the following calculated in accordance with GAAP: (a)
all liabilities, obligations and indebtedness for borrowed money including, but
not limited to, obligations evidenced by bonds, debentures, notes or other
similar instruments of the Borrower, (b) all obligations to pay the deferred
purchase price of property or services of the Borrower (including, without
limitation, all obligations under non-competition agreements), except trade
payables arising in the ordinary course of business not more than one hundred
and twenty (120) days past due, (c) all obligations of the Borrower as lessee
under Capital Leases, (d) all Debt of any other Person secured by a Lien on any
asset of the Borrower, (e) all Guaranty Obligations of the Borrower, (f) all
obligations, contingent or otherwise, of the Borrower relative to the face
amount of letters of credit, whether or not drawn, and banker's acceptances
issued for the account of the Borrower, (g) all obligations of the Borrower to
redeem, repurchase, exchange, defease or otherwise make payments in respect of
capital stock or other securities or partnership interests of the Borrower, (h)
all net payment obligations incurred by the Borrower pursuant to Hedging
Agreements and (i) all outstanding payment obligations of the Borrower with
respect to any synthetic lease, tax retention operating lease, off-balance sheet
loan or similar off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, receivership, insolvency, reorganization, or similar
debtor relief Applicable Laws of the United States of America or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any of the events specified in Section 10.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Documentation Agent" means First Union National Bank, in its capacity
as Documentation Agent hereunder.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"EBITDA" means, with respect to the Borrower for any period, the sum of
the following determined, without duplication, in accordance with GAAP: (a) Net
Income for such period plus (b) the sum of the following to the extent deducted
in determining Net Income for such period: (i) Interest Expense for such period,
(ii) income and franchise taxes for such period, (iii) amortization and
depreciation for such period, (iv) non-cash charges for such period solely with
respect to the impairment of goodwill in accordance with GAAP, and (v) non-cash
impairment charges for such period solely with respect to loan acquisition costs
minus (c) to the extent added in the determination of Net Income, extraordinary
gains for such period.
"Eligible Assignee" shall have the meaning assigned thereto in Section
12.10(h).
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"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrower (or, as applicable, any Guarantor) or any ERISA Affiliate or (b) has at
any time within the preceding six (6) years been maintained for the employees of
the Borrower (or, as applicable, any Guarantor) or any current or former ERISA
Affiliate.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by any Person in the ordinary course of business and not in response to any
third party action or request of any kind) or proceedings relating in any way to
any actual or alleged violation of or liability under any Environmental Law or
relating to any permit issued, or any approval given, under any such
Environmental Law, including, without limitation, any and all claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages, contribution, indemnification cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to human health or the environment.
"Environmental Laws" means any and all federal, foreign, state,
provincial and local laws, statutes, ordinances, rules, regulations, permits,
licenses, approvals, interpretations and orders of courts or Governmental
Authorities, relating to the protection of human health or the environment,
including, but not limited to, requirements pertaining to the manufacture,
processing, distribution, use, treatment, storage, disposal, transportation,
handling, reporting, licensing, permitting, investigation or remediation of
Hazardous Materials.
"Equipment Lender" means the lender which has provided the Equipment
Loan Financing to the Borrower (or any lender which has refinanced the Equipment
Loan Financing to the Borrower as permitted pursuant to Section 9.1(b)).
"Equipment Loan Financing" means the financing existing on the Closing
Date and set forth on Schedule 5.1(t) with respect to the equipment used at the
Hospital.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended or modified from time to
time.
"ERISA Affiliate" means any Person who together with the Borrower (or,
as applicable, any Guarantor) is treated as a single employer within the meaning
of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula:
Eurodollar Rate = Eurodollar Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
"Eurodollar Base Rate" means for any Interest Period:
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(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or
(b) in the event the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service shall cease to
be available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other service
that displays an average British Bankers Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, or
(c) in the event the rates referenced in the preceding subsections (a)
and (b) are not available, the rate per annum determined by the Administrative
Agent as the rate of interest (rounded upward to the next 1/100th of 1%) at
which deposits in Dollars for delivery on the first day of such Interest Period
in same day funds in the approximate amount of the Eurodollar Rate Loan being
made, continued or converted by the Administrative Agent and with a term
equivalent to such Interest Period would be offered by Bank of America's London
Branch to major banks in the offshore Dollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period.
"Eurodollar Rate Loan" means any Term Loan bearing interest at a rate
based upon the Eurodollar Rate as provided in Section 3.1(a).
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day, whether or not applicable to any
Lender, under regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate Loan
shall be adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" means any of the events specified in Section 10.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Existing Lenders" shall have the meaning assigned thereto in the
Statement of Purpose.
"Existing Loan Agreement" shall have the meaning assigned thereto in
the Statement of Purpose.
"Existing Loans" shall have the meaning assigned thereto in Section
4.2(f).
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"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.
"Financing Statements" means the UCC financing statements filed to
perfect the Lien of the Administrative Agent and the Lenders on certain personal
property and fixtures as more particularly described therein.
"▇▇▇▇▇" means MedCath Finance Company.
"Fiscal Year" means the fiscal year of the Borrower ending on September
30.
"Foreign Lender" shall have the meaning assigned thereto in Section
3.11(e).
"Fund" shall have the meaning assigned thereto in Section 12.10(h).
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrower and the Guarantors throughout the period indicated and
(subject to Section 12.9) consistent with the prior financial practice of the
Borrower and the Guarantors.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guarantor Leverage Ratio" means the ratio determined pursuant to
Section 12(c) of the Guaranty Agreement.
"Guarantors" means the Persons who have executed the Guaranty Agreement
(a) on the Closing Date or (b) after such date in accordance with Section 11(j)
of the Guaranty Agreement. The Guarantors as of the Closing Date are set forth
on Schedule 1.1(b).
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"Guaranty Agreement" means the unconditional guaranty agreement of even
date executed by the Guarantors in favor of the Administrative Agent for the
ratable benefit of itself and the Lenders, substantially in the form of Exhibit
H attached hereto, as amended, restated, supplemented or otherwise modified from
time to time.
"Guaranty Obligation" means, with respect to the Borrower, without
duplication, any obligation, contingent or otherwise, of any such Person
pursuant to which such Person has directly or indirectly guaranteed any Debt or
other obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of any
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
condition or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided, that the term Guaranty Obligation shall not include
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guaranty Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made and (b) the maximum amount for which such
guaranteeing Person may be liable pursuant to the terms of the instrument
evidencing such Guaranty Obligation.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law or common law, (d) the discharge or emission or release of
which requires a permit or license under any Environmental Law or other
Governmental Approval, (e) which are deemed to constitute a nuisance or a
trespass which pose a health or safety hazard to Persons or neighboring
properties, (f) which consist of underground or aboveground storage tanks,
whether empty, filled or partially filled with any substance, or (g) which
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.
"HCFA" means the Health Care Financing Administration or any successor
agency.
"Hedging Agreement" means any agreement with respect to any Interest
Rate Contract, forward rate agreement, commodity swap, forward foreign exchange
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option agreement or other agreement or arrangement designed to alter the risks
of any Person arising from fluctuations in interest rates, currency values or
commodity prices, all as amended, restated, supplemented or otherwise modified
from time to time.
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"HHS" means the United States Department of Health and Human Services,
and any successor thereto.
"Hospital" means the hospital owned and operated by the Borrower which
(a) is certified to participate in Medicare programs and Medicaid programs (as
applicable), (b) is at least approximately 85,000 square feet, (c) contains at
least 48 licensed beds and (d) is situated on the Land.
"Improvements" means the Hospital and other improvements constructed
on, or to be constructed on, the Land, together with all fixtures, improvements,
and appurtenances now or later to be located on the Land and/or in such
improvements.
"Indemnitees" shall have the meaning assigned thereto in Section 12.2
(b).
"Indemnified Liabilities" shall have the meaning assigned thereto in
Section 12.2 (b).
"Information" shall have the meaning assigned thereto in Section 12.12.
"Intercompany Loan Subordination Agreement" means any intercompany
subordination agreement of even date executed by ▇▇▇▇▇ in favor of the
Administrative Agent for the benefit of itself and the Lenders, as amended,
restated, supplemented or otherwise modified from time to time.
"Interest Expense" means, with respect to the Borrower for any period,
the gross interest expense (including, without limitation, interest expense
attributable to Capital Leases and all net payment obligations pursuant to
Hedging Agreements) of the Borrower, all determined for such period, without
duplication, in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
3.1(b).
"Interest Rate Contract" means any interest rate swap agreement,
interest rate cap agreement, interest rate floor agreement, interest rate collar
agreement, interest rate option or any other agreement regarding the hedging of
interest rate risk exposure executed in connection with hedging the interest
rate exposure of any Person and any confirming letter executed pursuant to such
agreement, all as amended, restated, supplemented or otherwise modified from
time to time.
"Land" means the real estate described in Exhibit A attached hereto,
which is owned by the Borrower and to be encumbered by the Mortgage.
"Lender" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 12.10.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Commitment Percentage of the Term Loans.
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"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest, hypothecation or encumbrance of any kind in respect
of such asset. For the purposes of this Agreement, a Person shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, Capital
Lease or other title retention agreement relating to such asset.
"Loan Documents" means, collectively, this Agreement, the Term Notes,
the Guaranty Agreement, the Security Documents, the Management Fee and Guaranty
Fee Subordination Agreement, each Intercompany Loan Subordination Agreement and
each other document, instrument, certificate and agreement executed and
delivered by the Borrower or any Guarantor in connection with this Agreement or
otherwise referred to herein or contemplated hereby (excluding any Hedging
Agreement), all as may be amended, restated, supplemented or otherwise modified
from time to time.
"Management Agreement" means (i) the management services agreement
dated __________, 200__ between the Borrower and the Management Company or (ii)
the agreement between that Management Company and the Borrower as set forth in
the operating agreement of the Borrower pursuant to which the Management Company
and the Borrower agree that the Management Company shall manage the Hospital.
"Management Company" means HHBF, Inc., a North Carolina corporation.
"Management Fee and Guaranty Fee Subordination Agreement" means the
subordination agreement of even date executed by the Management Company in favor
of the Administrative Agent for the benefit of itself and the Lenders, as
amended, restated, supplemented or otherwise modified from time to time.
"Material Adverse Effect" means, with respect to the Borrower or any of
the Guarantors, a material adverse effect on (i) the properties, business,
operations or condition (financial or otherwise) of (A) the Borrower or (B) the
Guarantors on a consolidated basis, taken as a whole, or (ii) any such Person or
the ability of any such Person to perform its obligations under the Loan
Documents to which it is a party.
"Material Contract" means (a) as of the Closing Date, the contracts and
agreements set forth on Schedule 5.1(l) and (b) after the Closing Date, (i) the
contracts and agreements set forth on Schedule 5.1(l), (ii) any contract or
other agreement, written or oral, of the Borrower or any of the Guarantors (A)
which involves monetary liability of or to any such Person in an amount in
excess of (1) $1,000,000 per annum with respect to the Borrower or any Guarantor
(other than the MedCath Parent Entities) and (2) $5,000,000 with respect to any
MedCath Parent Entity and (B) which by its terms may not be canceled within
ninety (90) days, or (iii) any other contract or agreement, written or oral, of
the Borrower or any of the Guarantors the failure to comply with which could
reasonably be expected to have a Material Adverse Effect.
"Maturity Date" means the first to occur of (a) July [26], 2006 or (b)
the date of termination by the Administrative Agent on behalf of the Lenders
pursuant to Section 10.2(a).
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"MedCath Parent Entities" means MedCath Corporation, MedCath Holdings,
Inc., MedCath Intermediate Holdings, Inc. and MedCath Incorporated.
"Medicaid Certification" means certification by HCFA or a Governmental
Authority under contract with HCFA that health care operations are in compliance
with all the conditions of participation set forth in the Medicaid Regulations.
"Medicaid Provider Agreement" means an agreement entered into between a
Governmental Authority or other such entity administering the Medicaid program
and a health care operation under which the health care operation agrees to
provide services for Medicaid beneficiaries in accordance with the terms of the
agreement and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act and any statutes succeeding thereto; (ii) all applicable provisions
of all federal rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes described
in clause (i) above and all federal administrative, reimbursement and other
guidelines of all Governmental Authorities (whether or not having the force of
law) promulgated pursuant to or in connection with the statutes described in
clause (i) above; (iii) all state statutes and plans for medical assistance
enacted in connection with the statutes and provisions described in clauses (i)
and (ii) above; and (iv) all applicable provisions of all rules, regulations,
manuals and orders of all Governmental Authorities promulgated pursuant to or in
connection with the statutes described in clause (iii) above and all state
administrative, reimbursement and other guidelines of all Governmental
Authorities (whether or not having the force of law) promulgated pursuant to or
in connection with the statutes described in clause (ii) above, in each case as
may be amended, supplemented or otherwise modified from time to time.
"Medicare Certification" means certification by HCFA or a Governmental
Authority under contract with HCFA that the health care operation is in
compliance with all the conditions of participation set forth in the Medicare
Regulations.
"Medicare Provider Agreement" means an agreement entered into between a
Governmental Authority administering the Medicare program and a health care
operation under which the health care operation agrees to provide services for
Medicare beneficiaries in accordance with the terms of the agreement and
Medicare Regulations.
"Medicare Regulations" means, collectively, (i) all federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statutes succeeding thereto; and
(ii) all applicable provisions of all rules, regulations, manuals, orders and
administrative, reimbursement and other guidelines (whether or not having the
force of law) of all Governmental Authorities (including without limitation,
HHS, HCFA, the Office of the Inspector General for HHS, or any person succeeding
to the functions of any of the foregoing) promulgated pursuant to or in
connection with any of the foregoing (whether or not
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having the force of law), as each may be amended, supplemented or otherwise
modified from time to time.
"Mortgage" means the Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing of even date executed by the Borrower in
favor of the Administrative Agent for the benefit of the Administrative Agent
and the Lenders securing the Land, the Improvements and the other property and
fixtures described therein, as amended, restated, supplemented or otherwise
modified from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower (or, as applicable, any Guarantor) or
any ERISA Affiliate is making, or is accruing an obligation to make, or has
accrued an obligation to make contributions within the preceding six (6) years.
"Net Income" means, with respect to the Borrower for any period, the
net income (or loss) of the Borrower for such period, determined in accordance
with GAAP; provided that there shall be excluded from Net Income (a) the net
income (or loss) of any Person (other than a Subsidiary which shall be subject
to clause (c) below), in which the Borrower has a joint interest with a third
party, except to the extent such net income is actually paid to the Borrower by
dividend or other distribution during such period, (b) the net income (or loss)
of any Person accrued prior to the date it becomes a Subsidiary of such Person
or is merged into or consolidated with such Person or any of its Subsidiaries or
that Person's assets are acquired by such Person or any of its Subsidiaries
except to the extent included pursuant to the foregoing clause (a), (c) the net
income (if positive) of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary to the Borrower
of such net income (i) is not at the time permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute rule
or governmental regulation applicable to such Subsidiary or (ii) would be
subject to any taxes payable on such dividends or distributions.
"Notice of Account Designation" shall have the meaning assigned thereto
in Section 2.2.
"Notice of Borrowing" means shall have the meaning assigned thereto in
Section 2.2.
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 3.2.
"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.4.
"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Term Loans,
(b) all existing or future payment and other obligations owing by the Borrower
to any Lender or the Administrative Agent under any Hedging Agreement with any
Lender or the Administrative Agent, and (c) all other fees and commissions
(including Attorney Costs), charges, indebtedness, loans, liabilities, financial
accommodations, obligations, covenants and duties owing by the Borrower or any
of the Guarantors to the Lenders or the Administrative Agent, in each case under
or in respect of this Agreement, any Term Note or any of the other Loan
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Documents of every kind, nature and description, direct or indirect, absolute or
contingent, due or to become due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any note.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 6.2.
"Other Taxes" shall have the meaning assigned thereto in Section
3.11(b).
"Parent" means MedCath Corporation, a Delaware corporation.
"Participant" shall have the meaning assigned thereto in Section
12.10(d).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for the employees of the
Borrower (or, as applicable, any Guarantor) or any ERISA Affiliates or (b) has
at any time within the preceding six (6) years been maintained for the employees
of the Borrower (or, as applicable, any Guarantor) or any of its current or
former ERISA Affiliates.
"Permitted Distributions" shall have the meaning assigned thereto in
Section 9.6(c).
"Permitted Distribution Date" shall have the meaning assigned thereto
in Section 9.6(c).
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Pledge Agreement" means the amended and restated pledge and security
agreement of even date executed by the Management Company in favor of the
Administrative Agent for the benefit of itself and the Lenders, substantially in
the form of Exhibit K attached hereto, as amended, restated, supplemented or
otherwise modified from time to time.
"Property" means the Land, the Improvements, the Tangible Personalty
and all other property constituting the "Mortgaged Property," as described in
the Mortgage, or subject to a right, lien or security interest to secure the
Term Loans pursuant to any other Loan Document.
"Register" shall have the meaning assigned thereto in Section 12.10(c).
"Related Credit Documents" means the collective reference to (i) each
of the loan agreements set forth on Schedule 1.1(c) hereto (including all Loan
Documents executed in connection therewith and as defined in each of the loan
agreements) and (ii) each other loan agreement (including all Loan Documents
executed in connection therewith and as defined in each
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of the loan agreements) executed in connection with the Commitment Agreement, in
each case as amended, restated, supplemented or otherwise modified in accordance
with the terms thereof.
"Related Guaranty Agreements" means the collective reference to (i)
each of the guaranty agreements executed by certain of the Guarantors set forth
on Schedule 1.1(d) hereto and (ii) each other guaranty agreement executed by
certain of the Guarantors in connection with the Commitment Agreement, in each
case as amended, restated, supplemented or otherwise modified in accordance with
the terms thereof.
"Replaced Lender" shall have the meaning assigned thereto in Section
3.13(c).
"Replacement Lender" shall have the meaning assigned thereto in Section
3.13(c).
"Required Lenders" means, at any date, any combination of Lenders
holding of at least sixty-six and two-thirds percent (66-2/3%) of the aggregate
unpaid principal amount of the Term Notes, or if no amounts are outstanding
under the Term Notes, any combination of Lenders whose Commitment Percentages
aggregate at least sixty-six and two-thirds percent (66-2/3%) of the Aggregate
Commitment.
"Responsible Officer" means, with respect to any Person, any of the
following: the chief executive officer or chief financial officer of such Person
or any other officer of such Person reasonably acceptable to the Administrative
Agent
"Security Agreement" means the amended and restated security agreement
of even date executed by the Borrower in favor of the Administrative Agent for
the benefit of itself and the Lenders, substantially in the form of Exhibit J,
as amended, restated, supplemented or otherwise modified from time to time.
"Security Documents" means collectively, the Guaranty Agreement, the
Mortgage, the Security Agreement, the Financing Statements, the Pledge Agreement
and each other agreement or writing pursuant to which the Borrower or any other
Person party thereto pledges or grants a security interest in any property or
assets to secure the Obligations or any such Person guaranties the payment
and/or performance of the Obligations.
"Senior Debt" means, with respect to the Borrower at any date of
determination, all Debt other than Subordinated Debt.
"Social Security Act" means Chapter 7 of Title 42 of the United States
Code, as amended from time to time, or any successor statute thereto.
"Solvent" means, as to the Borrower and each Guarantor on a particular
date, that any such Person (a) has capital sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage and is able to pay its debts as they mature, (b) owns property having a
value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
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"Subordinated Debt" means the collective reference to any Debt of the
Borrower which is subordinated to the Obligations with respect to right and time
of payment, remedies, covenants and such other terms and conditions, in each
case to the reasonable satisfaction of the Required Lenders.
"Subordinated Project Equity Loan" shall have the meaning assigned
thereto in Section 9.1(g).
"Subordinated Working Capital Loan" shall have the meaning assigned
thereto in Section 9.1(f).
"Subsidiary" means as to any Person, any corporation, partnership,
limited liability company or other entity of which more than fifty percent (50%)
of the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity is at
the time owned by or the management is otherwise controlled by such Person
(irrespective of whether, at the time, capital stock or other ownership
interests of any other class or classes of such corporation, partnership,
limited liability company or other entity shall have or might have voting power
by reason of the happening of any contingency). Unless otherwise qualified
references to "Subsidiary" or "Subsidiaries" herein shall refer to those of the
Borrower.
"Syndication Agent" means Bankers Trust Company, in its capacity as
Syndication Agent hereunder.
"Tangible Personalty" means all fixtures, equipment, furnishings and
other articles of personal property now or hereafter owned by the Borrower and
attached to or contained in and used in connection with the Land and the
Improvements and all renewals or replacements thereof or articles in
substitution thereof, whether or not the same are or shall be attached to the
Land and Improvements in any manner.
"Taxes" shall have the meaning assigned thereto in Section 3.11(a).
"Term Loan Facility" means the term loan facility established pursuant
to Article II.
"Term Loans" means the term loans made to the Borrower by the Lenders
pursuant to Section 2.1.
"Term Notes" means the Term Notes made by the Borrower payable to the
order of each of the Lenders, substantially in the form of Exhibit B attached
hereto, evidencing the Debt incurred by the Borrower pursuant to the Term Loan
Facility, and any amendments, modifications and supplements thereto, any
substitute therefor, and any replacement, restatements, renewals or extensions
thereof, in whole or in part; "Term Note" means any of such Term Notes.
"Termination Event" means: (a) except for any such event that could not
reasonably be expected to have a Material Adverse Effect, a "Reportable Event"
described in Section 4043 of
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ERISA for which the notice requirement has not been waived by the PBGC, or (b)
except for any withdrawal that could not reasonably be expected to have a
Material Adverse Effect, the withdrawal of the Borrower (or, as applicable, any
Guarantor) or any ERISA Affiliate from a Pension Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (c) the termination of a Pension Plan, the filing of a notice of intent to
terminate a Pension Plan or the treatment of a Pension Plan amendment as a
termination, each under Section 4041(c) of ERISA, or (d) the institution of
proceedings to terminate, or the appointment of a trustee with respect to, any
Pension Plan by the PBGC, or (e) any other event or condition which would
constitute grounds under Section 4042(a) of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan, or (f) the imposition
of a Lien pursuant to Section 412 of the Code or Section 302 of ERISA, or (g)
except for any such event or condition that could not reasonably be expected to
have a Material Adverse Effect, any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245
of ERISA, or (h) except for any such event or condition that could not
reasonably be expected to have a Material Adverse Effect, any event or condition
which results in the termination of a Multiemployer Plan under Section 4041A of
ERISA or the institution by PBGC of proceedings to terminate a Multiemployer
Plan under Section 4042 of ERISA.
"Title Insurer" means First American Title Insurance Company.
"Title Policy" means the mortgagee title policy issued by the Title
Insurer and meeting the requirements of this Agreement and the Mortgage.
"UCC" means the Uniform Commercial Code as in effect in the State of
North Carolina.
"Unfinanced Capital Expenditures" means, with respect to the Borrower
for any period, all Capital Expenditures other than (a) Capital Expenditures
made to replace assets to the extent financed by (i) the net cash proceeds of
asset dispositions not prohibited hereunder or (ii) the proceeds of insurance
received with respect to the loss or taking or damage to the asset or assets
being replaced or (b) Capital Expenditures financed by the proceeds of Senior
Debt.
"United States" means the United States of America.
SECTION 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular article, section, subsection, Schedule or Exhibit is a
reference to that article, section, subsection, Schedule or Exhibit of this
Agreement. Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Any reference herein to "Charlotte time"
shall refer to the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Term
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Notes and the other Loan Documents or any certificate, report or other document
made or delivered pursuant to this Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE II
TERM LOAN FACILITY
SECTION 2.1 Term Loan. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make a Term Loan to the Borrower on
the Closing Date. The Term Loan shall be funded by each Lender in a principal
amount equal to such Lender's Commitment Percentage of the aggregate principal
amount of the Term Loans made on the Closing Date, which aggregate principal
amount shall equal the Aggregate Commitment.
SECTION 2.2 Procedure for Advance of Term Loan. The Borrower shall give
the Administrative Agent irrevocable prior written notice in the form attached
hereto as Exhibit C (the "Notice of Borrowing") prior to 1:00 p.m. (Charlotte
time) on the Closing Date requesting that the Lenders make the Term Loan as a
Base Rate Loan on such date. Upon receipt of the Notice of Borrowing from the
Borrower, the Administrative Agent shall promptly notify each Lender thereof. On
the Closing Date, each Lender will make available to the Administrative Agent
for the account of the Borrower, at the office of the Administrative Agent in
immediately available funds, the amount of such Term Loan to be made by such
Lender on such borrowing date. The Borrower hereby irrevocably authorizes the
Administrative Agent to disburse the proceeds of the Term Loan in immediately
available funds by crediting or wiring such proceeds to the deposit account of
the Borrower identified in the most recent notice substantially in the form of
Exhibit D hereto (the "Notice of Account Designation") delivered by the Borrower
to the Administrative Agent or as may be otherwise agreed upon by the Borrower
and the Administrative Agent.
SECTION 2.3 Repayment of Term Loan. The Borrower shall repay the
aggregate outstanding principal amount of the Term Loan in consecutive quarterly
installments on the last Business Day of each of March, June, September and
December, commencing September 30, 2001 as set forth below, except as the
amounts of individual installments may be adjusted pursuant to Section 2.4
hereof:
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--------------------------------------------------------------------------------
CALENDAR YEAR PAYMENT DATE PRINCIPAL INSTALLMENT
($)
--------------------------------------------------------------------------------
2001 September 30, 2001
--------------------------------------------------------------------------------
December 31, 2001
--------------------------------------------------------------------------------
2002 March 31, 2002
--------------------------------------------------------------------------------
June 30, 2002
--------------------------------------------------------------------------------
September 30, 2002
-------------------------------------------------------------------------------
December 31, 2002
--------------------------------------------------------------------------------
2003 March 31, 2003
--------------------------------------------------------------------------------
June 30, 2003
--------------------------------------------------------------------------------
September 30, 2003
--------------------------------------------------------------------------------
December 31, 2003
--------------------------------------------------------------------------------
2004 March 31, 2004
--------------------------------------------------------------------------------
June 30, 2004
--------------------------------------------------------------------------------
September 30, 2004
--------------------------------------------------------------------------------
December 31, 2004
--------------------------------------------------------------------------------
2005 March 31, 2005
--------------------------------------------------------------------------------
June 30, 2005
--------------------------------------------------------------------------------
September 30, 2005
--------------------------------------------------------------------------------
December 31, 2005
--------------------------------------------------------------------------------
2006 March 31, 2006
--------------------------------------------------------------------------------
June 30, 2006
--------------------------------------------------------------------------------
July 26, 2006
--------------------------------------------------------------------------------
If not sooner paid, the Term Loan shall be paid in full, together with accrued
interest thereon, on the Maturity Date.
SECTION 2.4 Prepayment of Term Loan.
(a) Optional Prepayment. The Borrower may at any time and from time to
time prepay the Term Loans, in whole or in part, upon at least three (3)
Business Days' irrevocable notice to the Administrative Agent with respect to
any prepayment, in the form attached hereto as Exhibit E (a "Notice of
Prepayment"), specifying the date and amount of prepayment and whether the
prepayment is of Eurodollar Rate Loans, Base Rate Loans or a combination
thereof, and, if of a combination thereof, the amount allocable to each. Upon
receipt of such notice, the Administrative Agent shall promptly notify each
Lender. If any such notice is given, the amount specified in such notice shall
be due and payable on the date set forth in such notice. Partial prepayments
shall be in an aggregate amount of $1,000,000 or a whole multiple of $1,000,000
in excess thereof. Partial prepayments shall be applied ratably to the remaining
scheduled principal installments of the Term Loans (including the final payment
thereof) until the Term Loans are paid in full. Any such prepayments shall be
applied first to Base Rate Loans and then to Eurodollar Rate Loans in direct
order of maturities of Interest Periods; provided that any payment of any
Eurodollar Rate Loan shall be accompanied by any amount required to be paid
pursuant to Section 3.9 hereof (but otherwise without premium or penalty).
(b) Mandatory Prepayment.
(i) The Borrower shall make mandatory principal prepayments of
the Term Loans (A) in accordance with Section 1.6 of the Mortgage following the
receipt thereby of the net cash proceeds under any insurance policy required to
be maintained pursuant to this
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Agreement, the Mortgage and the other Loan Documents and (B) in accordance with
Section 1.15 of the Mortgage following the receipt thereby of the net cash
proceeds in connection with any condemnation proceeding.
(ii) Upon the occurrence of any event triggering the
prepayment requirement pursuant to this Section 2.4(b), the Borrower shall
promptly deliver a Notice of Prepayment to the Administrative Agent and, upon
receipt of such notice, the Administrative Agent shall promptly so notify the
Lenders. Each prepayment under this Section 2.4(b) shall be applied ratably to
the remaining scheduled principal installments of the Term Loans (including the
final payment thereof) until the Term Loans are paid in full. Any such
prepayments shall be applied first to Base Rate Loans and then to Eurodollar
Rate Loans in direct order of maturities of Interest Periods; provided that any
payment of any Eurodollar Rate Loan shall be accompanied by any amount required
to be paid pursuant to Section 3.9 hereof (but otherwise without premium or
penalty).
(c) General Conditions. Amounts prepaid under the Term Loans pursuant
to this Section 2.4 may not be reborrowed and will constitute a permanent
reduction in the Aggregate Commitment. Each prepayment shall be accompanied by
any amount required to be paid pursuant to Section 3.9 hereof.
SECTION 2.5 Term Notes. Each Lender's Term Loan and the obligation of
the Borrower to repay such Term Loan shall be evidenced by a separate Term Note
executed by the Borrower payable to the order of such Lender.
SECTION 2.6 Use of Proceeds. The Borrower shall use the proceeds of the
Term Loans (a) to refinance the obligations under the Existing Loan Agreement as
set forth herein and (b) to pay certain fees and expenses incurred in connection
with the transactions contemplated hereby.
ARTICLE III
GENERAL LOAN PROVISIONS
SECTION 3.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
3.1, at the election of the Borrower, Term Loans shall bear interest at (A) the
Base Rate plus the Applicable Margin as set forth in Section 3.1(c) or (B) the
Eurodollar Rate plus the Applicable Margin as set forth in Section 3.1(c). The
Borrower shall select the rate of interest and Interest Period, if any,
applicable to any Term Loan at the time the Notice of Borrowing is delivered on
the Closing Date or at the time a Notice of Conversion/Continuation is given
pursuant to Section 3.2. Each Term Loan or portion thereof bearing interest
based on the Base Rate shall be a "Base Rate Loan" and each Term Loan or portion
thereof bearing interest based on the Eurodollar Rate shall be an "Eurodollar
Rate Loan". Any Term Loan or any portion thereof as to which the Borrower has
not duly specified an interest rate as provided herein shall be deemed a Base
Rate Loan.
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(b) Interest Periods. In connection with each Eurodollar Rate Loan, the
Borrower, by giving notice at the times described in Section 3.1(a), shall elect
an interest period (each, an "Interest Period") to be applicable to such Term
Loan, which Interest Period shall be a period of one (1), two (2), three (3), or
six (6) months with respect to each Eurodollar Rate Loan; provided that:
(i) the Interest Period shall commence on the date of advance
of or conversion to any Eurodollar Rate Loan and, in the case of
immediately successive Interest Periods, each successive Interest
Period shall commence on the date on which the next preceding Interest
Period expires;
(ii) if any Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, that if any Interest Period
with respect to a Eurodollar Rate Loan would otherwise expire on a day
that is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iii) any Interest Period with respect to a Eurodollar Rate
Loan that begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the relevant calendar month at the end of such Interest
Period;
(iv) no Interest Period shall extend beyond the Maturity Date,
and Interest Periods shall be selected by the Borrower so as to permit
the Borrower to make the monthly principal installment payments
pursuant to Section 2.3 without payment of any amounts pursuant to
Section 3.9; and
(v) there shall be no more than two (2) Interest Periods in
effect at any time.
(c) Applicable Margin. The Applicable Margin provided for in Section
3.1(a) with respect to any Term Loan (the "Applicable Margin") shall be based
upon the table set forth below and shall be determined and adjusted quarterly on
the date (each a "Calculation Date") ten (10) Business Days after the date by
which the Borrower is required to provide an Officer's Compliance Certificate
for the most recently ended fiscal quarter of the Borrower; provided, however,
that (i) the initial Applicable Margin shall be determined by reference to the
Guarantor Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Borrower preceding the Closing Date (provided that the Pricing
Level applicable to such initial Applicable Margin shall not be less than
Pricing Level III as shown below) and shall remain at the applicable Pricing
Level until the first Calculation Date occurring after September 30, 2001 and
thereafter the Applicable Margin shall be determined by reference to the
Guarantor Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Borrower preceding the applicable Calculation Date and (ii) if
the Borrower fails to provide the Officer's Compliance Certificate as required
by Section 6.2 for the most recently ended fiscal quarter of the Borrower
preceding the applicable Calculation Date, the Applicable Margin from such
Calculation Date shall be based on Pricing
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Level IV until such time as an appropriate Officer's Compliance Certificate is
provided, at which time the Pricing Level shall be determined by reference to
the Guarantor Leverage Ratio as of the last day of the most recently ended
fiscal quarter of the Borrower preceding such Calculation Date. The Applicable
Margin shall be effective from one Calculation Date until the next Calculation
Date. Any adjustment in the Applicable Margin shall be applicable to all Term
Loans then existing or subsequently made or issued.
--------------------------------
Applicable Margin
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Eurodollar Base
Pricing Level Guarantor Leverage Ratio Rate Rate
=================================================================================================================
I Less than or equal to 2.00 to 1.00 2.50% 1.25%
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II Less than or equal to 2.50 to 1.00 but greater than 2.00 to 1.00 2.75% 1.50%
-----------------------------------------------------------------------------------------------------------------
III Less than or equal to 3.00 to 1.00 but greater than 2.50 to 1.00 3.00% 1.75%
-----------------------------------------------------------------------------------------------------------------
IV Greater than 3.00 to 1.00 3.50% 2.25%
-----------------------------------------------------------------------------------------------------------------
(d) Default Rate. Subject to Section 10.3, at the discretion of the
Administrative Agent or the Required Lenders, upon the occurrence and during the
continuance of an Event of Default, (i) the Borrower shall no longer have the
option to request Eurodollar Rate Loans, (ii) all outstanding Eurodollar Rate
Loans shall bear interest at a rate per annum of two percent (2%) in excess of
the rate then applicable to Eurodollar Rate Loans until the end of the
applicable Interest Period and thereafter at a rate equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans, and (iii) all outstanding
Base Rate Loans and other Obligations shall bear interest at a rate per annum
equal to two percent (2%) in excess of the rate then applicable to Base Rate
Loans or such other Obligations. Interest shall continue to accrue on the Term
Notes after the filing by or against the Borrower of any petition seeking any
relief in bankruptcy or under any act or law pertaining to insolvency or debtor
relief, whether state, federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing September 30, 2001; and interest on each Eurodollar Rate Loan shall
be payable on the last day of each Interest Period applicable thereto, and if
such Interest Period extends over three (3) months, at the end of each three (3)
month interval during such Interest Period. Interest on Eurodollar Rate Loans
and all fees payable hereunder shall be computed on the basis of a 360-day year
and assessed for the actual number of days elapsed and interest on Base Rate
Loans shall be computed on the basis of a 365/66-day year and assessed for the
actual number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Term
Notes charged or collected pursuant to the terms of this Agreement or pursuant
to any of the Term Notes exceed the highest rate permissible under any
Applicable Law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that such a court determines
that the Lenders have charged or received interest hereunder in excess of the
highest applicable rate, the rate in effect hereunder shall automatically be
reduced to the maximum rate permitted by Applicable Law and the Lenders shall at
the Administrative Agent's option (i) promptly refund to the Borrower
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any interest received by the Lenders in excess of the maximum lawful rate or
(ii) shall apply such excess to the principal balance of the Obligations. It is
the intent hereof that the Borrower not pay or contract to pay, and that neither
the Administrative Agent nor any Lender receive or contract to receive, directly
or indirectly in any manner whatsoever, interest in excess of that which may be
paid by the Borrower under Applicable Law.
SECTION 3.2 Notice and Manner of Conversion or Continuation of Term
Loans. Provided that no Default or Event of Default has occurred and is then
continuing, the Borrower shall have the option to (a) convert at any time all or
any portion of any outstanding Base Rate Loans in a principal amount equal to
$1,000,000 or any whole multiple of $1,000,000 in excess thereof into one or
more Eurodollar Rate Loans and (b) upon the expiration of any Interest Period,
(i) convert all or any part of its outstanding Eurodollar Rate Loans in a
principal amount equal to $1,000,000 or a whole multiple of $1,000,000 in excess
thereof into Base Rate Loans or (ii) continue such Eurodollar Rate Loans as
Eurodollar Rate Loans. Whenever the Borrower desires to convert or continue Term
Loans as provided above, the Borrower shall give the Administrative Agent
irrevocable prior written notice in the form attached hereto as Exhibit F (a
"Notice of Conversion/Continuation") not later than 12:00 p.m. (Charlotte time)
three (3) Business Days before the day on which a proposed conversion or
continuation of such Term Loan is to be effective specifying (A) the Term Loans
to be converted or continued, and, in the case of any Eurodollar Rate Loan to be
converted or continued, the last day of the Interest Period therefor, (B) the
effective date of such conversion or continuation (which shall be a Business
Day), (C) the principal amount of such Term Loans to be converted or continued,
and (D) the Interest Period to be applicable to such converted or continued
Eurodollar Rate Loan. The Administrative Agent shall promptly notify the Lenders
of such Notice of Conversion/Continuation.
SECTION 3.3 Annual Administrative Fees. In order to compensate the
Administrative Agent for administering the Term Loans, the Borrower agrees to
pay to the Administrative Agent, for its account, the annual administrative fees
set forth in the separate fee letter agreement executed by the Borrower, Bank of
America and Banc of America Securities dated June 1, 2001.
SECTION 3.4 Manner of Payment. Each payment by the Borrower on account
of the principal of or interest on the Term Loans or of any fee, commission or
other amounts payable to the Lenders under this Agreement or any Term Note shall
be made not later than 1:00 p.m. (Charlotte time) on the date specified for
payment under this Agreement to the Administrative Agent at the Administrative
Agent's Office for the account of the Lenders (other than as set forth below)
pro rata in accordance with their respective Commitment Percentages (except as
specified below), in Dollars, in immediately available funds and shall be made
without any condition, set-off, counterclaim, recoupment or deduction
whatsoever. Any payment received after such time but before 2:00 p.m. (Charlotte
time) on such day shall be deemed a payment on such date for the purposes of
Section 10.1, but for all other purposes shall be deemed to have been made on
the next succeeding Business Day. Any payment received after 2:00 p.m.
(Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Administrative Agent of each
such payment, the Administrative Agent shall distribute to each Lender at its
address for notices set forth herein its pro rata share of such payment in
accordance with such Lender's Commitment Percentage (except as specified below)
and shall wire advice of
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the amount of such credit to each Lender. Each payment to the Administrative
Agent of Administrative Agent's fees or expenses shall be made for the account
of the Administrative Agent and any amount payable to any Lender under Sections
3.8, 3.9, 3.10, 3.11 or 12.2 shall be paid to the Administrative Agent for the
account of the applicable Lender. Subject to Section 3.1(b)(ii) if any payment
under this Agreement or any Term Note shall be specified to be made upon a day
which is not a Business Day, it shall be made on the next succeeding day which
is a Business Day and such extension of time shall in such case be included in
computing any interest if payable along with such payment.
SECTION 3.5 Crediting of Payments and Proceeds. In the event that the
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 10.2, all payments received by the
Lenders upon the Term Notes and the other Obligations and all net proceeds from
the enforcement of the Obligations shall be applied first to all expenses then
due and payable by the Borrower hereunder and under the other Loan Documents,
then to all indemnity obligations then due and payable by the Borrower
hereunder, then to all Administrative Agent's fees then due and payable, then to
all commitment and other fees and commissions then due and payable, then to
accrued and unpaid interest on the Term Notes, then to any termination payments
due in respect of a Hedging Agreement with any Lender or the Administrative
Agent (which such Hedging Agreement is permitted or required hereunder) (pro
rata in accordance with all such amounts due), and then to the principal amount
of the Term Notes, in that order.
SECTION 3.6 Adjustments. If any Lender (a "Benefited Lender") shall at
any time receive any payment of all or part of the Obligations owing to it, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect to the Obligations owing to it (whether voluntarily or involuntarily, by
set-off or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of the Obligations
owing to such other Lender, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Term Loans, or shall provide such other Lenders with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to cause
such Benefited Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another Lender's
Term Loans may exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
SECTION 3.7 Nature of Obligations of the Lenders Regarding Term Loans;
Assumption by the Administrative Agent. The obligations of the Lenders under
this Agreement to make the Term Loans are several and are not joint or joint and
several. Unless the Administrative Agent shall have received notice from a
Lender prior to a proposed borrowing date that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of the
amount to be borrowed on such date (which notice shall not release such Lender
of its obligations hereunder), the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the
proposed borrowing date in accordance with
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Section 2.2, and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If such
amount is made available to the Administrative Agent on a date after such
borrowing date, such Lender shall pay to the Administrative Agent on demand an
amount, until paid, equal to the product of (a) the amount not made available by
such Lender in accordance with the terms hereof, times (b) the daily average
Federal Funds Rate during such period as determined by the Administrative Agent,
times (c) a fraction the numerator of which is the number of days that elapse
from and including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360. A certificate of the Administrative Agent with respect to any amounts
owing under this Section 3.7 shall be conclusive, absent manifest error. If such
Lender's Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days after such
borrowing date, the Administrative Agent shall be entitled to recover such
amount made available by the Administrative Agent with interest thereon at the
rate per annum applicable to such borrowing, on demand, from the Borrower. The
failure of any Lender to make available its Commitment Percentage of any Term
Loan requested by the Borrower shall not relieve it or any other Lender of its
obligation, if any, hereunder to make its Commitment Percentage of such Term
Loan available on the borrowing date, but no Lender shall be responsible for the
failure of any other Lender to make its Commitment Percentage of such Term Loan
available on the borrowing date. Notwithstanding anything set forth herein to
the contrary, any Lender that fails to make available its Commitment Percentage
shall not (a) have any voting or consent rights under or with respect to any
Loan Document or (b) constitute a "Lender" (or be included in the calculation of
Required Lenders hereunder) for any voting or consent rights under or with
respect to any Loan Document.
SECTION 3.8 Changed Circumstances.
(a) Circumstances Affecting Eurodollar Rate Availability. If with
respect to any Interest Period the Administrative Agent or any Lender (after
consultation with Administrative Agent) shall determine that, by reason of
circumstances affecting the foreign exchange and interbank markets generally,
deposits in eurodollars, in the applicable amounts are not being quoted via any
applicable page or screen or otherwise offered to the Administrative Agent or
such Lender for such Interest Period, then the Administrative Agent shall
forthwith give notice thereof to the Borrower. Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, the obligation of the Lenders to make Eurodollar Rate Loans and the right
of the Borrower to convert any Term Loan to or continue any Term Loan as a
Eurodollar Rate Loan shall be suspended, and the Borrower shall repay in full
(or cause to be repaid in full) the then outstanding principal amount of each
such Eurodollar Rate Loan together with accrued interest thereon, on the last
day of the then current Interest Period applicable to such Eurodollar Rate Loan
or convert the then outstanding principal amount of each such Eurodollar Rate
Loan to a Base Rate Loan as of the last day of such Interest Period.
(b) Laws Affecting Eurodollar Rate Availability. If, after the date
hereof, the introduction of, or any change in, any Applicable Law or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any of
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its Lending Offices) with any request or directive (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, shall make it unlawful or impossible for any of the Lenders (or any of
their respective Lending Offices) to honor its obligations hereunder to make or
maintain any Eurodollar Rate Loan, such Lender shall promptly give notice
thereof to the Administrative Agent and the Administrative Agent shall promptly
give notice to the Borrower and the other Lenders. Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, (i) the obligations of the Lenders to make Eurodollar Rate Loans and the
right of the Borrower to convert any Term Loan or continue any Term Loan as a
Eurodollar Rate Loan shall be suspended and thereafter the Borrower may select
only Base Rate Loans hereunder, and (ii) if any of the Lenders may not lawfully
continue to maintain a Eurodollar Rate Loan to the end of the then current
Interest Period applicable thereto as a Eurodollar Rate Loan, the applicable
Eurodollar Rate Loan shall immediately be converted to a Base Rate Loan for the
remainder of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with
respect to any Term Note or shall change the basis of taxation of
payments to any of the Lenders (or any of their respective Lending
Offices) of the principal of or interest on any Term Note or any other
amounts due under this Agreement in respect thereof (except for changes
in the rate of tax on the overall net income of any of the Lenders or
any of their respective Lending Offices imposed by the jurisdiction in
which such Lender is organized or is or should be qualified to do
business or such Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit, insurance or capital
or similar requirement against assets of, deposits with or for the
account of, or credit extended by any of the Lenders (or any of their
respective Lending Offices) or shall impose on any of the Lenders (or
any of their respective Lending Offices) or the foreign exchange and
interbank markets any other condition affecting any Term Note; and the
result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any Eurodollar Rate Loan or to reduce the yield
or amount of any sum received or receivable by any of the Lenders under
this Agreement or under the Term Notes in respect of a Eurodollar Rate
Loan, then such Lender shall promptly notify the Administrative Agent,
and the Administrative Agent shall promptly notify the Borrower of such
fact and demand compensation therefor and, within fifteen (15) days
after such notice by the Administrative Agent, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate
such Lender or Lenders for such increased cost or reduction. The
Administrative Agent will promptly notify the Borrower of any event of
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which it has knowledge which will entitle such Lender to compensation
pursuant to this Section 3.8(c);
provided, that the Administrative Agent shall incur no liability whatsoever to
the Lenders or the Borrower in the event it fails to do so. The amount of such
compensation shall be determined, in the applicable Lender's sole discretion,
based upon the assumption that such Lender funded its Commitment Percentage of
the Eurodollar Rate Loans in the London interbank market and using any
reasonable attribution or averaging methods which such Lender deems appropriate
and practical. A certificate of such Lender setting forth the basis for
determining such amount or amounts necessary to compensate such Lender shall be
forwarded to the Borrower through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.
SECTION 3.9 Indemnity. The Borrower hereby indemnifies each of the
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Term Loan (a) as a consequence of any failure by
the Borrower to make any payment when due of any amount due hereunder in
connection with a Eurodollar Rate Loan, (b) due to any failure of the Borrower
to borrow on the Closing Date or on a date specified therefor in a Notice of
Continuation/Conversion or (c) due to any payment, prepayment or conversion of
any Eurodollar Rate Loan on a date other than the last day of the Interest
Period therefor. The amount of such loss or expense shall be determined, in the
applicable Lender's sole discretion, based upon the assumption that such Lender
funded its Commitment Percentage of the Eurodollar Rate Loans in the London
interbank market and using any reasonable attribution or averaging methods which
such Lender deems appropriate and practical. A certificate of such Lender
setting forth the basis for determining such amount or amounts necessary to
compensate such Lender shall be forwarded to the Borrower through the
Administrative Agent and shall be conclusively presumed to be correct save for
manifest error.
SECTION 3.10 Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other Governmental Authority (whether or not having the force of law),
has or would have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to be maintained
by, any Lender or any corporation controlling such Lender as a consequence of,
or with reference to the Commitments and other commitments of this type, below
the rate which such Lender or such other corporation could have achieved but for
such introduction, change or compliance, then within five (5) Business Days
after written demand by any such Lender, the Borrower shall pay to such Lender
from time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the Borrower and the Administrative Agent by such
Lender, shall, in the absence of manifest error, be presumed to be correct and
binding for all purposes.
SECTION 3.11 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Term Notes shall be made free and clear of and without
deduction for any and all
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present or future taxes, levies, imposts, deductions, charges or withholding,
and all liabilities with respect thereto excluding, (i) in the case of each
Lender and the Administrative Agent, income and franchise taxes imposed by the
jurisdiction under the laws of which such Lender or the Administrative Agent (as
the case may be) is organized or is or should be qualified to do business or any
political subdivision thereof and (ii) in the case of each Lender, income and
franchise taxes imposed by the jurisdiction of such Lender's Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct or withhold any
Taxes from or in respect of any sum payable hereunder or under any Term Note to
any Lender or the Administrative Agent, (A) the sum payable shall be increased
as may be necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable
under this Section 3.11) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the amount such party would have received
had no such deductions or withholdings been made, (B) the Borrower shall make
such deductions or withholdings, (C) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
Applicable Law, and (D) the Borrower shall deliver to the Administrative Agent
evidence of such payment to the relevant taxing authority or other Governmental
Authority in the manner provided in Section 3.11(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Term Loans, or the other Loan Documents, or the perfection of any rights or
security interest in respect thereof (hereinafter referred to as "Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 12.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof (a "Foreign
Lender") shall deliver to the Borrower, with a copy to the Administrative Agent,
on the Closing Date or concurrently with the delivery of the relevant Assignment
and Acceptance, as applicable, (i) two United States Internal Revenue Service
Forms W-8ECI or Forms W-8BEN, as applicable (or successor forms) properly
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completed and certifying in each case that such Lender is entitled to a complete
exemption from withholding or deduction for or on account of any United States
federal income taxes, and (ii) an Internal Revenue Service Form W-8BEN or W-8ECI
or successor applicable form, as the case may be, to establish an exemption from
United States backup withholding taxes. Each such Lender further agrees to
deliver to the Borrower, with a copy to the Administrative Agent, a Form W-8BEN
or W-8ECI, or successor applicable forms or manner of certification, as the case
may be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower, certifying in the case of a Form
W-8BEN or W-8ECI that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (unless in any such case an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders such forms inapplicable
or the exemption to which such forms relate unavailable and such Lender notifies
the Borrower and the Administrative Agent that it is not entitled to receive
payments without deduction or withholding of United States federal income taxes)
and, in the case of a Form W-8BEN or W-8ECI, establishing an exemption from
United States backup withholding tax.
(f) Survival. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
SECTION 3.12 Security. The Obligations of the Borrower shall be secured
as provided in the Security Documents.
SECTION 3.13 Replacement of Lenders.
(a) If any Lender requests compensation pursuant to Section 3.8 or
Section 3.10, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.11, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Term Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if, in the judgment of such Lender, such designation or
assignment (A) would eliminate or reduce amounts payable pursuant to Section
3.8, Section 3.10 or Section 3.11, as the case may be, in the future and (B)
would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.
(b) If any Lender requests compensation pursuant to Section 3.8 or
Section 3.10, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.11, then the Borrower may, at its sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 12.10), all of its interests, rights and obligations under
this Agreement to an Eligible Assignee that shall assume such obligations (which
assignee may be
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another Lender, if a Lender accepts such assignment); provided that (A) the
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (B) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Term Loans, accrued interest thereon, accrued fees, breakage costs and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (C) in the case of any such assignment resulting
from a claim for compensation pursuant to Section 3.8 or Section 3.10, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
(c) To the extent that any Lender (a "Replaced Lender") is required to
assign all of its interests, rights and obligations under this Agreement to an
Eligible Assignee (a "Replacement Lender") pursuant to this Section 3.13, upon
the execution of all applicable assignment documents and the satisfaction of all
other conditions set forth herein, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to be a Lender hereunder, except
with respect to the indemnification provisions under this Agreement, which
provisions shall survive as to such Replaced Lender.
ARTICLE IV
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 4.1 Closing. The closing shall take place at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. on July [26], 2001, or on such
other date and time as the parties hereto shall mutually agree.
SECTION 4.2 Conditions to Closing and Term Loan. The obligation of the
Lenders to close this Agreement and to make the Term Loan is subject to the
satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Term Notes,
the Guaranty Agreement, the Pledge Agreement, the Security Agreement,
the Mortgage, the Management Fee and Guaranty Fee Subordination
Agreement, each Intercompany Loan Subordination Agreement, together
with any other applicable Loan Documents, shall have been duly
authorized, executed and delivered to the Administrative Agent by the
parties thereto, shall be in full force and effect and no default or
event of default shall exist thereunder, and the Borrower shall have
delivered original counterparts thereof to the Administrative Agent.
(b) Closing Certificates; etc.
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(i) Officer's Certificate of the Borrower. The
Administrative Agent shall have received a certificate from a
Responsible Officer of the Management Company, in its capacity
as the duly authorized and acting Manager of the Borrower, in
form and substance satisfactory to the Administrative Agent,
to the effect that all representations and warranties of the
Borrower contained in this Agreement and the other Loan
Documents are true, correct and complete; that the Borrower is
not in violation of any of the covenants contained in this
Agreement and the other Loan Documents; that, after giving
effect to the transactions contemplated by this Agreement, no
Default or Event of Default has occurred and is continuing;
and that the Borrower has satisfied each of the closing
conditions.
(ii) Officer's Certificate of the Guarantors. The
Administrative Agent shall have received a certificate from a
Responsible Officer of the Parent, on behalf of itself and the
other Guarantors, in form and substance satisfactory to the
Administrative Agent, to the effect that all representations
and warranties of the Guarantors contained in the Guaranty
Agreement and the other Loan Documents are true, correct and
complete; that the Guarantors are not in violation of any of
the covenants contained in the Guaranty Agreement and the
other Loan Documents; that, after giving effect to the
transactions contemplated by the Guaranty Agreement, no
Default or Event of Default has occurred and is continuing;
and that the Guarantors have satisfied each of the closing
conditions.
(iii) Certificate of Secretary of the Borrower. The
Administrative Agent shall have received a certificate of the
secretary or assistant secretary of the Management Company, in
its capacity as the duly authorized Manager of the Borrower,
certifying as to the incumbency and genuineness of the
signature of each officer of the Management Company executing
Loan Documents to which the Borrower is a party and certifying
that attached thereto is a true, correct and complete copy of
(A) the articles of organization of the Borrower and all
amendments thereto, certified as of a recent date by the
appropriate Governmental Authority in its jurisdiction of
incorporation, (B) the operating agreement on behalf of the
Borrower as in effect on the date of such certifications, (C)
resolutions duly adopted by the Board of Directors of the
Borrower authorizing the borrowings contemplated hereunder and
the execution, delivery and performance of this Agreement and
the other Loan Documents to which the Borrower is a party, (D)
each certificate required to be delivered pursuant to Section
4.2(b)(v)(A) and (E) the Management Agreement (if applicable).
(iv) Certificate of Secretary of the Guarantors. The
Administrative Agent shall have received a certificate of the
secretary or assistant secretary of each Guarantor certifying
as to the incumbency and genuineness of the signature of each
officer of each Guarantor executing Loan Documents to which it
is a party, certifying that attached thereto is a true,
complete and correct copy of (A) the articles of organization,
the articles of incorporation or such other charter documents
of such Guarantor and all amendments thereto, certified as of
a recent date by the appropriate Governmental Authority in its
jurisdiction of organization
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or incorporation, (B) the operating agreement, the bylaws or
such other applicable documents governing management of such
Guarantor as in effect on the date of such certification, (C)
resolutions duly adopted by the Board of Directors of such
Guarantor authorizing the execution, delivery and performance
of the Loan Documents to which it is a party and (D) each
certificate required to be delivered pursuant to Section
4.2(b)(v)(B).
(v) Certificates of Good Standing.
(A) The Administrative Agent shall have
received certificates as of a recent date of the good standing
of the Borrower and of the Management Company under the laws
of their respective jurisdictions of organization and
certificates as of a recent date of the good standing of the
Borrower and the Management Company under the laws of the
State in which the Hospital is located and certificates of the
relevant taxing authorities of such jurisdictions certifying
that such Person has filed required tax returns and owes no
delinquent taxes.
(B) The Administrative Agent shall have
received certificates as of a recent date of the good standing
of each Guarantor (other than the Management Company) under
the laws of its jurisdiction of organization and, to the
extent requested by the Administrative Agent, each other
jurisdiction where the each Guarantor is qualified to do
business and a certificate of the relevant taxing authorities
of such jurisdictions certifying that each Guarantor has filed
required tax returns and owes no delinquent taxes.
(vi) Opinions of Counsel. The Administrative Agent
shall have received favorable opinions of counsel to the
Borrower and the Guarantors addressed to the Administrative
Agent and the Lenders with respect to the Borrower and the
Guarantors, the Loan Documents and such other matters as the
Lenders shall request.
(vii) Tax Forms. The Administrative Agent shall have
received copies of the United States Internal Revenue Service
forms required by Section 3.11(e) hereof.
(c) Collateral.
(i) Filings and Recordings. All filings and
recordations necessary to perfect the liens and security
interests of the Lenders in the collateral described in the
Security Documents shall have been executed and delivered to
the Administrative Agent.
(ii) Pledged Collateral. The Administrative Agent
shall have received original stock certificates or other
certificates evidencing the capital stock or other ownership
interests pledged pursuant to the Pledge Agreement, if any,
together
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with an undated stock power for each such certificate duly
executed in blank by the registered owner thereof.
(iii) Lien Search. The Administrative Agent shall
have received (A) the results of a Lien search (including a
search as to judgments, pending litigation and tax matters)
made against the Borrower under the Uniform Commercial Code
(or applicable judicial docket) as in effect in any state in
which any of its assets are located, indicating among other
things that its assets are free and clear of any Lien except
for Liens permitted hereunder and (B) if required by the
Administrative Agent, the results of a search of the
appropriate judgment and tax lien records, showing no
outstanding judgment or tax lien against the Borrower or any
Guarantor.
(iv) Hazard and Liability Insurance. The
Administrative Agent shall have received certificates of
insurance, evidence of payment of all insurance premiums for
the current policy year of each insurance policy, and, if
requested by the Administrative Agent, copies (certified by a
Responsible Officer of the Management Company) of each
insurance policy in the form required hereunder and under the
Security Documents and otherwise in form and substance
reasonably satisfactory to the Administrative Agent.
(v) Title Insurance. The Administrative Agent shall
have received a marked-up commitment for a policy of title
insurance, insuring the Lenders' first priority Lien and
showing no Liens prior to the Lenders' Lien other than for ad
valorem taxes not yet due and payable and encumbrances on, and
exceptions to, title acceptable to the Administrative Agent,
with title insurance companies and coverages acceptable to the
Administrative Agent on the property subject to the Mortgage
with the final title insurance policy being delivered within
thirty (30) days after the Closing Date. Furthermore, the
Borrower agrees to provide or obtain any customary affidavits
and indemnities as may be required or necessary to obtain
title insurance satisfactory to the Administrative Agent.
(vi) Title Exceptions. The Administrative Agent shall
have received copies of all recorded documents creating
exceptions to the title policy referred to in Section
4.2(c)(v).
(vii) Matters Relating to Flood Hazard Properties.
The Administrative Agent shall have received a certification
from a nationally recognized reporting agency, certifying that
none of the Land is located in a flood hazard area.
(viii) As-Built Survey. The Administrative Agent
shall have received an as-built survey of the Land and the
Improvements as of a date not more than sixty (60) days prior
to the Closing Date certified by a registered engineer or land
surveyor. Such survey shall show the area of the Land, all
boundaries of the Land with courses and distances indicated,
including chord bearings and arc and chord distances for all
curves, and shall show dimensions and locations of all
easements,
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private drives, roadways, and other facts materially affecting
the Land, and shall show such other details as the
Administrative Agent may reasonably request, including,
without limitation, any encroachment (and the extent thereof
in feet and inches) onto the Land or by any of the
Improvements upon adjoining land or upon any easement
burdening the Land; the Improvements and the relation of the
Improvements by distances to the boundaries of the Land, to
any easements burdening the Land, and to the established
building lines and the street lines; and (A) a statement of
the number of each type of parking space required by
applicable laws, ordinances, orders, rules, regulations,
restrictive covenants and easements affecting the
Improvements, and the number of each such type of parking
space provided, and (B) the location of all utilities serving
the Improvements.
(ix) Environmental Assessment. The Administrative
Agent shall have received a Phase I environmental assessment
and such other environmental reports reasonably requested by
the Administrative Agent regarding the Land by an
environmental engineering firm acceptable to the
Administrative Agent showing no environmental conditions or
liabilities in violation of Environmental Laws that could
reasonably be expected to have a Material Adverse Effect.
(x) Zoning Compliance. The Administrative Agent shall
have received and approved satisfactory evidence that the
Property, including the Improvements, as constructed, complies
with all applicable zoning and land use regulations,
including, without limitation, those regulations related to
the use, area, width and depth of the Land as a building site
for the Improvements, the floor space area and height of the
Improvements, the setback of the Improvements from property
lines, and parking without the necessity of variance and
without the Property being a non-conforming use.
(xi) Access, Utilities, and Laws. The Administrative
Agent shall have received and approved (a) satisfactory
evidence that the Land abuts and has fully adequate direct
access to a public street (indication of such access on the
as-built survey noted in clause (viii) above being deemed
satisfactory evidence); (b) evidence that all utilities
necessary for the Improvements are serving the Improvements in
sufficient capacity (indication of such service on the
as-built survey noted in clause (viii) above being deemed
satisfactory evidence); (c) satisfactory evidence that all
applicable zoning ordinances, restrictive covenants and
governmental requirements affecting the Land permit the use
for which the Property is intended and have been complied with
without the necessity of variance and without the Property
being a nonconforming use; (d) a true and correct copy of a
valid and permanent certificate of occupancy (i.e., not
temporary subject to the fulfillment of conditions) for the
Improvements, together with all other relevant certifications
from Governmental Authorities regarding the approval to
operate the Improvements; and (e) evidence satisfactory to the
Administrative Agent of compliance by the Borrower and the
Property, and the proposed construction, use and occupancy of
the Improvements, with such other applicable laws and
governmental requirements as the Administrative Agent may
request,
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including all laws and governmental requirements regarding
access and facilities for handicapped or disabled persons
including, without limitation and to the extent applicable,
The Federal Architectural Barriers Act (42 U.S.C. ss. 4151 et
seq.), The Fair Housing Amendments Act of 1988 (42 U.S.C. ss.
3601 et seq.), The Americans With Disabilities Act of 1990 (42
U.S.C. ss. 12101 et seq.), The Rehabilitation Act of 1973 (29
U.S.C. ss. 794) and any applicable state requirements.
(xii) Tax and Standby Fee Certificates. The
Administrative Agent shall have received and approved
satisfactory evidence (a) of the identity of all taxing
authorities and utility districts (or similar authorities)
having jurisdiction over the Property or any portion thereof;
(b) that all taxes, standby fees and any other similar charges
have been paid, including copies of receipts or statements
marked "paid" by the appropriate authority; and (c) that the
Land is a separate tax lot or lots with separate assessment or
assessments of the Land and Improvements, independent of any
other land or improvements.
(xiii) Appraisal. The Administrative Agent shall have
received and accepted a market value appraisal of the Property
(including, without limitation, evidence that the Aggregate
Commitment does not exceed seventy-five percent (75%) of such
market value appraisal).
(xiv) Other Information. The Administrative Agent
shall have received such other certificates, documents and
information as are reasonably requested by the Lenders,
including, without limitation, local opinions of counsel,
engineering and structural reports, permanent certificates of
occupancy and evidence of zoning compliance, each in form and
substance satisfactory to the Administrative Agent.
(d) Consents; Defaults.
(i) Governmental and Third Party Approvals. The
Borrower shall have obtained all necessary approvals,
authorizations and consents of any Person which are material
to the conduct of its business and of all Governmental
Authorities and courts having jurisdiction with respect to the
transactions contemplated by this Agreement and the other Loan
Documents and the conduct of its business.
(ii) No Injunction, Etc. No action, proceeding,
investigation, regulation or legislation shall have been
instituted or threatened in writing before any Governmental
Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or
arises out of this Agreement or the other Loan Documents or
the consummation of the transactions contemplated hereby or
thereby, or which, in the Administrative Agent's sole
discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement and such other
Loan Documents.
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(iii) No Event of Default. No Default or Event of
Default shall have occurred and be continuing.
(e) Financial Matters.
(i) Financial Statements.
(A) The Administrative Agent shall have
received the most recent audited financial statements of the
Borrower, all in form and substance reasonably satisfactory to
the Administrative Agent and prepared in accordance with GAAP.
(B) The Administrative Agent shall have
received the most recent audited Consolidated financial
statements of the Parent and its Subsidiaries, all in form and
substance reasonably satisfactory to the Administrative Agent
and prepared in accordance with GAAP.
(ii) Financial Condition Certificate.
(A) The Borrower shall have delivered to the
Administrative Agent a certificate, in form and substance
reasonably satisfactory to the Administrative Agent, and
certified as accurate by a Responsible Officer of the
Borrower, that (1) the Borrower is Solvent, (2) the Borrower's
payables are current and not past due except those contested
in good faith, (3) attached thereto are calculations
evidencing compliance on a pro forma basis with the covenants
contained in Article VIII hereof, (4) the financial
projections previously delivered to the Administrative Agent
represent the good faith estimates (utilizing reasonable
assumptions) of the financial condition and operations of the
Borrower and (5) attached thereto is a calculation of the
Applicable Margin pursuant to Section 3.1(c).
(B) The Parent shall have delivered to the
Administrative Agent a certificate, in form and substance
reasonably satisfactory to the Administrative Agent, and
certified as accurate by a Responsible Officer of the Parent,
that (1) the Parent and each of its Subsidiaries are each
Solvent, (2) the payables of the Parent and each of its
Subsidiaries are current and not past due except those
contested in good faith, (3) attached thereto are calculations
evidencing compliance on a pro forma basis with the covenants
contained in Section 12 of the Guaranty Agreement and (4) the
financial projections previously delivered to the
Administrative Agent represent the good faith estimates
(utilizing reasonable assumptions) of the financial condition
and operations of the Parent and its Subsidiaries.
(iii) Payment at Closing; Fee Letters. The Borrower
shall have paid to the Administrative Agent and the Lenders
the fees set forth or referenced in Section 3.1 of the
Commitment Agreement and Section 3.3 hereof and any other
accrued and unpaid fees or commissions due thereunder or
hereunder (including,
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without limitation, Attorney Costs of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.) and to any other Person such amount
as may be due thereto in connection with the transactions
contemplated hereby, including all taxes, fees and other
charges in connection with the execution, delivery, recording,
filing and registration of any of the Loan Documents.
(f) Refinancing of the Existing Loans. On the Closing Date,
(i) all loans under the Existing Loan Agreement (the "Existing Loans")
shall be repaid in full, (ii) there shall have been paid in cash in
full all accrued but unpaid interest due on the Existing Loans to the
Closing Date, (iii) there shall have been paid in cash in full all
accrued but unpaid fees under the Existing Loan Agreement due to the
Closing Date and all other amounts, costs and expenses under the
Existing Loan Agreement due to the Closing Date, (iv) all outstanding
promissory notes issued by the Borrower to the Existing Lenders under
the Existing Loan Agreement shall be deemed canceled and the originally
executed copies thereof shall be promptly returned to the
Administrative Agent who shall forward such notes to the Borrower and
(v) to the extent requested thereby, the Administrative Agent shall
have received a pay-off letter and collateral releases, in each case in
form and substance satisfactory to thereto, evidencing such repayment,
termination, reconveyance and release.
(g) Miscellaneous.
(i) Notice of Borrowing and Notice of Account
Designation. The Administrative Agent shall have received the
Notice of Borrowing from the Borrower in accordance with
Section 2.2 and the Notice of Account Designation from the
Borrower in accordance with Section 2.2.
(ii) Other Documents. All opinions, certificates and
other instruments and all proceedings in connection with the
transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Administrative
Agent. The Administrative Agent shall have received copies of
all other documents, certificates and instruments reasonably
requested thereby, with respect to the transactions
contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 5.1 Representations and Warranties. To induce the
Administrative Agent and the Lenders to enter into this Agreement and to induce
the Lenders to make the Term Loans, the Borrower hereby represents and warrants
to the Administrative Agent and the Lenders both before and after giving effect
to the transactions contemplated hereunder that:
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(a) Organization; Power; Qualification. The Borrower is (i)
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation, (ii) has the power
and authority to own its properties and to carry on its business as now
being and hereafter proposed to be conducted and (iii) is duly
qualified and authorized to do business in each jurisdiction in which
the character of its properties or the nature of its business requires
such qualification and authorization except where the failure to be so
qualified and authorized could not reasonably be expected to have a
Material Adverse Effect. The jurisdictions in which the Borrower is
organized and qualified to do business as of the Closing Date are only
(i) its state of formation and (ii) the state in which the Hospital is
located.
(b) Ownership. The Borrower has no Subsidiaries. As of the
Closing Date, the capitalization of the Borrower consists of the
membership interests, authorized, issued and outstanding, described on
Schedule 5.1(b). All outstanding membership interests have been duly
authorized and validly issued and are fully paid and nonassessable,
with no personal liability attaching to the ownership thereof, and not
subject to any preemptive or similar rights. As of the Closing Date,
there are no outstanding purchase warrants, subscriptions, options,
securities, instruments or other rights of any type or nature
whatsoever, which are convertible into, exchangeable for or otherwise
provide for or permit the issuance of membership interests of the
Borrower, except as set forth in the operating agreement of the
Borrower.
(c) Authorization of Agreement, Loan Documents and Borrowing.
Each of the Borrower and the Management Company has the right, power
and authority and has taken all necessary corporate and other action to
authorize the execution, delivery and performance of this Agreement and
each of the other Loan Documents to which it is a party in accordance
with their respective terms. This Agreement and each of the other Loan
Documents have been duly executed and delivered by the duly authorized
officers of the Management Company on behalf of the Borrower, and each
such document constitutes the legal, valid and binding obligation of
the Borrower, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief
laws from time to time in effect which affect the enforcement of
creditors' rights in general and the availability of equitable
remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with
Laws, Etc. The execution, delivery and performance by the Borrower of
the Loan Documents to which the Borrower is a party, in accordance with
their respective terms, the borrowings hereunder and the transactions
contemplated hereby do not and will not, by the passage of time, the
giving of notice or otherwise, (i) require any Governmental Approval or
violate any Applicable Law relating to the Borrower, (ii) conflict
with, result in a breach of or constitute a default under the
organizational documents of the Borrower or any indenture, agreement or
other instrument to which the Borrower is a party or by which any of
its properties may be bound or any Governmental Approval relating to
the Borrower, (iii) result in or require the creation or imposition of
any Lien upon or with respect to any property now owned or hereafter
acquired by the Borrower other than Liens arising under
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the Loan Documents or (iv) require any consent or authorization of,
filing with, or other act in respect of, an arbitrator or Governmental
Authority and no consent of any other Person is required in connection
with the execution, delivery, performance, validity or enforceability
of this Agreement.
(e) Compliance with Law; Governmental Approvals. The Borrower
(i) has all Governmental Approvals required by any Applicable Law
(including, without limitation, Medicare Regulations and Medicaid
Regulations (as applicable)) for it to conduct its business, each of
which is in full force and effect, is final and not subject to review
or appeal and is not the subject of any pending or, to the best of its
knowledge, threatened attack by direct or collateral proceeding, (ii)
is in compliance with each Governmental Approval applicable to it and
in compliance with all other Applicable Laws (including, without
limitation, Medicare Regulations and Medicaid Regulations (as
applicable)) relating to it or any of its respective properties, except
where the failure to so comply could not reasonably be expected to have
a Material Adverse Effect, and (iii) has timely filed all material
reports, documents and other materials required to be filed by it under
all Applicable Laws with any Governmental Authority and has retained
all material records and documents required to be retained by it under
Applicable Law.
(f) Tax Returns and Payments. The Borrower has duly filed or
caused to be filed all federal, state, local and other tax returns
required by Applicable Law to be filed, and has paid, or made adequate
provision for the payment of, all federal, state, local and other
material taxes, assessments and governmental charges or levies upon it
and its property, income, profits and assets which are due and payable,
except for taxes (i) that are not yet delinquent or (ii) that are being
contested in good faith and against which adequate reserves are being
maintained in accordance with GAAP. Such returns accurately reflect in
all material respects all liability for taxes of the Borrower for the
periods covered thereby. There is no ongoing audit or examination or,
to the knowledge of the Borrower, other investigation by any
Governmental Authority of the tax liability of the Borrower. No
Governmental Authority has asserted any Lien or other claim against the
Borrower with respect to unpaid taxes which has not been discharged or
resolved. The charges, accruals and reserves on the books of the
Borrower in respect of federal, state, local and other taxes for all
Fiscal Years and portions thereof since the organization of the
Borrower are in the judgment of the Borrower adequate, and the Borrower
does not anticipate any additional material taxes or assessments for
any of such periods.
(g) Intellectual Property Matters. The Borrower owns or
possesses rights to use all franchises, licenses, copyrights, copyright
applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, service ▇▇▇▇, service ▇▇▇▇ rights, trade
names, trade name rights, copyrights and rights with respect to the
foregoing which are required to conduct its business. No event has
occurred which permits, or after notice or lapse of time or both would
permit, the revocation or termination of any such rights, and the
Borrower is not liable to any Person for infringement under Applicable
Law with respect to any such rights as a result of its business
operations, except for such infringements that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
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(h) Environmental Matters.
(i) The properties owned, leased or operated by the
Borrower now or in the past do not contain, and to its
knowledge have not previously contained, any Hazardous
Materials in amounts or concentrations which (A) constitute or
constituted a material violation of applicable Environmental
Laws or (B) could give rise to material liability under
applicable Environmental Laws;
(ii) The Borrower and such properties and all
operations conducted in connection therewith are in
compliance, in all material respects, with all applicable
Environmental Laws, and there is no contamination at, under or
about such properties or such operations which could
reasonably interfere with the continued operation of such
properties or impair the fair saleable value thereof;
(iii) The Borrower has not received any notice of
violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters, Hazardous
Materials, or compliance with Environmental Laws from (A) any
Governmental Authority or (B) to the extent any such
violation, alleged violation, non-compliance, liability or
potential liability could reasonably be expected to have a
Material Adverse Effect, any other Person, nor does the
Borrower have knowledge or reason to believe that any such
notice will be received or is being threatened;
(iv) Hazardous Materials have not been transported or
disposed of to or from the properties owned, leased or
operated by of the Borrower in violation of, or in a manner or
to a location which could give rise to a material liability
under, Environmental Laws, nor have any Hazardous Materials
been generated, treated, stored or disposed of at, on or under
any of such properties in violation of, or in a manner that
could give rise to a material liability under, any applicable
Environmental Laws;
(v) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of the
Borrower, threatened, under any Environmental Law to which the
Borrower is or will be named as a potentially responsible
party with respect to such properties or operations conducted
in connection therewith, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the
Borrower or such properties or such operations; and
(vi) There has been no release, or to the best of the
Borrower's knowledge, threat of release, of Hazardous
Materials at or from properties owned, leased or operated by
the Borrower, now or in the past, in violation of or in
amounts or in a manner that could give rise to a material
liability under Environmental Laws.
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(i) ERISA.
(i) The Borrower and each ERISA Affiliate is in
material compliance with all applicable provisions of ERISA
and the regulations and published interpretations thereunder
with respect to all Employee Benefit Plans except for any
required amendments for which the remedial amendment period as
defined in Section 401(b) of the Code has not yet expired and
except where a failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Each Employee
Benefit Plan that is intended to be qualified under Section
401(a) of the Code has been determined by the Internal Revenue
Service to be so qualified, and each trust related to such
plan has been determined to be exempt under Section 501(a) of
the Code except for such plans that have not yet received
determination letters but for which the remedial amendment
period for submitting a determination letter has not yet
expired. No liability has been incurred by the Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or
penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan except for a liability that could not
reasonably be expected to have a Material Adverse Effect;
(ii) As of the Closing Date, no Pension Plan has been
terminated, nor has any accumulated funding deficiency (as
defined in Section 412 of the Code) been incurred (without
regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service
been received or requested with respect to any Pension Plan,
nor has the Borrower or any ERISA Affiliate failed to make any
contributions or to pay any amounts due and owing as required
by Section 412 of the Code, Section 302 of ERISA or the terms
of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 302 of
ERISA, nor has there been any event requiring any disclosure
under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect
to any Pension Plan;
(iii) Except where the failure of any of the
following representations to be correct in all material
respects could not reasonably be expected to have a Material
Adverse Effect, neither the Borrower nor any ERISA Affiliate
has: (A) engaged in a nonexempt prohibited transaction
described in Section 406 of the ERISA or Section 4975 of the
Code, (B) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are
no premium payments which are due and unpaid, (C) failed to
make a required contribution or payment to a Multiemployer
Plan, or (D) failed to make a required installment or other
required payment under Section 412 of the Code;
(iv) No Termination Event with respect to the
Borrower or any ERISA Affiliate has occurred or is reasonably
expected to occur; and
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(v) Except where the failure of any of the following
representations to be correct in all material respects could
not reasonably be expected to have a Material Adverse Effect,
no proceeding, claim (other than a benefits claim in the
ordinary course of business), lawsuit and/or investigation is
existing or, to the best knowledge of the Borrower after due
inquiry, threatened concerning or involving any (A) employee
welfare benefit plan (as defined in Section 3(1) of ERISA)
currently maintained or contributed to by the Borrower or any
ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. The Borrower is not engaged principally or
as one of its activities in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock" (as each such
term is defined or used, directly or indirectly, in Regulation U of the
Board of Governors of the Federal Reserve System). No part of the
proceeds of any of the Term Loans will be used for purchasing or
carrying margin stock or for any purpose which violates, or which would
be inconsistent with, the provisions of Regulation T, U or X of such
Board of Governors.
(k) Government Regulation. The Borrower is not an "investment
company" or a company "controlled" by an "investment company" (as each
such term is defined or used in the Investment Company Act of 1940, as
amended) and the Borrower is not, or after giving effect to any Term
Loan will not be, subject to regulation under the Public Utility
Holding Company Act of 1935 or the Interstate Commerce Act, each as
amended, or any other Applicable Law which limits its ability to incur
or consummate the transactions contemplated hereby.
(l) Material Contracts. As of the Closing Date, each Material
Contract is, and after giving effect to the consummation of the
transactions contemplated by the Loan Documents will be, in full force
and effect in accordance with the terms thereof. The Borrower has
delivered to the Administrative Agent a true and complete copy of each
Material Contract listed on Schedule 5.1(l). Neither the Borrower nor,
to the knowledge of the Borrower, any other party thereto, is in breach
of or in default under any Material Contract, except where such breach
or default could not reasonably be expected to have a Material Adverse
Effect.
(m) Employee Relations. The Borrower has a stable work force
in place and is not, as of the Closing Date, party to any collective
bargaining agreement nor has any labor union been recognized as the
representative of its employees. The Borrower knows of no pending,
threatened or contemplated strikes, work stoppage or other collective
labor disputes involving its employees.
(n) Burdensome Provisions. The Borrower is not a party to any
indenture, agreement, lease or other instrument, or subject to any
corporate or partnership restriction, Governmental Approval or
Applicable Law which is so unusual or burdensome as in the foreseeable
future could be reasonably expected to have a Material Adverse Effect.
The Borrower does not presently anticipate that future expenditures
needed to meet the
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provisions of any statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as to have a Material
Adverse Effect.
(o) Financial Statements. The (i) audited balance sheet of the
Borrower as of September 30, 2000 and the related audited statements of
income and retained earnings and cash flows for the Fiscal Year then
ended and (ii) unaudited balance sheet of the Borrower as of March 31,
2001 and related unaudited interim statements of income and retained
earnings, copies of which have been furnished to the Administrative
Agent and each Lender, are complete and correct and fairly present in
all material respects the assets, liabilities and financial position of
the Borrower as at such dates, and the results of the operations and
changes of financial position for the periods then ended (other than
customary year-end adjustments for unaudited financial statements). All
such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP as applied in a
manner consistent with the past practices of the Borrower.
(p) No Material Adverse Change. Since September 30, 2000,
there has been no Material Adverse Effect with respect to the Borrower
and no event has occurred or condition arisen that could reasonably be
expected to have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and both before and after
giving effect to each Term Loan made hereunder, the Borrower and each
Guarantor will be Solvent.
(r) Title to Properties. The Borrower and each Guarantor has
such title to the real property owned or leased by it, including, but
not limited to, the Land and the Improvements, which are material to
the conduct of its business and valid and legal title to all of its
personal property and assets which are material to the conduct of its
business, including, but not limited to, the Tangible Personalty and
those assets reflected on the balance sheets of the Borrower delivered
pursuant to Section 6.1(o), except those which have been disposed of by
the Borrower or such Guarantor subsequent to such date which
dispositions have been in the ordinary course of business or as
otherwise expressly permitted hereunder.
(s) Liens. None of the properties and assets of the Borrower
is subject to any Lien, except Liens permitted pursuant to Section 9.2.
No financing statement under the Uniform Commercial Code of any state
which names the Borrower as debtor and which has not been terminated,
has been filed in any state or other jurisdiction and the Borrower has
not signed any such financing statement or any security agreement
authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 9.2.
(t) Debt and Guaranty Obligations.
(i) Schedule 5.1(t) is a complete and correct listing
of all Debt and Guaranty Obligations of the Borrower as of the
Closing Date.
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(ii) As of the Closing Date, the Borrower has
performed and is in compliance with all of the terms of all
Debt and Guaranty Obligations set forth on Schedule 5.1(t)
which are in excess of $1,000,000 and all instruments and
agreements relating thereto, and no default or event of
default, or event or condition which with notice or lapse of
time or both would constitute such a default or event of
default on the part of the Borrower exists with respect to any
such Debt or Guaranty Obligation.
(u) Litigation. Except for matters existing on the Closing
Date and set forth on Schedule 5.1(u), there are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened in
writing against or in any other way relating adversely to or affecting
the Borrower or any of its properties (including, without limitation,
the Medicaid Certification of the Borrower, the Medicare Certification
of the Borrower or the participation of the Borrower in any federal
health care program) in any court or before any arbitrator of any kind
or before or by any Governmental Authority which could reasonably be
expected to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred or is
continuing which constitutes a Default or an Event of Default, or which
constitutes, or which with the passage of time or giving of notice or
both would constitute, a default or event of default by the Borrower
under any Material Contract or judgment, decree or order to which the
Borrower is a party or by which the Borrower or any of its properties
may be bound or which would require the Borrower to make any payment
thereunder prior to the scheduled maturity date therefor which could
reasonably be expected to have a Material Adverse Effect.
(w) Mortgage.
(i) As of the Closing Date, the Mortgage, and the
rights of the Administrative Agent and the Lenders thereunder,
will have priority over all other Liens on the Land or
Improvements, including, without limitation, any mechanic's or
materialman's lien or similar lien.
(ii) After the Closing Date, the Mortgage, and the
rights of the Administrative Agent and the Lenders thereunder,
will have priority over all other Liens on the Land or
Improvements, including, without limitation, any mechanic's or
materialman's lien or similar lien (other than Liens permitted
pursuant to Section 9.2(i)).
(x) Separate Tax Lot. The Land is not part of a larger tract
of land owned by the Borrower or its affiliates or any Guarantor and is
not otherwise included under any unity of title or similar covenant
with other lands not encumbered by the Mortgage, and the Borrower has
obtained a separate tax lot or lots with a separate tax assessment or
assessments for the Land and the Improvements, independent of any other
lands or improvements.
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(y) Compliance with Laws. The Land and Improvements comply
with all Applicable Laws, including all subdivision and platting
requirements, without reliance on any adjoining or neighboring
property, the violation of which could reasonably be expected to have a
Material Adverse Effect.
(z) Healthcare Matters.
(i) The Borrower:
(A) has not been convicted of an offense or
committed an act or omission which could reasonably form a
basis under 42 U.S.C. ss. 1320a-7 and any statutes succeeding
thereto and any regulations promulgated thereunder for the
Secretary of HHS to exclude the Borrower from participation in
a "Federal health care program" (as that term is defined by 42
U.S.C. ss.1320a-7b(f), or any successor statute thereto);
(B) is not in default in the performance,
observance or fulfillment of any of the obligations, covenants
or conditions contained in any Medicaid Provider Agreement,
any Medicare Provider Agreement or any other agreement or
instrument to which the Borrower is a party, which default has
resulted in, or if not remedied within any applicable grace
period could result in, the revocation, termination,
cancellation or suspension of the Medicaid Certification of
the Borrower or the Medicare Certification of the Borrower.
(ii) Reimbursement from Third Party Payors.
(A) Accounts Receivable. The accounts
receivable of the Borrower have been and will continue to be
adjusted to reflect reimbursement policies of third party
payors such as Medicare, Medicaid, Blue Cross/Blue Shield,
private insurance companies, health maintenance organizations,
preferred provider organizations, alternative delivery
systems, managed care systems, government contracting agencies
and other third party payors. In particular, accounts
receivable relating to such third party payors do not and
shall not exceed amounts any obligee is entitled to receive
under any capitation arrangement, fee schedule, discount
formula, cost-based reimbursement or other adjustment or
limitation to its usual charges.
(B) Filings and Reports. The Borrower has
timely filed all material reports, administrative forms and
filings required to be filed in connection with the Medicare
Regulations and the Medicaid Regulations (as applicable) due
on or before the date hereof, and all required reports and
administrative forms and filings are true and complete in all
material respects, in each case except to the extent that any
such failure could not reasonably be expected to have a
Material Adverse Effect; there are no claims, actions,
proceedings or appeals pending (and the Borrower has not filed
anything that would result in any claims, actions or appeals)
before any Governmental Authority with respect to any cost
reports
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required to be filed by the Medicare Regulations or the
Medicaid Regulations (as applicable) or claims filed by the
Borrower on or before the date hereof, or with respect to any
adjustments, denials, recoupments or disallowances by any
intermediary, carrier, other insurer, commission, board or
agency in connection with any cost reports or claims; no
validation review, survey, inspection, audit, investigation or
program integrity review related to the Borrower has been
conducted with respect to the Borrower by any Governmental
Authority or government contractor in connection with the
Medicare program or the Medicaid program (as applicable), and
no such reviews are scheduled, pending or, to the knowledge of
Borrower, threatened against or affecting the Borrower; and
the Borrower has timely filed all material reports, data and
other information required by any other Governmental Authority
with authority to regulate the Borrower or its business in any
manner.
(iii) Licensing and Accreditation. The Borrower has,
to the extent applicable: (A) obtained (or been duly assigned)
and maintains in good standing all required (if any)
certificates of need or determinations of need as required by
the relevant state Governmental Authority for the acquisition,
construction, expansion of, investment in or operation of its
businesses as currently operated; (B) obtained and maintains
in good standing all required licenses, permits, certificates,
approvals and other authorizations (or waivers thereof)
required by any Governmental Authority which are necessary to
the conduct of its business; (C) to the extent prudent and
customary in the industry in which it is engaged, obtained and
maintains accreditation from all generally recognized
accrediting agencies; (D) obtained and maintains Medicaid
Certification and Medicare Certification; and (E) entered into
and maintains in good standing its Medicare Provider Agreement
and its Medicaid Provider Agreement.
(iv) Fraud and Abuse. Neither the Borrower nor, to
the knowledge of the Borrower's officers, any of its officers
or directors, have engaged in any activities which are
prohibited under the Medicare Regulations and Medicaid
Regulations, 42 U.S.C. ss. 1320a-7b, 42 U.S.C. ss. 1395nn, or
the regulations promulgated pursuant to such statutes or
related state or local statutes or regulations, or which are
prohibited by binding rules of professional conduct, or which
are prohibited under any statute which constitutes a "Federal
health care offense" (as that term is defined by 18 U.S.C. ss.
24, or any successor statute thereto), or the regulations
promulgated pursuant to such statutes, including but not
limited to the following: (A) knowingly and willfully making
or causing to be made a false statement or representation of a
material fact in any applications for any benefit or payment;
(B) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use
in determining rights to any benefit or payment; (C) failing
to disclose knowledge by a claimant of the occurrence of any
event affecting the initial or continued right to any benefit
or payment on its own behalf or on behalf of another, with
intent to secure such benefit or payment fraudulently; (D)
knowingly and willfully soliciting or receiving any
remuneration (including any kickback, bribe or rebate),
directly or
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indirectly, overtly or covertly, in cash or in kind or
offering to pay such remuneration (1) in return for referring
an individual to a person for the furnishing or arranging for
the furnishing of any item or service for which payment may be
made in whole or in part by a Federal health care program or
other applicable third party payors, or (2) in return for
purchasing, leasing or ordering or arranging for or
recommending the purchasing, leasing or ordering of any good,
facility, service, or item for which payment may be made in
whole or in part by a Federal health care program or other
applicable third party payors; (E) knowingly or willfully
offering or paying any remuneration (including any kickback,
bribe, or rebate) directly or indirectly, overtly or covertly,
in cash or in kind to any Person to induce such Person (1) to
refer an individual to a person for the furnishing or
arranging for the furnishing of any item or service for which
payment may be made in whole or in part under a Federal health
care program, or (2) to purchase, lease, order, or arrange for
or recommend purchasing, leasing, or ordering any good,
facility, service, or item for which payment may be made in
whole or in part under a Federal health care program.
(aa) Senior Debt Status. The Obligations of the Borrower and
each Guarantor under this Agreement and each of the other Loan
Documents ranks and shall continue to rank at least senior in priority
of payment to all Subordinated Debt.
(bb) Accuracy and Completeness of Information. All written
information, reports, statements and other papers and data produced by
or on behalf of the Borrower and furnished to the Administrative Agent
or any Lender in connection with this Agreement, or any of the other
Loan Documents, were, at the time the same were so furnished, complete
and correct in all material respects to the extent necessary to give
the Administrative Agent or any Lender complete, true and accurate
knowledge of the subject matter based on the Borrower's knowledge
thereof (other than projections, budgets or other estimates which shall
be determined in good faith utilizing reasonable assumptions). No
document furnished or written statement made to the Administrative
Agent or the Lenders by the Borrower in connection with the
negotiation, preparation or execution of this Agreement or any of the
Loan Documents contains or will contain any untrue statement of a fact
material to the creditworthiness of the Borrower or omits or will omit
to state a fact necessary in order to make the statements contained
therein not misleading to the extent material to the creditworthiness
of the Borrower. The Borrower is not aware of any facts which it has
not disclosed in writing to the Administrative Agent having a Material
Adverse Effect, or insofar as the Borrower can now foresee, which could
reasonably be expected to have a Material Adverse Effect.
SECTION 5.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article V and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including, but not limited to, any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date (except those that are expressly made as of a
specific date), shall survive the Closing Date and
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shall not be waived by the execution and delivery of this Agreement, any
investigation made by or on behalf of the Lenders or any borrowing hereunder.
ARTICLE VI
FINANCIAL INFORMATION AND REPORTS
Until all the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 12.11, the Borrower will furnish or
cause to be furnished to the Administrative Agent at the Administrative Agent's
Office at the address set forth in Section 12.1 and to the Lenders at their
respective addresses as set forth Schedule 1.1(a), or such other office as may
be designated by the Administrative Agent and the Lenders from time to time:
SECTION 6.1 Financial Statements.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within fifty-five (55) days after the end of each fiscal quarter, an
unaudited balance sheet of the Borrower as of the close of such fiscal quarter
and unaudited statements of income and expenses and cash flow for the fiscal
quarter then ended and that portion of the Fiscal Year then ended, all in
reasonable detail and prepared by the Borrower in accordance with GAAP (without
footnotes) and certified by a Responsible Officer of the Borrower to present
fairly in all material respects the financial condition of the Borrower as of
their respective dates and the results of operations of the Borrower for the
respective periods then ended, subject to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
event within one hundred (100) days after the end of each Fiscal Year,
commencing with the Fiscal Year ending September 30, 2001, an audited balance
sheet of the Borrower as of the close of such Fiscal Year and audited statements
of income and expenses, retained earnings and cash flow for the Fiscal Year then
ended, including the notes thereto, all in reasonable detail and prepared in
accordance with GAAP and accompanied by a report thereon prepared by Deloitte &
Touche, LLP, or another independent certified public accounting firm of
nationally recognized standing which is reasonably acceptable to the
Administrative Agent, that such financial statements are not qualified with
respect to scope limitations imposed by the Borrower or with respect to
accounting principles followed by the Borrower not in accordance with GAAP.
(c) Annual Forecasts. As soon as practicable and in any event no later
than thirty (30) days after the beginning of each Fiscal Year, an annual
forecast prepared by management of the Borrower, in reasonable detail and in the
form customarily prepared by management of the Borrower for its internal use and
setting forth an explanation for the principal assumptions on which such
forecasts were based, of balance sheets, income statements and cash flow
statements on a quarterly basis for each Fiscal Year thereafter until the
Maturity Date.
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(d) Other Information. Such other information regarding the operations,
business affairs and financial condition of the Borrower as the Administrative
Agent may reasonably request.
SECTION 6.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 6.1(a)(ii) or 6.1(b) and at such
other times as the Administrative Agent shall reasonably request, a certificate
of the chief financial officer or the treasurer of Borrower in the form of
Exhibit I attached hereto (an "Officer's Compliance Certificate"):
(a) stating that such officer has reviewed such financial
statements and, to the best of his knowledge, such financial statements
fairly present in all material respects the financial condition of the
Borrower as of the dates indicated and the results of its operations
and cash flows for the periods indicated;
(b) stating that to such officer's knowledge, based on a
reasonable examination, no Default or Event of Default exists, or, if
such is not the case, specifying such Default or Event of Default and
its nature, when it occurred, whether it is continuing and the steps
being taken by the Borrower with respect to such Default or Event of
Default;
(c) stating that the Borrower is in compliance with the
covenants and restrictions set forth in Articles VII, VIII and IX of
this Agreement and, with respect to the covenants set forth in Article
VIII, the calculations applicable thereto; and
(d) setting forth any other information reasonably required by
the Administrative Agent to ensure compliance with this Agreement.
SECTION 6.3 Accountant's Certificate. At each time financial statements
are delivered pursuant to Section 6.1(b), a certificate of the independent
public accountants certifying such financial statements addressed to the
Administrative Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Default or Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature and period of existence; and
(b) including the calculations prepared by such accountants required to
establish whether or not the Borrower are in compliance with the financial
covenants set forth in Article VIII hereof as at the end of each respective
period.
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SECTION 6.4 Other Reports.
(a) Accountants Reports. Promptly upon receipt thereof, copies of all
reports, if any, submitted to the Borrower or its Board of Directors by its
independent public accountants in connection with their auditing function,
including, without limitation, any management report and any management
responses thereto.
(b) Clinical Procedures Reports. At such times as the Administrative
Agent shall reasonably request, and at least quarterly, a certificate of an
executive officer of the Borrower setting forth the types of clinical procedures
performed during such period, the number of the clinical procedures performed
during such period, the patient days related to the clinical procedures
performed during such period and any other operating statistics reasonably
requested by the Administrative Agent, in a form prepared by the Borrower in the
ordinary course of its business.
(c) Permitted Payment Certificate. Not less than ten (10) days prior to
the proposed date of any Permitted Distribution pursuant to Section 9.6, a
certificate of the chief financial officer or the treasurer of the Management
Company on behalf of the Borrower:
(i) stating that such officer has reviewed the most recent
financial statements of the Borrower and, to the best of his knowledge,
such financial statements fairly present in all material respects the
financial condition of the Borrower as of the dates indicated and the
results of its operations and cash flows for the periods indicated;
(ii) setting forth the calculations required to establish that
the Borrower shall be in compliance with the requirements set forth in
Section 9.6(c) both before and after giving effect to such Permitted
Distribution; and
(iii) setting forth any other information reasonably required
by the Administrative Agent to ensure compliance with this Agreement.
(d) Other Reports. Such other information regarding the operations,
business affairs and financial condition of the Borrower as the Administrative
Agent or any Lender may reasonably request.
SECTION 6.5 Notice of Litigation and Other Matters. Prompt (but in no
event later than ten (10) days after an officer of the Borrower obtains
knowledge thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving the Borrower or any of its
properties, assets or businesses which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect;
(b) any violation by the Borrower of any Applicable Law or any notice
of any violation received by the Borrower from any Governmental Authority
including, without
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limitation, any notice of violation of Environmental Laws, which in any such
case could reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result
in, a strike or other work action against the Borrower or any contractor or any
material development in any labor controversy which if adversely determined
could reasonably be expected to have a Material Adverse Effect;
(d) any actual or threatened condemnation of any portion of the
Property, any negotiations with respect to any such taking, or any loss of or
substantial damage to the Property (excluding any such condemnation which only
affects a de minimus portion of the Property);
(e) any notice received by the Borrower with respect to the
cancellation, alteration or non-renewal of any insurance coverage maintained by
the Borrower except as in the ordinary course of the business of the Borrower
solely in connection with the replacement of any such insurance coverage;
(f) any attachment, judgment, lien, levy or order exceeding $500,000
that may be assessed against the Borrower (to the extent such attachment,
judgment, lien, levy or order is not fully covered by insurance and with respect
to which the applicable insurance carrier has not acknowledged that such
attachment, judgment, lien, levy or order is fully covered by insurance);
(g) (i) any Default or Event of Default or (ii) any event which
constitutes or which with the passage of time or giving of notice or both would
constitute a default or event of default under any Material Contract to which
the Borrower is a party or by which the Borrower or any of its properties may be
bound which could reasonably be expected to have a Material Adverse Effect;
(h) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining knowledge or
reason to know that the Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA;
(i) any expiration, termination or cancellation of the Borrower's
license to operate, Medicare Certification or Medicaid Certification or the
receipt by the Borrower of any notice with respect thereto; and
(j) any event which makes any of the representations set forth in
Section 5.1 inaccurate in any respect.
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SECTION 6.6 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of the Borrower
to the Administrative Agent or any Lender pursuant to this Article VI, or any
other provision of this Agreement or any of the other Loan Documents, shall be,
at the time the same is so furnished, in compliance with the representations and
warranties set forth in Section 5.1(bb).
ARTICLE VII
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 12.11, the Borrower will:
SECTION 7.1 Preservation of Existence and Related Matters. Preserve and
maintain its separate existence as a limited liability company and all rights,
franchises, licenses and privileges necessary to the conduct of its business,
and qualify and remain qualified as a foreign company and authorized to do
business in each jurisdiction where the nature and scope of its activities
require it to so qualify under Applicable Law, including in any event, the state
of its formation and the state in which the Hospital is located.
SECTION 7.2 Maintenance of Property. In addition to the requirements of
any of the Security Documents, protect and preserve all properties useful in and
material to the conduct of its business, including copyrights, patents, trade
names, service marks and trademarks material to the conduct of its business;
maintain in good working order and condition, reasonable wear and tear and
casualty excepted, all buildings, items of equipment and other items of tangible
real and personal property material to the conduct of its business; and from
time to time make or cause to be made all renewals, replacements and additions
to such property necessary for the conduct of its business, so that the business
carried on in connection therewith may be properly conducted at all times (such
protection, preservation and maintenance to be in a manner consistent with
standards of operation and administration generally acceptable for fully
accredited hospitals and health care facilities comparable to the Hospital).
SECTION 7.3 Accounting Methods and Financial Records. Maintain a system
of accounting, and keep such books, records and accounts (which shall be true
and complete in all material respects) as may be required or as may be necessary
to permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 7.4 Payment and Performance of Obligations. Pay and perform all
Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that the Borrower may contest any item described in clauses
(a) or (b) of
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this Section 7.4 in good faith so long as adequate reserves are maintained with
respect thereto in accordance with GAAP.
SECTION 7.5 Compliance With Laws and Approvals. Observe and remain in
compliance in all material respects with all Applicable Laws and maintain in
full force and effect all Governmental Approvals, in each case applicable to the
conduct of its business, except where the failure to observe or comply could not
reasonably be expected to have a Material Adverse Effect.
SECTION 7.6 Environmental Laws. In addition to and without limiting the
generality of Section 7.5, (a) comply in all material respects with, and use its
best efforts to ensure such compliance in all material respects by all tenants
and subtenants (if any) with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and use its best efforts to
ensure that all tenants and subtenants, if any, obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, (b) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws, and promptly comply in all material respects with all lawful
orders and directives of any Governmental Authority regarding Environmental
Laws, except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not
reasonably be expected to have a Material Adverse Effect, and (c) defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective parents, Subsidiaries, Affiliates, employees, agents, officers and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
presence of Hazardous Materials, or the violation of, noncompliance with or
liability under any Environmental Laws applicable to the operations of the
Borrower, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable attorney's and
consultant's fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
directly result from the gross negligence or willful misconduct of the party
seeking indemnification therefor.
SECTION 7.7 Compliance with ERISA. In addition to and without limiting
the generality of Section 7.5, (a) except where the failure to so comply could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (i) comply with all material applicable provisions of ERISA and
the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans, (ii) not take any action or fail to take action the
result of which could be a liability to the PBGC or to a Multiemployer Plan,
(iii) not participate in any prohibited transaction that could result in any
civil penalty under ERISA or tax under the Code and (iv) operate each Employee
Benefit Plan in such a manner that will not incur any tax liability under
Section 4980B of the Code or any liability to any qualified beneficiary as
defined in Section 4980B of the Code and (b) furnish to the Administrative Agent
upon the Administrative Agent's request such additional information about any
Employee Benefit Plan as may be reasonably requested by the Administrative
Agent.
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SECTION 7.8 Compliance With Agreements. Comply in all respects with
each term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without
limitation, any Material Contract, except (i) where the failure to so comply
could not reasonably be expected to have a Material Adverse Effect or (ii) where
any such term, condition or provision is contested in good faith through
applicable proceedings and where adequate reserves are maintained in accordance
with GAAP.
SECTION 7.9 Visits and Inspections. Upon reasonable notice to the
Borrower (unless there exists any Default or Event of Default), permit
representatives of the Administrative Agent or any Lender, from time to time, to
visit and inspect its properties and any materials thereon (including, without
limitation, the Land and the Improvements); inspect, audit and make extracts
from its books, records and files, including, but not limited to, management
letters prepared by independent accountants; and discuss with its principal
officers, and its independent accountants, its business, assets, liabilities,
financial condition, results of operations and business prospects.
SECTION 7.10 Interest Rate Contracts. Not later than ninety (90) days
after the Closing Date, execute Interest Rate Contracts with respect to interest
rate exposure under this Agreement with durations of at least three (3) years
and an aggregate notional principal amount thereunder equal to at least fifty
percent (50%) of the Aggregate Commitment at interest rates satisfactory to the
Administrative Agent and with a Lender or other counterparty reasonably
satisfactory to the Administrative Agent and otherwise in form and substance
reasonably satisfactory to the Administrative Agent.
SECTION 7.11 Maintenance of Licenses, Etc. In addition to and without
limiting the generality of Section 7.5, (a) observe and remain in compliance in
all material respects with all Applicable Laws, including, without limitation,
Medicare Regulations and Medicaid Regulations (as applicable), in connection
with the ownership or operation of the Hospital, (b) obtain and preserve, to the
fullest extent permitted by Applicable Law, all certifications and
authorizations necessary to ensure that the Hospital and the Borrower are
eligible for reimbursement under the Medicare Regulations and the Medicaid
Regulations (as applicable), and (c) obtain and preserve all material licenses,
permits, authorizations and qualifications required under Applicable Laws in
connection with the ownership or operation of the Hospital.
SECTION 7.12 Insurance.
(a) Maintain insurance with financially sound and reputable insurance
companies against such risks and in such amounts as are customarily maintained
by similar businesses and as may be required by Applicable Law and as are
required by any Security Documents (including, without limitation, Sections 1.4
through 1.8 of the Mortgage), and on the Closing Date and from time to time
thereafter deliver to the Administrative Agent upon its request a detailed list
of the insurance then in effect, stating the names of the insurance companies,
the amounts and rates of the insurance, the dates of the expiration thereof and
the properties and risks covered thereby.
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(b) For the purpose of Section 1.6 of the Mortgage, decisions to be
made by the Administrative Agent regarding the application of net cash proceeds
under any insurance policy shall be made by the Administrative Agent at the
direction of the Required Lenders.
SECTION 7.13 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this
Agreement, the Term Notes and the other Loan Documents.
ARTICLE VIII
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 12.11, the Borrower will not:
SECTION 8.1 Minimum EBITDA. As of the end of any fiscal quarter during
the periods set forth below, permit EBITDA for such fiscal quarter to be less
than the corresponding amount set forth below:
Period Minimum EBITDA
------ --------------
Closing Date through and including
December 30, 2001 $5,500,000
December 31, 2001 through and
including March 30, 2002 $6,000,000
March 31, 2002 through and including
September 29, 2002 $7,000,000
SECTION 8.2 Debt Service Coverage Ratio. As of the end of any fiscal
quarter during the periods set forth below, commencing with the fiscal quarter
ending September 30, 2002, permit the ratio of (a) Adjusted EBITDA for the
fiscal quarter then ended to (b) Adjusted Debt Service for such fiscal quarter
to be less than the corresponding ratio set forth below:
Period Ratio
------ -----
September 30, 2002 through and including
March 30, 2003 1.00 to 1.00
March 31, 2003 and thereafter 1.10 to 1.00
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ARTICLE IX
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 12.11, the Borrower will not:
SECTION 9.1 Limitations on Debt. Create, incur, assume or suffer to
exist any Debt except:
(a) the Obligations;
(b) Debt incurred as of the Closing Date in connection with
the Equipment Loan Financing (or any refinancing, but not any increase
in the principal amount, thereof);
(c) Debt incurred after the Closing Date consisting of Capital
Leases or other purchase money Debt incurred to provide all or a
portion of the purchase price (or to finance such purchase price within
ninety (90) days of acquisition) or the cost of construction of an
asset; provided that (i) such Debt when incurred shall not exceed one
hundred percent (100%) of the purchase price or the cost of
construction of such asset; (ii) no such Debt shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon
at the time of such refinancing; and (iii) the total amount of all such
Debt shall not exceed $5,000,000 on any date of determination;
(d) Debt which may be deemed to exist pursuant to any
performance, surety, statutory, appeal or similar obligations obtained
in the ordinary course of business;
(e) Debt incurred in connection with a Hedging Agreement (i)
with a counterparty and upon terms and conditions (including interest
rate) reasonably satisfactory to the Administrative Agent or (ii)
required pursuant to Section 7.10; provided, that any counterparty that
is a Lender shall be deemed satisfactory to the Administrative Agent;
(f) Subordinated Debt to ▇▇▇▇▇ evidencing intercompany loans
by ▇▇▇▇▇ to the Borrower for short-term working capital and other
general corporate purposes in an aggregate principal amount not to
exceed $30,100,000 (the "Subordinated Working Capital Loan"); provided
that the Subordinated Working Capital Loan shall be subordinated
pursuant to an Intercompany Loan Subordination Agreement in form and
substance satisfactory to the Administrative Agent; and
(g) Subordinated Debt to ▇▇▇▇▇ evidencing the loan by ▇▇▇▇▇ to
the Borrower of the Project Equity in an aggregate principal amount not
to exceed $6,700,000 (as may
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be increased up to $8,000,000) (the "Subordinated Project Equity
Loan"); provided that the Subordinated Project Equity Loan shall be
subordinated pursuant to an Intercompany Loan Subordination Agreement
in form and substance satisfactory to the Administrative Agent.
SECTION 9.2 Limitations on Liens. Create, incur, assume or suffer to
exist any Lien on or with respect to any of the Borrower's assets or properties
(including, without limitation, shares of capital stock or other ownership
interests), real or personal, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental
charges or levies (excluding any Lien imposed pursuant to any of the
provisions of Environmental Laws) not yet due or as to which the period
of grace (not to exceed thirty (30) days), if any, related thereto has
not expired;
(b) Liens consisting of deposits or pledges made in the
ordinary course of business in connection with, or to secure payment
of, obligations under workers' compensation, unemployment insurance or
similar legislation;
(c) Liens in favor of the Administrative Agent for the benefit
of the Administrative Agent and the Lenders;
(d) encumbrances on and exceptions to title contained in the
Title Policy;
(e) Liens securing Debt permitted under Section 9.1(b);
provided that such Liens do not at any time encumber any property other
than the equipment (and the proceeds thereof) of the Borrower used in
the Hospital which is financed by such Debt;
(f) purchase money Liens securing purchase money Debt (and
refinancings thereof) to the extent permitted under Section 9.1(c);
provided that (i) such purchase money Liens shall be created
substantially simultaneously with the acquisition of the related asset
and (ii) such purchase money Liens do not at any time encumber any
property other than the property (and the proceeds thereof) financed by
such Debt;
(g) Liens arising in connection with Capital Leases to the
extent permitted under Section 9.1(c); provided that (i) such Liens
shall be created substantially simultaneously with the lease of the
related asset and (ii) such Liens do not at any time encumber any
property other than the property (and the proceeds thereof) financed by
such Debt;
(h) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section
10.1(o);
(i) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business (i) which secure obligations
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which are not overdue for a period of more than sixty (60) days or (ii)
which are being contested in good faith by appropriate proceedings;
(j) Liens in an aggregate amount not to exceed $250,000 which
are being contested by the Borrower in good faith and which are
dismissed, discharged, stayed, bonded off or quashed within thirty (30)
days of issuance; and
(k) Liens on accounts receivable of the Borrower in connection
with the Subordinated Working Capital Loan; provided that such Liens
are subordinated to the Liens on such accounts receivable in favor of
the Administrative Agent (for the benefit of the Administrative Agent
and the Lenders) on the terms and conditions which are satisfactory to
the Administrative Agent.
SECTION 9.3 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership, limited liability
company or joint venture (including, without limitation, the creation or
capitalization or any Subsidiary), evidence of Debt or other obligation or
security, substantially all or a portion of the business or assets of any other
Person or any other investment or interest whatsoever in any other Person, or
make or permit to exist, directly or indirectly, any loans, advances or
extensions of credit to, or any investment in cash or by delivery of property
in, any Person, or enter into, directly or indirectly, any commitment or option
in respect of the foregoing except investments in:
(a) cash and marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof maturing within
120 days from the date of acquisition thereof;
(b) commercial paper maturing no more than 120 days from the date of
creation thereof and currently having the highest rating obtainable from either
Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. or ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) certificates of deposit maturing no more than 120 days from the
date of creation thereof issued by commercial banks incorporated under the laws
of the United States of America, each having combined capital, surplus and
undivided profits of not less than $500,000,000 and having a rating of "A" or
better by a nationally recognized rating agency; provided, that the aggregate
amount invested in such certificates of deposit shall not at any time exceed
$5,000,000 for any one such certificate of deposit and $10,000,000 for any one
such bank;
(d) time deposits maturing no more than thirty (30) days from the date
of creation thereof with commercial banks or savings banks or savings and loan
associations each having membership either in the FDIC or the deposits of which
are insured by the FDIC and in amounts not exceeding the maximum amounts of
insurance thereunder;
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(e) loans and advances to officers, directors, employees and Affiliates
(including advances for travel and miscellaneous expenses) in the ordinary
course of business in an aggregate amount not to exceed $25,000 on any date of
determination (without regard to write-offs or write-downs thereof);
(f) investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(g) investments by the Borrower in Hedging Agreements permitted under
Section 9.1(e); and
(h) investments by the Borrower in joint ventures; provided that (i)
such investments shall not exceed $150,000 individually or $300,000 in the
aggregate during the term of this Agreement, (ii) each such joint venture shall
be in substantially the same field of business as that conducted by the Borrower
on the Closing Date, (iii) the Borrower shall provide written notice of each
such joint venture not less than ten (10) Business Days prior to the proposed
date of consummation of such joint venture, (iv) the Borrower shall comply with
all terms and conditions of the Security Documents in connection with its
interest in each such joint venture within thirty (30) days of the date of
consummation of each such joint venture and (v) the Borrower shall provide to
the Administrative Agent all other agreements, certificates and other documents
reasonably requested thereby in connection with each such joint venture.
SECTION 9.4 Limitations on Mergers and Liquidation. Merge, consolidate
or enter into any similar combination with any other Person or liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution).
SECTION 9.5 Limitations on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of obsolete assets no longer used or usable in the
business of the Borrower; and
(b) the sale of assets which are replaced in the ordinary course of
business, the fair market value of which shall not exceed $500,000 with respect
to any transaction and $2,000,000 in the aggregate for all such transactions
during the term of this Agreement.
SECTION 9.6 Limitation on Distributions. Purchase, redeem, retire or
otherwise acquire, directly or indirectly, any of its ownership or equity
interests, or make any distribution of cash, property or assets among the
holders of its ownership or equity interests or make any changes in its capital
structure; provided that:
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(a) so long as no Default or Event of Default shall have
occurred and be continuing or will exist immediately after giving
effect to the distributions described herein, the Borrower may make
distributions to its equityholders, not otherwise permitted hereunder,
in an aggregate amount not to exceed $200,000 during the term of this
Agreement; provided that the Borrower shall (i) notify the
Administrative Agent in writing prior to making any such distribution
and (ii) provide to the Administrative Agent all documentation in
connection therewith;
(b) so long as (i) no Default or Event of Default under
Sections 10.1(a) or 10.1(b) shall have occurred and be continuing or
will exist immediately after giving effect to the distributions
described herein and (ii) no obligations have been accelerated pursuant
to Section 10.2(a), the Borrower may make quarterly distributions to
its equityholders on their pro rata share of the income of the Borrower
in an aggregate amount not to exceed in any year the amount of the
income tax liability incurred by such equityholders as a result of the
reporting of the Borrower's income, deductions, gains or losses on the
federal or state income tax returns of the equityholders, the aggregate
amount of which shall be calculated assuming all equityholders will pay
taxes at the highest combined federal and state tax rate; provided that
the Borrower shall provide to the Administrative Agent all
documentation in connection therewith; and
(c) the Borrower may declare or make distributions to its
equityholders to the extent not otherwise permitted hereunder or redeem
the membership interests of its equityholders to the extent provided
for in the operating agreement of the Borrower (as in effect on the
date of this Agreement or as subsequently amended, modified or changed
in accordance with Section 9.10) (such distributions and payments, the
"Permitted Distributions"); provided that:
(i) the aggregate amount of all Permitted
Distributions made during any Fiscal Year of the Borrower
shall not exceed Cash Flow Available for Distribution for the
preceding Fiscal Year of the Borrower; and
(ii) all Permitted Distributions made during any
Fiscal Year must be made during the sixty (60) day period (A)
commencing on the date of delivery by the Borrower to the
Agent and the Lenders of the annual financial statements for
the prior Fiscal Year of the Borrower which are required to be
delivered pursuant to Section 6.1(b) and (B) ending on the
date which is sixty (60) days after the date of such delivery
(provided that no Permitted Distributions may be made until
the first Fiscal Year following the date which is six (6) full
fiscal quarters after the Borrower has received a valid and
permanent certificate of occupancy for the Hospital);
(iii) no Default or Event of Default shall have
occurred and be continuing or will exist immediately after
giving effect to any Permitted Distribution;
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(iv) the sum of (A) the cash balance of the Borrower
plus (B) the aggregate amount of unused availability under
Section 11(l)(ii) of the Guaranty Agreement shall not be less
than $2,000,000 (such amount, the "Required Cash
Availability") as of the end of the Business Day on which any
Permitted Distribution is made (such date, the "Permitted
Distribution Date") (the Required Cash Availability to exist
after the payment and disbursement of (A) all operating
expenses due and payable as of the Permitted Distribution
Date, (B) all principal and interest on any Senior Debt due
and payable as of the Permitted Distribution Date, (C) all
principal and interest on any Subordinated Debt due and
payable as of the Permitted Distribution Date and (D) all
other Permitted Distributions due and payable as of such
date); and
(v) the Borrower shall deliver to the Administrative
Agent, as required by Section 6.4(c), a certificate in form
and substance satisfactory to the Administrative Agent
demonstrating compliance by the Borrower with the requirements
set forth in this Section 9.6(c).
SECTION 9.7 Amendments, Payments and Prepayments of Subordinated Debt.
Amend or modify (or permit the modification or amendment of) any of the terms or
provisions of any Subordinated Debt, or cancel or forgive, make any principal
payment on, make any voluntary or optional payment or prepayment on, or redeem
or acquire for value (including, without limitation, by way of depositing with
any trustee with respect thereto money or securities before due for the purpose
of paying when due) any Subordinated Debt; provided that if no Default or Event
of Default shall have occurred and be continuing or would exist immediately
after giving effect to the payments described below, the Borrower may:
(a) make all scheduled interest payments on Subordinated Debt;
(b) repay the Subordinated Working Capital Loan; and
(c) increase the amount of the Subordinated Working Capital Loan (to
the extent any such increase is permitted under Section 9.1(f)).
SECTION 9.8 Transactions With Affiliates. Except as disclosed on
Schedule 9.8 attached hereto, directly or indirectly:
(a) make any loan or advance to, or purchase or assume any note or
other obligation to or from, any of its officers, members, managers or other
Affiliates, or to or from any member of the immediate family of any of its
officers, members, managers, shareholders or other Affiliates, or subcontract
any operations to any of its Affiliates (other than loans and advances to
officers, directors, employees and Affiliates permitted pursuant to Section
9.3(e)), or
(b) enter into, or be a party to, any other transaction not described
in subsection (a) above with any of its Affiliates, except in the ordinary
course of business pursuant to the reasonable requirements of its business and
upon fair and reasonable terms that are no less
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favorable to the Borrower than the Borrower would obtain in a comparable arm's
length transaction with a Person not its Affiliate.
SECTION 9.9 Restrictive Agreements. Enter into any Debt which contains
any negative pledge on assets (other than, with respect to assets financed
thereby, the Equipment Loan Financing) or any covenants more restrictive than
the provisions hereof, or which restricts, limits or otherwise encumbers its
ability to incur Liens on or with respect to any of its assets or properties
other than the assets or properties securing such Debt.
SECTION 9.10 Certain Accounting Changes; Organizational Documents. (a)
Change its Fiscal Year end, or make any change in its accounting treatment and
reporting practices except as required by GAAP or (b) amend, modify or change
its articles of organization (or corporate charter or other similar
organizational documents) or amend, modify or change its operating agreement (or
other similar documents) in any manner adverse in any respect to the rights or
interests of the Lenders.
ARTICLE X
DEFAULT AND REMEDIES
SECTION 10.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Term Loans. The
Borrower shall default in any payment of principal of any Term Loan or
Term Note when and as due (whether at maturity, by reason of
acceleration or otherwise), and such default shall continue unremedied
for two (2) Business Days.
(b) Other Payment Defaults. The Borrower shall default in the
payment of any interest on any Term Loan or Term Note or the payment of
any other Obligation when and as due (whether at maturity, by reason of
acceleration or otherwise), and such default shall continue unremedied
for five (5) Business Days.
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by the Borrower or any Guarantor under this
Agreement, any Loan Document or any amendment hereto or thereto, shall
at any time prove to have been incorrect or misleading in any material
respect when made or deemed made.
(d) Default in Performance of Certain Covenants. The Borrower
shall default in the performance or observance of any covenant or
agreement contained in Sections 6.1, 6.2 or 6.5(g)(i) or Articles VIII
or IX of this Agreement or any Guarantor shall default in the
performance or observance of any covenant or agreement contained in
Sections 10(a), 10(b), 10(e)(v)(A), 11(l), 12 and 13 of the Guaranty
Agreement.
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(e) Default in Performance of Other Covenants and Conditions.
The Borrower or any Guarantor shall default in the performance or
observance of any term, covenant, condition or agreement contained in
this Agreement (other than as specifically provided for otherwise in
this Section 10.1) or any other Loan Document and such default shall
continue for a period of thirty (30) days after written notice thereof
has been given to the Borrower or such Guarantor by the Administrative
Agent.
(f) Hedging Agreement. The Borrower shall default in the
performance or observance of any terms, covenant, condition or
agreement under any Hedging Agreement with the Administrative Agent or
any Lender.
(g) Specific Cross Defaults.
(i) The occurrence of an event of default under the
Corporate Revolver.
(ii) Any Guarantor shall default in the performance
of any of its obligations under any of the Related Guaranty
Agreements; provided, however, that a default by any Affiliate
of any Guarantor which owns or operates a hospital or
diagnostic center under the terms of any instrument or loan to
which it is a party and for which such Guarantor provided its
guaranty shall not be considered a Default or an Event of
Default of such Guarantor pursuant to this Section 10.1(g)(ii)
unless (A) written demand for payment of all or a portion of
such debt has been made against such Guarantor by the lender
or lenders thereunder (or an agent or trustee acting on behalf
of the lender or lenders) and (B) such Guarantor fails to
immediately (1) pay such debt and (2) perform all other
related obligations in connection therewith.
(h) Other Debt Cross-Default. The Borrower or any Guarantor
shall (i) default in the payment of any Debt (other than (A) Debt
evidenced by the Term Notes and (B) any inter-company Debt, including
any Debt of the Borrower to any Guarantor) beyond the period of grace,
if any, provided in the instrument or agreement under which such Debt
was created and provided that with respect to the Parent and MedCath
Incorporated, such Debt exceeds an aggregate of $1,000,000 and with
respect to the Borrower and any other Guarantor, such Debt exceeds an
aggregate of $500,000, or (ii) default in the observance or performance
of any other agreement or condition relating to any Debt (other than
Debt evidenced by the Term Notes) or contained in any instrument or
agreement evidencing, securing or relating thereto or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Debt (or a trustee or agent on behalf of such holder or holders)
to cause, with the giving of notice if required, any such Debt to
become due prior to its stated maturity (any applicable grace period
having expired); provided, however, that a default by any Affiliate of
any Guarantor which owns or operates a hospital or diagnostic center
under the terms of any instrument or loan to which it is a party and
for which such Guarantor provided its guaranty shall not be considered
a Default or an Event of Default of such
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Guarantor pursuant to this Section 10.1(h) unless demand for payment of
all or a portion of such debt has been made against such Guarantor by
the lender or lenders thereunder (or an agent or trustee acting on
behalf of the lender or lenders).
(i) Other Cross-Defaults. The Borrower or any Guarantor shall
default in the payment when due, or in the performance or observance,
of any material obligation or condition of any Material Contract and
such default shall continue beyond the period of grace, if any,
provided in such Material Contract unless, but only as long as, the
existence of any such default is being contested by the Borrower or
such Guarantor in good faith by appropriate proceedings and adequate
reserves in respect thereof have been established on the books of the
Borrower or such Guarantor to the extent required by GAAP.
(j) Change in Control. (i) Any person or group of persons
(within the meaning of Section 13(d) of the Securities Exchange Act of
1934, as amended), other than any direct or indirect shareholder of the
Parent existing immediately prior to the Initial Public Offering (as
defined in the Commitment Agreement), shall obtain ownership or control
in one or more series of transactions of more than fifty percent (50%)
of the common stock or fifty percent (50%) of the voting power of the
Parent entitled to vote in the election of members of the board of
directors of the Parent, (ii) MedCath Incorporated shall cease to be a
wholly-owned Subsidiary of the Parent, (iii) the Management Company
shall cease to be a wholly-owned Subsidiary of MedCath Incorporated or
(iv) the Management Company shall be the beneficial owner of less than
that percentage of the equity interests in the Borrower owned by the
Management Company on the Closing Date or shall cease to be the manager
of the Borrower (any such event, a "Change in Control").
(k) Voluntary Bankruptcy Proceeding. The Borrower or any
Guarantor shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition
seeking to take advantage of any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or
composition for adjustment of debts, (iii) consent to or fail to
contest in a timely and appropriate manner any petition filed against
it in an involuntary case under such bankruptcy laws or other laws,
(iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by,
a receiver, custodian, trustee, or liquidator of itself or of a
substantial part of its property, domestic or foreign, (v) admit in
writing its inability to pay its debts as they become due, (vi) make a
general assignment for the benefit of creditors, or (vii) take any
corporate action for the purpose of authorizing any of the foregoing.
(l) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against the Borrower or any Guarantor in
any court of competent jurisdiction seeking (i) relief under the
federal bankruptcy laws (as now or hereafter in effect) or under any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts, or (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like
for the Borrower or any Guarantor or for all or any substantial part of
their respective assets, domestic or foreign, and such case or
proceeding shall continue undismissed or unstayed for a period of sixty
(60) consecutive days, or an order granting
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the relief requested in such case or proceeding (including, but not
limited to, an order for relief under such federal bankruptcy laws)
shall be entered.
(m) Failure of Agreements. Any provision of this Agreement or
of any other Loan Document shall for any reason cease to be valid and
binding on the Borrower, any Guarantor or any other Person party
thereto or the Borrower, any Guarantor or any other Person party
thereto shall so state in writing, or this Agreement or any other Loan
Document shall for any reason cease to create a valid and perfected
first priority Lien on, or security interest in, any of the collateral
purported to be covered thereby, in each case other than in accordance
with the express terms hereof or thereof, the priority of which shall
be subject only to Liens permitted pursuant to Section 9.2.
(n) ERISA Events. The occurrence of any of the following
events: (i) the Borrower, any Guarantor or any ERISA Affiliate fails to
make full payment when due of all amounts which, under the provisions
of any Pension Plan or Section 412 of the Code, the Borrower, any
Guarantor or any ERISA Affiliate is required to pay as contributions
thereto, (ii) an accumulated funding deficiency in excess of $2,000,000
occurs or exists, whether or not waived, with respect to any Pension
Plan of the Borrower, any Guarantor or any ERISA Affiliate, (iii) a
Termination Event with respect to the Borrower, any Guarantor or any
ERISA Affiliate or (iv) the Borrower, any Guarantor or any ERISA
Affiliate as an employer under one or more Multiemployer Plans makes a
complete or partial withdrawal from any such Multiemployer Plan and the
plan sponsor of any such Multiemployer Plan notifies such withdrawing
employer that such employer has incurred a withdrawal liability
requiring payment in an amount exceeding $2,000,000.
(o) Judgment. A judgment or order by any court for the payment
of money which causes the aggregate amount of all judgments and orders
by any court in any Fiscal Year (which are not fully covered by
insurance or with respect to which the applicable insurance carrier has
not acknowledged that such judgment is fully covered by insurance) to
exceed (i) $500,000 with respect to the Borrower, (ii) $1,000,000 with
respect to any Guarantor (other than MedCath Parent Entities), (iii)
$1,500,000 in the aggregate with respect to the Borrower and the
Guarantors (other than the MedCath Parent Entities) or (iv) $2,000,000
with respect to any of the MedCath Parent Entities, and such judgment
or order shall continue without discharge or stay for a period of
thirty (30) days.
(p) License to Operate, Medicare Certification and Medicaid
Certification. The Borrower's license to operate, Medicare
Certification or Medicaid Certification (as applicable) shall expire,
terminate, be cancelled or otherwise lost.
(q) Operating Agreement. The Borrower shall amend the
Borrower's operating agreement in a manner which would have a Material
Adverse Effect without the prior written consent of the Required
Lenders.
(r) Management Agreement. The Management Agreement shall be
amended in a manner which would have a Material Adverse Effect, without
the prior written
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consent of the Required Lenders, or shall cease to be valid and binding
in accordance with its terms.
(s) Environmental. Any one or more Environmental Claims shall
have been asserted against the Borrower or any Guarantor; the Borrower
or any Guarantor would be reasonably likely to incur liability as a
result thereof; and such liability would be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect.
SECTION 10.2 Remedies.
(a) Upon the occurrence of an Event of Default, with the consent of the
Required Lenders, the Administrative Agent may, and upon the request of the
Required Lenders, the Administrative Agent shall, do any one or more of the
following:
(i) declare the principal of and interest on the Term Loans
and the Term Notes at the time outstanding, and all other amounts owed
to the Lenders and the Administrative Agent under this Agreement or any
other Loan Document and all other Obligations (other than obligations
owing under any Hedging Agreement), to be forthwith due and payable,
whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which
are expressly waived, anything in this Agreement or any other Loan
Document to the contrary notwithstanding, and terminate the Term Loan
Facility and any right of the Borrower to request borrowings
thereunder; provided, that upon the occurrence of an Event of Default
specified in Section 10.1(k) or (l), the Term Loan Facility and any
right of the Borrower to request borrowings thereunder shall be
automatically terminated and all Obligations (other than obligations
owing under any Hedging Agreement) shall automatically become due and
payable without presentment, demand, protest or other notice of any
kind, all of which are expressly waived, anything in this Agreement or
any other Loan Document to the contrary notwithstanding;
(ii) institute an action to reduce any claim to judgment;
(iii) exercise any and all rights and remedies afforded by
this Agreement, the other Loan Documents, Applicable Law, equity or
otherwise; or
(iv) set-off and apply, to the extent thereof and to the
maximum extent permitted by law, any and all deposits, funds or assets
at any time held and any and all other indebtedness at any time owing
by any Lender to or for the credit or account of the Borrower against
any Obligations (other than Obligations owing under any Hedging
Agreement).
(b) The Borrower hereby appoints the Administrative Agent as the
attorney-in-fact of the Borrower, which power of attorney is irrevocable and
coupled with an interest, with full power of substitution and in the name of the
Borrower, if the Administrative Agent elects to do so, upon the occurrence of a
Default or an Event of Default, to:
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(i) endorse the name of the Borrower on any checks or drafts
representing proceeds of any insurance policies, or other checks or
instruments payable to the Borrower with respect to the Property;
(ii) prosecute or defend any action or proceeding incident to
the Property,
(iii) pay, settle or compromise all bills and claims so as to
clear title to the Property; and
(iv) take over and use all or any part of the labor,
materials, supplies and equipment contracted for, owned by or under the
control of the Borrower, whether or not previously incorporated into
the Improvements.
Any amounts expended by the Administrative Agent or the Lenders shall be a
demand obligation owing by the Borrower to the Lenders. The Lenders shall have
no liability to the Borrower for the sufficiency or adequacy of any such actions
taken by the Administrative Agent or the Lenders unless such actions constitute
gross negligence or willful misconduct on the part of the Administrative Agent
or the Lenders.
SECTION 10.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise. No delay or failure to take action
on the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of
dealing between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE XI
THE ADMINISTRATIVE AGENT
SECTION 11.1 Appointment and Authorization of the Administrative Agent.
Each Lender hereby irrevocably (subject to Section 11.9) appoints, designates
and authorizes the Administrative Agent to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to exercise
such powers and perform such duties as are expressly delegated to it by the
terms of this Agreement or any other Loan Document, together with such powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the
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Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Lender or participant, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent" herein and in
the other Loan Documents with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any Applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.
SECTION 11.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.
SECTION 11.3 Liability of the Administrative Agent. No Administrative
Agent-Related Person shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct in connection with its duties expressly set
forth herein), or (b) be responsible in any manner to any Lender or participant
for any recital, statement, representation or warranty made by the Borrower, any
Guarantor or any officer thereof, contained herein or in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Borrower, any Guarantor or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Administrative Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower, any Guarantor or any Affiliate thereof.
SECTION 11.4 Reliance by the Administrative Agent.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower and the Guarantors),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
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requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders or all the Lenders, if required hereunder, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and participants. Where this Agreement expressly
permits or prohibits an action unless the Required Lenders otherwise determine,
the Administrative Agent shall, and in all other instances, the Administrative
Agent may, but shall not be required to, initiate any solicitation for the
consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.2, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Administrative Agent to such Lender
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender.
SECTION 11.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Lenders, unless the Administrative Agent shall have received written notice from
a Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
Article X; provided, however, that unless and until the Administrative Agent has
received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.
SECTION 11.6 Credit Decision; Disclosure of Information by the
Administrative Agent. Each Lender acknowledges that no Administrative
Agent-Related Person has made any representation or warranty to it, and that no
act by the Administrative Agent hereinafter taken, including any consent to and
acceptance of any assignment or review of the affairs of the Borrower, any
Guarantor or any Affiliate thereof, shall be deemed to constitute any
representation or warranty by any Administrative Agent-Related Person to any
Lender as to any matter, including whether Administrative Agent-Related Persons
have disclosed material information in their possession. Each Lender represents
to the Administrative Agent that it has, independently and without reliance upon
any Administrative Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower, the Guarantors and their
respective Subsidiaries, and all applicable bank or other regulatory Applicable
Laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to the Borrower hereunder.
Each Lender also represents that it will,
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independently and without reliance upon any Administrative Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the Guarantors. Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower or any of the Guarantors or any of
their respective Affiliates which may come into the possession of any
Administrative Agent-Related Person.
SECTION 11.7 Indemnification of the Administrative Agent. Whether or
not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand each Administrative Agent-Related Person (to the extent
not reimbursed by or on behalf of the Borrower or the Guarantors promptly upon
demand therefor and without limiting the obligation of the Borrower and the
Guarantors to do so), pro rata, and hold harmless each Administrative
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Administrative Agent-Related Person of any portion of such
Indemnified Liabilities resulting from such Person's gross negligence or willful
misconduct; provided, however, that no action taken in accordance with the
directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 11.7. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower promptly upon
demand therefor. The undertaking in this Section 11.7 shall survive termination
of the Commitments, the payment of all Obligations hereunder and the resignation
or replacement of the Administrative Agent.
SECTION 11.8 The Administrative Agent in Its Individual Capacity. Bank
of America and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Borrower and each of the Guarantors and their respective
Affiliates as though Bank of America were not the Administrative Agent hereunder
and without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding the Borrower, any Guarantor or any Affiliate thereof
(including information that may be subject to confidentiality obligations in
favor of the Borrower, any Guarantor or any Affiliate thereof) and acknowledge
that the Administrative Agent shall be under no obligation to provide such
information to them. With respect to its Term Loans, Bank
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of America shall have the same rights and powers under this Agreement as any
other Lender and may exercise such rights and powers as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" include Bank of
America in its individual capacity.
SECTION 11.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon thirty (30) days' notice to the Lenders.
If the Administrative Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor administrative agent for the
Lenders which successor administrative agent shall be consented to by the
Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term "Administrative Agent" shall mean
such successor administrative agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article XI and Sections 5.2 and
10.3 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is thirty (30) days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
SECTION 11.10 Syndication Agent; Documentation Agent; Co-Lead Arranger.
None of the Lenders identified on the facing page or signature pages of this
Agreement as a "syndication agent", "documentation agent" or "co-lead arranger"
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, none of the Lenders so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
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ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing.
If to the Parent: MedCath Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Borrower: Heart Hospital of BK, LLC
c/o HHBF, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Bank of America as Bank of America, N.A.
Administrative Agent: IL1-231-08-03
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the address set forth on Schedule 1.1(a)
hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Term Loans will be disbursed.
SECTION 12.2 Expenses; Indemnity.
(a) The Borrower agrees (i) to pay or reimburse the Administrative
Agent and the Syndication Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of this
Agreement and the other Loan Documents and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, all out-of-pocket syndication and due
diligence expenses and all Attorney Costs (provided that such Attorney Costs
shall be limited to the fees and expenses of a single law firm representing the
Administrative Agent and the Syndication Agent) and (ii) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any "workout" or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including, without limitation, all
Attorney Costs. The foregoing costs and expenses shall include all search,
filing, recording, title insurance and appraisal charges and fees and taxes
related thereto, and other out-of-pocket expenses incurred by the Administrative
Agent and the cost of independent public accountants and other outside experts
retained by the Administrative Agent or any Lender. The agreements in this
Section 12.2(a) shall survive the termination of the Commitments and repayment
of all the other Obligations.
(b) Whether or not the transactions contemplated hereby are
consummated, the Borrower agrees to indemnify, save and hold harmless each
Agent-Related Person, each Lender
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and their respective Affiliates, directors, officers, employees, counsel, agents
and attorneys-in-fact (collectively the "Indemnitees") from and against: (i) any
and all claims, demands, actions or causes of action that are asserted against
any Indemnitee by any Person (other than the Administrative Agent or any Lender)
relating directly or indirectly to a claim, demand, action or cause of action
that such Person asserts or may assert against the Borrower, any Guarantor, any
Affiliate thereof or any of their respective officers or directors; (ii) any and
all claims, demands, actions or causes of action that may at any time (including
at any time following repayment of the Obligations and the resignation or
removal of the Administrative Agent or the replacement of any Lender) be
asserted or imposed against any Indemnitee, arising out of or relating to, the
Loan Documents, any predecessor loan documents, the Commitments, the use or
contemplated use of the proceeds of any Term Loan, or the relationship of the
Borrower, the Guarantors, the Administrative Agent and the Lenders under this
Agreement or any other Loan Document; (iii) any administrative or investigative
proceeding by any Governmental Authority arising out of or related to a claim,
demand, action or cause of action described in clause (i) or (ii) above; and
(iv) any and all liabilities (including liabilities under indemnities), losses,
costs or expenses (including Attorney Costs) that any Indemnitee suffers or
incurs as a result of the assertion of any foregoing claim, demand, action,
cause of action or proceeding, or as a result of the preparation of any defense
in connection with any foregoing claim, demand, action, cause of action or
proceeding, in all cases, whether or not arising out of the negligence of an
Indemnitee, and whether or not an Indemnitee is a party to such claim, demand,
action, cause of action or proceeding (all the foregoing, collectively, the
"Indemnified Liabilities"); provided that no Indemnitee shall be entitled to
indemnification for any claim caused by its own gross negligence or willful
misconduct or for any loss asserted against it by another Indemnitee. The
agreements in this Section 12.2(b) shall survive the termination of the
Commitments and repayment of all the other Obligations.
SECTION 12.3 Set-off.
(a) In addition to any rights now or hereafter granted under Applicable
Law and not by way of limitation of any such rights, upon and after the
occurrence of any Event of Default and during the continuance thereof, the
Lenders and any assignee or participant of a Lender in accordance with Section
12.10 are hereby authorized by the Borrower at any time or from time to time,
without notice to the Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by the Lenders, or any such
assignee or participant to or for the credit or the account of the Borrower
against and on account of the Obligations irrespective of whether or not (a) the
Lenders shall have made any demand under this Agreement or any of the other Loan
Documents or (b) the Administrative Agent shall have declared any or all of the
Obligations to be due and payable as permitted by Section 10.2 and although such
Obligations shall be contingent or unmatured. Notwithstanding the preceding
sentence, each Lender agrees to notify the Borrower and the Administrative Agent
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
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(b) Notwithstanding anything to the contrary contained in this
Agreement, no Lender shall take any remedial action under this Agreement or any
other Loan Document, including, without limitation, any action pursuant to
subsection (a) of this Section 12.3, without the consent of the Administrative
Agent and the Required Lenders.
SECTION 12.4 Governing Law. THIS AGREEMENT, THE TERM NOTES AND THE
OTHER LOAN DOCUMENTS, UNLESS OTHERWISE EXPRESSLY SET FORTH THEREIN, SHALL BE
GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES
THEREOF; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
SECTION 12.5 Jurisdiction and Venue.
(a) Jurisdiction. The Borrower hereby irrevocably consents to the
personal jurisdiction of the state and federal courts located in Mecklenburg
County, North Carolina, in any action, claim or other proceeding arising out of
any dispute in connection with this Agreement, the Term Notes and the other Loan
Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations. The Borrower hereby irrevocably consents to the
service of a summons and complaint and other process in any action, claim or
proceeding brought by the Administrative Agent or any Lender in connection with
this Agreement, the Term Notes or the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations, on behalf of itself or its property, in the manner specified in
Section 12.1. Nothing in this Section 12.5 shall affect the right of the
Administrative Agent or any Lender to serve legal process in any other manner
permitted by Applicable Law or affect the right of the Administrative Agent or
any Lender to bring any action or proceeding against the Borrower or its
properties in the courts of any other jurisdictions.
(b) Venue. The Borrower hereby irrevocably waives any objection it may
have now or in the future to the laying of venue in the aforesaid jurisdiction
in any action, claim or other proceeding arising out of or in connection with
this Agreement, any other Loan Document or the rights and obligations of the
parties hereunder. The Borrower irrevocably waives, in connection with such
action, claim or proceeding, any plea or claim that the action, claim or other
proceeding has been brought in an inconvenient forum.
SECTION 12.6 Waiver of Right to Trial by Jury. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
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BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 12.6 WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
SECTION 12.7 Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment or proceeds of the
collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.
SECTION 12.8 Injunctive Relief; Punitive Damages.
(a) The Borrower recognizes that, in the event the Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrower agrees that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) The Administrative Agent, the Lenders and the Borrower (on behalf
of itself and the Guarantors) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that it may now have or which may arise in the future in
connection with any dispute, whether such dispute is resolved through
arbitration or judicially.
SECTION 12.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or the Guarantors to determine compliance with any covenant contained
herein, shall, except as otherwise expressly contemplated hereby or unless there
is an express written direction by the Administrative Agent to the contrary
agreed to by the Borrower, be performed in accordance with GAAP as in effect on
the Closing Date. In the event that changes in GAAP shall be mandated by the
Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrower and the
Required Lenders shall have amended this Agreement to the extent necessary to
reflect any such changes in the financial covenants and other terms and
conditions of this Agreement.
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SECTION 12.10 Successors and Assigns; Participations.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Term Loans at the time owing to it); provided
that:
(i) except in the case of an assignment of the entire
remaining amount of the assigning Lender's Commitment and the Term
Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund with respect to
a Lender, the aggregate amount of the Commitment (which for this
purpose includes Term Loans outstanding thereunder) of the assigning
Lender subject to each such assignment, determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent, shall not be less than $5,000,000, unless
each of the Administrative Agent and, so long as no Event of Default
has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed);
(ii) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Term Loans or the
Commitment assigned; and
(iii) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section 12.10, from and after the effective date
specified in each Assignment and Acceptance, the Eligible Assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the 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 3.8, 3.9, 3.10, 3.11 and 12.2). Upon
request, the Borrower (at its expense) shall execute and deliver new or
replacement Term Notes to the assigning Lender and the assignee Lender. Any
assignment or transfer by a
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Lender of rights or obligations under this Agreement that does not comply with
this subsection (b) shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section 12.10.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Term Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Any Lender may, with notice to, but without the consent of, the
Borrower or the Administrative Agent, sell participations to one or more banks
or other entities (a "Participant") in all or a portion of such Lender's rights
and/or obligations under this Agreement (including all or a portion of its
Commitment and/or the Term Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative 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. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification that would (i) postpone any date upon
which any payment of money is scheduled to be paid to such Participant, (ii)
reduce the principal, interest, fees or other amounts payable to such
Participant, (iii) release any Guarantor from the Guaranty Agreement or (iv)
release all or substantially all of the Collateral. Subject to subsection (e) of
this Section 12.10, the Borrower agrees that each Participant shall be entitled
to the benefits of Sections 3.8(c), 3.9, 3.10 and 3.11; provided that, subject
to subsection (e) of this Section 12.10, no Participant shall be entitled to
receive any greater amount pursuant to such Sections 3.8(c), 3.9, 3.10 and 3.11
than the transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 12.3 as though it
were a Lender; provided such Participant agrees to be subject to Section 3.6 as
though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Sections 3.8(c), 3.10 or 3.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.11 unless
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the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
3.11(e) as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its Term
Notes, if any) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) If the consent of the Borrower to an assignment or to an Eligible
Assignee is required hereunder (including a consent to an assignment which does
not meet the minimum assignment threshold specified in clause (i) of the proviso
to the first sentence of Section 12.10(b)), the Borrower shall be deemed to have
given its consent ten (10) Business Days after the date notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by the Borrower prior to such fifth (5th) Business
Day.
(h) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; or (d) any other Person (other than a
natural Person) approved by the Administrative Agent and, unless (i)
such Person is taking delivery of an assignment in connection with
physical settlement of a credit derivatives transaction or (ii) an
Event of Default has occurred and is continuing, the Borrower (each
such approval not to be unreasonably withheld or delayed).
"Fund" means any Person (other than a natural Person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"Approved Fund" means any Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
SECTION 12.11 Amendments, Waivers and Consents.
(a) Except as set forth below or as specifically provided in any Loan
Document, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or consent
is in writing signed by the Required Lenders (or by the Administrative Agent
with the consent of the Required Lenders) and delivered to the Administrative
Agent and, in the case of an amendment, signed by the Borrower; provided, that
no amendment, waiver or consent shall (i) increase the Commitment of any Lender,
(ii) reduce the rate of interest or fees payable on any Term Loan, (iii) reduce
or forgive the principal amount of
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any Term Loan, (iv) extend the originally scheduled time or times of payment of
the principal of any Term Loan or the time or times of payment of interest on
any Term Loan or any fee or commission with respect thereto, (v) permit any
subordination of the principal or interest on any Term Loan, (vi) release the
Borrower from the Obligations hereunder, (vii) release any Guarantor from its
obligations under the Guaranty Agreement (other than as specifically permitted
or contemplated in this Agreement or the Guaranty Agreement), (viii) permit any
assignment (other than as specifically permitted or contemplated in this
Agreement) of any of the Borrower's rights and obligations hereunder, (ix)
release all or any material portion of the Collateral or release any Security
Document (other than asset sales permitted pursuant to Section 9.5 and as
otherwise specifically permitted or contemplated in this Agreement or the
applicable Security Document) or (x) amend the provisions of this Section 12.11
or the definition of Required Lenders, in each case, without the prior written
consent of each Lender. In addition, no amendment, waiver or consent to the
provisions of Article XI shall be made without the written consent of the
Administrative Agent.
(b) In the case of any amendment, waiver, consent or other modification
in connection with this Agreement for which a substantially similar
corresponding amendment, waiver, consent or other modification with regard to
any the Related Credit Documents will be made effective thereunder
contemporaneously, each Lender must vote in the same manner with respect to each
such amendment, waiver, consent or other modification in connection with this
Agreement and all such other Related Credit Documents.
SECTION 12.12 Confidentiality. The Administrative Agent and each of the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent requested
by any regulatory authority; (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section 12.12, to (i) any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii)
any direct or indirect contractual counterparty or prospective counterparty (or
such contractual counterparty's or prospective counterparty's professional
advisor) to any credit derivative transaction relating to obligations of the
Borrower and the Guarantors; (g) with the consent of the Borrower; (h) to the
extent such Information (i) becomes publicly available other than as a result of
a breach of this Section 12.12 or (ii) becomes available to the Administrative
Agent or any Lender on a nonconfidential basis from a source other than the
Borrower and the Guarantors; or (i) to the National Association of Insurance
Commissioners or any other similar organization or any nationally recognized
rating agency that requires access to information about a Lender's or its
Affiliates' investment portfolio in connection with ratings issued with respect
to such Lender or its Affiliates. For the purposes of this Section 12.12,
"Information" means all information received from the Borrower and the
Guarantors relating to the Borrower and the Guarantors or
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the business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower or the Guarantors; provided that, in the case of
information received from the Borrower or any Guarantor after the date hereof,
such information is clearly identified in writing at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section 12.12 shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
SECTION 12.13 Performance of Duties. The Borrower's obligations under
this Agreement and each of the other Loan Documents shall be performed by the
Borrower at its sole cost and expense.
SECTION 12.14 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied or the Term Loan Facility has not been
terminated.
SECTION 12.15 Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article XII and any other
provision of this Agreement and the other Loan Documents shall continue in full
force and effect and shall protect the Administrative Agent and the Lenders
against events arising after such termination as well as before.
SECTION 12.16 Titles and Captions. Titles and captions of Articles,
Sections and subsections in, and the table of contents of, this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 12.17 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 12.18 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
SECTION 12.19 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and irrevocably paid and satisfied in full. The
Administrative Agent is hereby permitted to release all Liens on the Collateral
in favor of the Administrative Agent, for the ratable benefit of itself and the
Lenders, upon repayment of the outstanding principal of and all accrued
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interest on the Term Loans, payment of all outstanding fees and expenses
hereunder and the termination of the Lender's Commitments. No termination of
this Agreement shall affect the rights and obligations of the parties hereto
arising prior to such termination or in respect of any provision of this
Agreement which survives such termination.
SECTION 12.20 Advice of Counsel. Each of the parties represents to each
other party hereto that it has discussed this Agreement with its counsel.
SECTION 12.21 No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto 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.
SECTION 12.22 Inconsistencies with Other Documents; Independent Effect
of Covenants.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control; provided, that any provision of the Security Documents which imposes
additional burdens on the Borrower or the Guarantors or further restricts the
rights of the Borrower or the Guarantors or gives the Administrative Agent or
Lenders additional rights shall not be deemed to be in conflict or inconsistent
with this Agreement and shall be given full force and effect.
(b) The Borrower expressly acknowledges and agrees that each covenant
contained in Articles VII, VIII and IX hereof and Sections 11, 12 and 13 of the
Guaranty Agreement shall be given independent effect. Accordingly, the Borrower
shall not engage in any transaction or other act otherwise permitted under any
covenant contained in Articles VII, VIII and IX hereof and Sections 11, 12 and
13 of the Guaranty Agreement if, before or after giving effect to such
transaction or act, the Borrower shall or would be in breach of any other
covenant contained in Articles VII, VIII and IX hereof and Sections 11, 12 and
13 of the Guaranty Agreement.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
[CORPORATE SEAL] HEART HOSPITAL OF BK, LLC, as Borrower
By:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
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BANK OF AMERICA, N.A., as Administrative
Agent
By:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
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BANK OF AMERICA, N.A., as Lender
By:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
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BANKERS TRUST COMPANY, as Syndication
Agent and as Lender
By:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
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FIRST UNION NATIONAL BANK, as
Documentation Agent and as Lender
By:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
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[ADDITIONAL LENDERS], as Lender
By:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
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Schedule 1.1(a)
Lenders and Commitments
[TO BE INSERTED]
95
Schedule 1.1(b)
Guarantors
MedCath Corporation (DE)
MedCath Holdings, Inc. (DE)
MedCath Finance Company (AZ)
MedCath Intermediate Holdings, Inc. (DE)
MedCath Incorporated (NC)
MedCath Diagnostics, LLC (NC)
CHF Centers of America, LLC (NC)
Heart Research Centers International, LLC (NC)
MedCath Nuclear Services, LLC (NC)
MedCath Cardiology Consulting & Management, Inc. (AZ)
MedCath Management of Ohio, Inc. (OH)
WMS Management, Inc. (OH)
MedCath of Massachusetts, Inc. (NC)
Austin MOB, Inc. (NC)
Venture Holdings, Inc. (AZ)
HHBF, Inc. (NC)