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EXHIBIT 10.33
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RENAL CARE GROUP, INC.
Borrower
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FIRST AMENDED AND RESTATED
LOAN AGREEMENT
$125,000,000 REVOLVING CREDIT LOAN
Dated as of August 4, 1997
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NATIONSBANK OF TENNESSEE, N.A., AGENT
FIRST AMERICAN NATIONAL BANK
FIRST UNION NATIONAL BANK
NATIONSBANK OF TENNESSEE, N.A.
SUNTRUST BANK, NASHVILLE, N.A.
Lenders
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TABLE OF CONTENTS
RECITALS...........................................................................1
I. DEFINITIONS...................................................................2
1.1 Terms Defined in This Agreement.........................2
1.2 Terms Generally........................................18
II. CREDIT FACILITIES.............................................................18
2.1 Amount of Revolving Credit Loan........................18
2.2 Use of Proceeds of Revolving Credit Loan...............18
2.3 Revolving Credit Notes.................................19
2.4 Separate Commitments of Lender.........................19
2.5 Advances of Loans......................................19
2.6 Interest...............................................22
2.7 Alternate Rate of Interest if LIBOR Unavailable........23
2.8 Change in Circumstances................................23
2.9 Change in Legality of LIBOR Loans......................25
2.10 Principal Repayment....................................26
2.11 Prepayment of LIBOR Loans..............................26
2.12 Prepayment of Base Rate Loans..........................27
2.13 Reduction of Commitment................................27
2.14 Periodic Commitment Fee Based on Use of Facilities.....27
2.15 Swingline Loans........................................28
III. CONDITIONS PRECEDENT........................................................31
3.1 Conditions to Initial Advance..........................31
3.2 Conditions to Subsequent Loans and Issuances...........34
IV. REPRESENTATIONS AND WARRANTIES...............................................35
4.1 Capacity...............................................35
4.2 Authorization..........................................35
4.3 Binding Obligations....................................35
4.4 No Conflicting Law or Agreement........................35
4.5 No Consent Required....................................36
4.6 Financial Statements...................................36
4.7 Fiscal Year............................................36
4.8 Litigation.............................................36
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4.9 Taxes; Governmental Charges............................36
4.10 Title to Properties....................................37
4.11 No Default.............................................37
4.12 Casualties; Taking of Properties.......................37
4.13 Compliance with Laws...................................37
4.14 Compliance with Fraud and Abuse Laws...................37
4.15 ERISA..................................................37
4.16 Full Disclosure of Material Facts......................37
4.17 Accuracy of Projections................................38
4.18 Investment Company Act.................................38
4.19 Personal Holding Company...............................38
4.20 Solvency...............................................38
4.21 Chief Executive Office.................................38
4.22 Subsidiaries...........................................38
4.23 Ownership of Patents, Licenses, Etc....................38
4.24 Environmental Compliance...............................38
4.25 Labor Matters..........................................39
4.26 OSHA Compliance........................................39
4.27 Regulation U...........................................39
4.28 Affiliate Transactions.................................39
4.29 Inter-Company Notes....................................39
V. AFFIRMATIVE COVENANTS.........................................................39
5.1 Payment of Obligations.................................39
5.2 Maintenance of Existence and Business..................40
5.3 Financial Statements and Reports.......................40
5.4 Taxes and Other Encumbrances...........................42
5.5 Payment of Debts.......................................43
5.6 Compliance with Laws...................................43
5.7 Maintenance of Property................................43
5.8 Compliance with Contractual Obligations................43
5.9 Further Assurances.....................................43
5.10 Security Interest; Setoff..............................44
5.11 Insurance..............................................44
5.12 Accounts and Records...................................44
5.13 Official Records.......................................44
5.14 Banking Relationships..................................45
5.15 Right of Inspection....................................45
5.16 ERISA Information and Compliance.......................45
5.17 Indemnity; Expenses....................................45
5.18 Assistance in Litigation...............................46
5.19 Name Changes...........................................46
5.20 Estoppel Letters.......................................47
5.21 Environmental Matters..................................47
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5.22 Opinions of Counsel....................................48
5.23 Guarantees From Borrower Entities......................48
5.24 Inter-Company Notes Receivable.........................48
VI. NEGATIVE COVENANTS...........................................................48
6.1 Guaranties.............................................48
6.2 Change of Management...................................49
6.3 Encumbrances...........................................49
6.4 Investments............................................49
6.5 Change of Control......................................49
6.6 Nature of Business.....................................49
6.7 Acquisitions, Mergers, Etc.............................49
6.8 Advances...............................................50
6.9 Disposition of Assets..................................50
6.10 Inconsistent Agreements................................50
6.11 Fictitious Names.......................................50
6.12 Subsidiaries and Affiliates............................50
6.13 Place of Business......................................50
6.14 Adverse Action With Respect to Plans...................51
6.15 Transactions With Affiliates...........................51
6.16 Constituent Document Amendments........................51
6.17 Adverse Transactions...................................51
6.18 Margin Securities......................................51
6.19 Accounting Changes.....................................51
6.20 Distributions..........................................51
6.21 Action Outside Ordinary Course.........................51
VII. FINANCIAL COVENANTS.........................................................52
7.1 Net Worth..............................................52
7.2 Leverage Ratio.........................................52
7.3 Total Capitalization Ratio.............................52
7.4 Fixed Charge Coverage..................................52
7.5 Current Ratio..........................................52
VIII. EVENTS OF DEFAULT..........................................................52
8.1 Events of Default......................................52
8.2 Remedies...............................................54
IX. AGENT........................................................................55
9.1 Appointment of Agent...................................55
9.2 Powers and Duties of Agent.............................55
9.3 Indemnification of Agent...............................57
9.4 No Representations by Agent............................57
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9.5 Independent Investigations by Lenders..................57
9.6 Notice of Default......................................58
9.7 Funding of Advances Pursuant to Borrowing Notices......58
9.8 Agent in its Individual Capacity.......................58
9.9 Holders................................................58
9.10 Successor Agent........................................59
9.11 Sharing of Payments, etc...............................59
9.12 Separate Liens on Collateral...........................60
9.13 Payments Between Agent and Lenders.....................60
9.14 Assignments and Participations.........................60
9.15 Bankruptcy Provisions..................................60
9.16 Foreclosure of Collateral..............................61
9.17 Procedures for Notices and Approvals...................61
9.18 Other Relationships With Borrower......................61
9.19 Foreign Tax Matters....................................61
9.20 Responses to Requests..................................62
X. GENERAL PROVISIONS............................................................62
10.1 Notices................................................62
10.2 Renewal, Extension, or Rearrangement...................63
10.3 Application of Payments................................63
10.4 Counterparts...........................................64
10.5 Negotiated Document....................................64
10.6 Consent to Jurisdiction; Exclusive Venue...............64
10.7 Not Partners; No Third Party Beneficiaries.............64
10.8 No Reliance on Lenders' Analysis.......................64
10.9 No Marshaling of Assets................................64
10.10 Impairment of Collateral...............................64
10.11 Business Days..........................................65
10.12 Standard of Care; Limitation of Damages................65
10.13 Incorporation of Schedules.............................65
10.14 Indulgence Not Waiver..................................65
10.15 Cumulative Remedies....................................65
10.16 Amendment and Waiver in Writing........................65
10.17 Assignment.............................................65
10.18 Entire Agreement.......................................66
10.19 Severability...........................................66
10.20 Time of Essence........................................66
10.21 Applicable Law.........................................66
10.22 Captions Not Controlling...............................66
10.23 Waiver of Right to Jury Trial..........................66
10.24 Facsimile Signatures...................................66
10.25 Additional Original Borrower Parties...................66
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EXHIBITS
1.3 Form of Swingline Note
2.3 Form of Revolving Credit Note
2.5.1(b) Form of Borrowing and Conversion Notices
3.1.1(d) Form of Joint and Several Unconditional Guaranty
3.1.1(e) Form of Equity Interests Security Agreement
3.1.1(f) Form of Collateral Assignment of Promissory Notes
3.1.1(j) Form of Borrower's Counsel Opinions
SCHEDULES
4.8 Litigation
4.28 Affiliate Transactions
4.29 Inter-Company Notes
6.2 Management Staffing
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FIRST AMENDED AND RESTATED LOAN AGREEMENT
This First Amended and Restated Loan Agreement is entered into as of the
4th day of August, 1997, by and among RENAL CARE GROUP, INC. ("Borrower"), a
Delaware corporation; FIRST AMERICAN NATIONAL BANK ("FANB"), a national banking
corporation, FIRST UNION NATIONAL BANK ("FUNB"), a national banking association,
NATIONSBANK OF TENNESSEE, N.A. ("NationsBank"), a national banking association,
AND SUNTRUST BANK, NASHVILLE, N.A. ("SunTrust"), a national banking association
(collectively "Lenders"); and NATIONSBANK OF TENNESSEE, N.A., in its capacity as
Agent for Lenders ("Agent"). RCG MISSISSIPPI, INC., a Delaware corporation,
RENAL CARE GROUP, INC., a Tennessee corporation, KANSAS NEPHROLOGY ASSOCIATION,
a Kansas corporation, RENAL CARE GROUP TEXAS, INC., a Texas corporation, and
D.M.N. OF INDIANA CORPORATION, an Indiana corporation (the "Additional Original
Borrower Parties") also join in the execution hereof for the purpose stated in
Section 10.25 below.
RECITALS
WHEREAS, NationsBank, Borrower and the Additional Original Borrower Parties
have previously entered into that Loan Agreement dated as of May 30, 1996, as
amended (the "1996 Loan Agreement"), providing for the extension of a credit
facility to Borrower and the Additional Original Borrower Parties; and
WHEREAS, NationsBank, Borrower and the Additional Original Borrower Parties
wish to increase and otherwise amend the credit facility provided for in the
1996 Loan Agreement to provide for a revised revolving credit facility and a
swingline facility, on certain terms and conditions, and to include all of the
Lenders as lenders under the revised revolving credit facility; and
WHEREAS, NationsBank has agreed to serve as the lender under the swingline
facility, on certain terms and conditions; and
WHEREAS, Agent has agreed to serve as administrative and collateral agent,
on certain terms and conditions, with respect to the revolving credit facility
to be extended to Borrower; and
WHEREAS, Borrower, Lenders and Agent wish to provide for the terms and
conditions of the amended credit to be granted to Borrower and the terms and
conditions of Agent's service as administrative and collateral agent with
respect thereto;
NOW, THEREFORE, as an inducement to cause Lenders to extend credit to
Borrower; as an inducement for Agent to serve under this Agreement; and for
other valuable consideration, the receipt and sufficiency of which are
acknowledged, it is agreed that the 1996 Loan Agreement is hereby amended and
restated to provide in full as follows:
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I. DEFINITIONS
1.1 Terms Defined in This Agreement. As used below in this Agreement, the
following capitalized terms shall have the following meanings, unless the
context expressly requires otherwise:
"ACCOUNT AGREEMENT" has the meaning assigned in Section 2.15.4 of this
Agreement.
"ACQUIRED PRACTICE" means each of (i) a Practice acquired by a Borrower
Entity before the Closing Date, and (ii) a Practice acquired by a Borrower
Entity after the Closing Date in a Permitted Acquisition.
"ADDITIONAL ORIGINAL BORROWER PARTIES" means RCG Mississippi, Inc., a
Delaware corporation, Renal Care Group, Inc., a Tennessee corporation, Kansas
Nephrology Association, a Kansas corporation, Renal Care Group Texas, Inc., a
Texas corporation, and D.M.N. of Indiana Corporation, an Indiana corporation.
"AFFILIATE" means, with respect to any Person, another Person that,
directly or indirectly through one or more intermediaries, Controls, or is
Controlled by, or is under common Control with, such Person.
"AGENT" means NationsBank of Tennessee, N.A., in its capacity as described
in Article IX of this Agreement, its lawful corporate successors and any
successor agent appointed pursuant to Article IX hereof.
"AGREEMENT" means this First Amended and Restated Loan Agreement (including
all schedules and exhibits hereto), as the same may be amended from time to
time.
"ALTERNATE BASE RATE" means the greater of (i) the Federal Funds Rate plus
one-half percent (1/2%), and (ii) the rate announced by Agent as its "prime
rate" (which rate is not necessarily the lowest rate offered on any particular
type of loan), in each case as it may change from time to time.
"APPLICABLE COMMITMENT FEE," "APPLICABLE LIBO RATE MARGIN" and "APPLICABLE
BASE RATE MARGIN" mean, with respect to Loans advanced under and the commitment
fee respecting the Revolving Credit Loan, (i) until the Pricing Tier
Determination Date determined by the delivery of Borrower's financial statements
for the fiscal quarter ending June 30, 1997, the rates identified as Tier 1 in
the table below, and (ii) thereafter, the rates established by Agent from time
to time upon each subsequent Pricing Tier Determination Date pursuant to the
percentage rates per annum set forth opposite the appropriate test in the
pricing grid below (ratio values shall be rounded to the nearest one-hundredth,
with any value of .005 rounded upward):
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LEVERAGE RATIO BASE RATE MARGIN LIBO COMMITMENT
RATE FEE
MARGIN
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Tier 1 -.25% .60% .20%
Less than or equal to 0.75
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Tier 2 -.10% .75% .20%
Greater than .75 and
less than or equal to 1.25
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Tier 3 0% .90% .25%
Greater than 1.25 and
less than or equal to 1.75
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Tier 4 .10% 1.05% .30%
Greater than 1.75
and less than or equal to 2.25
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Tier 5 .25% 1.35% .30%
Greater than 2.25
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The Leverage Ratio shall be established by Agent on each Pricing Tier
Determination Date on the basis of the then current consolidated quarterly
financial statements of and schedules prepared by Borrower delivered to Agent
pursuant to this Agreement. Additionally, if Borrower's financial statements are
determined to have been in error in a manner that affects the Leverage Ratio
sufficiently that, in retrospect, a higher tier should have applied to any
period, Borrower shall pay to Agent for the account of Lenders, upon demand, the
additional amount of interest that would have been paid had the financial
statements been correctly stated.
"BANKING DAY" means a Business Day, subject to the following additional
convention. As to notices or payments received on a Business Day at or before
11:00 a.m. Charlotte, North Carolina time, the Banking Day shall correspond to
the Business Day of receipt. As to notices or payments received on a Business
Day after 11:00 a.m. Charlotte, North Carolina time, the Banking Day of receipt
shall be deemed to be the next following Business Day.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as it may be
amended from time to time.
"BASE RATE LOAN" means a Loan for which Borrower has elected the
application of an interest rate based upon the Alternate Base Rate.
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"BORROWER" means Renal Care Group, Inc., a Delaware corporation, and its
successors and assigns. This definition does not abrogate the requirement set
forth below restricting Borrower's ability to assign any rights under this
Agreement.
"BORROWER'S LINE OF BUSINESS" means the business of owning, operating and
managing dialysis clinics and nephrology physician practices and providing
ancillary services relating to the needs of patients with end stage renal
disease.
"BORROWER ENTITIES" means Borrower and all Subsidiaries in existence from
time to time.
"BORROWING NOTICE" has the meaning assigned in Section 2.5.1(b) hereof.
"BUSINESS DAY" means any day on which Agent and national banks located in
Charlotte, North Carolina are open for the conduct of ordinary business;
provided however, that when used in connection with determining the LIBO Rate,
the term "Business Day" shall exclude any day on which banks are not open for
dealings in U.S. Dollar deposits in the London Interbank Market.
"CAPITAL EXPENDITURES" means expenditures, determined according to GAAP on
a consolidated basis, that would be capitalized and depreciated over more than
one annual accounting period.
"CAPITAL LEASE" means a lease that would be characterized as a financed
sale or purchase under GAAP.
"CASH CONSIDERATION" means all noncontingent obligations to pay cash
(whether payable over time, such as Seller Debt, or due at closing) as
consideration in connection with a Permitted Acquisition, whether characterized
as price, deferred price, consulting fee (if regarded as part of the purchase
price rather than for bona fide services to be provided independent of the
purchase) or otherwise, plus the maximum amount of contingent consideration
(including, but not limited to, "earnout notes") that could arise during the
first year following the acquisition as a result of the acquisition and all debt
assumed in connection with the acquisition, plus the amount of Borrower's
liability under Purchase Consideration Stock Redemption Agreements, calculated
as though the affected stock were repurchased at the stock price in effect on
the date of the closing of the Permitted Acquisition.
"CHANGE OF CONTROL" means the occurrence, after the date of this Agreement,
of (i) any Person or two or more Persons acting in concert acquiring beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of Borrower (or other securities convertible into such
securities) representing 30% or more of the combined voting power of all
securities thereof entitled to vote in the election of directors; or (ii) during
any period of up to 24 consecutive months, individuals who at the beginning of
such 24-month
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period were directors of Borrower ceasing for any reason to constitute a
majority of the Board of Directors thereof unless the Persons replacing such
individuals were nominated by the Board of Directors of Borrower; or (iii) any
Person or two or more Persons acting in concert acquiring by contract or
otherwise, or entering into a contract or arrangement which upon consummation
will result in the acquisition of, or control over, securities of Borrower (or
other securities convertible into such securities) representing 30% or more of
the combined voting power of all securities of Borrower entitled to vote in the
election of directors.
"CLOSING DATE" means the date of this Agreement.
"CMLTD" means scheduled maturities of long-term Debt (including Capital
Leases) arising for the 12 months following the date of determination.
"COLLATERAL" means all Property now or hereafter securing the Obligations.
"COMMITMENT" means the amount of each Lender's commitment to fund the
Revolving Credit Loan. Each Lender's several Commitment for the Revolving Credit
Loan shall reduce from time to time, as follows:
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Lender Commitment Commitment Commitment Commitment
from the from August 4, from August 4, from August 4,
Closing Date 2000 through 2001 through 2002 through
through August August 3, 2001 August 3, 2002 August 3, 2003
3, 2000
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FANB $20,000,000 $17,000,000 $14,000,000 $11,000,000
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FUNB $35,000,000 $29,750,000 $24,500,000 $19,250,000
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NationsBank $45,000,000 $38,250,000 $31,500,000 $24,750,000
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SunTrust $25,000,000 $21,250,000 $17,500,000 $13,750,000
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Total $125,000,000 $106,250,000 $87,500,000 $68,750,000
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The amount of each Lender's Commitment may further reduce at the election of
Borrower in accordance with Section 2.13 hereof.
"CONSOLIDATED EBITDA" means (i) the net income of Borrower and all other
Borrower Entities, plus the amount of expenses for interest, income taxes,
depreciation and amortization, for the four most recent fiscal quarters
preceding a date of determination, calculated on a consolidated basis according
to GAAP before extraordinary items, and calculated on a pro forma basis to give
effect to Acquisitions that occurred within the period over which Consolidated
EBITDA is being determined, with such pro forma calculation to be accomplished
pursuant to operating and financial assumptions customary in such circumstances
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as Agent may approve, (ii) less, without duplication, any noncash and
nonrecurring charges, (iii) less an adjustment to reflect the portion of
earnings of Majority-Owned Subsidiaries attributed to minority interests, (iv)
less the amount, if any, by which the contribution to Consolidated EBITDA by
Nonparticipating Subsidiaries and Permitted Equity Investments in the aggregate
would exceed ten percent (10%) of Consolidated EBITDA.
"CONSOLIDATED CURRENT RATIO" means current assets, determined on a
consolidated basis according to GAAP, divided by current liabilities, determined
on a consolidated basis according to GAAP.
"CONSOLIDATED NET WORTH" means shareholders' equity, determined on a
consolidated basis according to GAAP.
"CONTROL" or "CONTROLLED" means that a Person has the direct or indirect
power to conduct or govern the policies of another Person, whether this power
exists as a matter of right, through economic compulsion or otherwise.
"DEBT" means, with respect to any Person, all obligations, contingent or
otherwise, that would be classified under GAAP as a liability of that Person
including, but not limited to, any nonrecourse obligations secured by Property
of that Person.
"DEFAULT RATE" means the lesser of (i) two percent (2%) over the Alternate
Base Rate plus the Applicable Base Rate Margin in effect from time to time, or
(ii) the Maximum Lawful Amount.
"ENCUMBRANCE" means any interest in or restriction upon Property in favor
of one not the owner thereof, whether voluntary or involuntary, including, but
not limited to, (i) the lien or security interest arising from a deed of trust,
mortgage, pledge, security agreement, conditional sale, Capital Lease,
consignment, or bailment for security purposes, and (ii) reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases, and other such title encumbrances.
"ENVIRONMENTAL LAWS" means the Environmental Protection Act, the Resource
Conservation and Recovery Act of 1976, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Hazardous Materials Transportation
Act and any other federal, state or municipal law, rule or regulation relating
to air emissions, water discharge, noise emissions, solid or liquid waste
disposal, hazardous or toxic waste or materials, or other environmental or
health matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
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"ERISA AFFILIATE" means any Person who for purposes of Title IV of ERISA is
a member of Borrower's controlled group, or under common control with Borrower,
within the meaning of Section 414 of the IRC, the regulations promulgated
pursuant thereto and the published revenue rulings issued thereunder.
"ERISA EVENT" means (i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, unless the 30-day notice requirement with
respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of
operations at a facility in the circumstances described in Section 4068(f) of
ERISA; (iv) the withdrawal by Borrower or an ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer, as
defined in 4001(a)(2) of ERISA; (v) the failure by Borrower or any ERISA
Affiliate to make a material payment to a Plan required under Section 302(f)(1)
of ERISA; (vi) the adoption of an amendment to a Plan requiring the provision of
initial or additional security to such Plan, pursuant to Section 307 of ERISA;
or (vii) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, a Plan.
"EVENT OF DEFAULT" means the occurrence of any of the events specified in
Section 8.1 hereof, as to which any requirement for notice or lapse of time has
been satisfied.
"FANB" means First American National Bank, a national banking association.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519) or any successor publication,
published by the Federal Reserve Board (including any such successor,
"H.15(519)") for such day opposite the caption "Federal Funds (Effective)." If
on any relevant day such rate is not yet published in H.15(519), the rate for
such day will be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m. Quotations") for such
day under the caption "Federal Funds Effective Rate." If on any relevant day the
appropriate rate for such day is not yet published in either H.15(519) or the
Composite 3:30 p.m. Quotations, the rate for such day shall be the arithmetic
mean of the rates for the last transaction in overnight federal funds arranged
prior to 9:00 a.m., New York City time, on that day by each of three leading
brokers of federal funds transactions in New York City, selected by Agent.
"FINANCIAL STATEMENTS" means the audited consolidated balance sheet, income
statement, and statement of cash flows for Borrower dated December 31, 1996 and
the unaudited consolidated financial statements dated March 31, 1997 delivered
by Borrower to Lenders, and all notes thereto.
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"FIXED CHARGE COVERAGE RATIO" means (i) Consolidated EBITDA, less income
tax expense, plus expenses incurred under Operating Leases, less a charge of
Five Hundred and No/100 Dollars ($500.00) per dialysis station per fiscal
quarter to allow for maintenance Capital Expenditures, divided by (ii) the sum
of Interest Expense plus CMLTD (including implied amortization calculated as one
twenty-eighth (1/28th)of the outstanding principal amount of the Revolving
Credit Loan (together with the amount of the outstanding balance of the
Swingline Loan) as of the end of the applicable period), plus expenses incurred
under Operating Leases.
"FRAUD AND ABUSE LAWS" means Section 1128B(b) of the Social Security Act,
42 U.S.C. Section 1320a-7b(b) and Section 1877 of the Social Security Act, 42
U.S.C. Section 1877, as from time to time amended; any successor statute(s)
thereto; all rules and regulations promulgated thereunder; and any other Law
relating to the ownership of medical facilities by providers of medical services
or the referral of patients to medical facilities owned by providers of medical
services.
"FUNB" means First Union National Bank, a national banking association.
"GAAP" means generally accepted accounting principles pronounced by the
Financial Accounting Standards Board or any successor thereto, as in effect from
time to time.
"GOVERNMENTAL AUTHORITY" means any governmental or quasi-governmental
entity, court or tribunal including, without limitation, any department,
commission, board, bureau, agency, administration, service or other
instrumentality of any foreign or domestic governmental entity.
"HAZARDOUS SUBSTANCES" means those substances included from time to time
within the definition of hazardous substances, hazardous materials, toxic
substances, or solid waste under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended, 42 U.S.C. ss. 9601 et seq.;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss. 6901 et seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et seq.; the
Clean Water Act, 33 U.S.C. Section 1251 et. seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et. seq., and in the regulations promulgated
pursuant to such acts and laws; and such other substances that are or become
regulated under any applicable local, state, or federal law or regulation
addressing environmental hazards.
"INTER-COMPANY NOTES" means negotiable promissory notes in form and
substance approved by Agent evidencing obligations of Borrower Entities to one
another.
"INTEREST EXPENSE" means expenses for all interest (including current
charges on Capital Leases) and letter of credit fees and expenses for any
interest rate swaps or similar derivative contracts used for the management of
interest expense.
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"INTEREST PAYMENT DATE" means, (i) as to Base Rate Loans and Swingline
Loans, the first day of each calendar quarter and the Maturity Date and (ii) as
to LIBOR Loans, the last day of the Interest Period applicable to such Loan and,
in addition, in the case of a LIBOR Loan with an Interest Period of six (6)
months' duration, the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 3
months after the commencement of the Interest Period.
"INTEREST PERIOD" means, as to any LIBOR Loan, the period commencing on
(and including) the date of such LIBOR Loan and ending on (but excluding) the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter,
as Borrower may elect; provided, however, that (x) if any Interest Period would
end on a day that is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless, with respect to LIBOR Loans, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and (y)
no Interest Period with respect to any Loan shall end later than the Maturity
Date.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time.
"LAW" or "LAWS" means all applicable constitutional provisions, statutes,
codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, and requirements of all Governmental Authorities.
"LENDERS" means FANB, FUNB, NationsBank and SunTrust, their respective
successors and assigns as permitted under this Agreement.
"LEVERAGE RATIO" means Total Funded Debt divided by Consolidated EBITDA.
"LIBO RATE" means, for any given Interest Period with respect to a given
LIBOR Loan, the rate per annum appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars (rounded
upwards, if necessary, to the next higher 1/100 of 1%) at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term LIBO Rate shall mean, for any given Interest
Period with respect to a given LIBOR Loan, the rate per annum appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
"LIBO RATE RESERVE PERCENTAGE" means the reserve percentage
applicable during any Interest Period (or if more than one such percentage shall
be so applicable, the daily average of such percentages for those days in such
Interest Period during which any such
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percentage shall be so applicable) under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for Lenders with
respect to liabilities or assets consisting of or including LIBOR Liabilities
having a term equal to such Interest Period.
"LIBOR LIABILITIES" means deposit liabilities which are deemed to be
Eurocurrency liabilities as such term is defined under the regulations of the
Board of Governors of the Federal Reserve Bank.
"LIBOR LOAN" means a Loan for which Borrower has elected application of an
interest rate based on the LIBO Rate.
"LOAN" means a loan advanced under the Revolving Credit Loan or, when the
context so requires, advanced as a Swingline Loan.
"LOAN DOCUMENTS" means, collectively, each writing delivered at any time by
any Borrower Entity to Lenders or Agent relating to the Revolving Credit Loan or
the Swingline Loans.
"MAJORITY-OWNED SUBSIDIARY" means a Subsidiary that is not a Wholly-Owned
Subsidiary.
"MATERIAL ADVERSE CHANGE" means any material and adverse change in the
business, Properties, financial condition or operations of the Borrower Entities
in the aggregate.
"MATERIAL ADVERSE EFFECT" means any event or condition which, singly or in
the aggregate with other events or conditions, materially and adversely affects
the business, Properties, financial condition or operations of the Borrower
Entities, in the aggregate.
"MATURITY DATE" means August 4, 2003.
"MAXIMUM LAWFUL AMOUNT" means the maximum lawful amount of interest, loan
charges, commitment fees or other charges that may be assessed under Tennessee
law or, if higher, under applicable federal law.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. or its successor.
"NATIONSBANK" means NationsBank of Tennessee, N.A., a national banking
association.
"NET PROCEEDS" means (i) in the case of an issuance of equity for cash, the
gross proceeds of the issuance, less reasonable and customary underwriter and
brokerage fees and
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commissions, the fees and expenses of trustees and attorneys, and other
reasonable and customary closing fees and expenses, and (ii) in the case of an
issuance of equity in the course of a Permitted Acquisition or otherwise not for
cash, the full value of the issuance as determined according to GAAP.
"NON-PARTICIPATING SUBSIDIARY" means a Majority-Owned Subsidiary that is
not a Participating Subsidiary.
"OBLIGATIONS" means the obligations of Borrower to Lenders to repay the
Revolving Credit Loan, the Swingline Loans, and all other obligations of
Borrower and the other Borrower Entities to Lenders and to Agent under this
Agreement and the other Loan Documents.
"OPERATING LEASES" means leases that are not Capital Leases.
"PARTICIPATING SUBSIDIARY" means (i) any Wholly-Owned Subsidiary that
qualifies as a Permitted Subsidiary, and (ii) any Majority-Owned Subsidiary that
has elected to execute the Joint and Several Unconditional Guaranty as required
of Wholly-Owned Subsidiaries and which otherwise qualifies as a Permitted
Subsidiary.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ACQUISITION" means the acquisition (by asset purchase, stock
purchase, merger or otherwise) by a Borrower Entity of another Person, or of
substantially all of the assets of another Person, or of substantially all of
the assets of another Person used by that Person in a distinct line of business
or a distinct geographic or other division of its business (it being
acknowledged that medical records and certain other professional assets that are
required by Law to be owned by a Provider are not acquired in these
transactions), which meets the following criteria:
(a) The line of business engaged in by the acquired Person, or the
line of business in which the acquired assets were and are
utilized, must be within the Borrower's Line of Business.
(b) There may exist no Event of Default at the time of the
acquisition or giving effect to the acquisition including, but
not limited to, any Event of Default resulting from the breach of
any financial covenant contained in this Agreement.
(c) Borrower shall have timely provided to Lenders all information
required by Section 5.3.4 of this Agreement.
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(d) If at the time of the closing of the acquisition Borrower has
received advances under the Revolving Credit Loan on a cumulative
basis equal to or greater than Thirty-Five Million and No/100
Dollars ($35,000,000.00), the consent of the Required Lenders
shall be required as to any acquisition for which the Cash
Consideration exceeds Fifteen Million and No/100 Dollars
($15,000,000.00).
(e) If at the time of the closing of the acquisition Borrower has
received advances under the Revolving Credit Loan on a cumulative
basis equal to or greater than Seventy Million and No/100 Dollars
($70,000,000.00), the consent of the Required Lenders shall be
required as to any acquisition for which the Cash Consideration
exceeds Five Million and No/100 Dollars ($5,000,000.00).
(f) As to any acquisition that would either create an additional
Nonparticipating Subsidiary or increase the operations of an
existing Nonparticipating Subsidiary by its acquisition of
assets, the following additional restriction shall apply. If the
aggregate contribution from all Nonparticipating Subsidiaries to
Consolidated EBITDA would have exceeded ten percent (10%) of
Borrower's Consolidated EBITDA calculated as of the last
reporting date required under this Agreement as adjusted on a pro
forma basis to reflect all Permitted Acquisitions consummated
since the last report date and also giving effect to the proposed
acquisition, the prior written consent of the Required Lenders
shall be required. In determining whether the contribution of
Nonparticipating Subsidiaries exceeds ten percent (10%) for the
purpose of the preceding sentence, the portion of the definition
of Consolidated EBITDA that itself limits the contribution of
Nonparticipating Subsidiaries and Permitted Equity Investments in
the calculation of Consolidated EBITDA shall be disregarded.
"PERMITTED ENCUMBRANCES" means all of the following:
(a) Encumbrances securing the payment of any of the Obligations.
(b) Encumbrances securing taxes, assessments, or other governmental
charges not yet due or which are being contested in good faith by
appropriate action promptly initiated and diligently conducted,
if Borrower has made reserve therefor as required by GAAP.
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(c) Mechanics', repairmen's, materialmen's, warehousemen's,
landlords' and other like liens arising by operation of law
securing accounts that are not delinquent.
(d) Encumbrances on real property used by Borrower not securing
monetary obligations, provided that the Encumbrances are of a
type customarily placed on real property and do not materially
impair the value of the affected property.
(e) Pledges or deposits in the ordinary course of business to secure
nondelinquent obligations under ▇▇▇▇▇▇▇'▇ compensation or
unemployment laws or similar legislation or to secure the
performance of leases or contracts entered into in the ordinary
course of business.
(f) Encumbrances arising from good faith deposits in connection with
or to secure performance of statutory obligations and surety and
appeal bonds.
(g) Encumbrances arising by operation of law relating to bankers'
liens, rights of setoff or similar rights as to deposit accounts
or other funds maintained with a creditor depository institution,
provided that the Borrower Entity has no contractual obligation
to maintain any account with the creditor institution.
(h) Encumbrances securing Purchase Money Security Interests, provided
that the principal indebtedness secured thereby shall not at any
time exceed two and one-half percent (2.5%) of Borrower's
consolidated assets as reported from time to time in the
financial statements delivered pursuant to this Agreement.
(i) Encumbrances securing judgments that themselves do not give rise
to an Event of Default.
"PERMITTED EQUITY INVESTMENT" means an equity interest in any Person that
is owned directly by Borrower or by a Participating Subsidiary and which is not
an equity interest in another Borrower Entity, which meets the following
criteria:
(a) The Person must be engaged only in activities included in the
Borrower's Line of Business.
(b) As to any acquisition that would create an additional Permitted
Equity Investment, the following additional restriction shall
apply. If the aggregate contribution from all Permitted Equity
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Investments to Consolidated EBITDA would have exceeded ten
percent (10%) of Borrower's Consolidated EBITDA calculated as of
the last reporting date required under this Agreement as adjusted
on a pro forma basis to reflect all Permitted Equity Investments
consummated since the last report date and also giving effect to
the proposed investment, the prior written consent of the
Required Lenders shall be required. In determining whether the
contribution of Permitted Equity Investments exceeds ten percent
(10%) for the purpose of the preceding sentence, the portion of
the definition of Consolidated EBITDA that itself limits the
contribution of Nonparticipating Subsidiaries and Permitted
Equity Investments in the calculation of Consolidated EBITDA
shall be disregarded.
"PERMITTED SUBSIDIARY" means a Subsidiary owned directly by Borrower or
owned directly by a Participating Subsidiary as to which Borrower has delivered
or caused to be delivered to Agent for the benefit of Lenders, (i) if the
Subsidiary is a Wholly-Owned Subsidiary, the joinder thereof as a guarantor
under the Joint and Several Unconditional Guaranty (a Majority-Owned Subsidiary
is not required to become a guarantor but may do so to become a Participating
Subsidiary), and (ii) in all circumstances (that is, with respect to both
Wholly-Owned Subsidiaries and Majority-Owned Subsidiaries), a security agreement
and any necessary perfection documents granting to Agent to secure the
Obligations a first priority perfected security interest in the Borrower
Entity's equity interest(s) in the Subsidiary, in each case pursuant to
documentation in form and substance acceptable to Agent, with the validity of
the obligation of guaranty (if applicable) and of the grant and perfection of
the security interest granted to Agent and other matters as Agent may reasonably
require confirmed to Agent and Lenders by an opinion of Borrower's outside
counsel satisfactory to Agent and Lenders in all respects, and with all expenses
related to such documentation (including, but not limited to, filing fees and
taxes and the reasonable fees and expenses of Agent's attorneys) to be paid by
Borrower. Notwithstanding the foregoing, until and unless an Event of Default
occurs, Agent's security interest in a Borrower Entity's equity interest in a
Subsidiary need not be perfected if such perfection would require the filing of
a financing statement in any state that would result in the imposition of a tax
in excess of Five Hundred and No/100 Dollars ($500.00) and further subject to
the following limitations. The contribution to Consolidated EBITDA resulting
from all Subsidiaries exempted from perfection under the preceding sentence
shall not exceed the amount equal to five percent (5%) of Borrower's
Consolidated EBITDA for any four-quarter period, unless Agent determines, in its
discretion, and confirms to Borrower in writing, that in the absence of an Event
of Default such security interest(s) are appropriately left unperfected. In any
event, the approval of the Required Lenders shall be necessary to approve the
existence of unperfected Subsidiaries whose contribution to Consolidated EBITDA
exceeds ten percent (10%) of Borrower's Consolidated EBITDA for any four-quarter
period.
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"PERSON" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint stock company, trust,
unincorporated organization, government, governmental agency or political
subdivision thereof, or any other form of entity.
"PLAN" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by Borrower or any Subsidiary and
covered by Title IV of ERISA or to which Section 412 of the IRC applies.
"PRACTICE" means a dialysis clinic or laboratory or a nephrology medical
practice. Whenever in this Agreement "Practice" is used in describing an
acquisition by a Borrower, and if the reference relates to a medical practice,
such reference is to the acquisition of the assets used in the operation of the
Practice that can lawfully be acquired by such Borrower or to the acquisition of
the stock of a corporation that owns, as of the time of purchase, only those
assets that can be lawfully acquired by such Borrower.
"PRICING TIER DETERMINATION DATE" means the fifth (5th) Business Day
following each date on which Borrower has delivered to Agent and Lenders
financial reports and certifications as required by Section 5.3 hereof that
contain a calculation of, and information sufficient to support the calculation
of, Borrower's Leverage Ratio for the preceding four fiscal quarters.
"PRO RATA" OR "PRO RATA SHARE" refer to the apportionment among Lenders
according to their respective Commitments at the time of determination.
"PROPERTY" or "PROPERTIES" means any interest in any kind of property,
whether real, personal, or mixed, or tangible or intangible.
"PROVIDER" means a nephrologist who performs professional services
respecting a Practice that is either managed by a Borrower or the assets of
which are owned by a Borrower.
"PURCHASE CONSIDERATION STOCK REDEMPTION AGREEMENTS" means all of
Borrower's agreements to repurchase its own stock issued in connection with
Permitted Acquisitions, provided that (i) the agreement to repurchase is entered
into concurrently with the issuance of the stock that is subject to that
agreement, and (ii) no such agreement may be entered into at any time that the
aggregate liability of Borrower under all such agreements, together with its
obligations under any other agreements to repurchase stock that are permitted by
Section 6.20 of this Agreement, would exceed the amount of redemptions that
Borrower could perform under at the time of determination without violating the
requirement to maintain Consolidated Net Worth set forth in Section 7.1 of this
Agreement.
"PURCHASE MONEY SECURITY INTEREST" means an Encumbrance on specific
equipment (as defined in the UCC, and including, without limitation, any
Encumbrance arising
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under a Capital Lease), provided that (i) the obligation secured by any such
Encumbrance shall have arisen at the time of the acquisition of the encumbered
equipment and shall not exceed 100% of the cost of the equipment, and (ii) each
such Encumbrance shall secure only the obligation arising from the acquisition
of the encumbered equipment.
"REQUIRED LENDERS" means Lenders holding more than sixty-six and two-thirds
percent (66.67%) of the Total Commitments on the date of determination.
"REVOLVING CREDIT LOAN" means the revolving credit loan described in
Article II hereof.
"REVOLVING CREDIT NOTE" means any of the Revolving Credit
Notes referred to in Section 2.3 hereof.
"S & P" means Standard & Poor's Corporation or its successor.
"SELLER" means the owner or owners of a Practice that is acquired by a
Borrower Entity.
"SELLER DEBT" means Debt incurred in favor of one or more Sellers
representing all or part of the purchase price of an Acquired Practice.
"SERVICE AGREEMENT" means one of those service or management agreements now
in effect or hereafter entered into by a Borrower and Sellers in connection with
the management of nephrology practices.
"SOLVENT" shall mean, as to any Person, that as of any date of
determination, (i) the then fair value of the assets of such Person is (a)
greater than the then total amount of liabilities (including subordinated
liabilities) of such Person and (b) greater than the amount that will be
required to pay such Person's probable liability on such Person's then existing
debts as they become absolute and matured, (ii) such Person's capital is not
unreasonably small in relation to its business, and (iii) such Person has not
incurred and does not intend to incur, or believe or reasonably should believe
that it will incur, debts beyond its ability to pay such debts as they become
due.
"SUBSIDIARY" means any present or future corporation or other entity at
least a majority of whose outstanding voting stock or other voting securities
shall at the time be owned directly or indirectly by one or more Borrower
Entities or which is owned to a lesser degree but which is sufficiently
controlled by the Borrower Entities that the owned entity is required to be
reported with the other Borrower Entities on a consolidated basis under GAAP.
"SUNTRUST" means SunTrust Bank, Nashville, N.A., a national banking
association.
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"SWINGLINE BORROWING NOTICE" has the meaning assigned in Section 2.15.3(b)
hereof.
"SWINGLINE COMMITMENT" means Five Million and No/100 Dollars
($5,000,000.00).
"SWINGLINE LENDER" means NationsBank of Tennessee, N.A.
"SWINGLINE LOAN" means a loan advanced under Section 2.15 hereof.
"SWINGLINE NOTE" means the promissory note made by Borrower in
substantially the form of Exhibit 1.3 hereto executed and delivered to the
Swingline Lender, together with any amendments, modifications and supplements
thereto and restatements thereof
"TOTAL CAPITALIZATION RATIO" means (i) Total Funded Debt, divided by (ii)
the sum of Total Funded Debt plus Consolidated Net Worth.
"TOTAL COMMITMENTS" means the total amount of all Commitments in effect
from time to time.
"TOTAL FUNDED DEBT" means the principal balance at the time of
determination of all Debt for borrowed money evidenced by a promissory note,
debenture or similar instrument including, without limitation, liabilities
arising from Capital Leases, and specifically excluding, without limitation,
trade payables, accrued liabilities, income taxes and deferred income taxes,
determined on a consolidated basis.
"UCC" means the Uniform Commercial Code as adopted in Tennessee, as it may
be amended from time to time.
"JOINT AND SEVERAL UNCONDITIONAL GUARANTY" means that Joint and Several
Unconditional Guaranty executed by all Subsidiaries of Borrower whereby each
becomes liable for the Obligations.
"UNMATURED DEFAULT" means any event or condition that, but for the giving
of any required notice by Agent and/or the passing of time, would be an Event of
Default hereunder.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary that is entirely owned by one
or more Borrower Entities.
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1.2 Terms Generally.
1.2.1 Computations; Accounting Principles. Where the character or
amount of any asset or liability or item of income or expense is required
to be determined, or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, such determination
or calculation, to the extent applicable and except as otherwise specified
in this Agreement, shall be made in accordance with GAAP. If a change in
GAAP after the date of this Agreement would require a change affecting the
calculation of any requirement under this Agreement, then the Required
Lenders and Borrower shall negotiate in good faith for the amendment of the
affected requirements; provided, however, until and unless such an
amendment is agreed upon, the requirements of this Agreement shall remain
as written and compliance therewith shall be determined according to GAAP
as in effect prior to the change.
1.2.2 Gender and Number. Words used herein indicating gender or number
shall be read as context may require.
1.2.3 References Include Successors. References herein to specific
Laws, regulatory bodies, parties or agreements also refer to any successor
Laws, regulatory bodies, and parties, and to all modifications, extensions,
renewals and restatements of agreements.
1.2.4 References to This Agreement. "Herein," "hereof" and words of
similar import refer to this Agreement as a whole and not to any particular
provision hereof, unless otherwise expressly stated.
II. CREDIT FACILITIES
Concurrently with the execution of this Agreement, Lenders and the
Swingline Lender agree on a several basis, and not on a joint basis, in
accordance with their respective Commitments, to extend to Borrower the
Revolving Credit Loan and the Swingline Loan, under the following terms and
conditions:
2.1 Amount of Revolving Credit Loan. The principal indebtedness of Borrower
to Lenders outstanding under the Revolving Credit Loan, plus the amount of the
Swingline Commitment, shall not in the aggregate exceed the total amount of the
Commitments in effect from time to time.
2.2 Use of Proceeds of Revolving Credit Loan. The proceeds of the Revolving
Credit Loan shall be used by Borrower for acquisitions and other Capital
Expenditures, working capital and other general corporate purposes related to
the Borrower's Line of Business; provided, however, no more than Twenty-Five
Million Dollars
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($25,000,000.00) may be used for working capital purposes (for the purpose of
calculating availability under the working capital sublimit, all Swingline Loans
shall be regarded as made for working capital purposes).
2.3 Revolving Credit Notes. Borrower's obligations under the Revolving
Credit Loan shall be evidenced by Revolving Credit Notes in favor of the
respective Lenders in the form included as Exhibit 2.3 hereto payable to each
Lender in the maximum amount of its Commitment.
2.4 Separate Commitments of Lenders. Borrower acknowledges that each
Lender's commitment to fund its portion of the Revolving Credit Loan is made by
each Lender severally, and neither Agent nor any Lender shall be liable for the
failure of another Lender to timely perform under this Agreement.
2.5 Advances of Loans. Subject to the terms and conditions of this
Agreement, Borrower may borrow, repay and reborrow Loans under the Revolving
Credit Loan, provided that the outstanding principal balance of the Revolving
Credit Loan shall not at any time exceed the amount permitted under Section 2.1
above. Loans shall be disbursed as follows:
2.5.1 Loans Advanced Pursuant to Borrowing Notices.
2.5.1(a) Applicability. Loans under the Revolving Credit Loan may
be LIBOR Loans, Base Rate Loans, or a combination thereof, and the
funding thereof shall be subject to this Section 2.5.1.
2.5.1(b) Borrowing Notices. As long as Borrower meets the
conditions for funding stated in this Agreement, Borrower may submit
requests for Loans ("Borrowing Notices") to Agent. All requests shall
be made in writing or by telephone, subject to such security
procedures as Agent may require from time to time (provided that all
such telephonic notices shall be confirmed by written Borrowing
Notices within one (1) Business Day) and shall specify the proposed
disbursement date for the requested Loan; the amount of the Loan; the
purpose of the Loan (characterized in accordance with Section 2.2
above); the type of Loan, i.e., LIBOR Loan or Base Rate Loan; and if a
LIBOR Loan, the designated Interest Period. Each Borrowing Notice
shall irrevocably obligate Borrower to accept the Loan requested
thereby. Borrowing Notices shall be in the form of Exhibit 2.5.1(b)
hereto or such other form as Agent may from time to time reasonably
require.
2.5.1(c) Funding of Loans. Lenders shall fund their respective
portions of requested Loans on the Banking Day (determined
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with a cutoff of 11:00 a.m. Charlotte, North Carolina time, as
provided in the definition thereof) of Agent's receipt of the
Borrowing Notice, in the case of Base Rate Loans, and on the third
(3rd) Banking Day following the Banking Day of Agent's receipt of the
Borrowing Notice, in the case of LIBOR Loans. All funds shall be
disbursed directly into an account maintained by Borrower with Agent.
Borrower agrees that if any Lender elects to fund any requested
Loan(s) sooner after requested than is required hereunder, the Lender
may nevertheless use the entire response period allowed hereunder upon
receipt of any subsequent request, at the Lender's sole option.
2.5.1(d) Base Rate Loan Limitations. Individual Base Rate Loans
shall be in the minimum amount of Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00) each and in multiples of Fifty Thousand
and No/100 Dollars ($50,000.00).
2.5.1(e) LIBOR Loan Limitations. Individual LIBOR Loans shall be
in the minimum amount of Five Hundred Thousand and No/100 Dollars
($500,000.00) each and shall be requested in increments of One Hundred
Thousand and No/100 Dollars ($100,000.00). No more than ten (10) LIBOR
Loans may be outstanding under the Revolving Credit Loan at any time.
2.5.1(f) Additional Limitation on LIBOR Interest Periods.
Notwithstanding anything to the contrary in this Agreement, if an
Unmatured Default or an Event of Default shall have occurred and be
continuing, no additional LIBOR Loans may be created.
2.5.2 Conversion of Loans. Borrower shall have the right, on prior
notice to Agent made in writing or by telephone, subject to such security
procedures as Agent may require from time to time (provided that all such
telephonic notices shall be confirmed by written Borrowing Notices within
one (1) Business Day), which notice shall be given three (3) Banking Days
(determined with a cutoff of 11:00 a.m. Charlotte, North Carolina time, as
provided in the definition thereof) prior to the date of any requested
conversion, to convert any Base Rate Loan or LIBOR Loan into a Loan of
another type, or to continue any LIBOR Loan for another Interest Period,
subject in each case to the following:
2.5.2(a) Application of Loans. Each conversion shall be effected
by applying the proceeds of the new LIBOR Loan and/or Base Rate Loan,
as the case may be, to the Loan (or portion thereof) being converted.
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2.5.2(b) Notices of Conversions. Each notice pursuant to this
2.5.2(b) shall be irrevocable and shall refer to this Agreement and
specify the identity and principal amount of the particular Loan that
Borrower requests be converted or continued; if such notice requests
conversion, the date of such conversion (which shall be a Business
Day); and if a Loan is to be converted to a LIBOR Loan or a LIBOR Loan
is to be continued, the Interest Period with respect thereto. No LIBOR
Loan shall be converted at any time other than at the end of the
Interest Period applicable thereto, except in accordance with Section
2.11 hereof. Conversion notices shall be in the form attached as
Exhibit 2.5.1(b) hereto.
2.5.3 Absence of Election. In the event that Borrower shall not give
notice to continue any LIBOR Loan for a subsequent period, such LIBOR Loan
(unless repaid) shall automatically be converted into a Base Rate Loan. If
Borrower fails to specify in any Borrowing Notice the type of borrowing or,
in the case of a LIBOR Loan, the applicable Interest Period, Borrower will
be deemed to have requested a Base Rate Loan. If Agent reasonably believes
that any failure by Borrower to specify the type of borrowing or the
applicable Interest Period shall have resulted from failure of
communications equipment or clerical error, then prior to funding any such
borrowing Agent shall use reasonable efforts to obtain confirmation from
Borrower of the contents of such Borrowing Notice; provided, however, in
the absence of prompt confirmation by Borrower which specifies the type of
borrowing and/or the applicable Interest Period, Borrower will be deemed to
have requested a Base Rate Loan. Notwithstanding anything to the contrary
contained above, if an Event of Default or Unmatured Event of Default shall
have occurred and be continuing, no LIBOR Loan may be continued and no Base
Rate Loan may be converted into a LIBOR Loan.
2.5.4 Implied Representations Upon Request for Loan. Upon making any
request for any Loan, Borrower shall be deemed to have warranted to Agent
and Lenders that all conditions to funding set forth in Article III hereof
are satisfied and that all warranties made herein are true and shall be
true as of the funding of the requested Loan, subject to exception for
warranties that speak to a specific date or for which the underlying facts
have changed pursuant to transactions permitted under this Agreement.
2.5.5 Advance Not Waiver. Any Lender's making of any Loan that it is
not obligated to make under any provision of Article III hereof or any
other provision hereof shall not be construed as a waiver of such Lender's
right to withhold future Loans, notify Agent of an Event of Default, or
otherwise demand strict compliance with this Agreement.
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2.5.6 Draws by Debit Memorandum. Agent may cause Lenders to draw
amounts that may be available under the Revolving Credit Loan to pay any
Obligation that is not otherwise timely paid.
2.6 Interest. Interest shall accrue on each Loan as follows:
2.6.1 Base Rate Loans. Interest shall accrue on each Base Rate Loan at
an annual rate equal to the Alternate Base Rate plus the Applicable Base
Rate Margin, said rate to change contemporaneously with any change in the
Alternate Base Rate or the Alternate Base Rate Margin.
2.6.2 LIBOR Loans. Interest shall accrue on each LIBOR Loan at a rate
equal to the LIBO Rate for the selected Interest Period plus the Applicable
LIBO Rate Margin, said rate to change contemporaneously with any change in
the LIBO Rate Margin.
2.6.3 Additional Interest on LIBOR Loans. In addition to the interest
described above, Borrower shall pay to any Lender, if and so long as such
Lender shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including LIBOR Liabilities, additional interest on
the unpaid principal amount of each LIBOR Loan, from the date of such
advance until said principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i)
the LIBO Rate for the Interest Period from (ii) the rate obtained by
dividing the LIBO Rate by a percentage equal to 100% minus the LIBO Rate
Reserve Percentage for such Interest Period. This additional interest shall
be payable on each date on which interest is payable and shall be effective
only after the affected Lender (or Agent on behalf of all Lenders) gives
written notice thereof to Borrower. The amount of additional interest shall
be determined by each Lender, who shall notify Borrower and Agent thereof
and whose determination shall be conclusive, absent manifest error.
2.6.4 Calculation of Interest. Interest for both Base Rate Loans and
LIBOR Loans shall be computed on the basis of a 360-day year counting the
actual number of days elapsed. Interest shall accrue on the Business Day a
Loan is extended and shall accrue to but not including the Banking Day that
payment is received by Agent in immediately available funds.
2.6.5 Default Rate. Notwithstanding the foregoing, upon the occurrence
of an Event of Default and during the continuation of such Event of
Default, interest shall be charged at the Default Rate, regardless of
whether Lenders have elected to exercise any other remedies available to
Lenders,
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including, without limitation, acceleration of the maturity of the
outstanding principal of the Revolving Credit Loan.
2.6.6 Payment of Interest. Interest for Base Rate Loans and LIBOR
Loans shall be due and payable in arrears, without notice, on each Interest
Payment Date.
2.6.7 Usury Savings Provision. It is the intention of the parties that
all charges under or in connection with this Agreement and the Obligations,
however denominated, and including (without limitation) all interest,
commitment fees, late charges and loan charges, shall be limited to the
Maximum Lawful Amount. Such charges hereunder shall be characterized and
all provisions of the Loan Documents shall be construed as to uphold the
validity of charges provided for therein to the fullest possible extent.
Additionally, all charges hereunder shall be spread over the full permitted
term of the Obligations for the purpose of determining the effective rate
thereof to the fullest possible extent, without regard to prepayment of or
the right to prepay the Obligations. If for any reason whatsoever, however,
any charges paid or contracted to be paid in respect of the Obligations
shall exceed the Maximum Lawful Amount, then, without any specific action
by Lenders, Agent or Borrower, the obligation to pay such interest and/or
other charges shall be reduced to the Maximum Lawful Amount in effect from
time to time, and any amounts collected by Lenders that exceed the Maximum
Lawful Amount shall be applied to the reduction of the principal balance of
the Obligations and/or refunded to Borrower so that at no time shall the
interest or loan charges paid or payable in respect of the Obligations
exceed the Maximum Lawful Amount. This provision shall control every other
provision herein and in any and all other agreements and instruments now
existing or hereafter arising between Borrower and Lenders with respect to
the Obligations.
2.7 Alternate Rate of Interest if LIBOR Unavailable. In the event, and on
each occasion, that on the date of commencement of any Interest Period for a
LIBOR Loan, a Lender shall have determined (i) that dollar deposits in the
amount of the requested principal amount of such LIBOR Loan are not generally
available in the London Interbank Market; (ii) that the rate at which such
dollar deposits are being offered will not adequately and fairly reflect the
cost to the Lender of making or maintaining such LIBOR Loan during such Interest
Period; or (iii) that reasonable means do not exist for ascertaining the LIBO
Rate, the Lender shall, as soon as practicable thereafter, give written or
telephonic notice of such determination to Borrower and Agent. In the event of
any such determination, any request by Borrower for a LIBOR Loan under this
Agreement shall, until the circumstances giving rise to such notice no longer
exist, be deemed to be a request for a Base Rate Loan. Each determination by a
Lender hereunder shall be conclusive absent manifest error.
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2.8 Change in Circumstances.
2.8.1 Imposition of Requirements. Notwithstanding any other provision
herein, if after the date of this Agreement any change in applicable Laws
or in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof
(whether or not having the force of Law) shall change the basis of taxation
of payments to a Lender under any LIBOR Loan made by the Lender or any
other fees or amounts payable hereunder (other than taxes imposed on the
overall net income, gross receipts or added value of a Lender by the
country in which the Lender is located, or by the jurisdiction in which a
Lender has its principal office, or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve
requirement, special deposit, insurance charge (including FDIC insurance on
LIBOR Liabilities) or similar requirement against assets of, deposits with
or for the account of, or credit extended by, a Lender or shall impose on a
Lender or the London Interbank Market any other condition affecting this
Agreement or LIBOR Loans made by a Lender, and the result of any of the
foregoing shall be to increase the cost to the Lender of making or
maintaining its LIBOR Loan or to reduce the amount of any sum received or
receivable by a Lender hereunder (whether of principal, interest or
otherwise) in respect thereof by an amount deemed by the affected Lender to
be material, then Borrower will pay to such Lender such additional amount
or amounts as will compensate the Lender for such additional costs of
reduction.
2.8.2 Other Changes. If either (i) the introduction of, or any change
in, or in the interpretation of, any United States or foreign Law; or (ii)
compliance with any directive, guidelines or request from any central bank
or other United States or foreign Governmental Authority (whether or not
having the force of law) promulgated or made after the date hereof, affects
or would affect the amount of capital required or expected to be maintained
by a Lender (or any lending office of a Lender) or any corporation directly
or indirectly owning or controlling a Lender (or any lending office of a
Lender) based upon the existence of this Agreement, and the Lender shall
have determined that such introduction, change or compliance has or would
have the effect of reducing the rate of return on the Lender's capital or
on the capital of such owning or controlling corporation as a consequence
of its obligations hereunder (including its commitment) to a level below
that which the Lender or such owning or controlling corporation could have
achieved but for such introduction, change or compliance (after taking into
account that Lender's policies or the policies of such owning or
controlling corporation, as the case may be, regarding capital adequacy) by
an amount deemed by the Lender (in its sole discretion) to be material,
then, from time to time, Borrower shall pay to the Lender such additional
amount or amounts as will compensate the Lender for such reduction
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attributable to making, funding and maintaining its commitment and Loans
hereunder.
2.8.3 Computation of Amounts. A certificate of a Lender setting forth
the basis and method of computation of such amount or amounts specified in
Sections 2.8.1 and 2.8.2 hereof as shall be necessary to compensate the
Lender (or its participating banks) as specified above, as the case may be,
shall be delivered to Borrower and shall be conclusive absent manifest
error; provided however, that Borrower shall be responsible for compliance
herewith and the payment of increased costs only to the extent that (i) any
change in Laws giving rise to increased costs occurs after the date of this
Agreement; (ii) such increased costs are imposed by the Lender on all other
Borrowers similarly situated with Borrower; and (iii) the Lender gives
notice of the change giving rise to increased costs within ninety (90)
Business Days after the Lender has, or with reasonable diligence should
have had, knowledge of the change, or else Lender can only collect costs
from and after the date of the notice. Subject to the foregoing, Borrower
shall pay the affected Lender the amount shown as due on any such
certificate within ten (10) Business Days after its receipt of such
certificate.
2.8.4 No Duty to Contest. The protection of this Section 2.8 shall be
available to a Lender regardless of any possible contention of invalidity
or inapplicability of the Law or condition that shall have been imposed.
Should a Lender assess any charge to Borrower under this Section 2.8, and
provided that Borrower pays the assessment to the Lender, Borrower may
within ninety (90) days after receiving notice of such assessment
undertake, at Borrower's own expense, any contest of the matters giving
rise to the charge that may, in the opinion of Borrower's independent
counsel issued to the affected Lender, and concurred in by counsel to the
Lender, have a reasonable chance of success, provided further that the
contest would not require the assertion of any position contrary to a
position taken by the Lender generally with taxing or regulatory
authorities or any other involved parties and that there does not exist any
other circumstance that would disadvantage the Lender in the event of such
contest, as the affected Lender may determine in its discretion. The
affected Lender shall offer reasonable participation to Borrower for the
purpose of enabling Borrower to pursue the contest of such issue, with all
expenses, including fees and expenses of the affected Lender's counsel, to
be paid by Borrower.
2.9 Change in Legality of LIBOR Loans. Notwithstanding anything to the
contrary herein contained, if any change in any Law or in interpretation thereof
by any Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for a Lender to make or maintain any LIBOR Loan
or to give effect to its obligations as contemplated hereby, then, by written
notice to Borrower, the Lender may (i) declare that LIBOR Loans will not
thereafter be made by the Lender hereunder, whereupon Borrower shall
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be prohibited from requesting LIBOR Loans from the Lender hereunder unless such
declaration is subsequently withdrawn; and (ii) require that all outstanding
LIBOR Loans made by it be converted to Base Rate Loans, in which event (a) all
such LIBOR Loans shall be automatically converted to Base Rate Loans (but
without imposition of any additional breakage fee or other charge that would
normally become due under Section 2.11 hereof) as of the effective date of such
notice, and (b) all payments and prepayments of principal that would otherwise
have been applied to repay the converted LIBOR Loans shall instead be applied to
repay the Base Rate Loans resulting from the conversion of such LIBOR Loans.
Under such circumstances, a borrowing request for a LIBOR Loan shall be
regarded, as to the Lender who has given notice under this Section 2.9, a
request for a Base Rate Loan, and as to all other Lenders, it shall be regarded
as a request for a LIBOR Loan. For purposes of this Section 2.9, a notice to
Borrower by the Lender pursuant to (a) above shall be effective, if lawful, on
the last day of the then current Interest Period; in all other cases, such
notice shall be effective on the date of receipt by Borrower.
2.10 Principal Repayment. All remaining principal outstanding under the
Revolving Credit Loan shall become due on the Maturity Date or the earlier
acceleration of the Revolving Credit Loan in accordance with the terms of this
Agreement.
2.11 Prepayment of LIBOR Loans.
2.11.1 Notice of LIBOR Loan Prepayment. Borrower may, upon three (3)
Banking Days' prior written notice to Agent (with a Banking Day cutoff of
11:00 a.m. Charlotte, North Carolina time, as provided in the definition
thereof), and upon payment of all applicable premiums set forth in Section
2.11.3 hereof, prepay any outstanding LIBOR Loans prior to any Interest
Payment Date for such LIBOR Loans, in whole or in part. Each notice of
prepayment of any LIBOR Loan shall specify the date and amount of such
prepayment and shall be irrevocable.
2.11.2 Amount of LIBOR Loan Prepayment. Each partial prepayment of any
LIBOR Loan shall be in an aggregate principal amount which is the lesser of
(i) the then outstanding principal balance of the one or more LIBOR Loans
to be prepaid, or (ii) One Million and No/100 Dollars ($1,000,000.00) or a
larger integral multiple of One Hundred Thousand and No/100 Dollars
($100,000.00). Interest on the amount prepaid accrued to the prepayment
date shall be paid on such date.
2.11.3 LIBOR Loan Breakage Costs. Borrower shall indemnify, defend and
hold harmless each Lender against any loss or expense that a Lender may
incur in connection with the prepayment of a LIBOR Loan, the Borrower's
failure to borrow or to pay when it stated it would do so, including, but
not limited to, the fees or charges customarily included in "breakage
costs" that may result to a Lender from the early repayment of a LIBOR
Liability, which costs
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may be calculated by a Lender as though the Loan(s) retired by Borrower's
prepayment had been match-funded with a corresponding LIBOR Liability,
whether or not the Lender manages its LIBOR Liabilities on a loan-by-loan
basis. Additionally, upon prepayment of any LIBOR Loan on a date other than
the relevant Interest Payment Date for such borrowing, Borrower shall pay
to Lenders, in addition to all other payments then due and owing Lenders,
premiums which shall be equal to an amount, if any, reasonably determined
by Agent to be the difference between the rate of interest then applicable
to the relevant LIBOR Loan and the yield Lenders would receive upon
reinvestment of so much of the relevant LIBOR Loan as is prepaid for the
remainder of the term of the relevant LIBOR Loan or Loans. Anything in this
Section 2.11.3 to the contrary notwithstanding, the premiums payable upon
any such prepayment shall not exceed the amount, if any, determined by
Agent to be the difference between the rate of interest then applicable to
the relevant LIBOR Loan and the yield that Lenders could receive upon
reinvestment in the "Floor Reinvestment" of so much of the relevant LIBOR
Loan as is prepaid for the remainder of the term of the relevant LIBOR
Loan. For purposes hereof, "Floor Reinvestment" shall mean an investment
for the time period from the date of such prepayment to the end of the
relevant Interest Period applicable to such LIBOR Loan at an interest rate
per annum equal to the Federal Funds Rate on the date of such prepayment.
All determinations, estimates, assumptions, allocations and the like
required for the determination of such premiums shall be made by Agent in
good faith and shall be presumed correct absent manifest error.
2.12 Prepayment of Base Rate Loans. Borrower may at any time prepay any
outstanding Base Rate Loans prior to the Maturity Date in whole or in part
without premium or penalty upon at least one Business Day's prior notice to
Agent. All such prepayments shall be made in minimum amounts of Five Hundred
Thousand and No/100 Dollars ($500,000.00) and in increments of One Hundred
Thousand and No/100 Dollars ($100,000.00) each.
2.13 Reduction of Commitment. Borrower shall have the right to
prospectively and permanently reduce the amount of the Total Commitments, at any
time and from time to time, in any amount of at least Five Million and No/100
Dollars ($5,000,000.00) and in an integral multiple of One Million and No/100
Dollars ($1,000,000.00), which reduction shall reduce each Lender's Commitment
on a Pro Rata basis. Any reduction by Borrower shall take effect on a date
specified in a written notice to Agent that is at least ten (10) Business Days
after the date Agent receives such notice. Contemporaneously with each
reduction, the Borrower shall repay to the Agent for the account of each Bank in
accordance with its respective Commitment the amounts, if any, by which the then
outstanding principal balance of each Revolving Credit Note exceeds each
Commitment as so reduced. The Total Commitments may not in any event be reduced
below the principal amount of the Swingline Commitment. Upon any reduction,
Borrower shall immediately pay the Agent any breakage costs or other such
charges due under other provisions of this Agreement as a result of the early
payment of any LIBOR Loan in connection with the reduction of the Total
Commitments.
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Following such reduction, the nonusage fee provided for in Section
2.14 shall be calculated with respect to the Total Commitments as so reduced
from the effective date of the reduction.
2.14 Periodic Commitment Fee Based on Use of Facilities. Borrower shall pay
to Agent for distribution to Lenders Pro Rata an additional commitment fee for
the unused portion of the Revolving Credit Loan, such fee to accrue beginning on
the date that Agent confirms in writing that all conditions to the initial
advance provided under Section 3.1 of this Agreement have been satisfied or
waived. This fee shall be determined by applying the Applicable Commitment Fee
(applied on the basis of a 360-day year) to the average daily unused balance of
the Revolving Credit Loan (advances under the Swingline Commitment shall not be
regarded as "used" for the purpose of determining usage of the Revolving Credit
Loan). The commitment fee shall be paid in arrears on each Interest Payment Date
applicable to Base Rate Loans. This commitment fee is not refundable.
2.15 Swingline Loans. The Swingline Lender hereby agrees to extend to
Borrower Swingline Loans in the aggregate amount not to exceed Five Million and
No/100 Dollars ($5,000,000.00), on the following terms and conditions.
2.15.1 Use of Proceeds of Swingline Loans. Borrower may use the
proceeds of Swingline Loans for working capital purposes.
2.15.2 Swingline Note. The Swingline Loans shall be evidenced by the
Swingline Note.
2.15.3 Funding of Swingline Loans Advanced Pursuant to Borrowing
Notices.
2.15.3(a) Applicability. Except for Swingline Loans made pursuant
to Account Agreements as provided in Section 2.15.4 hereof, the
funding of Swingline Loans shall be subject to this Section 2.15.3.
2.15.3(b) Borrowing Notices. As long as Borrower meets the
conditions for funding stated in this Agreement, Borrower may submit
requests for Swingline Loans ("Swingline Borrowing Notices") to the
Swingline Lender. All requests shall be made in writing (or by
telephone, subject to such security procedures as the Swingline Lender
may require from time to time, provided that all telephonic notices
shall be confirmed by written Swingline Borrowing Notices within one
(1) Business Day) and shall specify the proposed date of the requested
disbursement and the aggregate amount of such disbursement. Each
Swingline Borrowing Notice shall irrevocably obligate Borrower to
accept the Swingline Loan requested thereby. Swingline Borrowing
Notices shall be in such form as the Swingline Lender may from time to
time require.
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2.15.3(c) Funding of Swingline Loans. The Swingline Lender shall
fund Swingline Loans on the Banking Day following the Banking Day of
the Swingline Lender's receipt of the Swingline Borrowing Notice. All
funds shall be disbursed directly into an account maintained by
Borrower with the Swingline Lender. Borrower agrees that if the
Swingline Lender elects to fund any requested Swingline Loan(s) sooner
after requested than is required hereunder, the Swingline Lender may
nevertheless use the entire response period allowed hereunder upon
receipt of any subsequent request, at its sole option.
2.15.4 Funding of Swingline Loans Advanced Pursuant to Cash Management
Accounts. Borrower may have in effect from time to time separate agreements
with the Swingline Lender or its affiliates ("Account Agreements")
establishing cash management procedures that may involve the automatic
disbursement and/or repayment of Swingline Loans. The Account Agreements
may be established using standardized forms that do not address the
specific circumstances of the Swingline Loan. To resolve potential
inconsistencies between this Agreement and Account Agreements, the terms
of this Agreement and of Account Agreements shall relate to one another as
follows:
2.15.4(a) Funding and Payment Procedures Controlled by Account
Agreements. The Account Agreements shall control this Agreement as to
(i) Section 2.15.3 hereof regarding funding procedures, and (ii)
Interest Payment Dates, to the extent that an Account Agreement may
provide for such payment more frequently than otherwise required under
this Agreement.
2.15.4(b) Certain Provisions Controlled by this Agreement.
Notwithstanding any provision of an Account Agreement to the contrary,
except as provided above in Section 2.15.4(a) hereof, the provisions
of this Agreement shall control any Account Agreement to the extent
that an Account Agreement may be inconsistent with this Agreement.
2.15.4(c) Continuing Warranty Under Account Agreements. Because
Account Agreements may provide for the making of Swingline Loans
without formal draw requests from Borrower, Borrower agrees that
Borrower's warranty under Section 2.15.5 hereof as to the satisfaction
of all conditions to the right to receive Swingline Loans shall be a
continuing one during any period that such an Account Agreement may be
in effect. Therefore, any Swingline Loans funded by the Swingline
Lender pursuant to an Account Agreement after the failure of a
condition stated in Article III hereof shall be deemed made upon the
affirmative misrepresentation of Borrower unless the Swingline Lender
has received written notice of and waived the failed condition in
writing.
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2.15.5 Implied Representations Upon Request for Swingline Loan. Upon
making any request for a Swingline Loan, Borrower shall be deemed to have
warranted to the Swingline Lender that all conditions to funding are
satisfied as of the submission of the request to the Swingline Lender.
2.15.6 Advance Not Waiver. The Swingline Lender's making of any
Swingline Loan that it is not obligated to make under any provision of
Article III hereof or any other provision hereof shall not be construed as
a waiver of the Swingline Lender's right to withhold future Swingline
Loans, notify Agent of an Event of Default, or otherwise demand strict
compliance with this Agreement.
2.15.7 Interest. Interest shall be charged and paid on each Swingline
Loan as follows:
2.15.7(a) Rate of Interest. Interest shall accrue on Swingline
Loans at an annual rate equal to the Adjusted Base Rate plus the
Applicable Base Rate Margin, said rate to change contemporaneously
with any change in the Adjusted Base Rate or the Applicable Base Rate
Margin.
2.15.7(b) Calculation of Interest. Interest shall be computed on
the basis of a 360-day year counting the actual number of days
elapsed.
2.15.7(c) Payment of Interest. Interest shall be due and payable
in arrears without notice on each Interest Payment Date.
2.15.7(d) Default Rate. Notwithstanding the foregoing, upon the
occurrence of an Event of Default and during the continuation of such
Event of Default until it is cured or waived, interest shall be
charged at the Default Rate, regardless of whether the Swingline
Lender has elected to exercise any other remedies available to it,
including, without limitation, acceleration of the maturity of the
outstanding principal of the Swingline Loans.
2.15.8 Repayment of Principal. All remaining principal, interest and
expenses outstanding under the Swingline Loans shall become due in full on the
Maturity Date or the earlier acceleration of the Revolving Credit Loan in
accordance with the terms of this Agreement. Borrower may at any time prepay any
outstanding Swingline Loans in whole or in part without premium or penalty.
2.15.9 Procedures Among Lenders. Within seven (7) days following the
written request of the Swingline Lender, Lenders shall acquire participation
interests in the outstanding Swingline Loans as necessary to cause each Lender
to own a Pro Rata interest in
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the outstanding Swingline Loans, pursuant to such documentation as Agent may
deem necessary. The obligation of each Lender to acquire such a participation
interest shall be unconditional and, without limiting the foregoing, shall
remain in effect irrespective of (i) the occurrence of any Event of Default or
Unmatured Default, (ii) the financial condition of Borrower, the Agent, the
Swingline Bank or any other Lender or (iii) the termination or cancellation of
the Commitments (provided that such Swingline Loan was made prior to the date
of such termination or cancellation). The Swingline Loans shall thereafter be
administered by Lenders and Agent as though the Swingline Loans were amounts
outstanding under the Revolving Credit Loan. Additionally, to this end, Agent
may, in its discretion, and without Borrower's consent, cause an advance to be
made under the Revolving Credit Loan sufficient to repay the outstanding
Swingline Loans, even if an Event of Default is then outstanding.
III. CONDITIONS PRECEDENT
3.1 Conditions to Initial Advance. Lenders shall not be obligated to make
their initial Loan under the Revolving Credit Loan, and the Swingline Lender
shall not be obligated to advance an initial Swingline Loan, unless and until
Borrower satisfies the following conditions (Borrower confirms that it presently
has efforts in process to satisfy all of these conditions and agrees to continue
these efforts in order to satisfy all conditions as soon as possible):
3.1.1 Loan Documents. Borrower shall have delivered to Agent the
following documents, fully executed and in form and substance acceptable to
Agent and Lenders:
3.1.1(a) Loan Agreement. This Agreement.
3.1.1(b) Revolving Credit Notes. The Revolving Credit Notes
issued by Borrower payable to the order of each of the respective
Lenders in the maximum principal amounts of the Lenders' respective
Commitments.
3.1.1(c) Swingline Note. The Swingline Note issued by Borrower
payable to the order of the Swingline Lender in the maximum principal
amount of the Swingline Commitment.
3.1.1(d) Guaranty of Subsidiaries. The Joint and Several
Unconditional Guaranty executed by all Subsidiaries of Borrower that
are required to be guarantors under the requirements of this
Agreement, in substantially the form attached hereto as Exhibit
3.1.1(d).
3.1.1(e) Pledge of Equity Interests. Equity Interests Security
Agreement in substantially the form attached hereto as Exhibit
3.1.1(e),
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irrevocable proxies, blank stock powers, original stock certificates,
financing statements, and such other documents as are necessary to
grant to Agent to secure the Obligations a first priority perfected
security interest in all of the equity interests of all of Borrower's
Subsidiaries, except that equity interests in Subsidiaries exempted
from perfection pursuant to the definition of Permitted Subsidiaries
need not be perfected.
3.1.1(f) Pledge of Inter-Company Notes. A Collateral Assignment
of Promissory Notes in substantially the form attached hereto as
Exhibit 3.1.1(f) granting to Agent to secure the Obligations a first
priority perfected security interest in all Inter-Company Notes,
together with the original Promissory Notes evidencing those
obligations, endorsed payable to the order of Agent.
3.1.1(g) Charters. Certified Copies of the Borrower Entities'
corporate charters or other constituent documents and all amendments
thereto, issued by the Secretaries of State for their states of
domicile.
3.1.1(h) Bylaws. Certified Copies of Bylaws, operating agreements
and other constituent and organizational documents for each of the
Borrower Entities.
3.1.1(i) Certificates of Good Standing. Certificates of good
standing or existence, as applicable, issued as to the Borrower
Entities by the Secretaries of State for the states of their domicile.
3.1.1(j) Foreign Qualification. Certificates of Authority issued
by the Secretaries of State for each state in which a Borrower Entity
is required to qualify as a foreign corporation or other foreign
entity.
3.1.1(k) Resolutions. Secretary Certifications including
certified copies of resolutions authorizing the execution of all
applicable Loan Documents on behalf of the Borrower Entities and
certifying as to the incumbency of authorized officers.
3.1.1(l) Consents. Written evidence of the final issuance of any
necessary consents of Governmental Authorities or other third parties
to the execution, delivery and performance of all Borrower Entities
under the Loan Documents.
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3.1.1(m) Opinions of Borrower's Counsel. Opinions of counsel to
the Borrower Entities addressed to Agent and Lenders in substantially
the form attached hereto as Exhibit 3.1.1(j).
3.1.1(n) UCC Searches. A current UCC search on the name of
Borrower issued by the Tennessee Secretary of State and like searches
on all Borrower Entities that are encumbering stock or other equity
interests to secure the Obligations, from such public offices as Agent
may require.
3.1.1(o) Closing Statement and Funding of Expenses. Loan Closing
Statement describing expenses due in connection with the closing of
the Revolving Credit Loan and evidencing Borrower's agreement to
immediate payment thereof in immediately available funds.
3.1.1(p) Compliance Certificate. A Compliance Certificate
confirming compliance with all provisions of this Agreement,
including, but not limited to, the financial covenants contained
herein, giving effect to the closing of the Revolving Credit Loan.
3.1.1(q) Other Documents. Such other documents as Agent may
reasonably require.
3.1.2 Additional Conditions. Borrower shall have satisfied the
following additional conditions:
3.1.2(a) Warranties. All warranties made in the Loan Documents
must be true in all material respects and shall be true in all
material respects taking into account the funding of the requested
Loan.
3.1.2(b) Covenants. All covenants made in the Loan Documents must
have been complied with in all material respects and shall have been
complied with, taking into account the funding of the requested Loan.
3.1.2(c) Absence of Unmatured Default. No Event of Default or
Unmatured Default shall exist under this Agreement.
3.1.2(d) No Adverse Change. There must be no Material Adverse
Change since March 31, 1997.
3.1.2(e) General Diligence. Agent and Lenders and their counsel
must be satisfied, in their reasonable discretion, regarding their
completion of such diligence as they may elect to undertake with
respect
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to Borrower and the Revolving Credit Loan, including such
investigation of the Properties, agreements, lease, litigation, tax,
accounting, labor, insurance, pension liabilities, debt agreements,
contingent liabilities and other matters as they may require.
3.1.2(f) Corporate Matters. Agent and Lenders must be satisfied,
in their reasonable discretion, regarding the corporate structure,
constituent documents, management, shareholder agreements and other
corporate matters as to all Borrower Entities, and including, but not
limited to, the execution of appropriate employment agreements.
3.1.2(g) Financial Information. Agent and Lenders must be
satisfied, in their reasonable discretion, as to the financial
information presented in the financial statements of Borrower and its
predecessors, as applicable, for the fiscal years ending December 31,
1995 and the Financial Statements. These financial statements must be
audited by independent public accountants of recognized national
standing, except that the most recent quarterly financial statements
may be company-prepared.
3.1.2(h) Projections. The satisfaction of Agent as of the Closing
Date, in its reasonable discretion, with three-year financial
projections to be delivered to them by Borrower, including pro forma
balance sheets and statements of income and cash flow in accordance
with GAAP.
3.1.2(i) Absence of Litigation. There must be no action, suit,
proceeding or investigation against any Borrower Entity before or
through any Governmental Authority which, if adversely determined,
would likely have a Material Adverse Effect.
3.2 Conditions to Subsequent Loans and Issuances. Lenders shall not be
obligated to make any Loan under the Revolving Credit Loan following the initial
advance, and the Swingline Lender shall not be obligated to advance any
Swingline Loans following the initial advance, unless all of the following
conditions are satisfied as of the time of the request and of funding or
issuance:
3.2.1 Conditions to Initial Advance. All of the conditions in Section
3.1 hereof must have been satisfied as of the date of the initial advance
hereunder.
3.2.2 Permitted Subsidiaries. All of the documents required in Section
3.1 for the Borrower Entities in existence on the Closing Date shall have
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been received by Agent as to any additional Permitted Subsidiaries, within
the time required in this Agreement.
3.2.3 Warranties. All warranties made in the Loan Documents must be
true in all material respects and shall be true in all material respects
taking into account the funding of the requested Loan.
3.2.4 Covenants. All covenants made in the Loan Documents must have
been complied with in all material respects and shall have been complied
with in all material respects taking into account the funding of the
requested Loan.
3.2.5 Absence of Unmatured Default. No Event of Default or Unmatured
Default shall exist under this Agreement.
3.2.6 Material Adverse Change. There shall not have occurred a
Material Adverse Change since Borrower's most recent fiscal year-end.
IV. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders and Agent that as of the
Closing Date:
4.1 Capacity. Each Borrower Entity is a corporation or other entity as set
forth in Schedule 1.1 hereof, and is duly organized, validly existing and in
good standing under the laws of the state of its domicile as set forth in
Schedule 1.1. Each Borrower Entity is qualified or authorized to do business in
all jurisdictions in which its ownership of property or conduct of business
requires such qualification or authorization or where the failure to be so
qualified or authorized would not have a Material Adverse Effect. Each Borrower
Entity has the power and authority to own its Properties and to carry on its
business as now being conducted and as proposed to be conducted after the
execution hereof, to execute and deliver this Agreement and the other Loan
Documents, and to perform its obligations hereunder and under the other Loan
Documents.
4.2 Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents by each Borrower Entity executing such
documents has been duly authorized by all requisite action.
4.3 Binding Obligations. This Agreement is and the other Loan Documents,
when executed and delivered to Agent and Lenders, will be, legal, valid and
binding upon each Borrower Entity who is a party thereto, enforceable in
accordance with its respective terms, subject only to principles of equity and
laws applicable to creditors generally, including bankruptcy laws.
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4.4 No Conflicting Law or Agreement. The execution, delivery and
performance of this Agreement and the other Loan Documents by each Borrower
Entity does not constitute a breach of or default under, and will not violate or
conflict with, any provisions of the corporate charter or other constituent
documents of a Borrower Entity; any contract, financing agreement, lease, or
other agreement to which a Borrower Entity is a party or by which its Properties
may be affected, the violation of which would have a Material Adverse Effect; or
any Law to which a Borrower Entity is subject or by which its Properties may be
affected, the violation of which would have a Material Adverse Effect; nor
will the same result in the creation or imposition of any Encumbrance upon any
Property of any Borrower Entity, other than those contemplated by the Loan
Documents.
4.5 No Consent Required. The execution, delivery, and performance of this
Agreement and the other Loan Documents by the Borrower Entities do not require
the consent or approval of or the giving of notice to any Person except for
those consents which have been duly obtained and are in full force and effect on
the date hereof and others, if any, which by their omission would not result in
a Material Adverse Effect.
4.6 Financial Statements. The Financial Statements are complete and
correct, have been prepared in accordance with GAAP, and present fairly the
financial condition and results of operations of the Borrower Entities as of the
date and for the period stated therein, subject to year-end adjustments. No
Material Adverse Change has occurred since the date of the Financial Statements.
Borrower acknowledges that Lenders have advanced (or shall advance) the
Revolving Credit Loan and the Swingline Loans in reliance upon the Financial
Statements.
4.7 Fiscal Year. Borrower's fiscal year ends on December 31 of each year.
4.8 Litigation. Except as disclosed on Schedule 4.8 hereto, (i) there is no
litigation, arbitration, legal or administrative proceeding, tax audit,
investigation, or other action or proceeding of any nature pending against any
Borrower Entity or any of its Properties which, if adversely determined, would
likely have a Material Adverse Effect, and (ii) there is no litigation,
arbitration, legal or administrative proceeding, tax audit, investigation, or
other action or proceeding of any nature threatened in writing against a
Borrower Entity which, if adversely determined, would have a Material Adverse
Effect. No Borrower Entity is subject to any outstanding court, arbitral or
administrative order, writ or injunction. To the best of Borrower's knowledge,
information and belief, no facts exist under which third parties have unasserted
claims against any Borrower Entity which, if adversely determined, would have a
Material Adverse Effect.
4.9 Taxes; Governmental Charges. Each Borrower Entity has filed or caused
to be filed or has lawfully extended the deadline for filing all tax returns and
reports required to be filed, other than those which, if not filed, would not
have a Material Adverse Effect. Each Borrower Entity has paid, or made adequate
provision for the payment of, all taxes, assessments and other governmental
charges that have or may have become due pursuant
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to such returns or otherwise, or pursuant to any assessment received by it,
except such taxes, etc., if any, as are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided. To
the best of Borrower's knowledge, there is no proposed material tax assessment
against any Borrower Entity. No extension of time for the assessment of federal,
state or local taxes of any Borrower Entity is in effect or has been requested.
Each Borrower Entity has timely made all required remittances of withholding
deposits and other assessments against payroll expenditures except for matters
that would not have a Material Adverse Effect.
4.10 Title to Properties. Each Borrower Entity has good and marketable
title to its Properties, free and clear of all Encumbrances except for Permitted
Encumbrances.
4.11 No Default. No Borrower Entity is in default in any respect that
affects its business, Properties, operations, or condition, financial or
otherwise, under any indenture, mortgage, deed of trust, obligation to equity
holders, credit agreement, note, agreement, lease, sale agreement or other
instrument to which any Borrower Entity is a party or by which its Properties
are bound, which default would have a Material Adverse Effect. To the best of
Borrower's knowledge, information and belief, no other party to any contract
with any Borrower Entity under which a default would have a Material Adverse
Effect is in default or breach thereof and no circumstances exist which, with
the giving of notice and/or the passing of time would constitute such default or
breach. No Event of Default or Unmatured Default exists under this Agreement.
4.12 Casualties; Taking of Properties. Neither the business nor the
Property of any Borrower Entity is presently impaired as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident, strike or other
labor disturbance, embargo, requisition or taking of property, cancellation of
contracts, permits, concessions by any domestic or foreign government or any
agency thereof, riot, activities of armed forces or acts of God or of any public
enemy, in any case as would have a Material Adverse Effect.
4.13 Compliance with Laws. No Borrower Entity is in violation of any Law to
which it, its business or any of its Properties are subject, the violation of
which would likely have a Material Adverse Effect, and there are no outstanding
citations, notices or orders of noncompliance issued to any Borrower Entity
under any such Law, the violation of which would likely have a Material Adverse
Effect. Each Borrower Entity has obtained all licenses, permits, franchises, or
other governmental authorizations necessary to the ownership of its Properties
or to the conduct of its business, except for those which, if not obtained,
would not have a Material Adverse Effect.
4.14 Compliance with Fraud and Abuse Laws. Without limiting any other
provision of this Agreement, no Borrower Entity and no Provider is in violation
of any Fraud and Abuse Law, the violation of which would have a Material Adverse
Effect.
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4.15 ERISA. No ERISA Event has occurred with respect to any Plan or is
reasonably expected to occur with respect to any Plan, except for those which,
if not obtained, would not have a Material Adverse Effect.
4.16 Full Disclosure of Material Facts. Borrower has fully advised Agent of
all matters involving the financial condition, business, operations and
Properties of the Borrower Entities that would be reasonably expected to have a
Material Adverse Effect. No information, exhibit, or report furnished or to be
furnished by Borrower to Lenders in connection with this Agreement contains, as
of the date thereof, any misrepresentation of fact or failed or will fail to
state any material fact, the omission of which would render the statements
therein materially false or misleading.
4.17 Accuracy of Projections. With respect to all business plans and other
forecasts and projections furnished by or on behalf of Borrower and made
available to Agent relating to the financial condition, business, operations or
Properties of the Borrower Entities, all facts stated as such therein were true
and complete in all material respects as of the time made and all estimates and
assumptions were made in good faith and believed to be reasonable at the time
made. As of the Closing Date, nothing had come to the attention of Borrower that
has changed its assessment of any such matters, except for changes that would
not have a Material Adverse Effect.
4.18 Investment Company Act. No Borrower Entity is an "investment company"
under the Investment Company Act of 1940, as amended.
4.19 Personal Holding Company. No Borrower Entity is a "personal holding
company" as defined in Section 542 of the IRC.
4.20 Solvency. Each Borrower Entity is Solvent as of the date hereof and
will remain Solvent upon the consummation of the transactions contemplated
hereby.
4.21 Chief Executive Office. The address designated herein to which notices
are to be sent under this Agreement is Borrower's chief executive office within
the meaning of Tennessee Code Annotated Section 47-9-103(3)(d).
4.22 Subsidiaries. Borrower has no Subsidiaries, except for those disclosed
in Schedule 1.1 hereto.
4.23 Ownership of Patents, Licenses, Etc. The Borrower Entities own all
licenses, permits, franchises, registrations, patents, copyrights, trademarks,
trade names or service marks, or the rights to use the foregoing, that are
necessary for the continued operation of their business except for such
licenses, etc., which, if not held or owned, would not have a Material Adverse
Effect.
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4.24 Environmental Compliance. Each Borrower Entity has duly complied with,
and their Properties are owned and operated in compliance with, all
Environmental Laws, the violation of which would have a Material Adverse Effect.
There have been no citations, notices or orders of non-compliance issued to any
Borrower Entity or, to the best of Borrower's knowledge, relating to their
business or Properties pursuant to any Environmental Law, except for those which
would not have a Material Adverse Effect. Each Borrower Entity has obtained all
required federal, state and local licenses, certificates or permits relating to
them and their Properties as required by applicable Environmental Laws, except
for those which, if not obtained, would not have a Material Adverse Effect.
4.25 Labor Matters. No Borrower Entity is subject to any collective
bargaining agreements or any decrees or orders requiring them to recognize, deal
with or employ any Person. No demand for collective bargaining has been asserted
against any Borrower Entity by any union or organization. No Borrower Entity has
experienced any strike, labor dispute, slowdown or work stoppage due to labor
dispute and, to the best knowledge of Borrower, there is no such strike,
dispute, slowdown or work stoppage threatened against any Borrower Entity. All
Borrower Entities are in compliance in all material respects with the Fair Labor
Standards Act of 1938, as amended, except for those matters which would not have
a Material Adverse Effect.
4.26 OSHA Compliance. All Borrower Entities are in compliance in all
material respects with the Federal Occupational Safety and Health Act, as
amended, and all regulations under the foregoing, except for those matters which
would not have a Material Adverse Effect.
4.27 Regulation U. No Borrower Entity is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System). No proceeds of any Loan will be used to purchase or carry any
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System) in violation of applicable law,
including, without limitation, Regulation U issued by the Board of Governors of
the Federal Reserve System.
4.28 Affiliate Transactions. No Borrower Entity is a party to any
transaction, contract or agreement with any Affiliate, except for Service
Agreements, lease agreements and other agreements among Borrower and its
Subsidiaries and those other agreements described in Schedule 4.28 hereof.
4.29 Inter-Company Notes. Schedule 4.29 hereto is a complete list of all
Inter-Company Notes now in existence, and no other Inter-Company Notes are
required to be in existence under the requirement of Section 5.24 hereof.
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V. AFFIRMATIVE COVENANTS
Borrower covenants that, during the term of this Agreement (and thereafter
where expressly stated herein):
5.1 Payment of Obligations. Borrower shall pay all amounts owed under the
Obligations when due without setoff, counterclaim or withholdings of any kind;
provided, however, if Borrower is required by law to withhold any taxes (other
than taxes based upon the income of the Lender imposed by the jurisdiction in
which the Lender is organized or from which its interest herein has been
generated) from any payments on the Obligations to any Lender(s), Borrower shall
make additional payments to such Lender(s) along with the regular payments as
they become due so that the end result is that such Lender(s) receives the
amount that the Lender(s) would have received if no such withholdings were made.
5.2 Maintenance of Existence and Business. Except for transactions among
Borrower Entities and other transactions permitted under this Agreement, each
Borrower Entity shall maintain its fundamental existence, name, rights, and
franchises, and shall maintain its qualification and good standing in all states
in which such qualification is necessary (except to the extent that failure to
so qualify would not have a Material Adverse Effect), and shall continue to
operate in the same type of business as such Borrower Entity engages in as of
the date hereof.
5.3 Financial Statements and Reports. Borrower shall furnish to Agent and
Lenders or cause Agent and Lenders to receive all of the following, all of which
must be in number sufficient for all Lenders and otherwise in form and substance
satisfactory to Agent and Lenders:
5.3.1 Quarterly Financial Reports. As soon as available, and in any
event by the fiftieth (50th) day of each fiscal quarter (except that no
quarterly financial statements need to be delivered for the fiscal quarter
ending December 31), Borrower shall deliver consolidated and consolidating
balance sheets and income statements and consolidated statements of cash
flows of Borrower and the other Borrower Entities for and as of the end of
the preceding fiscal quarter, all prepared by Borrower on a consolidated
(and consolidating, as applicable) basis and certified by Borrower's
president or chief financial officer to be complete and correct and to
present fairly, in accordance with GAAP (excluding year-end adjustments and
required footnote disclosures), the financial condition of Borrower and its
consolidated affiliates as of the date of such statements and the results
of their operations for such period. The quarterly financial information
shall further include calculations of all financial ratios, the
certification of Borrower's president or chief financial officer as to the
absence of any Event of Default or Unmatured Default and a summary of
acquisition activity, which summary shall be in such form as Agent may
reasonably require, and which shall include, but not be limited to,
information required by Section 5.3.4 (i) and (ii) below regarding any
acquisitions during the quarter for which such information was not already
provided pursuant to Section 5.3.4.
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5.3.2 Annual Financial Reports. As soon as available, and in any event
within ninety-five (95) days after the end of each fiscal year, Borrower
shall deliver audited balance sheets of Borrower as of the end of such year
and the related audited statements of income, retained earnings and cash
flows for such year, together with supporting schedules, all such
statements prepared in accordance with GAAP on a consolidated basis and
accompanied by an unqualified audit report prepared by Ernst & Young or
some other national accounting firm approved by the Required Lenders
showing the financial condition of Borrower and its consolidated affiliates
at the close of such year and the results of its operations during such
year. The annual audited financial statements shall be accompanied by
unaudited consolidating financial statements for all Borrower Entities,
except that consolidating statements of cash flows shall not be required.
The annual financial information shall include calculations of all
financial ratios as determined based upon the audited financial statements
and the certification of Borrower's president or chief financial officer as
to the absence of any Event of Default or Unmatured Default.
5.3.3 Budgets. As soon as available, and in any event within sixty
(60) days after the beginning of each fiscal year, Borrower shall deliver
its Capital Expenditures budget and its operating budget for the current
fiscal year.
5.3.4 Acquisitions. Within fifteen (15) days after the closing of any
Permitted Acquisition for which the Cash Consideration exceeds Five Million
and No/100 Dollars ($5,000,000.00), Borrower shall provide Lenders (i) a
description of the operating profile of the acquiree, (ii) a description of
the terms of the acquisition (including, but not limited to, the purchase
price and method and structure of payment thereof), (iii) historical
financial statements of the acquiree for the most recent two fiscal years
and for any subsequent interim periods, and (iv) a certification of
compliance including calculations (with detailed support) of all financial
covenants under this Agreement for the most recent quarterly compliance
date after giving effect to the acquisition on a pro forma basis.
5.3.5 Accountant Reports. Within fifteen (15) days of Borrower's
receipt thereof, Borrower shall deliver a copy of each management letter
submitted to Borrower or its consolidated affiliates by their accountants
in connection with any annual, interim or special audit made by them.
5.3.6 Owner Mailings. Promptly upon the sending thereof, Borrower
shall deliver a copy of each material statement, report or notice sent to
its shareholders.
5.3.7 SEC Filings. As soon as available, and in no event more than
fifteen (15) days after the filing thereof, Borrower shall deliver copies
of all
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regular, periodic and special reports that any Borrower Entity files
with the United States Securities and Exchange Commission or any successor
thereto, or any national securities exchanges or the National Association
of Securities Dealers.
5.3.8 Change in Accounting Policies. Borrower shall promptly give
written notice of any material change in accounting policies or financial
reporting practices on the part of any Borrower Entity.
5.3.9 Notice Upon Perceived Breach. Borrower agrees to give prompt
written notice of any action or inaction by or on behalf of Agent or any
Lender in connection with this Agreement or the Obligations that Borrower
believes may be actionable against such party or a defense to payment of
any or all of the Obligations for any reason, including, but not limited
to, commission of a tort or violation of any contractual duty or duty
implied by law.
5.3.10 Changes in Constituent Documents. Borrower shall give prompt
written notice of any material change in the corporate charter or bylaws of
Borrower or any Subsidiary following the encumbrance of the stock thereof
in favor of Agent as required under this Agreement, and shall provide Agent
with a copy of such change (Borrower Entities are restricted in the
adoption of such amendments as provided elsewhere in the Loan Documents,
and nothing contained in this Section shall be deemed a waiver of such
restrictions).
5.3.11 Notice of Litigation. Borrower shall give prompt written notice
of any litigation, arbitration, tax audit, administrative proceeding or
investigation that may hereafter be instituted or threatened in writing in
which Borrower would be a party or which otherwise may affect any Borrower
Entity or any of their business, operations or Properties, except for (i)
actions seeking monetary damages in an amount of less than five percent
(5%) of Consolidated EBITDA calculated over the most recent four fiscal
quarters for which financial statements have been submitted, (ii) actions
seeking only monetary damages in an unspecified amount, if Borrower
believes in good faith that the matter, if adversely determined, would not
have a Material Adverse Effect, and (iii) matters arising from premises or
vehicular liability seeking only monetary damages and which are fully
covered by insurance, subject only to any applicable deductible.
5.3.12 Defaults and Changes. Borrower shall give prompt written notice
if Borrower learns of the occurrence of (i) any event that constitutes an
Event of Default or an Unmatured Default, together with a detailed
statement of the steps being taken as a result thereof, or (ii) any
Material Adverse Change.
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5.3.13 Other Information. Borrower shall promptly provide such other
information respecting the condition or operations, financial or otherwise,
of the Borrower Entities as Agent or any Lender may from time to time
reasonably request.
5.4 Taxes and Other Encumbrances. Each Borrower Entity shall make due and
timely payment or deposit of all federal, state and local taxes, assessments or
contributions required of it by law, and execute and deliver to Agent, on
demand, appropriate certificates attesting to the payment or deposit thereof;
provided, however, that the Borrower Entities shall not be required to pay or
discharge any such tax, assessment, charge or claim for as long as it is being
diligently contested in good faith by proper proceedings and for which
appropriate reserves are being maintained.
5.5 Payment of Debts. Each Borrower Entity shall pay all of its Debts as
and when the same become due in accordance with their terms, except for such
Debts being contested in good faith by appropriate proceedings and for which
adequate reserves have been established on the books of such Borrower in
accordance with GAAP.
5.6 Compliance with Laws. Each Borrower Entity shall observe and comply
with all Laws (including, but not limited to, Fraud and Abuse Laws), and shall
maintain all certificates, franchises, permits, licenses, and authorizations
necessary to the conduct of its business or the operation of its Properties,
except for such Laws, certificates, etc., which, if violated or not obtained and
full penalties were imposed for such violation, would not cause a Material
Adverse Effect. Each Borrower Entity shall further use its best efforts to
assure the compliance by all Providers with all applicable Laws, including, but
not limited to, medical licensure and Fraud and Abuse Laws, relating to their
providing of professional services, except for those which, if violated and full
penalties were imposed for such violation, would not cause a Material Adverse
Effect.
5.7 Maintenance of Property. All Borrower Entities shall maintain their
Property (and any Property leased by or consigned or held under title retention
or conditional sales contracts) in good and workable condition at all times,
subject to ordinary wear and tear, normal discards and replacements due to
functional and useful-life obsolescence, and shall make all repairs,
replacements, additions, and improvements to their Property reasonably necessary
and proper to ensure that the business carried on in connection with their
Property may be conducted properly and efficiently at all times.
5.8 Compliance with Contractual Obligations. Each Borrower Entity will
perform all of its obligations in respect of all material contracts to which it
is a party and will use its best efforts to keep, and to take all action to
keep, such contracts in full force and effect and not allow any such contract to
lapse or be terminated or any rights to renew such to be forfeited or canceled,
if such lapse, etc. would have a Material Adverse Effect; provided, however,
that any such contract may lapse or be terminated or such renewal rights may be
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forfeited or canceled if in the reasonable business judgment of the Borrower
Entities it is in their best interests to allow or cause such lapse,
termination, forfeiture or cancellation.
5.9 Further Assurances. The Borrower Entities shall promptly cure any
defects in the creation, issuance, or delivery of the Loan Documents. The
Borrower Entities at their expense will execute (or cause to be executed) and
deliver to Agent upon request all such other and further documents, agreements,
and instruments in compliance with or accomplishment of the covenants and
agreements applicable to them in the Loan Documents, or to evidence further and
to describe more fully any Collateral intended as security for the Obligations,
or to correct any omissions in the Loan Documents, or to state more fully the
Obligations and agreements set out in any of the Loan Documents, or to perfect,
protect, or preserve any Encumbrances created pursuant to any of the Loan
Documents, or to make any recordings, to file any notices, or to obtain any
consents, all as Agent may reasonably request. Borrower appoints Agent as
Borrower's attorney-in-fact to execute any financing statements or other
instruments of perfection with respect to the Collateral.
5.10 Security Interest; Setoff. In order to further secure the payment of
the Obligations, Borrower hereby grants to Agent and to each Lender a security
interest and right of setoff against all of Borrower's presently owned or
hereafter acquired monies, items, credits, deposits and instruments (including
certificates of deposit) presently or hereafter in the possession of any Lender
or Agent. By maintaining any such accounts or other property with a Lender or
Agent, Borrower acknowledges that Borrower voluntarily subjects the property to
the security interest arising hereunder. Subject to the provisions in Article IX
hereof, a Lender may exercise its rights under this Section without prior notice
(but with prompt notice following the setoff) following an Event of Default.
Borrower agrees that neither Lenders nor Agent shall be liable for the dishonor
of any instrument after notice of setoff shall have been duly given resulting
from a Lender's exercise of its rights under this Section.
5.11 Insurance.
5.11.1 General Insurance Requirements. In addition to any other
specific requirements set forth in this Agreement and in other Loan
Documents, all Borrower Entities shall maintain insurance on all insurable
Properties now or hereafter owned by them against such risks and to the
extent customary in their industry, and shall maintain or cause to be
maintained public liability and worker's compensation insurance to the
extent customary in the industry.
5.11.2 Practice-Related Insurance Requirements. All Borrower Entities
shall maintain insurance for claims, however characterized, against them in
connection with the provision of medical services by Providers and/or
ancillary services provided by them, in an amount of at least One Million
and No/100 Dollars ($1,000,000.00) per occurrence. The Borrower Entities
shall further cause each Provider to maintain medical malpractice insurance
of at least
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One Million and No/100 Dollars ($1,000,000.00) per occurrence.
All required insurance shall be in form and substance acceptable to Agent.
5.12 Accounts and Records. The Borrower Entities shall maintain current
books of record and account, in which full, true, and correct entries will be
made of all transactions.
5.13 Official Records. The Borrower Entities shall maintain current
corporate and official records, minute books and stock ledgers.
5.14 Banking Relationships. The Borrower Entities shall maintain their
deposit accounts with Lenders or with other FDIC-insured depository
institutions.
5.15 Right of Inspection. The Borrower Entities shall permit any officer,
employee, or agent of a Lender or Agent to visit and inspect during ordinary
business hours any of their Property, to examine their books of record and
accounts and corporate records, to take copies and extracts from such books of
record and accounts, and to discuss the affairs, finances, and accounts of the
Borrower Entities with their respective officers, accountants, and auditors, all
at such reasonable times and as often as Agent or a Lender may reasonably desire
and upon reasonable advance notice absent an Event of Default. Without limiting
Agent's right to obtain equitable relief as to any other appropriate right in
this Agreement or in other Loan Documents, Borrower agrees that the rights in
this Section may be enforced by affirmative injunction and, to the extent the
right to review records may be denied, the right may be enforced by a
restraining order prohibiting the interference by Borrower with the exercise of
rights to review of the records pursuant to this Section. Absent an Event of
Default, all expenses of such inspections, etc. shall be paid by the respective
Lenders, and in the presence of an Event of Default, all reasonable expenses
thereof shall be paid by Borrower.
5.16 ERISA Information and Compliance. The Borrower Entities shall comply
with ERISA and all other applicable laws governing any pension or profit sharing
plan or arrangement to which they are a party, except for matters which would
not have a Material Adverse Effect. The Borrower Entities shall (i) upon
request, provide Agent with copies of any annual report required to be filed
pursuant to ERISA with respect to any Plan or any other employee benefit plan;
(ii) notify Agent upon the occurrence of any ERISA Event or of any additional
act or condition arising in connection with any Plan which they believe might
constitute grounds for termination thereof by the PBGC or for the appointment of
a trustee to administer the Plan; and (iii) furnish to Agent, promptly upon
request, such additional information concerning any Plan or any other employee
benefit plan as Agent may request.
5.17 Indemnity; Expenses. Borrower agrees to indemnify, defend (with
counsel reasonably satisfactory to the indemnified party or parties) and hold
harmless Lenders and Agent against any loss, liability, claim or expense,
including reasonable attorneys' fees, that they may incur in connection with the
Loan Documents or the Obligations, including those expenses, etc. that may
result from their ordinary negligence, except those losses, etc. that
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may result from a Lender's or Agent's gross negligence or willful misconduct.
Without limiting the foregoing, upon demand by Agent, Borrower will reimburse
Lenders and/or Agent for the following reasonable expenses if not paid by
Borrower promptly after written demand by Agent:
5.17.1 Taxes. All taxes that Lenders or Agent may be required to pay
because of the Obligations or because of Lenders' or Agent's interest in
any property securing the payment of the Obligations, excepting taxes based
upon the net income of a Lender or Agent.
5.17.2 Administration. All reasonable costs of the preparation of this
Agreement and any other related documents and the administration of the
Obligations (except for Lenders' and Agent's usual overhead incurred in the
acceptance and processing of payments, the routine review of financial
statements, certifications and reports, routine communications with
Borrower, and other ordinary activities that are not occasioned by an
Unmatured Default, Event of Default or by a request of Borrower to waive or
vary the terms of this Agreement).
5.17.3 Protection of Collateral. All costs of preserving, insuring,
preparing for sale (whether by improvement, repair or otherwise) or selling
any Collateral.
5.17.4 Costs of Collection. All court costs and other costs of
collecting any debt, overdraft or other obligation included in the
Obligations.
5.17.5 Litigation. All reasonable costs arising from any litigation,
investigation, or administrative proceeding (whether or not Agent or a
Lender is a party thereto) that Agent or a Lender may incur as a result of
the Obligations or as a result of their association with any of the
Borrower Entities, including, but not limited to, expenses incurred by
Agent or a Lender in connection with a case or proceeding involving any
Borrower Entity under any chapter of the Bankruptcy Code or any successor
statute thereto.
5.17.6 Attorneys' Fees. Reasonable attorneys' fees incurred in
connection with any of the foregoing.
If a Lender or Agent pays any of the foregoing expenses, they shall become a
part of the Obligations and shall bear interest at the Default Rate. This
Section shall remain in full effect regardless of the full payment of the
Obligations, the purported termination of this Agreement, the delivery of the
executed original of this Agreement to Borrower, or the content or accuracy of
any representation made by Borrower to Lenders or Agent; provided, however,
Agent or any Lender may terminate this Section as to itself by executing and
delivering to Borrower a written instrument of termination specifically
referring to this Section.
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5.18 Assistance in Litigation. Borrower covenants to, upon request,
cooperatively participate in any proceeding in which Borrower is not an adverse
party to Lenders or Agent and which concerns Lenders' or Agent's rights
regarding the Obligations or any Collateral.
5.19 Name Changes. Borrower shall give Agent notice no more than thirty
(30) days after any Borrower Entity changes its name or begins doing business
under any trade name.
5.20 Estoppel Letters. Borrower covenants to provide Agent, within ten (10)
days after request, an estoppel letter stating (i) the balance of the
Obligations, (ii) whether Borrower has any defenses to payment of the
Obligations, and (iii) the nature of any defenses to payment of the Obligations.
Such balance as presented for confirmation and the nonexistence of defenses
shall be presumed if Borrower fails to respond to such a request within the
required period.
5.21 Environmental Matters.
5.21.1 Compliance With Environmental Laws. All Borrower Entities will
(i) employ in connection with their operations, appropriate technology and
compliance procedures to maintain compliance with any applicable
Environmental Laws, the violation of which would reasonably be expected to
have a Material Adverse Effect, (ii) obtain and maintain any and all
materials permits or other permits required by applicable Environmental
Laws in connection with its operations, excepting only such permits, etc.
which would not by their absence cause a Material Adverse Effect, and (iii)
dispose of any and all Hazardous Substances only at facilities and with
carriers reasonably believed to possess valid permits under any applicable
state and local Environmental Laws. All Borrower Entities shall use their
best efforts to obtain all certificates required by law to be obtained by
them from all contractors employed by them in connection with the transport
or disposal of any Hazardous Substances.
5.21.2 Remedial Work. If any investigation, site monitoring,
containment, clean-up, removal, restoration or other remedial work of any
kind or nature with respect to any Borrower Entity's Properties is required
to be performed by them under any applicable local, state or federal law or
regulation, any judicial order, or by any governmental or non-governmental
entity or Person because of, or in connection with, the current or future
presence, suspected presence, release or suspected release of a Hazardous
Substance in or into the air, soil, groundwater, surface water or soil
vapor at, on, about, under, or within any of a Borrower Entity's Property
(or any portion thereof), Borrower shall within 30 days after written
demand for performance thereof (or such shorter period of time as may be
required under applicable law,
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regulation, order or agreement), commence and thereafter diligently
prosecute to completion, all such remedial work.
5.21.3 Indemnification of Lenders and Agent. Borrower agrees to
indemnify, defend (with counsel reasonably satisfactory to the indemnified
party or parties) and hold harmless Lenders and Agent against any loss,
liability claim or expense, including attorneys' fees, that a Lender or
Agent may incur as a result of the violation or alleged violation of any
Environmental Law by a Borrower Entity or with respect to any other
violation of Environmental Laws with respect to any Borrower Entity's
Properties. This covenant shall survive the repayment of the Revolving
Credit Loan.
5.22 Opinions of Counsel. Borrower agrees that Agent may from time to time,
but not more frequently than once every calendar year absent an Unmatured
Default or an Event of Default, request in writing a copy of the most recent
letter of in-house counsel and/or outside healthcare counsel issued to
Borrower's auditors addressing any material loss contingencies as to which such
counsel have devoted substantive attention. Copies of such letters shall be
delivered to Lender within ten (10) days after request. Additionally, Borrower
shall, within twenty (20) days after written request, respond to such questions
that may be raised by Agent from time to time regarding the Borrower Entities'
compliance with Fraud and Abuse Laws, and shall engage the assistance of
Borrower's healthcare counsel for the purpose of responding to such questions if
Agent so requests.
5.23 Guarantees From Borrower Entities. All Borrower Entities shall at all
times be guarantors of the Obligations, excepting only Subsidiaries that are not
required to be guarantors under the definition of Permitted Subsidiaries in this
Agreement.
5.24 Inter-Company Notes Receivable. The obligations of any Borrower Entity
that owes other Borrower Entities, in the aggregate, the amount of Five Million
and No/100 Dollars ($5,000,000.00) or more, shall be evidenced by Inter-Company
Notes pledged to Agent to secure the Obligations.
VI. NEGATIVE COVENANTS
Borrower covenants and agrees that, without Agent's prior written
confirmation of approval by the Required Lenders:
6.1 Guaranties. No Borrower Entity shall incur, create, assume, or in any
manner become or be liable with respect to any Debt of another Person, except
that the Borrower Entities may become liable by guaranty or otherwise for the
following:
6.1.1 Obligations to Lenders. The Obligations, pursuant to the Joint
and Several Unconditional Guaranty.
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6.1.2 Endorsements. Payment of collection items, pursuant to
endorsements of negotiable or similar instruments for collection or deposit
in the ordinary course of business.
6.1.3 Guaranties. Debt resulting from (i) the guaranty by a Borrower
Entity of obligations of other Borrower Entities and (ii) guaranties of
other Debt not exceeding, in the aggregate at any time, ten percent (10%)
of Borrower's Consolidated EBITDA calculated over the most recent four
fiscal quarters for which financial statements have been submitted.
6.2 Change of Management. Borrower shall not allow or suffer any change of
management effecting a material change in the duties or change in the personnel
presently staffing the positions of chief executive officer, president or chief
financial officer, as set forth in Schedule 6.2 hereto. Notwithstanding the
foregoing, should any of the named managers cease such active participation in
management due to their death or disability, Agent shall allow Borrower a period
of sixty (60) days thereafter in which a management succession plan may be
presented to Lenders so that the Required Lenders may, in their discretion,
elect to accept new management in lieu of prior management, subject to such
revisions of this Agreement as the Required Lenders may stipulate.
6.3 Encumbrances. No Borrower Entity shall create, incur, assume, or permit
to exist any Encumbrance on any of its Property (now owned or hereafter
acquired) except for Permitted Encumbrances, and shall not undertake a
commitment of any kind in favor of any Person other than as provided in this
Agreement in favor of Lenders and Agent (i) requiring that any or all of such
Borrower Entity's Property be or remain unencumbered, or (ii) requiring that a
Borrower Entity grant an Encumbrance (other than a Permitted Encumbrance) in
favor of any Person (other than Lenders or Agent for the benefit of Lenders) on
a Borrower Entity's Property under any circumstances whatsoever. No Borrower
Entity shall sign or file under the Uniform Commercial Code a financing
statement that names such Borrower Entity as debtor or the equivalent or sign
any security agreement authorizing any secured party thereunder to file any such
financing statement, except to secure Permitted Encumbrances.
6.4 Investments. No Borrower Entity shall make investments (including but
not limited to acquisitions or purchases of the obligations or stock of, or any
other or additional interest) in any person, firm, partnership, joint venture or
corporation except: (a) those specific investments in existence as of the
Closing Date, (b) general obligations of, or obligations unconditionally
guaranteed as to principal and interest by, the United States of America
maturing within fifteen (15) months of the date of purchase, (c) commercial
paper having a rating of not less than "A2" or "P2" from ▇▇▇▇▇'▇ or S & P,
respectively, (d) Permitted Acquisitions, (e) Permitted Equity Investments, (f)
certificates of deposit and bankers acceptances issued by a Lender or another
banking institution with a minimum net worth of Five Hundred Million and No/100
Dollars ($500,000,000.00) and having a letter of
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credit rating of not less than "A" from ▇▇▇▇▇'▇ or S & P, respectively, and (g)
such other investments as Agent may approve, in its reasonable discretion.
6.5 Change of Control. Borrower shall not suffer or permit the occurrence
of a Change of Control.
6.6 Nature of Business. No Borrower Entity shall engage in any activity
beyond those activities included in the Borrower's Line of Business.
6.7 Acquisitions, Mergers, Etc. Except for transactions involving only
Borrower Entities and Permitted Acquisitions, no Borrower Entity shall enter
into any agreement to merge, consolidate, or otherwise reorganize or
recapitalize, or sell, assign, lease, or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of their
Property (whether now owned or hereafter acquired).
6.8 Advances. No Borrower Entity shall extend any loans to any other
Persons, except that the Borrower Entities may extend (i) loans to other
Borrower Entities in the ordinary course of business, (ii) loans to employees of
Borrower Entities for reasonable travel and business expenses incurred in the
ordinary course of business, (iii) other loans to officers and directors of
Borrower Entities not to exceed the sum of Five Hundred Thousand and No/100
Dollars ($500,000.00) in the aggregate at any time, and (iv) loans to nephrology
physicians and nephrology physician practices not to exceed Five Million and
No/100 Dollars ($5,000,000.00) in the aggregate at any time.
6.9 Disposition of Assets. No Borrower Entity shall dispose of any of its
assets other than in (i) the sale or exchange of used or obsolete equipment
provided that the equipment disposed of is replaced with other equipment as
needed to maintain continuous operations, (ii) the transfer of assets among
Borrower Entities, if immediately after giving effect thereto no Event of
Default will exist, and (iii) other dispositions of assets which, in the
aggregate for any fiscal year, represent less than ten percent (10%) of each of
(x) Borrower's total assets on a consolidated basis as reported to Lenders for
the previous fiscal year, and (y) Borrower's Consolidated EBITDA determined on a
rolling four-quarter basis as reported for the previous fiscal year.
6.10 Inconsistent Agreements. No Borrower Entity shall enter into any
agreement containing any provision which would be violated or breached by the
performance by Borrower of the Obligations.
6.11 Fictitious Names. Borrower shall not use any name other than the name
used in executing this Agreement or any assumed or fictitious name.
6.12 Subsidiaries and Affiliates. No Borrower Entity shall create or
acquire any direct or indirect Subsidiary or Affiliate or divest itself of any
material assets by transferring them to any existing Subsidiary or Affiliate
other than (i) Permitted Subsidiaries,
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or (ii) in connection with Permitted Acquisitions; nor shall Borrower enter into
any partnership, joint venture, or similar arrangement, or otherwise make any
material change in its fundamental legal structure, except that Borrower may
acquire and create Permitted Subsidiaries from time to time in the ordinary
course of business and may own Permitted Equity Investments.
6.13 Place of Business. Borrower shall not transfer its executive offices,
or maintain records with respect to accounts at any locations other than at the
address for notices specified herein and at the locations of Practices
affiliated with Borrower, except as Agent may approve, in its reasonable
discretion.
6.14 Adverse Action With Respect to Plans. No Borrower Entity shall take
any action to terminate any Plan which would reasonably result in a material
liability of a Borrower Entity to any Person.
6.15 Transactions With Affiliates. No Borrower Entity shall enter into any
transaction with any Affiliate except in the ordinary course of business and on
fair and reasonable terms no less favorable to the Borrower Entity than they
would obtain in a comparable arms length transaction with a Person not an
Affiliate.
6.16 Constituent Document Amendments. No Borrower Entity shall amend its
corporate charter or bylaws in any material respect, except as necessary to
accomplish corporate transactions that do not require Agent's specific approval
or transactions for which such approval is necessary and has been granted.
6.17 Adverse Transactions. No Borrower Entity shall enter into any
transaction that materially and adversely affects or, to the best of its
knowledge, is likely to materially and adversely affect the Collateral or
Borrower's ability to repay the Obligations.
6.18 Margin Securities. No Borrower Entity shall own, purchase or acquire
(or enter into any contract to purchase or acquire) any "margin security" as
defined by any regulation of the Federal Reserve Board as now in effect or as
the same may hereafter be in effect.
6.19 Accounting Changes. Borrower shall not change its fiscal year or make
any other significant change in consolidated or consolidating accounting
treatment and reporting practices, except as required or permitted by GAAP. Any
change in fiscal year shall be subject to Agent's prior written approval.
6.20 Distributions. Except in favor of other Borrower Entities, no Borrower
Entity shall (i) declare or pay any dividends, member distributions or other
payments on account of its equity interests, or (ii) directly or indirectly
redeem or otherwise acquire any of the stock or other equity interests of any
Borrower Entity or any warrant, option or other right with respect thereto,
except for (v) dividends paid in Borrower's own stock, (w) interest
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payments on Debt payable in Borrower's own stock, (x) purchases necessary
pursuant to profit sharing plans in effect as of the Closing Date, (y) purchases
necessary pursuant to employee incentive plans in effect as of the Closing Date,
and (z) purchases pursuant to Purchase Consideration Stock Redemption
Agreements. The authority of this Section 6.20 does not abrogate the requirement
to maintain Consolidated Net Worth in accordance with Section 7.1 of this
Agreement.
6.21 Action Outside Ordinary Course. No Borrower Entity shall take any
other action outside the ordinary course of their business.
VII. FINANCIAL COVENANTS
7.1 Net Worth. Borrower shall maintain a Consolidated Net Worth as of the
end of each fiscal quarter in an amount at least equal to the sum of Ninety
Million and No/100 Dollars ($90,000,000.00), plus the Net Proceeds of all equity
issued by Borrower after the Closing Date, plus seventy-five percent (75%) of
the amount of net income for each fiscal year after the fiscal year ending
December 31, 1996, without adjustment for net losses.
7.2 Leverage Ratio. Borrower shall maintain a Leverage Ratio, measured as
of the end of each fiscal quarter for the previous four consecutive fiscal
quarters, of no greater than 2.75:1.00.
7.3 Total Capitalization Ratio. Borrower shall maintain at all times a
Total Capitalization Ratio of no greater than .45:1.00.
7.4 Fixed Charge Coverage. Borrower shall maintain a Fixed Charge Coverage
Ratio measured as of the end of each fiscal quarter for the previous four
consecutive fiscal quarters of at least 2.00:1.00.
7.5 Current Ratio. Borrower shall maintain at all times a Consolidated
Current Ratio of not less than 1.00:1.00.
VIII. EVENTS OF DEFAULT
8.1 Events of Default. Any of the following events shall be considered an
Event of Default under this Agreement:
8.1.1 Payments. Borrower's failure to make payment of any installment
of principal included in the Obligations when due or any payment of
interest or expenses included in the Obligations within three (3) days of
when due.
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8.1.2 Representations and Warranties. The making of any representation
or warranty by Borrower or any other party in any Loan Document that was
incorrect in any material respect as of the date thereof.
8.1.3 Negative Covenants. The failure of any Borrower Entity to comply
with any of the requirements of Article VI hereof.
8.1.4 Financial Covenants. The failure of any Borrower Entity to
comply with any of the requirements of Article VII hereof.
8.1.5 Reporting Requirements. The failure of any Borrower Entity or
any other party to timely perform any covenant in the Loan Documents
requiring the furnishing of notices, financial reports or other information
to Agent or Lenders when due.
8.1.6 Other Covenants. The failure of any Borrower Entity to observe
or perform any covenant contained in any Loan Document, which covenant is
not subject to any specific provision in this Article VIII; provided,
however, as to any such breach that is reasonably susceptible to being
cured, the occurrence of such breach shall not constitute an Event of
Default hereunder if such breach is fully cured within twenty (20) days (or
ten (10) days, if such breach may be cured by the payment of a specific sum
of money) after the earlier of the Borrower Entity's knowledge of the facts
giving rise thereto or Agent's written notice thereof to Borrower given in
accordance with the provisions hereof.
8.1.7 Involuntary Bankruptcy or Receivership Proceedings. The
appointment of a receiver, custodian, liquidator, or trustee for any
Borrower Entity, or for any of their Property, by the order or decree of
any court or agency or supervisory authority having jurisdiction; or any
Borrower Entity's adjudication as being bankrupt or insolvent; or the
sequestering of any of the Property of any Borrower Entity by court order
or the filing of a petition against any Borrower Entity under any state or
federal bankruptcy, reorganization, debt arrangement, insolvency,
readjustment of debt, dissolution, liquidation, or receivership law of any
jurisdiction, whether now or hereafter in effect, unless dismissed (in the
case of involuntary proceedings only) within sixty (60) days.
8.1.8 Voluntary Petitions. Any Borrower Entity's filing of a petition
in voluntary bankruptcy or to seek relief under any provision of any
bankruptcy, reorganization, debt arrangement, insolvency, receivership,
readjustment of debt, assignment of assets or general arrangement for the
benefit of creditors, dissolution, or liquidation law of any jurisdiction,
whether now or hereafter in effect, or their consent to the filing of any
petition against them under any such law.
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8.1.9 Discontinuance of Business. Any Borrower Entity's discontinuance
of its usual business or its dissolution, except pursuant to transactions
permitted under this Agreement.
8.1.10 Default on Other Debt. Any Borrower Entity's failure to make
any payment when due on any Debt in excess of Five Hundred Thousand and
No/100 Dollars ($500,000.00).
8.1.11 Undischarged Judgments. Existence of a judgment or judgments
for the payment of money against any Borrower Entity which, net of any
portion thereof for which insurance coverage has been finally confirmed,
exceeds in the aggregate five percent (5%) of Consolidated EBITDA for the
most recent four fiscal quarters for which financial statements have been
delivered pursuant to this Agreement, which is not paid, discharged or
bonded within thirty (30) days after entry.
8.1.12 Insolvency. Borrower shall no longer be Solvent.
8.1.13 Attachment. The issuance of an attachment or other process
against any Property of any Borrower Entity, unless removed (by bond or
otherwise) within twenty (20) days, if the loss of use of the property
attached would likely have a Material Adverse Effect.
8.1.14 Insurance. Any Borrower Entity's failure to maintain any
insurance required herein or in any other Loan Document.
8.1.15 Contest. Any Borrower Entity's challenge or contest of the
validity or enforceability of this Agreement or any other Loan Document or
the validity, priority or perfection of any security interest created
hereunder or under any other Loan Document in any action, suit or
proceeding, or should they cease to be in full force and effect.
8.1.16 Fraud and Abuse Laws. Receipt by a Borrower Entity of a notice
from a Governmental Authority that it (i) intends to disallow requested
reimbursements, demand adjustment or repayment of past reimbursements in
excess of five percent (5%) of Borrower's Consolidated EBITDA for the
previous fiscal year respecting amounts submitted for reimbursement or
collected by a Borrower Entity or a Provider, or (ii) intends to impose
civil money penalties or to seek to exclude any Borrower Entity or a
Provider from participation in the Medicare or Medicaid programs due to a
failure to comply with Fraud and Abuse Laws, if the consolidated gross
revenues to the Borrower Entities arising from the affected Borrower Entity
or Provider exceed five percent (5%) of Borrower's Consolidated EBITDA for
the previous fiscal year.
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8.2 Remedies. Upon the happening of any Event of Default:
8.2.1 Default Rate. The Obligations shall thereafter bear interest at
the Default Rate.
8.2.2 Termination of Commitments. As provided in Article III hereof,
Lenders shall not be obligated to advance any additional Loans and the
Swingline Bank will not be obligated to make any Swingline Loans, and
additionally, the Required Lenders may terminate the obligation of Lenders
and the Swingline Lender to advance any additional Loans by causing Agent
to give written notice thereof to Borrower, which formal termination shall
remain in effect notwithstanding any subsequent cure of the Event of
Default and whether or not the Revolving Credit Loan is accelerated unless
the Revolving Credit Loan is reinstated in writing by the Required Lenders.
8.2.3 Acceleration. The Required Lenders may declare the entire
principal amount of all Obligations then outstanding, including interest
accrued thereon, to be immediately due and payable without presentment,
demand, protest, notice of protest, or dishonor or other notice of default
of any kind, all of which are hereby expressly waived.
8.2.4 Setoff. Subject to Section 9.11 hereof, any Lender may exercise
its lien upon and right of setoff against any monies, items, credits,
deposits or instruments that such Lender may have in its possession and
which belong to Borrower or to any other person or entity liable for the
payment of any or all of the Obligations.
8.2.5 Other Remedies. Agent shall, at the direction of the Required
Lenders, exercise any right that Lenders have under any other document
evidencing or securing the Obligations or otherwise available to Lenders or
Agent at law or equity.
IX. AGENT
9.1 Appointment of Agent. Lenders hereby appoint Agent to act as specified
in this Article IX.
9.2 Powers and Duties of Agent.
9.2.1 Powers and Duties of Agent; Standard of Care. Agent shall
perform all duties expressly imposed upon Agent in this Agreement and those
other duties reasonably incidental thereto, subject to the approval of the
Required Lenders to the extent required in this Agreement. Agent's duties
hereunder are administrative and ministerial in nature, and Agent's
capacity is
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that of an independent contractor for Lenders. Agent is not a trustee or
other fiduciary for Lenders, and Agent has no duties whatsoever to Lenders
except as expressly set forth in this Agreement. Agent shall have no
liability to Lenders for any action or inaction relating to this Agreement
or the other Loan Documents, even for matters arising from its ordinary
negligence, except for actual losses caused by its gross negligence or
reckless or willful misconduct.
9.2.2 Matters Reserved to all Lenders. Absent the prior approval of
all Lenders, Agent shall not increase any Lender's Commitment; forgive or
reduce any principal, interest or fees due a Lender or Agent (unless the
affected party so agrees); extend the Maturity Date; or release Collateral
or the obligation of any Borrower Entity, except in connection with
transactions permitted under this Agreement without the consent of Agent or
the Required Lenders (such as the disposition of obsolete equipment).
9.2.3 Limitations on Agent's Duties. Agent shall not be obligated to
take any action hereunder or under any other Loan Document (i) if such
action would, in the opinion of Agent, be contrary to applicable law, this
Agreement or the other Loan Documents, (ii) if it shall not first be
specifically indemnified to its satisfaction pursuant to Section 9.3 hereof
against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action, (iii) if it would
likely subject Agent to a tax in any jurisdiction where it is not then
subject to a tax, (iv) if it would likely require Agent to qualify to do
business in any jurisdiction where it is not then so qualified, unless
Agent receives security or indemnity satisfactory to it against any tax or
other liability in connection with such qualification or resulting from the
taking of such action in connection therewith, or (v) if it would likely
subject Agent to in personam jurisdiction in any location where it is not
then so subject.
9.2.4 Agent's Right to Require Instructions in Performance of Duties.
If Agent, in its sole and absolute discretion, requests instructions from
the Required Lenders with respect to any act or action (including the
failure to act) in connection with this Agreement or any other Loan
Document for which the approval of the Required Lenders or all Lenders is
not otherwise required, Agent shall be entitled, at its option, to refrain
from such action, or to continue such inaction, unless and until Agent
shall have received such instructions, and Agent shall incur no liability
by reason of so acting or refraining from action. No Lender shall have any
right of action whatsoever against Agent as a result of Agent's acting or
refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of the Required Lenders in such a case.
9.2.5 Agent's Reliance on Others in Performance of Duties. Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
note,
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writing, resolution, notice, statement, consent, certificate, telex,
teletype or facsimile message, order or other documentary, teletransmission
or telephone message believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person. Agent may
consult with legal counsel (including counsel for Borrower), accountants
and other experts selected by it with respect to all matters pertaining to
this Agreement and the other Loan Documents and its duties hereunder and
thereunder and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel
(including counsel for Borrower), accountants or experts.
9.2.6 Sharing of Information. Except as otherwise expressly provided
in this Agreement, Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit
or other information concerning the business, prospects, operations,
properties, financial or other condition or creditworthiness of the
Borrower Entities or any other Person that may come into its possession,
whether before the Closing Date or at any time or times thereafter. All
notices to be given to Borrower by a Lender hereunder shall be concurrently
given to Agent.
9.3 Indemnification of Agent. To the extent Agent is not reimbursed by or
on behalf of Borrower, and without limiting the obligation of Borrower to do so,
Lenders will Pro Rata reimburse and indemnify Agent, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including attorneys' fees and expenses) or disbursements
of any kind or nature whatsoever that may at any time (including at any time
following the indefeasible repayment in full of the Revolving Credit Loan) be
imposed on, incurred by or asserted against Agent in any way relating to or
arising out of this Agreement or any other Loan Document or the transactions
contemplated thereby or any action taken or omitted by Agent under or in
connection with any of the foregoing, and in particular will reimburse Agent for
out-of-pocket expenses promptly upon demand by Agent therefor, even if incurred
due to the ordinary negligence of Agent; provided, however, that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements finally
determined by a court of competent jurisdiction and not subject to any appeal or
pursuant to arbitration to have resulted from Agent's gross negligence or
reckless or willful misconduct. Agent may offset any amounts due Agent by any
Lender against obligations of Agent to that Lender.
9.4 No Representations by Agent. Each Lender acknowledges that neither
Agent nor any of its officers, directors, employees, attorneys, accountants or
agents has made any representation or warranty to it regarding the Borrower
Entities, the Revolving Credit Loan, the Collateral or otherwise relating to
this Agreement. Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any other
Loan Document or in any document, instrument, certificate or other writing
delivered in connection herewith or therewith or for the execution,
effectiveness, genuineness, validity, enforceability, perfection, priority or
sufficiency of this Agreement or any other Loan
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Document or the financial condition of the Borrower Entities or any other
Person, or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Loan Document, or the financial condition of the Borrower Entities or
any other Person or the existence or possible existence of any Unmatured Default
or Event of Default.
9.5 Independent Investigations by Lenders. Each Lender acknowledges that,
independently and without reliance upon Agent or any other Lender and based on
such documents and information as it has deemed and may deem appropriate, (i) it
has made its own appraisal of and investigation into the business, prospects,
operations, properties, financial and other condition and creditworthiness of
the Borrower Entities in connection with its decision to enter into this
Agreement and extend credit to Borrower hereunder, and (ii) it will continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action hereunder.
9.6 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Default or Event of Default, other
than any Unmatured Default or Event of Default arising out of the failure to pay
any principal, interest, fees or other amounts payable to Agent for the account
of the Lenders, unless Agent has received written notice from Borrower or a
Lender describing such Unmatured Default or Event of Default and stating that
such notice is a "notice of default." In the event that Agent receives such a
notice, Agent shall promptly give notice thereof to the Lenders; provided,
however, that if any such notice has also been furnished to the Lenders, Agent
shall have no obligation to notify the Lenders with respect thereto. Each Lender
shall promptly give Agent such a notice upon its actual knowledge of an
Unmatured Default or an Event of Default; provided, however, that the failure of
any Lender to deliver such notice in the absence of gross negligence or reckless
or willful misconduct shall not affect its rights hereunder or under the other
Loan Documents.
9.7 Funding of Advances Pursuant to Borrowing Notices. Promptly following
receipt of notice from Agent that a Borrowing Notice has been submitted, and
provided that all conditions to funding are believed to have been satisfied,
each Lender shall, provided that it received timely notice of the new Loan,
transfer to a designated account with Agent that Lender's Pro Rata Share of the
requested funding. The transfer of funds shall occur within the time required
for funding under this Agreement. Should any Lender fail to timely fund its Pro
Rata Share of a requested Loan, Agent may, but shall be under no obligation
whatsoever to, advance to Borrower the defaulted Lender's Pro Rata Share of the
requested Loan. If such an advance is made, it shall be deemed an advance by
Agent for the account of the defaulting Lender and shall bear interest at the
rate applicable to the relevant Loan, payable upon demand.
9.8 Agent in its Individual Capacity. With respect to its Commitments, and
the Loans made by it, Agent shall have the same rights and powers under the Loan
Documents as any other Lender or holder of a Revolving Credit Note or the
Swingline Note and may exercise the same as though it were not performing the
duties specified herein; and the terms
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"Lenders," "Required Lenders," and any similar terms shall, unless the context
clearly otherwise indicates, include Agent in its individual capacity as a
Lender. Agent may accept deposits from, lend money to and generally engage in
any kind of banking, trust, financial advisory or other business with the
Borrower Entities or any of their respective Affiliates as if it were not
performing the servicing duties specified herein, and may accept fees and other
consideration from Borrower for services in connection with this Agreement and
otherwise without having to disclose or account for the same to Lenders.
9.9 Holders. Agent may deem and treat the payee of any Revolving Credit
Note as the holder thereof and Lender hereunder for all purposes hereof unless
and until a written notice of the assignment, transfer or endorsement thereof
purportedly executed by the payee, as the case may be, shall have been filed
with Agent. Any request, authority or consent of any Person that, at the time of
making such request or giving such authority or consent, is the holder of any
Revolving Credit Note according to Agent's information, shall be conclusive and
binding on any subsequent holder, transferee, assignee or endorsee, as the case
may be, of such Revolving Credit Note or of any note or notes issued in exchange
therefor.
9.10 Successor Agent. Agent may resign at any time upon sixty (60) days'
prior written notice to Borrower and the Lenders. Agent may be removed upon
Agent's insolvency, liquidation or the appointment of a receiver for Agent, by
action of the Required Lenders, at any time upon sixty (60) days' prior written
notice to Borrower and Agent. Such resignation or removal, as the case may be,
shall take effect upon the appointment of a successor Agent as provided herein.
The Required Lenders will, with Borrower's approval (which shall not be
unreasonably withheld), appoint from among the Lenders a successor Agent. If no
successor Agent shall have been appointed within such sixty (60) day period, (i)
if no Unmatured Default or Unmatured Default then exists, Borrower may appoint a
successor Agent from among the Lenders, and (ii) otherwise, Agent may appoint,
after consulting with the Lenders and Borrower, a successor agent from among the
Lenders, which Agent, however selected, shall serve as Agent until such time, if
any, as the Required Lenders and Borrower shall have appointed a successor Agent
as provided hereinabove. Upon the written acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any retiring
Agent's resignation as Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent.
9.11 Sharing of Payments, etc. Each Lender agrees that if it shall, through
the exercise of a right of banker's lien, set-off, counterclaim or otherwise,
obtain payment with respect to the Obligations which results in its receiving
more than its Pro Rata Share of the aggregate payments with respect to all of
the Obligations, then (a) such Lender shall be deemed to have simultaneously
purchased from the other Lenders a share in the Obligations so that the amount
of the Obligations held by each of the Lenders shall continue to equal their
respective Pro Rata Shares, and (b) such other adjustments shall be made from
time to time as shall be
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equitable to insure that the Lenders share such payments ratably. If any Lender
remits payments to other Lenders under this Section 9.11 and later is required
to refund the same as a preferential payment or otherwise, the other Lenders who
shared in the payment shall similarly arrange their interests in the Obligations
to reverse the distribution to them as to allow the originally remitting Lender
to refund such payment. No Lender shall exercise its banker's lien, set-off or
other right to accomplish such payment absent Agent's prior confirmation that
the exercise of such right would be consistent with the instructions of the
Required Lenders then in effect regarding the outstanding Event of Default.
9.12 Separate Liens on Collateral. Each Lender agrees with the other
Lenders that, with the exception of security interests in deposit accounts and
like property in the possession of a Lender as expressly provided for in this
Agreement, it will not take or permit to exist any Encumbrance in its favor on
any of the Collateral or other property of any of the Borrower Entities other
than Encumbrances securing the Obligations due to all Lenders pursuant to the
Loan Documents.
9.13 Payments Between Agent and Lenders. All payments by Agent to any
Lender, and all payments by any Lender to Agent, under the terms of this
Agreement shall be made by wire transfer in immediately available funds to the
receiving party's address specified for notices in this Agreement. If any of the
Lenders fail to pay when due any sum payable to Agent, then, except as otherwise
provided in Section 9.7 hereof, such sum shall bear interest at the Federal
Funds Rate, commencing on the date such payment was due and ending on, but
excluding, the date such payment is made.
9.14 Assignments and Participations. Any Lender may assign all of its
interest in the Revolving Credit Loan or any portion(s) thereof in the minimum
amount of Five Million and No/100 Dollars ($5,000,000.00) and in increments of
One Million and No/100 Dollars ($1,000,000.00) each, subject to the prior
written approval of Agent (and of Borrower, provided that no Event of Default
then exists), which approval shall not be unreasonably withheld or delayed. The
assignment shall be evidenced by documents in form and substance acceptable to
Agent, and the acquiring Lender shall expressly assume full responsibility as a
Lender hereunder, including, but not limited to, assumption of the applicable
portion of the Commitment. Upon consummation of such assignment, the assigning
Lender shall be deemed released from its obligations under the Loan Documents to
the extent of such assignment. An assignment fee of Two Thousand Five Hundred
and No/100 Dollars ($2,500.00) shall be paid to Agent as a condition to any
assignment of an interest in the Revolving Credit Loan (including assignments,
if any, among banks that are already Lenders). Lenders may sell participation
interests in their interests in the Revolving Credit Loan in the minimum amount
of Five Million and No/100 Dollars ($5,000,000.00) and in increments of One
Million and No/100 Dollars ($1,000,000.00) each as long as the terms of such
participations establish that no participant will be regarded as a Lender under
this Agreement and permit the participants to vote in determining the vote of
the Lender which sold the applicable participation only with respect to matters
for which the unanimous vote of all Lenders is required under this
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Agreement. Lenders may disclose financial information in their possession to
prospective purchasers of interests in the Revolving Credit Loan and to
prospective participants.
9.15 Bankruptcy Provisions. Should any of the Borrower Entities become a
party to a case under the Bankruptcy Code, each Lender shall be entitled to file
its own claim, to the extent such a filing may be necessary. Agent shall review
each claim before being filed by a Lender to assure that the claim is filed on a
basis consistent with Agent's records and Agent's legal positions taken pursuant
to this Agreement. Should any of the Borrower Entities become a party to a
reorganization proceeding under the Bankruptcy Code, each Lender shall be
recognized as the holder of a separate claim for the purpose of the approval or
rejection of a plan under 11 U.S.C. ss. 1126, may freely vote such claim, and
the provisions of that Section shall control the other provisions of this
Agreement that otherwise require the consent of the Required Lenders or all
Lenders in certain circumstances. Agent shall continue to administer the
Revolving Credit Loan on behalf of Lenders, as they may be amended by any
adopted Plan of Reorganization.
9.16 Foreclosure of Collateral. In the event of a foreclosure of any
Collateral, Agent may issue a credit bid for the account of all Lenders, up to
the amount of the then outstanding Obligations, pursuant to the instructions of
the Required Lenders. Any Property acquired at such a foreclosure (or acquired
by Agent through a conveyance in lieu of foreclosure) shall be held and
administered by Agent for the benefit of all Lenders pursuant to the terms of
this Article IX.
9.17 Procedures for Notices and Approvals. All notices given among Lenders
and Agent with respect to this Agreement or the other Loan Documents shall be
given in the manner provided in this Agreement.
9.18 Other Relationships With Borrower. Each Lender is free to engage in
deposit relationships and other business relationships with the Borrower
Entities, provided that such relationship does not violate any restriction set
forth in this Agreement.
9.19 Foreign Tax Matters. Each Lender which is a foreign person (i.e., a
Person other than a United States Person for United States Federal income tax
purposes) hereby agrees that:
9.19.1 Delivery of Forms. Such Lender shall, no later than the Closing
Date (or, in the case of a Lender which becomes a party hereto after the
Closing Date, the date upon which such Lender becomes a party hereto)
deliver to the Agent and Borrower:
9.19.1(a) two accurate and complete signed originals of Form
4224, or
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9.19.1(b) two accurate and complete signed originals of Form
1001,
in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees
for the account of such lending office or offices under this Loan
Agreement free from withholding of United States Federal income tax.
9.19.2 Change of Office. At any time such a Lender changes its lending
office or offices or selects an additional lending office, it shall, at the
same time or reasonably promptly thereafter, deliver to Agent and Borrower
in replacement for, or in addition to, the forms previously delivered by it
hereunder;
9.19.2(a) if such changed or additional lending office is located
in the United States, two accurate and complete signed originals of
Form 4224, or
9.19.2(b) otherwise, two accurate and complete signed originals
of Form 1001,
in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees
for the account of such changed or additional lending office under
this Loan Agreement free from withholding of United States federal
income tax.
9.19.3 Additional Documentation. Each such Lender shall, promptly upon
Agent's or Borrower's reasonable request to that effect, deliver to the
Agent and Borrower such other forms or similar documentation as may be
required from time to time by any applicable law, treaty, rule or
regulation in order to establish such Lender's tax status for withholding
purposes.
9.20 Responses to Requests. With respect to any consent or approval
requested by Borrower or Agent under a provision of this Agreement, Lenders
shall endeavor to provide to Agent written notice of their approval or
disapproval within seven (7) Business Days of receipt of the request;
provided, however, if any Lender fails to give such notice within seven (7)
Business Days, the request shall be regarded as disapproved by such Lender.
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X. GENERAL PROVISIONS
10.1 Notices. All communications relating to this Agreement or any of the
other Loan Documents shall be in writing and shall effective when be delivered
by mail, overnight courier, special courier, telecopier or otherwise to the
following addresses:
If to Borrower:
Renal Care Group, Inc.
Attn: ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy To:
▇▇▇▇▇▇ & Bird
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Agent:
NationsBank of Tennessee, N.A., Agent
Healthcare Banking Group
Attn: ▇. ▇▇▇▇▇▇ Choppin
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy To:
Boult, Cummings, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lenders:
As stated beside their signatures below
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Any party may change its address for receipt of notice by written direction
to the other parties hereto.
10.2 Renewal, Extension, or Rearrangement. All provisions of this Agreement
relating to Obligations shall apply with equal force and effect to each and all
promissory notes executed hereafter which in whole or in part represent a
renewal, extension for any period, increase, or rearrangement of any part of the
Obligations originally represented by any part of such other Obligations.
10.3 Application of Payments. Amounts received with respect to the
Obligations, except for payments or prepayments expressly provided for elsewhere
in this Agreement, shall be applied (i) first, to any expenses due Lenders or
Agent, (ii) second, to any fee due Agent, (iii) third, to accrued and unpaid
interest under any of the Obligations, (iv) fourth, to any commitment fees due
Lenders, and (iii) fifth, to reduce the unpaid principal portion of the
Obligations, in such manner as determined by Agent.
10.4 Counterparts. This Agreement may be executed in counterparts with all
signatures or by counterpart signature pages, and it shall not be necessary that
the signatures of all parties be contained on any one counterpart. Each
counterpart shall be deemed an original, but all of them together shall
constitute one and the same instrument.
10.5 Negotiated Document. This Agreement and the other Loan Documents have
been negotiated by the parties with full benefit of counsel and should not be
construed against any party as author.
10.6 Consent to Jurisdiction; Exclusive Venue. Each party hereto hereby
irrevocably consents to the jurisdiction of the United States District Court for
the Middle District of Tennessee and of all Tennessee state courts sitting in
Davidson County, Tennessee, for the purpose of any litigation to which Borrower,
Lenders or Agent may be a party and which concerns this Agreement or the
Obligations. It is further agreed that venue for any such action shall lie
exclusively with courts sitting in Davidson County, Tennessee, unless Lenders
and Agent agree to the contrary in writing.
10.7 Not Partners; No Third Party Beneficiaries. The relationship of
Lenders and Borrower is that of lenders and borrower only, and neither is a
fiduciary, partner or joint venturer of the other for any purpose. This
Agreement has been executed for the sole benefit of Lenders, and no third party
is authorized to rely upon Lenders' rights or duties hereunder.
10.8 No Reliance on Lenders' Analysis. Borrower acknowledges and represents
that, in connection with the Obligations, Borrower has not relied upon any
financial projection, budget, assessment or other analysis by Lenders or Agent
upon any representation by Lenders as to the risks, benefits or prospects of
Borrower's Line of Business activities or
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present or future capital needs incidental thereto, all such considerations
having been examined fully and independently by Borrower.
10.9 No Marshaling of Assets. Lenders and Agent may proceed against
collateral securing the Obligations and against parties liable therefor in such
order as they may elect, and neither Borrower nor any surety or guarantor for
Borrower nor any creditor of Borrower shall be entitled to require Lenders or
Agent to marshal assets. The benefit of any rule of law or equity to the
contrary is hereby expressly waived.
10.10 Impairment of Collateral. Lenders or Agent (acting as permitted under
this Agreement) may release any Collateral securing the Obligations or release
any party liable therefor. The defenses of impairment of collateral and
impairment of recourse and any requirement of diligence in collecting the
Obligations are hereby waived.
10.11 Business Days. If any payment date under the Obligations falls on a
day that is not a Business Day, or if the last day of any notice period falls on
such a day, the payment shall be due and the notice period shall end on the next
following Business Day.
10.12 Standard of Care; Limitation of Damages. Lenders and Agent shall be
liable to Borrower only for matters arising from this Agreement or otherwise
related to the Obligations resulting from such Lender's or Agent's gross
negligence or willful misconduct, and not for matters arising from their
ordinary negligence, and liability for all other matters is hereby waived.
Lenders and Agent shall not in any event be liable to Borrower for special or
consequential damages arising from this Agreement or otherwise related to the
Obligations.
10.13 Incorporation of Schedules. All Schedules and Exhibits referred to in
this Agreement are incorporated herein by this reference.
10.14 Indulgence Not Waiver. Lenders' or Agent's indulgence in the
existence of a default hereunder or any other departure from the terms of this
Agreement shall not prejudice Lenders' or Agent's rights to declare a default or
otherwise demand strict compliance with this Agreement.
10.15 Cumulative Remedies. The remedies provided Lenders and Agent in this
Agreement are not exclusive of any other remedies that may be available to
Lenders and Agent under any other document or at law or equity.
10.16 Amendment and Waiver in Writing. No provision of this Agreement can
be amended or waived, except by a statement in writing signed by the party or
parties against whom enforcement of the amendment or waiver is sought.
Provisions of this Agreement may be amended or waived by the agreement of
Borrower and the Required Lenders (which consent of the Required Lenders may be
evidenced by the confirmation thereof issued by Agent to Borrower), except that
(i) no amendment or waiver regarding matters expressly requiring the unanimous
consent of Lenders under Section 9.2.2 of this Agreement may be entered into
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absent the written consent of all Lenders, (ii) the amendment of Section 9.2.2
hereof, this subsection (ii), the definition of Pro Rata or Pro Rata Share and
the definition of Required Lenders under this Agreement shall require the
written consent of all Lenders, and (iii) no amendment or waiver may affect the
rights or duties of the Agent or the Swingline Lender without their written
consent.
10.17 Assignment. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of Borrower and Lenders, except
that Borrower shall not assign any rights or delegate any obligations arising
hereunder without the prior written consent of Lenders. Any attempted assignment
or delegation by Borrower without the required prior consent shall be void.
10.18 Entire Agreement. This Agreement and the other written agreements
among Borrower, Lenders and Agent represent the entire agreement between the
parties concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein. Provided, if there is a conflict between this
Agreement and any other document executed contemporaneously herewith with
respect to the Obligations, the provision in this Agreement shall control.
10.19 Severability. Should any provision of this Agreement be declared
invalid or unenforceable for any reason, the remaining provisions hereof shall
remain in full effect.
10.20 Time of Essence. Time is of the essence of this Agreement, and all
dates and time periods specified herein shall be strictly observed.
10.21 Applicable Law. The validity, construction and enforcement of this
Agreement and all other documents executed with respect to the Obligations shall
be determined according to the laws of Tennessee applicable to contracts
executed and performed entirely within that state.
10.22 Captions Not Controlling. Captions and headings have been included in
this Agreement for the convenience of the parties, and shall not be construed as
affecting the content of the respective Sections.
10.23 WAIVER OF RIGHT TO JURY TRIAL. THE PARTIES HERETO HEREBY KNOWINGLY
AND VOLUNTARILY, WITH BENEFIT OF COUNSEL, WAIVE THE RIGHT TO HAVE ANY DISPUTE
ARISING FROM OR RELATED TO THIS AGREEMENT OR THE OBLIGATIONS TRIED BY A JURY,
WITH THE RESULT THAT ANY SUCH DISPUTE WOULD BE TRIED BY A JUDGE RATHER THAN A
JURY. BORROWER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO AGENT
AND LENDERS IN ENTERING INTO THIS
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AGREEMENT AND CONFIRMS THAT NO REPRESENTATIVE OF AGENT OR LENDERS HAS MADE ANY
STATEMENT OR SUGGESTION THAT THIS PROVISION WILL NOT BE ENFORCED IN ACCORDANCE
WITH ITS TERMS.
10.24 Facsimile Signatures. This Agreement may be executed by facsimile
signatures, and shall be effective when Agent has received telecopy
transmissions of the signature pages executed by all parties hereto; provided,
however, that all parties shall deliver original executed documents to Agent
promptly following the execution hereof.
10.25 Additional Original Borrower Parties. The Additional Original
Borrower Parties join in the execution hereof to evidence their agreement to the
amendment and restatement of the 1996 Loan Agreement as provided in this
Agreement. The Additional Original Parties have no continuing rights or
obligations under this Agreement and shall not hereafter be regarded as parties
hereto. The Additional Original Parties do have obligations with respect to the
subject matter of this Agreement pursuant to the Joint and Several Unconditional
Guaranty they have executed as of the date hereof.
Executed as of the date first written above.
RENAL CARE GROUP, INC. (Delaware)
By: ________________________________________
Title: _____________________________________
RENAL CARE GROUP, INC. (Tennessee)
By: ________________________________________
Title:______________________________________
KANSAS NEPHROLOGY
ASSOCIATION
By: ________________________________________
Title: _____________________________________
SIGNATURE PAGE TO FIRST AMENDED AND RESTATED LOAN AGREEMENT
RENAL CARE GROUP, INC., BORROWER
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RENAL CARE GROUP TEXAS, INC.
By:
Title: _____________________________________
RCG MISSISSIPPI, INC.
By: ________________________________________
Title: _____________________________________
D.M.N. OF INDIANA CORPORATION
By: ________________________________________
Title: _____________________________________
SIGNATURE PAGE TO FIRST AMENDED AND RESTATED LOAN AGREEMENT
RENAL CARE GROUP, INC., BORROWER
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NATIONSBANK OF TENNESSEE, N.A.,
a national banking association, as Agent
By: ________________________________________
▇. ▇▇▇▇▇▇ Choppin, Senior Vice President
NATIONSBANK OF TENNESSEE, N.A.,
a national banking association, as a Lender
and Swingline Lender
By: ________________________________________
▇. ▇▇▇▇▇▇ Choppin, Senior Vice President
Address: Attn: ▇. ▇▇▇▇▇▇ Choppin
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax number: 615/▇▇▇-▇▇▇▇
Voice number: 615/749-3023
SIGNATURE PAGE TO FIRST AMENDED AND RESTATED LOAN AGREEMENT
RENAL CARE GROUP, INC., BORROWER
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FIRST UNION NATIONAL BANK, as a Lender
By: ________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
Address: Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax number: 615/▇▇▇-▇▇▇▇
Voice number: 615/251-9374
and to:
First Union Capital Markets Group
Specialized Industries Division
Healthcare Finance Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ Fax number:
704/383-9114
SIGNATURE PAGE TO FIRST AMENDED AND RESTATED LOAN AGREEMENT
RENAL CARE GROUP, INC., BORROWER
77
SUNTRUST BANK, NASHVILLE, N.A.,
as a Lender
By: ________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Address: Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
201 4th Avenue, North, Mezzanine
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax number: 615/▇▇▇-▇▇▇▇
Voice number: 615/748-4831
SIGNATURE PAGE TO FIRST AMENDED AND RESTATED LOAN AGREEMENT
RENAL CARE GROUP, INC., BORROWER
78
FIRST AMERICAN NATIONAL BANK, as a
Lender
By: ________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Address: Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
First American Center, 2nd Floor
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax number: 615/▇▇▇-▇▇▇▇
Voice number: 615/748-2191
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EXHIBIT 2.5.1(B)
BORROWING/CONVERSION NOTICE
TO: NationsBank of Tennessee, N.A., Agent
LENDERS: Parties to the Loan Agreement
Date: __________, 199_
BORROWER: Renal Care Group, Inc.
This notice is delivered under that First Amended and Restated
Loan Agreement (as renewed, extended and amended, the "Loan Agreement") dated as
of August 4, 1997, among Agent, Borrower and Lenders. Terms defined in the Loan
Agreement have the same meanings when used -- unless otherwise defined -- in
this request.
Borrower requests a Loan under the Loan Agreement as follows:
The requested draw is from the Revolving Credit Loan.
Borrowing Date(1) ___________, 199_
Amount of Borrowing $________________
Type of Borrowing(2) _________________
For LIBOR Loans, the Interest Period(3) __________ months
Select one:
____ The proceeds of the requested Loan shall be disbursed
to Borrower as provided in the Loan Agreement. The
purpose of the requested Loan is (select one for this
Loan):
_____ New advance for a Permitted Acquisition
_____ New advance for other permitted purposes.
____ The proceeds of the requested LIBOR Loan shall be
applied to the payment of Borrower's existing Base
Rate Loan, this new Loan being a conversion of a Base
Rate Loan to a LIBOR Loan
____ The proceeds of the requested LIBOR Loan shall be
applied to the payment of the following LIBOR Loan,
subject to all requirements of the Loan Agreement,
this new Loan being a conversion of a LIBOR Loan to a
different LIBOR Loan:
Date:_____________________
Amount:___________________
Interest Period:__________
________________________________
(1)Same Banking Day for Base Rate Loans, third following Banking Day for
LIBOR Loans
(2)LIBOR or Base Rate Loan.
(3)1, 2, 3 or 6 months.
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____ The proceeds of the requested Base Rate Loan shall be
applied to the payment of the following LIBOR Loan,
subject to all requirements of the Loan Agreement,
this new Loan being a conversion of a LIBOR Loan to a
Base Rate Loan:
Date:___________________________
Amount:_________________________
Interest Period:________________
Date:___________________________
Amount:_________________________
Interest Period:________________
Borrower certifies that on the date hereof and on the date of
the above Borrowing Date (after giving effect to the requested Loan and any
transaction funded thereby) (a) all of the representations and warranties in the
Loan Documents will be true and correct in all material respects (unless they
speak to a specific date or the facts on which they are based have been changed
by transactions contemplated or permitted by the Loan Agreement), (b) no Event
of Default or Unmatured Default will exist, and (c) all conditions to Borrower's
right to receive the requested Loan under the Loan Agreement have been
satisfied.
RENAL CARE GROUP, INC., Borrower
By: ___________________________________
(Name) ________________________________
(Title) _______________________________