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EXHIBIT 10.1
NOTE PURCHASE AGREEMENT
dated as of
December 23, 1997
among
MEDAPHIS CORPORATION,
the SUBSIDIARY GUARANTORS party hereto
and
[MED FUNDING, INC.]
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions...............................................................................1
SECTION 1.02. Accounting Terms and Determinations......................................................11
ARTICLE 2
PURCHASE AND SALE OF SECURITIES; TERMS OF SECURITIES
SECTION 2.01. Commitment to Purchase...................................................................11
SECTION 2.02. Takedown Procedures......................................................................12
SECTION 2.03. Fees.....................................................................................12
SECTION 2.04. Mandatory Termination and Reduction of Commitment........................................13
SECTION 2.05. Optional Reduction of Commitment.........................................................13
SECTION 2.06. Interest.................................................................................13
SECTION 2.07. Maturity of Notes; Prepayment of Notes...................................................14
SECTION 2.08. Fee Due in Certain Circumstances.........................................................14
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Corporate Existence and Power............................................................15
SECTION 3.02. Authorization, Execution and Enforceability; Lien Perfection.............................15
SECTION 3.03. Governmental Authorization...............................................................16
SECTION 3.04. Contravention............................................................................16
SECTION 3.05. Financial Information....................................................................16
SECTION 3.06. Litigation...............................................................................17
SECTION 3.07. Environmental Matters....................................................................17
SECTION 3.08. Taxes....................................................................................18
SECTION 3.09. Subsidiaries.............................................................................18
SECTION 3.10. Not an Investment Company................................................................18
SECTION 3.11. Full Disclosure..........................................................................18
SECTION 3.12. Capitalization...........................................................................18
SECTION 3.13. Solicitation; Access to Information......................................................19
SECTION 3.14. Non-fungibility..........................................................................19
SECTION 3.15. Permits..................................................................................19
SECTION 3.16. Real Property Interests..................................................................19
SECTION 3.17. Representations in Other Financing Documents.............................................19
SECTION 3.18. Compliance with ERISA....................................................................20
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SECTION 3.19. Government Regulation....................................................................20
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
SECTION 4.01. Purchase for Investment; Authority; Binding Agreement....................................20
ARTICLE 5
CONDITIONS PRECEDENT TO PURCHASE
SECTION 5.01. Conditions to Purchaser's Obligation at Initial Takedown.................................21
SECTION 5.02. Conditions to Purchaser's Obligations on Each Takedown...................................22
ARTICLE 6
COVENANTS
SECTION 6.01. Information..............................................................................24
SECTION 6.02. Payment of Obligations...................................................................26
SECTION 6.03. Insurance................................................................................26
SECTION 6.04. Conduct of Business and Maintenance of Existence.........................................26
SECTION 6.05. Compliance with Laws.....................................................................27
SECTION 6.06. Inspection of Property, Books and Records................................................27
SECTION 6.07. Investment Company Act...................................................................27
SECTION 6.08. Minimum Consolidated EBITDA..............................................................28
SECTION 6.09. Limitation on Debt.......................................................................28
SECTION 6.10. Restricted Payments......................................................................29
SECTION 6.11. Cash Settlement Payments.................................................................30
SECTION 6.12. Investments..............................................................................30
SECTION 6.13. Limitation on Liens......................................................................31
SECTION 6.14. Transactions with Affiliates.............................................................31
SECTION 6.15. Consolidations, Mergers and Sales of Assets..............................................32
SECTION 6.16. Subsidiaries.............................................................................33
SECTION 6.17. Use of Proceeds..........................................................................33
SECTION 6.18. Permanent Financing......................................................................33
SECTION 6.19. Additional Guarantees and Collateral; Further Assurances.................................34
SECTION 6.20. Board of Directors.......................................................................35
SECTION 6.21. Leases...................................................................................36
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ARTICLE 7
EVENTS OF DEFAULT
SECTION 7.01. Events of Default Defined; Acceleration of Maturity; Waiver of
Default........................................................................................36
ARTICLE 8
LIMITATION ON TRANSFERS
SECTION 8.01. Restrictions on Transfer.................................................................39
SECTION 8.02. Restrictive Legends......................................................................39
SECTION 8.03. Notice of Proposed Transfers.............................................................39
ARTICLE 9
GUARANTY
SECTION 9.01. The Guaranty.............................................................................40
SECTION 9.02. Guaranty Unconditional...................................................................41
SECTION 9.03. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances..................................................................................42
SECTION 9.04. Waiver by the Subsidiary Guarantors......................................................42
SECTION 9.05. Subrogation..............................................................................42
SECTION 9.06. Stay of Acceleration.....................................................................42
SECTION 9.07. Limit of Liability.......................................................................43
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices.................................................................................43
SECTION 10.02. No Waivers; Amendments..................................................................43
SECTION 10.03. Indemnification.........................................................................44
SECTION 10.04. Expenses................................................................................46
SECTION 10.05. Payment.................................................................................47
SECTION 10.06. Successors and Assigns..................................................................47
SECTION 10.07. Brokers.................................................................................47
SECTION 10.08. New York Law; Submission to Jurisdiction; Waiver of Jury Trial..........................47
SECTION 10.09. Severability............................................................................48
SECTION 10.10. Counterparts............................................................................48
SECTION 10.11. Confidentiality.........................................................................48
SECTION 10.12. Termination.............................................................................48
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SCHEDULES
Schedule 3.02 -- Lien Perfection
Schedule 3.07 -- Environmental Matters
Schedule 3.09 -- Subsidiaries
Schedule 3.12 -- Capitalization
Schedule 3.16 -- Real Property Interests
Schedule 6.13 -- Existing Liens
Schedule 6.15 -- Sale-Leaseback Transactions
Schedule 6.16 -- Subsidiaries that are Not Wholly Owned
EXHIBITS
Exhibit A -- Form of Note
Exhibit B -- Form of Security Agreement
Exhibit C -- Form of Pledge Agreement
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NOTE PURCHASE AGREEMENT
AGREEMENT dated as of December 23, 1997 among MEDAPHIS CORPORATION,
the SUBSIDIARY GUARANTORS party hereto or which hereafter become party hereto
and [MED FUNDING, INC.]
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. The following terms, as used herein, have
the following meanings:
"AFFILIATE" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Company (a "CONTROLLING PERSON") or
(ii) any Person (other than the Company or any of its Subsidiaries) which is
controlled by or is under common control with a Controlling Person. As used in
this definition, the term "CONTROL" means possession, directly or indirectly,
of the power either to (i) vote 25% or more of the securities having ordinary
voting power for the election of directors of such Person or (ii) direct or
cause the direction of the management or policies of a Person, whether by
contract or otherwise; provided that in no event shall Purchaser or any of its
affiliates be deemed to be an Affiliate.
"AGREEMENT" means this Agreement, as amended, restated, supplemented
or otherwise modified from time to time in accordance with its terms.
"ASSET SALE" means any sale, transfer or other disposition (including
any such transaction effected by way of merger or consolidation) by the Company
or any of its Subsidiaries of any ownership interest in any asset, including
without limitation any sale-leaseback transaction, but excluding (i) any sale,
transfer or other disposition of inventory and used, surplus, obsolete or worn
out equipment in the ordinary course of business, (ii) any sale, transfer or
other disposition to the Company or to a wholly-owned Subsidiary of the Company
and (iii) cash payments otherwise permitted under this Agreement; provided that
any disposition not excluded pursuant to clauses (i) through (iii) shall
constitute an Asset Sale only if, and solely to the extent that, the Net Cash
Proceeds therefrom, together with the Net Cash Proceeds from all other such
dispositions effected by the Company and its Subsidiaries after the date hereof
to the extent that such Net Cash
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Proceeds were not used to prepay the Notes pursuant to Section 2.07(b), exceed
$1,000,000.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"BUSINESS ACQUISITION" means (i) an Investment by the Company or any
of its Subsidiaries in any other Person pursuant to which such Person shall
become a Subsidiary or shall be merged into or consolidated with the Company or
any of its Subsidiaries or (ii) an acquisition by the Company or any of its
Subsidiaries of the property and assets of any Person (other than the Company
or any of its Subsidiaries) that constitute a substantial part of the assets of
such Person or of any division or other business unit of such Person.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York or Atlanta, Georgia are
authorized or required by law to close.
"CAPITAL LEASE" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"CASH EQUIVALENTS" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit of any domestic commercial bank (including a domestic
branch of a foreign bank) whose outstanding senior long-term debt securities
are rated either A- or higher by Standard & Poor's Ratings Services or A3 or
higher by ▇▇▇▇▇'▇ Investors Service, Inc., (iii) repurchase obligations with a
term of not more than 30 days for underlying securities of the types described
in clause (i) entered into with any bank meeting the qualifications specified
in clause (ii) above, (iv) commercial paper rated at least A-1 or the
equivalent thereof by Standard & Poor's Ratings Services or at least P-1 or the
equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc., maturing within one year
after the date of acquisition, (v) obligations denominated in a currency other
than dollars which are of a credit quality and maturity comparable to those
referred to in clauses (i) through (iv) above that are customarily used for
short-term investment of excess cash in the markets in which the Company and
its Subsidiaries operate, and (vi) shares of a money market mutual fund
substantially all of whose investments are described in clauses (i) through
(iv) above.
"CASH MANAGEMENT AGREEMENTS" means any agreement entered into from time
to time between the Company and/or any of its Subsidiaries, on the one hand, and
[Wachovia Bank of Georgia, N.A.] and/or any of its affiliates or any other
banking or
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financial institution, on the other hand, in connection with cash management
services for operating, collection, payroll and trust accounts of the Company
and/or its Subsidiaries provided by such banking or financial institution,
including, without limitation, automatic clearing house services, control
disbursement services, electronic funds transfer services, information
reporting services, lockbox services, stop payment services, and wire transfer
services.
"CASH MANAGEMENT SERVICES OBLIGATIONS" means any and all obligations
of the Company and/or any of its Subsidiaries under any of the Cash Management
Agreements or otherwise relating to any cash management services.
"CHANGE OF CONTROL" means such time as (a) any "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act of 1934,
as amended) shall become the beneficial owner, by way of merger, consolidation
or otherwise, of 51% or more of the voting power of all classes of voting
securities of the Company; or (b) a sale or transfer of all or substantially
all of the assets of the Company to any Person or group has been consummated;
or (c) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election was approved by a vote of a
majority of the directors then still in office, who either were directors at
the beginning of such period or whose election or nomination for the election
was previously so approved) cease for any reason to constitute a majority of
the directors of the Company then in office.
"CLOSING DATE" means the date of the Initial Takedown.
"COMMISSION" means the Securities and Exchange Commission.
"COMMITMENT" means $210,000,000, or the obligation of Purchaser
pursuant to this Agreement, subject to the terms and conditions set forth
herein, to purchase Notes hereunder in an aggregate principal amount not to
exceed such amount, as such amount may be reduced from time to time pursuant to
Sections 2.04 and 2.05.
"COMMON STOCK" means the authorized common stock, par value $0.01 per
share, of the Company.
"COMPANY" means Medaphis Corporation, a Delaware corporation, and its
successors.
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"CONSOLIDATED EBITDA" means, for any period, consolidated net income
of the Company and its Consolidated Subsidiaries for such period plus, to the
extent deducted in determining such consolidated net income, the aggregate
amount of (i) consolidated interest expense, (ii) income tax expense, (iii)
depreciation, amortization and other charges having no cash impact in the
current or any future period and (iv) in the case of the quarter ending
December 31, 1997, and without duplication of any amount included in (i) to
(iii) above, charges in respect of (A) prior deferred financing costs ($1.4
million), (B) Price Waterhouse fees ($2.4 million), (C) FAS 112 adjustment
($2.0 million), (D) BSG severance ($1.0 million) and (E) E.I.T.F. Issue No.
97-13 ($5.0 to $8.0 million).
"CONSOLIDATED SUBSIDIARY" means, at any date with respect to any
Person, any Subsidiary or other entity, the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
if such statements were prepared as of such date.
"CORPORATE DOCUMENTS" means the articles of incorporation and bylaws
of the Company and each Subsidiary Guarantor.
"DEBT" of any Person means, at any date, (a) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and operating leases for equipment and other assets) or which is
evidenced by a note, bond, debenture or similar instrument, (b) all obligations
of such Person under Capital Leases, (c) all obligations (contingent or
otherwise) of such Person to reimburse any bank or other Person in respect of
amounts paid under a letter of credit or similar instrument (other than
contingent obligations on performance bonds for customer contracts in the
ordinary course of business), (d) all Derivatives Obligations of such Person,
(e) all Guarantee Obligations of such Person in respect of Debt of any other
Person and (f) all liabilities of the types described in clauses (a) through
(e) above secured by any Lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof.
"DEBT INCURRENCE" means any incurrence by the Company or any of its
Subsidiaries of any Debt (including without limitation pursuant to the
Permanent Financing), other than Debt permitted under any of clauses (i)
through (viii) of Section 6.09(a).
"DEFAULT" means any Event of Default or any event or condition which,
with the giving of notice or lapse of time or both, would, unless cured or
waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity
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swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.
["DLJ BRIDGE"] means [DLJ Bridge Finance, Inc.,] a Delaware
corporation, and its successors.
["DLJSC"] means [▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation],
a Delaware corporation, and its successors.
"DOLLARS" or "$" mean lawful currency of the United States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Company other than a
Subsidiary that is organized under the laws of a jurisdiction outside the
United States and does not conduct a substantial amount of business in the
United States.
"ENGAGEMENT LETTER" means the letter agreement dated December 15, 1997
between the Company and [DLJSC.]
"ENVIRONMENTAL LAWS" means any and all statutes, laws, judicial
decisions, regulations, ordinances, rules, judgments, orders, decrees, codes,
plans, injunctions, permits, concessions, grants, franchises, licenses and
governmental restrictions, whether now or hereafter in effect, relating to
human health, the environment or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Materials or wastes into the environment,
including ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, Hazardous
Materials or wastes or the clean-up or other remediation thereof.
"EQUITY ISSUANCE" means the issuance of any equity securities by the
Company or any of its Subsidiaries (including without limitation any equity
securities issued pursuant to the Permanent Financing), but excluding:
(i) any issuance of equity securities to the Company or
any of its Subsidiaries;
(ii) any issuance of equity securities pursuant to the
exercise of stock options or warrants in existence on the Closing Date
or authorized pursuant to any agreement with any employees to which
the Company or any Subsidiary is a party on the Closing Date;
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(iii) any issuance of equity securities pursuant to any
401(k), employee stock purchase plan or employee benefit plan in
existence on the Closing Date and as may be amended from time to time;
(iv) any issuance of equity securities pursuant to the
exercise of stock options hereinafter granted from time to time to any
executives of the Company or any Subsidiary pursuant to any
compensation plan or grant authorized by the Board of Directors of the
Company or any Subsidiary; or
(v) any issuance of equity securities in connection with
any settlement of litigation or claims disclosed in the September 30,
1997 10-Q.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Company, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Company or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"EVENT OF DEFAULT" has the meaning set forth in Section 7.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING CREDIT AGREEMENT" means the Second Amended and Restated
Credit Agreement dated as of February 4, 1997 among the Company, the lenders
named therein and [SunTrust Bank, Atlanta,] as agent, as amended, restated,
supplemented or otherwise modified.
"EXPIRATION DATE" has the meaning set forth in Section 2.01.
"FINANCING DOCUMENTS" means this Agreement, the Notes and the Security
Documents.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"GUARANTEE OBLIGATION" means as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Debt, leases, dividends or other
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obligations (the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.
"HAZARDOUS MATERIALS" means (i) asbestos; (ii) polychlorinated
biphenyls; (iii) petroleum, its derivatives, by-products and other
hydrocarbons; and (iv) any other toxic, radioactive, caustic or otherwise
hazardous substance regulated under Environmental Laws.
"HAZARDOUS MATERIALS CONTAMINATION" means contamination (whether now
existing or hereafter occurring) of the improvements, buildings, facilities,
personalty, soil, groundwater, air or other elements on or of the relevant
property by Hazardous Materials, or any derivatives thereof, or on or of any
other property as a result of Hazardous Materials, or any derivatives thereof,
generated on, emanating from or disposed of in connection with the relevant
property.
"HOLDER" means any Holder of any Note.
"INITIAL TAKEDOWN" means the first Takedown hereunder.
"INTEREST PAYMENT DATE" each March 23, June 23, September 23 and
December 23 (or, if any such date is not a Business Day, the next succeeding
Business Day).
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
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"INVESTMENT" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise. It is
understood that a guarantee by a Person of any obligations of another Person
constitutes an Investment by the guaranteeing Person in the other Person in the
amount of the Guarantee Obligation.
"LIEN" means, any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement) and any
other arrangement having substantially the same economic effect as any of the
foregoing.
"MAJORITY HOLDERS" means (i) at any time prior to the issuance of the
Notes, Purchaser and (ii) at any time thereafter, the holders of voting rights
with respect to waivers, amendments and other actions permitted or required to
be taken by Holders under the terms of the Notes constituting a majority of
such voting rights attributable to the aggregate outstanding amount of Notes at
such time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, condition (financial or otherwise), operations, performance,
properties, Projections or prospects of the Company and its Subsidiaries, taken
as a whole.
"MATURITY DATE" means April 1, 1999.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA (i) to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the
ERISA Group during such five year period and (ii) which is covered by Title IV
of ERISA.
"NET CASH PROCEEDS" means, with respect to any transaction, an amount
equal to the cash proceeds received by the Company or any of its Subsidiaries
from or in respect of such transaction, less (i) any expenses (including
commissions or fees) actually incurred by the Company or such Subsidiary in
respect of such transaction, (ii) the amount of any Debt secured by a Lien on a
related asset and discharged from the proceeds of such transaction and (iii)
any taxes paid or payable by the Company or such Subsidiary with respect to
such transaction (as reasonably estimated by the Company's chief financial
officer in good faith).
"1996 10-K" means the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.
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"NOTES" means the Company's Senior Secured Increasing Rate Notes
substantially in the form set forth as Exhibit A hereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMANENT FINANCING" means any Debt Incurrence or Equity Issuance
following the date hereof for the purpose of refinancing the Notes.
"PERMITS" means domestic and foreign licenses, permits and approvals,
including provincial, state, federal, city and county permits and approvals.
"PERMITTED LIENS" means Liens expressly permitted to exist by the
terms of Section 6.13 hereof.
"PERMITTED TRANSFEREE" means any Person that acquires Notes other than
any Person who acquires such Notes (i) in a public offering or (ii) in the open
market, pursuant to sales under Rule 144 of the Securities Act or otherwise.
"PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof) or other entity of
any kind.
"PLAN" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"PLEDGE AGREEMENT" means the Pledge Agreement of even date herewith
among the Company, the Subsidiary Guarantors named therein and the Secured
Party, substantially in the form of Exhibit C, as amended from time to time.
"PRIME RATE" means, for any day, a rate per annum equal to the rate of
interest publicly announced by The Bank of New York (or its successor) from
time to time in The City of New York as its prime, reference or base rate, it
being understood that such rate is one of such bank's base rates and serves as
a basis upon which effective rates of interest are calculated for those loans
making reference thereto and may not be the lowest of such bank's base rates.
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"PROJECTIONS" means financial projections with respect to the Company
and its Subsidiaries, prepared by the Company or any of its Subsidiaries.
"PURCHASER" means [Med Funding, Inc.], a Delaware corporation, and its
successors.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution on
any shares of the capital stock of the Company (except dividends payable solely
in shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the capital stock of
the Company or (b) any option, warrant or other right to acquire shares of the
capital stock of the Company.
"SECURED PARTY" means Purchaser, as secured party under the Security
Documents.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY AGREEMENT" means the Security Agreement of even date
herewith among the Company, the Subsidiary Guarantors and the Secured Party,
substantially in the form of Exhibit B, as amended from time to time.
"SECURITY DOCUMENTS" means the Pledge Agreement, the Security
Agreement and any other agreements pursuant to which the Company or any of its
Subsidiaries provides a Lien on assets to secure any obligations in respect of
the Notes or this Agreement, and all supplementary assignments, security
agreements, pledge agreements, acknowledgments or other documents delivered or
to be delivered pursuant to the terms hereof or any other Security Document.
"SEPTEMBER 30, 1997 10-Q" means the Company's Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 1997.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which a majority of the capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person.
"SUBSIDIARY GUARANTOR" means each Subsidiary of the Company listed on
the signature pages hereof, and each other Person that hereafter enters into a
guaranty of the obligations of the Company.
"SYNTHETIC LEASE" means the loan and lease transactions arising under
the Participation Agreement dated as of April 21, 1995 among the Company, [TBC
Realty VI]
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Corporation, [Trust Company Bank] (now known as SunTrust Bank, Atlanta) and
[Creditanstalt Corporate Finance, Inc.] and the other documents described
therein.
"TAKEDOWN" has the meaning set forth in Section 2.02(a).
"TRANSFER" means any disposition of Notes that would constitute a sale
thereof under the Securities Act.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities (within
the meaning of Section 4001(a)(16) of ERISA) under such Plan, determined on a
plan termination basis using the assumptions prescribed by the PBGC for
purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all
Plan assets allocable to such liabilities under Title IV of ERISA (excluding
any accrued but unpaid contributions), all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the ERISA Group to the PBGC or
any other Person under Title IV of ERISA.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP
applied on a consistent basis (except for changes concurred in by the Company's
independent public accountants).
ARTICLE 2
PURCHASE AND SALE OF SECURITIES; TERMS OF SECURITIES
SECTION 2.01. COMMITMENT TO PURCHASE. (a) Subject to the terms and
conditions set forth herein and in reliance on the representations and
warranties of the Company contained herein and in the other Financing
Documents, the Company may at its option issue and sell, and Purchaser agrees
to purchase, Notes in an aggregate outstanding principal amount not to exceed
$210,000,000. The purchase price for the Notes shall be 100% of the principal
amount thereof.
(b) The Commitment will terminate on the earliest of (i) the date when
the Company shall have repaid all loans outstanding under the Existing Credit
Agreement (if such date occurs prior to the Closing Date), (ii) the date on
which the Company or any of its Subsidiaries commences the marketing of any
proposed Permanent Financing with respect to which [DLJSC] or any of its
Affiliates is not the exclusive agent, sole initial purchaser or sole
underwriter, as the case may be, if such marketing breaches the terms of this
Agreement or the Engagement Letter; (iii) the date of consummation of the
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Permanent Financing, (iv) December 31, 1997 (if such date occurs prior to the
Closing Date) and (v) March 31, 1998 (such earliest date, the "EXPIRATION
DATE"); provided that if at any time on or after the date hereof an Event of
Default shall have occurred and be continuing, Purchaser may at its option
terminate the Commitment by notice to the Company, such termination to be
effective upon the giving of such notice; and provided further that the
Commitment shall automatically terminate, without notice to the Company or any
other action on the part of Purchaser, upon the occurrence of any of the events
specified in Sections 7.01(e) and 7.01(f) with respect to the Company.
(c) The Commitment is not revolving in nature, and principal amounts
of Notes prepaid in accordance with Section 2.07 may not be resold to Purchaser
hereunder.
SECTION 2.02. TAKEDOWN PROCEDURES. (a) The Company shall give
Purchaser notice not later than 11:00 A.M. (New York City time) two Business
Days prior to each proposed purchase and sale of Notes hereunder (a
"TAKEDOWN"), other than the Initial Takedown if it occurs on December 23 or 24,
1997 and is in the amount of $185,000,000 which notice shall specify the
principal amount of Notes to be purchased and sold at such Takedown (which
amount shall be $5,000,000 or a larger multiple of $1,000,000, except that any
Takedown may be in an amount equal to either (x) the amount of interest payable
on the Notes on the date of Takedown or (y) the remaining unused amount of the
Commitment) and the date of such Takedown (which shall be a Business Day).
There shall not be more than three Takedowns subsequent to the Initial Takedown
hereunder.
(b) No later than 12:00 noon (New York City time) on the date of each
Takedown, Purchaser shall deliver by wire transfer, to the account number of
the Company specified by the Company in writing no later than 2:00 P.M. (New
York City time) two Business Days prior to the date of such Takedown,
immediately available funds in an amount equal to the aggregate purchase price
of the Notes to be purchased by Purchaser hereunder on such date, less the
aggregate amount of fees payable by the Company to Purchaser on such date
pursuant to Section 2.03.
(c) At each Takedown, against payment as set forth in subsection (b)
of this Section 2.02, the Company shall deliver to Purchaser a single Note
representing the aggregate principal amount of Notes to be purchased at such
Takedown registered in the name of Purchaser, or, if requested by Purchaser,
separate Notes in such other denominations and registered in such name or names
as shall be designated by Purchaser by notice to the Company at least two
Business Days prior to the date of such Takedown.
SECTION 2.03. FEES. (a) The Company shall pay Purchaser a commitment
fee in the amount of $4,200,000, which fee shall be fully earned upon the
execution and delivery of this Agreement by the parties hereto and shall be
payable in full in cash on the earlier of (i) the Closing Date and (ii)
December 31, 1997; provided that such fee shall not be payable (and shall be
waived) if Purchaser declines to purchase Notes hereunder because a
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condition in Section 5.01 is not satisfied notwithstanding that the Company
shall have used its best efforts to cause such condition to be satisfied.
(b) On the date of each Takedown hereunder, the Issuer shall pay to
Purchaser a takedown fee in an amount equal to 2.00% of the aggregate
outstanding principal amount of the Notes being purchased at such Takedown.
SECTION 2.04. MANDATORY TERMINATION AND REDUCTION OF COMMITMENT.
(a) The Commitment shall terminate on the Expiration Date.
(b) In addition, the Commitment shall be reduced by an amount equal
to the Net Cash Proceeds received by the Company or any of its Subsidiaries in
respect of any Asset Sale, Debt Incurrence or Equity Issuance minus the amount
of such Net Cash Proceeds required to prepay outstanding Notes in accordance
with Section 2.07(c). Each such reduction shall be effective on the date of the
related prepayment of the Notes, or if no Notes are at the time outstanding, on
the date of receipt of such Net Cash Proceeds.
SECTION 2.05. OPTIONAL REDUCTION OF COMMITMENT. The Company may, by
notice to Purchaser on or before the effective date of termination or
reduction, terminate the unused Commitment at any time or reduce the unused
Commitment from time to time in amounts equal to $5,000,000 or any larger
multiple of $1,000,000.
SECTION 2.06. INTEREST. (a) Interest on each Note shall be payable
quarterly in arrears, on each Interest Payment Date of each year in which such
Note remains outstanding, commencing with the first Interest Payment Date after
the date of issuance thereof, on the principal sum of such Note outstanding.
Interest on each Note shall be calculated at the rates per annum set forth
below, and shall accrue from and including the most recent Interest Payment
Date to which interest has been paid on such Note (or if no interest has been
paid on such Note, from the date of issuance thereof) to but excluding the date
on which payment in full of the principal sum of such Note has been made.
(b) The interest rate applicable to each Note shall be a floating
rate per annum equal to the sum of (i) the Prime Rate in effect from time to
time plus (ii) 2.50% plus (iii) an additional percentage amount, equal to 1.00%
from and including the Interest Payment Date falling on June 23, 1998 and
increasing by 0.50% effective on each Interest Payment Date thereafter until
the principal amount of such Note is paid in full or, in any case, if less, the
maximum rate permitted by applicable law. Interest on each Note will be
calculated on the basis of a 365-day year and paid for the actual number of
days elapsed.
SECTION 2.07. MATURITY OF NOTES; PREPAYMENT OF NOTES. (a) The Notes
shall mature on the Maturity Date.
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(b) The Company at its option may, upon ten days' written notice to
the Holders, at any time, prepay all or any part of the principal amount of the
Notes at a redemption price equal to 100.00% of the principal amount of the
Notes so prepaid together with accrued interest to the date of prepayment;
provided that if after giving effect to any such prepayment any Notes remain
outstanding, the aggregate outstanding principal amount thereof shall be not
less than $1,000,000.
(c) The Company shall, within five days of receipt by the Company or
any of its Subsidiaries of the Net Cash Proceeds of any Asset Sale, Debt
Incurrence or Equity Issuance, prepay a principal amount of the Notes equal to
the amount of such Net Cash Proceeds (less any amounts not required to be paid
as a result of the requirement in subsection (d) of this Section 2.07 that all
such prepayments be made in multiples of $1,000), at a redemption price equal
to 100.00% of the principal amount of the Notes so prepaid together with
accrued interest to the date of prepayment.
(d) Any prepayment of the Notes pursuant to Section 2.07(b) shall be
in a minimum amount of at least $1,000,000, unless less than $1,000,000 of the
Notes remain outstanding, in which case all of the Notes must be prepaid. Any
prepayment of the Notes pursuant to Section 2.07(c) shall be in a minimum
amount which is a multiple of $1,000 times the number of Holders at the time of
such prepayment.
(e) Any partial prepayment shall be made so that the Notes then held
by each Holder shall be prepaid in a principal amount which shall bear the same
ratio, as nearly as may be, to the total principal amount being prepaid as the
principal amount of such Notes held by such Holder shall bear to the aggregate
principal amount of all Notes then outstanding. In the event of a partial
prepayment, upon presentation of any Note the Company shall execute and deliver
to or on the order of the Holder, at the expense of the Company, a new Note in
principal amount equal to the remaining outstanding portion of such Note.
SECTION 2.08. FEE DUE IN CERTAIN CIRCUMSTANCES. If the Company at any
time or from time to time repays, prepays or otherwise redeems any Notes in
whole or in part, whether at its option or as required by the terms of the
Financing Documents and whether before, on or after the Maturity Date, with or
in anticipation of funds raised directly or indirectly by any means other than a
transaction in which [DLJSC] has acted as the exclusive agent, sole initial
purchaser or sole underwriter, the Company shall pay to the Purchaser a fee
equal to 3.00% of par plus accrued interest of the Notes so repaid, prepaid or
redeemed; provided that (i) if such transaction is a "Bank Financing" (as
defined in the Engagement Letter) as to which the Company shall have complied
with its obligations hereunder and under the Engagement Letter but [DLJSDF] (as
defined in the Engagement Letter) declined to match the terms and conditions of
the commitment letter received by the Company from the other lender, such fee
shall be, at the Company's option: (a) 3.00%, all of which shall be credited
against any or all fees payable by the Company at any
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time pursuant to the Engagement Letter, or (b) 1.00%, none of which shall be
creditable against Engagement Letter fees; (ii) no such fee shall be payable
with respect to any Transaction (as defined in the Engagement Letter) if [DLJSC]
has refused to act as exclusive agent, sole initial purchaser or sole
underwriter therein, (iii) any such fee not covered by clause (i) will be
credited against any fee payable pursuant to the Engagement Letter in respect of
any transaction from which the Company has or will raise such funds; and (iv)
the maximum fee payable hereunder shall be calculated based upon the principal
amount of the Notes outstanding at the time of payment with any and all net
proceeds raised through the date of payment from Transactions executed by DLJSC
under the Engagement Agreement first credited against such principal amount
outstanding.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The Company and each Guarantor, jointly and severally, represent and
warrant to Purchaser as set forth below:
SECTION 3.01. CORPORATE EXISTENCE AND POWER. The Company and each
Subsidiary Guarantor (i) is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of incorporation, and
(ii) has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted and as proposed to be conducted, except where the failure to have
such powers, licenses, authorizations, consents and approvals would not
reasonably be expected to have a Material Adverse Effect.
SECTION 3.02. AUTHORIZATION, EXECUTION AND ENFORCEABILITY; LIEN
PERFECTION.
(a) The execution, delivery and performance by the Company and each
Subsidiary Guarantor of the Financing Documents to which it is a party and the
issuance of the Notes by the Company have been duly and validly authorized and
are within its corporate powers. Each of the Financing Documents (other than
the Notes) has been duly executed and delivered by the Company and each
Subsidiary Guarantor party thereto and constitutes its valid and binding
agreement, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and equitable principles of general
applicability. When executed and delivered by the Company against payment
therefor in accordance with the terms hereof, the Notes will constitute valid
and binding obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights generally and equitable
principles of general applicability.
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(b) The Security Agreement and Pledge Agreement each create valid and
binding Liens in the Collateral purported to be covered thereby. Upon
completion of the actions and filings described in Schedule 3.02, (i) the Liens
created by the Security Agreement will constitute perfected Liens on all of the
Collateral purported to be covered thereby, subject to no prior or equal Lien
other than Permitted Liens and (ii) the Liens created by the Pledge Agreement
will constitute perfected Liens on all of the Collateral purported to be
covered thereby, subject to no prior or equal Lien.
SECTION 3.03. GOVERNMENTAL AUTHORIZATION. The execution and delivery
by the Company and each Subsidiary Guarantor of each of the Financing Documents
to which it is a party did not and will not, the issuance and sale of the Notes
by the Company will not, and the consummation of the transactions contemplated
hereby and thereby will not, require any action by or in respect of, or filing
with, any governmental body, agency or governmental official except (i) the
actions and filings described in Schedule 3.02 and (ii) other actions and
filings which, if not taken or made, will not affect in any material respect
the validity or enforceability of the Financing Documents or the perfection or
priority of the Lien created under the Security Documents.
SECTION 3.04. CONTRAVENTION. The execution and delivery by the Company
and each Subsidiary Guarantor of the Financing Documents to which it is a party
did not and will not, the issuance and sale of the Notes by the Company will
not, and the consummation of the transactions contemplated hereby and thereby
will not, contravene or constitute a default under or violation of any
provision of applicable law or regulation, the Corporate Documents or any
material agreement, judgment, injunction, order, decree or other instrument
binding upon it or any of its assets, or result in the creation or imposition
of any Lien on any asset of the Company or any of its Subsidiaries (other than
the Liens created by the Security Documents and Permitted Liens).
SECTION 3.05. FINANCIAL INFORMATION.
(a) The consolidated balance sheets of the Company as of December 31,
1995, December 31, 1996 and September 30, 1997 and the related consolidated
statements of operations, stockholders' equity and cash flows for each fiscal
year then ended (or for the nine months ended September 30, 1997, as the case
may be), each reported on by Price Waterhouse LLP and delivered to Purchaser on
or before the Closing Date, fairly present, in conformity with GAAP, the
consolidated financial position of the Company and its Consolidated
Subsidiaries as of each such date and their consolidated results of operations,
changes in stockholders' equity and cash flows for each such period.
(b) On the Closing Date, the Company and its Subsidiaries will not
have any liabilities, contingent or otherwise, including liabilities for taxes,
unusual or forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments, except (i) as referred to or reflected or
provided for in said balance sheet,
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(ii) as disclosed to DLJ Bridge or DLJSC in writing prior to December 15, 1997
or in the 1996 10-K or September 30, 1997 10-Q or (iii) as could not reasonably
be expected to have a Material Adverse Effect.
(c) No development has occurred since September 30, 1997 that has
resulted, or could reasonably be expected to result, in a Material Adverse
Effect, except as disclosed to DLJ Bridge or DLJSC in writing prior to December
15, 1997 or in the 1996 10-K or September 30, 1997 10-Q,
SECTION 3.06. LITIGATION. There is no action, suit or proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official (i) for which there is a reasonable possibility of an
adverse decision that would have a Material Adverse Effect, as reasonably
determined by the Company in accordance with its usual and customary audit and
disclosure practices, except as disclosed in the September 30, 1997 10-Q, or
(ii) which challenges the validity of any Financing Document.
SECTION 3.07. ENVIRONMENTAL MATTERS. The Company and each of its
Subsidiaries (a) have obtained all material Permits which are required under
Environmental Laws, and (b) are in compliance in all material respects with all
terms and conditions of such Permits and all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in any applicable Environmental Laws. Neither the Company
nor any of its Subsidiaries is aware of, or has received notice of, any past
present or future events, conditions circumstances, activities, practices,
incidents, actions or plans which, with respect to the Company or any
Subsidiary, may interfere with or prevent compliance or continued compliance in
all material respects with Environmental Laws, or may give rise to any material
common law or legal liability or otherwise form the basis of any material
claim, action, demand, suit, proceeding, hearing, study or investigation, based
on or related to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling or the emission, discharge, release
or, threatened release into the environment, of any pollutant, contaminant,
chemical, or industrial, toxic or hazardous substance or waste. Except as set
forth on Schedule 3.07, there is no civil, criminal or administrative action,
suit, demand, claim, hearing notice or demand proceeding pending or, to the
knowledge of the Company, threatened against Company or any Subsidiary relating
in any way to Environmental Laws that has had, and that could reasonably by
expected to have, a Material Adverse Effect.
SECTION 3.08. TAXES. The Company's federal tax identification number is
▇▇-▇▇▇▇▇▇▇. All income tax returns and all other material tax returns which are
required to be filed by or on behalf of the Company and its Subsidiaries have
been filed. All taxes shown as due on such returns have been paid or adequate
reserves have been established on the books of the Company, except to the extent
that (i) the Company's failure to pay
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any such taxes would not have a Material Adverse Effect or (ii) any such taxes
are being contested in good faith, and for which adequate reserves are
maintained on the books of the Company. The charges, accruals and reserves on
the books of the Company and its Consolidated Subsidiaries in respect of taxes
or other governmental charges have been established in accordance with GAAP.
SECTION 3.09. SUBSIDIARIES. Schedule 3.09 contains a complete list of
all of the Company's Subsidiaries on the Closing Date and the federal tax
identification number for each such Subsidiary. The Subsidiaries listed on
Schedule 3.09 with an asterisk or asterisks appearing after its name do not own
any material amount of assets.
SECTION 3.10. NOT AN INVESTMENT COMPANY. The Company is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 3.11. FULL DISCLOSURE. The information (other than any
Projections) heretofore furnished by the Company to [DLJSC], [DLJ Bridge] or
Purchaser for purposes of or in connection with the Financing Documents or any
transaction contemplated hereby does not, and all such information hereafter
furnished by the Company to Purchaser will not (in each case taken together and
on the date as of which such information is furnished), contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained therein, in the light of the
circumstances under which they are made, not misleading. All Projections
heretofore furnished by the Company to [DLJSC], [DLJ Bridge] or Purchaser for
purposes of or in connection with the Financing Documents or any transaction
contemplated hereby have been, and all Projections hereafter furnished by the
Company to Purchaser will be, prepared in good faith and based upon reasonable
assumptions believed to be reasonable at the time such Projections were
prepared. The Company has disclosed to Purchaser any and all facts which
materially and adversely affect or may affect (to the extent the Company can
now reasonably foresee), the business, operations or financial condition of the
Company and its Subsidiaries, taken as a whole, or the ability of the Company
to perform its obligations under the Financing Documents or to complete the
Permanent Financing.
SECTION 3.12. CAPITALIZATION. The capitalization of the Company on
November 30, 1997 is set forth on Schedule 3.12. The capitalization of the
Company did not change between November 30, 1997 and the Closing Date, except
shares of Common Stock have been issued upon exercise of stock options and
stock awards issued pursuant to employee benefit arrangements.
SECTION 3.13. SOLICITATION; ACCESS TO INFORMATION. No form of general
solicitation or general advertising was used by the Company or, to the best of
its knowledge, any other Person acting on behalf of the Company, in connection
with the
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offer and sale of the Notes. Neither the Company nor any Person acting on
behalf of the Company has, either directly or indirectly, sold or offered for
sale to any Person any of the Notes or any other similar security of the
Company except as contemplated by this Agreement, and the Company represents
that neither the Company nor any person acting on its behalf other than
Purchaser and its Affiliates will sell or offer for sale to any Person any such
security to, or solicit any offers to buy any such security from, or otherwise
approach or negotiate in respect thereof with, any Person or Persons so as
thereby to bring the issuance or sale of any of the Notes within the provisions
of Section 5 of the Securities Act.
SECTION 3.14. NON-FUNGIBILITY. When the Notes are issued and delivered
pursuant to this Agreement, the Notes will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities which are (i)
listed on a national securities exchange registered under Section 6 of the
Exchange Act or (ii) quoted in a U.S. automated inter-dealer quotation system.
SECTION 3.15. PERMITS. Except to the extent any of the following would
not result in a Material Adverse Effect: (a) the Company and its Subsidiaries
have all Permits as are necessary for the conduct of their respective
businesses as it has been carried on; (b) all such Permits are in full force
and effect, and each of the Company and its Subsidiaries has fulfilled and
performed all material obligations with respect to such Permits; (c) no event
has occurred which allows, or after notice or lapse of time would allow,
revocation or termination by the issuer thereof or which results in any other
impairment of the rights of the holder of any such Permit; and (d) each of the
Company and its Subsidiaries has no reason to believe that any governmental
body or agency is considering limiting, suspending or revoking any such Permit.
SECTION 3.16. REAL PROPERTY INTERESTS. Other than the ownership
interests in real property disclosed on Schedule 3.16 hereto, neither the
Company nor any Subsidiary has any ownership interest in any real property.
SECTION 3.17. REPRESENTATIONS IN OTHER FINANCING DOCUMENTS. Each of
the representations and warranties of the Company and each Subsidiary Guarantor
in the other Financing Documents is true and correct in all material respects.
SECTION 3.18. COMPLIANCE WITH ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code in respect of
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any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (iii) incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA except, in each case, as would not individually or in the
aggregate have a Material Adverse Effect.
SECTION 3.19. GOVERNMENT REGULATION. Neither the Company nor any of
its Subsidiaries is, or will be upon the issuance and sale of the Notes and the
use of the proceeds as described herein, subject to regulation under the Public
Utility Holding Company Act of 1935, as amended, the Federal Power Act, the
Interstate Commerce Act or to any federal or state statute or regulation
limiting its ability to issue and perform its obligations hereunder or under
any Financing Document to which it will be a party.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
SECTION 4.01. PURCHASE FOR INVESTMENT; AUTHORITY; BINDING AGREEMENT.
Purchaser represents and warrants to the Company that:
(a) Purchaser is an Accredited Investor within the meaning of Rule
501(a) under the Securities Act and the Notes to be acquired by it pursuant to
this Agreement are being acquired for its own account and Purchaser will not
offer, sell, transfer, pledge, hypothecate or otherwise dispose of the Notes
unless pursuant to a transaction either registered under, or exempt from
registration under, the Securities Act;
(b) the execution, delivery and performance of this Agreement and the
purchase of the Notes pursuant hereto are within Purchaser's corporate powers
and have been duly and validly authorized by all requisite corporate action;
(c) this Agreement has been duly executed and delivered by Purchaser;
(d) this Agreement constitutes a valid and binding agreement of
Purchaser enforceable in accordance with its terms;
(e) Purchaser has such knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of its
investment in the Notes and Purchaser is capable of bearing the economic risks
of such investment;
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(f) Purchaser is an affiliate of and under the control of [DLJSC]
and/or [DLJ Bridge]; and
(g) no form of general solicitation or general advertising was used
by Purchaser or, to the best of its knowledge, any other Person acting on its
behalf, in respect of the Notes or in connection with the purchase of the
Notes.
ARTICLE 5
CONDITIONS PRECEDENT TO PURCHASE
SECTION 5.01. CONDITIONS TO PURCHASER'S OBLIGATION AT INITIAL
TAKEDOWN. The obligation of Purchaser to purchase the Notes to be issued and
sold by the Company at the Initial Takedown hereunder is subject to the
satisfaction of the following conditions contemporaneously with such Takedown:
(a) Each of the Financing Documents shall be in full force and effect
and no term or condition thereof shall have been amended, waived or otherwise
modified without the prior written consent of Purchaser.
(b) Purchaser shall have received evidence satisfactory to it that on
the Closing Date: (i) after giving effect to the application of the proceeds of
the Initial Takedown, there shall be no outstanding Debt of the Company or any
of its Subsidiaries other than (v) contingent obligations owed to [SunTrust
Bank], Atlanta with respect to the letter of credit issued in the face amount of
approximately $2,500,000 in respect of workers' compensation, (w) Cash
Management Services Obligations, (x) Debt of the Company and its Subsidiaries
under the Financing Documents, (y) obligations under Capital Leases for which
not more than $16,200,000 is required in accordance with GAAP to be capitalized
on the balance sheet of the lessee and (z) other Debt in an aggregate principal
amount not to exceed $2,000,000; and (ii) satisfactory arrangements shall have
been made for the termination of each existing Lien on any asset of the Company
or any of its Subsidiaries, other than the Liens permitted by subsections (b)
and (d) through (i) of Section 6.13.
(c) No information heretofore furnished by the Company to Purchaser
or [DLJ Bridge] for purposes of or in connection with the Financing Documents or
any transaction contemplated hereby shall be inaccurate, incomplete or
misleading in any respect reasonably determined by Purchaser to be materially
adverse, and there shall not have occurred any change, nor shall any
information be disclosed to or discovered by Purchaser or [DLJ Bridge], which
Purchaser reasonably determines is materially adverse in respect of
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the condition (financial or otherwise), business, assets, liabilities,
properties, results of operations, Projections or prospects of the Company and
its Subsidiaries, taken as a whole.
(d) Purchaser shall have received the financial statements referred
to in Section 3.05, all of which shall in all respects be in form and substance
satisfactory to Purchaser in its sole discretion.
(e) The Security Agreement and Pledge Agreement shall have been
executed by each of the parties thereto and delivered to Purchaser.
(f) Purchaser shall be reasonably satisfied that all governmental,
shareholder and third party consents and approvals necessary in connection with
the Financing Documents and the transactions contemplated hereby and thereby
have been received and all applicable waiting periods shall have expired,
without any action being taken by any competent authority that could restrain,
prevent or impose any materially adverse conditions on such transactions or
that could seek or threaten any of the foregoing, and no law or regulation
shall be applicable which in the judgment of Purchaser could reasonably be
expected to have any such effect.
(g) Purchaser shall have received opinions, dated on or prior to the
Closing Date and in each case in form and substance reasonably satisfactory to
Purchaser, of (i) ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇, Executive Vice President and General
Counsel of the Company, (ii) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special
counsel for the Company and (iii) ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP.
(h) There shall not have occurred any disruption or adverse change in
the financial or capital markets generally which could reasonably be expected
to materially adversely affect the purchase of the Notes or the refinancing
thereof.
SECTION 5.02. CONDITIONS TO PURCHASER'S OBLIGATIONS ON EACH TAKEDOWN.
The obligation of Purchaser to purchase the Notes to be issued and sold by the
Company hereunder is subject to the satisfaction of the following conditions
contemporaneously with each Takedown:
(a) No development has occurred since September 30, 1997 that has
resulted in or could reasonably be expected to result in a Material Adverse
Effect, except as disclosed to [DLJSC] or [DLJ Bridge] in writing prior to
December 15, 1997 or in the 1996 10-K or September 30, 1997 10-Q.
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(b) Except as disclosed in the September 30, 1997 10-Q, there shall
exist no action, suit, investigation, litigation or proceeding pending or
threatened in any court or before any arbitrator or any governmental
instrumentality that purports to affect the Commitment or any Financing
Document or any of the transactions contemplated hereby or thereby, or that
could reasonably be expected to have a material adverse effect on the
Commitment or any Financing Document or any of the transactions contemplated
hereby or thereby.
(c) There shall not exist any Default.
(d) The representations and warranties of the Company and the
Subsidiary Guarantors contained in the Financing Documents shall be true and
correct in all material respects on and as of the time of such Takedown as if
made on and as of such time (except for the representations and warranties
contained in Sections 3.09 and 3.12, which must be true and correct in all
material respects on and as of the Closing Date) and each of the Company and
the Subsidiary Guarantors shall have performed and complied with all covenants
and agreements required by the Financing Documents to be performed by it or
complied with by it at or prior to such Takedown.
(e) All fees and expenses payable to or for the account of Purchaser or
[DLJSC] hereunder, under the Engagement Letter or otherwise in connection with
the transactions contemplated hereby, shall have been paid in full.
(f) Purchaser shall have received the Notes to be issued at such
Takedown, duly executed by the Company in the denominations and registered in
the names specified in or pursuant to Section 2.02.
(g) Unless the Synthetic Lease shall have theretofore been refinanced
or is to be refinanced with the proceeds of such Takedown, the unused amount of
the Commitment immediately after such Takedown shall equal or exceed the lesser
of (i) $10,000,000 and (ii) the aggregate amount required to satisfy in full
all remaining obligations of the Company and its Subsidiaries under, and to
cause the termination of, the Synthetic Lease.
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ARTICLE 6
COVENANTS
The Company agrees that, from and after the Closing Date and so long
as the Commitment remains in effect or any Notes remain outstanding and unpaid
or any other amount is owing to Purchaser or the Holders, and for the benefit
of Purchaser and the Holders:
SECTION 6.01. INFORMATION. The Company will deliver to Purchaser:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Company, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of the end of such fiscal year and
the related consolidated statements of income and cash flows and stockholders'
equity (deficit) for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on
without material qualification by Price Waterhouse LLP or other independent
public accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income
and cash flows and stockholders' equity (deficit) for such quarter and for the
portion of the Company's fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the corresponding
quarter and the corresponding portion of the Company's previous fiscal year,
all certified (subject to footnote presentation and normal year-end
adjustments, and excepting changes concurred in by the Company's independent
public accountants) as to fairness of presentation, GAAP and consistency by the
chief financial officer or the chief accounting officer of the Company;
(c) as soon as available and in any event within 30 days after the
end of each month of each fiscal year of the Company, a consolidated balance
sheet of the Company and its Consolidated Subsidiaries and the related
consolidated statements of income for such month and for the portion of the
fiscal year ended at the end of such month and of cash flows for the portion of
the fiscal year ended at the end of such month;
(d) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer of the Company (i) setting
forth in reasonable detail the calculations required to establish whether the
Company was in compliance with the requirements of Section 6.08 on the date of
such financial statements and (ii) stating whether any Default
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exists on the date of such certificate and, if any Default then exists, setting
forth the details thereof and the action which the Company is taking or
proposes to take with respect thereto;
(e) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements confirming the
calculations set forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (d) above, provided that such confirmation shall
be limited to such calculations which can be derived solely by the use of the
financial statements referred to in clause (a) above;
(f) within five Business Days after any officer of the Company
obtains knowledge of a Default, a certificate of the chief financial officer or
the chief accounting officer of the Company setting forth the details thereof
and the action which the Company is taking or proposes to take with respect
thereto;
(g) promptly upon the filing thereof, copies of all applications,
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent), proxy statements and reports which
the Company or any of its Subsidiaries shall have filed with the Commission or
any national stock exchange;
(h) promptly following the commencement thereof, notice and a
description in reasonable detail of any litigation or proceeding to which the
Company or any of its Subsidiaries is a party in which the amount involved is
$1,000,000 or more;
(i) promptly following the occurrence thereof, notice and a
description in reasonable detail of any development that would reasonably be
expected to have a Material Adverse Effect.
(j) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue
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Code, a copy of such application; (v) gives notice of intent to terminate any
Plan under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any required payment or contribution to any Plan or Multiemployer Plan or
makes any amendment to any Plan which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security, a certificate
of the Company's chief financial officer or chief accounting officer setting
forth details as to such occurrence and the action, if any, which the Company
or applicable member of the ERISA Group is required or proposes to take;
(k) promptly, and in any event no later than 30 days, after any
Domestic Subsidiary shall be formed or any Person shall become a Domestic
Subsidiary, notice thereof and a Perfection Certificate (as defined in the
Security Agreement) for such Domestic Subsidiary; and
(l) from time to time such additional information regarding the
financial position or business of the Company and its Subsidiaries as Purchaser
may reasonably request.
SECTION 6.02. PAYMENT OF OBLIGATIONS. The Company will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective obligations and liabilities, including, without
limitation, tax liabilities, except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect, and will maintain,
and will cause each Subsidiary to maintain, in accordance with generally
accepted accounting principles, appropriate reserves for the accrual of any of
the same.
SECTION 6.03. INSURANCE. The Company shall, and shall cause each of
its Subsidiaries to maintain such insurance, to such extent and against such
risks, including fire and other risks insured against by extended coverage, as
is customary with companies in the same or similar businesses operating in the
same or similar locations, including (i) public liability insurance against
claims for personal injury or death or property damage occurring upon, in,
about in connection with the use of any properties owned, occupied or
controlled by it and (ii) business interruption insurance; and maintain such
other insurance as may be required by law.
SECTION 6.04. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Company will continue, and will cause each Subsidiary to continue, to: (i)
preserve, renew and keep in full force and effect their respective corporate
existence, (ii) preserve, renew and keep in full force and effect their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business, except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect and (iii) engage in
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business of the same general type as now conducted by the Company and its
Subsidiaries, except the Company or any Subsidiary may discontinue any
immaterial line of business of the Company and its Subsidiaries if the Board of
Directors of the Company determines that such discontinuation is in the best
interests of the Company and not disadvantageous to any Holder; provided that
nothing in this Section 6.04 shall prohibit a merger or consolidation that is
permitted under Section 6.15.
SECTION 6.05. COMPLIANCE WITH LAWS. The Company will comply, and cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and the rules and
regulations thereunder), except where compliance therewith is contested in good
faith by appropriate proceedings or where the failure to comply would not
reasonably be expected to have a Material Adverse Effect.
SECTION 6.06. INSPECTION OF PROPERTY, BOOKS AND RECORDS. The Company
will keep, and will cause each Subsidiary to keep, proper books of record and
account in which full, true and correct entries shall be made of all dealings
and transactions in relation to its business and activities; and upon
reasonable advance notice will permit, and will cause each Subsidiary to
permit, representatives of Purchaser under the Company's supervision to visit
and inspect any of their respective properties, to examine and make abstracts
from any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective executive officers and,
subject to the right of the Company's representative to participate in any such
discussions, independent public accountants at such reasonable times and as
often as may reasonably be desired.
SECTION 6.07. INVESTMENT COMPANY ACT. The Company will not be or
become an open-end investment trust, unit investment trust or face-amount
certificate company that is or is required to be registered under Section 8 of
the Investment Company Act of 1940, as amended.
SECTION 6.08. MINIMUM CONSOLIDATED EBITDA. Consolidated EBITDA will
not for any measurement period set forth below be less than the applicable
amount set forth below, adjusted in accordance with the proviso below (if
applicable):
Measurement Period Amount
------------------ ------
1/1/98 - 3/31/98 $10,500,000
1/1/98 - 6/30/98 25,000,000
1/1/98 - 9/30/98 44,200,000
1/1/98 - 12/31/98 64,900,000
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provided that if Consolidated EBITDA for the fiscal quarter ended December 31,
1997 is less than $14,000,000 (the amount of any such shortfall being called
the "SHORTFALL"), each amount set forth above shall be increased by the product
of the Shortfall times the number of fiscal quarters in the applicable
measurement period. Compliance with this Section 6.08 shall be determined from
and after the date when unaudited management financial statements are prepared
in the ordinary course of business following the conclusion of the applicable
measurement period.
SECTION 6.09. LIMITATION ON DEBT.
(a) Neither the Company nor any Subsidiary will create, incur, assume
or suffer to exist any Debt, except:
(i) Debt of the Company and the Subsidiary Guarantors under the
Financing Documents;
(ii) Debt of the Company or any of its Subsidiaries outstanding
on the date of this Agreement as set forth in clause (i) of Section
5.01(b);
(iii) Debt of the Company or any of its Subsidiaries to a
wholly-owned Subsidiary of the Company, or of any Subsidiary of the
Company to the Company;
(iv) Debt of the Company or any of its Subsidiaries incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring any fixed asset (including through Capital Leases) after the
Closing Date, in an aggregate principal amount not to exceed
$10,000,000;
(v) Debt of the Company or any Subsidiary as an account party
for any letter of credit issued by any financial institution if such
letter of credit is issued solely as security for performance or
payment by the Company or such Subsidiary under any contract which is
not otherwise prohibited by this Agreement and which has been entered
into in the ordinary course of business of the Company or such
Subsidiary;
(vi) Cash Management Services Obligations;
(vii) Debt of the Company or any Subsidiary incurred on account
of financed insurance premiums for insurance required under Section
6.03 and as otherwise maintained by the Company or any Subsidiary in
the ordinary course of business;
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(viii) Renewals or extensions of any Debt described in clause
(ii) or (iv) above; and
(ix) Other Debt the terms and conditions of which shall have
been approved by the Majority Holders and the Net Cash Proceeds of
which are applied in accordance with Sections 2.04 and 2.07.
(b) Notwithstanding the restrictions on Debt contained in Section
6.09(a), the Company or any of Subsidiary of the Company may guarantee (i) any
Debt of the Company or any Subsidiary Guarantor permitted under Section 6.09(a)
and (ii) any contractual obligations of the Company or any Subsidiary Guarantor
incurred in the ordinary course of business, except to the extent such
contractual obligations constitute Debt that would be prohibited by Section
6.09(a).
(c) Neither the Company nor any Subsidiary of the Company will have
any Guarantee Obligations for which the primary obligor is a Person other than
the Company or a Consolidated Subsidiary.
SECTION 6.10. RESTRICTED PAYMENTS. Neither the Company nor any
Subsidiary of the Company will declare or make any Restricted Payment, except
that the Company or any of its Subsidiaries may purchase shares of capital
stock of the Company, or options or warrants to purchase any such shares, in
connection with ordinary course employee compensation arrangements if (i)
before and after giving effect to any such purchase, no Default shall have
occurred and be continuing and (ii) the aggregate amount of all such purchases
does not exceed $1,000,000 during any period of twelve months.
SECTION 6.11. CASH SETTLEMENT PAYMENTS. The Company will not, and will
not permit any of its Subsidiaries to, directly or indirectly make or agree to
make any cash payments to settle any actual or threatened action, suit or
proceeding constituting an actual or potential class action securities
litigation, other than settlement payments that are payable in cash but will be
fully funded by one or more insurance carriers, without any payment by the
Company or any of its Subsidiaries or in connection with settlements disclosed
in the September 30, 1997 10-Q.
SECTION 6.12. INVESTMENTS. The Company will not, and will not permit
any of its Subsidiaries to, make or acquire any Investment in any Person, other
than:
(a) Investments in existence on the date hereof and renewals thereof;
(b) Investments in Cash Equivalents;
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(c) Investments in the form of loans and advances to Subsidiaries on
the date hereof or to any Person that hereafter is a Subsidiary Guarantor or
becomes a Subsidiary Guarantor in accordance with Section 6.19;
(d) Investments in the form of the acquisition of stock, obligations
or securities received in settlement of debt obligations created in the
ordinary course of business which is owing to the Company or any Subsidiary;
(e) Investments in the form of an endorsement of a negotiable
instrument for collection or deposit in the ordinary course of business;
(f) Investments in the form of advances in the ordinary course of the
Company's or any Subsidiary's business to its officers and employees to cover
travel, entertainment or moving expenses to be incurred by them in connection
with the business of the Company or such Subsidiary;
(g) Investments in the form of usual and customary trade terms
extended by the Company or any Subsidiary to any customer in the ordinary
course of business;
(h) Investments in the form of advances of money in the ordinary
course of business of the Company or any of its Subsidiaries to its customers
which at no time exceed in the aggregate $10,000,000 (net of any accounts owed
by such customers to the Company and any of its Subsidiaries).; and
(i) Guarantee Obligations permitted under Section 6.09.
SECTION 6.13. LIMITATION ON LIENS. The Company will not create, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired by it,
except:
(a) the existing Liens to be terminated pursuant to Section 5.01(b);
(b) the Liens created by the Security Documents (including without
limitation any Liens thereunder securing the Cash Management Services
Obligations, subject to the limitations contained therein);
(c) Liens securing Debt permitted by clause (ii), (iv), (v), (vii) or
(ix) of Section 6.09(a);
(d) Liens for taxes, assessments or other governmental charges or
levies not yet due or which are being actively contested in good faith by
appropriate proceedings, if
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adequate reserves with respect thereto are maintained on the books of the
Company or its Subsidiaries, as the case may be, in accordance with GAAP;
(e) Statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of the Company or its Subsidiaries, as the case may be,
in accordance with GAAP;
(f) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security benefits or obligations or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return-of-money and other similar
obligations;
(g) zoning ordinances, easements, licenses, restrictions on the use
of real property and minor irregularities in title thereto which do not
materially impair the use of such property in the operation of the business of
the Company or any Subsidiary or the value of such property;
(h) inchoate Liens arising under ERISA to secure current service
pension liabilities as they are incurred under the provisions of Plans from
time to time; and
(i) Liens identified on Schedule 6.13.
SECTION 6.14. TRANSACTIONS WITH AFFILIATES. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, pay any funds to or
for the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate, except on terms to the Company or such Subsidiary no less favorable
than terms that could be obtained by the Company or such Subsidiary from a
Person that is not an Affiliate, as determined, in the case of any transaction
with a value of $1,000,000 or more, in good faith by the Board of Directors of
the Company; provided that no determination of the Board of Directors shall be
required with respect to any such transactions entered into in the ordinary
course of business or in connection with the execution or performance of the
Company's obligations under the Engagement Letter.
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SECTION 6.15. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS.
(a) Neither the Company nor any of its Subsidiaries will consolidate
or merge with or into any other Person, except that if before and after giving
effect to any such consolidation or merger no Default shall have occurred and
be continuing: (i) any Subsidiary of the Company may merge or consolidate with
or into the Company if the Company is the surviving entity, (ii) any Subsidiary
of the Company may merge or consolidate with or into any Subsidiary Guarantor
if a Subsidiary Guarantor is the surviving entity or the surviving entity
becomes a Subsidiary Guarantor and (iii) any Subsidiary of the Company that is
not a Domestic Subsidiary may merge or consolidate with or into any other
Subsidiary of the Company that is not a Domestic Subsidiary.
(b) The Company will not, and will not permit any of its Subsidiaries
to, sell, lease, license or otherwise transfer, directly or indirectly, in the
aggregate more than 10% of its or their assets (measured as of the date of this
Agreement) or issue any equity securities of any Subsidiary, other than: (i)
sale-leaseback transactions listed on Schedule 6.15 if the terms and conditions
are reasonably acceptable to Purchaser, (ii) sales of assets where the
consideration therefor consists solely of cash payable at closing (or
assumption of indebtedness or, in the case of sales of assets in the ordinary
course of business, cash payable upon normal trade terms) in an aggregate
amount at least equal to the fair market value of such assets; provided that,
in the case of abandoned assets, the consideration may be payable upon
acceptance and (iii) licenses (as licensor or licensee) of trademarks and
copyrights to customers in the ordinary course of business.
SECTION 6.16. SUBSIDIARIES.
(a) The Company will at all times continue to own, directly or
indirectly, 100% of the capital stock of each Person which is a wholly-owned
Subsidiary of the Company on the date hereof.
(b) Except as set forth on Schedule 6.16, the Company shall have no
Subsidiaries other than Subsidiaries of which the Company owns 100% of the
equity and voting interests.
SECTION 6.17. USE OF PROCEEDS. The proceeds from the issuance and sale
of the Notes by the Company pursuant to this Agreement shall be used solely (a)
to pay all principal, interest and other amounts payable under the Existing
Credit Agreement, (b) to pay fees and expenses relating to this Agreement and
the issuance and sale of the Notes at the Initial Takedown, (c) to pay interest
on Notes then outstanding, and (d) to prepay its obligations under the
Synthetic Lease and (e) for working capital needs and other general corporate
purposes of the Company.
SECTION 6.18. PERMANENT FINANCING. (a) The Company will, and will
cause its Subsidiaries to, take all actions which, in the reasonable judgment
of the Board of
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Directors of the Company, acting after consideration of advice from [DLJSC]
pursuant to the Engagement Letter, are necessary or desirable to obtain
Permanent Financing as soon as practicable through (x) bank financing on terms
usual and customary for similar financings and/or (y) through issuance of
securities at such interest rates and other terms as are prevailing for new
issues of securities of comparable size and credit rating in the capital markets
at the time such Permanent Financing is consummated and obtained in comparable
transactions made on an arm's-length basis between unaffiliated parties;
provided that if in the reasonable judgment of the Board of Directors of the
Company, acting after consideration of advice from [DLJSC] pursuant to the
Engagement Letter, common equity securities of the Company need to be provided
for the consummation of Permanent Financing on the terms set forth above, the
terms of the Permanent Financing shall provide for the issuance of such equity
securities (which may include warrants to purchase such equity securities). The
respective amounts to be financed through bank financing or through the issuance
of securities shall be as determined by the Company (after consultation with
[DLJSC]), but shall be in an amount at least sufficient to repay or redeem the
Notes in full in accordance with their terms. The Company hereby covenants and
agrees that the proceeds from the Permanent Financing shall be used to the
extent required to redeem in full the Notes in accordance with their terms.
(b) The Company covenants that it will, and will cause its Subsidiaries
to, (i) enter into such agreements reasonably requested by [DLJSC] as are
customary in connection with the Permanent Financing, (ii) make such filings
under the Securities Act, the Exchange Act, the Trust Indenture Act of 1939, as
amended, and state securities laws as shall be required to permit consummation
of the Permanent Financing and (iii) take such steps are necessary or desirable
to cause such filings to become effective or as are otherwise required to
consummate the Permanent Financing (including the delivery of all audited and
unaudited financial information that may be required in connection therewith).
(c) The Company covenants that it will, and will cause its
Subsidiaries to, use its best efforts to undertake the activities on the
schedule for the Permanent Financing which has been mutually agreed in
accordance with such schedule.
(d) The Company agrees that if and to the extent the Permanent
Financing is a bank financing not arranged by [DLJSC] or an affiliate, the
Company will not authorize the commencement of syndication of such bank
financing unless the arranger or arrangers thereof have provided an underwritten
commitment for the full amount of such bank financing, subject only to customary
closing conditions which to the reasonable satisfaction of Purchaser shall not
include any "market out" or similar condition.
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SECTION 6.19. ADDITIONAL GUARANTEES AND COLLATERAL; FURTHER ASSURANCES.
(a) Promptly, and in any event no later than 30 days, after any
Domestic Subsidiary shall be formed or any Person shall become a Domestic
Subsidiary, the Company shall cause such Domestic Subsidiary to become a party
to this Agreement by executing a supplement hereto, in form and substance
reasonably satisfactory to Purchaser, to cause such Domestic Subsidiary to
guarantee payment of the Notes in accordance with Article 9 and thereby to
become a Subsidiary Guarantor hereunder. Purchaser shall have the right, from
time to time to require the Company, pursuant to a written request from
Purchaser, to provide Liens and to cause any Subsidiary Guarantor to provide
Liens upon such assets as may be specified in such request to secure their
respective obligations in respect of the Notes and this Agreement. Any such
request may be made by Purchaser in its reasonable discretion. Within 45 days
after any such request, the Company will, and will cause the appropriate
Subsidiaries to, (i) execute and deliver to Purchaser such number of copies as
Purchaser may specify of such supplement and documents creating such Liens and
(ii) do all other things which may be necessary or which Purchaser may
reasonably request in order to confer upon and confirm to the holders of the
Notes the benefits of the guaranty of such Subsidiary and such Liens. Within 60
days after a request for Liens pursuant hereto, the Company will and will cause
the appropriate Subsidiaries to, deliver such legal opinions, certificates,
evidences of corporate action or other documents as Purchaser may reasonably
request, all in form and substance reasonably satisfactory to Purchaser,
relating to the satisfaction of the Company's obligations under this Section.
(b) The Company will, and will cause each of its Subsidiaries to, at
its sole cost and expense, do, execute, acknowledge and deliver all such
further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers and assurances as Purchaser shall from time to time
reasonably request, which may be necessary in the reasonable judgment of
Purchaser from time to time to assure, perfect, convey, assign, transfer and
confirm unto Purchaser the property and rights conveyed or assigned pursuant to
the Security Documents, or which the Company or such Subsidiary may be or may
hereafter become bound to convey or assign to Purchaser or which may facilitate
the performance of the terms of the Security Documents, or the filing,
registering or recording of the Security Documents.
(c) Promptly, and in any event no later than 30 days after any
acquisition of a direct Investment in any Domestic Subsidiary, the Company
shall cause any direct Investment held by it in any Domestic Subsidiary at any
time (whether in the form of equity or Debt) to be subject to a valid and
perfected first priority Lien in favor of Purchaser and the Holders.
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(d) All costs and expenses in connection with the granting,
perfecting and enforcement of any security interests hereunder (including
without limitation legal fees and other costs and expenses in connection with
the preparation, execution, delivery, recordation or filing of documents and
any other acts in connection therewith as Purchaser may request) shall be paid
by the Company promptly when due.
(e) The Company will not, and will not permit any of its Subsidiaries
to, enter into any agreement that would impair its ability to comply, or which
would purport to prohibit it from complying, with the provisions of this
Section 6.19.
SECTION 6.20. BOARD OF DIRECTORS. If an Event of Default shall have
occurred and be continuing:
(a) the Company will notify Purchaser of all meetings and
actions by written consent of the Board of Directors of the Company at
the same time and in the same manner as notice of any meetings of the
Board of Directors is required to be given to its directors who do not
waive such notice (or, if such action requires no notice, the Company
will give Purchaser notice thereof describing the matters upon which
action is to be taken); and
(b) Purchaser shall have the right to send one representative
selected by it to attend each meeting of the Board of Directors of the
Company; provided that the representative's right to attend any such
meeting shall be limited to the extent necessary to protect the
Company's attorney-client privilege unless Purchaser's representative
is willing and able to become a member of the Board of Directors of
the Company, in which case the Company shall cause Purchaser's
representative to be appointed as an additional director to its Board
of Directors;
and provided further that the Company's obligations and the Purchaser's rights
under (a) and (b) above shall terminate at such time as Purchaser is no longer
the holder of at least 50% of the aggregate outstanding principal amount of the
Notes.
SECTION 6.21. LEASES. Not later than March 31, 1998, the Company will
deliver to Purchaser a complete list of each lease to which the Company or any
of its Subsidiaries is a party for which the aggregate remaining amount of
rental payments under such lease exceeds $1,000,000.
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ARTICLE 7
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT DEFINED; ACCELERATION OF MATURITY;
WAIVER OF DEFAULT. In case one or more of the following (each, an "EVENT OF
DEFAULT"), whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body, shall have occurred and be continuing:
(a) default in the payment of all or any part of the principal or
premium, if any, on any of the Notes as and when the same shall become due and
payable either at maturity, upon any redemption, by declaration or otherwise;
or
(b) default in the payment of any installment of interest upon any of
the Notes or any fees payable under this Agreement as and when the same shall
become due and payable, and continuance of such default for a period of five
Business Days; or
(c) failure on the part of the Company duly to observe or perform any
of the covenants contained in (i) Sections 6.07 through 6.17, or Section
6.19(a), 6.19(c) or 6.21 of this Agreement, (ii) Sections 3(b) or 4 of the
Pledge Agreement or (iii) Section 4(a) of the Security Agreement; or
(d) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements contained in the Financing Documents, if
such failure shall continue for a period of 30 days after the date on which
written notice thereof shall have been given to the Company at the option of
any Holder; or
(e) the Company or any of its Subsidiaries shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect in any jurisdiction or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall make
a general assignment for the benefit of creditors, or shall fail generally to
pay its debts as they become due, or shall take any corporate action to
authorize any of the foregoing; or
(f) an involuntary case or other proceeding shall be commenced
against the Company or any of its Subsidiaries seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or
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hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall
be entered against the Company or any of its Subsidiaries under the bankruptcy
laws as now or hereafter in effect in any jurisdiction; or
(g) there shall be a default in respect of any Debt of the Company or
any of its Subsidiaries in an aggregate principal amount in excess of
$5,000,000 whether such Debt now exists or shall hereafter be created
(excluding the Notes and any Debt owed by the Company or any of its
Subsidiaries to the Company or any of its Subsidiaries) if such default results
in acceleration of the maturity of such Debt or if the holder of such Debt is
entitled to accelerate the maturity thereof; or the Company or any of its
Subsidiaries shall fail to pay at maturity any such Debt whether such Debt now
exists or shall hereafter be created; or
(h) final judgments for the payment of money (to the extent not
covered by insurance) which in the aggregate at any one time exceed $1,000,000
shall be rendered against the Company or any of its Subsidiaries by a court of
competent jurisdiction and shall remain undischarged or not stayed for a period
(during which execution shall not be effectively stayed) of 60 days after such
judgment becomes final, other than judgments implementing settlements that are
either disclosed in the 1996 10-K or the September 30, 1997 10-Q or that are
entered into after the date hereof in compliance with Section 6.11; or
(i) any representation or warranty made or deemed made by the Company
or any of its Subsidiaries in any Financing Document or which is contained in
any certificate furnished at any time under or in connection with any Financing
Document shall prove to have been untrue in any material respect when made or
deemed made; or
(j) a Change of Control has occurred; or
(k) the Liens created by any of the Security Documents shall at any
time fail to constitute valid and perfected Liens on substantially all of the
collateral purported to be secured thereby, subject to no prior or equal Lien
other than Permitted Liens, or the Company or any Subsidiary Guarantor shall so
assert in writing; or any of the Financing Documents shall for any reason fail
to constitute the valid and binding agreement of the Company or any Subsidiary
Guarantor party thereto, as the case may be, or the Company or any Subsidiary
Guarantor shall so assert in writing; or
(l) if any such event would reasonably be expected to have a Material
Adverse Effect: (i) any member of the ERISA Group shall fail to pay when due an
amount or amounts which it shall have become liable to pay under Title IV of
ERISA; or (ii) notice
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of intent to terminate a material plan other than a standard termination shall
be filed under Title IV of ERISA by any member of the ERISA Group, any plan
administrator or any combination of the foregoing; or (iii) the PBGC shall
institute proceedings under Title IV of ERISA, which proceedings are not
terminated within 30 days after commencement, to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to
cause a trustee to be appointed to administer any material plan; or (iv) there
shall occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA Group to
incur a current payment obligation; or
then, and in each and every such case (other than under clauses (e) and (f)
with respect to the Company), unless the principal of all the Notes shall have
already become due and payable, the Majority Holders, by notice in writing to
the Company, may declare the entire principal amount of the Notes together with
accrued interest thereon to be, and upon the Company's receipt of such notice
the entire principal amount of the Notes together with accrued interest thereon
shall become, immediately due and payable. If an Event of Default specified in
clauses (e) or (f) with respect to the Company occurs, the principal of and
accrued interest on the Notes will be immediately due and payable without any
declaration or other act on the part of the Holders. An acceleration notice may
be annulled and past Defaults (other than an Event of Default set forth in
Section 7.01(a) or (b) that has not been cured) may be waived by the Majority
Holders.
ARTICLE 8
LIMITATION ON TRANSFERS
SECTION 8.01. RESTRICTIONS ON TRANSFER. From and after the Closing
Date and their respective dates of issuance, as the case may be, none of the
Notes shall be transferable except upon the conditions specified in Sections
8.02 and 8.03, which conditions are intended to ensure compliance with the
provisions of the Securities Act in respect of the Transfer of any of such
Notes or any interest therein. Purchaser will cause any proposed transferee of
any Notes (or any interest therein) held by it to agree to take and hold such
Notes (or any interest therein) subject to the provisions and upon the
conditions specified in this Section 8.01 and in Sections 8.02 and 8.03.
SECTION 8.02. RESTRICTIVE LEGENDS. (a) Each Note issued to Purchaser
or to a subsequent transferee shall (unless otherwise permitted by the
provisions of Section 8.02(b) or Section 8.03) include a legend in
substantially the following form:
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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED
OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE AND THEN ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON
TRANSFER SET FORTH IN THE NOTE PURCHASE AGREEMENT DATED AS OF DECEMBER
23, 1997, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER OF THIS
SECURITY AT ITS PRINCIPAL EXECUTIVE OFFICE.
(b) Any Holders of Notes registered pursuant to the Securities Act and
qualified under applicable state securities laws may exchange such Notes on
transfer for new securities that shall not bear the legend set forth in
paragraph (a) of this Section 8.02.
SECTION 8.03. NOTICE OF PROPOSED TRANSFERS. (a) Five Business Days
prior to any proposed Transfer (other than Transfers of Notes (i) registered
under the Securities Act, (ii) to an Affiliate of [DLJSC] or a general
partnership in which [DLJSC] or an Affiliate of [DLJSC] is one of the general
partners or (iii) to be made in reliance on Rule 144A under the Securities Act)
of any Notes, the holder thereof shall give written notice to the Company of
such holder's intention to effect such Transfer, setting forth the manner and
circumstances of the proposed Transfer, and shall be accompanied by (i) an
opinion of counsel reasonably satisfactory to the Company addressed to the
Company to the effect that the proposed Transfer of such Notes may be effected
without registration under the Securities Act, (ii) such representation letters
in form and substance reasonably satisfactory to the Company to ensure
compliance with the provisions of the Securities Act and (iii) such letters in
form and substance reasonably satisfactory to the Company from each such
transferee stating such transferee's agreement to be bound by the terms of this
Agreement. Such proposed Transfer may be effected only if the Company shall have
received such notice of transfer, opinion of counsel, representation letters and
other letters referred to in the immediately preceding sentence, whereupon the
holder of such Notes shall be entitled to Transfer such Notes in accordance with
the terms of the notice delivered by the holder to the Company. Each Note
transferred as above provided shall bear the legend set forth in Section 8.02(a)
except that such Note shall not bear such legend if the opinion of counsel
referred to above is to the further effect that neither such legend nor the
restrictions on Transfer in Sections 8.01 through 8.03 are required in order to
ensure compliance with the provisions of the Securities Act.
(b) Five Business Days prior to any proposed Transfer of any Notes to
be made in reliance on Rule 144A under the Securities Act ("RULE 144A"), the
holder thereof shall give written notice to the Company of such holder's
intention to effect such Transfer, setting forth the manner and circumstances
of the proposed Transfer and certifying that
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such Transfer will be made (i) in full compliance with Rule 144A and (ii) to a
transferee that (A) such holder reasonably believes to be a "qualified
institutional buyer" within the meaning of Rule 144A and (B) is aware that such
Transfer will be made in reliance on Rule 144A. Such proposed Transfer may be
effected only if the Company shall have received such notice of transfer,
whereupon the holder of such Notes shall be entitled to Transfer such Notes in
accordance with the terms of the notice delivered by the holder to the Company.
Each Note transferred as above provided shall bear the legend set forth in
Section 8.02(a).
ARTICLE 9
GUARANTY
SECTION 9.01. THE GUARANTY. Each Subsidiary Guarantor hereby
unconditionally guarantees the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal of and interest on
each Note issued by the Company pursuant to this Agreement, and the full and
punctual payment of all other amounts payable by the Company under this
Agreement or any other Financing Document. Upon failure by the Company to pay
punctually any such amount, each Subsidiary Guarantor shall forthwith on demand
pay the amount not so paid at the place and in the manner specified in this
Agreement or the applicable Financing Document.
SECTION 9.02. GUARANTY UNCONDITIONAL. The obligations of each
Subsidiary Guarantor hereunder shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Company or any other Subsidiary
Guarantor under this Agreement or any other Financing Document, by operation of
law or otherwise;
(b) any modification or amendment of or supplement to this Agreement
or any other Financing Document (except to the extent that by its terms it
expressly provides for a modification or amendment of or supplement to this
Article 9);
(c) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Company or any other
Subsidiary Guarantor under this Agreement or any other Financing Document;
(d) any change in the corporate existence, structure or ownership of
the Company or any Subsidiary Guarantor, or any insolvency, bankruptcy,
reorganization or
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other similar proceeding affecting the Company or any Subsidiary Guarantor or
their respective assets or any resulting release or discharge of any obligation
of the Company or any other Subsidiary Guarantor contained in this Agreement or
any other Financing Document;
(e) the existence of any claim, set-off or other rights which the
Subsidiary Guarantor may have at any time against the Company, any other
Subsidiary Guarantor, Purchaser or any other Person, whether in connection with
this Agreement or any unrelated transactions, provided that nothing herein
shall prevent the assertion of any such claim by separate suit or compulsory
counterclaim;
(f) any invalidity or unenforceability relating to or against the
Company or any other Subsidiary Guarantor for any reason of this Agreement or
any Financing Document, or any provision of applicable law or regulation
purporting to prohibit the payment by the Company of the principal of or
interest on any Note or any other amount payable by the Company or any other
Subsidiary Guarantor under this Agreement or any other Financing Document; or
(g) any other act or omission to act or delay of any kind by the
Company, any other Subsidiary Guarantor, Purchaser or any other Person or any
other circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of or defense to the
Subsidiary Guarantor's obligations hereunder.
SECTION 9.03. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN
CERTAIN CIRCUMSTANCES. Unless specifically released in accordance with Section
10.02(b), each Subsidiary Guarantor's obligations hereunder shall remain in
full force and effect until the Commitment shall have terminated and the
principal of and interest on the Notes and all other amounts then due and
payable by the Company under this Agreement and the other Financing Documents
shall have been paid in full. If at any time any payment of the principal of or
interest on any Note or any other amount payable by the Company under this
Agreement or any other Financing Document is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, each Subsidiary Guarantor's obligations hereunder with
respect to such payment shall be reinstated as though such payment had been due
but not made at such time. In the event that any Subsidiary Guarantor shall
cease to be a Subsidiary of the Company, if permitted by the terms of this
Agreement and if at such time and after such event no Default shall have
occurred and be continuing, the obligations of such Subsidiary Guarantor shall
be deemed terminated at such time.
SECTION 9.04. WAIVER BY THE SUBSIDIARY GUARANTORS. Each Subsidiary
Guarantor irrevocably waives acceptance hereof, presentment, demand, protest
and any
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notice not provided for herein, as well as any requirement that at any time any
action be taken by any Person against the Company, any Subsidiary Guarantor or
any other Person.
SECTION 9.05. SUBROGATION. Upon making full payment with respect to
any obligation of the Company hereunder, the Subsidiary Guarantors shall be
subrogated to the rights of the payee against the Company with respect to such
obligation; provided that such Subsidiary Guarantor shall not enforce either
(a) any right to receive payment by way of subrogation against the Company or
against any direct or indirect security for such obligation, or any other right
to be reimbursed, indemnified or exonerated by or for the account of the
Company in respect thereof or (b) the right to receive payment, in the nature
of contribution or for any other reason, from any other Subsidiary Guarantors
with respect to such payment, in each case so long as (i) Purchaser has any
Commitment hereunder or (ii) any amount payable under this Agreement or any
other Financing Document remains unpaid.
SECTION 9.06. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable under this Agreement or any other Financing
Document is stayed upon the insolvency, bankruptcy or reorganization of the
Company or any other Person, all such amounts otherwise subject to acceleration
under the terms of this Agreement shall nonetheless be payable by the
Subsidiary Guarantors forthwith on demand by Purchaser at the request of the
Majority Holders.
SECTION 9.07. LIMIT OF LIABILITY. The obligations of each Subsidiary
Guarantor hereunder shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, demands and other communications
to any party hereunder shall be in writing (including telecopier or similar
writing) and shall be given to such party at its address set forth on the
signature pages hereof, or such other address as such party may hereinafter
specify for the purpose. Each such notice, demand or other communication shall
be effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified on the signature page hereof, or (ii) if given by
overnight courier, addressed as aforesaid or by any other means, when delivered
at the address specified in this Section. A copy of all notices sent to the
Company or any Subsidiary Guarantor shall be contemporaneously sent by
overnight courier and facsimile
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transmission to: ▇▇▇▇ ▇▇. ▇▇▇▇▇▇, Jr., Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
(Illinois), ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
telephone: (▇▇▇) ▇▇▇-▇▇▇▇; facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
SECTION 10.02. NO WAIVERS; AMENDMENTS. (a) No failure or delay on the
part of any party in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to any party at law or in equity or otherwise.
(b) Any provision of this Agreement may be amended, supplemented or
waived if, but only if, such amendment, supplement or waiver is in writing and
is signed by the Company and the Majority Holders; provided, that without the
consent of each Holder of any Note affected thereby, an amendment, supplement
or waiver may not (a) reduce the aggregate principal amount of Notes whose
Holders must consent to an amendment, supplement or waiver, (b) reduce the rate
or extend the time for payment of interest on any Note of such Holder, (c)
reduce the principal amount of or extend the stated maturity of any Note of
such Holder or alter the redemption provisions with respect thereto, (d) make
any Note of such Holder payable in money or property other than as stated in
the Notes or (e) release all or substantially all of the collateral in pledge
under the Security Documents. In determining whether the Holders of the
requisite principal amount of Notes have concurred in any direction, consent,
or waiver as provided in this Agreement or in the Notes, Notes which are owned
by the Company or any other obligor on or guarantor of the Notes, or by any
Person (other than [DLJSC] or any of its Subsidiaries) controlling, controlled
by, or under common control with any of the foregoing, shall be disregarded and
deemed not to be outstanding for the purpose of any such determination; and
provided further that no such amendment, supplement or waiver which affects the
rights of Purchaser and its Affiliates otherwise than solely in their
capacities as Holders of Notes shall be effective with respect to them without
their prior written consent.
SECTION 10.03. INDEMNIFICATION. The Company (the "INDEMNIFYING PARTY")
agrees to indemnify and hold harmless Purchaser, its Affiliates, and each
Person, if any, who controls Purchaser, or any of its affiliates, within the
meaning of the Securities Act or the Exchange Act (a "CONTROLLING PERSON"), and
the respective partners, agents, employees, officers and directors of
Purchaser, its Affiliates and any such Controlling Person (each an "INDEMNIFIED
PARTY" and collectively, the "INDEMNIFIED PARTIES"), from and against any and
all losses, claims, damages, liabilities and expenses (including, without
limitation and as incurred, reasonable costs of investigating, preparing or
defending any such claim or action, whether or not such Indemnified Party is a
party thereto, arising out of, or in connection with any activities
contemplated by this Agreement or any other services rendered in connection
herewith, including, but not limited to, losses, claims,
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damages, liabilities or expenses arising out of or based upon any untrue
statement or any alleged untrue statement of a material fact or any omission or
any alleged omission to state a material fact in any of the disclosure or
offering or confidential information documents (the "DISCLOSURE DOCUMENTS")
pertaining to any of the transactions or proposed transactions contemplated
herein, including any eventual refinancing or resale of the Notes, provided
that the Indemnifying Party will not be responsible for any claims,
liabilities, losses, damages or expenses that are determined by final judgment
of a court of competent jurisdiction to result from such Indemnified Party's
gross negligence, willful misconduct or bad faith. The Indemnifying Party also
agrees that Purchaser shall have no liability (except for breach of provisions
of this Agreement) for claims, liabilities, damages, losses or expenses,
including legal fees, incurred by the Indemnifying Party in connection with
this Agreement except to the extent they are determined by final judgment of a
court of competent jurisdiction to result from Purchaser's gross negligence,
willful misconduct or bad faith.
If any action shall be brought against an Indemnified Party with
respect to which indemnity may be sought against the Indemnifying Party under
this Agreement, such Indemnified Party shall promptly notify the Indemnifying
Party in writing and the Indemnifying Party shall, if requested by such
Indemnified Party or if the Indemnifying Party desires to do so, assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Party and payment of all reasonable fees and expenses. The
failure to so notify the Indemnifying Party shall not affect any obligations
the Indemnifying Party may have to such Indemnified Party under this Agreement
or otherwise unless the Indemnifying Party is materially adversely affected by
such failure. Such Indemnified Party shall have the right to employ separate
counsel in such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party,
unless: (i) the Indemnifying Party has failed to assume the defense and employ
counsel reasonably satisfactory to Purchaser or (ii) the named parties to any
such action (including any impleaded parties) include such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the Indemnifying Party,
in which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of such action or proceeding on behalf of such Indemnified Party,
provided, however, that the Indemnifying Party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be responsible hereunder for the
reasonable fees and expenses of more than one such firm of separate counsel, in
addition to any local counsel, which counsel shall be designated by Purchaser.
The Indemnifying Party shall not be liable for any settlement of any such
action effected without the written consent of the Indemnifying Party (which
shall not be
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unreasonably withheld) and the Indemnifying Party agrees to indemnify and hold
harmless each Indemnified Party from and against any loss or liability by
reasons of settlement of any action effected with the consent of the
Indemnifying Party. In addition, the Indemnifying Party will not, without the
prior written consent of Purchaser, settle or compromise or consent to the
entry of any judgment in or otherwise seek to terminate any pending or
threatened action, claim, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Party is a party thereto) unless such settlement, compromise,
consent or termination includes an express unconditional release of Purchaser
and the other Indemnified Parties, reasonably satisfactory in form and
substance to Purchaser, from all liability arising out of such action, claim,
suit or proceeding.
If for any reason the foregoing indemnity is unavailable (otherwise
than pursuant to the express terms of such indemnity) to an Indemnified Party
or insufficient to hold an Indemnified Party harmless, then in lieu of
indemnifying the Indemnified Party, the Indemnifying Party shall contribute to
the amount paid or payable by such Indemnified Party as a result of such
claims, liabilities, losses, damages, or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Party
on the one hand and by Purchaser on the other from the transactions
contemplated by this Agreement or (ii) if the allocation provided by clause (i)
is not permitted under applicable law, in such proportion as is appropriate to
reflect not only the relative benefits received by the Indemnifying Party on
the one hand and Purchaser on the other, but also the relative fault of the
Indemnifying Party and Purchaser as well as any other relevant equitable
considerations. Notwithstanding the provisions of this Section 10.03, the
aggregate contribution of all Indemnified Parties shall not exceed the amount
of fees actually received by Purchaser pursuant to this Agreement. It is hereby
further agreed that the relative benefits to the Indemnifying Party on the one
hand and Purchaser on the other with respect to the transactions contemplated
hereby shall be determined by reference to, among other things, whether any
untrue or alleged untrue statement of material fact or the omission or alleged
omission to state a material fact related to information supplied by the
Indemnifying Party or by Purchaser and the party's relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
The indemnification, contribution and expense reimbursement
obligations set forth in this Section 10.03: (i) shall be in addition to any
liability the Indemnifying Party may have to any Indemnified Party at common
law or otherwise, (ii) shall survive the termination of this Agreement and the
payment in full of the Notes and (iii) shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of Purchaser or
any other Indemnified Party.
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SECTION 10.04. EXPENSES. The Company agrees to pay all reasonable
out-of-pocket costs, expenses and other payments in connection with the
purchase by Purchaser from the Company of the Notes as contemplated by this
Agreement including without limitation (i) fees and disbursements of special
counsel and any local counsel for Purchaser incurred in connection with the
preparation of this Agreement, not to exceed $350,000 in the aggregate, (ii)
all reasonable out-of-pocket expenses of Purchaser, including reasonable fees
and disbursements of counsel, in connection with any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (iii) if an Event of Default occurs, all reasonable out-of-pocket expenses
incurred by Purchaser and each holder of Notes, including reasonable fees and
disbursements of a single counsel (which counsel shall be selected by Purchaser
if Purchaser is a holder of Notes when such Event of Default occurs), in
connection with such Event of Default and collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom. The obligations set
forth in this Section 10.04 shall survive the termination of this Agreement and
the payment in full of the Notes.
SECTION 10.05. PAYMENT. The Company agrees that, so long as Purchaser
shall own any Notes purchased by it from the Company hereunder, the Company
will make payments to Purchaser of all amounts due thereon by wire transfer by
1:00 P.M. (New York City time) on the date of payment to such account as is
specified beneath Purchaser's name on the signature page hereof or to such
other account or in such other similar manner as Purchaser may designate to the
Company in writing.
SECTION 10.06. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the Company and Purchaser and their
respective successors and assigns; provided that the Company may not assign or
otherwise transfer its rights or obligations under this Agreement to any other
Person without the prior written consent of the Majority Holders. All
provisions hereunder purporting to give rights to [DLJMB], [DLJSC] and its
Affiliates or to Holders are for the express benefit of such Persons.
SECTION 10.07. BROKERS. The Company represents and warrants that,
except for [DLJSC], it has not employed any broker, finder, financial advisor or
investment banker who might be entitled to any brokerage, finder's or other fee
or commission in connection with this Agreement or the sale of the Notes.
SECTION 10.08. NEW YORK LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
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COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 10.09. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
SECTION 10.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original with the same effect
as if the signatures thereto and hereto were upon the same instrument.
SECTION 10.11. CONFIDENTIALITY. Except as required by law, the
Agreement and all information given to Purchaser by the Company, unless
publicly available or otherwise available to Purchaser without restriction or
breach of any confidentiality agreement, will be held by Purchaser in
confidence and will not be disclosed to anyone other than Purchaser's agents
and advisors without the Company's prior approval or used for any purpose other
than those referred to in this Agreement. The obligations set forth in this
Section 10.11 shall survive for a period of two years from the date of the
termination of this Agreement and the payment in full of the Notes.
SECTION 10.12. TERMINATION. The Company's and each Subsidiary
Guarantor's obligations hereunder and under the other Financing Documents
(other than the obligations set forth in Sections 10.03 and 10.04 hereof,
Section 12 of the Security Agreement and Section 11 of the Pledge Agreement and
similar provisions of any other Security Documents) shall terminate upon the
termination of the Commitment and payment in full of the principal of and
interest on the Notes and all other amounts payable by the Company under this
Agreement and the other Financing Documents.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers, as of the date first
above written.
MEDAPHIS CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SUBSIDIARY GUARANTORS
ASSETCARE, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
AUTOMATION ATWORK
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
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BSG ALLIANCE/IT, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
BSG CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
BSG GOVERNMENT SOLUTIONS, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇
Title: Secretary
CONSORT TECHNOLOGIES, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇▇▇'▇ FINANCIAL SERVICES, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
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HEALTH DATA SCIENCES CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
MEDAPHIS HEALTHCARE INFORMATION
TECHNOLOGY COMPANY (F/K/A MEDAPHIS
SYSTEMS CORPORATION)
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
MEDAPHIS PHYSICIAN SERVICES
CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
MEDAPHIS SERVICES CORPORATION (F/K/A
MEDAPHIS HOSPITAL SERVICES CORPORATION)
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
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MEDICAL MANAGEMENT SCIENCES, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
NATIONAL HEALTHCARE
TECHNOLOGIES, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
ADDRESS FOR ALL SUBSIDIARY GUARANTORS:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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PURCHASER
[MED FUNDING, INC.]
By:
---------------------------------------
Name:
Title:
ADDRESS:
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT A
FORM OF NOTE
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD, UNLESS
IT HAS BEEN REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN ONLY IN COMPLIANCE
WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 23, 1997, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER
OF THIS SECURITY AT ITS PRINCIPAL EXECUTIVE OFFICE.
No. $
MEDAPHIS CORPORATION
SENIOR SECURED INCREASING RATE NOTE
MEDAPHIS CORPORATION, a Delaware corporation (together with its
successors, the "COMPANY"), for value received hereby promises to pay to [MED
FUNDING, INC.] and registered assigns the principal sum of
___________________________________________ by wire transfer of immediately
available funds to the Holder's account at such bank in the United States as
may be specified in writing by the Holder to the Company, on April 1, 1999 in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest on the unpaid principal amount hereof on the dates and at the rate or
rates provided for in the Note Purchase Agreement. Reference is made to the
Note Purchase Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof and the basis upon which this Note is
secured.
This Note is one of a duly authorized issue of Senior Secured
Increasing Rate Notes of the Company (the "NOTES") referred to in the Note
Purchase Agreement dated as of December 23, 1997 among the Company, the
Subsidiary Guarantors party thereto and [Med Funding,]
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Inc. (as the same may be amended from time to time in accordance with its
terms, the "NOTE PURCHASE AGREEMENT"). The Notes are transferable and
assignable to one or more purchasers (in minimum denominations of $5,000,000 or
larger multiples of $1,000,000), in accordance with the limitations set forth
in the Note Purchase Agreement. The Company agrees to issue from time to time
replacement Notes in the form hereof to facilitate such transfers and
assignments.
Pursuant to the provisions of the Note Purchase Agreement, payment of
principal and interest on this Note has been unconditionally guaranteed by the
Subsidiary Guarantors thereunder.
The Company shall keep at its principal office a register (the
"REGISTER") in which shall be entered the names and addresses of the registered
holders of the Notes and particulars of the respective Notes held by them and
of all transfers of such Notes. References to the "Holder" or "Holders" shall
mean the Person listed in the Register as the payee of any Note.
The ownership of the Notes shall be proven by the Register.
This Note shall be deemed to be a contract under the laws of the State
of New York, and for all purposes shall be construed in accordance with the
laws of said State. The parties hereto, including all guarantors or endorsers,
hereby waive presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance and
enforcement of this Note, except as specifically provided herein, and assent to
extensions of the time of payment, or forbearance or other indulgence without
notice.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
----------------
MEDAPHIS CORPORATION
By:
-----------------------------------
Name:
Title:
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