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EXHIBIT 10.21
FIFTH AMENDED AND RESTATED
CREDIT AGREEMENT
BY AND AMONG
AMERICAN HOMEPATIENT, INC.,
THE LENDERS NAMED HEREIN
AND
BANKERS TRUST COMPANY,
AS THE AGENT
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DATED AS OF MAY 25, 2001
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TABLE OF CONTENTS*
Page
Section 1. Definitions and Principles of Construction.............................1
1.01 Defined Terms................................................................1
1.02 Principles of Construction..................................................20
Section 2. Amount and Terms of Credit............................................20
2.01 The Loans...................................................................20
2.02 Prepayment of Loans Outstanding on Effective Date; Notes....................20
2.03 Interest on the Loans.......................................................21
2.04 Increased Costs; Taxes......................................................24
2.05 Use of Proceeds.............................................................27
2.06 Special Provisions Governing Eurodollar Rate Loans..........................27
2.07 Letters of Credit...........................................................32
2.08 Loan Accounts...............................................................38
Section 3. Fees..................................................................38
3.01 Fees........................................................................38
Section 4. Prepayments and Payments..............................................39
4.01 Scheduled Payments of Loans.................................................39
4.02 Prepayments.................................................................39
4.03 Application of Prepayments..................................................41
4.04 General Provisions Regarding Payments.......................................42
Section 5. Conditions Precedent..................................................43
5.01 Conditions to Effectiveness.................................................43
5.02 Conditions to all Loans and Letters of Credit...............................47
Section 6. Representations, Warranties and Agreements............................48
6.01 Corporate Status............................................................48
6.02 Corporate Power and Authority...............................................48
6.03 No Violation................................................................48
6.04 Governmental Approvals......................................................49
6.05 Financial Statements; Financial Condition; Undisclosed Liabilities; etc.....49
6.06 Litigation..................................................................49
6.07 True and Complete Disclosure................................................50
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*This Table of Contents is provided for convenience only and is not a part of
the attached Credit Agreement.
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6.08 Use of Proceeds; Margin Regulations.........................................50
6.09 Tax Returns and Payments....................................................50
6.10 Compliance with ERISA.......................................................50
6.11 Capitalization..............................................................51
6.12 Subsidiaries................................................................51
6.13 Compliance with Statutes, etc...............................................51
6.14 Investment Company Act......................................................51
6.15 Public Utility Holding Company Act..........................................51
6.16 Labor Relations.............................................................51
6.17 Patents, Licenses, Franchises and Formulas..................................52
6.18 No Material Adverse Change..................................................52
6.19 Fraud and Abuse.............................................................52
6.20 Title to Properties; Liens..................................................54
6.21 Joint Ventures..............................................................54
6.22 Accounts Receivable Collateral..............................................54
6.23 Reimbursement Programs......................................................54
6.24 Survival of Rights Created Under Existing Credit Agreement..................55
Section 7. Affirmative Covenants.................................................55
7.01 Information Covenants.......................................................55
7.02 Books, Records and Inspections..............................................59
7.03 Maintenance of Property, Insurance..........................................59
7.04 Corporate Franchises........................................................60
7.05 Compliance with Statutes, etc...............................................60
7.06 ERISA.......................................................................60
7.07 End of Fiscal Years; Fiscal Quarters........................................61
7.08 Performance of Obligations..................................................61
7.09 Payment of Taxes and Claims.................................................61
7.10 Licensing...................................................................62
7.11 Further Assurances; New Subsidiaries........................................62
7.12 Accounts Receivable.........................................................62
7.13 Retention of Consultant.....................................................63
7.14 Refinancing.................................................................63
7.15 Real Estate.................................................................63
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7.16 Deposit Account Agreements..................................................63
7.17 Security Agreements.........................................................63
Section 8. Negative Covenants....................................................65
8.01 Liens.......................................................................66
8.02 Consolidation, Merger, Sale of Assets, etc..................................67
8.03 Dividends...................................................................68
8.04 Indebtedness................................................................69
8.05 Advances, Investments and Loans.............................................70
8.06 Transactions with Affiliates................................................71
8.07 Capital Expenditures........................................................72
8.08 Leverage Ratio..............................................................72
8.09 Minimum Interest Coverage Ratio.............................................72
8.10 Limitation on Voluntary Payments and Modifications of Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements; etc............................................73
8.11 Restrictions on Subsidiary Dividends and Other Distributions................73
8.12 Business....................................................................74
8.13 Transfer of Copyrights, Patents and Trademarks..............................74
8.14 Joint Ventures..............................................................74
8.15 Deposit Accounts............................................................74
8.16 Minimum Consolidated EBITDA.................................................75
8.17 Accounts Receivable Collections.............................................76
Section 9. Events of Default.....................................................76
9.01 Payments....................................................................76
9.02 Representations, etc........................................................76
9.03 Covenants...................................................................76
9.04 Default Under Other Agreements..............................................77
9.05 Bankruptcy, etc.............................................................77
9.06 ERISA.......................................................................77
9.07 Credit Documents............................................................78
9.08 Changes of Control..........................................................78
9.09 Judgments...................................................................78
9.10 Governmental Policies.......................................................78
9.11 Loss of Licenses............................................................79
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9.12 O.I.G. Investigation.......................................................79
Section 10. The Agent............................................................80
10.01 Appointment................................................................80
10.02 Nature of Duties...........................................................81
10.03 Lack of Reliance on the Agent..............................................81
10.04 Certain Rights of the Agent................................................81
10.05 Reliance...................................................................81
10.06 Indemnification............................................................82
10.07 The Agent in its Individual Capacity.......................................82
10.08 Holders....................................................................82
10.09 Resignation by the Agent...................................................82
10.10 Release of Collateral......................................................83
Section 11. Miscellaneous........................................................83
11.01 Payment of Expenses, etc...................................................83
11.02 Right of Setoff............................................................84
11.03 Notices....................................................................84
11.04 Benefit of Agreement.......................................................85
11.05 Assignments and Participations in Loans and Letters of Credit..............85
11.06 No Waiver; Remedies Cumulative.............................................87
11.07 Payments Pro Rata..........................................................88
11.08 Calculations; Computations.................................................88
11.09 Governing Law; Waiver of Jury Trial; Service of Process....................88
11.10 Confidentiality............................................................89
11.11 Counterparts...............................................................89
11.12 Headings Descriptive.......................................................89
11.13 Amendment or Waiver........................................................89
11.14 Survival...................................................................91
11.15 Domicile of Loans..........................................................91
11.16 Integration................................................................91
11.17 Secured Obligations........................................................91
11.18 Release....................................................................92
11.19 Settlement.................................................................92
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SCHEDULES
SCHEDULE 1.01(a) Pro Rata Shares
SCHEDULE 6.01 Good Standing of Guarantor Subsidiaries
SCHEDULE 6.06 Litigation
SCHEDULE 6.11 Rights With Respect to Capital Stock
SCHEDULE 6.12 Subsidiaries
SCHEDULE 6.21 Joint Ventures
SCHEDULE 7.03 Insurance
SCHEDULE 8.01 Permitted Liens
SCHEDULE 8.04(ii) Existing Indebtedness
EXHIBITS TO CREDIT AGREEMENT
EXHIBIT A Form of Notice of Conversion/Continuation
EXHIBIT B Form of Notice of Issuance or Extension of Letter of Credit
EXHIBIT C Form of Term Note
EXHIBIT D Form of Concentration Bank Agreement
EXHIBIT E Form of Assignment and Acceptance Agreement
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Opinion of Counsel to Borrower
EXHIBIT H Consent to Amendment and Restatement
EXHIBIT I Form of Warrant Agreement
EXHIBIT J Form of Amended and Restated Borrower Security Agreement
EXHIBIT K Form of Amended and Restated Subsidiary Security Agreement
EXHIBIT L Form of Collection Bank Agreement
EXHIBITS TO EXISTING CREDIT AGREEMENT
EXHIBIT G Subsidiary Guaranty
EXHIBIT H Borrower Pledge Agreement
EXHIBIT I Subsidiary Pledge Agreement
EXHIBIT J Borrower Security Agreement
EXHIBIT K Subsidiary Security Agreement
EXHIBIT L-1 Trademark Security Agreement
EXHIBIT L-2 Subsidiary Trademark Security Agreement
EXHIBIT M Subordination Agreement
EXHIBIT N Form of Collection Bank Agreement
EXHIBIT T Borrower Partnership Security Agreement
EXHIBIT U Subsidiary Partnership Security Agreement
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EXHIBIT 10.21
AMERICAN HOMEPATIENT, INC.
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
This FIFTH AMENDED AND RESTATED CREDIT AGREEMENT is dated as
of May 25, 2001 and entered into by and among AMERICAN HOMEPATIENT, INC. (the
"BORROWER"), a corporation organized and existing under the laws of Delaware,
BANKERS TRUST COMPANY and THE OTHER FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each a "LENDER" and, collectively, the "LENDERS"),
BANKERS TRUST COMPANY, as the issuer of the letters of credit pursuant to
Section 2.07 (in such capacity, the "ISSUING BANK") and BANKERS TRUST COMPANY,
acting in the manner and to the extent described in Section 10 (in such
capacity, the "AGENT"). Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Section 1.01 of this Agreement.
R E C I T A L S
WHEREAS, pursuant to that certain Fourth Amended and Restated
Credit Agreement dated as of December 19, 1997, as amended, supplemented or
otherwise modified to the date hereof (said Fourth Amended and Restated Credit
Agreement, as so amended, supplemented or otherwise modified, is referred to
hereinafter as the "EXISTING CREDIT AGREEMENT"), by and among the Borrower, the
Lenders and the Agent, the Lenders have made certain credit facilities available
to the Borrower in accordance with the terms thereof; and
WHEREAS, the parties hereto desire to amend and restate the
Existing Credit Agreement in its entirety for the purposes of, among other
things, (i) amending certain provisions thereof relating to the interest rates,
maturity and loan amortization provisions applicable to the term loan facility,
(ii) eliminating the revolving loan facility, and (ii) making certain other
amendments to and modifications of the provisions of the Existing Credit
Agreement as provided herein:
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the Borrower, the Lenders
and the Agent agree to amend and restate the Existing Credit Agreement in its
entirety as follows:
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.
1.01 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"ACCOUNT DEBTOR" means any Person obligated on an Account
Receivable of the Borrower or any of its Subsidiaries, including without
limitation, any Insurer and any Medicaid/Medicare Account Debtor.
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"ACCOUNTS RECEIVABLE" means all accounts receivable pledged as
Collateral.
"ACQUISITION" means any acquisition of the capital stock of,
or all (or substantially all) of the assets of, any Person or any division of
such Person permitted pursuant to Section 8.02(v).
"ADJUSTED CONSOLIDATED EBITDA" means, as to any Person,
Consolidated EBITDA, as adjusted by adding thereto, if applicable, (i) $190,000
per month, commencing upon completion of Sale 1 (as described in the Sales
Letter) and ending ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) $53,000 per month, commencing upon
completion of Sale 2 (as described in the Sales Letter) and ending ▇▇▇▇▇ ▇▇,
▇▇▇▇, (▇▇▇) $121,000 per month, commencing upon completion of Sale 3 (as
described in the Sales Letter) and ending on March 31, 2002, and (iii) $100,000,
commencing upon completion of Sale 4 (as described in the Sales Letter) and
ending on March 31, 2002; provided, however, that the monthly adjustment for the
month of any Sale shall be prorated based upon the actual number of days in the
month and the number of days since completion of such Sale.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date, the rate (rounded upward to the next highest one hundredth
of one percent) obtained by dividing (i) the Eurodollar Rate for that date by
(ii) a percentage equal to 100% minus the stated maximum rate of all reserves
required to be maintained against "EUROCURRENCY LIABILITIES" as specified in
Regulation D of the Board of Governors of the Federal Reserve System (or against
any other category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Loans is determined or any category of
extensions of credit or other assets that includes loans by a non-United States
office of a bank to United States residents).
"ADJUSTED NET REVENUES" means, for any period, reported net
revenues of the Borrower and its Subsidiaries for such period, in each case as
adjusted for (i) revenues that are associated with locations in which cash
collections are not statistically tracked and (ii) revenues associated with
Joint Ventures.
"AFFECTED LENDER" means any Lender affected by any of the
events described in Section 2.06(b) or (c).
"AFFILIATE" means, with respect to any Person, any other
Person (other than an individual) directly or indirectly controlling, controlled
by, or under direct or indirect common control with, such Person; provided,
however, that for purposes of Section 8.06, an Affiliate of the Borrower shall
include any Person (including an individual) that directly or indirectly owns
more than 10% of the Borrower and any officer or director of the Borrower or any
such Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.
"AGENT" has the meaning assigned to that term in the first
paragraph of this Agreement and shall include any successor to the Agent
appointed pursuant to Section 10.09.
"AGREEMENT" means this Fifth Amended and Restated Credit
Agreement, as it may be amended, amended and restated, supplemented or otherwise
modified from time to time.
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"AHPF" means AHP Finance, Inc., a Tennessee corporation.
"AHPT" means American HomePatient, Inc., a Tennessee
corporation.
"APPLICABLE BASE MARGIN" means a percentage per annum equal to
2.75%.
"APPLICABLE EURODOLLAR MARGIN" means a percentage per annum
equal to 3.50%.
"ASSET SALE" means any sale, lease or other transfer
(including any such transaction effected by way of merger or consolidation) of
any asset by Borrower or any of its Subsidiaries, including, without limitation,
any sale-leaseback transaction, whether or not involving a capital lease, but
excluding (i) any sale of inventory, Cash or Cash Equivalents and obsolete,
unused or unnecessary equipment, in each case in the Ordinary Course of
Business, (ii) sales of equipment other than in the Ordinary Course of Business
with an aggregate Book Value of not more than $50,000 in any 12 month period,
and (iii) any transfer of assets by any Guarantor Subsidiary to another
Guarantor Subsidiary or to Borrower.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance
Agreement entered into by a Lender and an Eligible Assignee, and accepted by the
Agent, substantially in the form annexed hereto as EXHIBIT E.
"BANKRUPTCY CODE" has the meaning assigned to that term in
Section 9.05.
"BASE LENDING RATE" means, at any time, the higher of, (a) the
Prime Rate and (b) the rate that is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BASE RATE LOANS" means Loans maintained or made by the
Lenders bearing interest at rates determined by reference to the Base Lending
Rate as provided in Section 2.03.
"BLOCKED ACCOUNT AGREEMENT" means a blocked account agreement
(with activation) to be entered into by Agent and Borrower pursuant to Section
7.16(iii) in form and substance satisfactory to Agent and Borrower for the
deposit of Excess Cash Balances and investment earnings thereon.
"BOOK VALUE" means, with respect to any stock, property or
assets of Borrower or any of its Subsidiaries as of any date of determination,
the book value thereof on the consolidated balance sheet of the Borrower on such
date, after taking into account any reserves specifically related to such stock,
property or assets, or a proportionate share of any unallocated reserves
applicable to stock, property or assets of the type being valued, in each case,
as reflected on the books of Borrower at least ninety (90) days preceding the
date of determination, as adjusted to reflect property or assets not included on
such date of determination based on a physical count of the property or assets
in connection with the valuation thereof.
"BORROWER" has the meaning assigned to that term in the first
paragraph of this Agreement.
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"BORROWER COMMON STOCK" means common stock of the Borrower,
par value $0.01 per share.
"BORROWER PARTNERSHIP SECURITY AGREEMENT" means a Borrower
Partnership Security Agreement executed and delivered by the Agent and the
Borrower pursuant to the Prior Credit Agreement or this Agreement, substantially
in the form annexed to the Existing Credit Agreement as Exhibit T, as such
Borrower Partnership Security Agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"BORROWER PLEDGE AGREEMENT" means that certain Borrower Pledge
Agreement dated as of October 20, 1994, executed and delivered by the Borrower
and the Agent pursuant to the Original Credit Agreement, a copy of which was
annexed to the Existing Credit Agreement as Exhibit H, as such Borrower Pledge
Agreement has heretofore been, and as it hereafter may be, amended, amended and
restated, supplemented or otherwise modified from time to time.
"BORROWER SECURITY AGREEMENT" means that certain Borrower
Security Agreement dated as of October 20, 1994 executed and delivered by
Borrower and Agent pursuant to the Original Credit Agreement, a copy of which is
annexed to the Existing Credit Agreement as Exhibit J, as such Borrower Security
Agreement is hereafter amended and restated pursuant to Section 7.17 in
substantially in the form annexed hereto as EXHIBIT J, as such amended and
restated Borrower Security Agreement thereafter may be, amended, amended and
restated, supplemented or otherwise modified from time to time.
"BUSINESS DAY" means any day except Saturday, Sunday and any
day that shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Services ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States or any state
thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund as
regulated by Rule 2a-7 under the Investment Company Act of 1940 that (a) has a
net asset value which
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remains a constant $1.00 per share, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating then obtainable from either S&P or
Moody's.
"CASUALTY EVENT" means (i) any Condemnation Event with respect
to any property owned by or leased to the Borrower or any of its Subsidiaries,
or (ii) any damage to, or destruction of, any property owned by or leased to
Borrower or any of its Subsidiaries.
"CASUALTY PROCEEDS" means (i) with respect to any Condemnation
Event, all awards or payments received by Borrower or any of its Subsidiaries by
reason of such Condemnation Event, including all amounts received with respect
to any transfer in lieu or anticipation of such Condemnation Event or in
settlement of any proceeding relating to such Condemnation Event, and (ii) with
respect to any other Casualty Event, all insurance proceeds or payments
(excluding payments with respect to business interruption) which the Borrower or
any of its Subsidiaries receives by reason of such other Casualty Event.
"CERTIFICATE OF EXEMPTION" has the meaning assigned to that
term in Section 2.06(g)(iii).
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COLLATERAL" means all the personal and mixed property and, if
required by Section 7.15, Real Estate made subject to a Lien pursuant to the
Credit Documents.
"COLLECTED FUNDS" means, with respect to any financial
institution, funds in a Deposit Account which are not subject to hold for
uncollected funds pursuant to Federal Reserve Regulation CC or such financial
institution's customary procedures.
"COLLECTION BANK AGREEMENTS" means (i) those certain
Collection Bank Agreements executed and delivered pursuant to the Prior Credit
Agreement in substantially the form delivered pursuant to the Prior Credit
Agreement, a copy of which is annexed to the Existing Credit Agreement as
Exhibit N, as such Collection Bank Agreements are hereafter amended and restated
pursuant to Sections 7.16(i) or 8.15 by each of the Borrower or any of its
Subsidiaries and any of the Lenders that have executed Collection Bank
Agreements pursuant to the Prior Credit Agreement in substantially the form
annexed hereto as EXHIBIT N, or such other form as may be reasonably acceptable
to Agent, as each such revised Collection Bank Agreement thereafter may be,
amended, amended and restated, supplemented or otherwise modified from time to
time, and (ii) those certain Collection Bank Agreements executed and delivered
pursuant to Sections 7.16(i) or 8.15 by each of the Borrower or any of its
Subsidiaries and the Concentration Bank and any Lender into which proceeds of
Accounts Receivable of each of the Borrower or its Subsidiaries are deposited
and in substantially the form annexed hereto as EXHIBIT N, or such other form as
may be reasonably acceptable to Agent, as such Collection Bank Agreements
thereafter may be, amended, amended and restated, supplemented or otherwise
modified from time to time.
"COLLECTION DAY" means each day of the calendar year other
than (i) Saturday and Sunday of each week during such year and (ii) the
following holidays during such year: Christmas, New Year's Day, Thanksgiving,
Fourth of July, Memorial Day, and Labor Day.
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"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form annexed hereto as EXHIBIT F delivered to the Agent and Lenders by the
Borrower under Section 7.01(f).
"CONCENTRATION BANK" means (i) Bank of America, N.A., until
such time as all amounts in the concentration account held by it are transferred
to PNC Bank, National Association, and (ii) PNC Bank, National Association
commencing on the date funds are first transferred by Bank of America, N.A. from
the concentration account held by it, or any permitted successor thereto.
"CONCENTRATION BANK AGREEMENT" means (i) that certain
Concentration Bank Agreement to be executed and delivered by the Borrower, the
Agent and the Concentration Bank, pursuant to Section 7.16(ii) in substantially
the form annexed hereto as EXHIBIT D, as such Concentration Bank Agreement
hereafter may be, amended, amended and restated, supplemented or otherwise
modified from time to time, and (ii) until Bank of America, N.A. shall have
transferred all amounts in the concentration account held by it, as
Concentration Bank, that certain Concentration Bank Agreement dated as of
November 1, 2000 among Bank of America, N.A., Borrower and Agent.
"CONDEMNATION EVENT" means any condemnation or other taking or
temporary or permanent requisition of any property, any interest therein or
right appurtenant thereto, or any change of grade affecting any property, as a
result of the exercise of any right of condemnation or eminent domain. A
transfer to a Governmental Authority in lieu or anticipation of condemnation
shall be deemed to be a Condemnation Event.
"CONPHARMA NOTE" has the meaning assigned to that term in the
Existing Credit Agreement.
"CONSENT TO AMENDMENT AND RESTATEMENT" means the Consent to
Amendment and Restatement to be executed and delivered by each Guarantor
Subsidiary pursuant to Section 5.01(a)(v), substantially in the form annexed
hereto as EXHIBIT H.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures by the Borrower and its Subsidiaries during that
period for fixed or capital assets (including, without limitation, expenditures
for product development and maintenance and repairs that should be capitalized
in accordance with generally accepted accounting principles consistently applied
and including capitalized lease obligations).
"CONSOLIDATED EBITDA" means, as to any Person and for any
period, the Consolidated Net Income of such Person and its Subsidiaries and
Joint Ventures for such period, (i) before interest, provision for taxes,
amortization of intangibles and depreciation and other non-cash income or
expense that was deducted or added in arriving at such Consolidated Net Income
for such period, extraordinary gains or losses, gains or losses from the sale of
assets (other than the sale of inventory in the Ordinary Course of Business),
any costs or expenses incurred by the Borrower at the request of the Lenders
related to the engagement of the Consultant or the Investment Banker and any
costs and expenses incurred by Borrower pursuant to Section 11.01, including,
without limitation, the costs and expenses of the Lender Financial Advisor, and
(ii) excluding therefrom amounts attributable to (x) minority interests held by
third
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Persons and/or their Subsidiaries, and (y) Joint Ventures that remain invested
in such Joint Ventures and are not distributed to the Borrower.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to capitalized interest
and capital leases in accordance with generally accepted accounting principles
consistently applied) of the Borrower and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements, but
excluding, however, any amounts referred to in Section 3 payable to the Agent
and Lenders on or before the Effective Date and amortization of deferred loan
costs and warrants.
"CONSOLIDATED NET INCOME" means, as to any Person and for any
period, the net income (or loss) of such Person and its Subsidiaries, after
provisions for taxes, on a consolidated basis for such period taken as a single
accounting period determined in conformity with generally accepted accounting
principles consistently applied.
"CONSULTANT" means an outside consultant selected by Borrower
satisfactory to Agent with expertise in improving cash collection procedures and
performance of health care companies.
"CONTINGENT OBLIGATION" means, as to any Person, (A) any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("PRIMARY OBLIGATIONS") of
any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such 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 (x) for the purchase or payment of any such primary obligation or
(y) 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 or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business; and (B) any obligations of such Person under any Interest Rate
Agreement. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"CREDIT DOCUMENTS" means this Agreement, each Note, if any,
the Letters of Credit, the Subsidiary Guaranty, the Borrower Pledge Agreement,
the Subsidiary Pledge Agreement, the Borrower Security Agreement, the Subsidiary
Security Agreement, the Borrower Partnership Security Agreement, the Subsidiary
Partnership Security Agreement, the Collection Bank Agreements, the
Concentration Bank Agreement, the Consent to Amendment and
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Restatement, the Trademark Security Agreement, the Subsidiary Trademark Security
Agreement, the Warrant Agreement, the Warrant Certificates, the Blocked Account
Agreement and the Mortgages.
"DEFAULT" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and "$" means the lawful money of the United States
of America.
"EBITDA PAYMENT" means, as to Borrower and its Subsidiaries
for any quarter, 95% of the excess of Modified Consolidated EBITDA over the
minimum Consolidated EBITDA for such quarter as determined pursuant to Section
8.16.
"EFFECTIVE DATE" means the first date upon which all of the
conditions set forth in Section 5.01 of this Agreement shall have been satisfied
or waived.
"ELIGIBLE ASSIGNEE" means (i) (A) a commercial bank organized
under the laws of the United States or any state thereof; (B) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (C) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; or (D) any other entity that is an "accredited investor" (as defined in
Regulation D under the Securities Act of 1933, as amended) that extends credit
or buys loans as one of its businesses including, but not limited to, insurance
companies, mutual funds and lease financing companies, or (ii) any Lender and
any Affiliate of any Lender or the Issuing Bank; provided that no Affiliate of
the Borrower shall be an Eligible Assignee.
"ENGAGEMENT DATE" means the earlier of (i) 30 days after the
Effective Date, and (ii) 30 days after resolution of any investigation by the
O.I.G. or any other Governmental Authority.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to ERISA, as
in effect at the date of this Agreement, and to any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA AFFILIATE" means any person (as defined in Section 3(9)
of ERISA) that together with the Borrower or any of its Subsidiaries would be a
member of the same "CONTROLLED GROUP" within the meaning of Section 414(b), (m),
(c) and (o) of the Code.
"EURODOLLAR RATE" means, for any Interest Rate Determination
Date, the arithmetic average (rounded upwards, if necessary, to the nearest 1/16
of 1%) of the offered
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quotation, if any, to first class banks in the Eurodollar market by Bankers
Trust Company for Dollar deposits of amounts in immediately available funds
comparable to the principal amount of the Eurodollar Rate Loan of the Agent for
which the Eurodollar Rate is being determined with maturities comparable to the
Interest Period for which such Eurodollar Rate will apply as of approximately
10:00 A.M. (New York time) two Business Days prior to the commencement of such
Interest Period.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Eurodollar Rate as provided in Section 2.03.
"EURODOLLAR RATE TAXES" has the meaning assigned to that term
in Section 2.06(g)(i).
"EVENT OF DEFAULT" has the meaning assigned to that term in
Section 9.
"EXCESS CASH BALANCES" means as of any Business Day, the
difference between (i) all Collected Funds in the Concentration Account at the
end of such Business Day prior to any automatic sweep of excess balances into
overnight investments pursuant to the terms of the Concentration Bank Agreement,
and (ii) $3,000,000.
"EXCESS CASUALTY PROCEEDS" means any Casualty Proceeds
received by Borrower or any of its Subsidiaries which have not been expended or
committed to be expended within 180 days after a Casualty Event to restore,
repair, replace or build the asset in respect of which such Casualty Proceeds
were received.
"EXISTING BANK LOANS" means the "Revolving Loans", "Term
Loans" and the "Swing Loans" as defined in the Existing Credit Agreement and
extended to the Borrower thereunder.
"EXISTING CREDIT AGREEMENT" has the meaning assigned to that
term in the Recitals to this Agreement.
"EXISTING INDEBTEDNESS" has the meaning assigned to that term
in Section 8.04(ii).
"EXISTING NOTES" means the "Revolving Notes", the "Term Notes"
and the "Swing Line Note" as defined in the Existing Credit Agreement and issued
to the Lenders thereunder.
"FDA" means the United States Food and Drug Administration.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such day
on such transactions
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received by the Agent from three Federal funds brokers of recognized standing
selected by the Agent.
"FEES" means all amounts payable pursuant to or referred to in
Section 3.01.
"FIRST AMENDED AND RESTATED CREDIT AGREEMENT" means that
certain Amended and Restated Credit Agreement dated as of October 26, 1995 by
and among the Borrower, the "Banks" party thereto and Bankers Trust Company, as
the "Agent", as amended, supplemented or otherwise modified prior to the
effective date of the Second Amended and Restated Credit Agreement.
"FISCAL YEAR" means the fiscal year of the Borrower and its
Subsidiaries (other than Joint Ventures) ending on December 31 of each calendar
year.
"FOREIGN LENDER" has the meaning assigned to that term in
Section 2.06(g)(iii).
"FUNDING DATE" means the date of the funding of a Loan or the
date of the issuance of a Letter of Credit, as applicable.
"GOVERNMENT ACTS" has the meaning assigned to such term in
Section 2.07(h).
"GOVERNMENTAL REIMBURSEMENT PROGRAMS" means (i) the United
States of America acting under the Medicaid/Medicare program established
pursuant to the Social Security Act or the Civilian Health & Medicaid Program
for the Uniform Services, (ii) any state or the District of Columbia acting
pursuant to a health plan adopted pursuant to Title XIX of the Social Security
Act, or (iii) any agent, carrier, administrator or intermediary for any of the
foregoing.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GUARANTOR SUBSIDIARY" means each Subsidiary of the Borrower
listed in Schedule 6.12 annexed hereto and each other Subsidiary of the Borrower
that executes a Subsidiary Guaranty pursuant to Section 7.11(b).
"GUARANTOR SUBSIDIARY DOCUMENTS" means collectively the
Subsidiary Guaranty, Subsidiary Pledge Agreement, Subsidiary Security Agreement,
Subsidiary Trademark Security Agreement and Subsidiary Partnership Security
Agreement.
"INDEBTEDNESS" means, as to any Person, without duplication,
(i) all indebtedness (including principal, fees and charges) of such Person for
borrowed money or for the deferred purchase price of property or services, (ii)
the maximum undrawn amount of or maximum unreimbursed amount under all letters
of credit issued for the account of such Person and all drafts drawn thereunder,
(iii) all liabilities secured by any Lien on any property owned by such Person,
whether or not such liabilities have been assumed by such Person; provided that
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liabilities that are nonrecourse to the credit of the Borrower and its
Subsidiaries, shall be deemed to constitute Indebtedness only in an amount equal
to the lesser of (a) the fair market value (on the date of determination of
Indebtedness for purposes of this Agreement) of such property or (b) the amount
of such liabilities, (iv) the aggregate amount required to be capitalized under
generally accepted accounting principles under leases under which such Person is
the lessee, (v) all Contingent Obligations of such Person and (vi) the total
redemption price (including, without limitation, the liquidation preference, par
value, premium and accrued dividends) of any preferred stock of such Person with
a mandatory redemption date prior to the Termination Date.
"INSURER" means a Person that insures a Patient against
certain of the costs incurred in the receipt by such Patient of Medical
Services, or that has an agreement with the Borrower or any of its Subsidiaries
to compensate the Borrower or such Subsidiary for providing Medical Services to
such Patient.
"INTERCOMPANY ACQUISITION NOTE" means any promissory note
evidencing Indebtedness under a loan or advance by AHPF to AHPT permitted under
Section 8.05(vii) to fund an Acquisition by AHPT; provided that the obligations
of AHPT under any Intercompany Acquisition Note shall be expressly subordinated,
on terms satisfactory in form and substance to the Agent, to the Obligations of
AHPT under the Subsidiary Guaranty.
"INTERCOMPANY ACQUISITION GUARANTY/SECURITY AGREEMENT" means
any guaranty, security agreement or guaranty and security agreement pursuant to
which (x) a newly-acquired Subsidiary of AHPT guaranties the obligations of AHPT
under an Intercompany Acquisition Note issued to AHPF in connection with the
Acquisition of such Subsidiary and/or grants a security interest to AHPF in its
inventory to secure its obligations under such a guaranty or (y) AHPT grants a
security interest to AHPF in its inventory to secure its obligations under an
Intercompany Acquisition Note issued to AHPF in connection with an Acquisition
of assets; provided that (i) any such guaranty shall be expressly subordinated
in right of payment, on terms satisfactory in form and substance to the Agent,
to the Obligations of such Subsidiary under the Subsidiary Guaranty, (ii) any
such security interest shall be expressly subordinated, on terms satisfactory in
form and substance to the Agent, to the security interest in the inventory of
such Subsidiary created in favor of the Agent pursuant to the Subsidiary
Security Agreement, and (iii) any such guaranty or security interest shall be
assigned to the Agent on terms satisfactory in form and substance to the Agent.
"INTEREST PAYMENT DATE" means, with respect to any Eurodollar
Rate Loan, the last day of the Interest Period applicable to such Loan; provided
that in the case of each Interest Period of longer than one month "Interest
Payment Date" shall mean the date that is one month after the commencement of
such Interest Period and each successive date that is one month after that.
"INTEREST PERIOD" means any period applicable to a Loan as
determined pursuant to Section 2.03(b).
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement or other similar agreement or arrangement
designed to protect the Borrower against fluctuations in interest rates.
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"INTEREST RATE DETERMINATION DATE" means each date for
calculating the Eurodollar Rate for purposes of determining the interest rate in
respect of an Interest Period. The Interest Rate Determination Date shall be the
second Business Day prior to the first day of the related Interest Period for a
Eurodollar Rate Loan.
"INVESTMENT BANKER" means an investment banking firm selected
by Borrower and reasonably satisfactory to Required Lenders with expertise in
the sale, refinancing of obligations and sale of equity interests of health care
companies or other means of restructuring health care companies.
"ISSUING BANK" means Bankers Trust Company or its Affiliate or
any successor Lender or its Affiliate in the capacity of issuer of Letters of
Credit pursuant to Section 2.07.
"JOINT VENTURE" means a single-purpose corporation,
partnership, joint venture or other similar legal arrangement (whether created
pursuant to contract or conducted through a separate legal entity) now or
hereafter formed by the Borrower or any of its Subsidiaries with another Person
(other than the Borrower or any of its Subsidiaries) in order to conduct a
common venture or enterprise with such other Person.
"LENDER" has the meaning assigned to that term in the first
paragraph of this Agreement and shall include each successor and assignee
pursuant to Section 11.05.
"LENDER FINANCIAL ADVISOR" means Zolfo ▇▇▇▇▇▇, LLC, and shall
include any successor or replacement therefor.
"LENDING OFFICE" means, with respect to each Lender, the
office of such Lender specified opposite its signature below as its lending
office or such other office of such Lender as such Lender may from time to time
specify as such to the Borrower and the Agent.
"LETTER OF CREDIT" means any of the standby letters of credit
issued (or deemed issued under Section 2.07(a)) or to be issued by the Issuing
Bank for the account of the Borrower pursuant to Section 2.07 and for the
purposes described in Section 2.05(b); provided that, notwithstanding anything
to the contrary contained herein, any such letter of credit may be issued by an
Affiliate of the Issuing Bank; provided, further, that to the extent that a
letter of credit is issued by an Affiliate of the Issuing Bank, such Affiliate
shall, for all purposes under this Agreement, the Credit Documents and all other
instruments and documents referred to herein and therein be deemed to be the
"ISSUING BANK" with respect to such letter of credit.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount that is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by the Issuing Bank and not theretofore reimbursed by the
Borrower.
"LETTER OF NON-EXEMPTION" has the meaning assigned to that
term in Section 2.06(g)(iii).
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"LIEN" means any mortgage, pledge, hypothecation, assignment
for security, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, any agreement to give
any security interest and any lease having substantially the same effect as any
of the foregoing).
"LOAN" or "LOANS" means the Loans made by Lenders to Borrower
pursuant to Section 2.01.
"MARGIN STOCK" has the meaning provided in Regulation U of the
Board of Governors of the Federal Reserve System.
"MEDICAID/MEDICARE ACCOUNT DEBTOR" means any Account Debtor
under any Government Reimbursement Program.
"MEDICAL SERVICES" means medical and health care services
provided to a Patient, including, but not limited to, medical and health care
services provided to a Patient and performed by the Borrower or any of its
Subsidiaries which are covered by a policy of insurance issued by an Insurer,
and includes physician services, nurse and therapist services, dental services,
hospital services, skilled nursing facility services, comprehensive outpatient
rehabilitation services, home health care services, residential and out-patient
behavioral healthcare services, and medicine or health care equipment provided
by the Borrower or any of its Subsidiaries to a Patient for a necessary or
specifically requested valid and proper medical or health purpose.
"MODIFIED CONSOLIDATED EBITDA" means, as to any Person and for
any period, the Consolidated Net Income of such Person and its Subsidiaries and
Joint Ventures for such period, (i) before interest, provision for taxes,
amortization of intangibles and depreciation and other non-cash income or
expense that was deducted or added in arriving at such Consolidated Net Income
for such period and extraordinary gains or losses, gains or losses from the sale
of assets (other than the sale of inventory in the Ordinary Course of Business),
and (ii) excluding therefrom amounts attributable to (x) minority interests held
by third Persons and/or their Subsidiaries, and (y) Joint Ventures that remain
invested in such Joint Ventures and are not distributed to the Borrower.
"MORTGAGE" means any mortgage, deed of trust or other
instrument or document evidencing the security interest of Agent on behalf of
Lenders in the Real Estate to be executed and delivered by Borrower or any of
its Subsidiaries pursuant to Section 7.15.
"NONGOVERNMENTAL PAYORS" means third party payors that
reimburse providers for Medical Services, such as private insurers and managed
care systems.
"NOTE" means a promissory note of the Borrower issued at the
request of a Lender in its favor to evidence the Loan of such Lender,
substantially in the form annexed hereto as EXHIBIT C, as it may be amended,
supplemented or otherwise modified from time to time.
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"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of EXHIBIT A annexed hereto with respect to a proposed
conversion or continuation of a Loan.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice in the
form of EXHIBIT B annexed hereto with respect to a proposed issuance or
extension of a Letter of Credit.
"NOTICE OFFICE" means the office of the Agent set forth on the
signature page of Agent or such other office or offices as the Agent may
hereafter designate in writing as such to the other parties hereto.
"OBLIGATIONS" means all amounts now or hereafter owing to the
Agent, Issuing Bank (including for this purpose any obligation to cash
collateralize the Letters of Credit) or any Lender pursuant to the terms of this
Agreement or any other Credit Document. For the purposes of the Credit
Documents, the Obligations shall include all "Obligations", as such term is
defined in the Existing Credit Agreement, to the extent such Obligations are not
otherwise continued pursuant to this Agreement.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
association or joint venture, a certificate executed on behalf of such
corporation, association or joint venture, by the Chairman of the Board (if an
officer) or the President or one of its Vice Presidents and by the Chief
Financial Officer or the Chief Accounting Officer or the Treasurer or an
Assistant Treasurer of such corporation or the managing partner (or Person with
equivalent authority) of such association or joint venture; provided that every
Officers' Certificate with respect to the compliance with a condition precedent
to the making of any Loans or issuance of any Letters of Credit hereunder shall
include (i) a statement that the officer or officers or managing partner (or
Person with equivalent authority) making or giving such Officers' Certificate
have read such condition and any definitions or other provisions contained in
this Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion as
to whether or not such condition has been complied with, and (iii) a statement
as to whether, in the opinion of the signers, such condition has been complied
with.
"O.I.G." means the Office of Inspector General of the United
States Department of Health and Human Services.
"ORDINARY COURSE OF BUSINESS" means, in respect of any
transaction involving the Borrower or any Subsidiary of the Borrower, the
ordinary course of such Person's business, as conducted by any such Person in
accordance with past practice (including, without limitation, such Person's past
practice of consultation with legal counsel) and undertaken by such Person in
good faith and not for purposes of evading any covenant or restriction in any
Credit Document.
"ORIGINAL CREDIT AGREEMENT" means that certain Credit
Agreement dated as of October 20, 1994 by and among the Borrower, the "Banks"
party thereto, and Banker's Trust Company, as the "Agent", as amended,
supplemented or otherwise modified prior to the effective date of the First
Amended and Restated Credit Agreement.
"OSHA" means the United States Occupational Safety and Health
Administration.
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"PATIENT" means any Person receiving Medical Services from the
Borrower or any of its Subsidiaries and all Persons legally liable to pay the
Borrower or any of its Subsidiaries for such Medical Services other than
Insurers.
"PAYMENT OFFICE" means the office of the Agent located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Commercial Loan
Division Ref: AHP, or such other office as the Agent may hereafter designate in
writing as such to the other parties hereto.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA or any successor thereto.
"PERMITTED LIENS" has the meaning assigned to that term in
Section 8.01(iii).
"PERSON" means any individual, partnership, limited liability
company, joint venture, firm, corporation, association, trust, insurance company
or other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"PERFORMANCE PLAN" has the meaning assigned to that term in
Section 7.01(d).
"PLAN" means any multiemployer plan or single-employer plan as
defined in Section 4001 of ERISA, that is maintained or contributed to, or at
any time during the five calendar years preceding the date of this Agreement was
maintained or contributed to, by the Borrower or by a Subsidiary of the Borrower
or an ERISA Affiliate.
"PRIME RATE" means the rate that Bankers Trust Company
announces from time to time as its prime lending rate, and the Prime Rate shall
change when and as such prime lending rate changes. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bankers Trust Company may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.
"PRIOR CREDIT AGREEMENT" means, collectively, the Original
Credit Agreement, the First Amended and Restated Credit Agreement, the Second
Amended and Restated Credit Agreement, the Third Amended and Restated Credit
Agreement and the Existing Credit Agreement.
"PRO RATA SHARE" means, except to the extent otherwise
expressly provided herein (i) with respect to all payments, computations and
other matters relating solely to the Term Loan Commitment or the Loan of any
Lender pursuant to Section 4.01, mandatory prepayments of the Loans pursuant to
Section 4.02(b)(ii) to be applied to the March 31, 2002 scheduled payment or
mandatory payments pursuant to Section 4.02(b)(v), the percentage obtained by
dividing (x) the Term Loan Exposure of that Lender by (y) the aggregate Term
Loan Exposure of all Lenders, (ii) with respect to all principal and interest
payments relating to the Loans and reimbursement and cash collateralization
obligations related to the Letters of Credit, the percentage obtained by
dividing (x) all Obligations due and owing on the date of determination to that
Lender (including all Obligations due and owing to the Issuing Bank if that
Lender is the Issuing Bank, which Obligations shall include any obligation to
cash collateralize the Letters of Credit pursuant to Section 2.07(c) or Section
9) by (y) the sum of all Obligations due and owing on the date of determination
to all Lenders (including all Obligations due and
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owing to the Issuing Bank, which Obligations shall include any obligation to
cash collateralize the Letters of Credit pursuant to Section 2.07(c) or Section
9), and (iii) for all other purposes with respect to each Lender and the Issuing
Bank, including payment of Fees due hereunder, the percentage obtained by
dividing (x) the sum of the Term Loan Exposure of that Lender plus the Letter of
Credit Usage if that Lender is the Issuing Bank by (y) the sum of the aggregate
Term Loan Exposure of all Lenders plus the Letter of Credit Usage, in any such
case as the applicable percentage may be adjusted by assignments permitted
pursuant to Section 11.05. The initial Pro Rata Share of each Lender for
purposes of clause (i) and all determinations to be made pursuant to clauses
(ii) and (iii) of the preceding sentence is set forth opposite the name of that
Lender in SCHEDULE 1.01(A) annexed hereto and SCHEDULE 1.01(a) shall be amended
and the Lenders' Pro Rata Shares shall be adjusted from time to time to give
effect to the addition of any new Lenders and any reallocations among existing
Lenders necessary to reflect assignments pursuant to Section 11.05. The sum of
the Pro Rata Shares of all Lenders for purposes of clause (i) of the preceding
sentence at any date of determination shall equal 100%. The sum of the Pro Rata
Shares of all Lenders and the Issuing Bank for purposes of clauses (ii) and
(iii) of the preceding sentence at any date of determination shall equal 100%.
"PROPOSAL DATE" means 150 days after the retention of the
Investment Banker by Borrower pursuant to Section 7.14.
"REAL ESTATE" means the real property owned by Borrower
located at (i) ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ County, North Charleston, South
Carolina, (ii) ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, and (iii)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇, and any other real
property owned by Borrower or any of its Subsidiaries.
"REFINANCING DEFAULT" means any of the following: (i) the
failure of the Borrower to retain the Investment Banker by the Engagement Date,
or (ii) the failure of the Borrower to submit a Refinancing Proposal to Agent by
the Proposal Date.
"REFINANCING PROPOSAL" means a proposal by Borrower to
refinance or otherwise address the outstanding Obligations, including, without
limitation, refinancing the Obligations, Asset Sales, sales of equity interests
in the Borrower or other reasonably possible means of addressing the Obligations
and a detailed timeline for the implementation thereof.
"REGISTRATION RIGHTS AGREEMENT" means that certain
Registration Rights Agreement, to be executed and delivered by the Borrower
pursuant to Section 5.01(a)(vi), substantially in the form of the Registration
Rights Agreement set forth in Exhibit C to the Warrant Agreement.
"REPORTABLE EVENT" means an event described in Section 4043(b)
of ERISA with respect to a Plan as to which the 30-day notice requirement has
not been waived by the PBGC.
"REQUIRED LENDERS" means Lenders having or holding 51% or more
of the sum of the aggregate Term Loan Exposure of all Lenders plus the Letter of
Credit Usage.
"RESTRUCTURING NOTE" has the meaning assigned to that term in
the Existing Credit Agreement.
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"SALES" means Sale 1, Sale 2, Sale 3 and Sale 4, as described
in the Sales Letter.
"SALES LETTER" means the certain letter dated the date hereof
from Borrower to Agent describing certain Asset Sales.
"SEC" means the Securities and Exchange Commission or any
governmental agency substituted therefor.
"SECOND AMENDED AND RESTATED CREDIT AGREEMENT" means that
certain Second Amended and Restated Credit Agreement dated as of May 1, 1996 by
and among the Borrower, the "Banks" party thereto and Bankers Trust Company, as
the "Agent", as amended, supplemented or otherwise modified prior to the
effective date of the Third Amended and Restated Credit Agreement.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SETTLEMENT" means the settlement agreement with the
Department of Justice concerning the investigation related to the legal action
entitled United States ex rel. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ vs. American HomePatient, Inc.,
American HomePatient, Inc., Delaware and ▇▇▇▇▇ & ▇▇▇▇▇ Enterprises, Inc. in
substantially the form of the settlement agreement provided to counsel for Agent
on May 15, 2001.
"SOCIAL SECURITY ACT" means the Social Security Act as
codified at 42 U.S.C. ss.1395 et. seq.
"SUBORDINATION AGREEMENTS" means the Subordination Agreements
executed pursuant to the Prior Credit Agreement among the Borrower, the Agent
and certain holders of the Unsecured Seller Debt, substantially in the form
annexed to the Existing Credit Agreement as Exhibit M.
"SUBSIDIARY" means, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency which has not occurred by the date of
determination) is at the time owned by such Person and/or one or more
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Subsidiaries of such
Person has more than a 50% equity interest at the time.
"SUBSIDIARY GUARANTY" means that certain Guaranty Agreement
dated as of October 20, 1994, executed and delivered by each Guarantor
Subsidiary for the benefit of the Agent pursuant to Section 5.01 of the Prior
Credit Agreement and any Guarantor Subsidiary
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required to deliver the same pursuant to Section 7.11(b) of the Prior Credit
Agreement or this Agreement, a copy of which (executed by each Subsidiary of the
Borrower which is a Guarantor Subsidiary on the Effective Date) is annexed to
the Existing Credit Agreement as Exhibit G, as such Guaranty Agreement has
heretofore been, and as it hereafter may be, amended, amended and restated,
supplemented or otherwise modified from time to time.
"SUBSIDIARY PARTNERSHIP SECURITY AGREEMENT" means a Subsidiary
Partnership Security Agreement executed and delivered by the Agent and any
Guarantor Subsidiary required to deliver the same pursuant to Section 7.11(b) of
the Prior Credit Agreement or this Agreement, substantially in the form annexed
to the Existing Credit Agreement as Exhibit U, as such Subsidiary Partnership
Security Agreement may be amended, amended and restated, supplemented or
otherwise modified from time to time.
"SUBSIDIARY PLEDGE AGREEMENT" means that certain Subsidiary
Pledge Agreement dated as of October 20, 1994, executed and delivered by the
Agent and each Guarantor Subsidiary pursuant to Section 5.01 of the Prior Credit
Agreement and any Guarantor Subsidiary required to deliver the same pursuant to
Section 7.11(b) of the Prior Credit Agreement or this Agreement, a copy of which
(executed by each Subsidiary of the Borrower which is a Guarantor Subsidiary on
the Effective Date) is annexed to the Existing Credit Agreement as Exhibit I, as
such Subsidiary Pledge Agreement has heretofore been, and as it hereafter may
be, amended, amended and restated, supplemented or otherwise modified from time
to time.
"SUBSIDIARY SECURITY AGREEMENT" means that certain Subsidiary
Security Agreement dated as of October 20, 1994 executed and delivered by
Borrower and Agent pursuant to the Original Credit Agreement, a copy of which is
annexed to the Existing Credit Agreement as Exhibit L, as such Subsidiary
Security Agreement is hereafter amended and restated pursuant to Section 7.17 in
substantially the form annexed hereto as EXHIBIT K, as such Subsidiary Security
Agreement thereafter may be, amended, amended and restated, supplemented or
otherwise modified from time to time.
"SUBSIDIARY TRADEMARK SECURITY AGREEMENT" means the trademark
security agreement dated as of May 1, 1996, executed and delivered by the Agent
and each Guarantor Subsidiary which is not party to the Trademark Security
Agreement pursuant to Section 5.01 of the Prior Credit Agreement, and any
Guarantor Subsidiary required to deliver the same pursuant to Section 7.11(b) of
the Prior Credit Agreement or this Agreement, a copy of which (executed by each
Subsidiary of the Borrower which is a Guarantor Subsidiary on the Effective
Date) is annexed to the Existing Credit Agreement as Exhibit L-2, as such
Subsidiary Trademark Security Agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"TARGET" means the Person to be acquired, or the Person whose
assets are to be acquired, in any Acquisition.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided that "TAX
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ON THE OVERALL NET INCOME" of a Person shall be construed as a reference to a
tax imposed by the jurisdiction (whether local, state, federal or foreign) in
which that Person's principal office (and/or, in the case of a Lender, its
lending office) is located or in which that Person is deemed to be doing
business on all or part of the net income, profits or gains of that Person
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise).
"TERM LOAN COMMITMENT" means the commitment of a Lender to
make a Loan to the Borrower pursuant to Section 2.01, and "TERM LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate.
"TERM LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Loans, that Lender's
Term Loan Commitment and (ii) after the funding of the Loans, the outstanding
principal amount of the Loan of that Lender.
"TERMINATION DATE" means December 31, 2002.
"THIRD AMENDED AND RESTATED CREDIT AGREEMENT" means that
certain Third Amended and Restated Credit Agreement dated as of June 6, 1997 by
and among the Borrower, the "Banks" party thereto and Bankers Trust Company, as
"Agent", as amended, supplemented or otherwise modified prior to the effective
date of the Existing Credit Agreement.
"TOTAL DEBT" means all Indebtedness of the Borrower and its
Subsidiaries on a consolidated basis outstanding on any date of determination,
but excluding Indebtedness with respect to Letters of Credit and Interest Rate
Agreements.
"TRADEMARK SECURITY AGREEMENT" means that certain Trademark
Security Agreement dated as of October 20, 1994, executed and delivered by the
Borrower, the Agent and each Guarantor Subsidiary which is a Guarantor
Subsidiary prior to the Effective Date pursuant to Section 5.01 of the Prior
Credit Agreement, a copy of which is annexed to the Existing Credit Agreement as
Exhibit L-1, as such Trademark Security Agreement has heretofore been, and as it
hereafter may be, amended, amended and restated, supplemented or otherwise
modified from time to time.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the relevant jurisdiction.
"UNFUNDED CURRENT LIABILITY" means, as to any Plan, the
amount, if any, by which the present value of the accrued benefits under such
Plan as of the close of its most recent plan year determined in accordance with
Section 412 of the Code exceeds the fair market value of the assets allocable
thereto.
"UNSECURED SELLER DEBT" means the Indebtedness permitted by
Section 8.04(xiii).
"WARRANT AGREEMENT" means that certain Warrant Agreement, to
be executed and delivered by the Borrower pursuant to Section 5.01(a)(iii),
substantially in the form annexed
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hereto as EXHIBIT I, as such Warrant Agreement may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"WARRANT CERTIFICATE" means each of the warrant certificates,
to be executed and delivered by the Borrower pursuant to Section 5.01(a)(iv),
substantially in the form of the warrant certificates set forth in Exhibits A
and B to the Warrant Agreement.
"WHOLLY-OWNED SUBSIDIARY" means, as to any Person, (i) any
corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
1.02 PRINCIPLES OF CONSTRUCTION.
(a) All references to sections, schedules and exhibits are to
sections, schedules and exhibits in or to this Agreement unless otherwise
specified. The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
(b) All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles in
conformity with those used in the preparation of the financial statements
referred to in Sections 6.05(a). Except in connection with the preparation of
the financial statements and other information required to be delivered by the
Borrower to the Lenders pursuant to Sections 7.01(a), (b), (d), (e) and (h),
calculations made with respect to the definitions, covenants and other
provisions of this Agreement shall give effect to adjustments in component
amounts required or permitted by Accounting Principles Board Opinions Nos. 16
and 17 as a result of any Acquisition.
SECTION 2. AMOUNT AND TERMS OF CREDIT.
2.01 THE LOANS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the
Borrower set forth herein, each Lender severally agrees to lend to the Borrower,
in a single borrowing on the Effective Date, an amount not exceeding its Pro
Rata Share of the Term Loan Commitments to be used for the purposes identified
in Section 2.05. The amount of each Lender's Term Loan Commitment is set forth
opposite its name on SCHEDULE 1.01(a) annexed hereto and the aggregate amount of
the Term Loan Commitments is $296,608,020.09. The Loans made on the Effective
Date shall be Base Rate Loans.
2.02 PREPAYMENT OF LOANS OUTSTANDING ON EFFECTIVE DATE; NOTES.
(a) On the Effective Date, the Existing Bank Loans shall be
prepaid with the proceeds of the Loans.
(b) On and after the Effective Date, the Existing Notes shall
be of no further force and effect, and each Lender shall deliver any Existing
Notes issued to such Lender, marked to show their cancellation, to the Borrower.
The Borrower shall execute and deliver to each
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Lender that requests that a Note be delivered to it (or to the Agent for that
Lender) on the Effective Date a Note substantially in the form of EXHIBIT C to
evidence that Lender's Loan, in the principal amount of that Lender's Term Loan
Commitment and with other appropriate insertions. Each Lender will note on its
internal records the amount of the Loan made by it and each payment in respect
thereof and, prior to any transfer of its Note, will endorse on the reverse side
thereof the outstanding principal amount of the Loan evidenced thereby. Failure
to make any such notation shall not affect the Borrower's obligations in respect
of its Loan.
2.03 INTEREST ON THE LOANS.
(a) RATE OF INTEREST. Subject to the provisions of Sections
2.03(e), 2.03(g), 2.03(h) and 2.06(g), each Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Lending
Rate or the Adjusted Eurodollar Rate. The applicable basis for determining the
rate of interest for Loans made on the Effective Date shall be Base Rate Loans.
The basis for determining the interest rate with respect to a Loan may be
changed from time to time pursuant to Section 2.03(d). If on any day a Loan is
outstanding with respect to which notice has not been delivered to the Agent in
accordance with the terms of this Agreement specifying the basis for determining
the rate of interest, then for that day that Loan shall bear interest determined
by reference to the Base Lending Rate. The Loans shall bear interest through
maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Lending
Rate plus the Applicable Base Margin; and
(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Applicable Eurodollar Margin.
(b) INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, the Borrower may, pursuant to the applicable Notice of
Conversion/Continuation select an interest period (each an "INTEREST PERIOD") to
be applicable to such Loan, which Interest Period shall be, at the Borrower's
option, either a one or two week period or a one, two or three month period;
provided that:
(i) in the case of immediately successive Interest Periods,
each successive Interest Period shall commence on the day on which the
next preceding Interest Period expires;
(ii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
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(iv) no Interest Period with respect to the Loans shall extend
beyond the Termination Date;
(v) no Interest Period with respect to any portion of the
Loans shall extend beyond a date on which the Borrower is required to
make a scheduled payment of principal of the Loans unless the sum of
(a) the aggregate principal amount of Loans that are Base Rate Loans
plus (b) the aggregate principal amount of Loans that are Eurodollar
Rate Loans with Interest Periods expiring on or before such date
equals or exceeds the principal amount required to be paid on the
Loans on such date; and
(vi) there shall be no more than ten (10) Eurodollar Rate
Loans with different maturities outstanding at any time.
(c) INTEREST PAYMENTS. Subject to Section 2.03(e), interest
shall be payable on the Loans as follows:
(i) interest on each Base Rate Loan shall be payable monthly
in arrears on and to the last Business Day of each month (each a
"REGULAR INTEREST PAYMENT DATE" with respect to Base Rate Loans), upon
any prepayment of any such Loan (to the extent accrued on the amount
being prepaid), and at maturity (including final maturity).
(ii) interest on each Eurodollar Rate Loan shall be payable in
arrears on and to (but not including) each Interest Payment Date
applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity.
(d) CONVERSION OR CONTINUATION. Subject to the provisions of
Section 2.06, the Borrower shall have the option (i) to convert at any time all
or any part of the outstanding Loans from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis, or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $1,000,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan and the succeeding Interest
Period(s) of such continued Loan shall commence on the last day of the Interest
Period of the Loan to be continued; provided, however, Eurodollar Rate Loans may
only be converted into Base Rate Loans on the expiration date of an Interest
Period applicable thereto; provided further that no outstanding Loan may be
continued as, or be converted into, a Eurodollar Rate Loan when any Default or
Event of Default has occurred and is continuing; and provided further that the
Base Rate Loans made on the Effective Date may not be converted to Eurodollar
Rate Loans prior to three Business Days after the Effective Date.
The Borrower shall deliver a Notice of Conversion/Continuation
to the Agent no later than (i) 12:00 Noon (New York time) at least two Business
Days in advance of the proposed conversion/continuation date in the case of a
conversion to a Base Rate Loan, and (ii) at least three Business Days in advance
of the proposed conversion/continuation date in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan. A Notice of Conversion/Continuation
shall certify (i) the proposed conversion/continuation date (which shall
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be a Business Day), (ii) the amount of the Loan to be converted/continued, (iii)
the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) that no Default or Event of Default has occurred and is
continuing, and shall reaffirm the statements made by Borrower in Section 11.18.
In lieu of delivering the above-described Notice of Conversion/Continuation, the
Borrower may give the Agent telephonic notice by the required time of any
proposed conversion/continuation under this Section 2.03(d); provided that such
notice shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to the Agent on or before the proposed
conversion/continuation date.
Neither the Agent nor any Lender shall incur any liability to
the Borrower in acting upon any telephonic notice referred to above that the
Agent believes in good faith to have been given by a duly authorized officer or
other person authorized to act on behalf of the Borrower or for otherwise acting
in good faith under this Section 2.03(d) and upon conversion/continuation by the
Agent in accordance with this Agreement, pursuant to any telephonic notice the
Borrower shall have effected such conversion or continuation, as the case may
be, hereunder.
Except as provided in Section 2.06(d), a Notice of
Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate
Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after
the related Interest Rate Determination Date, and the Borrower shall be bound to
convert or continue in accordance therewith.
(e) DEFAULT RATE. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2.00% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate that is 2.00% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans); provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective, such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and thereafter bear interest payable upon demand at a rate that
is 2.00% per annum in excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans. The payment or acceptance of the increased rate
provided by this Section 2.03(e) shall not constitute a waiver of any Event of
Default or an amendment to this Agreement or otherwise prejudice or limit any
rights or remedies of the Agent or any Lender.
(f) COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 360-day year and the actual number of days elapsed in
the period during which it accrues. In computing interest, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, shall be included; and the date of payment of such Loan or the expiration
date of an Interest Period applicable to such Loan, or with respect to a Base
Rate Loan being converted to a
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Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, shall be excluded; provided that if a Loan is repaid on
the same day on which it is made, one day's interest shall be paid on that Loan.
(g) ADDITIONAL INTEREST. Anything in this Agreement to the
contrary notwithstanding, without duplication of any other amounts of interest
payable under this Agreement in respect of the Loans, (i) on the last Business
Day of May 2001, the Borrower shall pay to Agent for distribution to each Lender
in proportion to its Pro Rata Share, additional interest in respect of the
Existing Bank Loans that would have been required to be paid on such date
pursuant to Section 2.06(g) of the Existing Credit Agreement if such Existing
Bank Loans and all Loans made hereunder (including for this purpose unreimbursed
draws on Letters of Credit) on and after the Effective Date had been outstanding
under the Existing Credit Agreement, and (ii) the Borrower shall pay additional
interest in respect of the Loans (including for this purpose unreimbursed draws
on Letters of Credit) on the last Business Day of each month commencing June
2001 to Agent for distribution to each Lender in proportion to its Pro Rata
Share additional interest in respect of the Loans (and any unreimbursed draws on
Letters of Credit) for each day during such month, in each case, at an annual
rate of 4.50% on the difference between (x) the aggregate principal amount of
all Loans (including for this purpose unreimbursed draws on Letters of Credit)
outstanding on the date of calculation, and (y) Consolidated EBITDA for the four
quarters ending on such Business Day multiplied by 400%.
(h) REFINANCING DEFAULT RATE. Upon the occurrence and during
the continuation of a Refinancing Default during any period in which an Event of
Default has not occurred and is continuing, the outstanding principal amount of
all Loans shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) at
a rate that is 2.00% per annum in excess of the interest otherwise payable under
this Agreement with respect to the applicable Loans.
2.04 INCREASED COSTS; TAXES.
(a) INCREASED COSTS. If any Lender shall determine that the
adoption of any applicable law, rule or regulation concerning capital adequacy
or any applicable change therein, or any change in interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender (or its Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, in each case occurring after the Effective
Date, has or will have the effect of reducing the rate of return on such
Lender's capital as a consequence of its obligation to make a Loan hereunder to
a level below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's policies with
respect to capital adequacy) by any amount deemed by such Lender to be material,
then from time to time, within fifteen (15) days after demand by such Lender,
the Borrower shall pay to such Lender such additional amounts as shall
compensate such Lender for such reduction. Each Lender shall promptly notify the
Borrower of any of the matters set forth in the preceding sentence. A
certificate as to additional amounts owed any such Lender, showing in reasonable
detail the basis for the calculation thereof, submitted in good faith to the
Borrower and the Agent by such Lender shall be presumed to be correct.
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(b) WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by the
Borrower under this Agreement and the other Credit Documents shall be
paid free and clear of and (except to the extent required by law)
without any deduction or withholding on account of any Tax (other than
franchise taxes and Taxes on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the
United States of America or any other jurisdiction from or to which a
payment is made by or on behalf of the Borrower or by any federation or
organization of which the United States of America or any such
jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If the Borrower or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by the Borrower to
the Agent or any Lender under any of the Credit Documents:
(A) the Borrower shall notify the Agent of any such
requirement or any change in any such requirement as soon as
the Borrower becomes aware of it;
(B) the Borrower shall pay any such Tax before the
date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on the Borrower) for
its own account or (if that liability is imposed on the Agent
or such Lender, as the case may be) on behalf of and in the
name of the Agent or such Lender;
(C) the sum payable by the Borrower in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, the Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been
required or made; and
(D) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax that
it is required by clause (B) above to pay, the Borrower shall
deliver to the Agent evidence satisfactory to the other
affected parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or other
authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (C) above except to the extent that any change,
after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the assignment under
Section 11.05 by which such Lender became a Lender (in the case of each
other Lender), in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the rate
of such deduction, withholding or
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payment from that in effect at the date of this Agreement or at the
date of such assignment, as the case may be, in respect of payments to
such Lender.
(iii) Alternatives. Notwithstanding the provisions of Section
2.04(b)(ii), in lieu of paying a Lender such additional moneys as are
required by Section 2.04(b)(ii), the Borrower may exercise any one of
the following options:
(A) If the requirement to make a deduction or
withholding of a Tax referred to in Section 2.04(b)(ii)
relates only to Eurodollar Rate Loans then being requested by
the Borrower pursuant to a Notice of Conversion/Continuation,
the Borrower may by giving notice (by telephone promptly
confirmed in writing) to the Agent (who shall promptly give
similar notice to each other Lender) no later than the date
immediately prior to the date on which such Eurodollar Rate
Loans are to be made, withdraw that Notice of
Conversion/Continuation and the Eurodollar Rate Loans then
being requested shall be made by the Lenders as Base Rate
Loans; or
(B) If the requirement to make a deduction or
withholding of a Tax referred to in Section 2.04(b)(ii)
relates only to Eurodollar Rate Loans outstanding at the time
the requirement is discovered, upon written notice to the
Agent and each Lender, the Borrower may terminate the
obligations of the Lenders to make or maintain Loans as, and
to convert Loans into, Eurodollar Rate Loans and, in such
event, the Borrower shall at the end of the then current
Interest Period, convert all of the Eurodollar Rate Loans into
Base Rate Loans in the manner contemplated by Section 2.03(d)
but without satisfying the advance notice requirements therein
in which case the Borrower must take the actions referred to
in Section 2.04(b)(ii) until such conversion; or
(C) If the requirement to make a deduction or
withholding of a Tax referred to in Section 2.04(b)(ii)
relates to Loans other than Eurodollar Rate Loans, the
Borrower may notify each Lender to which such requirement
relates that the Borrower will not make the payments required
under Section 2.04(b)(ii)(C) with respect to such Loans at the
end of the 30 day period described below and each such Lender
will have 30 days in which to notify the Agent (which will
notify the Borrower) that it will continue as a Lender under
this Agreement without such payments or that it refuses so to
continue, and, if any such Lender refuses to continue, (i) the
Borrower shall pay to such Lender, on a date 15 days after
notice of such refusal is made, all interest and fees and
other amounts due and owing to such Lender including amounts
due under Section 2.04(b)(ii) through the end of such 30 day
period (and, to the extent such Lender is the Issuing Bank,
any Letters of Credit shall be returned to the Issuing Bank
marked "cancelled" or Cash shall be deposited with the Issuing
Bank in an amount equal to the maximum amount that may at any
time be drawn on such Letters of Credit) on such date and the
principal amount of all such Loans of such Lender or (ii)
another financial institution that is an Eligible Assignee,
shall purchase for cash such Loans of such Lender and become a
Lender for all purposes under this Agreement and assume all
obligations of such Lender
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pursuant to an Assignment and Acceptance that shall have
become effective pursuant to Section 11.05.
2.05 USE OF PROCEEDS.
(a) LOANS. The proceeds of the Loans borrowed on the Effective
Date shall be applied by the Borrower to prepay all the Existing Bank Loans. The
Borrower hereby represents that the proceeds of the Existing Bank Loans were
used in compliance with Section 2.08(a) of the Existing Credit Agreement.
(b) LETTERS OF CREDIT. The Letters of Credit shall be used for
the purpose of supporting (x) workers' compensation liabilities of the Borrower
or its Subsidiaries, (y) the obligations of the Borrower or its Subsidiaries to
third party insurers arising (1) by virtue of the laws of any jurisdiction
requiring third party insurers and (2) in lieu of payments in cash of insurance
obligations or (z) performance, payment, deposit or surety obligations of the
Borrower or its Subsidiaries, in any case if required by law or governmental
rule or regulation, by any landlord under any real estate lease, or by custom
and practice in the business of the Borrower and its Subsidiaries (including in
connection with the participation by the Borrower and its Subsidiaries in
Medicare or Medicaid programs).
(c) MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by the Borrower to purchase or
carry any Margin Stock in any manner that might cause the borrowing or the
application of such proceeds to violate Regulation T, Regulation U or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of the Board or to violate the Securities Exchange Act of 1934, in
each case as in effect on the date or dates of such borrowing and such use of
proceeds.
2.06 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
(a) DETERMINATION OF INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York time) on each Interest Rate Determination Date, the
Agent shall determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) the interest rate that shall
apply to the Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to the Borrower and
each Lender.
(b) SUBSTITUTED RATE OF BORROWING. If on any Interest Rate
Determination Date any Lender (including the Agent) shall have determined (which
determination shall be final and conclusive and binding upon all parties but,
with respect to the following clauses (i) and (ii)(B), shall be made only after
consultation with the Borrower and the Agent) that:
(i) by reason of any changes arising after the date of this
Agreement affecting the Eurodollar market or affecting the position of
that Lender in such market, adequate and fair means do not exist for
ascertaining the applicable interest rate by reference to the
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Eurodollar Rate with respect to the Eurodollar Rate Loans as to which
an interest rate determination is then being made; or
(ii) by reason of (A) any change after the date hereof in any
applicable law or governmental rule, regulation or order (or any
interpretation thereof and including the introduction of any new law or
governmental rule, regulation or order) or (B) other circumstances
affecting that Lender or the Eurodollar market or the position of that
Lender in such market (such as for example, but not limited to,
official reserve requirements required by Regulation D of the Board of
Governors of the Federal Reserve System to the extent not given effect
in the Eurodollar Rate), the Eurodollar Rate shall not represent the
effective pricing to that Lender for Dollar deposits of comparable
amounts for the relevant period;
then, and in any such event, that Lender shall be an Affected Lender and it
shall promptly (and in any event as soon as possible after being notified of a
conversion or continuation) give notice (by telephone promptly confirmed in
writing) to the Borrower and the Agent (which notice the Agent shall promptly
transmit to each other Lender) of such determination. Thereafter, the Borrower
shall pay to the Affected Lender, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as the Affected Lender in its sole discretion
shall reasonably determine) as shall be required to cause the Affected Lender to
receive interest with respect to its Eurodollar Rate Loans for the Interest
Period following that Interest Rate Determination Date at a rate per annum equal
to 1.00% per annum in excess of the effective pricing to the Affected Lender for
Dollar deposits to make or maintain its Eurodollar Rate Loans. A certificate as
to additional amounts owed the Affected Lender, showing in reasonable detail the
basis for the calculation thereof, submitted in good faith to the Borrower and
the Agent by the Affected Lender shall be presumed to be correct.
(c) REQUIRED TERMINATION AND PREPAYMENT. If on any date any
Lender shall have reasonably determined (which determination shall be final and
conclusive and binding upon all parties) that the making or continuation of its
Eurodollar Rate Loans has become unlawful or impossible by reason of compliance
by that Lender in good faith with any law, governmental rule, regulation or
order (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful), then, and in any such event, that Lender
shall be an Affected Lender and it shall promptly give notice (by telephone
promptly confirmed in writing) to the Borrower and the Agent (which notice the
Agent shall promptly transmit to each other Lender) of that determination.
Subject to the prior withdrawal of a Notice of Conversion/Continuation or
prepayment of the Eurodollar Rate Loans of the Affected Lender as contemplated
by the following Section 2.06(d), the obligation of the Affected Lender to make
or maintain its Eurodollar Rate Loans during any such period shall be terminated
at the earlier of the termination of the Interest Period then in effect or when
required by law and the Borrower shall no later than the termination of the
Interest Period in effect at the time any such determination pursuant to this
Section 2.06(c) is made or, earlier, when required by law, repay or prepay the
Eurodollar Rate Loans of the Affected Lender, together with all interest accrued
thereon.
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(d) OPTIONS OF THE BORROWER. In lieu of paying an Affected
Lender such additional moneys as are required by Section 2.06(b) or the
prepayment of an Affected Lender required by Section 2.06(c), the Borrower may
exercise any one of the following options:
(i) If the determination by an Affected Lender relates only to
Eurodollar Rate Loans then being requested by the Borrower pursuant to
a Notice of Conversion/Continuation, the Borrower may by giving notice
(by telephone promptly confirmed in writing) to the Agent (who shall
promptly give similar notice to each other Lender) no later than the
date immediately prior to the date on which such Eurodollar Rate Loans
are to be made, withdraw that Notice of Conversion/Continuation and the
Eurodollar Rate Loans then being requested shall be made by the Lenders
as Base Rate Loans; or
(ii) Upon written notice to the Agent and each Lender, the
Borrower may terminate the obligations of the Lenders to maintain Loans
as, and to convert Loans into, Eurodollar Rate Loans and in such event,
the Borrower shall, prior to the time any payment pursuant to Section
2.06(c) is required to be made or, if the provisions of Section 2.06(b)
are applicable, at the end of the then current Interest Period, convert
all of the Eurodollar Rate Loans into Base Rate Loans in the manner
contemplated by Section 2.03(d) but without satisfying the advance
notice requirements therein.
(e) COMPENSATION. The Borrower shall compensate each Lender,
upon written request by that Lender (which request shall set forth in reasonable
detail the basis for requesting such amounts), for all reasonable losses,
expenses and liabilities (including, without limitation, any loss (including
interest paid) sustained by that Lender in connection with the re-employment of
such funds), that such Lender may sustain: (i) if for any reason (other than a
default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Notice of Conversion/Continuation or a
telephonic request for borrowing or conversion/continuation or a successive
Interest Period does not commence after notice therefor is given pursuant to
Section 2.03(d), (ii) if any prepayment of any of its Eurodollar Rate Loans
occurs on a date that is not the last day of an Interest Period applicable to
that Loan, (iii) if any prepayment of any of its Eurodollar Rate Loans is not
made on any date specified in a notice of prepayment given by the Borrower, or
(iv) as a consequence of any other default by the Borrower to repay its
Eurodollar Rate Loans when required by the terms of this Agreement.
(f) QUOTATION OF EURODOLLAR RATE. Anything herein to the
contrary notwithstanding, if on any Interest Rate Determination Date the Agent
is as a matter of general practice not quoting rates to first class banks in the
Eurodollar market for the offering of Dollars for deposit with maturities
comparable to the Interest Period and in amounts comparable to the Eurodollar
Rate Loans requested, the Agent shall contact the other Lenders, if any, for
their quotes for rates to first class banks in the Eurodollar market with
respect to the requested Eurodollar Rate Loan, such other Lenders to be
contacted in decreasing order of their respective Pro Rata Shares (and in
alphabetical order in the case of two or more Lenders having the same Pro Rata
Shares). In the event that none of the Lenders are making Eurodollar quotes in
the applicable amount and with the applicable maturity, the Agent shall give the
Borrower and each Lender prompt notice thereof and the Loans requested shall be
made as Base Rate Loans.
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(g) EURODOLLAR RATE TAXES. The Borrower agrees that:
(i) Promptly upon notice from any Lender to the Borrower, the
Borrower will pay, prior to the date on which penalties attach thereto,
all present and future income, stamp and other taxes, levies, or costs
and charges whatsoever imposed, assessed, levied or collected on or in
respect of a Loan solely as a result of the interest rate being
determined by reference to the Eurodollar Rate and/or the provisions of
this Agreement relating to the Eurodollar Rate and/or the recording,
registration, notarization or other formalization of any thereof and/or
any payments of principal, interest or other amounts made on or in
respect of a Loan when the interest rate is determined by reference to
the Eurodollar Rate (all such taxes, levies, costs and charges being
herein collectively called "EURODOLLAR RATE TAXES"); provided, however,
that Eurodollar Rate Taxes shall not include any other Taxes. The
Borrower shall also pay such additional amounts equal to increases in
Taxes payable by that Lender which increases are attributable to
payments made by the Borrower described in the immediately preceding
sentence or this sentence. A certificate as to additional amounts owed
by the Borrower pursuant to this clause (i), showing in reasonable
detail the basis for the calculation thereof, submitted in good faith
to the Borrower and the Agent by any Lender shall be presumed to be
correct. Promptly after the date on which payment of any such
Eurodollar Rate Tax is due pursuant to applicable law, the Borrower
will, at the request of that Lender, furnish to that Lender evidence,
in form and substance satisfactory to that Lender, that the Borrower
has met its obligations under this Section 2.06(g).
(ii) The Borrower will indemnify each Lender against, and
reimburse each Lender on demand for, any Eurodollar Rate Taxes, as
determined by that Lender in its good faith discretion; provided that
such Lender shall provide the Borrower with appropriate receipts for
any payments or reimbursements made by the Borrower pursuant to this
clause (ii) of Section 2.06(g).
(iii) Each Lender organized under the laws of a jurisdiction
outside of the United States (referred to in this Section 2.06(g) as a
"FOREIGN LENDER") as to which payments to be made hereunder or under
the Notes, if any, are exempt from United States withholding tax or are
subject to such tax at a reduced rate under an applicable statute or
tax treaty shall provide to the Borrower and the Agent (x) a properly
completed and executed Internal Revenue Service Form 4224 or Form 1001
or other applicable form, certificate or document prescribed by the
Internal Revenue Service of the United States certifying as to such
Foreign Lender's entitlement to such exemption or reduced rate with
respect to payments to be made to such Foreign Lender hereunder and
under the Notes, if any (referred to in this Section 2.06(g) as a
"CERTIFICATE OF EXEMPTION") or (y) a letter from such Foreign Lender
stating that it is not entitled to any such exemption or reduced rate
(referred to in this Section 2.06(g) as a "LETTER OF NON-EXEMPTION").
Each Foreign Lender shall provide such a Certificate of Exemption or a
Letter of Non-Exemption before the Effective Date. Each Foreign Lender
that becomes a Lender pursuant to an Assignment and Acceptance that has
become effective pursuant to Section 11.05 shall provide a Certificate
of Exemption or a Letter of Non-Exemption on the date such Foreign
Lender becomes a Lender. Until the Borrower and the Agent have received
from such Foreign Lender a Certificate of Exemption, the accuracy of
which shall be
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reasonably satisfactory to the Borrower, the Borrower shall, subject to
its obligations under Sections 2.06(g)(i), 2.06(g)(ii) and 2.06(i), be
entitled to withhold taxes from such payments to such Foreign Lender at
the statutory rate applicable to amounts to be paid hereunder to such
Foreign Lender.
(iv) Notwithstanding anything to the contrary contained in
this Section 2.06g), the Borrower shall not be required to pay any
amounts pursuant to this Section 2.06(g) to any Foreign Bank unless
such Foreign Bank has provided to the Borrower, within 60 days after
the receipt by such Foreign Bank of a written request therefor, either
a Certificate of Exemption or a Letter of Non-Exemption.
(h) BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of, any of
its branch offices or the office of an Affiliate of that Lender.
(i) INCREASED COSTS. Except as provided in Section 2.06(b)
with respect to certain determinations on Interest Rate Determination Dates, if,
after the date hereof by reason of, (x) the introduction of or any change
(including, without limitation, any change by way of imposition or increase of
reserve requirements) in, or in the interpretation of, any law or regulation, or
(y) the compliance with any guideline or request from any central bank or other
governmental authority or quasi-governmental authority exercising control over
banks or financial institutions generally (whether or not having the force of
law):
(i) any Lender (or its applicable lending office) shall be
subject to any tax, duty or other charge with respect to its Eurodollar
Rate Loans or its obligation to make Eurodollar Rate Loans, or shall
change the basis of taxation of payments to any Lender of the principal
of or interest on its Eurodollar Rate Loans or its obligation to make
Eurodollar Rate Loans (except for changes in the rate of tax on the
overall net income of such Lender or its applicable lending office
imposed by the jurisdiction (whether local, state, federal or foreign)
in which such Lender's principal executive office or applicable lending
office is located); or
(ii) any reserve (including, without limitation, any imposed
by the Board of Governors of the Federal Reserve System), special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender's applicable lending
office shall be imposed or deemed applicable or any other condition
affecting its Eurodollar Rate Loans or its obligation to make
Eurodollar Rate Loans shall be imposed on any Lender or its applicable
lending office or the interbank Eurodollar market,
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Rate Loans, or
there shall be a reduction in the amount received or receivable by that Lender
or its applicable lending office, then the Borrower shall from time to time,
upon written notice from and demand by that Lender (with a copy of such notice
and demand to the Agent), pay to the Agent for the account of that Lender,
within five Business Days after receipt of such notice and demand, additional
amounts sufficient to indemnify that Lender against such increased cost or
reduced amount. A certificate as to the
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amount of such increased cost or reduced amount, submitted to the Borrower and
the Agent by that Lender, shall be presumed to be correct. Any payments to be
made by the Borrower under Sections 2.06(b), 2.06(g) or 2.06(i) are to be
without duplication.
(j) ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this Section 2.06 shall be
made as though that Lender had actually funded its relevant Eurodollar Rate Loan
through the purchase of a Eurodollar deposit bearing interest at the Eurodollar
Rate in an amount equal to the amount of that Eurodollar Rate Loan and having a
maturity comparable to the relevant Interest Period and through the transfer of
such Eurodollar deposit from an offshore office of that Lender to a domestic
office of that Lender in the United States of America; provided, however, that
each Lender may fund each of its Eurodollar Rate Loans in any manner it sees fit
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 2.06.
(k) EURODOLLAR RATE LOANS AFTER DEFAULT. Unless the Agent and
the Required Lenders shall otherwise agree, after the occurrence of and during
the continuance of a Default or an Event of Default, the Borrower may not elect
to have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan
after the expiration of any Interest Period then in effect for that Loan.
(l) AFFECTED LENDERS' OBLIGATION TO MITIGATE. Each Lender
agrees that, as promptly as practicable after it becomes aware of the occurrence
of an event or the existence of a condition that would cause it to be an
Affected Lender under Section 2.06(b) or 2.06(c) or that would entitle such
Lender to receive payments under Section 2.06(g) or 2.06(i), it will, to the
extent not inconsistent with such Lender's internal policies, use reasonable
efforts to make, fund or maintain the affected Eurodollar Rate Loans of such
Lender through another lending office of such Lender if as a result thereof the
additional moneys which would otherwise be required to be paid to such Lender
pursuant to Section 2.06(b), 2.06(g) or 2.06(i) would be materially reduced or
the illegality or other adverse circumstances which would otherwise require
prepayment of such Loans pursuant to Section 2.06(c) would cease to exist, and
if, as determined by such Lender in its sole discretion, the making, funding or
maintaining of such Loans through such other lending office would not otherwise
materially adversely affect such Loans or such Lender. The Borrower hereby
agrees to pay all reasonable expenses incurred by any Lender in utilizing
another lending office of such Lender pursuant to this Section 2.06(l).
2.07 LETTERS OF CREDIT.
(a) LETTERS OF CREDIT. All Letters of Credit outstanding under
the Existing Credit Agreement on the Effective Date shall be deemed to be
Letters of Credit issued pursuant to the terms of this Agreement. In addition to
the Borrower requesting that the Issuing Bank continue Letters of Credit
existing on the Effective Date, the Borrower may request, in accordance with the
provisions of this Section 2.07, on and after the Effective Date to and
excluding the Termination Date, that the Issuing Bank issue Letters of Credit
for the account of the Borrower; provided that the Borrower shall not request
that the Issuing Bank issue (and the Issuing Bank shall not issue) any Letter of
Credit if, after giving effect to such issuance, the Letter of Credit Usage
would exceed $3,400,000. In no event shall the Issuing Bank issue any Letter of
Credit having an expiration date later than the Termination Date or the date
that is one
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year after the issuance thereof except as expressly provided herein; provided,
however, that the Issuing Bank may agree to renew any Letter of Credit
automatically annually for a period not to exceed one year if the Issuing Bank
does not cancel such renewal. If the Issuing Bank, in its sole discretion,
determines to issue a Letter of Credit expiring after the scheduled Termination
Date or to renew an existing Letter of Credit to a date expiring after the
scheduled Termination Date, the Borrower shall be required on the third Business
Day immediately preceding the Termination Date to deposit with the Issuing Bank
cash collateral for the repayment of any drawings under the Letter of Credit,
such deposit to be in an amount equal to the maximum amount that may be drawn
under such Letter of Credit and to be upon such terms and conditions as the
Issuing Bank may require. The issuance or renewal of any Letter of Credit in
accordance with the provisions of this Section 2.07 shall require the
satisfaction of the conditions set forth in Section 5.02.
Each Letter of Credit supporting the payment of Indebtedness
may provide that the Issuing Bank may (but shall not be required to) pay the
beneficiary thereof upon the occurrence of a Default or an Event of Default and
the acceleration of the maturity of the Loans or, if payment is not then due to
the beneficiary, provide for the deposit of funds in an account to secure
payment to the beneficiary and that any funds so deposited shall be paid to the
beneficiary of the Letter of Credit if conditions to such payment are satisfied
or returned to the Issuing Bank (or, if all Obligations shall have been
indefeasibly paid in full, to the Borrower) if no payment to the beneficiary has
been made and the final date available for drawings under the Letter of Credit
has passed. Each payment or deposit of funds by the Issuing Bank as provided in
this paragraph shall be treated for all purposes of this Agreement as a drawing
duly honored by the Issuing Bank under the related Letter of Credit.
(b) NOTICE OF ISSUANCE. Whenever the Borrower desires to cause
the Issuing Bank to issue or renew a Letter of Credit, it shall deliver to the
Issuing Bank and the Agent a Notice of Issuance of Letter of Credit in the form
of EXHIBIT B (i) no later than 1:00 P.M. (New York time) at least four Business
Days in advance of the proposed date of issuance or such shorter time as may be
acceptable to the Issuing Bank, with respect to the issuance of a Letter of
Credit, and (ii) as provided in the Letter of Credit with respect to a renewal
of a Letter of Credit. The Notice of Issuance of Letter of Credit shall specify
(i) the proposed date of issuance or renewal (which shall be a Business Day),
(ii) the face amount of the Letter of Credit, (iii) the expiration date of the
Letter of Credit, (iv) the name and address of the beneficiary, (v) such other
documents or materials as the Issuing Bank may reasonably request, and (vi) a
precise description of the documents and the verbatim text of any certificate to
be presented by the beneficiary which, if presented by the beneficiary prior to
the expiration date of the Letter of Credit, would require the Issuing Bank to
make payment under the Letter of Credit; provided that the Issuing Bank, in its
sole judgment, may require changes in any such documents and certificates. In
determining whether to pay any Letter of Credit, the Issuing Bank shall be
responsible only to use reasonable care to determine that the documents and
certificates required to be delivered under that Letter of Credit have been
delivered and that they comply on their face with the requirements of that
Letter of Credit.
(c) PAYMENT OF AMOUNTS DRAWN UNDER OR NECESSARY TO
COLLATERALIZE LETTERS OF CREDIT. In the event (i) the beneficiary of any Letter
of Credit makes a drawing thereunder or (ii) the Borrower is required under
Section 2.07(a) or Section 9 to cash collateralize any Letter of Credit, the
Issuing Bank immediately shall notify the Borrower, and
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the Borrower shall reimburse the Issuing Bank or make a deposit with the Issuing
Bank, as appropriate, on the day on which such drawing is honored or such cash
collateral deposit is required in an amount in same day funds equal to the
amount of such drawing or, in the case of such a deposit, the maximum amount
that may be drawn under the applicable Letter of Credit.
(d) FAILURE OF BORROWER TO REIMBURSE THE ISSUING BANK. If the
Borrower shall fail to reimburse the Issuing Bank, for any reason, as provided
in Section 2.07(c), the Issuing Bank shall promptly notify the Agent. The Agent
shall promptly thereafter notify the Lenders. The Agent shall thereafter apply
all amounts received by it in accordance with the Pro Rata Shares of Lender and
the Issuing Bank as provided in clause (ii) of the definition of "Pro Rata
Shares" until such time as all unreimbursed draws on the Letters of Credit are
paid in full and, if applicable, any requirement to cash collateralize the
Letters of Credit is satisfied.
(e) COMPENSATION. The Borrower agrees to pay the following
amounts to the Issuing Bank with respect to each Letter of Credit issued by it:
(i) with respect to each Letter of Credit, (A) a letter of
credit fee equal to the Applicable Eurodollar Margin multiplied by the
maximum amount available from time to time for drawing under such
Letter of Credit (calculated on the basis of a 360-day year and the
actual number of days elapsed) and (B) a facing fee equal to 0.25% per
annum multiplied by the maximum amount available from time to time for
drawing under such Letter of Credit (calculated on the basis of a
360-day year and the actual number of days elapsed), which amounts
payable under clauses (A) and (B) shall be payable to the Issuing Bank
quarterly in arrears on and to the last Business Day of each January,
April, July and October commencing October, 2001; provided that if the
aggregate amount of the facing fee payable under clause (B) in respect
of any Letter of Credit will be less than $500, the Borrower shall pay
to the Issuing Bank, on the date of issuance of such Letter of Credit,
a facing fee of $500 which shall be in lieu of the facing fee otherwise
payable pursuant to such clause (B);
(ii) with respect to drawings made under any Letter of Credit,
interest, payable on demand, on the amount paid by the Issuing Bank in
respect of each such drawing from the date of the drawing through the
date such amount is reimbursed by the Borrower at a rate that is equal
to the sum of the Base Lending Rate and the Applicable Base Margin;
provided that if such amount is not paid on demand, such amount shall
bear interest thereafter at a rate that is equal to 2.00% per annum in
excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans which such rate shall not thereafter be increased
pursuant to Section 2.03(e); and
(iii) with respect to the issuance, amendment or transfer of
each Letter of Credit and each drawing made thereunder, documentary and
processing charges in accordance with the Issuing Bank's standard
schedule for such charges in effect at the time of such issuance,
amendment, transfer or drawing, as the case may be, or as otherwise
agreed to by the Issuing Bank.
(iv) On the last Business Day of July, 2001, the Borrower
shall pay to the Issuing Bank an amount equal to all amounts that would
have been payable by Borrower
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under the terms of the Existing Credit Agreement if the Letters of
Credit had continued to be issued thereunder instead of pursuant
hereto. The Agent shall distribute to the Lenders according to their
respective Pro Rata Shares under the Existing Credit Agreement an
aggregate amount equal to the amounts paid by the Borrower pursuant to
this clause (iv) multiplied by a fraction, the numerator of which is
the number of days between April 30, 2001 and the Effective Date and
the denominator of which is 90.
(f) OBLIGATIONS ABSOLUTE. The obligation of the Borrower to
reimburse the Issuing Bank for drawings made under the Letters of Credit issued
by it shall be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances including,
without limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any persons or entities for
whom any such transferee may be acting), the Agent, any Lender or any
other Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction
(including any underlying transaction between the Borrower and the
beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; provided that the Issuing Bank
shall use reasonable care to determine that the documents and
certificates required to be delivered under any Letter of Credit have
been delivered and that they comply on their face with the requirements
of that Letter of Credit;
(iv) payment by the Issuing Bank under any Letter of Credit
against presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of Credit;
provided that the Issuing Bank shall use reasonable care to determine
that the documents and certificates required to be delivered under any
Letter of Credit have been delivered and that they comply on their face
with the requirements of that Letter of Credit;
(v) any adverse change in the business, operations, property,
assets, condition (financial or otherwise) or prospects of the Borrower
or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Credit Document
by the Borrower or any of its Subsidiaries, the Agent or any Lender
(other than the Issuing Bank);
(vii) any other circumstance or happening whatsoever, that is
similar to any of the foregoing; or
(viii) the fact that a Default or an Event of Default shall
have occurred and be continuing;
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provided that the Borrower shall not be required to pay any such amounts to the
extent they arise from the gross negligence or willful misconduct of the Issuing
Bank (as determined by a court of competent jurisdiction).
(g) ADDITIONAL PAYMENTS. If by reason of:
(i) any change in any applicable law, regulation, rule, decree
or regulatory requirement or any change in the interpretation or
application by any judicial or regulatory authority of any law,
regulation, rule, decree or regulatory requirement, in each case
occurring after the Effective Date; or
(ii) compliance by the Issuing Bank with any direction,
request or requirement (whether or not having the force of law)
announced or issued after the Effective Date by any governmental or
monetary authority, including, without limitation, any announcements or
issuances under Regulation D of the Board of Governors of the Federal
Reserve System;
THEN:
(i) the Issuing Bank shall be subject to any tax, levy, charge
or withholding of any nature or to any variation thereof or to any
penalty with respect to the maintenance or fulfillment of its
obligations under this Section 2.07, whether directly or by such being
imposed on or suffered by the Issuing Bank;
(ii) any reserve, special deposit, premium, FDIC assessment,
capital adequacy or similar requirement is or shall be applicable,
imposed or modified in respect of any Letters of Credit issued by the
Issuing Bank; or
(iii) there shall be imposed on the Issuing Bank any other
condition regarding this Section 2.07 or any Letter of Credit;
AND the result of the foregoing is to directly or indirectly increase the cost
to the Issuing Bank of issuing, making or maintaining any Letter of Credit, or
to reduce the amount receivable in respect thereof by the Issuing Bank, THEN and
in any such case the Issuing Bank may, at any time within a reasonable period
after the additional cost is incurred or the amount received is reduced, notify
the Borrower, and the Borrower shall pay within five Business Days of the date
of such notice such amounts as the Issuing Bank may specify to be necessary to
compensate the Issuing Bank for such additional cost or reduced receipt,
together with interest on such amount from the date demanded until payment in
full thereof at a rate equal at all times to the Base Lending Rate plus 2.00%
per annum. The determination by the Issuing Bank, as the case may be, of any
amount due pursuant to this Section 2.07(g) as set forth in a certificate
setting forth the calculation thereof in reasonable detail, shall be presumed to
be correct.
(h) INDEMNIFICATION; NATURE OF THE ISSUING BANK'S DUTIES. In
addition to amounts payable as elsewhere provided in this Section 2.07, the
Borrower hereby agrees to protect, indemnify, pay and save harmless the Issuing
Bank from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys' fees and reasonable
allocated costs of internal counsel) that the Issuing Bank may
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incur or be subject to as a consequence, direct or indirect, of (i) the issuance
of any Letter of Credit, other than as a result of gross negligence or willful
misconduct of the Issuing Bank or the Issuing Bank's failure to use reasonable
care to determine that the documents and certificates required to be delivered
under such Letter of Credit had been delivered and that they complied on their
face with the requirements of that Letter of Credit as determined by a court of
competent jurisdiction or (ii) the failure of the Issuing Bank to honor a
drawing under any Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "GOVERNMENT
ACTS").
As between the Borrower and the Issuing Bank, the Borrower
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit issued by the Issuing Bank by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing, the
Issuing Bank shall not be responsible (absent gross negligence or willful
misconduct (as determined by a court of competent jurisdiction)): (i) for the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of such Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with conditions required in order
to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) for errors in
interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; and (viii) for any consequences
arising from causes beyond the control of the Issuing Bank, including, without
limitation, any Government Acts. None of the above shall affect, impair, or
prevent the vesting of any of the Issuing Bank's rights or powers hereunder;
provided that, notwithstanding the foregoing, the Issuing Bank shall use
reasonable care to determine that the documents and certificates required to be
delivered under such Letter of Credit have been delivered and that they comply
on their face with the requirements of that Letter of Credit.
In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Bank under or in connection with the Letters of Credit issued by it or
the related certificates, if taken or omitted in good faith and absent gross
negligence or willful misconduct of the Issuing Bank (as determined by a court
of competent jurisdiction), shall not put the Issuing Bank under any resulting
liability to the Borrower.
Notwithstanding anything to the contrary contained in this
Section 2.07(h), the Borrower shall have no obligation to indemnify the Issuing
Bank in respect of any liability incurred by the Issuing Bank arising solely out
of the gross negligence or willful misconduct of the Issuing Bank as determined
by a court of competent jurisdiction, or out of the wrongful dishonor by the
Issuing Bank of a proper demand for payment made under the Letters of Credit;
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provided that the Issuing Bank shall use reasonable care to determine that the
documents and certificates required to be delivered under any Letter of Credit
have been delivered and that they comply on their face with the requirements of
that Letter of Credit.
(i) COMPUTATION OF INTEREST. Interest payable pursuant to this
Section 2.07 shall be computed on the basis of a 360-day year and the actual
number of days elapsed in the period during which it accrues.
2.08 LOAN ACCOUNTS. Each Lender shall open and maintain on its
books one or more loan accounts in the name of Borrower; provided that the
failure to open and maintain such loan accounts shall not affect the obligations
of Borrower hereunder. Each loan account shall show (without duplication) as
debits thereto each Lender's portion of each Base Rate Loan and each Eurodollar
Loan and as credits thereto all Loan payments received for the account of such
Lender with respect to such Lender's portion of each such Loan and applied to
principal so that the balance of the loan account(s) at all times reflects the
principal amount due such Lender from Borrower with respect to all Base Rate
Loans and all Eurodollar Loans. All entries in said books shall be presumptive
evidence of the making of such Base Rate Loans and such Eurodollar Loans, the
obligation of Borrower to repay each such Loan, and all payments received and
disbursed by such Lender. Borrower agrees that if, in the opinion of any Lender,
a promissory note or other evidence of indebtedness is required or appropriate
to reflect or enforce any Loan outstanding to or to be made by such Lender then
Borrower shall promptly execute and deliver to such Lender a promissory note to
evidence such Lender's Loan in substantially the form of EXHIBIT C in the amount
of such Lender's Term Loan Commitment with appropriate insertions, together with
such documents as such Lender may reasonably request to evidence the due
authorization, execution, delivery and enforceability of such Note. If any Note
is issued hereunder, Agent and the Borrower may treat the payee of that Note as
the owner thereof for all purposes.
SECTION 3. FEES.
3.01 FEES.
(a) AGENCY FEE. The Borrower agrees to pay to the Agent on the
Effective Date an amount separately agreed to by the Agent and the Borrower.
(b) ADMINISTRATIVE FEE. The Borrower agrees to pay to the
Agent an annual administrative fee in the amount and at the times separately
agreed to by the Agent and the Borrower.
(c) RESTRUCTURING FEE. The Borrower shall pay to the Agent,
for distribution to each of the Lenders in accordance with its Pro Rata Share,
restructuring fees of (i) $1,200,000 on the Effective Date, (ii) $200,000 on
each of December 31, 2001, March 31, 2002 and June 30, 2002, and (iii) $459,000
on September 30, 2002; provided that the Pro Rata Share of the restructuring fee
to be paid to each Lender, other than the Bank of Montreal, on the Effective
Date shall be reduced by the amount owed by each Lender, other than the Bank of
Montreal, to the Issuing Bank pursuant to Section 5.01(m).
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(d) ANNUAL FEE. Within five Business Days after each
anniversary of the Effective Date and on the Termination Date, the Borrower
agrees to pay to the Agent a fee for distribution to each of the Lenders in
accordance with its Pro Rata Share an amount equal to 0.5% of the sum of the
average of the principal amount outstanding on the Loans during the preceding
one year period and the Letter of Credit Usage (or, with respect to the
Termination Date, the period from the prior anniversary of the Effective Date
and the Termination Payment Date). The annual fee due on the Termination Date
shall be prorated based on the actual number of days in the period from the
prior anniversary of the Effective Date and the Termination Date and a 360-day
year.
SECTION 4. PREPAYMENTS AND PAYMENTS.
4.01 SCHEDULED PAYMENTS OF LOANS. The Borrower shall make
principal payments on the Loans in installments on the dates and in the amounts
set forth below:
=============================================================
DATE SCHEDULED PAYMENT
-------------------------------------------------------------
September 30, 2001 $ 750,000.00
-------------------------------------------------------------
December 31, 2001 $ 750,000.00
-------------------------------------------------------------
March 31, 2002 $ 11,600,000.00
-------------------------------------------------------------
June 30, 2002 $ 1,000,000.00
-------------------------------------------------------------
September 30, 2002 $ 1,000,000.00
-------------------------------------------------------------
December 31, 2002 $281,508,020.09
provided that the scheduled installments of principal of the Loans set forth
above shall be reduced in connection with (i) any voluntary prepayments of the
Loans in accordance with Section 4.02(a) and (ii) any mandatory prepayments in
accordance with Section 4.02(b); and provided, further that the Loans and all
other amounts owed hereunder with respect to the Loans shall be paid in full no
later than the Termination Date, and the final installment payable by the
Borrower in respect of the Loans on such date shall be in an amount, if such
amount is different from that specified above, sufficient to repay all amounts
owing by the Borrower under this Agreement with respect to the Loans.
4.02 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. The Borrower shall have the right
to prepay the Loans, without premium or penalty, in whole or in part from time
to time on the following terms and conditions: (i) the Borrower shall deliver to
the Agent at its Notice Office prior notice of its intent to prepay the Loans
and the amount of such prepayment no later than 12:00 Noon (New York time) one
Business Day in advance of the proposed prepayment date (in the case of a Base
Rate Loan) and three Business Days in advance of the proposed prepayment date
(in the case of a Eurodollar Rate Loan), which notice the Agent shall promptly
transmit to each of the Lenders, and (ii) Eurodollar Rate Loans prepaid other
than on the expiration of the Interest Period applicable thereto shall be
subject to payment of breakage costs by the Borrower. Any such voluntary
prepayment shall be applied as specified in Section 4.03(a).
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(b) MANDATORY PREPAYMENTS. The Loans shall be prepaid in the
amounts and under the circumstances set forth below, all such prepayments to be
applied as specified in Section 4.03:
(i) Prepayments and Reductions Due to Issuance of Securities.
No later than the second Business Day following the date of receipt by
the Borrower of the cash proceeds (net of underwriting discounts and
commissions and other reasonable costs associated therewith) from the
issuance of any Securities of the Borrower, the Borrower shall prepay
the Loans in an aggregate amount equal to 100% of such net cash
proceeds. Concurrently with any prepayment of the Loans pursuant to
this Section 4.02(b)(i), the Borrower shall deliver to Agent an
Officers' Certificate demonstrating the calculation of the net cash
proceeds that gave rise to such prepayment. In the event that the
Borrower shall subsequently determine that the actual net cash proceeds
were greater than the amount set forth in such Officers' Certificate,
the Borrower shall promptly make an additional prepayment of the Loans
in an amount equal to the amount of such excess, and the Borrower shall
concurrently therewith deliver to Agent an Officers' Certificate
demonstrating the derivation of the additional net cash proceeds
resulting in such excess.
(ii) Prepayments and Reductions Due to Asset Sales. No later
than the fifth Business Day following the date of receipt by the
Borrower or any of its Subsidiaries of the cash proceeds (net of any
expenses reasonably incurred by the Borrower or any of its Subsidiaries
in respect of such Asset Sales, including, without limitation,
reasonable attorneys' fees and expenses and the amount of any taxes
actually paid or to become payable by the Borrower, as reasonably
estimated by its Chief Financial Officer, in respect of such Asset
Sale), the Borrower shall prepay the Loans in an aggregate amount equal
to the net cash proceeds. Concurrently with any prepayment of the Loans
pursuant to this Section 4.02(b)(ii), the Borrower shall deliver to
Agent an Officers' Certificate demonstrating the calculation of the net
cash proceeds that gave rise to such prepayment. In the event that the
Borrower shall subsequently determine that the actual net cash proceeds
were greater than the amount set forth in such Officers' Certificate,
the Borrower shall promptly make an additional prepayment of the Loans
in an amount equal to the amount of such excess, and the Borrower shall
concurrently therewith deliver to Agent an Officers' Certificate
demonstrating the derivation of the additional net cash proceeds
resulting in such excess. Cash proceeds for this purpose shall include
the collection of Accounts Receivable associated with the assets sold
in such Asset Sale even if such Accounts Receivable are not included in
the assets sold in such Asset Sale.
(iii) Prepayments Due to Tax Refunds. No later than the
second Business Day following the date of receipt by the Borrower or
any of its Subsidiaries of any cash proceeds from any tax refunds made
by the Internal Revenue Service or any state or local Governmental
Authority, the Borrower shall prepay the Loans in an aggregate amount
equal to 100% of such cash proceeds. Concurrently with any prepayment
of the Loans pursuant to this Section 4.02(b)(iii), the Borrower shall
deliver to the Agent an Officers' Certificate demonstrating the
calculation of the cash proceeds that gave rise to such prepayment. In
the event that the Borrower shall subsequently determine that the
actual cash proceeds were greater than the amount set forth in such
Officers' Certificate, the Borrower shall promptly make an additional
prepayment of the Loans in an amount equal
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to the amount of such excess, and the Borrower shall concurrently
therewith deliver to the Agent an Officers' Certificate demonstrating
the derivation of the additional cash proceeds resulting in such
excess.
(iv) Prepayments Due to Excess Casualty Proceeds. No later
than the second Business Day following the receipt by the Borrower or
any of its Subsidiaries of any Excess Casualty Proceeds, the Borrower
shall prepay the Loans in an aggregate amount equal to 100% of such
Excess Casualty Proceeds. Concurrently with any prepayment of the Loans
pursuant to this Section 4.02(b)(iv), the Borrower shall deliver to the
Agent an Officers' Certificate demonstrating the calculation of the
Excess Casualty Proceeds that gave rise to such prepayment. In the
event that the Borrower shall subsequently determine that the Excess
Casualty Proceeds are greater than the amount set forth in such
Officers' Certificate, the Borrower shall promptly make an additional
prepayment of the Loans in an amount equal to the amount of the
additional Excess Casualty Proceeds, and the Borrower shall
concurrently therewith deliver to the Agent an Officers' Certificate
demonstrating the derivation of the additional Excess Casualty
Proceeds.
(v) EBITDA Payments. On or prior to 45 days after the end of
each quarter commencing June 30, 2001, the Borrower shall prepay the
Loans in the aggregate amount of the EBITDA Payment for such quarter.
4.03 APPLICATION OF PREPAYMENTS.
(a) APPLICATION OF VOLUNTARY PREPAYMENTS BY ORDER OF MATURITY.
Subject to Section 2.07(d), any voluntary prepayments of the Loans pursuant to
Section 4.02(a) shall be applied to reduce the scheduled installments of
principal of the Loans set forth in Section 4.01 in forward order of maturity
and to cash collateralize a proportionate share of the Letters of Credit as
determined in accordance with clause (iii) of the definition of "Pro Rata
Share".
(b) APPLICATION OF CERTAIN OTHER MANDATORY PREPAYMENTS. All
proceeds of Asset Sales held by Agent in escrow on the Effective Date shall be
immediately applied as a mandatory prepayment of the Loans pursuant to Section
4.02(b)(ii) to the principal installment due on March 31, 2002, including,
without limitation, the net cash proceeds of the sale of certain assets of AHPT
to Option Care Enterprises, Inc. Subject to Section 2.07(d), any amount required
to be applied as a mandatory prepayment of the Loans pursuant to Section
4.02(b)(ii) shall first be applied to the principal installment due on the Loans
on March 31, 2002. Subject to Section 2.07(d), any mandatory prepayments of the
Loans pursuant to Section 4.02(b)(i), Section 4.02(b)(ii) in excess of the
principal payment due on March 31, 2002, Section 4.02(b)(iii) or Section
4.02(b)(iv) shall be applied to reduce the scheduled installments of principal
of the Loans set forth in Section 4.01 in inverse order of maturity and to cash
collateralize a proportionate share of the Letters of Credit as determined in
accordance with clause (iii) of the definition of Pro Rata Share. Subject to
Section 2.07(d), any mandatory prepayments of the Loans pursuant to Section
4.02(b)(v) shall be applied to reduce the scheduled installments of principal of
the Loans in Section 4.01 in forward order of maturity.
(c) APPLICATION OF PREPAYMENTS TO BASE RATE LOANS AND
EURODOLLAR RATE LOANS. Any prepayment of the Loans shall be applied first to
Base Rate Loans to the full extent
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thereof before application to Eurodollar Rate Loans, in each case in a manner
which minimizes the amount of any payments required to be made by the Borrower
pursuant to subsection 2.06(e).
(d) APPLICATION OF PREPAYMENTS TO PRINCIPAL AND INTEREST. All
payments in respect of the principal amount of any Loan shall include payment of
accrued interest on the principal amount being repaid or prepaid, and all such
payments (and, in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be applied to the
payment of interest before application to principal.
(e) DIRECT PAYMENTS. Borrower shall, and shall cause each of
its Subsidiaries to, cause all amounts payable to Agent pursuant to Section
4.02(b)(i) to be paid directly to Agent by execution of irrevocable payment
instructions or powers of attorney in form and substance satisfactory to Agent
or otherwise in a manner satisfactory to Agent.
4.04 GENERAL PROVISIONS REGARDING PAYMENTS.
(a) METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Agent for the account of the Lender or the Lenders entitled
thereto not later than 1:00 P.M. (New York time), on the date when due and shall
be made in Dollars in immediately available funds at the Payment Office of the
Agent. Whenever any payment to be made hereunder or under any Note shall be
stated to be due on a day that is not a Business Day, the due date thereof shall
be extended to the next succeeding Business Day and such extension of time shall
be included in the computation of the payment of interest hereunder or under any
Note or of the Fees hereunder, as the case may be; provided, however, that if
the day on which payment relating to a Eurodollar Rate Loan is due is not a
Business Day but is a day of the month after which no further Business Day
occurs in that month, then the due date thereof shall be the next preceding
Business Day. All voluntary prepayments shall be made in an aggregate minimum
amount of $100,000 and integral multiples of $10,000 in excess of that amount.
(b) NET PAYMENTS. All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
(c) APPORTIONMENT OF PAYMENTS. Aggregate principal and
interest payments attributable to the Loans shall be apportioned among all
outstanding Loans to which such payments relate, and such payments shall be
apportioned ratably to the Lenders, proportionately to the Lenders' respective
Pro Rata Shares as set forth in clause (i) of the definition of "Pro Rata
Shares". The Agent promptly shall distribute to each Lender at its primary
address set forth below its name on the appropriate signature page hereof or
such other address as any Lender may request its Pro Rata Share of all such
payments received by the Agent. The Fees of such Lender when received by the
Agent pursuant to Section 3.01 shall be distributed to the respective Pro Rata
Shares as set forth in clause (iii) of the definition of "Pro Rata Shares".
Anything contained in this Agreement or the Credit Documents
to the contrary notwithstanding, upon the occurrence and during the continuance
of any Event of Default specified in Section 9 or after the acceleration of the
maturity of the Loans and the other amounts referred to in Section 9, all
payments relating to the Loans and the other Obligations shall be
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made to the Agent for the account of the Lenders and Issuing Bank and all
amounts received by the Agent that are to be applied to the payment of the
Obligations shall be distributed to the Lenders and the Issuing Bank in
accordance with their Pro Rata Shares as set forth in clause (ii) of the
definition of "Pro Rata Shares".
SECTION 5. CONDITIONS PRECEDENT.
5.01 CONDITIONS TO EFFECTIVENESS. This Agreement shall become
effective only upon satisfaction of all of the following conditions on or prior
to June 8, 2001:
(a) EXECUTION OF AGREEMENT; CREDIT DOCUMENTS; NOTES. The Agent
shall have received: (i) an original of this Agreement (whether the same or
different copies) duly executed by the Borrower, each Lender and the Agent, (ii)
an original Note made to the order of each Lender that has requested that a Note
be issued to it on the Effective Date, duly executed by the Borrower in the
amount, maturity and as otherwise provided herein, (iii) an original of the
Warrant Agreement, duly executed by the Borrower in favor of each of the
Lenders, (iv) original Warrant Certificates in favor of each of the Lenders,
duly executed by the Borrower, in the amounts set forth in the Warrant
Agreement, (v) an original Consent to Amendment and Restatement duly executed by
each Guarantor Subsidiary, (vi) an original Registration Rights Agreement duly
executed by Borrower, Agent and Lenders, (vii) an original Concentration Bank
Agreement duly executed by Borrower and PNC Bank, National Association, (viii) a
duly executed Blocked Account Agreement duly executed by Borrower, and (ix) to
the extent not already received, signed copies of the other Credit Documents
(whether the same or different copies) duly executed by the parties thereto,
including, without limitation, the Guarantor Subsidiary Documents duly executed
by each Guarantor Subsidiary that has not previously executed such documents.
(b) NO DEFAULT; REPRESENTATION AND WARRANTIES; MATERIAL
ADVERSE CHANGES. All representations and warranties of the Borrower and its
Subsidiaries set forth in this Agreement and in each of the other Credit
Documents shall be true, correct and complete in all material respects on and as
of the Effective Date and after giving effect to the transactions contemplated
to occur on such date, and the Borrower shall have delivered to the Agent an
Officer's Certificate, dated as of the Effective Date, signed by the President
or Vice President of the Borrower, and attested to by the Secretary or any
Assistant Secretary of the Borrower, in form and substance satisfactory to the
Agent, to the effect that on and as of the Effective Date and after giving
effect to the transactions contemplated to occur on such date, (i) no Default or
Event of Default shall have occurred and be continuing, (ii) all representations
and warranties contained herein and in the other Credit Documents are true,
correct and complete in all material respects and (iii) no material adverse
change has occurred in the business, operations, properties, assets or condition
(financial or otherwise) or prospects of any of the Borrower and its
Subsidiaries taken as whole since December 31, 2000.
(c) CORPORATE DOCUMENTS; PROCEEDINGS.
(i) On the Effective Date, the Agent shall have received a
certificate, dated the Effective Date, signed by the President or Vice
President of the Borrower, and attested to by the Secretary or any
Assistant Secretary of the Borrower, in form and
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substance satisfactory to the Agent, certifying (A) resolutions of the
Board of Directors of the Borrower authorizing and approving this
Agreement, the Notes, if any, the Warrant Agreement, the Warrant
Certificates, the Registration Rights Agreement, the Concentration Bank
Agreement, the Blocked Account Agreement, the other Credit Documents
and the transactions contemplated hereby, (B) the signatures and
incumbency of the Borrower's officers executing this Agreement, the
Notes, if any, the Warrant Agreement, the Warrant Certificates, the
Registration Rights Agreement, the Concentration Bank Agreement, the
Blocked Account Agreement, any other Credit Documents to which the
Borrower is a party and the documents, instruments or other
certificates to be delivered in connection with this Agreement and the
other Credit Documents, and (C) the Certificate of Incorporation and
By-Laws of the Borrower together with copies of the Certificate of
Incorporation and By-Laws of the Borrower and the resolutions of the
Borrower referred to in such certificate. In lieu of delivering a copy
of its Certificate of Incorporation or By-Laws to the Agent pursuant to
the preceding sentence, the Borrower may certify in its certificate
delivered pursuant to this clause (i) that such Certificate of
Incorporation or By-Laws, as the case may be, were delivered to the
Agent pursuant to the Existing Credit Agreement and that there has been
no change in such Certificate of Incorporation or By-Laws, as the case
may be, since the date of such delivery.
(ii) On the Effective Date, the Agent shall have received a
certificate, dated the Effective Date, signed by the President or Vice
President of each of the Borrower's Subsidiaries party to any Credit
Document, and attested to by the Secretary or any Assistant Secretary
of such Subsidiary, in form and substance satisfactory to the Agent,
certifying (A) the resolutions adopted by the Board of Directors of
such Subsidiary approving and authorizing the Consent to Amendment and
Restatement and the transactions contemplated thereby and by this
Agreement and, with respect to any Guarantor Subsidiary that has not
executed the Guaranty Subsidiary, the Guarantor Subsidiary Documents,
(B) the signatures and incumbency of the officers of such Subsidiary
executing the Credit Documents to which such Subsidiary is a party and
the documents, instruments or other certificates to be delivered in
connection with this Agreement and the other Credit Documents, and (C)
the Articles or Certificate of Incorporation or other charter documents
and By-Laws of such Subsidiary, together with copies of the Articles or
Certificate of Incorporation or other charter documents and By-Laws of
such Subsidiary and the resolutions of such Subsidiary referred to in
such certificate. In lieu of delivering a copy of its Articles or
Certificate of Incorporation or other charter documents or By-Laws to
the Agent pursuant to the preceding sentence, any of the Borrower's
Subsidiaries may certify in its certificate delivered pursuant to this
clause (ii) that such Articles or Certificate of Incorporation, other
charter documents or By-Laws, as the case may be, were delivered to the
Agent pursuant to the Existing Credit Agreement and that there has been
no change in such Articles or Certificate of Incorporation, other
charter documents or By-Laws, as the case may be, since the date of
such delivery.
(iii) On the Effective Date, the Agent shall have received
copies of the Articles or Certificate of Incorporation or other charter
documents of each of the Borrower and each of the Borrower's
Subsidiaries party to any Credit Document,
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certified as of a recent date prior to delivery by the Secretary of
State of its jurisdiction of incorporation, together with a good
standing certificate from its jurisdiction of incorporation dated a
recent date prior to delivery; provided, however, that the Articles or
Certificate of Incorporation or other charter documents of a Subsidiary
need not be delivered pursuant to this clause (iii) if such Subsidiary
certifies pursuant to clause (ii) above that such Articles or
Certificate of Incorporation or other charter documents were delivered
to the Agent pursuant to the Existing Credit Agreement and that there
has been no change in such Articles or Certificate of Incorporation or
other charter documents since the date of such delivery.
(iv) All corporate, partnership and legal proceedings and all
instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Credit Documents shall be
satisfactory in form and substance to the Lenders, and the Agent shall
have received all information and copies of all documents and papers,
including records of corporate proceedings and governmental approvals,
if any, that any Lender reasonably may have requested in connection
therewith, such documents and papers as appropriate to be certified by
proper corporate, partnership or governmental authorities.
(d) PERFECTION OF SECURITY INTERESTS. The Borrower and its
Subsidiaries shall have taken or caused to be taken such actions in such a
manner so that the Agent has or maintains a valid and perfected first priority
security interest in all Collateral (subject to Liens consented to by the
Required Lenders with respect to such Collateral and other Liens permitted by
Section 8.01) encumbered or to be encumbered under the Credit Documents. Such
actions shall include, without limitation: (i) the delivery, to the extent not
theretofore delivered, pursuant to the applicable Credit Documents by the
Borrower and its Subsidiaries of such certificates (which certificates shall be
registered in the name of the Agent or properly endorsed in blank for transfer
or accompanied by irrevocable undated stock powers duly endorsed in blank, all
in form and substance satisfactory to the Agent) representing all of the capital
stock required to be pledged pursuant to the Credit Documents; (ii) the
delivery, to the extent not theretofore delivered, pursuant to the applicable
Credit Documents by the Borrower and its Subsidiaries of such promissory notes
(which promissory notes shall be endorsed to the order of the Agent, all in form
and substance satisfactory to the Agent) representing all of the pledged debt
required to be pledged pursuant to the Credit Documents; (iii) the delivery, to
the extent not theretofore delivered, to the Agent of Uniform Commercial Code
financing statements, or amendments thereto, executed by the Borrower and its
Subsidiaries as to the Collateral granted by the Borrower and its Subsidiaries
for all jurisdictions as may be necessary or desirable to perfect the Agent's
security interest in such Collateral; and (iv) evidence reasonably satisfactory
to the Agent that all other filings (including, without limitation, filings with
the United States Patent and Trademark Office), recordings and other actions the
Agent deems necessary or advisable to establish, preserve and perfect the first
priority Liens (subject to Liens permitted under this Agreement or consented to
by the Required Lenders with respect to such Collateral) granted to the Agent in
personal and mixed property and the Real Estate shall have been made.
(e) PAYMENT OF FEES. The Borrower shall have paid (i) the Fees
required by Section 3.01 to be paid on or prior to the Effective Date, and (ii)
to the Agent, Issuing Bank and
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the Lenders (as such terms are defined in the Existing Credit Agreement) all
unpaid fees accrued under the Existing Credit Agreement prior to the Effective
Date.
(f) CONVERSION OF EXISTING REVOLVING LOANS; PAYMENT OF
INTEREST AND FEES. On or before the Effective Date, notwithstanding anything
contained in the Existing Credit Agreement or Section 2.03 of this Agreement to
the contrary, (i) the Borrower shall pay to Agent, for distribution (as
appropriate) to Lenders, all accrued and unpaid interest with respect to all
Existing Bank Loans outstanding on the Effective Date, other than interest
accrued pursuant to Section 2.06(e) of the Existing Credit Agreement, and (ii)
the Borrower shall pay to Agent, for distribution (as appropriate) to Lenders,
all commitment fees and letter of credit fees which are accrued and unpaid as of
the Effective Date under Sections 3.01(b) and 2.10(e) of the Existing Credit
Agreement.
(g) FINANCIAL STATEMENTS. The Lenders shall have received
final projected financial statements (including balance sheets and statements of
operations, stockholders' equity and cash flows) of the Borrower and its
Subsidiaries for the three-year period after the Effective Date in form and
substance satisfactory to the Lenders.
(h) EXISTING AND CONTINUING INDEBTEDNESS. The Existing
Indebtedness that shall remain outstanding after the Effective Date shall be as
set forth on SCHEDULE 8.04(ii) annexed hereto, and the Borrower shall have
delivered to the Agent an Officers' Certificate to such effect.
(i) SATISFACTION OF CONDITIONS TO FUNDING. All conditions
precedent to the making of Loans and the issuance of Letters of Credit described
in Section 5.02 shall be satisfied on and as of the Effective Date with respect
to the Loans and the Letters of Credit to be continued on such date.
(j) OPINIONS OF COUNSEL. On the Effective Date, the Agent
shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ & Manner, P.C., counsel to
the Borrower, an opinion substantially in the form annexed hereto as EXHIBIT G,
addressed to each of the Lenders and dated the date of delivery, covering such
matters incident to the transactions contemplated herein as the Agent may
reasonably request.
(k) CERTAIN APPROVALS AND AGREEMENTS. Borrower and its
Subsidiaries shall have obtained all third party consents, waivers, amendments,
and approvals that may be necessary under Borrower's and its Subsidiaries'
existing contracts and agreements in connection with the borrowings under this
Agreement and all related transactions, and Borrower and its Subsidiaries shall
otherwise be in material compliance with such agreements.
(l) COMPLIANCE CERTIFICATE. On the Effective Date, Borrower
shall have received a Compliance Certificate in form and substance satisfactory
to Lenders with respect to the period ending March 31, 2001.
(m) LENDER OBLIGATIONS. Each Lender, other than the Bank of
Montreal, shall pay to the Issuing Bank an amount equal to 25% of its Pro Rata
Share (as defined in the Existing Credit Agreement) of the outstanding Letters
of Credit to be continued on the Effective Date in the manner provided in
Section 3.01(c). The Bank of Montreal and the Issuing Bank shall enter
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into a participation agreement in form and substance satisfactory to each
pursuant to which Bank of Montreal shall exchange its existing interest in the
Letters of Credit and purchase a participation interest in the Letters of Credit
consistent with the provisions of Section 11.05(f).
All the Notes, certificates, legal opinions and other
documents and papers referred to in this Section 5, unless otherwise specified,
shall be delivered to the Agent for the account of each of the Lenders and,
except for the Notes and the Warrant Certificates, in sufficient counterparts
for each of the Lenders and shall be satisfactory in form and substance to the
Lenders.
5.02 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT. The
obligations of the Lenders to make Loans on the Effective Date and the Issuing
Bank to issue or renew Letters of Credit on each Funding Date are subject to the
following further conditions precedent:
(a) The Issuing Bank shall have received, in accordance with
the provisions of Section 2.07(b) before the Funding Date (other than with
respect to any Letters of Credit issued on the Effective Date), an originally
executed Notice of Issuance of Letter of Credit signed by the Chief Executive
Officer, the Chief Financial Officer or the Treasurer of the Borrower or by any
officer of the Borrower designated by the Board of Directors of the Borrower or
any of the above-described officers on behalf of the Borrower in writing
delivered to the Issuing Bank. The obligation of the Issuing Bank to issue or
renew any Letter of Credit is subject to the further condition precedent that on
or before the date of issuance or renewal of such Letter of Credit, the Issuing
Bank shall have received, in accordance with the provisions of Section 2.07(b),
all other information specified in Section 2.07(b) and such other documents as
the Issuing Bank reasonably may require in connection with the issuance or
renewal of such Letter of Credit.
(b) As of the Funding Date (or, with respect to the renewal of
a Letter of Credit, the date of notice of renewal thereof):
(i) The representations and warranties contained herein shall
be true, correct and complete in all material respects on and as of
that date to the same extent as though made on and as of that date
taking into account any amendments to the Schedules or Exhibits hereto
as a result of any disclosures made by the Borrower to the Agent and
the Lenders after the Effective Date approved by the Agent and the
Required Lenders in their reasonable discretion;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by the
making of the Loans on or the continuation of the Letters of Credit on
the Effective Date or the issuance or renewal of any Letter of Credit
thereafter that would constitute a Default or an Event of Default;
(iii) The Borrower shall have performed in all material
respects all agreements and satisfied all conditions that this
Agreement provides shall be performed by it on or before that date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making the Loans or the Issuing Bank from continuing, issuing or
renewing the Letters of Credit; and
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(v) The making of the Loans or the continuing, issuing or
renewing of the Letters of Credit requested on such date shall not
violate any law, including, without limitation, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In
order to induce the Lenders to enter into this Agreement and to maintain and
make the Loans and the Issuing Bank to continue, issue and renew the Letters of
Credit, the Borrower makes the following representations, warranties and
agreements, which shall survive the execution and delivery of this Agreement and
the Notes, if any, the making of the Loans and the continuation, issuance or
renewal of the Letters of Credit:
6.01 CORPORATE STATUS. Except as set forth on SCHEDULE 6.01
Each of the Borrower and its Subsidiaries (i) is a duly organized and validly
existing corporation, partnership or association, as the case may be, in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
power and authority to own its property and assets and to transact the business
in which it is engaged, (iii) is duly qualified as a foreign corporation,
partnership or association, as the case may be, and in good standing in each
jurisdiction where its ownership, leasing or operation of property or the
conduct of its business requires such qualification, except if the failure to be
so qualified could not reasonably be expected to have a material adverse effect
on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole
and (iv) is in compliance with all requirements of law, including, but not
limited to, all federal, state and local statutes, regulations and ordinances
relating to the delivery of healthcare services of the type provided by the
Borrower and its Subsidiaries and payment therefor, except to the extent that
the failure to do so could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
6.02 CORPORATE POWER AND AUTHORITY. The Borrower and each of
its Subsidiaries has the corporate, partnership or other power to execute,
deliver and perform the terms and provisions of each of the Credit Documents to
which it is a party and has taken all necessary corporate, partnership or other
action to authorize the execution, delivery and performance by it of each of
such Credit Documents. The Borrower and each of its Subsidiaries has duly
executed and delivered each of the Credit Documents to which it is party, and
each of such Credit Documents constitutes the legal, valid and binding
obligation of the Borrower or such Subsidiary, as the case may be, enforceable
against the Borrower or such Subsidiary, as the case may be, in accordance with
its terms except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by general equitable principles (regardless of
whether the issue of enforceability is considered in a proceeding in equity or
at law).
6.03 NO VIOLATION. Neither the execution, delivery or
performance by the Borrower or a Subsidiary of the Borrower of the Credit
Documents to which it is a party, nor compliance by it with the terms and
provisions of any such Credit Documents, (i) will contravene any provision of
any law, statute, rule or regulation or any order, writ, injunction or decree of
any court or governmental instrumentality, (ii) will conflict or be inconsistent
with or
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result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (other than Liens permitted
under Section 8.01) upon any of the property or assets of the Borrower or any of
its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement, loan agreement or any other agreement, contract or
instrument to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the Certificate of Incorporation or
By-Laws (or other documents of formation and governance, as the case may be) of
the Borrower or any of its Subsidiaries.
6.04 GOVERNMENTAL APPROVALS. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made prior to the Effective Date), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance by the Borrower or any of its Subsidiaries
of any Credit Document to which the Borrower or any of such Subsidiaries is a
party, or (ii) the legality, validity, binding effect or enforceability of any
such Credit Document, except, in any case, filings, approvals and authorizations
that could not reasonably be expected to have a material adverse effect on the
business, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
6.05 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES; ETC.
(a) The financial statements delivered to the Lenders pursuant
to Sections 7.01(a) and (b) of the Existing Credit Agreement and to the Lenders
pursuant to Section 5.01(g) present fairly the consolidated financial condition
of the Borrower and its Subsidiaries as at the respective dates thereof and the
consolidated results of operations and changes in financial condition of the
Borrower and its Subsidiaries for each of the periods covered thereby, subject
(in the case of any unaudited interim financial statements) to changes resulting
from normal year-end adjustments. All such consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
and practices consistently applied.
(b) Except as fully reflected in the financial statements
described in Section 6.05(a), and except for Interest Rate Agreements permitted
hereunder, there were as of the Effective Date no liabilities or obligations
with respect to the Borrower or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due)
that, either individually or in aggregate, would be material to the Borrower and
its Subsidiaries taken as a whole. As of the Effective Date the Borrower does
not know of any basis for the assertion against the Borrower or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is not
fully reflected in the financial statements described in Section 6.05(a) that,
either individually or in the aggregate, would be material to the Borrower and
its Subsidiaries taken as a whole.
6.06 LITIGATION. Except as set forth on SCHEDULE 6.06, there
is no action, suit or arbitration or other proceeding pending or, to the best
knowledge of the Borrower), threatened with respect to (i) any Credit Document,
(ii) any tax return, (iii) any Acquisition that has been consummated, if any, or
(iv) any other matter that, if adversely determined, is reasonably likely
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to materially and adversely affect the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
6.07 TRUE AND COMPLETE DISCLOSURE. All factual information
(taken as a whole) heretofore or contemporaneously furnished by the Borrower or
on behalf of the Borrower with its knowledge in writing to any Lender
(including, without limitation, all information contained in the Credit
Documents) for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of the Borrower in
writing to any Lender will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any fact necessary to make such information (taken as a whole)
not materially misleading at such time in light of the circumstances under which
such information was provided.
6.08 USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of the
Loans and any Letters of Credit have been and will be used by the Borrower for
the purposes set forth in Section 2.05; provided that no part of the proceeds of
any Loan or any Letter of Credit was or will be used by the Borrower to purchase
or carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan or the
issuance or renewal of any Letter of Credit nor the use of the proceeds thereof
will violate or be inconsistent with the provisions of Regulations T, U or X of
the Board of Governors of the Federal Reserve System.
6.09 TAX RETURNS AND PAYMENTS. Each of the Borrower and its
Subsidiaries has filed all tax returns required to be filed by it and has paid
all income taxes payable by it that have become due pursuant to such tax returns
and all other taxes and assessments payable by it that have become due, other
than those not yet delinquent, those being contested in good faith and those
listed on SCHEDULE 6.06.
6.10 COMPLIANCE WITH ERISA. Each Plan is in substantial
compliance with ERISA; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability, no Plan has an accumulated or waived funding
deficiency or permitted decreases in its funding standard account within the
meaning of Section 412 of the Code; neither the Borrower nor any Subsidiary of
the Borrower nor ERISA Affiliate has incurred any material liability to or on
account of a Plan pursuant to Sections 502(c), (i) or (l), 515, 4062, 4063,
4064, 4071, 4201 or 4204 of ERISA or Chapter 43 of the Code or expects to incur
any liability under any of the foregoing sections; no proceedings have been
instituted to terminate any Plan; no condition exists that presents a material
risk to the Borrower or any of its Subsidiaries of incurring a liability to or
on account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
no Lien imposed under the Code or ERISA on the assets of the Borrower or any of
its Subsidiaries exists or is likely to arise on account of any Plan; the
Borrower and its Subsidiaries may terminate contributions to any other employee
benefit plans maintained by them without incurring any material liability to any
Person interested therein; and no Plan has received notice from the Internal
Revenue Service of the failure of such Plan to qualify under Section 401(a) of
the Code.
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6.11 CAPITALIZATION. The authorized capital stock of the
Borrower consists of 35,000,000 shares of Borrower Common Stock, of which
16,327,389 shares were issued and outstanding as of the date hereof and
5,000,000 shares of preferred stock, $0.01 par value per share, of which none
are issued and outstanding. All such outstanding shares have been duly and
validly issued, are fully paid and non-assessable. The Borrower does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock except as described on SCHEDULE 6.11 or as issued under any
employee stock option plan of the Borrower and reported to the Agent each fiscal
quarter.
6.12 SUBSIDIARIES. On the Effective Date, the corporations
listed on SCHEDULE 6.12 and the associations or joint ventures listed on
SCHEDULE 6.21 are the only Subsidiaries of the Borrower. SCHEDULE 6.12 and
SCHEDULE 6.21 correctly set forth, as of the Effective Date, the percentage
ownership (direct and indirect) of the Borrower in each class of capital stock
or partnership interests of each of its Subsidiaries and also identify the
direct owner thereof.
6.13 COMPLIANCE WITH STATUTES, ETC. Each of the Borrower and
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliance as would not, in the aggregate, have a material adverse effect on
the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole.
6.14 INVESTMENT COMPANY ACT. Neither the Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6.15 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.16 LABOR RELATIONS. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that would have a material
adverse effect on the Borrower and its Subsidiaries taken as a whole. There is
(i) no significant unfair labor practice complaint pending or, to the best
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries before the National Labor Relations Board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending or, to the best knowledge of the
Borrower, threatened against the Borrower or any of its Subsidiaries, (ii) no
significant strike, labor dispute, slowdown or stoppage pending or, to the best
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries, and (iii) to the best knowledge of the Borrower, no union
representation question existing with respect to the employees of the Borrower
or any of its Subsidiaries and, to the best knowledge of the Borrower, no union
organizing activities are taking place, except (with respect to any matter
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specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as would not have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole.
6.17 PATENTS, LICENSES, FRANCHISES AND FORMULAS. Each of the
Borrower and its Subsidiaries owns all the patents, trademarks, permits, service
marks, trade names, copyrights, licenses, franchises and formulas, or rights
with respect to the foregoing, and has obtained assignments of all leases and
other rights of whatever nature, necessary for the present conduct of its
business. No proceedings, claims, actions or oppositions have been instituted or
are pending or, to the best of the Borrower's and its Subsidiaries' knowledge,
after due inquiry, are threatened that challenge the validity of the Borrower's
or its Subsidiaries' use of such patents, trademarks, permits, service marks,
trade names, copyrights, licenses, franchises and formulas, or rights with
respect to the foregoing, that would result in a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
6.18 NO MATERIAL ADVERSE CHANGE. Since December 31, 2000,
there has been no material adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole other than change due to action
expressly permitted by the terms of this Agreement.
6.19 FRAUD AND ABUSE. The Borrower and its Subsidiaries, and,
to the knowledge of the Borrower and its Subsidiaries after reasonable inquiry,
their respective officers and directors, and persons who provide professional
services under agreements with the Borrower or any of its Subsidiaries have been
and are in material compliance with federal Medicare and Medicaid statutes, 42
U.S.C. ▇▇.▇▇. 1320a-7, 1320a-7(a), 1320a-7b and 1395nn, as amended, and the
regulations promulgated thereunder or related state and local statutes and
regulations and rules of professional conduct, and have not at anytime:
(i) knowingly and willfully made or caused to be made a false
statement or representation of a material fact in any application for
any benefit or payment;
(ii) knowingly and willfully made or caused to be made any
false statement or representation of a material fact for use in
determining rights to any benefit or payment;
(iii) presented or caused to be presented a claim for
reimbursement for services under Medicare or Medicaid, or other state
health care programs that is for an item or service that is known or
should be known to be (a) not provided as claimed, or (b) false or
fraudulent;
(iv) failed to disclose knowledge by a claimant of the
occurrence of any event affecting the initial or continued right to any
benefit or payment on its own behalf or on behalf of another, with
intent fraudulently to secure such benefit or payment;
(v) knowingly and willfully illegally offered, paid, solicited
or received any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in
kind (a) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for
which payment may
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be made in whole or in part by Medicare or Medicaid, or other state
health care programs, or (b) in return for purchasing, leasing or
ordering or arranging for or recommending purchasing, leasing or
ordering any good, facility, service, or item for which payment may be
made in whole or in part by Medicare or Medicaid or other state health
care programs;
(vi) knowingly made a payment, directly or indirectly, to a
physician as an inducement to reduce or limit services to individuals
who are under the direct care of the physician and who are entitled to
benefits under Medicare or Medicaid, or other state health care
programs;
(vii) provided to any person information that is known or
should be known to be false or misleading that could reasonably be
expected to influence the decision when to discharge a hospital
in-patient from the hospital;
(viii) knowingly and willfully made or caused to be made or
induced or sought to induce the making of any false statement or
representation (or omitted to state a fact required to be stated
therein or necessary to make the statements contained therein not
misleading) of a material fact with respect to (a) the conditions or
operations of a facility in order that the facility may qualify for
Medicare or Medicaid or other state health care program certification,
or (b) information required to be provided under ss. 1124A of the
Social Security Act (42 U.S.C. ss. 1320a-3);
(ix) knowingly and willfully (a) charged for any Medicaid
service, money or other consideration at a rate in excess of the rates
established by the state, or (b) for services covered (in whole or in
part) by Medicaid, charged, solicited, accepted or received, in
addition to amounts paid by Medicaid, any gift, money, donation or
other consideration (other than a charitable, religious or
philanthropic contribution from an organization or from a person
unrelated to the patient) (y) as a precondition of treating the
patient, or (z) as a requirement for the patient's continued treatment;
(x) completed Certificates of Medical Necessity on behalf of
physicians in violation of the Health Care Financing Administration's
carrier directives prohibiting home health care providers from so
doing;
(xi) violated the federal Food, Drug and Cosmetic Act and the
so-called "pharmacy exemption" contained therein and the FDA's
Compliance Policy Guide Number 7132.16 entitled "Manufacture,
Distribution, and Promotion of Adulterated, Misbranded, or Unapproved
New Drugs for Human Use by State-Licensed Pharmacies;" or
(xii) violated the FDA's guidelines or OSHA regulations
including those in connection with any oxygen filling stations
maintained or operated by the Borrower or any of its Subsidiaries and
29 C.F.R. 1910, 1030 Occupational Exposure to Bloodborne Pathogens;
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such that the actions or inactions in the foregoing clauses (i) through (xii),
individually or in the aggregate, would have a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole.
6.20 TITLE TO PROPERTIES; LIENS. The Borrower and its
Subsidiaries have good, sufficient and legal title to all of their respective
properties and assets reflected in the most recent financial statements
delivered pursuant to Sections 7.01(a) and (b) of this Agreement (or, if no such
financial statements have yet been delivered, the most recent financial
statements delivered pursuant to Sections 7.01(a) and (b) of the Existing Credit
Agreement), except for assets disposed of since the date of such financial
statements in the Ordinary Course of Business or as otherwise permitted under
Section 8.02. Except as permitted by this Agreement, all such properties and
assets are free and clear of Liens.
6.21 JOINT VENTURES. The Borrower and its Subsidiaries are not
party to any Joint Venture other than the Joint Ventures set forth on SCHEDULE
6.21.
6.22 ACCOUNTS RECEIVABLE COLLATERAL. The Accounts Receivable
and any related reimbursement contracts with the payor of such Accounts
Receivable have not been satisfied, subordinated or rescinded in any manner
(other than settlements in the Ordinary Course of Business with payors of such
Accounts Receivable reached to facilitate collection); such Accounts Receivable
were created through the provision of services or merchandise supplied by either
(a) the Borrower and its Subsidiaries and the related charges were usual,
customary and reasonable, or (b) a target of an Acquisition prior to such
Acquisition and the Borrower believes, after due investigation, that the related
charges were usual, customary and reasonable; such Accounts Receivable are owned
by the Borrower and its Subsidiaries free and clear of any adverse claim and the
Borrower and its Subsidiaries have the right to assign and transfer such
Accounts Receivable except as such assignment or transfer would be prohibited by
Section 1815(c) of the Social Security Act, 42 U.S.C. ss. 1395g(c) and the
regulations promulgated thereunder; and there are no procedures or
investigations pending or threatened before any Governmental Authority seeking a
determination or ruling that might affect the validity or enforceability of a
material portion of such Accounts Receivable subject to the review or
jurisdiction of such Governmental Authority. All Accounts Receivable have been
appropriately adjusted to reflect changes in reimbursement policies of any
Medicaid/Medicare Account Debtor or Nongovernmental Payor that are known by
Borrower.
6.23 REIMBURSEMENT PROGRAMS. Borrower and its Subsidiaries are
qualified to participate in Government Reimbursement Programs and are entitled
to reimbursement thereunder for services rendered to qualified beneficiaries and
have complied in all materials respects with the conditions of participation in
all Governmental Reimbursement Programs and related contracts. Borrower and its
Subsidiaries are in compliance in all material respects with contracts with
Nongovernmental Payors. With respect to Government Reimbursement Programs and
contracts with Nongovernmental Payors, (i) no notice of any offsets against
future reimbursement has been received by Borrower or any of its Subsidiaries,
nor to the knowledge of Borrower is there any reasonable basis therefor, except
with respect to offsets in the Ordinary Course of Business that could not
reasonably be expected to materially and adversely affect the business of the
Borrower and its Subsidiaries, taken as a whole, (ii) there are no pending
appeals,
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adjustments, challenges, audits, litigation, notices of intent to open or reopen
completed payments, except such adjustments made in the Ordinary Course of
Business that could not, individually or in the aggregate, reasonably be
expected to materially and adversely affect the business of the Borrower and its
Subsidiaries, taken as a whole, and (iii) neither Borrower nor any of its
Subsidiaries has received notice of pending threatened or possible suspension,
exclusion, decertification or other loss of participation.
6.24 SURVIVAL OF RIGHTS CREATED UNDER EXISTING CREDIT
AGREEMENT. Notwithstanding the modification effected by this Agreement of the
representations, warranties and covenants of the Borrower contained in the
Existing Credit Agreement, the Borrower hereby acknowledges and agrees that any
choses in action or other rights created in favor of the Lenders and the Agent
(as defined in the Existing Credit Agreement) and their respective successors
and assigns, if any, arising out of the representations and warranties of the
Borrower contained in or delivered (including representations and warranties
delivered in connection with the making of any loans thereunder) in connection
with the Existing Credit Agreement, including all amendments and waivers
relating thereto, shall survive the execution and delivery of this Agreement.
SECTION 7. AFFIRMATIVE COVENANTS. The Borrower covenants and
agrees that on and after the Effective Date and until the Loans and the Notes,
if any, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full and all Letters of Credit are
cancelled, expired or otherwise provided for to the satisfaction of the Issuing
Bank:
7.01 INFORMATION COVENANTS. The Borrower will furnish to each
Lender:
(a) QUARTERLY FINANCIAL STATEMENTS. Within 60 days (or 90 days
in the case of the fourth fiscal quarter) after the close of each quarterly
accounting period in each Fiscal Year, the consolidated balance sheets of the
Borrower and its Subsidiaries as at the end of such quarterly period and the
related consolidated statements of operations and statements of cash flows for
the elapsed portion of the Fiscal Year ended with the last day of such quarterly
period and for such quarterly period and setting forth comparative figures for
the related periods in the prior Fiscal Year for the statements of operations
and cash flows, all of which shall be certified by the Chief Executive Officer
or the Chief Financial Officer of the Borrower, subject to normal year-end audit
adjustments and, promptly, commencing with the quarter ended March 31, 2001, the
financial review provided quarterly to the Board of Directors of the Borrower.
(b) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the
close of each Fiscal Year, the consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such Fiscal Year and the related consolidated
statements of operations and statements of cash flows for such Fiscal Year, in
each case setting forth comparative figures for the preceding fiscal year and
certified, in the case of the consolidated financial statements, without
qualification by independent certified public accountants of recognized national
standing reasonably acceptable to the Required Lenders, together with a report
of such accounting firm stating that in the course of its regular audit of the
financial statements of the Borrower, which audit was conducted in accordance
with generally accepted auditing standards, such accounting firm obtained no
knowledge of any Default or Event of Default related to accounting or financial
reporting matters
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that has occurred and is continuing or, if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof.
(c) MANAGEMENT LETTERS. Promptly after the Borrower's receipt
thereof, a copy of any "management letter" received by the Borrower from its
certified public accountants.
(d) PERFORMANCE PLAN. On or before February 15, 2002), a
performance plan (a "PERFORMANCE PLAN") for such year, in a form no less
detailed than the financial projections delivered to the Lenders prior to the
Effective Date pursuant to the Existing Credit Agreement, for the Borrower and
its Subsidiaries as a whole (in each case including forecast consolidated
statements of operations and cash flow and balance sheets) and prepared by the
Borrower for the quarter ending March 31, 2002 and for the elapsed portion of
such Fiscal Year ended with the last day of such quarter accompanied by the
statement of the Chief Executive Officer or the Chief Financial Officer of the
Borrower to the effect that, to the best of such officer's knowledge, the
Performance Plan is a reasonable estimate and forecast for the period covered
thereby.
(e) PERFORMANCE REPORTS. Within 60 days after the end of each
fiscal quarter (or 90 days after the end of the Fiscal Year), a performance
report, in a form reasonably satisfactory to the Lenders, containing
consolidated balance sheets for the Borrower and its Subsidiaries as a whole as
at the end of that quarter and the related consolidated statements of operations
and cash flows for the quarter and the elapsed portion of the Fiscal Year then
ended, and comparing actual results of operations and financial position to that
forecast in the Performance Plan for the quarter and for the elapsed portion of
the Fiscal Year ended with the last day of that quarter, as the case may be,
setting forth comparative figures for the related periods in the prior Fiscal
Year and stating the reasons for any variance between the actual results of
operations, financial position and cash flows and forecasted results of
operations, financial position and cash flows and explanations of the variances
that are adverse to the Borrower or any of its Subsidiaries. Such performance
report shall also contain a statement of receivables (including an aging report)
held by the Borrower and its Subsidiaries as a whole.
(f) COMPLIANCE CERTIFICATES. At the time of the delivery of
the financial statements provided for in Sections 7.01(a) and (b) and the
quarterly performance reports provided for in Section 7.01(e), a Compliance
Certificate of the Chief Executive Officer or the Chief Financial Officer of the
Borrower to the effect that, to the best of such officer's knowledge, no Default
or Event of Default has occurred and is continuing or, if any Default or Event
of Default has occurred and is continuing, specifying the nature and extent
thereof, which Compliance Certificate also shall set forth the calculations
required to establish whether the Borrower was in compliance with those
provisions of Section 8 identified on the Compliance Certificate at the end of
such quarter, fiscal quarter or Fiscal Year, as the case may be.
(g) NOTICE OF DEFAULT, LITIGATION OR HEALTH CARE COMPLIANCE.
Promptly, and in any event within three Business Days after any of the Chief
Executive Officer, Chief Financial Officer or Chief Operating Officer of the
Borrower obtains knowledge thereof, notice of (i) the occurrence of any event
that constitutes a Default or an Event of Default, (ii) any litigation or
governmental or arbitration proceeding pending (x) against the Borrower or any
of its Subsidiaries that could reasonably be expected to materially and
adversely affect the business,
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operations, property, assets, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries, taken as a whole, or (y) with respect to any
Credit Document, (iii) any material adverse changes in the status of any
litigation or other proceeding reported by the Borrower pursuant to Section 6.06
or this Section 7.01(g), (iv) any material claim, complaint, notice or request
for information received by the Borrower or any of its Subsidiaries with respect
to compliance with health care regulatory requirements relating to the delivery
of health care services of the type provided by the Borrower and payment
therefor (excluding malpractice claims), including, but not limited to, any
violation or alleged violation of any federal, state or local statute,
regulation, or ordinance relating to the delivery of medical services and
payment therefor, including, but not limited to, the requirements set forth
under federal Medicare and Medicaid statutes, 42 U.S.C. ▇▇.▇▇. 1320a-7,
1320a-7a, 1320a-7b and 1395nn, and the regulations promulgated thereunder and
related state or local statutes or regulations, (v) any material development in
any proceeding with respect to the Borrower's or any of its Subsidiaries'
qualification or right to participate in any Governmental Reimbursement Program
or the right to receive or retain amounts received or due or to become due from
any Government Reimbursement Programs or any Nongovernmental Payor that could
have or could reasonably be expected to have a material adverse affect on the
business, operations, property assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole, and (vi) any
other event that could reasonably be expected to materially and adversely affect
the business, operations, property, assets, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries, taken as a whole. Borrower
shall furnish the Agent (with sufficient copies for each Lender) no later than
five days after the end of each month until completion of the Settlement, a
narrative report summarizing the status of the Settlement. Additionally,
Borrower shall furnish Agent (with sufficient copies for each Lender) no later
than five days after the end of any month in which any material claim,
complaint, notice or request for information has been received by the Borrower
or any of its Subsidiaries from any Governmental Authority and each month
thereafter until such claim, complaint, notice or request is resolved, a
narrative report summarizing the status of such claim, complaint, notice or
request for information.
(h) OTHER REPORTS AND FILINGS. Promptly, copies of all
financial information, proxy materials and other information and reports, if
any, that the Borrower or any of its Subsidiaries shall file with the SEC.
(i) REPORTS OF ASSET TRANSFERS TO SUBSIDIARIES OR JOINT
VENTURES. No later than 10 Business Days after any transfer to any Joint Venture
that is not a Guarantor Subsidiary of (i) any assets of the Borrower or any of
its Subsidiaries having a fair market value exceeding $1,000,000 in the
aggregate or (ii) any intangible assets material to the business, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries, the Borrower shall notify the Agent of the nature of such
transaction and the business purpose therefor.
(j) MONTHLY FINANCIAL STATEMENTS. Within 30 days after the end
of each calendar month, (i) the consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such month and the related consolidated
statements of operations and statements of cash flows for such month and for the
elapsed portion of the Fiscal Year ended with the last day of such month, all of
which shall be certified by the Chief Executive Officer or the Chief Financial
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Officer of the Borrower, subject to normal year-end audit adjustments, (ii) a
performance report, in a form reasonably satisfactory to the Lenders, comparing
the actual results of operations, financial position and cash flows for such
month and for the elapsed portion of the Fiscal Year ended with the last day of
such month to those forecasted in the Performance Plan and stating the reasons
for any variance between such actual and forecasted results of operations,
financial position and cash flows and explanations for any such variances that
are adverse to the Borrower or any of its Subsidiaries, (iii) a narrative
report, in the form prepared for presentation to senior management, describing
the operations of the Borrower and its Subsidiaries (including placements of
oxygen concentrators) for such month and for the period from the beginning of
the then current Fiscal Year to the end of such month, (iv) an Accounts
Receivable report for such month, in form and substance satisfactory to the
Lenders, consisting of (a) detailed Accounts Receivable agings (including both
billed and unbilled Accounts Receivable, on both a current and an
over-90-days-old basis), (b) an analysis of trends of held revenue, and (c) an
analysis of collections of Accounts Receivable, (v) a Joint Venture report, in
form and substance satisfactory to the Lenders, including details with respect
to investments by the Borrower and its Subsidiaries in Joint Ventures, advances
by the Borrower and its Subsidiaries to Joint Ventures and the amount of
restricted cash held for Joint Ventures, for such month and the year-to-date,
and (vi) a breakdown of revenues of the Borrower and its Subsidiaries for such
month by individual product line, all of which shall be certified by the Chief
Executive Officer or the Chief Financial Officer of the Borrower.
(k) OTHER MONTHLY REPORTS. Within ten working days after the
end of each calendar month, (i) a "flash" report, in form and substance
satisfactory to the Lenders, setting forth the net revenues and Consolidated
EBITDA of the Borrower and its Subsidiaries for such month, (ii) a report, in
form and substance satisfactory to the Lenders, setting forth a breakdown of
Accounts Receivable by billing center for such month, with a comparison of
operating data (i.e., reject rates, etc.) to the Borrower's established
targets/goals and a revised time frame, if appropriate, for meeting such
targets/goals, (iii) a report, in form and substance satisfactory to the
Lenders, setting forth the location and account number of each bank account of
Borrower and each of its Subsidiaries and the closing balance thereof at the end
of the preceding month, and (iv) a report, in form and substance satisfactory to
the Lenders, on the status of the consolidation of the billing centers in
accordance with the plan provided by Borrower to Lenders, Agent and the Lender
Financial Advisor. Within ten (10) working days after the delivery of such
reports, Borrower shall schedule a conference call with each of the Lenders to
discuss such reports and any material developments during the prior month,
including, without limitation, any material deviations from the Performance Plan
for such month.
(l) WEEKLY AND BI-WEEKLY FORECASTS AND CENSUS INFORMATION. (i)
Within two working days after the beginning of each week, a weekly cash
disbursement forecast for such week and for each of the following 11 weeks, in
form and substance satisfactory to the Lenders, which forecasts shall include
details on receipts and disbursements for the Borrower and its Subsidiaries for
each week of the applicable 12-week period and shall include cumulative
year-to-date totals and prior week variances, and (ii) within seven working days
after the end of every second week, census information for the two-week period
then ended, all of which shall be certified by the Chief Executive Officer or
the Chief Financial Officer of the Borrower.
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(m) COLLATERAL QUESTIONNAIRE. The Borrower shall complete and
deliver to Agent an updated collateral questionnaire, substantially in the form
of the collateral questionnaire dated April 2000 and in any case in form and
substance satisfactory to the Agent on or prior to July 1, 2001.
(n) OTHER INFORMATION. From time to time, such other
information or documents (financial or otherwise) as any Lender reasonably may
request.
7.02 BOOKS, RECORDS AND INSPECTIONS.
(a) The Borrower will, and will cause each of its Subsidiaries
to, keep proper books of record and account in which full, true and correct
entries in conformity with generally accepted accounting principles consistently
applied and all requirements of law (including, without limitation, Section
13(b)(2) of the Securities Exchange Act of 1934, as amended) shall be made of
all dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Subsidiaries to, permit the officers
and designated representatives of the Agent or any Lender to visit and inspect
any of the properties of the Borrower or such Subsidiary, and to examine the
books of record and account of the Borrower or such Subsidiary (including,
without limitation, any cost or other reimbursement reports submitted to a
Governmental Authority in contemplation of any receivable, any responses,
statements or reports relating thereto prepared by any Person and any medical
record audits) and discuss the affairs, finances and accounts of the Borrower or
such Subsidiary with, and be advised as to the same by, its and their
management, officers and independent accountants, all at reasonable times and
upon reasonable notice, as the Agent or such Lender or any of their officers or
designated representatives may request.
(b) Without limiting the generality of clause (a) of this
Section 7.02, the Borrower will, and will cause each of its Subsidiaries to,
permit the Lender Financial Advisor to visit and inspect, on a daily basis, any
of the properties of the Borrower or such Subsidiary, and to examine the books
of record and account of the Borrower or such Subsidiary and discuss the
affairs, finances and accounts of the Borrower or such Subsidiary with, and to
be advised as to the same by, its and their management, officers and independent
accountants in order to, among other things (w) render accounting and reporting
assistance to the Agent and the Lenders in connection with the Borrower's
compliance or noncompliance with the covenants set forth in this Agreement, (x)
review monthly, quarterly, annual and any other financial information delivered
to the Agent and the Lenders or included in reports to be filed with the SEC,
(y) review, evaluate and provide the Agent and the Lenders recommendations
regarding the Borrower's and its Subsidiaries' short and long term financial
projections and (z) develop for the Agent and the Lenders strategies and
initiatives and perform such other duties as the Agent or the Lenders may
request from time to time.
7.03 MAINTENANCE OF PROPERTY, INSURANCE. SCHEDULE 7.03 sets
forth a true and complete listing of all insurance maintained by the Borrower
and its Subsidiaries as of the Effective Date and the amounts of such insurance.
The Borrower will, and will cause each of its Subsidiaries to, (i) keep all
property useful and necessary in its business in good working order and
condition, (ii) maintain with financially sound and reputable insurance
companies insurance on all its property and its directors and officers in at
least such amounts and against at least such
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risks as are described in SCHEDULE 7.03; provided that the Borrower and its
Subsidiaries may self-insure against risks consistent with standard industry
practices for companies in the same or similar businesses, and (iii) furnish to
each Lender, within 45 days after the end of each Fiscal Year and otherwise,
upon written request, full information as to the insurance carried.
7.04 CORPORATE FRANCHISES. Except as permitted by Section
8.02, the Borrower will, and will cause each of its Subsidiaries to, do or cause
to be done, all things necessary to preserve and keep in full force and effect
its existence and its material rights, franchises, licenses and patents;
provided, however, that nothing in this Section 7.04 shall prevent (a) the
withdrawal by the Borrower or any of its Subsidiaries of its qualification as a
foreign corporation, association or joint venture in any jurisdiction where such
withdrawal would not have a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole, (b) the merger of AHPT, with and
into the Borrower under Section 8.02(vii), or (c) the discontinuance of any
Subsidiary of the Borrower if such discontinuance would not have a material
adverse effect on the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
7.05 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and
will cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business, including, without limitation, the laws and regulations referred to in
Section 6.19, and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliance as could not, in the aggregate, reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
7.06 ERISA. (a) As soon as possible and, in any event, within
ten days after the Borrower or any of its Subsidiaries or ERISA Affiliates knows
or has reason to know any of the following, the Borrower will deliver to each of
the Lenders a certificate of the Chief Executive Officer or the Chief Financial
Officer of the Borrower setting forth details as to such occurrence and such
action, if any, that the Borrower, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by the Borrower, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding
deficiency has been incurred or an application may be or has been made to the
Secretary of the Treasury for a waiver or modification of the minimum funding
standard (including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan; that a
Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability
giving rise to a Lien under ERISA or the Code; that proceedings may be or have
been instituted to terminate a Plan; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan;
that the Borrower, any of its Subsidiaries or ERISA Affiliates will or may incur
any liability (including any contingent or secondary liability) to or on account
of the termination of or withdrawal from a Plan under Sections 4062, 4063, 4064,
4201 or 4204 of ERISA; that the Borrower, any of its Subsidiaries or ERISA
Affiliates
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will or may incur any liability under Chapter 43 of the Code or under Sections
502(c), (i) or (1) or 4071 of ERISA; that there exists a condition that presents
a material risk to the Borrower, any of its Subsidiaries or ERISA Affiliates of
incurring a liability to or on account of a Plan pursuant to the assertion of a
material claim (other than a routine claim for benefits) against any such Plan;
or that any Plan has been determined by the Internal Revenue Service to fail to
qualify under Section 401(a) of the Code.
(b) The Borrower will deliver to each of the Lenders a
complete copy of the annual report (Form 5500) of each Plan required to be filed
with the Internal Revenue Service.
(c) In addition to any certificates or notices delivered to
the Lenders pursuant to clause (a) of this Section 7.06, copies of annual
reports and any other notices received by the Borrower or any of its
Subsidiaries required to be delivered to the Lenders hereunder shall be
delivered to the Lenders no later than ten days after the later of the date such
report or notice has been filed with the Internal Revenue Service or the PBGC,
given to Plan participants or received by the Borrower or such Subsidiary.
7.07 END OF FISCAL YEARS; FISCAL QUARTERS. The Borrower shall
cause (i) each of its fiscal years, and the fiscal years of each of its
Subsidiaries other than Joint Ventures, to end on December 31 and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31; provided that any Subsidiary acquired subsequent
to the Effective Date that has different fiscal year ends, fiscal quarter ends
or both than those set forth in this Section 7.07 shall conform such periods to
those set forth herein in the ordinary course consistent with past practice.
7.08 PERFORMANCE OF OBLIGATIONS. The Borrower will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, indenture, security agreement and other debt instrument
by which it is bound, except such non-performances as could not in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
7.09 PAYMENT OF TAXES AND CLAIMS. The Borrower will, and will
cause each of its Subsidiaries to, pay or cause to be paid all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its franchises, business, income or
property before any material penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a material
Lien upon any of its properties or assets, prior to the time when any material
penalty or fine shall be incurred with respect thereto; provided that so long as
no property or assets (other than money for such charge or claim and the
interest or penalty accruing thereof) of the Borrower or any of its Subsidiaries
is in danger of being lost or forfeited as a result thereof, no such charge or
claim need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if such reserve or
other appropriate provision, if any, as shall be required in conformity with
generally accepted accounting principles consistently applied shall have been
made therefor.
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7.10 LICENSING. The Borrower will and will cause each of its
Subsidiaries to be operated at all times in compliance in all material respects
with all federal, state and local statutes, regulations and ordinances relating
to the licensing of health care services of the type provided by the Borrower
and to maintain, at all times, accreditation for no less than 90% of the
branches owned by the Borrower and its Subsidiaries longer than one year with
the Joint Commission on Accreditation of Healthcare Organizations.
7.11 FURTHER ASSURANCES; NEW SUBSIDIARIES.
(a) At any time and from time to time upon the request of the
Agent, the Borrower shall and shall cause each of its Wholly-Owned Subsidiaries
to execute and deliver such further documents and do such other acts and things
as the Agent reasonably may request in order to effect fully the purposes of
this Agreement and the other Credit Documents and to provide for payment of the
Obligations in accordance with the terms of this Agreement and the other Credit
Documents. Without limiting the generality of the foregoing, the Borrower shall
promptly take all such actions, and shall promptly provide the Agent with all
such information, as the Agent may reasonably request in order to (i) enable the
Agent to perform an audit of the Collateral for the purpose of confirming that
the Agent has a valid and perfected security interest in all personal and mixed
property and Real Estate of the Borrower and its Subsidiaries and (ii) create,
perfect and/or continue the Agent's security interest in any such property to
the extent necessary to effect fully the purposes of this Agreement and the
other Credit Documents.
(b) In the event a Person becomes a Subsidiary of the Borrower
after the Effective Date, the Borrower shall, within 10 Business Days of such
event, cause such Subsidiary to execute and deliver the Subsidiary Guaranty, the
Subsidiary Pledge Agreement, a Subsidiary Partnership Security Agreement, the
Subsidiary Security Agreement, Collection Bank Agreements, the Subsidiary
Trademark Security Agreement and, if applicable, Mortgages, in each case
together with such other agreements, pledges, assignments, documents and
certificates (including, without limitation, any amendments to the Credit
Documents) as may be necessary or desirable or as the Agent may request and do
such other acts and things as the Agent reasonably may request in order to have
such domestic Subsidiary guaranty and/or secure the Obligations and effect fully
the purposes of this Agreement and the other Credit Documents and to provide for
payment of the Obligations in accordance with the terms of this Agreement and
the other Credit Documents.
(c) Notwithstanding any provision contained herein or in any
of the Credit Documents, none of the Borrower nor any of its Guarantor
Subsidiaries shall be deemed to be in default under (or to have breached any
provision of) this Agreement or any Credit Document solely by virtue of
permitting to exist any Lien described in Section 8.01(xv) until such time as
such Lien is required to be terminated under such Section.
7.12 ACCOUNTS RECEIVABLE. The Borrower and its Subsidiaries
will submit all necessary documentation and supply all necessary information for
payment of all Accounts Receivable (other than settlements in the Ordinary
Course of Business with payors of such Accounts Receivable reached to facilitate
collection to the payor for each of such Accounts Receivable); will not
subordinate or rescind any of the Accounts Receivable; and will notify Agent
promptly if any procedures or investigations are pending or threatened before
any
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Governmental Authority seeking a determination or ruling that might materially
and adversely affect the validity or enforceability of a material portion of
such Accounts Receivable subject to the review or jurisdiction of such
Governmental Authority.
7.13 RETENTION OF CONSULTANT. On or prior to December 31,
2001, the Borrower shall retain the Consultant to analyze and evaluate the
existing operations of Borrower and its Subsidiaries and recommend procedures to
improve cash collections, reduce operating costs and other procedures to improve
the overall performance of Borrower and its Subsidiaries.
7.14 REFINANCING. The Borrower will:
(a) RETENTION OF INVESTMENT BANKER. On or prior to the
Engagement Date, retain the Investment Banker to consider all options available
to the Borrower to refinance or otherwise address the outstanding Obligations to
the Lenders, including, without limitation, refinancing the Obligations, Asset
Sales, sales of equity interests in the Borrower and other reasonably possible
means of addressing the Obligations to the satisfaction of the Lenders. The
terms of the engagement of the Investment Banker shall be reasonably acceptable
to Agent.
(b) INFORMATION. Cause the Investment Banker to provide Agent
with all information and proposals suggested by the Investment Banker to
Borrower with respect to refinancing or otherwise addressing the Obligations as
Agent may reasonably request.
(c) REFINANCING PROPOSAL. On or prior to the Proposal Date,
provide the Refinancing Proposal to the Lenders.
7.15. REAL ESTATE. On or prior to December 31, 2001, Borrower
shall either (i) sell each Real Estate property and apply the net proceeds
thereof as provided in Sections 2.07(d) and 4.02(b)(ii), or (ii) execute and
deliver a Mortgage with respect to each Real Property in recordable form and
otherwise in form and substance satisfactory to Agent, or (iii) any combination
of (i) and (ii).
7.16. DEPOSIT ACCOUNT AGREEMENTS. On or prior to August 1,
2001, Borrower shall, and shall cause its Subsidiaries to, deliver to Agent
Collection Bank Agreements duly executed by the Concentration Bank and each
Lender into which proceeds of Accounts Receivable of each of Borrower or its
Subsidiaries are deposited.
7.17 SECURITY AGREEMENTS. On or prior to July 31, 2001,
(i) Borrower shall execute and deliver to Agent a Borrower
Security Agreement in substantially the form set forth in EXHIBIT J,
(ii) Borrower shall cause each of its Guarantor Subsidiaries
to execute and deliver to Agent a Subsidiary Security Agreement in
substantially the form of EXHIBIT K,
(iii) the Agent shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ & Manner, P.C., counsel to Borrower, an opinion in form and
substance satisfactory to Agent, addressed to each of the Lenders and
dated the date of delivery of the Borrower Security Agreement and the
Subsidiary Security Agreement, covering such matters
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incident to the execution and delivery of such Borrower Security
Agreement and the Subsidiary Security Agreement and the perfection of
the security interests created thereunder, under the Borrower Security
Agreement or the Subsidiary Security Agreement executed pursuant to the
Original Credit Agreement, the Concentration Bank Agreement executed by
PNC Bank, National Association and the Blocked Account Agreement as the
Agent may reasonably request,
(iv) the Agent shall have received a certificate, dated the
date of delivery of the Borrower Security Agreement, signed by the
President or Vice President of the Borrower, and attested to by the
Secretary or any Assistant Secretary of the Borrower, in form and
substance satisfactory to the Agent, certifying (A) resolutions of the
Board of Directors of the Borrower authorizing and approving the
Borrower Security Agreement, (B) the signatures and incumbency of the
Borrower's officers executing the Borrower Security Agreement and the
documents, instruments or other certificates to be delivered in
connection with the execution and delivery thereof, and (C) the
Certificate of Incorporation and By-Laws of the Borrower together with
copies of the Certificate of Incorporation and By-Laws of the Borrower
and the resolutions of the Borrower referred to in such certificate. In
lieu of delivering a copy of its Certificate of Incorporation or
By-Laws to the Agent pursuant to the preceding sentence, the Borrower
may certify in its certificate delivered pursuant to this clause (iv)
that such Certificate of Incorporation or By-Laws, as the case may be,
were previously delivered to the Agent and that there has been no
change in such Certificate of Incorporation or By-Laws, as the case may
be, since the date of such delivery,
(v) the Agent shall have received a certificate, dated the
date of delivery of the Subsidiary Security Agreement, signed by the
President or Vice President of each of the Borrower's Subsidiaries
party to the Subsidiary Security Agreement, and attested to by the
Secretary or any Assistant Secretary of such Subsidiary, in form and
substance satisfactory to the Agent, certifying (A) the resolutions
adopted by the Board of Directors of such Subsidiary approving and
authorizing the Subsidiary Security Agreement, (B) the signatures and
incumbency of the officers of such Subsidiary executing the Subsidiary
Security Agreement and the documents, instruments or other certificates
to be delivered in connection with the execution and delivery of the
Subsidiary Security Agreement, and (C) the Articles or Certificate of
Incorporation or other charter documents and By-Laws of such
Subsidiary, together with copies of the Articles or Certificate of
Incorporation or other charter documents and By-Laws of such Subsidiary
and the resolutions of such Subsidiary referred to in such certificate.
In lieu of delivering a copy of its Articles or Certificate of
Incorporation or other charter documents or By-Laws to the Agent
pursuant to the preceding sentence, any of the Borrower's Subsidiaries
may certify in its certificate delivered pursuant to this clause (v)
that such Articles or Certificate of Incorporation, other charter
documents or By-Laws, as the case may be, were previously delivered to
the Agent and that there has been no change in such Articles or
Certificate of Incorporation, other charter documents or By-Laws, as
the case may be, since the date of such delivery.
(vi) the Agent shall have received copies of the Articles or
Certificate of Incorporation or other charter documents of each of the
Borrower and each of the Borrower's Subsidiaries party to the
Subsidiary Security Agreement, certified as of a
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recent date prior to delivery by the Secretary of State of its
jurisdiction of incorporation, together with a good standing
certificate from its jurisdiction of incorporation dated a recent date
prior to delivery; provided, however, that the Articles or Certificate
of Incorporation or other charter documents of a Subsidiary need not be
delivered pursuant to this clause (vi) if such Subsidiary certifies
pursuant to clause (v) above that such Articles or Certificate of
Incorporation or other charter documents were previously delivered to
the Agent and that there has been no change in such Articles or
Certificate of Incorporation or other charter documents since the date
of such delivery.
(vii) all corporate, partnership and legal proceedings and all
instruments and agreements in connection with the Borrower Security
Agreement and the Subsidiary Security Agreement shall be satisfactory
in form and substance to the Lenders, and the Agent shall have received
all information and copies of all documents and papers, including
records of corporate proceedings and governmental approvals, if any,
that any Lender reasonably may have requested in connection therewith,
such documents and papers as appropriate to be certified by proper
corporate, partnership or governmental authorities.
(viii) the Borrower and its Subsidiaries shall have taken or
caused to be taken such actions in such a manner so that the Agent has
or maintains a valid and perfected first priority security interest in
all Collateral (subject to Liens consented to by the Required Lenders
with respect to such Collateral and other Liens permitted by Section
8.01) encumbered or to be encumbered under the Credit Documents. Such
actions shall include, without limitation, the delivery, to the extent
not theretofore delivered, to the Agent of Uniform Commercial Code
financing statements, or amendments thereto, executed by the Borrower
and its Subsidiaries as to the Collateral granted by the Borrower and
its Subsidiaries for all jurisdictions as may be necessary or desirable
to perfect the Agent's security interest in such Collateral.
(ix) the Borrower shall cause each of it Guarantor
Subsidiaries to be in good standing under the laws of its jurisdiction
of organization and to be duly qualified as a foreign corporation in
each jurisdiction where its ownership, leasing or operation of property
or the conduct of its business requires qualification, to the extent
provided in Section 6.01.
(x) Agent shall terminate on behalf of Lenders all obligations
of Neogenesis, Inc. under the Credit Documents to which it is a party
and shall file such termination statements under the Uniform Commercial
Code with respect to security interests of Agent in property of
Neogenesis as may be reasonably necessary to terminate Agent's security
interest therein.
SECTION 8. NEGATIVE COVENANTS. The Borrower covenants and
agrees that on and after the Effective Date and until the Loans and the Notes,
if any, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full and all Letters of Credit are
cancelled, expired or otherwise provided for to the satisfaction of the Issuing
Bank:
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8.01 LIENS. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or permit to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired; provided that the provisions of this Section 8.01 shall not
prevent the creation, incurrence, assumption or existence of:
(i) Liens for taxes not yet due, or Liens for taxes being
contested in good faith and by appropriate proceedings for which
adequate reserves have been established the failure to pay which would
not have a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole;
(ii) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law, that were incurred in the
Ordinary Course of Business, such as carriers', warehousemen's and
mechanics' liens and other similar Liens arising in the Ordinary Course
of Business and (x) that do not in the aggregate materially detract
from the value of property or assets having a value individually or in
the aggregate in excess of $50,000, or materially impair the use
thereof in the operation of the business of the Borrower or any of its
Subsidiaries or (y) that are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens in existence on the Effective Date that are
listed, and the property subject thereto described, in SCHEDULE 8.01
(Liens described in this clause (iii), "PERMITTED LIENS");
(iv) Liens in favor of the Agent;
(v) Liens relating to leases and subleases granted to others
not interfering in any material respect with the business of the
Borrower or any of its Subsidiaries;
(vi) Easements, rights-of-way, restrictions, minor defects or
irregularities of title and other similar charges or encumbrances not
interfering in any material respect with the Ordinary Course of
Business of the Borrower or any of its Subsidiaries;
(vii) Liens relating to any interest or title of a lessor
under any lease;
(viii) Liens relating to Interest Rate Agreements permitted
under Section 8.04(xi);
(ix) Liens relating to bankers' liens and other rights of
setoff;
(x) Pledges or deposits in connection with worker's
compensation, unemployment insurance and other social security
legislation;
(xi) Liens on assets purchased using the proceeds of
non-recourse purchase money Indebtedness permitted by Section 8.04(ix);
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(xii) Any attachment or judgment Lien not constituting an
Event of Default under Section 9.09;
(xiii) Any deposit arrangement, made in connection with a
transaction to secure performance of obligations in connection with
such transaction, not in excess (either individually or in the
aggregate) of $5,000,000; provided that such deposit arrangement is
terminated on the date upon which such performance obligations are
required to be discharged under the terms of the document creating such
deposit arrangement;
(xiv) Liens created to secure Indebtedness of the Borrower and
its Subsidiaries incurred after the Effective Date as permitted in
8.04(xiii);
(xv) Liens consisting of Uniform Commercial Code financing
statements relating to property or assets acquired (whether in
Acquisitions or otherwise) after the Effective Date, so long as (A)
none of such financing statements shall secure any outstanding
Indebtedness and (B) as soon as practicable but in any event within 45
days of the date of any such acquisition, the Borrower shall take all
action (including without limitation the filing of termination
statements with the appropriate filing offices) necessary to terminate
all such financing statements relating to property or assets acquired
in such acquisition; and
(xvi) Liens in favor of AHPF created pursuant to one or more
Intercompany Acquisition Guaranty/Security Agreements.
8.02 CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. The Borrower
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the Ordinary Course of Business) of any
Person, or permit any of its Subsidiaries to do any of the foregoing, except
that:
(i) the Borrower and its Subsidiaries may make sales of
inventory in the Ordinary Course of Business;
(ii) the Borrower and its Subsidiaries may dispose of
equipment and capital assets (x) that are obsolete or in need of
replacement in the Ordinary Course of Business, or (y) with a Book
Value of $50,000 in the aggregate, other than in the Ordinary Course of
Business, in any 12 month period;
(iii) the Borrower and its Subsidiaries may, in addition to
any sales permitted in clauses (i) and (ii) above, sell (by way of
merger or otherwise) for cash and/or promissory notes permitted under
Section 8.05(viii), stock, property or assets of the Borrower or any of
its Subsidiaries if the Book Value of all such stock, property and
assets sold by Borrower and its Subsidiaries during any 12 month period
pursuant to this clause (iii) does not exceed $1,000,000 in the
aggregate (excluding for this purpose the Book Value of the property
and assets in St. Louis, Missouri sold to Option Care
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Enterprises, Inc. prior to the Effective Date and the Book Value of the
property and assets to be sold to SBH Medical, Ltd., an Ohio limited
liability company, with respect to its infusion pharmacy business
located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇);
(iv) any Subsidiary of the Borrower may merge or consolidate
(a) into the Borrower or (b) with any other domestic Wholly-Owned
Subsidiary of the Borrower, so long as such Wholly-Owed Subsidiary is
the surviving corporation, association or joint venture, and in the
case of any merger or consolidation involving a Guarantor Subsidiary,
the Guarantor Subsidiary (or a Subsidiary of the Borrower that will
become a Guarantor Subsidiary on or before consummation of such merger)
is the surviving corporation;
(v) the Borrower and its Wholly-Owned Subsidiaries may
(without regard to the limitations set forth in Section 8.07) acquire
property and assets of other Persons (including any assets or property
acquired in any Acquisition) with the prior written consent of the
Required Lenders;
(vi) the Borrower and its Subsidiaries may make capital
expenditures to the extent not in violation of Section 8.07;
(vii) notwithstanding the provisions of clauses (i) through
(vi) of this Section 8.02, AHPT, may merge with and into the Borrower,
provided that the Borrower shall acquire any and all assets of such
entity, and provided such merger will not have a material adverse
effect on (A) the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole, (B) the value of the Collateral, or (C)
the ability of the Borrower to pay or the Lenders to collect the
Obligations;
(viii) any Subsidiary of the Borrower may be dissolved if such
dissolution will not have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole; and
(ix) (a) the Borrower may convey, sell or otherwise transfer
any assets of the Borrower to any domestic Wholly-Owned Subsidiary and
(b) any Subsidiary of the Borrower may convey, sell or otherwise
transfer any assets of such Subsidiary to the Borrower or to any
domestic Wholly-Owned Subsidiary; provided that, in each case, such
sale, conveyance or transfer will not have a material adverse effect on
(A) the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries, taken as
a whole, (B) the value of the Collateral, or (C) the ability of the
Borrower to pay or the Lenders to collect the Obligations.
8.03 DIVIDENDS.
(a) The Borrower will not declare or pay any dividends (other
than dividends that are payable solely to the holders of any class of stock of
the Borrower in shares of that class of stock), or return any capital, to its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital
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stock now or hereafter outstanding (or any options or warrants issued by the
Borrower with respect to its capital stock), or set aside any funds for any of
the foregoing purposes, or permit any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock of the Borrower now or hereafter outstanding (or any options or warrants
issued by the Borrower with respect to its capital stock), except that the
Borrower may acquire stock options or restricted stock from its employees or
former employees in an aggregate amount not to exceed $250,000 in any calendar
year.
(b) The Borrower will not permit any of its Subsidiaries to
declare or pay any dividends, or return any capital, to its stockholders or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for a consideration, any shares of any class of
its capital stock now or hereafter outstanding (or any options or warrants
issued by such Subsidiary with respect to its capital stock), or set aside any
funds for any of the foregoing purposes, or permit any of its Subsidiaries to
purchase or otherwise acquire for a consideration any shares of any class of the
capital stock of such Subsidiary now or hereafter outstanding (or any options or
warrants issued by such Subsidiary with respect to its capital stock) (each of
the foregoing being a "RESTRICTED SUBSIDIARY PAYMENT"), except that any
Subsidiary of the Borrower may make Restricted Subsidiary Payments to the
Borrower or any Wholly-Owned Subsidiary of the Borrower and any Joint Venture
that is a Subsidiary of the Borrower may make Restricted Subsidiary Payments in
proportion to the ownership interests therein.
8.04 INDEBTEDNESS. The Borrower will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(i) Indebtedness of the Borrower and its Subsidiaries incurred
under the Credit Documents;
(ii) Indebtedness listed on SCHEDULE 8.04(II) ("EXISTING
INDEBTEDNESS") and Indebtedness incurred by the Borrower or any of its
Subsidiaries to renew or refinance the Existing Indebtedness of the
Borrower or such Subsidiary; provided that the new Indebtedness shall
not exceed the principal amount of the Existing Indebtedness so renewed
or refinanced and shall not contain any terms or conditions, taken as a
whole, less favorable to the Borrower and the Lenders than the Existing
Indebtedness being renewed or refinanced;
(iii) accrued expenses and current trade accounts payable
incurred in the Ordinary Course of Business and obligations under trade
letters of credit incurred by the Borrower or any of its Subsidiaries
in the Ordinary Course of Business, that are to be repaid in full not
more than one year after the date on which such Indebtedness is
originally incurred to finance the purchase of goods by the Borrower or
such Subsidiary;
(iv) obligations under letters of credit incurred by the
Borrower or any of its Subsidiaries in the Ordinary Course of Business
in support of obligations incurred in connection with worker's
compensation, unemployment insurance and other social security
legislation, or as a result of participation by the Borrower and its
Subsidiaries in Medicare or Medicaid programs;
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(v) Indebtedness incurred as a result of loans and advances
permitted under Section 8.05(ii)-(iv);
(vi) obligations under letters of credit incurred by the
Borrower or any of its Subsidiaries in the Ordinary Course of Business
and to the extent consistent with past practice in support of
obligations under leases, bonds posted for judgments being appealed or
as a condition to bringing any action, suit or other proceeding not to
exceed $500,000 other than letters of credit listed on SCHEDULE
8.04(II);
(vii) non-recourse Indebtedness payable solely from and
secured solely by life insurance policies and annuities (and any
related trusts or escrows) maintained by the Borrower and its
Subsidiaries for their respective officers, employees and directors;
(viii) surety bonds, performance bonds and other completion
bonds in the Ordinary Course of Business and consistent with past
practice or as required by law;
(ix) non-recourse purchase money Indebtedness not exceeding
the purchase price of the asset so purchased and secured solely by such
asset;
(x) capitalized leases;
(xi) Interest Rate Agreements (and guaranties thereof) entered
into by the Borrower and its Subsidiaries with respect to Indebtedness
in an aggregate notional principal amount not to exceed $150,000,000;
(xii) Contingent Obligations in respect of any guaranty by the
Borrower or a Subsidiary of any obligations of any of their respective
Subsidiaries permitted under this Agreement;
(xiii) Indebtedness incurred as a result of loans permitted
under Section 8.05(vii);
(xiv) Contingent Obligations created pursuant to any
Intercompany Acquisition Guaranty/Security Agreements; and
(xv) Indebtedness of Borrower and its Subsidiaries incurred
after the Effective Date in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding.
8.05 ADVANCES, INVESTMENTS AND LOANS. The Borrower will not,
and will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock or other ownership
interest (other than stock or ownership interests issued as part of the
formation of a Subsidiary of the Borrower for consideration not to exceed
$150,000 in the aggregate with respect to all such Subsidiaries), obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may each acquire and
hold receivables owing to it, if created or acquired in the Ordinary
Course of Business and payable or
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dischargeable in accordance with customary trade terms to the extent
consistent with past practice;
(ii) loans and advances by any Subsidiary of the Borrower to
the Borrower; provided such loans or advances are at all times
subordinated to the Obligations of the Borrower on terms satisfactory
to the Required Lenders;
(iii) loans and advances by the Borrower to any Guarantor
Subsidiary in the Ordinary Course of Business so long as after giving
effect to such loan or advance there shall not have occurred a Default
or an Event of Default;
(iv) loans and advances by any Guarantor Subsidiary to any
other Guarantor Subsidiary in the Ordinary Course of Business so long
as after giving effect to such loan or advance there shall not have
occurred a Default or Event of Default;
(v) the Borrower and its Subsidiaries (a) may make new loans
and advances to officers, employees and agents in the Ordinary Course
of Business (for purposes other than purchasing stock or stock options
or exercising stock options) equal, in the aggregate for the Borrower
and its Subsidiaries, to no more than $100,000 at any one time
outstanding and may make loans to officers, directors and employees in
connection with the purchase or exercise of options for the Borrower
Common Stock, provided that no cash is advanced and (b) may make
interest-free loans or advances to officers and employees of the
Borrower and its Subsidiaries in the form of payment by the Borrower of
premiums in respect of so-called "split-dollar" life insurance policies
in an amount which shall not in the aggregate exceed $1,000,000 per
annum;
(vi) the Borrower and its Subsidiaries may make and own
investments in Cash Equivalents; provided that such Cash Equivalents
are not subject to setoff rights in favor of the financial institution
(other than a Lender or the Concentration Bank to the extent provided
in the Concentration Bank Agreement) issuing or selling any such Cash
Equivalents arising from any banking relationship of the Borrower and
its Subsidiaries;
(vii) loans made by AHPF to AHPT and evidenced by one or more
Intercompany Acquisition Notes;
(viii) investments consisting of promissory notes, in an
aggregate principal amount not to exceed $1,000,000 at any time
outstanding, received as part of the consideration in connection with
sales of stock, property or assets of any of its Subsidiaries permitted
under Section 8.02(iii); and
(ix) loans and advances to Joint Ventures set forth on
SCHEDULE 6.21 in an aggregate amount not to exceed $5,000,000 at any
time outstanding, but only to the extent required to be advanced under
the terms of Joint Venture agreements as in effect on the date hereof.
8.06 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any transaction or series
of related transactions, whether or not in the Ordinary Course of Business, with
any Affiliate of the Borrower, other than on terms
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and conditions substantially as favorable to the Borrower or such Subsidiary as
would be obtainable by the Borrower or such Subsidiary at the time in a
comparable arm's-length transaction with a Person other than an Affiliate.
8.07 CAPITAL EXPENDITURES. The Borrower will not, and will not
permit any of its Subsidiaries to, make Consolidated Capital Expenditures during
any Fiscal Year set forth below in an aggregate amount in excess of the
correlative amount set forth below opposite such Fiscal Year:
=============================================
FISCAL YEAR AMOUNT
---------------------------------------------
2001 $20,000,000
---------------------------------------------
2002 $22,000,000
8.08 LEVERAGE RATIO. The Borrower shall not permit the ratio
of (i) Total Debt to (ii) Adjusted Consolidated EBITDA for any consecutive
four-fiscal quarter period ending as of the last day of any fiscal quarter of
the Borrower set forth below to be more than the correlative amount set forth
below:
==========================================================
FISCAL QUARTER LEVERAGE RATIO
----------------------------------------------------------
2001 FQ2 5.901:1.00
----------------------------------------------------------
2001 FQ3 5.993:1.00
----------------------------------------------------------
2001 FQ4 6.204:1.00
----------------------------------------------------------
2002 FQ1 5.919:1.00
----------------------------------------------------------
2002 FQ2 5.982:1.00
----------------------------------------------------------
2002 FQ3 6.134:1.00
----------------------------------------------------------
2002 FQ4 6.306:1.00
8.09 MINIMUM INTEREST COVERAGE RATIO. The Borrower shall not
permit the ratio of (i) Adjusted Consolidated EBITDA of the Borrower and its
Subsidiaries to (ii) Consolidated Interest Expense for any consecutive
four-fiscal quarter period ending as of the last day of any fiscal quarter of
the Borrower set forth below to be less than the correlative amount set forth
below:
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=========================================================
MINIMUM INTEREST
FISCAL QUARTER COVERAGE RATIO
---------------------------------------------------------
2001 FQ2 1.544:1.00
---------------------------------------------------------
2001 FQ3 1.513:1.00
---------------------------------------------------------
2001 FQ4 1.512:1.00
---------------------------------------------------------
2002 FQ1 1.552:1.00
---------------------------------------------------------
2002 FQ2 1.552:1.00
---------------------------------------------------------
2002 FQ3 1.514:1.00
---------------------------------------------------------
2002 FQ4 1.501:1.00
8.10 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
INDEBTEDNESS; MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN
OTHER AGREEMENTS; ETC. The Borrower will not, and will not permit any of its
Subsidiaries to, (i) make any voluntary or optional payment or prepayment on or
redemption or acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before due
for the purpose of paying when due) any Indebtedness on which it is an obligor
which payment, prepayment or redemption or acquisition for value (in the case of
this clause (y)) is in excess of $100,000 per year in the aggregate except (in
the case of this clause (y)) with respect to payments or prepayments on or
redemptions or acquisitions for value of the (A) Obligations under the terms of
this Agreement or (B) any Indebtedness for which failure to make such payment,
prepayment, redemption or acquisition for value would constitute a violation of
a law or regulation enacted, adopted or becoming effective after the Effective
Date, or (C) any trade payables prepaid in the Ordinary Course of Business to
take advantage of favorable prepayment terms, (ii) amend or modify, or permit
the amendment or modification of, any provision of any Indebtedness or of any
agreement (including, without limitation, any purchase agreement, indenture,
loan agreement or security agreement) relating to any of the foregoing other
than amendments that (A) only extend the maturity of or lower the interest rate
on Indebtedness and amendments of this Agreement permitted by its terms or (B)
are immaterial and would not have a material adverse effect on the business,
operations, property, assets, liabilities (contingent or otherwise), condition
(financial or otherwise) or prospects of the Borrower or any of its
Subsidiaries, or (iii) amend, modify or change the Certificate or Articles of
Incorporation (including, without limitation, by the filing or modification of
any certificate of designation) or the By-Laws (or any other documents of
formation and governance, as the case may be) of the Borrower or any of its
Subsidiaries party to any of the Credit Documents or any Subsidiary of such
Subsidiaries (except to reflect a name change previously noticed to the Agent
and except as permitted under Section 8.02(vii), provided that such amendment
shall not adversely affect the Lenders' position as creditors hereunder).
8.11 RESTRICTIONS ON SUBSIDIARY DIVIDENDS AND OTHER
DISTRIBUTIONS. The Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction, other than as set
forth in this Agreement, on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits
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owned by the Borrower or any Subsidiary of the Borrower, or pay any Indebtedness
owed to the Borrower or a Subsidiary of the Borrower, (b) make loans or advances
to the Borrower or (c) transfer any of its properties or assets to the Borrower,
except for such encumbrances or restrictions existing under or by reasons of (i)
applicable law, (ii) this Agreement, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of the
Borrower or a Subsidiary of the Borrower that exists on the Effective Date and
(iv) customary provisions restricting transactions with Affiliates of Persons
party to a Joint Venture. The Borrower will not, and will not permit any of its
Subsidiaries to, amend, modify or otherwise change the terms of, or permit the
modification of, any provision of any Restructuring Note, any Intercompany Term
Note, the ConPharma Note, any Intercompany Acquisition Note or any Intercompany
Acquisition Guaranty/Security Agreement if the effect of such change is to
change the subordination provisions thereof (or of any guaranty thereof) or to
change any collateral therefor (other than to release such collateral).
8.12 BUSINESS. The Borrower will not, and will not permit any
of its Subsidiaries to, engage (directly or indirectly) in any business other
than the business in which it was engaged on the Effective Date and any business
directly related to such business.
8.13 TRANSFER OF COPYRIGHTS, PATENTS AND TRADEMARKS. The
Borrower will not, and will not permit any of its Subsidiaries to, transfer any
of their respective copyrights, licenses, patents, trademarks, permits, service
marks, trade names, franchises and formulas, or rights with respect to the
foregoing, except transfers pursuant to licenses granted in the Ordinary Course
of Business that would not have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole.
8.14 JOINT VENTURES. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to enter into any Joint Venture not set
forth on SCHEDULE 6.21.
8.15 DEPOSIT ACCOUNTS. Except as otherwise permitted in this
Section 8.15, the Borrower shall not, and shall not suffer nor permit any of its
Subsidiaries to, (i) maintain any Deposit Account with an average daily balance
in excess of $100,000 in any given month with any financial institution that has
not executed a Collection Bank Agreement, other than pursuant to the
Concentration Bank Agreement or the Blocked Account Agreement, (ii) maintain
amounts in excess of $5,000,000 in the aggregate at any time outstanding in
Deposit Accounts with financial institutions that have not executed Collection
Bank Agreements, other than pursuant to the Concentration Bank Agreement or the
Blocked Account Agreement, (iii) maintain any amounts in Deposit Accounts with
the Concentration Bank or any Lender, other than pursuant to the Collection Bank
Agreement or the Blocked Account Agreement, unless such financial institution
has executed a Collection Bank Agreement in substantially the form of EXHIBIT N,
or such other form as may be reasonably acceptable to Agent, on or prior to
August 1, 2001, (iv) maintain more than $1,500,000 in Deposit Accounts on behalf
of Joint Ventures listed on SCHEDULE 6.21, (v) deposit any amount into a Deposit
Account that is the subject of a Collection Bank Agreement that does not
represent proceeds of Collateral, or (vi) maintain any Deposit Account with the
Agent, other than pursuant to the Blocked Account Agreement. Borrower shall, and
shall cause its Subsidiaries to use reasonable efforts to obtain Collection Bank
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Agreements in substantially the form of EXHIBIT N, or such other form as may be
reasonably acceptable to Agent, from all financial institutions with which it
maintains Deposit Accounts.
8.16. MINIMUM CONSOLIDATED EBITDA. The Borrower shall not
permit Consolidated EBITDA for the three-month (quarterly) period ending on the
last day of any month set forth below to be less than the correlative amount
indicated:
===========================================================
MONTH ENDING MINIMUM CONSOLIDATED EBITDA
-----------------------------------------------------------
May 2001 $11,819,000
-----------------------------------------------------------
June 2001 $11,794,000
-----------------------------------------------------------
July 2001 $11,588,000
-----------------------------------------------------------
August 2001 $11,759,000
-----------------------------------------------------------
September 2001 $11,985,000
-----------------------------------------------------------
October 2001 $12,329,000
-----------------------------------------------------------
November 2001 $12,954,000
-----------------------------------------------------------
December 2001 $12,637,000
-----------------------------------------------------------
January 2002 $12,325,000
-----------------------------------------------------------
February 2002 $12,540,000
-----------------------------------------------------------
March 2002 $12,548,000
-----------------------------------------------------------
April 2002 $12,441,000
-----------------------------------------------------------
May 2002 $11,225,000
-----------------------------------------------------------
June 2002 $11,112,000
-----------------------------------------------------------
July 2002 $10,758,000
-----------------------------------------------------------
August 2002 $10,687,000
-----------------------------------------------------------
September 2002 $10,627,000
-----------------------------------------------------------
October 2002 $10,815,000
-----------------------------------------------------------
November 2002 $11,290,000
-----------------------------------------------------------
December 2002 $11,196,000
, less, if applicable, (i) $190,000 per month commencing upon completion of Sale
1, as described in the Sales Letter, and ending ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) $53,000 per
month commencing upon completion of Sale 2, as described in the Sales Letter,
and ending ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) $121,000 per month, commencing upon completion
of Sale 3, as described in the Sales Letters and ending on March 31, 2002, and
(i) $100,000, commencing upon completion of Sale 4 and ending on
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March 31, 2002; provided, however, that the monthly adjustment for the month of
any Sale shall be prorated based upon the actual number of days in the month and
the number of days since completion of such Sale.
8.17 ACCOUNTS RECEIVABLE COLLECTIONS.
(a) The Borrower shall not permit the average daily amount
collected by the Borrower and its Subsidiaries in respect of Accounts Receivable
for each Collection Day during any consecutive three-month period (the "CURRENT
THREE-MONTH PERIOD") to be less than the Applicable Three-Month Percentage (as
hereinafter defined) of the average daily Adjusted Net Revenues for each
Collection Day during the consecutive three-month period immediately preceding
the commencement of such Current Three-Month Period. For purposes of this
Section 8.17(a), the term "APPLICABLE THREE-MONTH PERCENTAGE" shall mean (i) for
any Current Three-Month Period ending during the fourth fiscal quarter of 2000,
87%, and (ii) for any Current Three-Month Period ending during the first fiscal
quarter of 2001 or thereafter, 90%.
(b) The Borrower shall not permit the average daily amount
collected by the Borrower and its Subsidiaries in respect of Accounts Receivable
for each Collection Day during any month (the "CURRENT MONTH") to be less than
the Applicable Monthly Percentage (as hereinafter defined) of the average daily
Adjusted Net Revenues for each Collection Day during the third month immediately
preceding such Current Month. For purposes of this Section 8.17(b), the term
"APPLICABLE MONTHLY PERCENTAGE" shall mean (i) for any Current Month ending
during the fourth fiscal quarter of 2000, 85%, and (ii) for any Current Month
ending during the first fiscal quarter of 2001 or thereafter, 86%.
SECTION 9. EVENTS OF DEFAULT. Upon the occurrence of any of
the following specified events (each an "EVENT OF DEFAULT");
9.01 PAYMENTS. The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note, (ii) default in the payment
when due of any amount payable to the Issuing Bank in reimbursement of any
drawing under a Letter of Credit or any cash collateralization requirements, or
(iii) default, and such default shall continue unremedied for two Business Days,
in the payment when due of interest on any Loan, any Fees or any other amounts
owing hereunder or under any Note; or
9.02 REPRESENTATIONS, ETC. Any representation, warranty or
statement made by the Borrower or any of its Subsidiaries herein or in any other
Credit Document or in any certificate delivered pursuant hereto or thereto shall
prove to be untrue in any material respect on the date as of which made or
deemed made; or
9.03 COVENANTS. The Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(g)(i), Section 7.13 or Section 8, (ii) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(j), Section 7.01(k) or Section 7.01(l) and such default shall
continue unremedied for a period of five days after written notice to the
Borrower by the Agent, or (iii) default in the due performance or observance by
it of any term, covenant or agreement (other than those referred to in Sections
9.01 and 9.02 and clause (i) or clause (ii) of
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this Section 9.03) contained in this Agreement and such default shall continue
unremedied for a period of 30 days after written notice to the Borrower by the
Agent.
9.04 DEFAULT UNDER OTHER AGREEMENTS. The Borrower or any of
its Subsidiaries shall (i) default in any payment of Indebtedness in an
aggregate principal amount equal to or exceeding $1,500,000 (other than the
Loans, the Restructuring Notes, the Intercompany Term Notes, the ConPharma Note
and the Intercompany Acquisition Notes) beyond the period of grace (not to
exceed 30 days), if any, provided in the instrument or agreement under which
such Indebtedness was created or (ii) default in the observance or performance
of any agreement or condition relating to Indebtedness in an aggregate principal
amount equal to or exceeding $3,750,000 (other than the Loans, the Restructuring
Notes, the Intercompany Term Notes, the ConPharma Note and the Intercompany
Acquisition Notes) or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause (determined without regard to whether
any notice is required), any such Indebtedness to become due prior to its stated
maturity; or Indebtedness of the Borrower or any of its Subsidiaries, in an
aggregate principal amount equal to or exceeding $3,750,000, shall be declared
to be due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof; or
9.05 BANKRUPTCY, ETC. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "BANKRUPTCY," as now or hereafter in effect, or any
successor thereto (the "BANKRUPTCY CODE"); or an involuntary case is commenced
against the Borrower or any of its Subsidiaries, and the petition is not
controverted within ten days, or is not dismissed within 60 days, after
commencement of the case (provided that the Borrower expressly authorizes the
Agent and each Lender to appear in any court conducting any such proceeding
during such 60 day period to preserve, protect and defend their rights under
this Agreement and the other Credit Documents); or a custodian (as defined in
the Bankruptcy Code) is appointed for, or takes charge of, all or substantially
all of the property of the Borrower or any of its Subsidiaries; or the Borrower
or any of its Subsidiaries commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Borrower or any of its Subsidiaries; or
there is commenced against the Borrower or any of its Subsidiaries any such
proceeding that remains undismissed for a period of 60 days; or the Borrower or
any of its Subsidiaries is adjudicated insolvent or bankrupt, or any order of
relief or other order approving any such case or proceeding is entered; or the
Borrower or any of its Subsidiaries suffers any appointment of any custodian or
the like for it or any substantial part of its property to continue undischarged
or unstayed for a period of 30 days; or the Borrower or any of its Subsidiaries
makes a general assignment for the benefit of creditors; or any corporate,
partnership or other action is taken by the Borrower or any of its Subsidiaries
for the purpose of effecting any of the foregoing; or
9.06 ERISA. Any Plan shall fail to maintain the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code; any Plan is, shall have been or is likely to be
terminated or the subject of a termination proceeding under ERISA; any
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Plan shall have an Unfunded Current Liability, or the Borrower or any of its
Subsidiaries or ERISA Affiliates has incurred or is likely to incur a liability
to or on account of a Plan under Sections 502(c), (i) or (l), 515, 4062, 4063,
4064, 4071, 4201 or 4204 of ERISA or Chapter 43 of the Code; and there shall
result from any such event or events the imposition of a Lien upon or the
granting of a security interest in the assets of the Borrower or any of its
Subsidiaries, or a liability or a material risk of incurring a liability to the
PBGC or a Plan or a trustee appointed under ERISA, that will have a material
adverse effect upon the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole; or
9.07 CREDIT DOCUMENTS. Any of the Credit Documents or any
material provision thereof shall cease to be in full force and effect for any
reason, other than the satisfaction in full of all Obligations and the
termination of this Agreement or otherwise in accordance with the provisions of
Section 10.10, or is declared to be null and void, or any Guarantor Subsidiary
shall default in the due performance or observance of any material term,
covenant or agreement on its part to be performed or observed pursuant to any of
the Credit Documents to which it is a party, or any Guarantor Subsidiary denies
that it has any further liability under any of the Credit Documents to which it
is a party or gives notice to such effect, or any junior creditor claims or
asserts the invalidity or unenforceability of any subordination provisions of
any Unsecured Seller Debt; or
9.08 CHANGES OF CONTROL. (i) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the meaning
of the Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Borrower representing 20% or more of the
combined voting power of all securities of the Borrower entitled to vote in the
election of directors; or (ii) during any period of up to 12 consecutive months,
commencing before or after the date of this Agreement, individuals who at the
beginning of such 12-month period were directors of the Borrower shall cease for
any reason to constitute a majority of the Board of Directors of the Borrower;
or (iii) any Person or two or more Persons acting in concert shall have acquired
by contract or otherwise, or shall have entered into a contract or arrangement
that upon consummation shall result in its or their acquisition of or control
over, securities of the Borrower representing 20% or more of the combined voting
power of all securities of the Borrower entitled to vote in the election of
directors; or
9.09 JUDGMENTS. One or more judgments, decrees or arbitration
awards shall be entered against the Borrower or any of its Subsidiaries
involving in the aggregate for the Borrower and its Subsidiaries a liability
(not paid or fully covered by insurance as to which the insurer has acknowledged
coverage in writing) of $3,000,000 or more, and all such judgments, decrees or
awards shall not have been vacated, discharged or stayed or bonded pending
appeal within 30 days after the entry thereof; or
9.10 GOVERNMENTAL POLICIES. Any change shall occur in state or
federal laws, rules or governmental regulations or budgetary allocations that
reasonably could be expected to have a material adverse effect on the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole; or
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9.11 LOSS OF LICENSES. Any Governmental Authority shall
finally revoke or fail to renew any license, permit or franchise of the Borrower
or the Borrower shall for any reason lose any license, permit or franchise or
the Borrower or any of its Subsidiaries shall suffer the imposition of any
restraining order, escrow, suspension or impound of funds in connection with any
proceeding (judicial or administrative) with respect to any license, permit or
franchise which event could reasonably be expected to have a material adverse
effect on the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole;
or
9.12 O.I.G. INVESTIGATION.
(a) any investigation and/or audit of the Borrower and its
Subsidiaries by the O.I.G. or any other Governmental Authority (other than the
Settlement) shall result in a liability (whether or not being contested) on the
part of the Borrower and its Subsidiaries and/or a reduction or set-off in
respect of future Accounts Receivable of the Borrower and its Subsidiaries in an
aggregate amount which, in the opinion of the Required Lenders, could reasonably
be expected to have a material adverse effect on the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole;
(b) there shall have been a development in any investigation
and/or audit (other than the Settlement) that the Required Lenders determine
could reasonably be expected to have material adverse effect on the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole;
(c) the Borrower and its Subsidiaries shall have been assessed
or otherwise shall have incurred any cost, expense, fine, demand or liability
(however denominated or asserted) that exceeds $1,000,000 or any reduction or
set-off in respect of future Accounts Receivable of the Borrower and its
Subsidiaries in an aggregate amount in excess of $1,000,000 with respect to any
investigation and/or audit (other than the Settlement);
(d) there shall have been any development in any investigation
and/or audit (other than the Settlement) that the Required Lenders determine
could reasonably be expected to result in any cost, expense, fine, demand or
liability (however denominated or asserted) that exceeds $1,000,000 or any
reduction or set-off in respect of future Accounts Receivable of the Borrower
and its Subsidiaries in an aggregate amount in excess of $1,000,000;
(e) any amount is owed or is demanded by any Governmental
Authority to be paid with respect to the Settlement, other than $7,000,000, plus
interest thereon, and the fees and expenses of the relator or there has been any
acceleration or any voluntary prepayment of any installment thereof;
(f) any representation and warranty set forth in the
Settlement is not true and correct or any claim is made by any Governmental
Authority that any such representation and warranty is not true and correct; or
(g) the Borrower or any of its Subsidiaries has breached or
any claim has been made by any Governmental Authority that Borrower or any of
its Subsidiaries has breached the
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terms of the Settlement or any claim is otherwise made by any Governmental
Authority for rescission of the Settlement;
THEN, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent, upon the written request of the Required
Lenders, shall by written notice to the Borrower, (provided, that, if an Event
of Default specified in Section 9.05 shall occur with respect to the Borrower,
the result which would occur upon the giving of written notice by the Agent to
the Borrower as hereafter shall occur automatically without the giving of any
such notice) declare the principal of and any accrued interest in respect of all
Loans and the Notes, if any, and all Obligations owing hereunder and thereunder
to be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower, and the obligation of each Lender to make any
Loan and the obligation of the Issuing Bank to issue or renew any Letter of
Credit shall thereupon terminate. So long as any Letter of Credit shall remain
outstanding, any amounts received by the Agent shall be held by the Agent,
pursuant to such documentation as the Agent shall request, as cash collateral
for the obligation of the Borrower to reimburse the Issuing Bank in the event of
any drawing under any outstanding Letters of Credit, and so much of such funds
shall at all times remain on deposit as cash collateral as aforesaid as shall
equal the maximum amount available at any time for drawing under all Letters of
Credit (the "MAXIMUM AVAILABLE AMOUNT"); provided that in the event of
cancellation or expiration of any Letter of Credit or any reduction in the
Maximum Available Amount, the Agent shall apply the difference between the cash
collateral held by the Agent immediately prior to such cancellation, expiration
or reduction and the Maximum Available Amount immediately after such
cancellation, expiration or reduction first to the payment of any outstanding
Obligations, and second to the payment to whomsoever shall be lawfully entitled
to receive such funds; provided further that to the extent that any payments of
principal and/or interest on the Loans shall not have been paid when due, Agent
shall apply the cash collateral held by it to payment of all Obligations of
Borrower to the Lenders and the Issuing Bank as provided in Section 11.07, Agent
may thereafter demand that Borrower make such additional deposits as cash
collateral as may be necessary to equal the Maximum Available Amount, and Agent,
at the request of Required Lenders may make demand for such additional amounts
as may be owed to Lenders.
SECTION 10. THE AGENT.
10.01 APPOINTMENT. The Lenders hereby designate Bankers Trust
Company as the Agent (for purposes of this Section 10, the term "AGENT" shall
include Bankers Trust Company in its capacity as the Agent pursuant to the other
Credit Documents) to act as specified herein and in the other Credit Documents.
Each Lender hereby irrevocably authorizes, and each holder of any Loan by the
acceptance of such Loan shall be deemed irrevocably to authorize, the Agent to
take such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. The Agent may perform any of its duties hereunder by or through its
officers, directors, agents or employees.
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10.02 NATURE OF DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. Neither the Agent nor any of its officers, directors,
agents or employees shall be liable for any action taken or omitted by it or
them hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Agent shall be mechanical and administrative in nature; the
Agent shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Lender or the holder of any Loan; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any obligations
in respect of this Agreement or any other Credit Document except as expressly
set forth herein.
10.03 LACK OF RELIANCE ON THE AGENT. Independently and without
reliance upon the Agent, each Lender and the holder of each Loan, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Borrower
in connection with the making and the continuance of the Loans and the taking or
not taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of the Borrower and, except as expressly provided in this
Agreement, the Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender or the holder of any Loan with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter.
The Agent shall not be responsible to any Lender or the holder of any Loan for
any recitals, statements, information, representations or warranties herein or
in any document, certificate or other writing delivered in connection herewith
or for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of the Borrower or be required
to make any inquiry concerning either the performance or observance of any of
the terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of the Borrower or the existence or
possible existence of any Default or Event of Default.
10.04 CERTAIN RIGHTS OF THE AGENT. If the Agent shall request
instructions from the Required Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Agent shall be entitled to refrain from such act or taking such
action unless and until the Agent shall have received instructions from the
Required Lenders; and the Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender or the holder
of any Loan shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders unless the agreement of all Lenders is required by the terms of this
Agreement.
10.05 RELIANCE. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, e-mail, order or other document or telephone message signed, sent or
made by any Person that the Agent believed to be the proper Person, and, with
respect to all legal matters pertaining to this Agreement and any other Credit
Document and its duties hereunder and thereunder, upon advice of counsel
selected by it.
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10.06 INDEMNIFICATION. To the extent the Agent is not
reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Agent, in proportion to their respective proportionate shares of
the aggregate amount of the Loans as of the date of determination, for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Agent in performing its duties hereunder or under any other Credit
Document, or in any way relating to or arising out of this Agreement or any
other Credit Document; provided that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions, judgment,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct.
10.07 THE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to
its obligation to maintain and make Loans under this Agreement, the Agent shall
have the rights and powers specified herein for a "Lender" and may exercise the
same rights and powers as though it were not performing the duties specified
herein; and the term "LENDERS," "REQUIRED LENDERS," "HOLDERS OF LOANS" or any
similar terms shall, unless the context clearly otherwise indicates, include the
Agent in its individual capacity. The Agent may accept deposits from, lend money
to, and generally engage in any kind of banking, trust or other business with
the Borrower or any Affiliate of the Borrower as if it were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to the Lenders.
10.08 HOLDERS. The Agent may deem and treat the payee of any
Note and the holder of any Loan as the owner thereof for all purposes hereof
unless and until a written notice of the assignment, transfer or endorsement
thereof, as the case may be, shall have been filed with the Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Loan shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Loan or of any Loan or Loans issued in exchange therefor,
whether or nor evidenced by a Note.
10.09 RESIGNATION BY THE AGENT.
(a) The Agent may resign from the performance of all its
functions and duties hereunder and/or under the other Credit Documents at any
time by giving 15 Business Days prior written notice to the Borrower and the
Required Lenders. Such resignation shall take effect upon the appointment of a
successor to the Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation, the Lenders shall
appoint a successor to the Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(c) If no successor to the Agent has been appointed pursuant
to clause (b) above by the 20th Business Day after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Lenders shall thereafter perform all the duties of the Agent
hereunder and/or under any other Credit Document until such time, if any, as the
Lenders appoint a successor to the Agent as provided above.
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(d) Any resignation of the Agent pursuant to Section 10.09(a)
shall also constitute the resignation of Bankers Trust Company or its successor
as Issuing Bank, and any successor Agent appointed pursuant to Section 10.09(b)
shall, upon its acceptance of such appointment, become the successor Issuing
Bank.
10.10 RELEASE OF COLLATERAL. Without further written consent
or authorization from Lenders, Agent may, in its sole discretion, execute any
documents or instruments necessary to release any Lien encumbering any item of
Collateral that is the subject of a sale or other disposition of assets
permitted by this Agreement or otherwise consented to in accordance with Section
11.13(a); provided that the proceeds of any Asset Sale have been applied to
prepayment of the Loans as provided in Sections 2.07(d) and 4.02(b)(ii).
SECTION 11. MISCELLANEOUS.
11.01 PAYMENT OF EXPENSES, ETC. The Borrower shall: (i) pay
all the actual costs and reasonable expenses (w) of the Agent (including,
without limitation, the reasonable fees and disbursements of O'Melveny & ▇▇▇▇▇
LLP, special counsel to the Agent) in connection with the preparation,
execution, delivery and syndication of this Agreement and the other Credit
Documents and the Existing Credit Agreement and the documents and instruments
referred to herein and therein and any amendment, waiver or consent relating
hereto or thereto, (x) of the Agent and each of the Lenders in connection with
the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein (including, without
limitation, the reasonable fees and disbursements of O'Melveny & ▇▇▇▇▇ LLP,
special counsel to the Agent, and such other counsel as any other Lender may
retain from time to time in connection herewith), (y) of the Agent (including,
without limitation, the reasonable fees and disbursements of O'Melveny & ▇▇▇▇▇
LLP, special counsel to the Agent) in connection with the custody or
preservation of any of the Collateral or in connection with creating, perfecting
and preserving Liens in favor of the Agent on behalf of the Lenders pursuant to
any Credit Document, including any filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees and title insurance premiums and
(z) of the Lender Financial Advisor and any other consultants, advisors, agents,
auditors or accountants chosen by the Agent or the Required Lenders, to perform,
investigate, test or review such matters relating to the Borrower and its
Subsidiaries as the Agent or the Required Lenders shall designate (including,
without limitation, any review, investigation or evaluation conducted pursuant
to Section 7.02); (ii) pay and hold each of the Lenders harmless from and
against any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save each of the Lenders harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission (other than to the extent attributable to such Lender) to pay such
taxes; and (iii) indemnify the Agent and each Lender, its officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses and disbursements incurred by
any of them as a result of, or arising out of, or in any way related to, or by
reason of, any investigation, litigation or other proceeding (whether or not the
Agent or any Lender is a party thereto) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of the
proceeds of any Loans or Letters of Credit hereunder or the consummation of any
transactions contemplated herein or in any other Credit Document, including,
without limitation, the reasonable fees and disbursements of counsel incurred in
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connection with any such investigation, litigation or other proceeding (but
excluding any such liabilities, obligations, losses, etc., to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified). After the occurrence of an Event of Default or upon the
acceleration of the Obligations (whether pursuant to the terms hereof or
applicable law), the Borrower shall pay all costs and expenses, including
reasonable attorneys' fees (including, without limitation, allocated costs of
internal counsel) and costs of settlement, incurred by the Agent and/or the
Lenders in enforcing any Obligations of, or in collecting any payments due from,
the Borrower or any Subsidiary hereunder or under the other Credit Documents by
reason of such Event of Default (including in connection with the sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.
11.02 RIGHT OF SETOFF. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default,
Issuing Bank and each Lender is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by the Issuing
Bank or such Lender or any affiliate thereof (including without limitation, by
branches and agencies of the Issuing Bank or such Lender wherever located) to or
for the credit or the account of the Borrower or any Guarantor Subsidiary
against and on account of the Obligations and liabilities of the Borrower to
Issuing Bank or such Lender under this Agreement or under any of the other
Credit Documents, including, without limitation, all interests in Obligations
purchased by Issuing Bank or such Lender pursuant to Section 11.05(b), and all
other claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document or otherwise, irrespective of whether or
not the Issuing Bank or such Lender shall have made any demand hereunder and
although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
11.03 NOTICES. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic telecopier or cable communication) and mailed,
telegraphed, telecopied, cabled or delivered: if to the Borrower, at its address
specified opposite its signature below; if to any Lender, at its office
specified opposite its signature below; and if to the Agent, at its Notice
Office; or, as to the Borrower or the Agent, at such other address as shall be
designated by such party in a written notice to the other parties hereto and, as
to each other party, at such other address as shall be designated by such party
in a written notice to the Borrower and the Agent. In addition, a copy of all
notices sent to the Borrower or the Agent in accordance with Sections 7.01(g) or
9 shall also be sent to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ & Manner, P.C., 1800 First
American Center, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, Esq., and to O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq. All such notices and
communications shall, when mailed, telegraphed, telecopied, e-mailed or cabled
or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by
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telecopier or e-mail, except that notices and communications to the Agent shall
not be effective until received by the Agent.
11.04 BENEFIT OF AGREEMENT. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, that the Borrower may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of each Lender.
11.05 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF
CREDIT.
(a) GENERAL. Each Lender shall have the right at any time to
(i) sell, assign, transfer or negotiate to any Eligible Assignee, or (ii) sell
participations to any Eligible Assignee in, all or any part of any Loan or Loans
made by it or any other interest herein or in any other Obligations owed to it;
provided that no such sale, assignment, transfer or participation shall, without
the consent of the Borrower, require the Borrower to file a registration
statement with the SEC, apply to qualify such assignment or participation of the
Loans or the other Obligations under the securities laws of any state or
otherwise become subject to any federal or state securities laws requirements
with respect thereto; provided, further that no such sale, assignment or
transfer described in clause (i) above shall be effective unless and until an
Assignment and Acceptance effecting such sale, assignment or transfer shall have
been accepted by the Agent and recorded in the Agent's records as provided in
Section 11.05(b)(ii). Except as otherwise provided in this Section 11.05, no
Lender shall, as between the Borrower and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or any granting of participations in, all or any part of the
Loans or the other Obligations owed to such Lender.
(b) ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Loan or other
Obligation may (A) be assigned in any amount (of a constant and not a
varying percentage) to another Lender, or to an Affiliate of the
assigning Lender or another Lender, with the giving of notice to the
Borrower and the Agent or (B) be assigned in an amount of not less than
$5,000,000 (or such lesser amount as shall constitute the aggregate
amount of the Loans and other Obligations of the assigning Lender), to
any other Eligible Assignee with the giving of notice to the Borrower
and the Agent and with the consent of the Borrower and the Agent, in
the case of an assignment made by a Lender other than the Agent, or
with the consent of the Borrower, in the case of an assignment made by
the Agent (which consent of the Borrower and the Agent shall not be
unreasonably withheld or delayed); provided that in no event shall the
Borrower's consent be required if a Default or an Event of Default has
occurred and is continuing. To the extent of any such assignment in
accordance with this Section 11.05, the assigning Lender shall be
relieved of its obligations with respect to its Loans. The parties to
each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in its records, an Assignment and Acceptance,
together with, with respect to assignments that occur following the
Effective Date, a processing and recordation fee of $3,500, and such
certificates, documents or other evidence, if any, with respect to
United States federal income tax withholding matters as the assignee
under such Assignment and Acceptance may be
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required to deliver to the Agent pursuant to Section 2.06(g)(iii). Upon
such execution, delivery and acceptance, from and after the effective
date specified in such Assignment and Acceptance, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a
Lender hereunder and (z) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and
be released from its obligations under this Agreement (and, in the case
of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto). A new Note, if requested
by the assignee shall, upon surrender of the assigning Lender's Note,
if any, be issued to the assignee and to the assigning Lender,
substantially in the form of EXHIBIT C annexed hereto with appropriate
insertions, to reflect the outstanding Loans of the assignee and the
assigning Lender.
(ii) Acceptance by the Agent; Recordation in Records. Upon its
receipt of an Assignment and Acceptance executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in Section
11.05(b)(i) and any certificates, documents or other evidence with
respect to United States federal income tax withholding matters that
such assignee may be required to deliver to the Agent pursuant to
Section 2.06(g)(iii), the Agent shall, if such Assignment and
Acceptance has been completed and is in the form of EXHIBIT E hereto
and if the Agent and the Borrower have consented to the assignment
evidenced thereby (in each case to the extent such consent is required
pursuant to Section 11.05(b)(i)), (a) accept such Assignment and
Acceptance by executing a counterpart thereof as provided therein
(which acceptance shall not be unreasonably withheld or delayed and
shall evidence any required consent of the Agent to such assignment),
(b) record the information contained therein in its records, and (c)
give prompt notice thereof to the Borrower. The Agent shall maintain a
copy of each Assignment and Acceptance delivered to and accepted by it
as provided in this Section 11.05(b)(ii).
(c) LOAN PARTICIPATIONS. The holder of any Loan participation,
other than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except action directly affecting (i) the extension of the scheduled final
maturity of any Loan allocated to such participation, (ii) a reduction of the
principal amount of or the rate of interest payable on any Loan, and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation, (iii) the release of the Liens held by Agent on behalf
of the Lenders with respect to all or substantially all of the Collateral, or
(iv) a reduction of the amount of any fees payable hereunder to the extent
subject to such participation. The Borrower hereby acknowledges and agrees that,
only for purposes of Sections 2.04, 2.06, 11.02 and 11.07(b), any participation
will give rise to a direct obligation of the Borrower to the participant and the
participant shall be considered to be a "Lender"; provided that no participant
shall be entitled to receive any greater amount pursuant to Section 2.04 or 2.06
than the transferor Lender would have been entitled to receive in respect of the
amount of the participation effected by such transferor Lender to such
participant had no such participation occurred.
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(d) ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
Section 11.05, any Lender may assign and pledge all or any portion of its Loans,
the other Obligations owed to such Lender, and its Note to any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any operating circular issued by such Federal
Reserve Bank; provided that (i) no Lender shall, as between the Borrower and
such Lender, be relieved of any of its obligations hereunder as a result of any
such assignment and pledge and (ii) in no event shall such Federal Reserve Bank
be considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
(e) INFORMATION. Each Lender and the Issuing Bank may furnish
any information concerning the Borrower and its Subsidiaries in the possession
of that Lender or the Issuing Bank from time to time to assignees and
participants (including prospective assignees and participants).
(f) LETTERS OF CREDIT. Neither the Issuing Bank nor any
participant in the Letters of Credit may sell, assign, transfer or negotiate any
portion of the Letters of Credit, other than the grant or transfer of
participations therein or any other Obligations owed to it with respect to such
Letters of Credit as provided herein. No such grant or transfer of a
participation in the Letters of Credit shall, without the consent of the
Borrower, require the Borrower to file a registration statement with the SEC,
apply to qualify such grant or transfer of a participation in the Letters of
Credit or the other Obligations under the securities laws of any state or
otherwise become subject to any federal or state securities laws requirements
with respect thereto. Except as otherwise provided in this Section 11.05, the
Issuing Bank shall, as between the Borrower and the Issuing Bank, not be
relieved of any of its obligations hereunder as a result of any granting or
transfer of participations in, any portion of the Letters of Credit or the other
Obligations owed to the Issuing Bank. The Borrower's consent shall not be
required in connection with any grant or transfer of participations in the
Letters of Credit. The holder of any participation in the Letters of Credit
shall not be entitled to require the Issuing Bank to take any action hereunder
of any kind or nature, including, without limitation, any actions with respect
to approvals, consents, amendments or waivers pursuant to Section 11.13. The
Borrower hereby acknowledges and agrees that, only for purposes of Sections
11.02 and 11.07(b), any participation will give rise to a direct obligation of
the Borrower to the participant and the participant shall be considered to be a
"Lender". Nothing herein shall restrict the Issuing Bank from selling,
assigning, transferring, or negotiating its interest in the Loans separate from
the Letters of Credit.
11.06 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on
the part of the Agent or any Lender or the holder of any Loan in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between the Borrower and the Agent or any Lender or the holder
of any Loan shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the Agent
or any Lender or the holder of any Loan would otherwise have. No notice to or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the
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rights of the Agent or any Lender or the holder of any Loan to any other or
further action in any circumstances without notice or demand.
11.07 PAYMENTS PRO RATA.
(a) The Agent agrees that promptly after its receipt of each
payment from or on behalf of the Borrower in respect of any Obligations of the
Borrower hereunder, it shall distribute by the next Business Day such payment to
the Lenders and Issuing Bank pro rata based upon their respective Pro Rata
Shares, if any, of the Obligations then due and owing.
(b) Each of the Lenders and Issuing Bank agrees that, if it
should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Credit Documents, or otherwise), that is applicable to the payment of the
principal of, or interest on, the Loans, or under any Letter of Credit of a sum
which with respect to the related sum or sums received by other Lenders or the
Issuing Bank, as the case may be, is in a greater proportion than the total
amount of such Obligation then owed and due to such Lender or Issuing Bank bears
to the total amount of such Obligation then owed and due to all of the Lenders
and the Issuing Bank immediately prior to such receipt, then such Lender or the
Issuing Bank, as the case may be, receiving such excess payment shall purchase
for cash without recourse or warranty from the other Lenders and the Issuing
Bank an interest in the Obligations of the Borrower to such Lenders and the
Issuing Bank in such amount as shall result in a proportional participation by
all the Lenders and the Issuing Bank in such amount in accordance with their Pro
Rata Share of the Obligations then due and owing as provided in clause (ii) of
the definition of "Pro Rata Share"; provided, however, that if all or any
portion of such excess amount is thereafter recovered from such Lender or
Issuing Bank, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.
11.08 CALCULATIONS; COMPUTATIONS. The financial statements to
be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Borrower to the
Lenders); provided that, except as otherwise specifically provided herein, all
computations determining compliance with Section 8 shall utilize accounting
principles and policies in conformity with those used to prepare the historical
financial statements delivered to the Lenders pursuant to Section 7.01 of the
Existing Credit Agreement; provided, further that, without limiting the
generality of the foregoing proviso, in no event shall the Borrower change the
Accounts Receivable reserve policies applied by the Borrower for purposes of
such computations without the consent of the Required Lenders.
11.09 GOVERNING LAW; WAIVER OF JURY TRIAL; SERVICE OF PROCESS.
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK. THE AGENT, THE LENDERS
AND THE BORROWER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
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AGREEMENT OR ANY OTHER CREDIT DOCUMENT. The Borrower hereby agrees that service
of all process in any such proceeding in any such court may be made by
registered or certified mail, return receipt requested, to the Borrower at its
address provided on the signature pages hereto, such service being hereby
acknowledged by the Borrower to be sufficient for personal jurisdiction in any
action against the Borrower in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of the
Agent or any Lender to bring proceedings against the Borrower in the courts of
any other jurisdiction.
11.10 CONFIDENTIALITY. Each Lender shall hold all non-public
information obtained pursuant to the requirements of this Agreement which has
been identified as confidential by the Borrower in accordance with such Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by the Borrower that in any event a Lender may make disclosures to Affiliates of
such Lender or disclosures reasonably required by any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or any participations therein or
disclosures required or requested by any governmental agency or representative
thereof or pursuant to legal process; provided that, unless specifically
prohibited by applicable law or court order, each Lender shall notify the
Borrower of any request by any governmental agency or representative thereof
(other than any such request in connection with any examination of the financial
condition of such Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information; and provided,
further that in no event shall any Lender be obligated or required to return any
materials furnished by the Borrower or any of its Subsidiaries.
11.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts by facsimile or otherwise, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument. A set of counterparts executed by all the parties
hereto shall be lodged with the Borrower and the Agent.
11.12 HEADINGS DESCRIPTIVE. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
11.13 AMENDMENT OR WAIVER.
(a) No approval, consent, amendment or waiver of this
Agreement or any of the Credit Documents shall be effective unless it is in
writing signed by the Agent and the Required Lenders; provided, however, that
any such approval, consent, amendment or waiver that (a) reduces the amount of
any interest, principal, fees or other amounts owing to any Lender hereunder,
including, without limitation, amounts payable under Section 4 (but excluding
any waiver of any increase in the interest rate applicable to the Loans pursuant
to Section 2.03(e)); (b) releases any Person from all or any portion of its
liabilities under the Subsidiary Guaranty; (c) amends any provisions of this
Section 11.13; (d) reduces the percentage specified in the definition of the
term "REQUIRED LENDERS" or changes the definition of "PRO RATA SHARE"; (e)
postpones the scheduled final maturity date (but not the date of any scheduled
installment of
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principal) of any of the Loans or the date on which any interest or any fees are
payable under this Agreement or any of the Credit Documents; (f) releases all or
substantially all of the Collateral (except as set forth in Sections 8.02(i),
(ii) or (iii) or 8.13, or if the sale or disposition of such Collateral is
permitted under any of the Credit Documents), or (g) by the terms of any
provision of this Agreement requires the approval of all the Lenders shall be
effective only if it is in writing signed by all the Lenders directly affected;
provided, further, that no amendment, modification or waiver of any provision of
Section 10 or of any other provision of this Agreement expressly requiring the
approval or concurrence of the Agent shall be effective without the written
concurrence of the Agent; and provided, further, that no amendment, modification
or waiver of any provision of Section 2.07 or any other provision of this
Agreement for the benefit of the Issuing Bank shall be effective without the
concurrence of the Issuing Bank.
(b) If in connection with any proposed approval, consent,
amendment or waiver with respect to any of the provisions of this Agreement as
contemplated by clauses (a) through (g) of the first proviso of Section 11.13(a)
the consent of the Required Lenders is obtained but the consent of one or more
of the other Lenders whose consent is also required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described below, to replace each
such non-consenting Lender or Lenders with one or more Replacement Lenders (as
defined in Section 11.13(c) pursuant to Section 11.13(c) so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
approval, consent, amendment or waiver.
(c) In the event of certain refusals by a Lender as provided
in Section 11.13(b) to consent to certain proposed approvals, amendments,
consents or waivers with respect to this Agreement which have been approved by
the Required Lenders, the Borrower may, upon five Business Days' written notice
to the Agent (which notice the Agent shall promptly transmit to each of the
Lenders) repay all Loans, together with accrued and unpaid interest, fees and
other amounts owing to such Lender (a "Replaced Lender") in accordance with, and
subject to the requirements of, said subsection 11.13(b) so long as the consents
required by Section 11.13(b) in connection with the repayment pursuant to this
Section 11.13(c) have been obtained.
(i) At the time of any replacement pursuant to this subsection
11.13(c), the lender replacing such Replaced Lender (the "Replacement
Lender") shall enter into one or more assignment agreements, in form
and substance satisfactory to the Agent, pursuant to which the
Replacement Lender shall acquire all of the outstanding Loans of the
Replaced Lender and, in connection therewith, shall pay to (x) the
Replaced Lender in respect thereof an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Lender, and (B) an amount equal to
all accrued, but theretofore unpaid, fees owing to the Replaced Lender;
and
(ii) all obligations of the Borrower owing to the Replaced
Lender (excluding those specifically described in clause (a) above in
respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement.
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Upon the execution of the respective assignment documentation,
the payment of amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Lender, delivery to the Replacement Lender of the
appropriate Note or Notes executed by the Borrower, the Replacement Lender shall
become a Lender hereunder and the Replaced Lender shall cease to constitute a
Lender hereunder, except with respect to the Borrower's obligations regarding
the indemnification provisions under this Agreement, which shall survive for the
benefit of such Replaced Lender. Notwithstanding anything to the contrary
contained above, no Issuing Bank may be replaced hereunder at any time while it
has Letters of Credit outstanding hereunder unless arrangements satisfactory to
such Issuing Bank (including the furnishing of a standby letter of credit in
form and substance, and issued by an issuer satisfactory to such Issuing Bank or
the furnishing of cash collateral in amounts and pursuant to arrangements
satisfactory to such Issuing Bank) have been made with respect to such
outstanding Letters of Credit.
11.14 SURVIVAL. All indemnities set forth herein including,
without limitation, in Sections 2.04, 10.06 and 11.01 shall survive the
execution and delivery of this Agreement and the Notes, if any, and the making
and repayment of the Loans and the Letters of Credit.
11.15 DOMICILE OF LOANS. Each Lender may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender.
11.16 INTEGRATION. This Agreement, together with the exhibits
to this Agreement and the other documents described herein, is intended by the
parties hereto as a complete statement of the terms and conditions of their
agreement.
11.17 SECURED OBLIGATIONS. The Borrower hereby agrees and
confirms that on and after the Effective Date each Credit Document to which the
Borrower is a party, including, as applicable, the Borrower Security Agreement,
the Borrower Pledge Agreement and the Trademark Security Agreement, and all
collateral encumbered thereby shall continue to secure to the fullest extent
possible the payment and performance of all "Obligations" and "Secured
Obligations" (as defined in each applicable Credit Document), including without
limitation the payment and performance of all such "Secured Obligations" in
respect of the Obligations of the Borrower now or hereafter existing under or in
respect of this Agreement and the Loans. Without limiting the generality of the
foregoing, the Borrower hereby acknowledges and confirms its understanding and
intent that, upon the Effective Date and as a result thereof, the definition of
"Obligations" contained in this Agreement includes the obligations of the
Borrower under the Loans, whether or not evidenced by a Note.
The Borrower acknowledges and agrees that any of the Credit
Documents to which it is a party or otherwise bound shall continue in full force
and effect and that all of its respective obligations thereunder shall be valid
and enforceable and shall not be impaired, limited or otherwise affected by the
execution, delivery or effectiveness of this Agreement or any future amendment
or modification of this Agreement. The Borrower represents and warrants that all
representations and warranties contained in each Credit Document to which it is
a party, including the Borrower Security Agreement, the Borrower Pledge
Agreement and the Trademark Security Agreement, are true, correct and complete
in all material respects on and as of the Effective Date to the same extent as
though made on and as of that date, except to the extent any such representation
or warranty specifically relates to an earlier date, in which case such
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representation or warranty shall have been true, correct and complete in all
material respects on and as of such earlier date.
The Borrower hereby acknowledges and agrees that on and after
the Effective Date, each reference in the Credit Documents to the "Credit
Agreement", "thereunder", "thereof" and words of like import referring to the
Existing Credit Agreement shall mean and be a reference to this Agreement.
11.18 RELEASE. The Borrower, its successors and assigns and
any Person that may derivatively or otherwise assert a claim through or by any
of the foregoing to the fullest extent permitted by applicable law
(collectively, the "RELEASORS") hereby releases, remises, acquits and forever
discharges the Agent, each Lender and each of their respective employees,
agents, representatives, consultants, attorneys, fiduciaries, servants,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, related corporate divisions, participants and
assigns (all of the foregoing hereinafter called the "RELEASED PARTIES"), from
any and all actions and causes of action, judgments, executions, suits, debts,
claims, demands, liabilities, obligations, setoffs, recoupments, counterclaims,
defenses, damages and expenses of any and every character, known or unknown,
suspected or unsuspected, direct and/or indirect, at law or in equity, of
whatsoever kind or nature, whether heretofore or hereafter arising, for or
because of any matter or things done, omitted or suffered to be done by any of
the Released Parties prior to and including the Effective Date, and in any way
directly or indirectly arising out of or in any way connected to this Agreement,
the Existing Credit Agreement or the other Credit Documents (all of the
foregoing hereinafter called the "RELEASED MATTERS"). Each Releasor acknowledges
that the agreements in this Section 11.18 are intended to be in full
satisfaction of all or any alleged injuries or damages arising in connection
with the Released Matters and constitute a complete waiver of any right of
setoff or recoupment, counterclaim or defense of any nature whatsoever which
arose prior to the Effective Date to payment or performance of the Obligations.
Borrower represents and warrants that it has no knowledge of any claim by it
against the Released Parties or of any facts, or acts or omissions of the
Released Parties which on the Effective Date would be the basis of a claim by
the Releasors against the Released Parties which is not released hereby.
Borrower represents and warrants that it has not purported to transfer, assign,
pledge or otherwise convey any of its right, title or interest in any Released
Matter to any other Person and that the foregoing constitutes a full and
complete release of all Released Matters. Borrower has been advised by counsel
of its choosing and have granted this release freely, and voluntarily and
without duress.
The foregoing release shall be effective as a bar to any and
all actions, fees, damages, losses, claims, liabilities and demands of
whatsoever character, nature and kind, known or unknown, suspected or
unsuspected, notwithstanding any provisions of applicable law restricting the
effect of such a release. In furtherance thereof, the Borrower expressly waives
any and all rights conferred upon them by any provisions of applicable law to
the effect that a general release does not extend to claims which the creditor
does not know or suspect to exist in its factor at the time of executing the
release, which if known by it must have materially affected its settlement with
the debtor.
11.19 SETTLEMENT. Notwithstanding anything herein, the Lenders
have not agreed or otherwise consented to any of the terms of the Settlement and
reserve all rights with respect thereto, except to the extent that what
constitutes a Default or Event of Default is expressly limited as provided in
Section 9.12.
92
99
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
AMERICAN HOMEPATIENT, INC.,
a Delaware corporation
By:
----------------------------------------
Name:
Title:
Notice Address: American HomePatient, Inc.
Maryland Farms Office Park
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
S-1
100
BANKERS TRUST COMPANY,
Individually and as the Agent
By:
----------------------------------------
Name:
Title:
Notice Address: Deutsche Banc Alex. ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
With a copy to:
Deutsche Banc Alex. ▇▇▇▇▇ Incorporated
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
Lending Office: Deutsche Banc Alex. ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
--------------------------------------
Tel: 212/
Fax: 212/
Deutsche Banc Alex. ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
Deutsche Banc Alex. ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Siantoro Goeyardi
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
S-2
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES
By:
----------------------------------------
Name:
Title:
Bank of America Securities
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
S-3
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
By:
----------------------------------------
Name:
Title:
Notice Address
and Lending Office: Bank of Montreal
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇. Turf
Tel: 312/▇▇▇-▇▇▇▇ (▇▇▇▇)
Tel: 312/▇▇▇-▇▇▇▇ (Turf)
Fax: 312/▇▇▇-▇▇▇▇
▇-▇
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
By:
----------------------------------------
Name:
Title:
Notice Address
and Lending Office: Barclays Capital Plc.
5 The North Colonnade
Canary Wharf
▇▇▇▇▇▇ ▇▇▇ ▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
S-5
104
BEAR, ▇▇▇▇▇▇▇ & CO., INC.
By:
----------------------------------------
Name:
Title:
Notice Address
and Lending Office: Bear, ▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
▇-▇
▇▇▇
▇▇▇▇▇▇▇▇, N.A.
By:
----------------------------------------
Name:
Title:
Notice Address
and Lending Office: Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇ (▇▇▇▇▇)
Tel: 212/▇▇▇-▇▇▇▇ (Vlandis)
Fax: 212/▇▇▇-▇▇▇▇
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106
LEGAL NOTICES:
CONTINENTAL CASUALTY COMPANY
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Title:
Continental Casualty Company
▇/▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Avenue
CNA Plaza - ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Phone: 312/▇▇▇-▇▇▇▇
Fax: 312/▇▇▇-▇▇▇▇
FINANCIAL NOTICES:
Continental Casualty Company ▇/▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Avenue
CNA Plaza - ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
Phone:
Fax:
and
Continental Casualty Company
c/o Loews Corporation
667 Madison Avenue, ▇▇▇ ▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇
Phone: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
S-8
107
PAYMENT INSTRUCTIONS FOR CONTINENTAL CASUALTY COMPANY:
Chase NYC
ABA No. ▇▇▇-▇▇▇-▇▇▇
New York City, NY
Acct. Name: North America Insurance F/B/O CNA Insurance
Credit Acct. No: 323-512968
For Subacct. No: G 07400
Subacct. Name: Continental Casualty Company
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇ 312/822-5270
S-9
108
EVEREST CAPITAL LIMITED
By:
----------------------------------------
Name:
Title:
Notice Address: Everest Capital Limited
The Bank of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇ Bermuda
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: 441/ ▇▇▇-▇▇▇▇
Fax: 441/▇▇▇-▇▇▇▇
S-10
109
FERNWOOD ASSOCIATES
By:
----------------------------------------
Name:
Title:
Notice Address
and Lending Office: Fernwood Associates
c/o Intermarket Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
S-11
110
▇▇▇▇▇▇▇▇ MASTER FUND LTD.
By:
----------------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇ Master Fund Ltd.
c/o Longacre Management, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
S-12
111
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇,
INCORPORATED
By:
----------------------------------------
Name:
Title:
Notice Address
and Lending Office: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇,
Incorporated
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
S-13
112
RCG CARPATHIA MASTER FUND, LTD.
By:
----------------------------------------
Name:
Title:
Notice Address
and Lending Office:
RCG Carpathia Master Fund, Ltd.
c/o Ramius Capital
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
S-14
113
SATELLITE SENIOR INCOME FUND, LLC
C/O SATELLITE ASSET MANAGEMENT, LP
By:
----------------------------------------
Name:
Title:
Notice Address
and Lending Office:
Satellite Senior Income Fund, LLC
c/o Satellite Asset Management, LP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
S-15
114
SUMITOMO MITSUI BANKING CORPORATION
By:
----------------------------------------
Name:
Title:
Notice Address
and Lending Office: Sumitomo Mitsui Banking Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Tel: 212/▇▇▇-▇▇▇▇
Fax: 212/▇▇▇-▇▇▇▇
S-16
115
FRANKLIN FLOATING RATE TRUST
By:
----------------------------------------
Name:
Title:
Notice Address and
Lending Office: Franklin Floating Rate Trust
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇
Tel: 650/▇▇▇-▇▇▇▇
Fax: 650/▇▇▇-▇▇▇▇
S-17
116
SCHEDULE 1.01
PRO RATA SHARES
% of Term Loan
Lenders Commitments Amount of Loans
------- ----------- ---------------
Bankers Trust Company 18.7500801978 $ 55,614,241.64
Bank of America Securities 1.4166603953 4,201,928.35
Bank of Montreal 6.▇▇▇▇▇▇▇▇▇▇ 18,538,001.25
Barclays Capital PLC 3.6667175037 10,875,778.19
Bear, ▇▇▇▇▇▇▇ & Co., Inc. 26.0093176296 77,145,722.06
Citibank, N.A 6.1842654708 18,343,027.37
Continental Casualty Company 3.▇▇▇▇▇▇▇▇▇▇ 11,617,332.47
Everest Capital Limited 3.3332442248 9,886,669.70
Fernwood Associates 12.3117807162 36,517,729.02
Franklin Floating Rate Trust 3.3332442147 9,886,669.67
▇▇▇▇▇▇▇▇ Master Fund Ltd. 1.6666221124 4,943,334.85
Merrill, Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇, Incorporated 5.5781744691 16,545,312.85
RCG Carpathia Master Fund, Ltd. 1.9999465349 5,932,001.82
Satellite Senior Income Fund, LLC 4.3332174923 12,852,670.61
Sumitomo Mitsui Banking Corporation 1.2499999996 3,707,600.25
-------------- ----------------
100% $ 296,608,020.09
S-18