1
EXHIBIT 10.2
[EXECUTION COPY]
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AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF SEPTEMBER 30, 1999
AMONG
NORTHSTAR HEALTH SERVICES, INC.
AS BORROWER,
THE SUBSIDIARY GUARANTORS,
THE LENDERS LISTED HEREIN,
AS LENDERS,
CERBERUS CAPITAL MANAGEMENT, LLC,
AS AGENT
AND
THE CHASE MANHATTAN BANK
AS COLLATERAL AGENT
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NORTHSTAR HEALTH SERVICES, INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1
DEFINITIONS
1.1 Certain Defined Terms....................................................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement......................22
1.3 Other Definitional Provisions and Rules of Construction.................................................22
SECTION 2
AMOUNTS AND TERMS OF LOANS
2.1 Loans; Notes............................................................................................22
2.2 Interest on the Loans...................................................................................23
2.3 Fees....................................................................................................24
2.4 Repayments and Prepayments; General Provisions Regarding Payments.......................................24
2.5 Use of Proceeds.........................................................................................29
2.6 Increased Costs; Taxes; Capital Adequacy................................................................29
2.7 Obligations of Lenders to Mitigate......................................................................33
2.8 Acknowledgment and Consent to Amendment and Restatement of Original Credit Agreement....................33
SECTION 3
CONDITIONS TO LOANS
3.1 Loan Party Documents....................................................................................34
3.2 Legal Opinions..........................................................................................35
3.3 Fees....................................................................................................35
3.4 Officers' Certificate Regarding Certain Conditions......................................................35
3.5 Resignation of Agent; New Collateral Agent..............................................................36
3.6 Collateral Documents....................................................................................36
3.7 Cash Management System..................................................................................36
3.8 Evidence of Insurance. .................................................................................36
(i)
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3.9 ▇▇▇▇▇▇ Agreements. .....................................................................................36
3.10 Warrant. ...............................................................................................37
3.11 Miscellaneous Other Conditions..........................................................................37
SECTION 4
COMPANY'S REPRESENTATIONS AND WARRANTIES
4.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries...........................38
4.2 Authorization of Borrowing, etc.........................................................................39
4.3 Financial Condition.....................................................................................40
4.4 No Material Adverse Change: No Restricted Junior Payments...............................................40
4.5 Title to Properties; Liens; Real Property...............................................................40
4.6 Litigation; Violation of Law or Order...................................................................41
4.7 Payment of Taxes........................................................................................41
4.8 Performance of Agreements; Materially Adverse Agreements;Material Contracts, Leases,
Transactions with Affiliates............................................................................42
4.9 Governmental Regulation. ...............................................................................42
4.10 Securities Activities...................................................................................43
4.11 Employee Benefits Plans.................................................................................43
4.12 Certain Fees............................................................................................44
4.13 Environmental Protection................................................................................44
4.14 Employee Matters........................................................................................45
4.15 [INTENTIONALLY OMITTED].................................................................................45
4.16 Matters Relating to Collateral..........................................................................45
4.17 Disclosure .............................................................................................46
SECTION 5
COMPANY'S AFFIRMATIVE COVENANTS
5.1 Financial Statements and Other Reports..................................................................46
5.2 Corporate Existence, etc................................................................................52
5.3 Payment of Taxes and Claims; Tax Consolidation..........................................................53
5.4 Maintenance of Properties; Insurance....................................................................53
5.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender Meetings.........................54
5.6 Compliance with Laws, etc...............................................................................54
5.7 Environmental Review and Investigation, Disclosure, etc.; Company's Actions Regarding
Hazardous Materials Activities, Environmental Claims and Violations of Environmental Laws...............55
(ii)
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5.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents by
Certain Subsidiaries and Future Subsidiaries............................................................58
5.9 After-Acquired Real Property............................................................................59
5.10 Key Man Insurance.......................................................................................59
5.11 Chief Financial Officer.................................................................................59
SECTION 6
COMPANY'S NEGATIVE COVENANTS
6.1 Indebtedness............................................................................................59
6.2 Liens and Related Matters...............................................................................60
6.3 Investments; Joint Ventures.............................................................................61
6.4 Contingent Obligations..................................................................................61
6.5 Restricted Junior Payments..............................................................................62
6.6 Financial Covenants.....................................................................................62
6.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions........................................63
6.8 Consolidated Capital Expenditures.......................................................................64
6.9 Restriction on Leases...................................................................................64
6.10 Sales and Lease-Backs...................................................................................65
6.11 Sale or Discount of Receivables.........................................................................65
6.12 Transactions with Shareholders and Affiliates...........................................................65
6.13 Disposal of Subsidiary Stock............................................................................65
6.14 Conduct of Business.....................................................................................66
6.15 Amendments of Documents Relating to Subordinated Indebtedness...........................................66
6.16 Fiscal Year.............................................................................................66
6.17 Cash Management System..................................................................................66
6.18 Collections and Disbursements...........................................................................66
SECTION 7
EVENTS OF DEFAULT
7.1 Failure to Make Payments When Due.......................................................................67
7.2 Default in Other Agreements.............................................................................68
7.3 Breach of Certain Covenants.............................................................................68
7.4 Breach of Warranty......................................................................................68
7.5 Other Defaults Under Loan Documents.....................................................................68
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc....................................................68
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc......................................................69
7.8 Judgments and Attachments...............................................................................69
7.9 Dissolution.............................................................................................69
(iii)
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7.10 Employee Benefit Plans..................................................................................69
7.11 Material Adverse Effect.................................................................................70
7.12 Change in Control.......................................................................................70
7.13 Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of Obligations......................70
7.14 Loss of Approval........................................................................................70
7.15 Cash Management System..................................................................................71
SECTION 8
AGENT
8.1 Appointment.............................................................................................71
8.2 Powers and Duties; General Immunity.....................................................................72
8.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness.....................75
8.4 Right to Indemnity......................................................................................75
8.5 Successor Agent.........................................................................................75
8.6 Collateral Documents and Guaranties.....................................................................76
8.7 Application of Proceeds.................................................................................77
SECTION 9
MISCELLANEOUS
9.1 Assignments and Participations in Loans.................................................................77
9.2 Expenses................................................................................................79
9.3 Indemnity...............................................................................................80
9.4 Set-Off; Security Interest in Deposit Accounts..........................................................81
9.5 Ratable Sharing.........................................................................................81
9.6 Amendments and Waivers..................................................................................82
9.7 Independence of Covenants...............................................................................83
9.8 Notices.................................................................................................83
9.9 Survival of Representations, Warranties and Agreements..................................................83
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative...................................................84
9.11 Marshalling: Payments Set Aside........................................................................84
9.12 Severability. .........................................................................................84
9.13 Obligations Several: Independent Nature of Lenders' Rights.............................................84
9.14 Headings................................................................................................84
9.15 Applicable Law..........................................................................................84
9.16 Successors and Assigns..................................................................................85
9.17 Consent to Jurisdiction and Service of Process..........................................................85
9.18 Waiver of Jury Trial....................................................................................86
(iv)
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9.19 Confidentiality.........................................................................................86
9.20 Counterparts............................................................................................87
9.21 Continuity of Loans and Security Interests..............................................................87
9.22 Effectiveness...........................................................................................87
EXHIBITS
Exhibit 2.1B Amended and Restated Note
Exhibit 2.6B(iii) Certificate of Non-Bank Status
Exhibit 3.1A Amended and Restated Company Pledge Agreement
Exhibit 3.1B Amended and Restated Company Security Agreement
Exhibit 3.1C Amended and Restated Subsidiary Guaranty
Exhibit 3.1D Amended and Restated Subsidiary Stock Pledge Agreement
Exhibit 3.1E Amended and Restated Subsidiary Security Agreement
Exhibit 3.2 Opinions
Exhibit 3.5 IBJS Resignation
Exhibit 3.9A ▇▇▇▇▇▇ Subordination Agreement
Exhibit 3.9B ▇▇▇▇▇▇ Payment Letter
Exhibit 3.10 Warrant to Purchase Shares of Common Stock
Exhibit 5.1(iv) Compliance Certificate
Exhibit 5.1(xix) Receivables Report
Exhibit 9.1B Assignment Agreement
SCHEDULES
Schedule 2.1 Loans and Pro Rata Share
Schedule 3.4B Certain Events of Default
Schedule 3.8 Summary of Insurance
Schedule 3.11 Certain Material Adverse Effects
Schedule 4.1D Information Regarding Company and Subsidiaries
Schedule 4.1E Changes
Schedule 4.4 Adverse Changes
Schedule 4.5 Real Property Interests
Schedule 4.6 Litigation
Schedule 4.8C Material Contracts
Schedule 4.8D Operating and Capital Leases
Schedule 4.8E Holders of 5% Equity/Affiliate Transactions
Schedule 4.11 Certain ERISA Matters
Schedule 4.13 Environmental Matters
Schedule 6.1 Permitted Indebtedness
Schedule 6.2 Liens
Schedule 6.3 Investments Owned
(v)
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Schedule 6.4 Contingent Obligations
(vi)
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NORTHSTAR HEALTH SERVICES, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of September 30,
1999 and entered into by and among NORTHSTAR HEALTH SERVICES, INC., a Delaware
corporation ("COMPANY"), THE SUBSIDIARY GUARANTORS LISTED ON THE SIGNATURE PAGES
HEREOF, THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each
individually referred to herein as a "LENDER" and collectively as "LENDERS"),
and CERBERUS CAPITAL MANAGEMENT, LLC ("CERBERUS"), for itself and as agent for
Lenders and THE CHASE MANHATTAN BANK, as Collateral Agent (the "COLLATERAL
AGENT").
R E C I T A L S
WHEREAS, pursuant to the Original Credit Agreement (this and
other capitalized terms used in these recitals without definition being used as
defined in Section 1.1), the Lenders agreed to extend certain credit facilities
to Company, the proceeds of which were used (i) to refinance substantially all
indebtedness of Company and its Subsidiaries outstanding on the date thereof,
(ii) to pay certain fees and expenses, (iii) to provide financing for the
working capital needs of Company and its Subsidiaries and (iv) to provide a
portion of the purchase price of certain acquisitions by Company and its
Subsidiaries;
WHEREAS, Company secured all of the Obligations under the
Original Credit Agreement and under the other Loan Documents by granting to
Agent, on behalf of Lenders, a first priority security interest in all of its
personal property, including a pledge of all of the capital stock of each of its
Subsidiaries;
WHEREAS, the Subsidiary Guarantors guaranteed the Obligations
of the Loan Parties under the Original Credit Agreement and the other Loan
Documents and granted to Agent, on behalf of Lenders, a first priority security
interest in all of their respective personal property as security therefor,
including a pledge of all of the equity interests in each of their respective
Subsidiaries, other than the KRS Partnerships;
WHEREAS, IBJS desires to resign as Agent under the Original
Credit Agreement and Cerberus has agreed to become Agent in its place;
WHEREAS, the parties hereto have agreed to amend and restate
the Original Credit Agreement to (i) extend the maturity of the Loans on the
terms set forth herein, (ii) to effect IBJ's resignation as Agent thereunder and
to appoint Cerberus as its successor as Agent under the Credit Agreement, as
amended and restated hereby, and (iii) make certain other changes as more fully
set forth herein, which amendment and restatement shall become effective upon
the satisfaction of the conditions precedent set forth in Section 3;
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WHEREAS, it is the intent of the parties hereto that this
Agreement shall not constitute a novation of the obligations and liabilities of
the parties under the Original Credit Agreement nor be deemed to evidence or
constitute repayment of all or any portion of such obligations and liabilities
and that this Agreement shall amend and restate in its entirety the Obligations
under the Original Credit Agreement and re-evidence the Obligations of Company
outstanding thereunder;
WHEREAS, it is the intent of the Loan Parties to confirm that
all Obligations of the Loan Parties under the other Loan Documents shall
continue in full force and effect and that, from and after the Restatement
Closing Date, all references to the "Credit Agreement" contained therein shall
be deemed to refer to this Agreement;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Company, Lenders and Agent, intending to be legally bound, hereby
agree that on the Restatement Closing Date, the Original Credit Agreement shall
be amended and restated in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACQUISITION LOANS" means the Acquisition Loans made under and
defined in Section 4.1(a) of the Original Credit Agreement.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contact or otherwise.
"AGENT" means, prior to the Restatement Closing Date, IBJS, in
its capacity as agent to Lenders under the Original Credit Agreement, and, on
and after the Restatement Closing Date, Cerberus, as successor to IBJS, and any
successor Agent appointed pursuant to Section 8.5.
"AGREEMENT" means this Amended and Restated Credit Agreement
dated as of September 30, 1999, as it may be further amended, restated,
supplemented or otherwise modified from time to time.
"APPROVALS" has the meaning assigned to that term in Section
5.6.
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"ASSET SALE" means the sale by Company or any of its
Subsidiaries to any Person other than Company or any of its wholly-owned
Subsidiaries of (i) any of the stock of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line business of Company or
any of its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Company or any of its Subsidiaries (other than any such assets to
the extent that the aggregate value of such assets sold in any single
transaction or related series of transactions is equal to $100,000 or less).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of EXHIBIT 9.1B annexed hereto.
"BAD DEBT EXPENSE" means, for any period, (a) bad debt
write-offs for such period, plus (b) the change in bad debt reserves for such
period, less (c) bad debt recoveries for such period all determined in
accordance with GAAP.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means at any time, the higher of (x) the Prime
Rate or (y) the rate which is 2 of 1% in excess of the Federal Funds Effective
Rate.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York or is a
day on which banking institutions located in such state are authorized or
required by law or other governmental action to close.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"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 of America 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 Group ("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
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of the United States of America 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 that (a) has at least 95% of its assets invested continuously
in the types of investments referred to in clauses (i) and (ii) above, (b) has
net assets of not less than $500,000,000, and (c) has the highest rating
obtainable from either S&P or Moody's.
"CASH MANAGEMENT SYSTEM" has the meaning assigned to that term
in the Company Security Agreement.
"CERBERUS" has the meaning assigned to that term in the
introduction to this Agreement.
"CERTIFICATE OF NON-BANK STATUS" means a certificate
substantially in the form of EXHIBIT 2.6B(III) annexed hereto delivered by a
Lender to Agent pursuant to Section 2.6B(iii).
"CLOSING DATE" means October 20, 1995, the date on which the
initial Loans under the Original Credit Agreement were made.
"COLLATERAL" means collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations and
all proceeds thereof.
"COLLATERAL AGENT" means The Chase Manhattan Bank, as
collateral agent or any successor Collateral Agent from time to time appointed
pursuant to Section 8.5 hereof.
"COLLATERAL DOCUMENTS" means the Company Pledge Agreement, the
Company Security Agreement, the Subsidiary Pledge Agreement, the Subsidiary
Security Agreement and all other instruments or documents delivered by any Loan
Party pursuant to this Agreement or any of the other Loan Documents, each as
contemplated to be amended hereby and as it may be further amended, in order to
grant to Agent, on behalf of Lenders, a Lien on any real, personal or mixed
property of that Loan party as security for the Obligations.
"COLLECTING AGENTS" has the meaning stated in Section 6.17.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY COMMON STOCK" means the common stock of Company, par
value $0.01 per share.
"COMPANY PLEDGE AGREEMENT" means the Stock Pledge Agreement
dated as of the Closing Date made by Company in favor of the Agent and the
Collateral Agent, as amended and
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restated by the Amended and Restated Company Pledge Agreement in the form of
EXHIBIT 3.1A hereto, as the same may be further amended, restated, supplemented
or otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Security Agreement
dated as of the Closing Date made by Company in favor of the Agent and the
Collateral Agent, as amended and restated by the Amended and Restated Company
Security Agreement in the form of EXHIBIT 3.1B hereto, as the same may be
further amended, restated, supplemented or otherwise modified from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT 5.1(IV) annexed hereto delivered to Agent and Lenders by
Company pursuant to Section 5.1(iv).
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, (A)
Consolidated EBITDA, less (B) the sum of (i) Consolidated Capital Expenditures
paid in cash for such period and (ii) scheduled principal payments of the Loans
during such period.
"CONSOLIDATED AVAILABLE CASH" means for any period, an amount
of Cash and Cash Equivalents equal to (a) Consolidated Excess Cash Flow, plus
(b) the scheduled repayments of the Loans pursuant to Section 2.4A of this
Agreement, plus (c) the amounts referred to in clause (f) of the definition of
"Consolidated Excess Cash Flow".
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
sum of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries plus (ii) to the extent not covered by
clause (i) of this definition, the aggregate of all expenditures by Company and
its Subsidiaries during that period (a) to purchase or develop computer software
or systems (but only to the extent such expenditures are capitalized on the
consolidated balance sheet of Company and its Subsidiaries in conformity with
GAAP) or (b) to acquire (by purchase or otherwise) the business, property or
fixed assets of any Person, or the stock or other evidence of beneficial
ownership of any Person that, as a result of such acquisition, becomes a
Subsidiary of Company.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period excluding, however, any interest
expense not payable in Cash (including amortization of discount and amortization
of debt issuance costs).
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.
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"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, excluding the ▇▇▇▇▇▇ Obligations and the Obligations.
"CONSOLIDATED EBITDA" means, for any period, the sum of the
amounts of such period of (A) Consolidated Net Income, (B) Consolidated Interest
Expense, (C) provisions for taxes based on income, (D) total depreciation
expense, (E) total amortization expense, and (E) other non-cash items reducing
Consolidated Net Income less other non-cash items increasing Consolidated Net
Income, all of the foregoing as determined on a consolidated basis for Company
and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an
amount (if positive) equal to Consolidated EBITDA, minus (a) Consolidated
Capital Expenditures (net of any proceeds of any related financing with respect
to such expenditures), minus (b) the scheduled repayments of the Loans pursuant
to Section 2.4A of this Agreement, minus (c) the Consolidated Working Capital
Adjustment, minus (d) the provision for current taxes based on income of the
Company and its Subsidiaries and payable in cash with respect to such period,
minus (e) Consolidated Cash Interest Expense (excluding the interest component
of the scheduled repayments under this Agreement), minus (f) all other amounts
payable by the Company and its Subsidiaries under this Agreement, other than the
payments referred to in Section 2.4B(ii)(e).
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum
(without duplication) of the amounts for such period of (i) Consolidated
Interest Expense, (ii) provisions for taxes based on income, and (iii)
Consolidated Rental Payments, all of the foregoing as determined on a
consolidated basis for Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including 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 2.3 payable to Agent and Lenders on or before the
Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Company, its Subsidiaries and the other members of its
consolidated group on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP; provided that there shall
be excluded (i) the income (or loss) of any Person which is not a guarantor or
co-obligor on the Loan (other than a Subsidiary of Company) in which any other
Person (other than Company or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to Company or any of its Subsidiaries by such Person during such period,
(ii) the income (or loss) of any Person accrued prior to the date it becomes a
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Subsidiary of Company or is merged into or consolidated with Company or any of
its Subsidiaries or that Person's assets are acquired by Company or any of its
Subsidiaries, (iii) the income of any Subsidiary of Company which is not a
guarantor or co-obligor on the Loan to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, (iv) any after-tax gains or losses
attributable to Asset Sales or returned surplus assets of any Pension Plan, and
(v) (to the extent not included in clauses (i) through (iv) above) any net
extraordinary gains or income or net non-cash extraordinary losses.
"CONSOLIDATED NET WORTH" means, as at any date of
determination, the sum of the capital stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) of Company and its
Subsidiaries on a consolidated basis determined in conformity with GAAP.
"CONSOLIDATED RENTAL PAYMENTS" means, for any period, the
aggregate amount of all rents paid or payable by Company and its Subsidiaries on
a consolidated basis during that period under all Capital Leases and Operating
Leases to which Company or any of its Subsidiaries is a party as lessee.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, (a) the Consolidated Current Assets, minus (b) Consolidated
Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any
period on a consolidated basis, the amount (which may be a negative number) by
which Consolidated Working Capital as of the end of such period exceeds (or is
less than) Consolidated Working Capital as of the beginning of such period.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party
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or parties to an agreement, and (c) any liability of such Person for the
obligation of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"CONTINUING DIRECTORS" shall mean the directors of Company on
the Restatement Closing Date and each other director whose nomination for
election to the Board of Directors is recommended by a majority of the then
Continuing Directors.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement to which Company or any of its
Subsidiaries is a party.
"DEPOSIT ACCOUNT" means (i) 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 and (ii) any "deposit account" as defined in the UCC in effect in the
State of New York.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) 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 political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses including insurance companies, investment funds,
investment accounts, mutual funds and lease financing companies; and (B) any
Lender and any Affiliate of any Lender; provided that no Affiliate of Company
shall be an Eligible Assignee.
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"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements or governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Company or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean
Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et
seq.), and the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
Section 11001 et seq.), each as amended or supplemented, any analogous present
or future state or local statutes or laws, and any regulations promulgated
pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of Company or any of
its Subsidiaries shall continue to be considered an ERISA Affiliate of company
or such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such
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period for which Company or such Subsidiary could be liable under the Internal
Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by Company, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing sponsors or
the termination of any such Pension Plan resulting in liability pursuant to
Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Company, any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code, to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EVENT OF DEFAULT" means each of the events set forth in
Section 7.
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Company or any of its Subsidiaries
or any of their respective predecessors or Affiliates.
"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 which is a Business Day, the average of the quotations for such day
on such transactions received by Agent from three Federal funds brokers of
recognized standing selected by Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in
Section 5.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral and (ii) such Lien is
the only Lien (other than Permitted Encumbrances and Liens permitted pursuant to
Section 6.2) to which such Collateral is subject.
"FISCAL QUARTER" means the fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of the Company and its
Subsidiaries, each of which ends on December 31 of each calendar year. For
purposes of this Agreement, any particular Fiscal Year shall be designated by
reference to the calendar year in which such Fiscal Year ends.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Agent
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or (ii) such other office
of Agent as may from time to time hereafter be designated as such in a written
notice delivered by Agent to Company and each Lender.
"GAAP" means, subject to the limitations on the application
thereof set forth in Section 1.2, generally accepted accounting principles set
forth in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent, consent order or consent decree of or
from any federal, state or local governmental authority, agency or court.
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"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", acutely hazardous waste, "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous wastes",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any Persons in the vicinity of
any Facility or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"HEALTHCARE FACILITY" means each outpatient rehabilitation
clinic or patient care facility operated by Company or any of its Subsidiaries
in connection with the provision of rehabilitation therapy and related services.
"HEDGE AGREEMENT " means an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively.
"IBJS" means IBJ Whitehall Bank & Trust Company, formerly
known as IBJ ▇▇▇▇▇▇▇▇ Bank and Trust Company.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than three months from the date of
incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument, and (v) all indebtedness secured by any Lien on any
property or
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asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in Section
9.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of Company and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise), business
or operation of Company and its Subsidiaries, taken as a whole.
"INTEREST PAYMENT DATE" means the first day of each calendar
month, commencing on October 1, 1999.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by Company or by any Subsidiary of Company from any
Person other than Company or any of its Subsidiaries, of any equity Securities
of such Subsidiary, (iii) any direct or indirect loan, advance, (other than
advances to employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or capital
contribution by Company or any of its Subsidiaries to any other Person other
than a wholly-owned Subsidiary of Company, including all indebtedness and
accounts receivable from that other Person that are not current assets or did
not arise from sales to that other Person in the ordinary course of business, or
(iv) Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"JOINT VENTURE" means a joint venture, partnership, limited
partnership, limited liability company or other similar arrangement, whether in
corporate, partnership or other legal form; provided that in no event shall any
corporate Subsidiary of any Person be considered to be a Joint Venture to which
such Person is a party.
"KRS PARTNERSHIPS" means Keystone Rehabilitation Associates of
Warren, an Ohio general partnership, Keystone Rehabilitation Systems of
McMurray, a Pennsylvania general
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21
partnership, The Rehab Center, formerly known as Keystone Rehabilitation Systems
of Ephrata, a Pennsylvania general partnership and Keystone Rehabilitation
Systems of Washington, a Pennsylvania general partnership.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to Section 9.1.
"LENDER AGENTS" means the Agent, the Collateral Agent and each
Supplemental Collateral Agent.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Notes, the
Subsidiary Guaranty, the Collateral Documents, the Subordination Agreement, the
▇▇▇▇▇▇ Subordination Agreement the ▇▇▇▇▇▇ Payment Letter, and the Block Account
Agreements, each as contemplated to be amended hereby and as they may be further
amended.
"LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination, the outstanding principal amount of the Loan of that
Lender.
"LOAN PARTY" means each of Company and any of Company's
Subsidiaries from time to time executing a Loan Document, and "LOAN PARTIES"
means all such Persons, collectively.
"LOANS" has the meaning stated in Section 2.1A.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operation, properties, assets, condition (financial or
otherwise) or prospects of Company or any of its Subsidiaries, (ii) the
impairment of the ability of any Loan Party to perform, or of Agent or Lenders
to enforce, the Obligations, or (iii) the failure of Agent, for and on behalf of
Lenders, to have a valid and perfected First Priority Lien on any of the
Collateral.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to renew
could have a Material Adverse Effect.
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"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received from such Asset Sale, net of any bona fide direct
costs incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
and (ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans) that is secured by
a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments
or proceeds received by Company or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Company or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof.
"NET PATIENT SERVICE REVENUES" means, for any period, (a)
gross ▇▇▇▇▇▇▇▇ for such period, less (b) contractual allowances for such period,
each as reported in the financial statements and calculated in accordance with
GAAP.
"NOTES" means (i) the promissory notes of Company issued
pursuant to Section 2.1B on the Restatement Closing Date evidencing the
obligation of Company to repay the Loans and amending and restating the
"Revolving Credit Notes", the "Term Notes" and the "Acquisition Notes", in each
case as defined in and issued to Lenders under the Original Credit Agreement,
and (ii) any promissory notes issued by Company pursuant to the last sentence of
Section 9.1B(i) in connection with assignments of the Loans of any Lenders, in
each case substantially in the form of EXHIBIT 2.1B annexed hereto, in each case
as they may be amended, restated, supplemented or otherwise modified from time
to time.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Agent, the Collateral Agent, Lenders or any
of them under the Loan Documents, whether for principal, interest, fees,
expenses, indemnification or otherwise.
"OFFICERs' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and by its
chief financial officer or its treasurer; provided that every Officers'
Certificate with respect to the compliance with a condition precedent to the
making of the Loans
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hereunder shall include (i) a statement that the officer or officers 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.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"ORIGINAL CREDIT AGREEMENT" means that certain Credit
Agreement dated as of October 20, 1995, by and among Company, as borrower, the
financial institutions listed on the signature pages thereof, as Lender, and
IBJS, as agent for the Lenders, as amended as of November 15, 1995 and as of
December 1, 1995.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim and any such Lien expressly prohibited
by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by Section
5.3;
(ii) statutory Liens of landlords, statutory Liens of banks
and rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess of
5 days) are being contested in good faith by appropriate proceedings,
so long as (1) such reserves or other appropriate provision, if any, as
shall be required by GAAP shall have been made for any such contested
amounts and (2) in the case of a Lien with respect to any portion of
the Collateral, such contest proceedings conclusively operate to stay
the sale of any portion of the Collateral on account of such Lien;
(iii) Liens incurred on deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids,
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leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money, so long as no
foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof);
(iv) any Lien serving as an attachment or judgment not
constituting an Event of Default under Section 7.8;
(v) leases or subleases granted to third parties in accordance
with any applicable terms of the Collateral Documents and not
interfering in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries or resulting in a
material diminution in the value of any Collateral as security for the
Obligations;
(vi) easements, rights-of-way, restrictions, encroachments,
and other minor defects or irregularities in title, in each case which
do not and will not interfere in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries or result
in a material diminution in the value of any Collateral as security for
the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
any lease permitted by Section 6.9, (b) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to, or
(c) subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding
clause (b), so long as the holder of such restriction or encumbrance
agrees to recognize the rights of such lessee or sublessee under such
lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of
any real property; and
(x) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
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"PLEDGED COLLATERAL" means, collectively, the "PLEDGED
COLLATERAL" as defined in the Company Pledge Agreement and the Subsidiary Pledge
Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"POTENTIAL REVOCATION" has the meaning stated in Section
5.6(i).
"PRIME RATE" means the rate that The Chase Manhattan Bank
announces from time to time as its prime lending rate, as in effect from time to
time. The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. Cerberus or any other
Lender may make commercial loans or other loans at rates of interest at, above
or below the Prime Rate.
"PRO RATA SHARE" means, with respect to each Lender, the
percentage obtained by dividing (x) the Loan Exposure of that Lender by (y) the
aggregate Loan Exposure of all Lenders, as such percentage may be adjusted by
assignments permitted pursuant to Section 9.1. The initial Pro Rata Share of
each Lender is set forth opposite the name of that Lender in SCHEDULE 2.1
annexed hereto.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUISITE LENDERS" means Lenders having or holding more than
50% of the aggregate Loan Exposure of all Lenders.
"RESPONSIBLE OFFICER" means when used with respect to the
Collateral Agent, any officer assigned to the Global Trust Services (or any
successor thereto), including any Vice President, Assistant Vice President,
Trust Officer, any Assistant Secretary, any trust officer or any other officer
of the Collateral Agent customarily performing functions similar to those
performed by any of the above designated officers and in each case having direct
responsibility for the administration of this Agreement.
"RESTATEMENT CLOSING DATE" means September 30, 1999, which is
the date on which this Agreement becomes effective.
"RESTRICTED JUNIOR PAYMENT" means (A)(i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value,
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direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness or any other Indebtedness of the Company subordinated in right of
payment to the Loans or the Obligations or (B) any payment of the kinds set
forth in (A) above by any other Loan Party unless paid to a Loan Party which is
a wholly-owned subsidiary of the Company.
"REVOLVING LOANS" means the Revolving Loans made under and
defined in Section 3.1(a) of the Original 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, any
warrants, rights and options or any right to subscribe to, purchase or acquire,
any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SUBORDINATED INDEBTEDNESS" means (i) the Indebtedness of
Company evidenced by the ▇▇▇▇▇▇ Obligations and (ii) any other Indebtedness of
Company subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms in form
and substance satisfactory to Agent and Requisite Lenders.
"SUBORDINATION AGREEMENT" means the Intercreditor and
Subordination Agreement, dated as of October 20, 1995, as amended and
supplemented as of November 15, 1995, as of November 30, 1995 and as of December
1, 1995, among Company, certain of its Subsidiaries, Agent, and the Subordinated
Creditors (as therein defined).
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) unless such contingency occurs to vote in the
election of the Person or Persons (whether directors, managers, trustees or
other Persons performing similar functions) having the power to direct or cause
the direction of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
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"SUBSIDIARY GUARANTOR" means any Subsidiary of Company that is
party to the Subsidiary Guaranty as of the Restatement Closing Date or will
execute and deliver a counterpart thereof from time to time hereafter pursuant
to Section 5.8.
"SUBSIDIARY GUARANTY" means the Subsidiaries Guarantee
executed and delivered by the Original Guarantors on the Closing Date, as
supplemented as of November 15, 1995 and as of December 1, 1995 as amended and
restated by the Amended and Restated Subsidiaries Guaranty in the form of
EXHIBIT 3.1C hereto and to be executed and delivered by additional Subsidiaries
of Company from time to time hereafter in accordance with Section 5.8, as such
Subsidiary Guaranty may further be amended, restated, supplemented or otherwise
modified from time to time.
"SUBSIDIARY PLEDGE AGREEMENT" means the Subsidiaries Stock
Pledge Agreement executed and delivered by the Original Guarantors on the
Closing Date, as supplemented as of November 15, 1995 and as of December 1, 1995
as amended and restated by the Amended and Restated Subsidiaries Stock Pledge
Agreement in the form of EXHIBIT 3.1D hereto and to be executed and delivered by
any additional Subsidiary Guarantor from time to time hereafter in accordance
with Section 5.8, as such Subsidiary Pledge Agreement may be amended, restated,
supplemented or otherwise modified from time to time.
"SUBSIDIARY SECURITY AGREEMENT" means the Subsidiary Security
Agreement executed and delivered by the Original Guarantors on the Closing Date,
as amended and supplemented as of November 15, 1995 and as of December 1, 1995
as amended and restated by the Amended and Restated Subsidiaries Security
Agreement in the form of EXHIBIT 3.1E hereto and to be executed and delivered by
any additional Subsidiary Guarantor from time to time hereafter in accordance
with Section 5.8, as such Subsidiary Security Agreement may be amended,
restated, supplemented or otherwise modified from time to time.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to
that term in Section 8.1B.
"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 on the overall net income" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction in which
that Person is organized or 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
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (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) of that Person (and/or, in
the case of a Lender, its lending office).
"TERM LOANS" means the Term Loans made under and defined in
Section 2.1(a) of the Original Credit Agreement.
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"TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT," "TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS," "TRANSACTIONS CONTEMPLATED HEREBY,"
TRANSACTIONS CONTEMPLATED THEREBY," and any similar phrase includes the making
and holding of the Loans, the granting, perfection and priority of the security
interests in Collateral, making the payments contemplated under the Loan
Documents, maintaining the Deposit Accounts, maintaining and complying with the
Cash Management System and with all other terms and covenants hereof.
"UCC" means, for any state, the Uniform Commercial Code from
time to time in effect for that state.
"WARRANT" means the Warrant to Purchase Shares of Common Stock
of the Company, substantially in the form of EXHIBIT 3.10.
"▇▇▇▇▇▇ OBLIGATIONS" means all obligations of each Loan Party
to one or more ▇▇▇▇▇▇ Parties (including without limitation the obligations to
the ▇▇▇▇▇▇ Parties set forth on SCHEDULE 6.1).
"▇▇▇▇▇▇ PARTIES" means, collectively, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇ and the ▇▇▇▇▇▇ Family Limited Partnership, a Pennsylvania limited
partnership and any other of their Affiliates.
"▇▇▇▇▇▇ PAYMENT LETTER" means the Letter Agreement, among the
▇▇▇▇▇▇ Parties, the Company and the Lenders, substantially in the form of
EXHIBIT 3.9B.
"▇▇▇▇▇▇ SUBORDINATION AGREEMENT" means the Agreement, dated as
of the date hereof, among the ▇▇▇▇▇▇ Parties, the Company and the Agent, in the
form of EXHIBIT 3.9A thereto.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
AGREEMENT. Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii), (v) and (xiii) of Section 5.1 shall be prepared in accordance with GAAP
as in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in Section 5.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in Section 4.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
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B. References to "Sections" and "Sections" shall be to Sections and
Sections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2. AMOUNTS AND TERMS OF LOANS
2.1 LOANS; NOTES.
A. LOANS. Company and Lenders hereby acknowledge and agree that as of
the Restatement Closing Date the amount of the Term Loans, Revolving Loans and
Acquisition Loans (together, the "LOANS"), and all accrued interest and fees
outstanding thereon, is as set forth on SCHEDULE 2.1 annexed hereto and the
amount of each Lender's Pro Rata Share is as set forth opposite its name on
SCHEDULE 2.1. On the Restatement Closing Date, all Term Loans, Revolving Loans
and Acquisition Loans outstanding on such date shall be converted to and
maintained as Loans hereunder, and all accrued interest and fees outstanding
thereon shall be capitalized and maintained as Loans hereunder.
B. NOTES. Company shall execute and deliver to each Lender (or to Agent
for that Lender) on the Restatement Closing Date an amended and restated Note
substantially in the form of EXHIBIT 2.1B annexed hereto to evidence that
Lender's Loan, in the principal amount of that Lender's Loan and with other
appropriate insertions. Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by Agent
as provided in Section 9.1B(ii). Any request, authority or consent of any person
or entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, assignee or transferee of that Note or of any Note or Notes
issued in exchange therefor.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of Sections 2.2C and
2.6, 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
equal to the sum of the Base Rate plus 2.125% per annum.
B. INTEREST PAYMENTS. Subject to the provisions of Section 2.2C,
interest on each Loan shall be payable in arrears on each Interest Payment Date
applicable to that Loan, upon any
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prepayment of that Loan (to the extent accrued on the amount being prepaid) and
at maturity (including final maturity). Such interest payments shall include all
interest accrued through such Interest Payment Date.
C. 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 allowable in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2.5% 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 which is 2.5% per
annum in excess of the interest rate otherwise payable under this Agreement for
Loans).
D. COMPUTATION OF INTEREST. Interest on the Loans shall be computed on
the basis of a 360-day year in each case for the actual number of days elapsed
in the period during which it accrues. In computing interest on any Loan, the
date of the making of such Loan shall be included and the date of payment of
such 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.
E. CAPITALIZATION OF INTEREST AND LEGAL FEES. The parties acknowledge
and agree that the outstanding principal amount of the Loans as of the
Restatement Closing Date includes accrued and unpaid interest on the Loans in
the amount of $293,114.35 and the legal fees of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇,
counsel to the Lenders and the Agent, incurred in connection with the amendment
and restatement of the Loan Documents, in the amount of $175,000.
2.3 FEES.
A. ANNUAL ADMINISTRATIVE FEE. Company agrees to pay to Agent an annual
administrative fee in the amount of $15,000, payable in advance on the Closing
Date and on each anniversary of the Closing Date.
B. COLLATERAL AGENT'S FEE. Company agrees to pay to Collateral Agent a
fee in the amount of $125 per month ($1,250 per month during the occurrence of a
Default), together with the Collateral Agent's expenses incurred in connection
with the transactions described herein.
C. OTHER FEES. Company agrees to pay to Agent such other fees in the
amounts and at the times separately agreed upon between Company and Agent.
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2.4 REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED PAYMENTS OF LOANS. Company shall make payments of
principal and interest on the Loans on the first day of each calendar month,
commencing October 1, 1999, in installments in the amounts and on the dates set
forth below:
-----------------------------------------------------------------
REPAYMENT DATE SCHEDULED MONTHLY REPAYMENT
(INCLUDING INTEREST)
-----------------------------------------------------------------
October 1, 1999 $300,000
-----------------------------------------------------------------
November 1, 1999 $300,000
-----------------------------------------------------------------
December 1, 1999 $300,000
-----------------------------------------------------------------
January 1, 2000 $350,000
-----------------------------------------------------------------
February 1, 2000 $350,000
-----------------------------------------------------------------
March 1, 2000 $350,000
-----------------------------------------------------------------
April 1, 2000 $350,000
-----------------------------------------------------------------
May 1, 2000 $350,000
-----------------------------------------------------------------
June 1, 2000 $350,000
-----------------------------------------------------------------
July 1, 2000 $400,000
-----------------------------------------------------------------
August 1, 2000 $450,000
-----------------------------------------------------------------
September 1, 2000 $500,000
-----------------------------------------------------------------
October 1, 2000 $550,000
-----------------------------------------------------------------
November 1, 2000 $600,000
-----------------------------------------------------------------
December 1, 2000 $650,000
-----------------------------------------------------------------
December 31, 2000 $8,401,449.35
-----------------------------------------------------------------
; provided that the scheduled installments of principal of the Loans set forth
above shall be reduced in inverse order of maturity in connection with any
voluntary or mandatory prepayments of the Loans in accordance with Section
2.4B(iii); and provided, further that the Loans and all other amounts owed
hereunder with respect to the Loans and all other Obligations shall be paid in
full no later than December 31, 2000, and the final installment payable by
Company 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
Obligations in full. In addition, notwithstanding Section 7.1 of this Agreement
the failure to make the Scheduled Monthly Repayment in full on such Repayment
Date shall not constitute an
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Event of Default, if both (i) no Event of Default or Potential Event of Default
shall have otherwise occurred and (ii) the Company has on any Repayment Date set
forth above repaid in respect of the Obligations the greater of (A) all of the
Company's Consolidated Available Cash and (B) $350,000.
B. PREPAYMENTS.
(i) Voluntary Prepayments. Company may, upon not less than one
Business Day's prior written or telephonic notice given to Agent by
12:00 Noon (New York City time) on the date required and, if given by
telephone, promptly confirmed in writing to Agent (which original
written or telephonic notice Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time
to time prepay any Loans on any Business Day in whole or in part in an
aggregate minimum amount of $100,000 and integral multiples of $100,000
in excess of that amount. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such notice
shall become due and payable on the prepayment date specified therein.
Any such voluntary prepayment shall be applied as specified in Section
2.4B(iii).
(ii) Mandatory Prepayments. The Loans shall be prepaid in the
amounts and under the circumstances set forth below, all such
prepayments to be applied as set forth below or as more specifically
provided in Section 2.4B(iii);
(a) Prepayments and Reductions From Net Asset Sale
Proceeds. No later than the first Business Day following the
date of receipt by Company or any of its Subsidiaries of any
Net Asset Sale Proceeds in respect of any Asset Sale, Company
shall prepay the Loans in an aggregate amount equal to such
Net Asset Sale Proceeds.
(b) Prepayments from Net Insurance/Condemnation
Proceeds. No later than the first Business Day following the
date of receipt by Agent or by Company or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds,
Agent, on behalf of Company, or Company shall prepay the Loans
in an aggregate amount equal to the amount of such Net
Insurance/Condemnation Proceeds minus any such Net
Insurance/Condemnation Proceeds in an aggregate amount less
than $100,000 (the "PROPOSED REINVESTMENT PROCEEDS") that
Company or such Subsidiary intends to use within 180 days of
such date of receipt to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of
which such Net Insurance/Condemnation Proceeds were received;
provided that Company shall have delivered to Agent, on or
before such first Business Day, an Officers' Certificate
setting forth the proposed use of the Proposed Reinvestment
Proceeds and such other information with respect to such
proposed use as Agent may reasonably request. In addition, no
later than 180 days after receipt of any Net
Insurance/Condemnation Proceeds, Company shall prepay the
Loans in an amount equal to the amount of any related Proposed
Reinvestment Proceeds that have not been applied to the costs
of
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repairing, restoring or replacing the applicable assets of
Company or such Subsidiary as provided above.
(c) Prepayments Due to Reversion of Surplus Assets of
Pension Plans. On the date of return to Company or any of its
Subsidiaries of any surplus assets of any pension plan of
Company or any of its Subsidiaries, Company shall prepay the
Loans in an aggregate amount (such amount being the "NET
PENSION PROCEEDS") equal to 100% of such returned surplus
assets, net of transaction costs and expenses incurred in
obtaining such return, including incremental taxes payable as
a result thereof.
(d) Prepayments Due to Issuance of Debt or Equity
Securities. On the date of receipt by Company of the cash
proceeds (any such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses, being
"NET SECURITIES PROCEEDS") from the issuance of any debt or
equity Securities of Company, Company shall prepay the Loans
in an aggregate amount equal to such Net Securities Proceeds.
(e) Prepayments from Consolidated Excess Cash Flow.
In the event that there shall be Consolidated Excess Cash Flow
for any month, the Company shall, no later than 25 days after
the end of such month, distribute such Consolidated Excess
Cash Flow as follows:
(i) So long as no Event of Default or
Potential Event of Default has occurred or will occur
after giving effect to such payment, then
Consolidated Excess Cash Flow for such month shall be
distributed by the Company as follows:
(I) First, if the repayments under
Section 2.4A shall not have been made in
full as scheduled, then all such
Consolidated Excess Cash Flow shall be used
to repay the Obligations in an amount equal
to the aggregate amount of all such
scheduled repayments which have not been so
made until such time as the Company shall
have repaid all amounts then due under
Section 2.4A in accordance with the schedule
set forth therein.
(II) Second, the excess (if any) up
to the next $52,500 may be retained or used
by the Company (provided that no more than
$25,000 per month may be used to repay the
▇▇▇▇▇▇ Obligations);
(III) Third, the excess (if any)
shall be split 50% to repay the Obligations
and 50% to the Company (provided the Company
agrees
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it shall not use any of such 50% to pay or
repay any of the ▇▇▇▇▇▇ Obligations).
(ii) In all other cases (including without
limitation, if an Event of Default or a Potential
Event of Default has occurred or would otherwise
result), then 100% of Consolidated Excess Cash Flow
for all periods shall be applied by the Company to
prepay the Obligations.
(f) Calculations of Net Proceeds Amounts; Additional
Prepayments Based on Subsequent Calculations. Concurrently
with any prepayment of the Loans pursuant to Sections
2.4B(ii)(a)-(e), Company shall deliver to Agent an Officers'
Certificate demonstrating the calculation of the amount (the
"NET PROCEEDS AMOUNT") of the applicable Net Asset Sale
Proceeds or Net Insurance/Condemnation Proceeds, the
applicable Net Pension Proceeds or Net Securities Proceeds (as
such terms are defined in Sections 2.4B(ii)(c) and (d)), or
the applicable Consolidated Excess Cash Flow, as the case may
be, that gave rise to such prepayment. In the event that
Company shall subsequently determine that the actual Net
Proceeds Amount was greater than the amount set forth in such
Officers' Certificate, Company shall promptly make an
additional prepayment of the Loans in an amount equal to the
amount of such excess, and Company shall concurrently
therewith deliver to Agent an Officers' Certificate
demonstrating the derivation of the additional Net Proceeds
Amount resulting in such excess.
(iii) Application of Prepayments. Any prepayments of the Loans
pursuant to Section 2.4B(i) or Section 2.4B(ii) shall be applied to
reduce the scheduled installments of principal of the Loans set forth
in Section 2.4A in inverse order of maturity.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Agent not later than 12:00 Noon (New York City time) on
the date due at the Funding and Payment Office for the account of
Lenders; funds received by Agent after that time on such due date shall
be deemed to have been paid by Company on the next succeeding Business
Day. Company and each other Loan Party hereby authorizes Agent and the
Collateral Agent to charge the Company's and each other Loan Party's
accounts with Agent and/or the Collateral Agent and/or all other
Deposit Accounts in order to cause timely payment to be made of all
principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that purpose). The
Company hereby waives any and all requirements or conditions to its
Obligations hereunder including diligence, presentment, demand, protest
and notice of any kind.
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(ii) Application of Payments 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 shall be applied to the payment of
interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to Lenders'
respective Pro Rata Shares. Agent shall promptly distribute to each
Lender, at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request, its Pro Rata Share of all such payments received by
Agent and the commitment fees of such Lender when received by Agent.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of the Note held by it, or any part thereof (other than by
granting participation therein), that Lender will make a notation
thereon of the Loan evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of the Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to such Loan or any payments of principal or interest
on such Note.
2.5 USE OF PROCEEDS.
A. LOANS. The proceeds of (i) the Term Loans were used by Company to
refinance the Indebtedness owed to the Existing Creditor (as defined in the
Original Credit Agreement) under the Existing Financing Documents (as defined in
the Original Credit Agreement) and to pay certain related fees and expenses,
(ii) the Revolving Loans were used to pay certain fees and expenses and to
finance the working capital needs of Company and its subsidiaries in the
ordinary course of business and (iii) the Acquisition Loans were used to finance
a portion of the purchase price of certain acquisitions permitted under the
Original Credit Agreement and to pay certain related costs and expenses.
B. MARGIN REGULATIONS. The Company represents and warrants to each
Lender that no portion of the proceeds of any borrowing under this Agreement
were used by Company or any of its Subsidiaries in any manner that might cause
the borrowing or the application of such proceeds to violate Regulation G,
Regulation U, Regulation T or Regulation X of the Board of Governors of the
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Federal Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such borrowing
and such use of proceeds.
2.6 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the provision
of Section 2.6B (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender shall determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender; or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Loan hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this Section 2.6A, which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
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B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax 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 or governmental authority from or to which a payment
is made by or on behalf of Company or by any federation or organization
or governmental authority 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 Company 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 Company to Agent or any
Lender under any of the Loan Documents:
(a) Company shall notify Agent of any such
requirement or any change in any such requirement as soon as
Company becomes aware of it;
(b) Company 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 Company) for its own
account or (if that liability is imposed on Agent or such
Lender, as the case may be) on behalf of and in the name of
Agent or such Lender;
(c) the sum payable by Company 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,
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 which
it is required by clause (b) above to pay, Company shall
deliver to 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 Agreement pursuant to 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
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deduction, withholding or payment from that in effect at the date of this
Agreement or at the date of such Assignment Agreement, as the case may be, in
respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (for purposes of this
Section 2.6B(iii), a "NON-US LENDER") shall deliver to Agent
for transmission to Company, on or prior to the Closing Date
(in the case of each Lender listed on the signature pages
hereof) or on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each
other Lender), and at such other times as may be necessary in
the determination of Company or Agent (each in the reasonable
exercise of its discretion), (1) two original copies of
Internal Revenue Service Form 1001 or 4224 (or any successor
forms), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations
issued thereunder to establish that such Lender is not subject
to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan
Documents or (2) if such Lender is not a "bank" or other
Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service Form
1001 or 4224 pursuant to clause (1) above, a Certificate re
Non-Bank Status together with two original copies of Internal
Revenue Service Form W-8 (or any successor form), properly
completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect
to any payments to such Lender of interest payable under any
of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to Section
2.6B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Agent for
transmission to Company two new original copies of Internal
Revenue Service Form 1001 or 4224, or a Certificate re
Non-Bank Status and two original copies of Internal Revenue
Service form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other
certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or
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(2) notify Agent and Company of its inability to deliver any
such forms, certificates or other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
Section 2.6B(ii) which become payable because such Lender
shall have failed to satisfy the requirements of clause (a) or
(b)(1) of this Section 2.6B(iii); provided that if such Lender
shall have satisfied the requirements of Section 2.6B(iii)(a)
on the Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this Section 2.6B(iii)(c) shall
relieve Company of its obligation to pay any additional
amounts pursuant to clause (c) of Section 2.6B(ii) in the
event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in Section 2.6B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loan or other obligations hereunder to a level below that
which such Lender or such controlling corporation could have achieved but for
such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Company from such Lender of the statement
referred to in the next sentence, Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Company (with a copy to Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional amounts, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
2.7 OBLIGATIONS OF LENDERS TO MITIGATE. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering the
Loan of such Lender becomes aware of the occurrence of an event or the existence
of a condition that would entitle such Lender to receive payments under Section
2.6, it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts (i) to make,
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fund or maintain the Loan of such Lender through another lending office of such
Lender, or (ii) take such other measures as such Lender may deem reasonable, if
as a result thereof the additional amounts which would otherwise be required to
be paid to such Lender pursuant to Section 2.6 would be materially reduced and
if, as determined by such Lender in its sole discretion, the making, funding or
maintaining of such Loan through such other lending office or in accordance with
such other measures, as the case may be, would not otherwise materially
adversely affect such Loan or the interests of such Lender; provided that such
Lender will not be obligated to utilize such other lending office pursuant to
this Section 2.7 unless Company agrees to pay all incremental expense incurred
by such Lender as a result of utilizing such other lending office as described
in clause (i) above. A certificate as to the amount of any such expenses payable
by Company pursuant to this Section 2.7 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender to Company (with a
copy to Agent) shall be conclusive absent manifest error.
2.8 ACKNOWLEDGMENT AND CONSENT TO AMENDMENT AND RESTATEMENT OF ORIGINAL CREDIT
AGREEMENT. Company is a party to the Company Security Agreement and the Company
Pledge Agreement pursuant to which Company has created Liens in favor of Agent
on certain Collateral to secure the Obligations. The Subsidiary Guarantors are a
party to the Subsidiary Guaranty, the Subsidiary Security Agreement and the
Subsidiary Pledge Agreement pursuant to which the Subsidiary Guarantors have (i)
guarantied the Obligations and (ii) created Liens in favor of Agent on certain
Collateral and pledged certain Collateral to Agent to secure the obligations of
such Subsidiary Guarantors under the Subsidiary Guaranty. Each Subsidiary
Guarantor hereby acknowledges that it has reviewed the terms and provisions of
this Agreement and consents to the amendment of the Original Credit Agreement
effected pursuant hereto. Each Loan Party hereby confirms that each Loan
Document to which it is a party or otherwise bound and all Collateral encumbered
thereby will continue to guaranty or secure, as the case may be, to the fullest
extent possible pursuant to its respective terms, the payment and performance of
all Obligations (as such term is defined in the applicable Loan Document)
including without limitation the payment and performance of all such
Obligations, as the case may be, in respect of the Obligations of Company now or
hereafter existing under or in respect of the Original Credit Agreement (as
amended hereby). Each Loan Party acknowledges and agrees that any of the Loan
Documents to which it is a party or otherwise bound shall continue in full force
and effect and that all of its obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Agreement. Each Subsidiary Guarantor represents and
warrants that all representations and warranties contained in the Subsidiary
Guaranty, the Subsidiary Security Agreement and the Subsidiary Pledge Agreement
to which it is party are true, correct and complete in all material respects as
of the Restatement Closing Date, to the same extent as though made on and as of
that date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date. Each Subsidiary Guarantor
acknowledges and agrees that (i) notwithstanding the conditions to effectiveness
set forth in this Agreement, such Subsidiary Guarantor is not required by the
terms of the Subsidiary Guaranty or any other Loan Documents to consent to the
amendment and restatement of the Credit Agreement effected pursuant to this
Agreement and (ii) nothing in this
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Agreement or any other Loan document shall be deemed to require the consent of
such Subsidiary Guarantor to any future amendments, restatements or other
modifications to this Agreement.
SECTION 3. CONDITIONS TO LOANS
The obligations of Lenders to amend and restate the Original
Credit Agreement on the terms set forth herein are subject to the prior or
concurrent satisfaction of the following conditions.
3.1 LOAN PARTY DOCUMENTS. On or before the Restatement Closing Date, Company
shall, and shall cause each other Loan Party to, deliver or cause to be
delivered to Lenders (or to Agent for Lenders with sufficient originally
executed copies, where appropriate, for each Lender and its counsel) the
following with respect to Company or such Loan Party, as the case may be, each,
unless otherwise noted, dated the Restatement Closing Date:
(i) Certified copies of the Certificate or Articles of
Incorporation, together with a good standing certificate from the
Secretary of State of the State of its jurisdiction of incorporation
and each other state in which such Person is qualified as a foreign
corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each dated a recent date prior
to the Restatement Closing Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Restatement Closing Date by its corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors and (except for
the Company) shareholders of such Person approving and authorizing the
execution, delivery and performance of this Agreement and the other
Loan Documents to which it is a party, certified as of the Restatement
Closing Date by the corporate secretary or an assistant secretary of
such Person as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of the officers of
such Person executing this Agreement and the other Loan Documents to
which it is a party;
(v) Executed originals of this Agreement, the Notes (duly
executed in accordance with Section 2.1B, drawn to the order of each
Lender and with appropriate insertions) (in the case of Company), each
of the amended and restated Loan Documents in the forms attached as
Exhibits 3.1A through 3.1E hereto, and the other Loan Documents to
which such Person is a party; and
(vi) Such other documents as Agent may reasonably request.
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3.2 LEGAL OPINIONS. Lenders and their respective counsel shall have received (i)
originally executed copies of one or more favorable written opinions of ▇▇▇▇▇
▇▇▇▇▇▇ & Heckscher, LLP, counsel for Loan Parties in form and substance
reasonably satisfactory to Agent and its counsel, dated as of the Restatement
Closing Date and setting forth substantially the matters in the opinions
designated in EXHIBIT 3.2 annexed hereto and as to such other matters as Agent
acting on behalf of Lenders may reasonably request and (ii) evidence
satisfactory to Agent that Company has requested such counsel to deliver such
opinions to Lenders.
3.3 FEES. Company shall have paid to Agent, for distribution (as appropriate) to
Agent and Lenders, the fees payable on the Restatement Closing Date referred to
in Section 2.3.
3.4 OFFICERS' CERTIFICATE REGARDING CERTAIN CONDITIONS. The following conditions
shall be satisfied and the Loan Parties shall have delivered to Agent an
Officers' Certificate, in form and substance satisfactory to Agent, to that
effect:
A. REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained herein and in the other Loan Documents shall be true, correct and
complete in all material respects on and as of the Restatement Closing Date to
the same extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true, correct and
complete in all material respects on and as of such earlier date.
B. NO EVENT OF DEFAULT. Except for the events set forth on SCHEDULE
3.4B, no event shall have occurred and be continuing as of the Restatement
Closing Date, or would result from the consummation of the borrowing of the
Loans thereon or from the consummation of the transactions contemplated hereby
and by the other Loan Documents, that would constitute an Event of Default or a
Potential Event of Default.
C. PERFORMANCE OF AGREEMENTS. Company shall have performed in all
material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Restatement Closing Date.
3.5 RESIGNATION OF AGENT; NEW COLLATERAL AGENT. IBJS shall have resigned as
Agent and shall have executed a resignation which resignation shall have been
accepted by the Lenders, all substantially in the form of EXHIBIT 3.5 attached
hereto. The Collateral Agent shall have accepted its appointment as Collateral
Agent and shall have executed and delivered the Loan Documents to which it is a
party.
3.6 COLLATERAL DOCUMENTS. The Collateral Documents shall be in full force and
effect and no default shall have occurred and be continuing thereunder. The
Agent shall have received evidence satisfactory to it of the perfection of all
security interests and liens with the priority contemplated by the Loan
Documents and arrangements satisfactory to the Lenders shall have been made for
the
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transfer of the Collateral and the recordation of such transfer to Cerberus, as
Agent, on the Restatement Closing Date.
3.7 CASH MANAGEMENT SYSTEM. The Cash Management System shall be in place in form
and substance satisfactory in all respects to the Agent.
3.8 EVIDENCE OF INSURANCE. Agent shall have received a certificate from
Company's insurance broker or other evidence satisfactory to it that all
insurance required to be maintained pursuant to Section 5.4 is in full force and
effect and that Agent on behalf of Lenders has been named as additional insured
and/or loss payee thereunder to the extent required under Section 5.4. A correct
and complete summary of the Company's insurance is set forth on SCHEDULE 3.8.
3.9 ▇▇▇▇▇▇ AGREEMENTS.
▇. ▇▇▇▇▇▇ SUBORDINATION AGREEMENT. Each of the ▇▇▇▇▇▇ Parties shall
have executed and delivered the ▇▇▇▇▇▇ Subordination Agreement.
▇. ▇▇▇▇▇▇ PAYMENT LETTER. Each of the ▇▇▇▇▇▇ Parties and the Company
shall have executed and delivered the ▇▇▇▇▇▇ Payment Letter.
3.10 WARRANT. The Company shall have executed, delivered and issued to the
Lenders the Warrant.
3.11 MISCELLANEOUS OTHER CONDITIONS.
A. NO MATERIAL ADVERSE EFFECT. Except as set forth on SCHEDULE 3.11,
since March 31, 1999, no Material Adverse Effect (in the sole opinion of Agent)
shall have occurred.
B. COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Agent, acting on
behalf of Lenders, and its counsel shall be satisfactory in form and substance
to Agent and such counsel, and Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents as Agent may
reasonably request.
C. NO INJUNCTION OR RESTRAINING ORDER. No order, judgment or decree of
any court, arbitrator or governmental authority shall purport to enjoin or
restrain any Lender from making or holding the Loan to be made or held by it on
the Restatement Closing Date or shall impair in any respect the priority or
perfection of the security interests or liens contemplated hereby or by the
other Loan Documents.
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D. NO VIOLATION OF LAW. The making of the Loans requested on the
Restatement Closing Date shall not violate any law including Regulation G,
Regulation T, Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System.
E. NO ADVERSE LITIGATION. As of the Restatement Closing Date, there
shall not be pending or, to the knowledge of Company, threatened, any action,
suit, proceeding, governmental investigation or arbitration against or affecting
Company or any of its Subsidiaries or any property of Company or any of its
Subsidiaries that has not been disclosed by Company in writing pursuant to
Section 4.6 prior to the execution of this Agreement, and there shall have
occurred no development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in either event,
in the opinion of Agent or of Requisite Lenders, would be expected to have a
Material Adverse Effect.
SECTION 4. COMPANY's REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement,
Company represents and warrants to each Lender, on the date of this Agreement
and on the Closing Date, that the following statements are true, correct and
complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in SCHEDULE 4.1D annexed hereto. Each
Loan Party has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby. Except as set forth on SCHEDULE 4.1D,
there are no outstanding warrants, options or rights for the purchase of the
equity Securities of Company and no stockholder of Company has or will have any
preemptive rights to subscribe for any additional equity Securities of Company.
The issuance and sale of all Company Common Stock was, or will be, upon the
issuance and sale thereof, either (a) registered or qualified under applicable
federal and state securities laws or (b) exempt therefrom.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operation, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged only
in the businesses identified in Section 6.14.
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D. CAPITALIZATION; LOCATION. All of the Subsidiaries of the Company,
including, without limitation, the KRS Partnerships, are identified on SCHEDULE
4.1D annexed hereto. SCHEDULE 4.1D also sets forth for the Company and for each
Subsidiary of the Company: (i) the legal name and each "dba" and trade name;
(ii) its form and jurisdiction of organization; (iii) the total authorized
shares of each class of capital stock or other ownership interests thereof; (iv)
the total number of Securities, by class, issued and outstanding; (v) the name
of the holders thereof and the number of shares of each class or other ownership
interests held by each holder; (vi) each state in which it does business; (vii)
each state in which it is authorized to do business; (viii) each state and
county in which it has a "place of business" within the meaning of the UCC for
such state or in which it maintains an office; (ix) each state and county in
which Collateral is located; (x) the location of its chief executive office
(within the meaning of the UCC of that state), and (xi) the sole manager of each
KRS Partnership, as said SCHEDULE 4.1D may be supplemented from time to time
pursuant to the provisions of Section 5.1(xvi). The capital stock of the Company
and of each of the Subsidiaries of Company identified in SCHEDULE 4.1D annexed
hereto (as so supplemented) as issued and outstanding is duly authorized,
validly issued, fully paid and nonassessable and none of such capital stock
constitutes Margin Stock. Each of the Subsidiaries of Company identified in
SCHEDULE 4.1D annexed hereto (as so supplemented) is a corporation duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation set forth therein, has all requisite
corporate power and authority to own and operate its properties and to carry on
its business as now conducted and as proposed to be conducted, and is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, in each
case except where failure to be so qualified or in good standing or a lack of
such corporate power and authority has not had and will not have a Material
Adverse Effect. SCHEDULE 4.1D annexed hereto (as so supplemented) correctly sets
forth the ownership interest of Company in each of its Subsidiaries.
E. CHANGES. SCHEDULE 4.1E annexed hereto sets forth a true and complete
description of any and all mergers, name changes, and dispositions (whether by
dividend or otherwise), acquisitions or similar transactions to which Company
and its Subsidiaries have been party or otherwise affecting the Company or any
Subsidiary since the Closing Date.
F. APPROVALS. The Company and each of its Subsidiaries and each
Healthcare Facility has obtained all Approvals required to conduct its business
as presently conducted and all such Approvals remain in full force and effect
and no Potential Revocations exist.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents have been duly authorized by all necessary corporate
action on the part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by Loan Parties
of the Loan Documents and the consummation of the transactions contemplated by
the Loan Documents do not
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and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
contractual Obligation of Company or any of its Subsidiaries, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of company or any of its Subsidiaries (other than any Liens created under
any of the Loan Documents in favor of Agent on behalf of Lenders), or (iv)
required any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of Company or any of its Subsidiaries, except
for such approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lenders.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Loan Parties of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body or other
Person.
D. BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
E. SUBORDINATED OBLIGATIONS. The Subordination Agreement will be legal,
valid, binding and enforceable against ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in accordance with its
terms and the Loans and all other monetary Obligations hereunder shall and will
be within the definition of "Senior Obligations" included in such Subordination
Agreement. The ▇▇▇▇▇▇ Subordination Agreement and the ▇▇▇▇▇▇ Payment Letter will
each be legal, valid, binding and enforceable against the ▇▇▇▇▇▇ Parties in
accordance with their respective terms.
4.3 FINANCIAL CONDITION. Company has heretofore delivered to Lenders, at
Lenders' request, the following financial statements and information: (i) the
audited consolidated and consolidating balance sheet of Company and its
Subsidiaries as at December 31, 1998 and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for the Fiscal Year then ended and (ii) the
unaudited consolidated and consolidating balance sheet of Company and its
Subsidiaries as at June 30, 1999 and the related unaudited consolidated and
consolidating statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for the 6 months then ended. All such statements
were prepared in conformity with GAAP consistently applied and fairly present,
in all material respects, the financial position (on a consolidated and, where
applicable, consolidating basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated and, where applicable, consolidating basis) of the
entities described therein
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for each of the periods then ended, subject, in the case of any such unaudited
financial statements, to changes resulting from audit and normal year-end
adjustments. Company does not (and will not following the funding of the initial
Loans) have any Contingent Obligation, contingent liability or liability for
taxes, long-term lease or unusual forward or long-term commitment that is not
reflected in the foregoing financial statements or the notes thereto and which
in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or any of its Subsidiaries.
4.4 NO MATERIAL ADVERSE CHANGE: NO RESTRICTED JUNIOR PAYMENTS. Except as
described on SCHEDULE 4.4 annexed hereto, since December 31, 1994, no event or
change has occurred that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect. Neither Company nor any of its
Subsidiaries has directly or indirectly declared, ordered, paid or made, or set
apart any sum or property for, any Restricted Junior Payment or agreed to do so
except as permitted by Section 6.5.
4.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. TITLE TO PROPERTIES; LIENS. Company and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in Section 4.3 or in the most recent
financial statements delivered pursuant to Section 5.1, in each case except for
assets disposed of since the date of such financial statements in the ordinary
course of business or as otherwise permitted under Section 6.7. Except as
permitted by Section 6.2A, all such properties and assets are free and clear of
Liens.
B. REAL PROPERTY. As of the Closing Date, SCHEDULE 4.5 annexed hereto
contains a true, accurate and complete list of (i) all real property in which
any Loan Party has a fee interest, and (ii) all leases, subleases or assignments
of leases (together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting any interest owned by any Loan Party in any
real property, regardless of whether such Loan Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. Except as specified in SCHEDULE 4.5 annexed hereto, each
agreement listed in clause (ii) of the immediately preceding sentence is in full
force and effect and Company does not have knowledge of any default that has
occurred and is continuing thereunder, and each such agreement constitutes the
legally valid and binding obligation of each applicable Loan Party, enforceable
against such Loan Party in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles.
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4.6 LITIGATION; VIOLATION OF LAW OR ORDER.
A. Except as set forth on SCHEDULE 4.6, there are no actions, suits,
proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Company or any of its Subsidiaries) at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign (including any Environmental Claims) that are pending or, to the
knowledge of Company, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries nor any of their
properties (i) is in violation of any applicable laws (including Environmental
Laws) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, or (ii) is in violation of or is subject to
or in default with respect to any final judgments, writ, injunctions, decrees,
rules or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
4.7 PAYMENT OF TAXES. Except to the extent permitted by Section 5.3, all tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all taxes shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon
Company and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and Payable have been paid when
due and payable. Company knows of no proposed tax assessment against Company or
any of its Subsidiaries which is not being actively contested by Company or such
Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
4.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS, LEASES, TRANSACTIONS WITH AFFILIATES.
A. Neither Company nor any of its Subsidiaries has breached or is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any Contractual Obligations, Contingent Obligations,
agreements or instruments or any charter or other internal restrictions which
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
C. SCHEDULE 4.8C annexed hereto contains a true, correct and complete
list of all the Material Contracts in effect on the Restatement Closing Date.
Except as described on SCHEDULE
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4.8C, all such Material Contracts are in full force and effect and no material
defaults currently exist thereunder.
D. SCHEDULE 4.8D annexed hereto contains a true, correct and complete
list of all Operating Leases and Capital Leases to which Company or any of its
Subsidiaries is a party as of the Restatement Closing Date.
E. SCHEDULE 4.8E annexed hereto contains a true, correct and complete
list of any transaction to which Company or any of its Subsidiaries is a party
as of the Restatement Closing Date with any holder of 5% or more of any class of
equity Securities of Company or any Affiliate of Company or of any such holder.
4.9 GOVERNMENTAL REGULATION. Neither Company nor any of its Subsidiaries is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable or may limit, impair or restrict the enforceability of any of the
transactions contemplated by the Loan Documents.
4.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of Section 6.2
or 6.7 or subject to any restriction contained in any agreement or instrument,
between Company and any Lender or any Affiliate or any Lender, relating to
Indebtedness and within the scope of Section 6.1, will be Margin Stock.
C. If requested by the Agent or any Lender, the Borrower will furnish
to the Agent and each Lender a statement on Federal Reserve Form U-1 or
otherwise satisfying the requirements as to Margin Stock and to insure
compliance with Applicable Federal Regulations.
4.11 EMPLOYEE BENEFITS PLANS.
A. Except as set forth on SCHEDULE 4.11, the Company, each of its
Subsidiaries and each of their respective ERISA Affiliates are in compliance
with all applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan,
and have performed all their obligations under each Employee Benefit
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Plan. Each Employee Benefit Plan which is intended to qualify under Section
401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code, no Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $100,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $100,000.
4.12 CERTAIN FEES. No broker's or finder's fee or commission will be payable
with respect to this Agreement, the Original Credit Agreement or any of the
transactions contemplated hereby or thereby, and Company hereby indemnifies
Lenders against, and agrees that it will hold Lenders harmless from, any claim,
demand or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
4.13 ENVIRONMENTAL PROTECTION. Except as set forth in SCHEDULE 4.13 annexed
hereto:
(i) neither Company nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with
any Person relating to (a) any Environmental Law, (b) any Environmental
Claim, or (c) any Hazardous Materials Activity;
(ii) neither Company nor any of its Subsidiaries has received
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. Section 9604) or any comparable state law;
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(iii) there are and, to Company's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim
against Company or any of its Subsidiaries;
(iv) neither Company nor any of its Subsidiaries nor, to
Company's knowledge, any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental law
indicating past or present treatment of Hazardous Materials at any
Facility, and none of Company's or any of its Subsidiaries' operations
involves the generation, transportation, treatment, storage or disposal
of hazardous wastes, as defined under 40 C.F.R. Parts 260-170 or any
state equivalent;
(v) compliance with all current or reasonably foreseeable
future requirements pursuant to or under Environmental Laws will not,
individually or in the aggregate, have a reasonable possibility of
giving rise to a Material Adverse Effect.
Notwithstanding anything in this Section 4.13 to the contrary,
no event or condition has occurred or is occurring with respect to Company or
any of its Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity, including any matter
disclosed on SCHEDULE 4.13 annexed hereto, which individually or in the
aggregate has had or could reasonably be expected to have a Material Adverse
Effect.
4.14 EMPLOYEE MATTERS. There is no strike or work stoppage in existence or
threatened involving Company or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect.
4.15 [INTENTIONALLY OMITTED]
4.16 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties, together with the actions
taken on or prior to the date hereof, create in favor of Agent for the benefit
of Lenders, as security for the respective Secured Obligations (as defined in
the applicable Collateral Document in respect of any Collateral), a valid and
perfected First Priority Lien on all of the Collateral, and all filings and
other actions necessary or desirable to perfect and maintain the perfection and
First Priority status of such Liens have been duly made or taken and remain in
full force and the periodic filing of UCC continuation statements in respect of
UCC financing statements filed by or on behalf of Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Agent pursuant to any of the
Collateral Documents or (ii) the exercise by Agent of any rights or remedies in
respect of any Collateral (whether specifically granted or created pursuant to
any filings or recordings
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contemplated by Section 4.16A) except as may be required in connection with the
dispositions of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed
in favor of Agent as contemplated hereby no effective UCC financing statement,
fixture filing or other instrument similar in effect covering all or any part of
the Collateral is on file in any filing or recording office.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate any regulation (including Regulation
G, T, U or X) of the Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to Agent
by or on behalf of any Loan Party with respect to any of the Collateral (in each
case taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects.
F. CASH MANAGEMENT SYSTEM. The Cash Management System attached to the
Company Security Agreement as Annex A is an accurate and complete description in
all respects as of the Restatement Closing Date of the Deposit Accounts
maintained by the Loan Parties and Cash Management System and does not omit to
state any material fact necessary to make the statements set forth therein not
misleading. No Loan Party nor any of its Subsidiaries (including, without
limitation, the KRS Partnerships) owns or maintains any Deposit Account which is
not described in the Cash Management System.
4.17 DISCLOSURE.
A. NO UNTRUE STATEMENT. No representation or warranty of Company or any
of its Subsidiaries contained in any Loan Document or in any other document,
certificate or written statement furnished to Lenders by or on behalf of Company
or any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to Company, in the case of any document
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same were
made.
B. PROJECTIONS. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results.
C. NO OTHER FACTS. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to Company (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect
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and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
SECTION 5. COMPANY's AFFIRMATIVE COVENANTS
Company covenants and agrees that, until payment in full of all of the
Loans and other Obligations, unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS. Company will maintain, and cause
each of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP consistently applied. Company
will deliver to Agent, the Collateral Agent and Lenders:
(i) Monthly Financials: as soon as available and in any event
within 25 days after the end of each month ending after the Closing
Date, (a) the consolidated and consolidating balance sheets of Company
and its Subsidiaries as at the end of such month and the related
consolidated and consolidating statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for such month
and for the period from the beginning of the then current Fiscal Year
to the end of such month, setting forth in each case in comparative
form the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the Financial
Plan for the current Fiscal Year, to the extent prepared on a monthly
basis, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and
normal year-end adjustments, and (b) a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for
presentation to senior management for such month and for the period
from the beginning of the then current Fiscal Year to the end of such
month;
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each Fiscal Quarter, (a) the
consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated and consolidating statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for such Fiscal
Quarter and for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter, setting forth in each
case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, all in
reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and
normal year-end
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adjustments, and (b) a narrative report describing the operations of
Company and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year; (a) the
consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Year and the related
consolidated and consolidating statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for such Fiscal
Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding figures from
the Financial Plan for the current Fiscal Year, covered by such
financial statements, all in reasonable detail and certified by the
chief financial officer of Company that they fairly present, in all
material respects, the financial conditions of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a
narrative report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Year, and (c) in the case of such consolidated
financial statements, an audit report thereon of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP
or other independent certified public accountants of recognized
national standing selected by Company and satisfactory to Agent, which
report shall be unqualified and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in
such financial statements) and that the examination by such accountants
in connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;
(iv) Officers' and Compliance Certificates: together with each
delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (i), (ii) and (iii) above, (a) an Officers'
Certificate of Company stating that the signers have reviewed the terms
of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of Company and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the
date of such Officers' Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default, or, if
any such condition or event existed or exists, specifying the nature
and period of existence thereof and what action Company has taken, is
taking and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail compliance during and at
the end of the applicable accounting periods with the restrictions
contained in Section 6, in each case to the extent compliance with such
restrictions is required to be tested at the end of the applicable
accounting period;
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(v) Reconciliation Statements: if, as a result of any change
in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in Section
4.3, the consolidated financial statements of Company and its
Subsidiaries delivered pursuant to subdivisions (i), (ii), (iii) or
(xiii) of this Section 5.1 will differ in any material respect from the
consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii),
(iii) or (xiii) of this subdivision 5.1 following such change,
consolidated financial statements of Company and its Subsidiaries for
(y) the current Fiscal Year to the effective date of such change and
(z) the two full Fiscal Years immediately preceding the Fiscal Year in
which such change is made, in each case prepared on a pro forma basis
as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this Section 5.1 following
such change, a written statement of the chief accounting officer or
chief financial officer of Company setting forth the differences
(including any differences that would affect any calculations relating
to the financial covenants set forth in Section 6.6) which would have
resulted if such financial statements had been prepared without giving
effect to such change;
(vi) Accountants' Certification: together with each delivery
of consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the
independent certified public accountants giving the report thereon (a)
stating that their audit examination has included a review of the terms
of this Agreement and the other Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with their audit
examination, any condition or event that constitutes an Event of
Default or Potential Event of Default has come to their attention and,
if such a condition or event has come to their attention, specifying
the nature and period of existence thereof; provided that such
accountants shall not be liable by reason of any failure to obtain
knowledge of any such Event of Default or Potential Event of Default
that would not be disclosed in the course of their audit examination,
and (c) stating that based on their audit examination nothing has come
to their attention that causes them to believe either or both that the
information contained in the certificates delivered therewith pursuant
to subdivision (iv) above is not correct or that the matters set forth
in the Compliance Certificates delivered therewith pursuant to clause
(b) of the subdivision (iv) above for the applicable Fiscal Year are
not stated in accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries made by such
accountants, including any comment letter submitted by such accountants
to management in connection with their annual audit;
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(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company to its
security holders other than Company or another Subsidiary of Company,
(b) all regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if any,
filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments
in the business of Company of any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Agent) or taken any other action with respect to a claimed Event of
Default or Potential Event of Default, (b) that any Person has given
any notice to Company or any of its Subsidiaries or taken any other
action with respect to a claimed default or event or condition of the
type referred to in Section 7.2, (c) of any condition or event that
would be required to be disclosed in a current report filed by Company
with the Securities and Exchange Commission on Form 8-K (Items 1, 2, 4,
5 and 6 of such Form as in effect on the date hereof) if Company were
required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either
in any case or in the aggregate, a Material Adverse Effect, an
Officers' Certificate specifying the nature and period of existence of
such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Event of
Default, Potential Event of Default, default, event or condition, and
what action Company has taken, is taking and proposes to take with
respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any
officer of Company obtaining knowledge of (X) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or
any property of Company of any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by Company to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise present the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
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written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Company or any of its
Subsidiaries equal to or greater than $100,000, and promptly after
request by Agent such other information as may be reasonable requested
by Agent to enable Agent and its counsel to evaluate any of such
Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a)
each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with
respect to each Pension Plan; (b) all notices received by Company, any
of its Subsidiaries or any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) copies of
such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Agent shall reasonably request;
(xiii) Financial Plans/Budgets: as soon as practicable and in
any event no later than 30 days prior to the beginning of each Fiscal
Year, a consolidated and consolidating plan/budget and financial
forecast for such Fiscal Year and the next four succeeding Fiscal Years
approved by the Company's Board of Directors (the "FINANCIAL PLAN" for
such Fiscal Year), including (a) forecasted consolidated and
consolidating balance sheets and forecasted consolidated and
consolidating statements of income and cash flows of Company and its
Subsidiaries for each such Fiscal Year, together with pro forma
Compliance Certificates for each such Fiscal Year and an explanation of
the assumptions on which such forecasts are based, (b) forecasted
consolidated and consolidating statements of income and cash flows of
Company and its Subsidiaries for each month of the first each such
Fiscal Year, together with an explanation of the assumptions on which
such forecasts are based, (c) the amount of forecasted unallocated
overhead for each such Fiscal Year, and (d) such other information and
projections as any Lender may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance
satisfactory to Agent outlining all material insurance coverage
maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be
maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year;
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(xv) Board of Directors: (a) promptly and in any event within
five Business Days after the approval of such minutes by the Board of
Directors, copies of all minutes of meetings of, and written consents
of, the Board of Directors of the Company and any committees thereof,
(b) promptly and in any event within five Business Days after any
change in the Board of Directors of the Company, written notice of such
change, and (c) at least two Business Days prior to any meeting of the
Board of Directors of the Company of committee thereof, notice of such
meeting;
(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to
such Person (a) the date on which such Person became a subsidiary of
Company and (b) all of the data required to be set forth on SCHEDULE
4.1D AND SCHEDULE 4.1E annexed hereto with respect to all Subsidiaries
of Company (it being understood that such written notice shall be
deemed to supplement SCHEDULE 4.1D AND SCHEDULE 4.1E annexed hereto for
all purposes of this Agreement;
(xvii) Material Contracts: promptly, and in any event within
ten Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;
(xviii) UCC Search Report: As promptly as practicable after
the date of delivery to Agent of any UCC financing statement executed
by any Loan Party pursuant to Section 3 or Section 5.8, copies of
completed UCC searches evidencing the proper filing, recording and
indexing of all such UCC financing statements and listing all other
effective financing statements that name such Loan Party as debtor,
together with copies of all such other financing statements not
previously delivered to Agent by or on behalf of Company or such Loan
Party;
(xix) Receivables Reports: Within 25 days of the end of each
calendar month, a monthly report regarding receivables (including
without limitation, a list of payors and the amounts owning by each,
receivables allocated by category and by Loan Party, performance data
(including a comparison of gross to net income), an aging report
reconciled to the report for the prior month and to the plan for the
month and a bad debt expense report all substantially in the form of
EXHIBIT 5.1(xix);
(xx) Fiscal Intermediary Reports: Promptly, and in any event
within five Business Days after any cost reports or settlement sheets
are delivered to or received from any fiscal intermediary or any
governmental authority, a copy of such report or settlement sheet;
(xxi) Healthcare Notices and Reports: Promptly after
commencement of any Medicare audit by Veritus, notice to the Lenders,
the Agent and the Collateral Agent of each
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audit; and promptly after receipt thereof, copies of all
correspondence, notices, reports and audit results with respect to
Medicare payments;
(xxii) Adjustments to EBITDA: promptly after any calculation
of Consolidated EBITDA hereunder, written notice, specifying in
reasonable detail, any non-cash adjustments to Consolidated EBITDA; and
(xxiii) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
5.2 CORPORATE EXISTENCE, ETC. Except as permitted under Section 6.7, Company
will, and will cause each of its Subsidiaries to, at all times preserve and keep
in full force and effect its corporate existence and all rights and franchises
material to its business; provided, however that neither Company nor any of its
Subsidiaries shall be required to preserve any such right or franchise if the
Board of Directors of Company or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
Company or such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Company, such Subsidiary or Lenders.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to, pay all
Taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law or otherwise have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charge or claim need be
paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (1) such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor and (2) in the case of a charge or claim which has
or may become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such charge or claim.
B. Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Company or any of its Subsidiaries).
5.4 MAINTENANCE OF PROPERTIES; INSURANCE.
A. MAINTENANCE OF PROPERTIES. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear
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and tear excepted, all material properties used or useful in the business of
Company and its Subsidiaries (including all Intellectual Property) and from time
to time will make or cause to be made all appropriate repairs, renewals and
replacements thereof.
B. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood
insurance with respect to any property subject to a mortgage in favor of Agent
and Lenders that is located in a community that participates in the National
Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System, and (ii)
replacement value casualty insurance on the Collateral under such policies of
insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times satisfactory to Agent
in its commercially reasonable judgment. Each such policy of insurance shall (a)
name Agent for the benefit of Lenders as an additional insured thereunder as its
interests may appear and (b) in the case of each business interruption and
casualty insurance policy, contain a loss payable clause or endorsement,
satisfactory in form and substance to Agent, that names Agent for the benefit of
Lenders as the loss payee thereunder and provides for at least 30 days prior
written notice to Agent of any modification or cancellation of such policy.
5.5 INSPECTION RIGHTS; AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE; LENDER
MEETINGS.
A. INSPECTION RIGHTS. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
B. AUDITS OF ACCOUNTS RECEIVABLE. Company shall, and shall cause each
of its Subsidiaries to, permit any authorized representatives designated by
Agent to conduct two audits of all accounts receivable of Loan Parties during
each twelve-month period after the Restatement Closing Date, each such audit to
be in scope and substance satisfactory to Agent and Requisite Lender, all upon
reasonable notice and at such reasonable times during normal business hours as
may reasonably be requested.
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C. LENDER MEETING. Company will, upon the request of Agent or Requisite
Lenders, participate in a meeting of Agent and Lenders to be held at Company's
corporate offices (or at such other location as may be agreed to by Company and
Agent) at such time as may be agreed to by Company and Agent.
5.6 COMPLIANCE WITH LAWS, ETC. Company shall comply, and shall cause each of its
Subsidiaries and all other Persons on or occupying any Facilities to comply,
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority (including all Environmental Laws), noncompliance
with which could reasonably be expected to cause, individually or in the
aggregate, a Material Adverse Effect.
Without limitation of the foregoing:
(i) Company and each of its Subsidiaries, and each Healthcare
Facility, has obtained and will continue to maintain all material
licenses, consents, registrations, certifications, certificates of need
and other approvals or authorizations from, and has made all material
filings, reports submissions and registrations to or with
(collectively, the "APPROVALS"), all governmental authorities
(including, without limitation, the U.S. Department of Health and Human
Services, Health Care Financing Administration and applicable State and
local authorities) necessary to be obtained to conduct its business as
currently conducted and to operate the Healthcare Facilities. No such
Approvals have or threaten to be expired or to be revoked, terminated,
suspended, limited or amended and no proceedings for any such
revocation, termination, suspension, limitation or amendment, or
investigation, audit, or other action by any governmental authority
with respect to any such revocation, termination, suspension,
limitation or amendment, is pending or, to the best knowledge of
Company, threatened (each a "POTENTIAL REVOCATION").
(ii) Company, each of its Subsidiaries and each Healthcare
Facility is qualified and will continue to be qualified for
participation in any material federal or state programs for the funding
and administration of payments for rehabilitation therapy and related
services which relate to the business of Company, such Subsidiary or
such healthcare Facility (including, without limitation, Titles 18 and
19 of the Federal Social Security Act, commonly known as the Medicare
and Medicaid programs), and will maintain "provider" status within the
meaning of the regulations of the Health Care Financing Administration,
in each case to the extent such qualification or status is necessary or
applicable to the conduct of the business of Company or such Subsidiary
or the operation of such healthcare Facility. Company, each of its
Subsidiaries and each of the healthcare Facilities is in compliance and
will continue to be in compliance in all material respects with all
applicable laws, rules, regulations and orders (including, without
limitation all administrative, operating and financial or reimbursement
requirements established by all applicable governmental authorities)
with respect to the operation of the Healthcare Facilities and the
provision of rehabilitation therapy and related services applicable to
it and the conduct of the business conducted by it.
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5.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; COMPANY'S ACTIONS
REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL CLAIMS AND
VIOLATIONS OF ENVIRONMENTAL LAWS.
A. ENVIRONMENTAL REVIEW AND INVESTIGATION. Company agrees that Agent
may, from time to time and in its reasonable discretion, (i) retain, at
Company's expense, an independent professional consultant to review any
environmental audits, investigations, analyses and reports relating to Hazardous
Materials prepared by or for Company and (ii) in the event (a) Agent reasonably
believes the Company has breached any representation, warranty or covenant
contained in Section 4.6, 4.13, 5.6 or 5.7 or that there has been a material
violation of Environmental Laws at any Facility or by Company or any of its
Subsidiaries at any other location or (b) an Event of Default has occurred and
is continuing, conduct its own investigation of any Facility; provided that, in
the case of any Facility no longer owned, leased, operated or used by Company or
any of its subsidiaries, Company shall only be obligated to use its best efforts
to obtain permission for Agent's professional consultant to conduct an
investigation of such Facility. For purposes of conducting such a review and/or
investigation, Company hereby grants to Agent and its agents, employees,
consultants and contractors the right to enter into or onto any Facilities
currently owned, leased, operated or used by Company or any of its Subsidiaries
and to perform such tests on such property (including taking samples of soil,
groundwater and suspected asbestos-containing materials) as are reasonably
necessary in connection therewith. Any such investigation of any Facility shall
be conducted, unless otherwise agreed to by Company and Agent, during normal
business hours and, to the extent reasonable practicable, shall be conducted so
as not to interfere with the ongoing operations at such Facility or to cause any
damage or loss to any property at such Facility. Company and Agent hereby
acknowledge and agree that any report of any investigation conducted at the
request of Agent pursuant to this Section 5.7A will be obtained and shall be
used by Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Agent agrees to deliver a copy
of any such report to Company with the understanding that Company acknowledges
and agrees that (x) it will indemnify and hold harmless Agent and each Lender
from any costs, losses or liabilities relating to Company's use of or reliance
on such report, (y) neither Agent nor any Lender makes any representation or
warranty with respect to such report, and (z) by delivering such report to
Company, neither Agent nor and Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
B. ENVIRONMENTAL DISCLOSURE. Company will deliver to Agent and Lenders:
(i) Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or
with respect to any Environmental Claim;
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(ii) Notice of Certain Releases, Remedial Actions, etc.
promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any
federal, state or local governmental or regulatory agency under any
applicable Environmental Laws, (b) any remedial action taken by company
or any other Person in response to (1) any Hazardous Materials
Activities the existence of which has a reasonable possibility of
resulting in one or more Environmental Claims having, individually or
in the aggregate, a Material Adverse Effect, or (2) any Environmental
Claims that, individually or in the aggregate, have a reasonable
possibility of resulting in a Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
Releases, etc. as soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility
of giving rise to a Material Adverse Effect, (b) any Release required
to be reported to any federal, state or local governmental or
regulatory agency, and (c) any request for information from any
governmental agency that suggests such agency is investigating whether
Company or any of its Subsidiaries may be potentially responsible for
any Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental
Impact. prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Company or any of
its Subsidiaries that could reasonably be expected to (1) expose
Company or any of its Subsidiaries to, or result in, Environmental
Claims that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or (2) affect the ability of
Company or any of its Subsidiaries to maintain in full force and effect
all material Governmental Authorizations required under any
Environmental Laws for their respective operations and (b) any proposed
action to be taken by Company or any of its Subsidiaries to modify
current operations in a manner that could reasonably be expected to
subject Company or any of its Subsidiaries to any material additional
obligations or requirements under any Environmental Laws.
(v) Other Information. with reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Agent in relation to any matters disclosed pursuant to
this Section 5.7.
C. COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) Remedial Actions Relating to Hazardous Materials
Activities. Company shall promptly undertake, and shall cause each of
its Subsidiaries promptly to undertake, any and all investigations,
studies, sampling, testing, abatement, cleanup, removal, remediation or
other response actions necessary to remove, remediate, clean up or
▇▇▇▇▇ any Hazardous Materials Activity on, under or about any Facility
that is in violation of any Environmental
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Laws or that presents a material risk of giving rise to an
Environmental Claim. In the event Company or any of its Subsidiaries
undertakes any such action with respect to any Hazardous Materials,
Company or such Subsidiary shall conduct and complete such action in
compliance with all applicable Environmental Laws and in accordance
with the policies, orders and directives of all federal, state and
local governmental authorities except when, and only to the extent
that, Company's or such Subsidiary's liability with respect to such
hazardous materials Activity is being contested in good faith by
Company or such Subsidiary.
(ii) Actions With Respect to Environmental Claims and
Violations of Environmental Laws. Company shall promptly take, and
shall cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any material violation of applicable
Environmental Laws by Company or its Subsidiaries and (ii) make an
appropriate response to any Environmental claim against Company or any
of its Subsidiaries and discharge any obligations it may have to any
Person thereunder.
5.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL DOCUMENTS
BY CERTAIN SUBSIDIARIES AND FUTURE SUBSIDIARIES.
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS. In the event that any Person becomes a Subsidiary of Company after
the date hereof, Company will promptly notify Agent of that fact and cause such
Subsidiary to execute and deliver to Agent counterparts of the Subsidiary
Guaranty, Subsidiary Pledge Agreement and Subsidiary Security Agreement and to
take all such further actions and execute all such further documents and
instruments as may be necessary or, in the opinion of Agent, desirable to create
in favor of Agent, for the benefit of Lenders, a valid and perfected First
Priority Lien on all of the personal and mixed property assets of such
Subsidiary described in the applicable forms of Collateral Documents.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Company shall
deliver to Agent, together with such Loan Documents, (i) certified copies of
such Subsidiary's Certificate or Articles of Incorporation, together with a good
standing certificate from the Secretary of State of the jurisdiction of its
incorporation and each other state in which such Person is qualified as a
foreign corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to Agent,
(ii) a copy of such Subsidiary's Bylaws, certified by its corporate secretary or
an assistant secretary as of a recent date prior to their delivery to Agent,
(iii) a certificate executed by the secretary or an assistant secretary of such
Subsidiary as to (a) the fact that the attached resolutions of the Board of
Directors of such Subsidiary approving and authorizing the execution, delivery
and performance of such Loan Documents are in full force and effect and have not
been modified or amended and (b) the incumbency and signatures of the officers
of such Subsidiary executing such Loan Documents, and (iv) a favorable opinion
of counsel to such Subsidiary, in form and substance satisfactory to Agent and
its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the
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due authorization, execution and delivery by such Subsidiary of such Loan
Documents, (c) the enforceability of such Loan Documents against such
Subsidiary, (d) such other matters (including matters relating to the creation
and perfection of Liens in any collateral pursuant to such Loan Documents) as
Agent may reasonably request, all of the foregoing to be satisfactory in form
and substance to Agent and its counsel.
C. COLLATERAL PERFECTION AND INFORMATION. The Company shall take all
action to ensure that the representation and warranties given in Section 4.1
shall remain true and correct at all times. The Company shall and shall cause
each of its Subsidiaries to execute and deliver all documents and instruments,
and take all other action that Agent or Requisite Lenders may request, such that
Agent, on behalf of Lenders, as security for the Obligations, shall at all times
have a First Priority Lien (subject to Liens permitted hereunder) on all
property and assets of the Company and each of the subsidiaries. If at any time
any information set forth on SCHEDULES 4.1D OR 4.1E shall become untrue, the
Company shall immediately send to the Agent replacement SCHEDULES 4.1D AND 4.1E
which shall be true and correct as of such date and which shall replace the
prior SCHEDULES 4.1D AND 4.1E from and after the date of receipt thereof by
Agent.
5.9 AFTER-ACQUIRED REAL PROPERTY. If Company or any of its Subsidiaries
purchases or otherwise acquires any interest in real property after the
Restatement Closing Date (including any interests arising under a lease), then
Company shall and shall cause its Subsidiaries to, concurrently with such
purchase or other acquisition, execute and deliver all documents and instruments
and take all other action that Agent or Requisite Lenders may request to grant
to Agent, on behalf of Lenders, as security for the Obligations, a First
Priority Lien (subject to liens permitted hereunder) on all such real property
interests; provided, that this Section 5.9 shall not be construed to permit any
transaction not otherwise permitted by the terms of this Agreement.
5.10 KEY MAN INSURANCE. The Company shall obtain, and maintain in full force and
effect until all Obligations hereunder have been repaid in full, a "key man"
life insurance policy, in the amount of $1,000,000 on ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
5.11 CHIEF FINANCIAL OFFICER. The Company agrees to use best efforts to retain a
chief financial officer by October 15, 1999.
SECTION 6. COMPANY's NEGATIVE COVENANTS
Company covenants and agrees that, until payment in full of
all of the Loans and other Obligations, unless Requisite Lenders shall otherwise
give prior written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1 INDEBTEDNESS. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
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(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by Section 6.4 and,
upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so
extinguished;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases;
provided that such Capital Leases are permitted under the terms of
Section 6.9;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any
wholly-owned Subsidiary of Company may become and remain liable with
respect to Indebtedness to Company or any other wholly-owned Subsidiary
of Company; provided that (a) all such intercompany Indebtedness shall
be evidenced by promissory notes, (b) all such intercompany
Indebtedness owed by Company to any of its Subsidiaries shall be
subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of the applicable promissory notes or
an intercompany subordination agreement, and (c) any payment by any
Subsidiary of Company under any guaranty of the Obligations shall
result in a pro tanto reduction of the amount of any intercompany
Indebtedness owed by such Subsidiary to Company or to any of its
Subsidiaries for whose benefit such payment is made; and
(v) Company and its Subsidiaries, as applicable, may remain
liable with respect to Indebtedness described in SCHEDULE 6.1 annexed
hereto; and
6.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statements or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in SCHEDULE 6.2 annexed hereto.
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B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of Section 6.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall so be secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
Section 6.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness neither Company
nor any of its Subsidiaries shall enter into any agreement (other than an
agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness) prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Except as provided herein, Company will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company.
6.3 INVESTMENTS; JOINT VENTURES. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments
in Cash Equivalents;
(ii) Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of
Company;
(iii) Company and its Subsidiaries may make intercompany loans
to the extent permitted under Section 6.1(iv);
(iv) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted by Section 6.8; and
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in SCHEDULE 6.3 annexed hereto.
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6.4 CONTINGENT OBLIGATIONS. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary
Guaranty; and
(ii) Company and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in SCHEDULE 6.4
annexed hereto.
6.5 RESTRICTED JUNIOR PAYMENTS. Except as specifically provided for in Section
2.4B(ii)(e), the Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any sum for
any Restricted Junior Payment.
6.6 FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO.
(i) Company shall not permit the ratio of (x) Consolidated
EBITDA to (y) Consolidated Interest Expense for any calendar month set
forth below to be less than the correlative ratio indicated:
Month Minimum
Ended Interest Coverage Ratio
----- -----------------------
October 1999 3.00:1.00
November 1999 2.80:1.00
December 1999 2.80:1.00
(ii) The Company shall not permit the ratio of (x)
Consolidated EBITDA to (y) Consolidated Interest Expense for any
calendar month during the year 2000 to be less than 3.00:1.00.
B. MAXIMUM LEVERAGE RATIO. Company shall not permit the ratio of (i)
Consolidated Total Debt to (ii) Consolidated EBITDA as of the last day of any
Fiscal Quarter ending during any of the periods set forth below to exceed the
correlative ratio indicated:
Quarter Ended Maximum Leverage Ratio
------------- ----------------------
December 31, 1999 4.30:1.00
March 31, 2000 4.00:1.00
June 30, 2000 3.80:1.00
September 30, 2000 3.60:1.00
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December 31, 2000 3.60:1.00
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C. MINIMUM CONSOLIDATED EBITDA.
(i) Company shall not permit Consolidated EBITDA for any month
set forth below to be less than the correlative amount indicated for
such month:
Minimum Consolidated
Month EBITDA
----- ------
October 1999 $430,000
November 1999 $385,000
December 1999 $382,000
(ii) Company shall not permit Consolidated EBITDA for any
Fiscal Year set forth below to be less than the correlative amount
indicated for such Fiscal Year:
Minimum Consolidated
Fiscal Year EBITDA
----------- ------
1999 $4,595,000
2000 $4,950,000
(iii) Company shall not permit Consolidated EBITDA for any
month set forth below to be less than the correlative amount indicated
for such month:
Minimum Consolidated
Month EBITDA
----- ------
January 2000 $408,000
February 2000 $408,000
March 2000 $447,000
April 2000 $388,000
May 2000 $427,000
June 2000 $427,000
July 2000 $388,000
August 2000 $447,000
September 2000 $388,000
October 2000 $427,000
November 2000 $407,000
December 2000 $388,000
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D. NET PATIENT SERVICE REVENUE/BAD DEBT COVERAGE. Company shall not
permit Bad Debt Expense (x) for any Fiscal Quarter to be more than 2.5% of Net
Patient Service Revenue and (y) for any Fiscal Year to be more than 2.0% of Net
Patient Service Revenues.
6.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS. Company
shall not, and shall not permit any of its Subsidiaries to, alter the corporate,
capital or legal structure of Company or any of its Subsidiaries, or enter into
any transaction of merger or consolidation, or liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease or
sub-lease (as lessor or sub-lessor), transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business,
property or assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or substantially all the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any Person or
any division or line of business of any Person, except;
(i) any Subsidiary of Company may be merged with or into
Company or any wholly-owned Subsidiary Guarantor, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed
of, in one transaction or a series of transactions, to Company or any
wholly-owned Subsidiary Guarantor; provided that, in the case of such a
merger, Company or such wholly-owned Subsidiary Guarantor shall be the
continuing or surviving corporation;
(ii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted under Section 6.8;
(iii) Company and its Subsidiaries may dispose of obsolete,
worn out or surplus property in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be, in
the reasonable judgment of the Agent, in an amount at least equal to
the fair market value thereof; and
(v) the Company may wind-up, and sell the assets of, the
Company's mobile diagnostic division.
6.8 CONSOLIDATED CAPITAL EXPENDITURES. Company shall not, and shall not permit
its Subsidiaries to, make or incur Consolidated Capital Expenditures; provided,
that Company and its Subsidiaries may make Consolidated Capital Expenditures in
an aggregate amount of $10,000 per calendar month; provided further, however,
that notwithstanding the foregoing limitation, the Company and its Subsidiaries
may make Consolidated Capital Expenditures in excess of $10,000 per month
utilizing the Company's portion, if any, of Consolidated Excess Cash Flow
properly allocated to the Company under Section 2.4B(ii)(e)(III) for the
immediately preceding month;
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provided, further, however, that any remaining Excess Cash Flow may be used to
make Capital Expenditures in the next succeeding month, so long as there is
sufficient Excess Cash Flow for such month to make such Capital Expenditures.
6.9 RESTRICTION ON LEASES. Company shall not, and shall not permit any of its
Subsidiaries to, become liable in any way, whether directly or by assignment or
as a guarantor or other surety, for the obligations of the lessee under any
lease, whether an Operating Lease or a Capital Lease (other than intercompany
leases between Company and its wholly-owned Subsidiaries), unless, immediately
after giving effect to the incurrence of liability with respect to such lease,
the Consolidated Rental Payments at the time in effect during the then current
Fiscal Year or any future period of 12 consecutive calendar months shall not
exceed the corresponding amount set forth below opposite such Fiscal Year:
MAXIMUM CONSOLIDATED
FISCAL YEAR RENTAL PAYMENTS
----------- ---------------
1999 $4,200,000
2000 $4,620,000
6.10 SALES AND LEASE-BACKS. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as
a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which Company or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Company or any of its Subsidiaries) or (ii) which Company or
any of its Subsidiaries intends to use for substantially the same purpose as any
other property which has been or is to be sold or transferred by Company or any
of its Subsidiaries to any Person (other than Company or any of its
Subsidiaries) in connection with such lease.
6.11 SALE OR DISCOUNT OF RECEIVABLES. Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable.
6.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange
of any property or the rendering of any service) with any holder of 5% or more
of any class of equity Securities of Company or with an Affiliate of Company or
of any such holder, on terms that are less favorable to Company or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such a holder or Affiliate; provided that the foregoing
restriction shall not apply to (i) any transaction between Company and any of
its wholly-owned Subsidiaries or between any of its wholly-owned Subsidiaries or
(ii) reasonable and customary fees paid to members of the Boards of Directors of
Company and its Subsidiaries.
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6.13 DISPOSAL OF SUBSIDIARY STOCK. Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify directors if
required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Company, another Subsidiary of
Company, or to qualified directors if required by applicable law.
6.14 CONDUCT OF BUSINESS. From and after the Restatement Closing Date, Company
shall not, and shall not permit any of its Subsidiaries to, engage in any
business other than the businesses engaged in by Company and its Subsidiaries on
the Restatement Closing Date and similar or related businesses.
6.15 AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS. Company
shall not, and shall not permit any of its Subsidiaries to, (A) amend or
otherwise change the terms of the Subordination Agreement or of any Subordinated
Indebtedness, or make any payment consistent with an amendment thereof or change
thereto, if the effect of such amendment or change is to increase the interest
rate on such Subordinated Indebtedness, change (to earlier dates) any dates upon
which payments of principal or interest are due thereon, change any event of
default or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or (B)
if the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to Company or Lenders.
6.16 FISCAL YEAR. Company shall not change its Fiscal Year-end from December 31.
6.17 CASH MANAGEMENT SYSTEM.
A. MAINTENANCE OF CASH MANAGEMENT SYSTEM. The Company and each Loan
Party shall, and shall cause its Subsidiaries to, maintain and strictly comply
with all terms of the Cash Management System in strict accordance with the terms
thereof attached to the Company Security Agreement as Annex A.
B. NO OTHER ACCOUNTS. No Loan Party nor any of its Subsidiaries
(including, without limitation, the KRS Partnerships) shall own, open or
maintain any Deposit Account other than a Deposit Account described on Annex A
to the Company Security Agreement.
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C. [INTENTIONALLY OMITTED]
D. CASH MANAGEMENT SYSTEM. Company and each Loan Party agrees to
perform and comply and to cause each of its respective Subsidiaries to perform
and comply with the terms and provisions of the Cash Management System,
including, without limitation the following covenants and agreements:
(i) All funds on deposit in the Deposit Accounts of each Loan
Party and each of its Subsidiaries shall be transferred on a daily
basis in accordance with the Cash Management System.
(ii) No Loan Party may withdraw or pay any funds from any
Deposit Account except as provided in the Cash Management System.
(iii) Any receipts received or held by each Loan Party and any
of their respective officers, employees, agent or other Persons acting
for or in concert with any Loan Party to make collections for or on
behalf of any Loan Party ("COLLECTING AGENTS"), shall be held in trust
for Agent as Collateral.
6.18 COLLECTIONS AND DISBURSEMENTS
A. MINIMUM COLLECTIONS. Collections of the Company and its Subsidiaries
for each successive four-week period ending on a Friday shall be no less than
$2,100,000.
B. MAXIMUM DISBURSEMENTS. Cash disbursements of the Company and its
Subsidiaries for each successive four-week period ending on Friday, shall not
exceed the sum of collections for such period and the amount of cash balances on
the first day of such period. Except as provided in the immediately prior
sentence, without the prior consent of Lenders, Company and each of its
Subsidiaries agrees that it shall not pay, or commit to pay, or undertake any
transaction which would result in or require the payment of, any cash
disbursement that would be unusual or extraordinary or outside the ordinary
course of business, such determination to be made by reference both to the
business of the Company and its Subsidiaries as presently conducted and by
reference to the business plan, budget and projections delivered pursuant to
Section 5.1(xiii).
C. OUTPATIENT CLINICS. The Company and its Subsidiaries shall not spend
or otherwise incur expenses with respect to the funding, creation or acquisition
of new outpatient clinics, centers or facilities in excess of $50,000 per year
starting in 2000.
D. MINIMUM INVOICES. Amounts invoiced by Company and its Subsidiaries
on or prior to the tenth day of each month for services rendered during the
prior month shall be no less than $3,000,000.
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SECTION 7. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE. Failure by Company to pay any installment
of principal of any Loan when due, whether at stated maturity, by acceleration,
by notice of voluntary prepayment, by mandatory prepayment or otherwise; or
failure by Company to pay any interest on any Loan or any fee or any other
amount due under this Agreement within two days after the date due; or
7.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or of any of its Subsidiaries to pay
when due any principal of or interest on or any other amount payable in
respect of one or more items of Indebtedness (other than Indebtedness
referred to in Section 7.1) or Contingent Obligations in an individual
principal amount of $250,000 or more or with an aggregate principal
amount of $250,000 or more, in each case beyond the end of any grace
period provided therefor; or (ii) breach or default by Company or any
of its Subsidiaries with respect to any other material term of (a) one
or more items of Indebtedness or Contingent Obligations in the
individual or aggregate principal amounts referred to in clause (i)
above or (b) any loan agreement, mortgage, indenture or other agreement
relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the
holder or holders of that Indebtedness or Contingent Obligation(s) (or
a trustee on behalf of such holder or holders) to cause, that
Indebtedness of Contingent Obligation(s) to become or be declared due
and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving
of notice, lapse of time, both, or otherwise); or
7.3 BREACH OF CERTAIN COVENANTS. Failure of Company to perform or comply with
any term or condition contained in Section 2.5 or 5.2 or Section 6 of this
Agreement; or
7.4 BREACH OF WARRANTY. Any representation, warranty, certification or other
statement made by Company or any of its Subsidiaries in any Loan Document or in
any statement or certificate at any time given by Company or any of its
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS. Any Loan Party shall default in the
performance of or compliance with any term contained in this Agreement or any of
the other Loan Documents, other than any such term referred to in any other
Section of this Section 7, and such default shall not have been remedied or
waived within 10 days after the earlier of (i) an officer of Company or such
Loan Party becoming aware of such default or (ii) receipt by Company and such
Loan Party of notice from Agent or any Lender of such default; or
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7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) A court having
jurisdiction in the premises shall enter a decree or order for relief in respect
of Company or any of its Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable federal or state law;
or (ii) an involuntary case shall be commenced against Company or any of its
Subsidiaries under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Company or any of its Subsidiaries, or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
Company or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Company or any of
its Subsidiaries; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i)Company or any of its
Subsidiaries shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
Company or any of its Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Company or any of its Subsidiaries shall be unable, or shall
fail generally, or shall admit in writing its inability, to pay its debts as
such debts become due; or the Board of Directors of company of any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
7.8 JUDGMENTS AND ATTACHMENTS. Any money judgment, order, award, decree, writ or
warrant of attachment or similar order or process involving (i) in any
individual case an amount in excess of $250,000 or (ii) in the aggregate at any
time an amount in excess of $250,000 (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against Company or any of its
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 15 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or
7.9 DISSOLUTION. Any order, judgment or decree shall be entered against Company
or any of its Subsidiaries for the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
7.10 EMPLOYEE BENEFIT PLANS. There shall occur one or more ERISA Events which
individually or in the aggregate results in or might reasonably be expected to
result in liability of
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Company, any of its Subsidiaries or any of their respective ERISA Affiliates in
excess of $150,000 during the term of this Agreement; or there shall exist an
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), which exceeds $150,000; or
7.11 MATERIAL ADVERSE EFFECT. Any event or change shall occur that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect; or
7.12 CHANGE IN CONTROL. (i) Company shall cease to own, directly or indirectly,
beneficially or of record at least that percentage of the Capital Stock of its
Subsidiaries that is owned by Company or its Subsidiaries on the Restatement
Closing Date; or (ii) any Person or any two or more Persons acting in concert
(other than the ▇▇▇▇▇▇ Parties) shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act), directly or indirectly, of Securities of Company (or other
Securities convertible into such Securities) representing 30% or more of the
combined voting power of all Securities of Company entitled to vote in the
election of directors (other than Securities having such power only by reason of
the happening of a contingency unless such contingency occurs); or (iii) on or
after the Restatement Closing Date, the Board of Directors of Company shall not
consist of a majority of Continuing Directors; or (iv) ▇▇▇▇▇▇ ▇▇▇▇▇▇ shall cease
for any reason whatsoever, to be an executive officer of Company and
continuously perform his duties as of the Restatement Closing Date as such
officer, unless a successor satisfactory to Agent and Requisite Lenders shall
have replaced him in such capacity within 30 days after such cessation; or
7.13 INVALIDITY OF SUBSIDIARY GUARANTY; FAILURE OF SECURITY; REPUDIATION OF
OBLIGATIONS. At any time after the execution and delivery thereof; (A) the
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall, as to one or more Loan Parties, in whole or in part (i)
cease to be in full force and effect (other than in accordance with its terms)
or (ii) be declared to be null and void, (B) any Collateral Document shall, as
to one or more Loan Parties, in whole or in part, (i) cease to be in full force
and effect (other than by reason of a release of Collateral thereunder in
accordance with the terms hereof or thereof, the satisfaction in full of the
Obligations or any other termination of such Collateral Document in accordance
with the terms hereof or thereof) or (ii) be declared null and void, or (C)
Agent shall not have or shall cease to have a valid and perfected First Priority
Lien in any Collateral purported to be covered thereby, having a fair market
value in the reasonable judgment of Agent, individually or in the aggregate,
exceeding $100,000, in each case for any reason other than the failure of Agent
or any Lender to take any action within its control, or (D) any Loan Party shall
contest the validity or enforceability of any Loan Document in writing or deny
in writing that it has any further liability under any Loan Document to which it
is a party; or
7.14 LOSS OF APPROVAL. Any Approval shall have expired, or been revoked or
terminated, suspended, limited or been amended in any manner, or Company or any
of its Subsidiaries or any of their respective Healthcare Facilities shall cease
to be qualified to participate in any Federal or
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state program for the funding and administration of payments for rehabilitation
therapy and related services which relate to the business of Company or any of
its Subsidiaries or any of their respective Healthcare Facilities or Company or
any of its Subsidiaries or any of their respective Facilities shall become the
subject of any investigation or audit by any governmental authority adverse to
Company or any of its Subsidiaries or any of the respective Facilities, which,
in any such case, whether individually or in the aggregate with any other such
expirations, revocations, terminations, suspensions, limitations, amendments,
cessation of qualification, investigations or audits, could reasonably be
expected to have a Material Adverse Effect; or Company or any of its
Subsidiaries or any of their respective Healthcare Facilities shall have
received any notice of overpayment;
7.15 CASH MANAGEMENT SYSTEM. Failure by any Loan Party to comply with any term
or provision of the Cash Management System.
THEN (i) upon the occurrence of any Event of Default described in Section 7.6 or
7.7, each of (a) the unpaid principal amount of and any accrued interest on the
Loans and (b) all other Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by Company, and (ii) upon the
occurrence and during the continuation of any other Event of Default, Agent
shall, upon the written request or with the written consent of Requisite
Lenders, by written notice to Company, declare all or any portion of the amounts
described in clauses (a) and (b) above to be, and the same shall forthwith
become, immediately due and payable, and the obligation of each Lender to make
any Loan shall thereupon terminate.
SECTION 8. AGENT
8.1 APPOINTMENT.
A. APPOINTMENT OF AGENTS. Each Lender hereby appoints Cerberus as Agent
and The Chase Manhattan Bank as Collateral Agent hereunder and under the other
Loan Documents as successor to IBJS and each Lender hereby authorizes Agent,
Collateral Agent and any other Lender Agents to execute and deliver the Loan
Documents and to act as its agent in accordance with the terms of this Agreement
and the other Loan Documents. Agent, Collateral Agent and any other Lender Agent
agree to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. The provisions of this Section 8 are solely
for the benefit of Lender Agents and Lenders. The Company shall have no rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, Lender Agents shall act solely as an
agent of Lenders and do not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Company or any
of its Subsidiaries.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. Lender Agents shall
have the right at any time and from time to time to appoint any Person as a
separate trustee, co-trustee, collateral agent or collateral co-agent or
sub-agent (any such additional Person being referred to herein individually as a
"SUPPLEMENTAL COLLATERAL AGENT" and collectively as "SUPPLEMENTAL
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COLLATERAL AGENTS") to have any of the rights or perform any of the duties of
Agent hereunder or under any other Loan Document.
8.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Lender Agent to take such action on such Lender's behalf and to exercise such
powers, rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to Lender Agent by the terms hereof and
thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. Lender Agents shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents. Lender Agents may exercise such powers, rights and remedies and
perform such duties by or through its agents or employees. No Lender Agent shall
have, by reason of this Agreement or any of the other Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Lender Agent any obligations in
respect of this Agreement or any of the other Loan Documents except as expressly
set forth herein or therein.
B. COLLATERAL AGENT. Notwithstanding any other term of this Agreement
or Loan Document to the contrary, but subject to this Section 8.2, the
Collateral Agent shall not exercise any discretion under or make any decision to
be made under any Loan Document. If a Loan Document requires the Collateral
Agent to determine whether to take an action or refrain from taking an action,
the Collateral Agent shall (i) notify Agent in writing in advance thereof and
(ii) follow Agent's instructions with respect thereto (unless otherwise directed
by the Required Lenders pursuant to Section 8.6). The Collateral Agent agrees to
keep the Agent informed as to (i) any material change in the Collateral or in
the security interests therein or the perfection thereof of which a Responsible
Officer of the Collateral Agent becomes aware, (ii) any Event of Default or
Potential Event of Default of which a Responsible Officer of the Collateral
Agent becomes aware and (iii) any other matter or information reasonably
requested by the Agent within the Collateral Agent's actual knowledge, provided,
however, the Collateral Agent shall have no duty or responsibility, either
initially or continually, to make any investigation, evaluation or appraisal
regarding the Collateral, the Loans, any Loan Document or Collateral Document,
the Company or any Subsidiary or to monitor the Company's, any Subsidiary's or
any other party's performance or non-performance on any Loan Document or
Collateral Document.
C. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Lender Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Lender Agent to Lenders or by or on
behalf of Company to Agent or any Lender in connection with the Loan Documents
and the transactions contemplated thereby or for the financial
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condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall any Lender Agent be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, no Lender Agent
shall have any liability arising from confirmations of the amount of outstanding
Loans.
D. EXCULPATORY PROVISIONS.
(a) No Lender Agent nor any of its officers, directors,
employees or agents shall be liable to Lenders for any action taken or
omitted by any Lender Agent under or in connection with any of the Loan
Documents except to the extent caused by such Lender Agent's gross
negligence or willful misconduct. The Agent and the Collateral Agent
may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct or any such agents or
attorneys-in-fact selected by it except to the extent such selection is
the result of gross negligence or willful misconduct of the Agent or
the Collateral Agent, as the case may be.
(b) Each Lender Agent shall be entitled to refrain from any
act or the taking of any action (including the failure to take an
action) in connection with this Agreement or any of the other Loan
Documents or from the exercise of any power, discretion or authority
vested in it hereunder or thereunder (i) unless and until with respect
to the Agent, Agent shall have received instructions in respect thereof
from Requisite Lenders (or such other Lenders as may be required to
give such instructions under Section 9.6) and with respect to the
Collateral Agent, the Collateral Agent shall have received instructions
in respect thereof from the Agent and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case
may be), each Lender Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion
or authority, in accordance with such instructions or (ii) if such
instruction is, in the Agent's or the Collateral Agent's judgement,
contrary to any applicable provisions of law, or any Loan Document.
Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent or the Collateral Agent as a result
of the Agent or Collateral Agent acting or refraining from acting under
this Agreement or any of the Loan Documents in accordance with the
instructions of the Lenders, Required Lenders or Agent (as applicable).
Without prejudice to the generality of the foregoing, (i) each Lender
Agent shall be entitled to rely, and shall be fully protected in
relying, upon any communication, instrument or document believed by it
to be genuine and correct and to have been signed or sent by the proper
person or persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys
for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against any Lender Agent as a result of such
Lender Agent acting or (where
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so instructed) refraining from acting under this Agreement or any of
the other Loan Documents in accordance with the instructions of
Requisite Lenders (or such other Lenders as may be required to give
such instructions under Section 9.6) or in accordance with the
instructions of Agent.
(c) The Agent and the Collateral Agent shall not be liable for
any allocation or distribution of payments made by it to Lenders in
good faith pursuant hereto, and if any such allocation or distribution
is subsequently determined to have been made in error, the sole
recourse of any Lender to whom payment was due but not made shall be to
recover from the other Lenders any payment in excess of the amount to
which such other Lenders are determined to have been entitled. Each
other Lender agrees to pay over such excess.
(d) Except for liability resulting from the Agent's or the
Collateral Agent's own recklessness or willful misconduct, the Lenders
hereby exonerate and release the Agent and Collateral Agent now and
hereafter from any existing or future obligation or liability to the
Lenders, express or implied, for any (i) loss of, depreciation of, or
failure to realize upon, the Collateral; (ii) failure to collect or
receive payment of sums owing to the Loan; (iii) mistake, omission or
error in judgement in (A) passing upon, making or accepting any Loan
Documents in respect of the Collateral, or (B) making or failing to
make any examinations, appraisals, audits or reviews of the affairs of
the Borrower and its Affiliates and the Collateral; or (iv) any other
action taken or omitted to be taken by it hereunder. IN NO EVENT SHALL
THE AGENT OR COLLATERAL AGENT BE OR BECOME LIABLE UNDER THIS AGREEMENT
OR IN RESPECT OF ANY ACT, OMISSION OR EVENT RELATING TO THE SUBJECT
MATTER HEREOF, ON ANY THEORY OF LIABILITY, FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES.
(e) As to any matters not expressly provided for by this
Agreement or the Loan Documents, the Agent and the Collateral Agent
shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by the
Lenders, Required Lenders or Agent, as applicable, and such
instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders.
(f) Neither Lender Agent shall have any duty (A) to see to any
recording, filing, or depositing of this Agreement, any Loan Document
or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see to the
maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance or (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of
any kind owing with respect to, assessed or levied against, any part of
the Collateral.
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E. DEFAULT NOTICES; ACTION UPON DEFAULT. Neither the Agent nor the
Collateral Agent shall be deemed to have knowledge of the occurrence of an Event
of Default unless the Agent or Collateral Agent (as applicable) has received a
written notice of such Event of Default from a Buyer or from a Loan Party.
F. LENDER AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, any Lender Agent in its individual capacity as a
Lender hereunder. With respect to its participation in the Loans, each Lender
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
having an interest in the Loans in its individual capacity. Each Lender Agent
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of banking, trust, financial advisory or other business with Company
or any of its Affiliates as if it were not performing the duties specified
herein, and may accept fees and other consideration from Company for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
8.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS. Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans hereunder and that
it has made and shall continue to make its own appraisal of the creditworthiness
of Company and its Subsidiaries. No Lender Agent shall have any duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender 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, and no Lender Agent shall have any responsibility with respect to
the accuracy of or the completeness of any information provided to Lenders.
8.4 RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify each Lender Agent, to the extent that such Lender
Agent shall not have been reimbursed by Company, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against Lender Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Lender Agent in any way relating to or arising out of this Agreement
or the other Loan Documents; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Lender Agent's
gross negligence or willful misconduct. If any indemnity furnished to Lender
Agent for any purpose shall, in the opinion of Agent, be insufficient or become
impaired, such Lender Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
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8.5 SUCCESSOR AGENT. Any Lender Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and Company, and any Lender Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Company and Lender Agents and signed by
Requisite Lenders; provided however, no Collateral Agent may resign or be
removed unless and until a successor has been appointed and accepts as successor
Collateral Agent and becomes party to the Collateral Documents. Unless a
successor Collateral Agent shall have been appointed and have accepted
appointment within 60 days after the giving of such notice of resignation, the
resigning Collateral Agent may petition any court of competent jurisdiction for
the appointment of a successor collateral agent. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a one or more successor Lender
Agents. Upon the acceptance of any appointment as Lender Agent hereunder by a
successor Lender Agent, that successor Lender Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Lender Agent and the retiring or removed Lender Agent shall
be discharged from its duties and obligations under this Agreement. After any
retiring or removed Lender Agent's resignation or removal hereunder as Lender
Agent, the provisions of this Section 8 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Lender Agent under this
Agreement.
8.6 COLLATERAL DOCUMENTS AND GUARANTIES. Each Lender hereby further authorizes
Agent and Collateral Agent, on behalf of and for the benefit of Lenders, to
enter into each Collateral Document as secured party and to be the agents for
and representative of Lenders under the Subsidiary Guaranty, and each Lender
agrees to be bound by the terms of each Collateral Document and the Subsidiary
Guaranty; provided that Agent and Collateral Agent shall not (i) enter into or
consent to any material amendment, modification, termination or waiver of any
provision contained in any Collateral Document or the Subsidiary Guaranty or
(ii) release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of Requisite Lenders (or, if required
pursuant to Section 9.6, all Lenders) or the Agent (as applicable); provided
further, however, that, without further written consent or authorization from
Lenders, Agent may execute any documents or instruments necessary to (a) 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 to which Requisite
Lenders or the Agent (as applicable) have otherwise consented or (b) release any
Subsidiary Guarantor from the Subsidiary Guaranty if all of the capital stock of
such Subsidiary Guarantor is sold to any Person (other than an Affiliate of
Company) pursuant to a sale or other disposition permitted hereunder or to which
Requisite Lenders or the Agent (as applicable) have otherwise consented.
Anything contained in any of the Loan Documents to the contrary notwithstanding,
Company, the Loan Parties, Agent, Collateral Agent and each Lender hereby agree
that (X) no Lender shall have any right individually to realize upon any of the
Collateral under any Collateral Document or to enforce the Subsidiary Guaranty,
it being understood and agreed that all powers, rights and remedies under the
Collateral Documents and the Subsidiary Guaranty may be exercised solely by
Agent and/or Collateral Agent for the benefit of Lenders in accordance with the
terms thereof, and (Y) in the event of a foreclosure by Agent or Collateral
Agent on any of the Collateral
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pursuant to a public or private sale, Agent or any Lender may be the purchaser
of any or all of such Collateral at any such sale and Agent, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing) and Collateral Agent, as agent for Agent (as applicable) shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such public
sale, to use and apply any of the Obligations as a credit on account of the
purchase price for any collateral payable by agent at such sale.
8.7 APPLICATION OF PROCEEDS. If, following the occurrence of an Event of
Default, any Lender Agent receives any moneys, proceeds or other amounts
("COLLATERAL PROCEEDS") paid to it in respect of the Collateral or pursuant to
the Loan Documents, whether pursuant to enforcement proceedings with respect to
the Collateral or otherwise, all such Collateral Proceeds and all other payments
received from or for the account of the Company or any Loan Party shall be
applied first to the payment of Expenses incurred by Lender Agents and any other
sums due to the Agent or Collateral Agent or any other Lender Agent pursuant to
this Agreement, or any Loan Document, and then shall be distributed to the
Lenders, in the following order, unless such Collateral Proceeds or other
payments are required to be otherwise applied by agreement, or applicable law:
(a) to unpaid Expenses due to the Lenders; (b) to accrued interest on the Loans;
(c) to the unpaid principal amount of the Loans; and (d) to all other
Obligations.
SECTION 9. MISCELLANEOUS
9.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
A. GENERAL. Subject to Section 9.1B, each Lender shall have the right
at any time to (i) sell, assign or transfer to any Eligible Assignee, or (ii)
sell participations to any Person in, all or any part of the Loan 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 Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities law of any state. Except as otherwise
provided in this section 9, no Lender shall, as between Company and such Lender,
be relieved of any of its obligations hereunder as a result of any sale,
assignment or transfer of, or any granting of participations in, all or any part
of the Loan or 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 to another Lender, or to
an Affiliate of the assigning Lender or another Lender, with the giving
of notice to Company and Agent or (b) be assigned in an aggregate
amount of not less than $3,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Loan and other Obligations of
the assigning Lender) to any other Eligible Assignee with the consent
of Agent (which consent shall
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not be unreasonably withheld or delayed provided that on the date of
such assignment if such other lender or Affiliate of the assigning
Lender is a non-U.S. Lender, it shall deliver evidence of exemption
from United States federal income tax withholding). To the extent of
any such assignment in accordance with either clause (a) or (b) above,
the assigning Lender shall be relieved of its obligations with respect
to its Loan or other obligations or the portion thereof so assigned.
The parties to each such assignment shall execute and deliver to the
Agent, for its acceptance an Assignment Agreement, together with a
processing fee of $3,000 and such forms, certificates or other
evidence, if any, with respect to United States federal income tax
withholding matters as the assignee under such Assignment Agreement may
be required to deliver to Agent pursuant to Section 2.6B(iii)(a). Upon
such execution, delivery and acceptance from and after the effective
date specified in such Assignment Agreement, (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 Agreement, 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 Agreement, relinquish its rights (other than any
rights which survive the termination of this Agreement under Section
9.9B) and be released from its obligations under this Agreement (and,
in the case of an Assignment Agreement 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). The assigning
Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its Note to Agent for
cancellation, and thereupon new Notes shall be issued to the assignee
and/or to the assigning Lender, substantially in the form of EXHIBIT
2.1B annexed hereto and with appropriate insertions, to reflect the
outstanding Loans of the assignee and/or the assigning Lender.
(ii) Acceptance by Agent. Upon its receipt of an Assignment
Agreement executed by an assigning Lender and an assignee representing
that it is an Eligible Assignee, together with the processing fee
referred to in Section 9.1B(i) and any forms, certificates or other
evidence with respect to United States federal income tax withholding
matters that such assignee may be required to deliver to Agent pursuant
to Section 2.6B(iii)(a), Agent shall, if Agent has consented to the
assignment evidenced thereby (to the extent such consent is required
pursuant to Section 9.1B(i)), (a) accept such Assignment Agreement by
executing a counterpart thereof as provided therein (which acceptance
shall evidence any required consent of Agent to such assignment) and
(b) give prompt notice thereof to Company. Agent shall maintain a copy
of each Assignment Agreement delivered to and accepted by it as
provided in this Section 9.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other 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 date
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of any Loan allocated to such participation or (ii) a reduction of the principal
amount of or the rate of interest payable on any Loan allocated to such
participation, and all amounts payable by Company hereunder (including amounts
payable to such Lender, pursuant to Section 2.6) shall be determined as if such
Lender had not sold such participation. Company and each Lender hereby
acknowledge and agree that, solely for purposes of Sections 9.4 and 9.5, (a) any
participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments
and participations permitted under the foregoing provisions of this Section 9.1,
any Lender may assign and pledge all or any portion of its Loan, 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 Company 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 may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to Section 9.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loan; and (iii) that it will
make its Loan for its own account in the ordinary course of its business and
without a view to distribution of such Loan within the meaning of the Securities
Act or the Exchange Act or other federal securities laws (it being understood
that, subject to the provisions of this Section 9.1, the disposition of such
Loan or any interests therein shall at all times remain within it exclusive
control). Each Lender that becomes a party hereto pursuant to an Assignment
Agreement shall be deemed to agree that the representations and warranties of
such Lender contained in Section 5 of such Assignment Agreement are incorporated
by this reference.
9.2 EXPENSES. Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto incurred by the Lender Agents
or any Lender; (ii) all costs of furnishing all opinions by counsel for Company
(including any opinions requested by Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) the reasonable
fees, expenses and disbursements of all counsel to Lender Agents (including any
local counsel and allocated costs of internal counsel) in connection with the
negotiation, preparation,
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execution and administration of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and any other documents or matters
requested by Company; (iv) all the actual costs and expenses of creating and
perfecting Liens in favor of Lender Agents on behalf of Lenders pursuant to any
Collateral Document, including filing and recording fees, expenses and taxes,
stamp or documentary taxes, search fees, title insurance premiums, and
reasonable fees, expense and disbursements of counsel to Agent and of counsel
providing any opinions that any Lender Agent or Requisite Lenders may request in
respect of the Collateral Documents or the Liens created pursuant thereto; (v)
all the actual costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any auditors, accountants or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
any Lender Agent or its counsel) of examining the books, records and accounts of
the Company and/or its Subsidiaries and of obtaining and reviewing any
appraisals, environmental audits or reports and any audits or reports with
respect to accounts receivable of Company and its Subsidiaries, in each case, as
provided for hereunder; (vi) all the actual costs and reasonable expenses in
respect of the custody or preservation of any of the Collateral and the
maintenance of collateral accounts (including without limitation, custodial fees
and fees of banks and/or other financial institutions for maintaining the
Pledged Accounts); (vii) all other actual and reasonable costs and expenses
incurred by Lender Agents in connection with the negotiation, preparation and
execution of the Loan Documents and any consents, amendments, waivers or other
modifications thereto and the transactions contemplated thereby; and (viii)
after the occurrence of an Event of Default or a Potential Event of Default, all
costs and expenses, including attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by Lender Agents and Lenders
in enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents by reason of such Event of
Default or Potential 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 reorganization, insolvency or
bankruptcy proceedings, including post-petition expenses relating in any way to
the administration, monitoring or any other aspect of any bankruptcy case (the
foregoing all collectively referred to as "EXPENSES").
9.3 INDEMNITY. In addition to the payment of expenses pursuant to Section 9.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnities' selection of counsel),
indemnify, pay and hold harmless Agent, Collateral Agent and Lenders, and the
officers, directors, employees, agents and affiliates of Agent, Collateral Agent
and Lenders (collectively called the "INDEMNITEES"), from and against any and
all Indemnified Liabilities (as hereinafter defined); provided that Company
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any
and all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments,
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suits, claims (including Environmental Claims), costs (including the costs of
any investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up or
▇▇▇▇▇ any Hazardous Materials Activity), expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for Indemnitees including without limitation in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Loan Documents or the transactions contemplated hereby or thereby
(including Lenders' agreement to make or maintain the Loans hereunder or the use
or intended use of the proceeds thereof, or any enforcement of any of the Loan
Documents (including any sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Subsidiary Guaranty), (ii) the
statements contained in the commitment letter delivered by any Lender to Company
with respect thereto, or (iii) any Environmental Claim or any Hazardous
Materials Activity relating to or arising from, directly or indirectly, any past
or present activity, operation, land ownership, or practice of Company or any of
its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this Section 9.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
9.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS. In addition to any rights
now or hereafter granted under applicable law and not by way of limitation of
any such rights, upon the occurrence of any Event of Default each Lender is
hereby authorized by Company at any time or from time to time, without notice to
Company or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and to apply any and all deposits (general or
special, including Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender to or for the credit or
the account of Company against and on account of the obligations and liabilities
of Company to that Lender under this Agreement and the other Loan Documents,
including all claims of any nature or description arising our of or connected
with this Agreement or any other Loan Document, irrespective of whether or not
(i) that Lender shall have made any demand hereunder or (ii) the principal of or
the interest on the Loans or any other amounts due hereunder shall have become
due and payable pursuant to Section 7 and although said obligations and
liabilities, or any of them, may be contingent or unmatured. Company hereby
further grants to Agent and each Lender a security interest in all deposits and
accounts maintained with Agent or such Lender as security for the Obligations.
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9.5 RATABLE SHARING. Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment (other than a voluntary prepayment of Loans
made and applied in accordance with the terms of this Agreement), by realization
upon security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to that Lender hereunder or under the other Loan
Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Agent and each other Lender of
the receipt of such payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
9.6 AMENDMENTS AND WAIVERS. No amendment, modification, termination or waiver of
any provision of this Agreement or of the Notes, and no consent to any departure
by Company therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: reduces the principal amount
of any of the Loans; changes in any manner the definition of "Pro Rata Share" or
the definition of "Requisite Lenders"; changes in any manner any provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of all Lenders; postpones the scheduled final maturity date (but not
the date of any scheduled installment of principal) of any of the Loans;
postpones the date on which any interest or any fees are payable; decreases the
interest rate borne by any of the Loans (other than any waiver of any increase
in the interest rate applicable to any of the Loans pursuant to Section 2.2C) or
the amount of any fees payable hereunder; releases any Lien granted in favor of
the Agent or Collateral Agent with respect to any material portion of the
Collateral or releases any material Subsidiary Guarantor from its obligations
under the Subsidiary Guaranty, in each case other than in accordance with the
terms of the Loan Documents; or changes in any manner the provisions contained
in Section 7.1 or this Section 9.6 shall be effective only if evidenced by a
writing signed by or on behalf of all Lenders. In addition, (i) any amendment,
modification, termination or waiver of any of the provisions contained in
Section 3 shall be effective only if evidenced by a writing signed by or on
behalf of Agent, Collateral Agent and ▇▇▇▇▇▇▇▇▇
-▇▇-
▇▇
▇▇▇▇▇▇▇, (▇▇) no amendment, modification, termination or waiver of any provision
of any Note shall be effective without the written concurrence of the Lender
which is the holder of that Note, and (iii) no amendment, modification,
termination or waiver of any provision of Section 8 or of any other provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of Agent and the Collateral Agent shall be effective without the
written concurrence of Agent and the Collateral Agent. Agent and the Collateral
Agent may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on Company
in any case shall entitle Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
of consent effected in accordance with this Section 9.6 shall be binding upon
each Lender at the time outstanding, each future Lender and, if signed by
Company, on Company.
9.7 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of an Event of Default or Potential Event of Default if
such action is taken or condition exists.
9.8 NOTICES. Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile (so long as such
notice sent by telefacsimile is followed within two Business Days by a notice
sent by another method specified hereunder) or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Agent and Collateral Agent shall not be
effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company, Agent and Collateral Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Agent and Collateral
Agent.
9.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in Sections 2.6, 9.2 and 9.3 and
the agreements of Lenders set forth in Sections 8.2C, 8.4 and 9.5 shall survive
the payment of the Loans and the termination of this Agreement.
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9.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or delay
on the part of Agent, Collateral Agent or any Lender in the exercise of any
power, right or privilege hereunder or under any other Loan Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. All rights and remedies existing under this
Agreement and the other Loan Documents are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
9.11 MARSHALLING: PAYMENTS SET ASIDE. Neither Agent, Collateral Agent nor any
Lender shall be under any obligation to marshal any assets in favor of Company
or any other party or against or in payment of any or all of the Obligations. To
the extent that Company makes a payment or payments to Agent, Collateral Agent
or Lenders (or to Agent or the Collateral Agent for the benefit of Lenders), or
Agent, Collateral Agent or Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.
9.12 SEVERABILITY. In case any provision in or obligation under this Agreement
or the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
9.13 OBLIGATIONS SEVERAL: INDEPENDENT NATURE OF LENDERS' RIGHTS. The obligations
of Lenders hereunder are several and no Lender shall be responsible for the
obligations of any other Lender hereunder. Nothing contained herein or in any
other Loan Document, and no action taken by Lenders pursuant hereto or thereto,
shall be deemed to constitute Lenders as a partnership, an association, a joint
venture or any other kind of entity. The amounts payable at any time hereunder
to each Lender shall be a separate and independent debt, and each Lender shall
be entitled to protect and enforce its rights arising out of this Agreement and
it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
9.14 HEADINGS. Section and Section headings in this Agreement are included
herein for convenience or reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
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9.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
9.16 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the partes hereto and the successors and assigns of Lenders (it being
understood that Lenders' rights of assignment are subject to Section 9.1).
Neither Company's rights or obligations hereunder nor any interest therein may
be assigned or delegated by Company without the prior written consent of all
Lenders.
9.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY AND/OR EACH
OTHER LOAN PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY
EXECUTING AND DELIVERING THIS AGREEMENT, COMPANY AND EACH OTHER LOAN PARTY, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) 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 COMPANY AND EACH
OTHER LOAN PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION 9.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
COMPANY AND EACH OTHER LOAN PARTY IN ANY SUCH PROCEEDING IN
ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
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PROCEEDINGS AGAINST COMPANY AND EACH OTHER LOAN PARTY IN THE
COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 9.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
9.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT AND EACH OTHER LOAN PARTY
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING
ESTABLISHED. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including contract claims, tort claims, breach of
duty claims and all other common law and statutory claims. Each party hereto
acknowledges that this waiver is a material inducement to enter into a business
relationship, that each has already relied on this waiver in entering into this
Agreement, and that each will continue to rely on this waiver in their related
future dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 9.18 AND EXECUTED BY EACH OF THE PARTIES HERETO),AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In any event
of litigation, this Agreement may be filed as a written consent to a trial by
the court.
9.19 CONFIDENTIALITY. Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement which has been identified as
confidential by Company 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 Company 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 its Loan 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
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Lender shall notify Company 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 Company or any of its
Subsidiaries.
9.20 COUNTERPARTS. This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Agent of written or telephonic notification of such execution and authorization
of delivery thereof.
9.21 CONTINUITY OF LOANS AND SECURITY INTERESTS. It is the intention of each of
the parties hereto that the Original Credit Agreement be amended and restated so
as to preserve the perfection and priority of all security interests securing
indebtedness under the Original Credit Agreement and the other Loan Documents
and that all indebtedness and obligations of Company and its Subsidiaries
hereunder and thereunder shall be secured by the Collateral Documents and that
this Agreement shall not constitute a novation of the obligations and
liabilities existing under the Original Credit Agreement or be deemed to
evidence or constitute repayment of all or any portion of any such obligations
or liabilities. The parties hereto further acknowledge and agree that this
Agreement constitutes an amendment of the Original Credit Agreement made under
the terms of Section 12.1 thereof.
9.22 EFFECTIVENESS. This Agreement shall become effective upon the execution of
a counterpart hereof by each of the parties hereto and receipt by Company and
Agent of written or telephonic notification of such execution and authorization
of delivery thereof; provided that, unless and until all of the conditions set
forth in Section 3.1 have been satisfied or waived, the Original Credit
Agreement and the Loan Documents shall remain in full force and effect without
giving effect to the amendments set forth herein or the amendments to the Loan
Documents executed in connection herewith, all as if this Amended and Restated
Credit Agreement and the amendments to the Loan Documents executed in connection
herewith had never been executed and delivered.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
COMPANY:
Address: NORTHSTAR HEALTH SERVICES, INC.
The Atrium
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By:________________________________
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name:
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SUBSIDIARY
GUARANTORS:
Address: NSHS SERVICES, INC.
c/o Northstar Health Services, Inc.
The Atrium
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ By:________________________________
Name:
Title:
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Address: KEYSTONE REHABILITATION
SYSTEMS, INC.
c/o Northstar Health Services, Inc.
The Atrium
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ By:________________________________
Name:
Title:
Address: NORTHSTAR MEDICAL SERVICES, INC.
c/o Northstar Health Services, Inc.
The Atrium
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ By:________________________________
Name:
Title:
Address: NORTHSTAR DIAGNOSTIC SERVICES, INC.
c/o Northstar Health Services, Inc.
The Atrium
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ By:________________________________
Name:
Title:
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Address: VASCUSONICS INC.
c/o Northstar Health Services, Inc.
The Atrium
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ By:________________________________
Name:
Title:
Address: KEYSTONE REHABILITATION
MANAGEMENT, INC.
c/o Northstar Health Services, Inc.
The Atrium
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ By:________________________________
Name:
Title:
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LENDERS:
Address: CERBERUS CAPITAL MANAGEMENT, LLC,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ individually and as Agent
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By:________________________________
Name:
Title:
Address: BEAR ▇▇▇▇▇▇▇ & CO.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By:________________________________
Name:
Title:
-▇▇-
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇:
Address: THE CHASE MANHATTAN BANK,
as Collateral Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Capital Markets Fiduciary
Services, Cerberus Capital
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By:________________________________
Name:
Title:
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