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Exhibit 10 (u)
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RESPONSE ONCOLOGY, INC.
Borrower
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LOAN AGREEMENT
$22,000,000.00 REVOLVING ACQUISITION LOAN
$5,500,000.00 REVOLVING WORKING CAPITAL LOAN
Dated as of May 31, 1996
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NATIONSBANK OF TENNESSEE, N.A., AGENT
NATIONSBANK OF TENNESSEE, N.A.
UNION PLANTERS NATIONAL BANK
Lenders
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TABLE OF CONTENTS
RECITALS........................................................................ 1
I. DEFINITIONS................................................................ 1
1.1 Terms Defined in This Agreement...................... 1
1.2 Terms Generally......................................17
II. LOANS.......................................................................18
2.1 Acquisition Loan.....................................18
2.2 Use of Proceeds of Acquisition Loan..................18
2.3 Acquisition Loan Notes...............................18
2.4 Working Capital Loan.................................18
2.5 Use of Proceeds of Working Capital Loan..............18
2.6 Working Capital Loan Notes...........................18
2.7 Separate Commitments of Lender.......................18
2.8 Advances of Loans....................................18
2.9 Interest.............................................21
2.10 Alternate Rate of Interest if LIBOR Unavailable......22
2.11 Change in Circumstances..............................23
2.12 Change in Legality of LIBOR Loans....................24
2.13 Principal Repayment..................................25
2.14 Prepayment of LIBOR Loans............................25
2.15 Prepayment of Prime Rate Loans.......................26
2.16 Fixed Commitment Fees................................26
2.17 Periodic Commitment Fee Based on Use of Facilities...26
2.18 Agent's Fee..........................................26
III. CONDITIONS PRECEDENT......................................................26
3.1 Conditions to Initial Advance........................26
3.2 Conditions to Subsequent Loans.......................29
IV. REPRESENTATIONS AND WARRANTIES.............................................29
4.1 Capacity.............................................29
4.2 Authorization........................................29
4.3 Binding Obligations..................................29
4.4 No Conflicting Law or Agreement......................30
4.5 No Consent Required..................................30
4.6 Financial Statements.................................30
4.7 Fiscal Year..........................................30
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4.8 Litigation...........................................30
4.9 Taxes; Governmental Charges..........................30
4.10 Title to Properties..................................31
4.11 No Default...........................................31
4.12 Casualties; Taking of Properties.....................31
4.13 Compliance with Laws.................................31
4.14 Compliance with Fraud and Abuse Laws.................31
4.15 ERISA................................................31
4.16 Full Disclosure of Material Facts....................32
4.17 Accuracy of Projections..............................32
4.18 Investment Company Act...............................32
4.19 Personal Holding Company.............................32
4.20 Solvency.............................................32
4.21 Chief Executive Office...............................32
4.22 Subsidiaries.........................................32
4.23 Ownership of Patents, Licenses, Etc..................32
4.24 Environmental Compliance.............................32
4.25 Labor Matters........................................33
4.26 OSHA Compliance......................................33
4.27 Regulation U.........................................33
4.28 Affiliate Transactions...............................33
V. AFFIRMATIVE COVENANTS.......................................................33
5.1 Payment of Obligations...............................33
5.2 Maintenance of Existence and Business................33
5.3 Financial Statements and Reports.....................34
5.4 Additional Information...............................35
5.5 Certain Additional Reporting Requirements............35
5.6 Taxes and Other Encumbrances.........................36
5.7 Payment of Liabilities...............................37
5.8 Compliance with Laws.................................37
5.9 Maintenance of Property..............................37
5.10 Compliance with Contractual Obligations..............37
5.11 Further Assurances...................................37
5.12 Security Interest; Setoff............................38
5.13 Insurance............................................38
5.14 Accounts and Records.................................38
5.15 Official Records.....................................39
5.16 Banking Relationships................................39
5.17 Right of Inspection..................................39
5.18 ERISA Information and Compliance.....................39
5.19 Indemnity; Expenses..................................39
5.20 Assistance in Litigation.............................40
5.21 Name Changes.........................................41
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5.22 Estoppel Letters.....................................41
5.23 Environmental Matters................................41
5.24 Opinions of Counsel..................................42
5.25 Additional Collateral Upon Certain Event.............42
VI. NEGATIVE COVENANTS.........................................................43
6.1 Debts, Guaranties, and Other Obligations.............43
6.2 Change of Management.................................44
6.3 Change of Ownership..................................44
6.4 Distributions........................................44
6.5 Encumbrances.........................................44
6.6 Investments..........................................44
6.7 Sales and Leasebacks.................................45
6.8 Change of Control....................................45
6.9 Nature of Business...................................45
6.10 Further Acquisitions, Mergers, Etc...................45
6.11 Advances.............................................45
6.12 Disposition of Assets................................45
6.13 Inconsistent Agreements..............................45
6.14 Fictitious Names.....................................45
6.15 Subsidiaries and Affiliates..........................46
6.16 Place of Business....................................46
6.17 Adverse Action With Respect to Plans.................46
6.18 Transactions With Affiliates.........................46
6.19 Constituent Document Amendments......................46
6.20 Adverse Transactions.................................46
6.21 Margin Securities....................................46
6.22 Accounting Changes...................................46
6.23 Action Outside Ordinary Course.......................46
VII. FINANCIAL COVENANTS.......................................................47
7.1 Current Ratio........................................47
7.2 Total Funded Debt to Capital.........................47
7.3 Total Funded Debt to Consolidated EBITDA.............47
7.4 Fixed Charge Coverage................................47
7.5 Net Worth............................................47
7.6 Capital Expenditures.................................47
VIII. EVENTS OF DEFAULT........................................................47
8.1 Events of Default....................................47
8.2 Remedies.............................................50
IX. AGENT......................................................................50
9.1 Appointment of Agent.................................50
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9.2 Powers of Agent......................................50
9.3 Duties of Agent......................................51
9.4 Indemnification of Agent.............................53
9.5 No Representations by Agent..........................53
9.6 Independent Investigations by Lenders................53
9.7 Notice of Default....................................54
9.8 Funding of Loans Pursuant to Borrowing Notices.......54
9.9 Agent in its Individual Capacity.....................54
9.10 Holders..............................................54
9.11 Successor Agent......................................55
9.12 Sharing of Payments, etc...............................55
9.13 Separate Liens on Collateral...........................55
9.14 Payments Between Agent and Lenders.....................55
9.15 Assignments and Participations.........................56
9.16 Bankruptcy Provisions..................................56
9.17 Foreclosure of Collateral..............................56
9.18 Procedures for Notices and Approvals.................56
9.19 Amendments to Article IX...............................56
X. GENERAL PROVISIONS..........................................................57
10.1 Notices.................................................57
10.2 Renewal, Extension, or Rearrangement.................58
10.3 Application of Payments..............................58
10.4 Counterparts.........................................58
10.5 Negotiated Document..................................58
10.6 Consent to Jurisdiction; Exclusive Venue.............58
10.7 Not Partners; No Third Party Beneficiaries...........59
10.8 No Reliance on Lenders' Analysis.....................59
10.9 No Marshaling of Assets..............................59
10.10 Impairment of Collateral.............................59
10.11 Business Days........................................59
10.12 Participations.......................................59
10.13 Standard of Care; Limitation of Damages..............59
10.14 Incorporation of Schedules...........................60
10.15 Indulgence Not Waiver................................60
10.16 Cumulative Remedies..................................60
10.17 Amendment and Waiver in Writing......................60
10.18 Assignment...........................................60
10.19 Entire Agreement.....................................60
10.20 Severability.........................................60
10.21 Time of Essence......................................60
10.22 Applicable Law.......................................60
10.23 Captions Not Controlling.............................61
10.24 Arbitration..........................................61
10.25 Facsimile Signatures.................................62
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LOAN AGREEMENT
This Loan Agreement is entered into as of the 31st day of May, 1996, by and
among RESPONSE ONCOLOGY, INC. ("Borrower"), a Tennessee corporation; NATIONSBANK
OF TENNESSEE, N.A. ("NationsBank"), a national banking association, and UNION
PLANTERS NATIONAL BANK ("Union Planters"), a national banking association
(collectively "Lenders"); and NATIONSBANK OF TENNESSEE, N.A., in its capacity as
Agent for Lenders ("Agent").
RECITALS
WHEREAS, Lenders have agreed to extend a revolving acquisition loan
facility and a revolving working capital facility to Borrower, on certain terms
and conditions, as set forth in detail in this Agreement; and
WHEREAS, Lenders wish to appoint Agent to administer the loans extended by
Lenders to Borrower; and
NOW, THEREFORE, as an inducement to cause Lenders to extend credit to
Borrower, and for other valuable consideration, the receipt and sufficiency of
which are acknowledged, it is agreed as follows:
I. DEFINITIONS
1.1 Terms Defined in This Agreement. As used below in this Agreement, the
following capitalized terms shall have the following meanings, unless the
context expressly requires otherwise:
"ACQUISITION EBITDA" means, with respect to a Practice acquired by a
Consolidated Entity and covered by a Service Agreement, (i) the pro forma income
to the Consolidated Entities that would have arisen under the applicable Service
Agreement preceding the effective date of the acquisition, determined based upon
the actual financial performance of the acquired Practice over the period for
which a calculation of Consolidated EBITDA is made, without adjustment, (ii)
less the pro forma amount of expenses (other than interest, taxes, depreciation
and amortization) that the Consolidated Entities would have incurred over the
same period on account of the acquired Practice (including, but not limited to,
additional expense of administrative personnel), in each case calculated as if
the Practice had been acquired effective as of the beginning of the relevant
financial period.
"ACQUISITION LOAN" means the revolving credit facility described by amount
and use in Sections 2.1 and 2.2 hereof.
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"AFFILIATE" means, with respect to any Person, another Person that,
directly or indirectly through one or more intermediaries, Controls, or is
Controlled by, or is under common Control with, such Person.
"AGENT" means NationsBank of Tennessee, N.A., in its capacity as described
in Article IX of this Agreement, its lawful corporate successors and any
successor agent appointed pursuant to Article IX hereof.
"AGREEMENT" means this Loan Agreement (including all schedules and exhibits
hereto), as the same may be amended from time to time.
"APPLICABLE COMMITMENT FEE," "APPLICABLE LIBO RATE MARGIN," and "APPLICABLE
PRIME RATE MARGIN" mean, with respect to Loans advanced under and the commitment
fee respecting the Acquisition Loan, during any Effective Period, the percentage
rates per annum set forth opposite the appropriate test in the pricing grid
below (ratio values shall be rounded to the nearest one-hundredth, with any
value of .005 rounded upward):
TOTAL FUNDED DEBT TO PRIME RATE MARGIN LIBOR COMMITMENT
CONSOLIDATED EBITDA MARGIN FEE IN BASIS
POINTS
Less than or equal to 1.00 .25% 1.50% 20bps
Greater than or equal to 1.01 .50% 1.75% 25bps
and less than or equal to 2.00
Greater than or equal to 2.01 .75% 2.125% 30bps
and less than or equal to 3.00
Greater than or equal to 3.01 1.00% 2.625% 35bps
Additionally, with respect to Loans advanced under and the commitment fee
respecting the Working Capital Loan, "APPLICABLE COMMITMENT FEE," "APPLICABLE
LIBO RATE MARGIN," and "APPLICABLE PRIME RATE MARGIN" mean, during any Effective
Period, the percentage rates per annum set forth opposite the appropriate test
in the pricing grid below (ratio values shall be rounded to the nearest
one-hundredth, with any value of .005 rounded upward):
TOTAL FUNDED DEBT TO PRIME RATE MARGIN LIBOR COMMITMENT FEE
CONSOLIDATED MARGIN IN BASIS POINTS
EBITDA
Less than or equal to 0% 1.25% 15bps
1.00
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TOTAL FUNDED DEBT TO PRIME RATE MARGIN LIBOR COMMITMENT FEE
CONSOLIDATED MARGIN IN BASIS POINTS
EBITDA
Greater than or equal .25% 1.50% 20bps
to 1.01 and less than
or equal to 2.00
Greater than or equal .50% 1.875% 25bps
to 2.01 and less than
or equal to 3.00
Greater than or equal .75% 2.375% 30bps
to 3.01
The Total Funded Debt to Consolidated EBITDA ratio shall be established by Agent
on the basis of the consolidated quarterly financial statements of and schedules
prepared by Borrower delivered to Agent pursuant to this Agreement and shall be
calculated as set forth in Section 7.3 hereof. Notwithstanding the foregoing, at
the end of any Effective Period, and during the existence and continuation of an
Event of Default, and during any period of time for which Pricing Values may be
set by Agent pursuant to Section 8.1.5 hereof, the Pricing Values with respect
to the Loans shall automatically become the highest values provided for in the
applicable pricing grid set forth above in respect of the two respective Credit
Facilities. Additionally, the Applicable Prime Rate Margin for Prime Rate Loans
and the Applicable LIBO Rate Margin for LIBOR Loans shall each be reduced by
one-fourth of one percent (1/4%) if Borrower shall receive aggregate Net Equity
Proceeds after the Closing Date from the public offering of its equity
securities of at least Thirty Million and No/100 Dollars ($30,000,000.00).
"ASSUMED DEBT" means Purchase Money Debt assumed by a Consolidated Entity,
or Purchase Money Debt secured by a Purchase Money Security Interest in Property
acquired by a Consolidated Entity, whether or not the Purchase Money Debt is
contractually assumed, occurring in either case in the course of a Permitted
Acquisition.
"BANKING DAY" means a Business Day, subject to the following additional
convention. As to notices or payments received by Agent on a Business Day at or
before 12:00 p.m. (noon) Nashville time, the Banking Day shall correspond to the
Business Day of receipt. As to notices or payments received by Agent on a
Business Day after 12:00 p.m. (noon) Nashville time, the Banking Day of receipt
shall be deemed to be the next following Business Day.
"BANKRUPTCY CODE" means Title I of the Bankruptcy Reform Act of 1978, as it
may be amended from time to time.
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"BEST OF BORROWER'S KNOWLEDGE" means the actual knowledge, information and
belief of the Chairman, Chief Executive Officer, Chief Financial Officer,
Controller or General Counsel of Borrower, with no duty of inquiry.
"BORROWER" means Response Oncology, Inc., a Tennessee corporation, its
successors and assigns. This definition does not abrogate the requirements set
forth below restricting Borrower's ability to assign any rights under this
Agreement.
"BORROWER'S PORTION" means the percentage of equity interest that Borrower
acquires in an entity acquired in or created in connection with a Permitted
Acquisition. Additionally, if an acquisition is of less than all of the interest
or assets of a Seller, or if a Seller had a declining number of Practices over
the relevant accounting period, the Borrower's Portion shall include only such
of the operations of the Seller as were acquired by a Consolidated Entity in a
Permitted Acquisition.
"BORROWING BASE" means (i) Borrower's Consolidated EBITDA for the most
recent four fiscal quarters, as determined by the quarterly financial statements
and schedules delivered to Agent from time to time pursuant to this Agreement,
(ii) multiplied by 2.5.
"BORROWING NOTICE" has the meaning assigned in Section 2.8.1(b) hereof.
"BUSINESS DAY" means any day on which Agent is open for the conduct of
ordinary business; provided however, that when used in connection with
determining the LIBO Rate, the term "Business Day" shall exclude any day on
which banks are not open for dealings in U.S. Dollar deposits in the London
Interbank Market.
"CAPITAL EXPENDITURES" means expenditures, determined according to GAAP on
a consolidated basis, that would be capitalized and depreciated over more than
one annual accounting period.
"CAPITAL LEASE" means a lease that would be characterized as a financed
sale or purchase under GAAP.
"CHANGE OF CONTROL" means the occurrence, after the date of this Agreement,
of (i) any Person or two or more Persons acting in concert acquiring beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of Borrower (or other securities convertible into such
securities) representing 51% or more of the combined voting power of all
securities thereof entitled to vote in the election of directors; or (ii) during
any period of up to 12 consecutive months, commencing after the date of this
Agreement, individuals who at the beginning of such 12-month period were
directors of Borrower ceasing for any reason to constitute a majority of the
Board of Directors thereof unless the Persons replacing such individuals were
nominated by the Board of Directors of Borrower; or (iii) any Person or two or
more Persons acting in concert acquiring by contract
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or otherwise, or entering into a contract or arrangement which upon consummation
will result in its acquisition of, or control over, securities of Borrower (or
other securities convertible into such securities) representing 51% or more of
the combined voting power of all securities of Borrower entitled to vote in the
election of directors.
"CLOSING DATE" means the date of this Agreement.
"CMLTD" means scheduled principal payments in respect of long-term
Liabilities payable during the 12 months following the date of determination.
"COLLATERAL" means all Property now or hereafter securing the Obligations.
"COMMITMENT" means the amount of each Lender's commitment to fund the
respective Credit Facilities. Each Lender's several Commitment for the
Acquisition Loan shall be as follows:
NationsBank Sixteen Million and No/100 Dollars ($16,000,000.00)
Union Planters Six Million and No/100 Dollars ($6,000,000.00)
Each Lender's several Commitment for the Working Capital Loan shall be as
follows:
NationsBank Four Million and No/100 Dollars ($4,000,000.00)
Union Planters One Million Five Hundred Thousand and No/100 Dollars
($1,500,000.00)
"CONSOLIDATED CAPITAL" means Consolidated Net Worth plus Total Funded Debt.
"CONSOLIDATED CURRENT RATIO" means current assets, determined on a
consolidated basis according to GAAP, divided by current liabilities, determined
on a consolidated basis according to GAAP.
"CONSOLIDATED EBITDA" means the EBITDA of the Borrower, determined on a
consolidated basis, and adjusted as follows with respect to acquisitions. The
positive Acquisition EBITDA of acquired Practices shall be included in
Consolidated EBITDA only if Agent is satisfied, in its reasonable discretion, as
to the accuracy and reliability of the financial information related thereto. In
assessing the accuracy and reliability of such financial information, (i)
unqualified audited financial statements prepared by a regional or national
accounting firm shall be acceptable, and (ii) financial statements reviewed (but
not audited) by such a firm shall also be acceptable unless Agent in good faith
determines that reviewed statements for a particular enterprise are subject to
material doubt as to their accuracy. The negative Acquisition EBITDA for any
Practice shall be included in Consolidated EBITDA, based upon the best
information available. Notwithstanding any other provision hereof, the EBITDA
attributed to Non-Corporate Unperfected Subsidiaries shall not be included in
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Consolidated EBITDA if Non-Corporate Unperfected Subsidiaries would account for
more than ten percent (10%) of total Consolidated EBITDA.
"CONSOLIDATED ENTITIES" means Borrower and all Subsidiaries of Borrower,
from time to time.
"CONSOLIDATED NET INCOME" means net income, determined on a consolidated
basis according to GAAP.
"CONSOLIDATED NET WORTH" means shareholders' equity, determined on a
consolidated basis according to GAAP.
"CONTROL" or "CONTROLLED" means that a Person has the direct or indirect
power to conduct or govern the policies of another Person, whether this power
exists as a matter of right or through economic compulsion.
"CREDIT CEILING" means, with respect to a Credit Facility, the amount
determined by subtracting from the Borrowing Base the principal amount
outstanding under the other Credit Facility, to the effect that the total
principal amount outstanding under the Credit Facilities shall not in total
exceed the Borrowing Base at any time.
"CREDIT FACILITIES" means the Acquisition Loan and the Working Capital
Loan.
"DEFAULT RATE" means the Maximum Lawful Amount of interest that can be
charged.
"EBITDA" means the sum of net income before extraordinary items plus
Interest Expense and expenses for taxes, depreciation and amortization,
determined according to GAAP.
"EFFECTIVE PERIOD" means a period of up to one calendar quarter, determined
as follows. Pursuant to other provisions of this Agreement, Borrower's financial
information for each quarter-end is to be submitted during the succeeding
quarter, except that year-end financial statements are not due until April 30 of
the following year. The performance pricing provisions of this Agreement
reevaluate pricing quarterly, based upon those quarterly financial results. An
Effective Period imposing pricing based upon a quarter other than the quarter
ending December 31 shall begin on the later of (i) the first day of the third
month of the following fiscal quarter, or (ii) if financial statements are
submitted later than required under this Agreement and Agent waives any Event of
Default arising therefrom, five (5) Business Days after the submission of
required financial statements. An Effective Period imposing pricing based upon
the quarter ending December 31 shall begin "as of" the first day of the third
month of the following fiscal quarter, with a retroactive adjustment of interest
to be made when the year-end financial statements are timely submitted, if
necessary to reflect an increase or decrease of the interest rates or fees based
upon performance for the period ending
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December 31. If year-end financial statements are not timely submitted, but are
nonetheless accepted by Agent and Agent waives any Event of Default arising
therefrom, the Effective Period imposing pricing based upon the quarter ending
December 31 shall begin "as of" five (5) Business Days after the submission of
the required annual financial statements. The Effective Period shall end on the
last day of the second month of each fiscal quarter following the quarter in
which the Effective Period was scheduled to begin. Therefore, assuming the
timely delivery of all required financial statements, the Effective Periods will
be determined as follows:
Financial Statements Due By Effective Period
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May 15 June 1 - August 31
August 15 September 1 - November 30
November 15 December 1 - February 28/29
April 30 March 1 (retroactive) - May 31
An initial Effective Period shall commence on the Closing Date and continue
through the last day of August, 1996, and Pricing Values shall be determined
during this initial Effective Period based on the financial reports as of and
for the period ended March 31, 1996.
"ENCUMBRANCE" means any interest in Property in favor of one not the owner
thereof, whether voluntary or involuntary, including, but not limited to, (i)
the lien or security interest arising from a deed of trust, mortgage, pledge,
security agreement, conditional sale, Capital Lease, consignment, or bailment
for security purposes, and (ii) reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and other
such title encumbrances.
"ENVIRONMENTAL LAWS" means the Environmental Protection Act, the Resource
Conservation and Recovery Act of 1976, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Hazardous Materials Transportation
Act and any other federal, state or municipal law, rule or regulation relating
to air emissions, water discharge, noise emissions, solid or liquid waste
disposal, hazardous or toxic waste or materials, or other environmental or
health matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"ERISA AFFILIATE" means any Person who for purposes of Title IV of ERISA is
a member of Borrower's controlled group, or under common control with Borrower,
within the meaning of Section 414 of the IRC, the regulations promulgated
pursuant thereto and the published revenue rulings issued thereunder.
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"ERISA EVENT" means (i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, unless the 30-day notice requirement with
respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of
operations at a facility in the circumstances described in Section 4068(f) of
ERISA; (iv) the withdrawal by Borrower or an ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer, as
defined in 4001(a)(2) of ERISA; (v) the failure by Borrower or any ERISA
Affiliate to make a material payment to a Plan required under Section 302(f)(1)
of ERISA; (vi) the adoption of an amendment to a Plan requiring the provision of
initial or additional security to such Plan, pursuant to Section 307 of ERISA;
or (vii) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, a Plan.
"EVENT OF DEFAULT" means the occurrence of any of the events specified in
Section 8.1 hereof, as to which any requirement for notice or lapse of time has
been satisfied.
"FINANCIAL PROJECTIONS" means the financial projections prepared by
Borrower, a copy of which is attached hereto as Exhibit 1.1.
"FINANCIAL STATEMENTS" means the audited consolidated balance sheet, income
statement, and statement of cash flows for Borrower dated December 31, 1995 and
the unaudited consolidated financial statements dated March 31, 1996 delivered
by Borrower to Lender, and all notes thereto.
"FIXED CHARGE COVERAGE RATIO" means (i) Consolidated EBITDA, plus expenses
incurred under Operating Leases, and less a charge of Ten Thousand and No/100
Dollars ($10,000.00) per year per wholly-owned IMPACT Center and Five Thousand
and No/100 Dollars ($5,000.00) per year for each IMPACT Center that is not
wholly-owned by a Consolidated Entity to allow for maintenance Capital
Expenditures, and less loans advanced to Providers, divided by (ii) the sum of
Interest Expense plus CMLTD (including implied amortization calculated as
one-seventh of the outstanding principal amount of the Credit Facilities as of
the end of the applicable period), plus expenses incurred under Operating
Leases. The values for the fixed charges used in the calculation of this ratio
will be determined on a pro forma basis as though the acquisitions occurring
during the period over which the Fixed Charge Coverage Ratio is being determined
had occurred as of the beginning of that period, with such calculations to take
into account, along with other adjustments that Agent may approve, in its
reasonable discretion, (i) the exclusion of Interest Expense, CMLTD, Capital
Lease expense and Operating Lease expense of the target related to debts, leases
and obligations that were extinguished in connection with the acquisition, (ii)
the inclusion of Interest Expense, CMLTD, Capital Lease expense and Operating
Lease expense obligations of the target that survived the acquisition, and (iii)
the inclusion of Interest
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Expense, CMLTD, Capital Lease expense and Operating Lease Expense arising from
obligations incurred in connection with the acquisition (including, but not
limited to, added Interest Expense arising from Seller Debt or from Loans
advanced under this Agreement incidental to the acquisition).
"FRAUD AND ABUSE LAWS" means Section 1128B(b) of the Social Security Act,
42 U.S.C. Section 1320a-7b(b) and Section 1877 of the Social Security Act, 42
U.S.C. Section 1877, as from time to time amended; any successor statute(s)
thereto; all rules and regulations promulgated thereunder; and any other Law
relating to the ownership of medical facilities by providers of medical services
or the referral of patients to medical facilities owned by providers of medical
services.
"GAAP" means generally accepted accounting principles pronounced by the
Financial Accounting Standards Board or any successor thereto, as in effect from
time to time.
"GOVERNMENTAL AUTHORITY" means any governmental or quasi-governmental
entity, court or tribunal including, without limitation, any department,
commission, board, bureau, agency, administration, service or other
instrumentality of any foreign or domestic governmental entity.
"HAZARDOUS SUBSTANCES" means those substances included from time to time
within the definition of hazardous substances, hazardous materials, toxic
substances, or solid waste under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended, 42 U.S.C. ss. 9601 et seq.;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss. 6901 et seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et seq.; the
Clean Water Act, 33 U.S.C. Section 1251 et. seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et. seq., and in the regulations promulgated
pursuant to such acts and laws; and such other substances that are or become
regulated under any applicable local, state, or federal law or regulation
addressing environmental hazards.
"IMPACT CENTER" means a high dose chemotherapy cancer treatment center
operated by a Consolidated Entity.
"INTEREST EXPENSE" means expenses for interest (and including the interest
portion of current charges on Capital Leases) and expenses for any interest rate
swaps or similar derivative contracts used for the management of interest
expense.
"INTEREST PAYMENT DATE" means, (i) as to Prime Rate Loans, the first day of
each month, and (ii) as to any LIBOR Loan, the last day of the Interest Period
applicable to such Loan and, in addition, in the case of a LIBOR Loan with an
Interest Period of six (6) or twelve (12) months' duration, the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 3, 6, 9 and 12 months, as applicable, after
the commencement of the Interest Period.
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"INTEREST PERIOD" means, as to any LIBOR Loan, the period commencing on the
date of such LIBOR Loan and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day) in the calendar
month that is 1, 2, 3, 6 or 12 months thereafter, as Borrower may elect;
provided, however, that (x) if any Interest Period would end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, with respect to LIBOR Loans, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (y) no
Interest Period with respect to any Loan shall end later than the Maturity Date.
Interest shall accrue from and including the first Banking Day of an Interest
Period to but excluding the last Banking Day of such Interest Period.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time.
"LAW" or "LAWS" means all applicable constitutional provisions, statutes,
codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, and requirements of all Governmental Authorities.
"LENDERS" means NationsBank and Union Planters, their respective successors
and assigns.
"LIABILITY" means, with respect to any Person, an obligation, contingent or
otherwise, that would be classified under GAAP as a liability of that Person
including, but not limited to, any nonrecourse obligation secured by Property of
that Person.
"LIBO RATE" means, for any given Interest Period with respect to a given
LIBOR Loan, the rate per annum appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term LIBO Rate shall mean, for any
given Interest Period with respect to a given LIBOR Loan, the rate per annum
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates.
"LIBO RATE RESERVE PERCENTAGE" means the reserve percentage applicable
during any Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
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reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for Lenders with respect to liabilities
or assets consisting of or including LIBOR Liabilities having a term equal to
such Interest Period.
"LIBOR LIABILITIES" means deposit liabilities incurred through the London
Interbank Market.
"LIBOR LOAN" means a Loan for which Borrower has elected application of an
interest rate based on the LIBO Rate.
"LOAN" means a loan advanced under the Credit Facilities.
"LOAN DOCUMENTS" means, collectively, each writing delivered at any time by
Borrower to Lenders or Agent relating to the Credit Facilities.
"MATERIAL ADVERSE CHANGE" means any material and adverse change in the
business, Properties, or operations of the Consolidated Entities.
"MATERIAL ADVERSE EFFECT" means any event or condition which, singly or in
the aggregate with other events or conditions, materially and adversely affects
the business, Properties, or operations of the Consolidated Entities, considered
collectively.
"MATURITY DATE" means May 31, 1998, with respect to the Acquisition Loan,
and May 31, 1997, with respect to the Working Capital Loan; provided, however,
that Borrower may extend the Maturity Date for the Working Capital Loan to May
31, 1998, by giving Agent written notice of such election in the form set forth
in Exhibit 1.2 hereto and paying an extension fee of Thirteen Thousand Seven
Hundred Fifty and No/100 Dollars ($13,750.00), to be apportioned to Lenders Pro
Rata in accordance with their respective Commitments for the Working Capital
Loan.
"MAXIMUM LAWFUL AMOUNT" means the maximum lawful amount of interest, loan
charges, commitment fees or other charges that may be assessed under Tennessee
law or, if higher, under applicable federal law.
"MIAMI DEBT" means the obligations of Borrower under that Non-Negotiable
Promissory Note made by Borrower dated January 2, 1996 in the original principal
amount of Five Million Nine Hundred Fifty-Nine Thousand Nine Hundred Seventy-Two
and No/100 Dollars ($5,959,972.00), and any modification, extension or renewal
thereof approved by Agent.
"NATIONSBANK" means NationsBank of Tennessee, N.A., its successors and
assigns.
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"NET EQUITY PROCEEDS" means the Net Proceeds of issuances of equity by
Borrower, less any amount of such Net Proceeds used to redeem existing,
outstanding equity securities of Borrower.
"NET PROCEEDS" means gross proceeds of a transaction less reasonable and
customary underwriter and brokerage fees and commissions, the fees and expenses
of trustees and attorneys, and other reasonable and customary closing fees and
expenses.
"NON-CORPORATE SUBSIDIARY" means a Permitted Subsidiary that is other than
a corporation.
"NON-CORPORATE UNPERFECTED SUBSIDIARY" means a Non-Corporate Subsidiary,
Borrower's interest in which is not subject to a perfected security interest to
secure the Obligations.
"NOTE" means any of the Acquisition Loan Notes or the Working Capital Loan
Notes referred to in Sections 2.3 and 2.6 hereof, respectively.
"OBLIGATIONS" means the obligations of Borrower to Lenders to repay the
Credit Facilities and all other obligations of Borrower and the Consolidated
Entities to Lenders and to Agent under this Agreement and the other Loan
Documents.
"OPERATING LEASES" means leases that are not Capital Leases.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ACQUISITION" means the acquisition (by asset purchase, stock
purchase, merger or otherwise, subject to the other requirements of this
definition set forth below) by Borrower of the assets of a Practice in the
ordinary course of business (it being acknowledged that medical records and
certain other professional assets that are required by Law to be owned by a
physician Provider are not acquired in these transactions), which purchase meets
all of the following criteria:
(a) The form of the acquisition shall have been of the assets of a
Practice or, if for stock or other equity interest, the target
acquired shall become a Permitted Subsidiary concurrently with
the closing of the acquisition.
(b) Borrower shall have delivered to Lender, prior to closing the
acquisition, unaudited pro forma financial statements or
certificates demonstrating continued compliance with all
covenants in this Agreement following the acquisition.
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(c) Agent shall have given its written consent to the acquisition
prior to the closing thereof, in the cases of those acquisitions
(i) for which the total consideration is greater than seven (7)
times Acquisition EBITDA over the previous twelve (12) months
(with Acquisition EBITDA determined for the purpose of this
Subsection (i) only based upon the pro forma financial
performance of the acquired Practice over the twelve (12) - month
period, including adjustment for cost savings that Borrower can
establish will occur immediately following the transaction), (ii)
for which the portion of the purchase price consisting of cash,
Assumed Debt and Seller Debt exceeds three percent (3%) of
Borrower's total assets as reported by Borrower pursuant to this
Agreement most recently prior to the date of determination, (iii)
in which the Acquisition EBITDA of the target is negative for
either of the previous two (2) fiscal years, (iv) of more than
three (3) Practices in a single transaction, or (v) which,
together with previous acquisitions within a single calendar
year, total seven (7) or more Practices.
"PERMITTED ENCUMBRANCES" means all of the following:
(a) Encumbrances securing the payment of any of the Obligations.
(b) Encumbrances securing taxes, assessments, or other governmental
charges not yet due or which are being contested in good faith by
appropriate action promptly initiated and diligently conducted,
if Borrower has made reserve therefor as required by GAAP.
(c) Mechanics', repairmen's, materialmen's, warehousemen's,
landlords' and other like liens arising by operation of law
securing accounts that are not delinquent.
(d) Encumbrances on real property used by Borrower not securing
monetary obligations, provided that the Encumbrances are of a
type customarily placed on real property and do not materially
impair the value of the affected property.
(e) Pledges or deposits in the ordinary course of business to secure
nondelinquent obligations under ▇▇▇▇▇▇▇'▇ compensation or
unemployment laws or similar legislation or to secure the
performance of leases or contracts entered into in the ordinary
course of business.
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(e) Purchase Money Security Interests, to the extent permitted by
Section 6.1.7 hereof.
"PERMITTED SUBSIDIARY" means a Subsidiary that (i) is now or hereafter
becomes a Borrower or a guarantor under this Agreement, (ii) is owned, in both
economic interest and voting rights, by Borrower in an amount exceeding 50%,
(iii) is owned by Borrower in a proportion sufficient to allow Borrower to
Control the Subsidiary, including the right to cause the Subsidiary to make
lawful distributions of income, and the financial interest of Borrower therein
is, in Agent's reasonable judgment, freely alienable by Borrower through a
security interest granted therein or otherwise, and (iv) as to which Borrower
has granted to Agent as additional security for the Loans, a first priority
perfected security interest in its stock or other equity interest in the
Subsidiary pursuant to documentation in form and substance acceptable to Agent
and its counsel, with the validity and perfection of the security interest and
other matters as Agent may reasonably require confirmed to Agent by an opinion
of Borrower's outside counsel satisfactory to Agent in all respects, and with
all expenses related to such documentation (including, but not limited to,
filing fees and taxes and the reasonable fees and expenses of Lenders' and
Agent's attorneys) to be paid by Borrower; provided, however, that Borrower need
not grant a perfected security interest in its equity interest in a
Non-Corporate Subsidiary in order for such Subsidiary to be a Permitted
Subsidiary.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization,
government, governmental agency or political subdivision thereof, or any other
form of entity.
"PLAN" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by Borrower or any Subsidiary and
covered by Title IV of ERISA or to which Section 412 of the IRC applies.
"PRACTICE" means an oncology or hematology treatment center or an oncology
or hematology medical practice. Whenever in this Agreement "Practice" is used in
describing an acquisition by Borrower, and if the reference relates to a medical
practice, such reference is to the acquisition of the assets used in the
operation of the Practice that can lawfully be acquired by Borrower or to the
acquisition of an interest in an entity that owns, as of the time of purchase,
only those assets that can be lawfully acquired by Borrower.
"PRICING VALUES" means the Applicable LIBO Rate Margin and Applicable Prime
Rate Margin for both of the Credit Facilities and the Applicable Commitment Fee.
"PRIME RATE" shall be that rate announced by Agent from time to time as its
Prime Rate and is one of several interest rate bases used by Agent. Lenders and
Agent lend at rates both above and below Agent's Prime Rate and Borrower
acknowledges that the Prime Rate is not represented or intended to be the lowest
or most favorable rate of interest offered by any Lender or Agent.
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"PRIME RATE LOAN" means a Loan for which Borrower has elected application
of an interest rate based on the Prime Rate.
"PRO RATA" OR "PRO RATA SHARE" refer to the apportionment among Lenders
according to their respective total Commitments at the time of determination;
provided, however, if at a time of determination there are principal amounts
outstanding under either or both of the Credit Facilities, and if any Lender has
failed to fund any unrepaid Loan that was funded by any other Lender or Lenders,
this apportionment shall be determined according to the respective total
principal amounts of the Credit Facilities held by the respective Lenders rather
than by their Commitments.
"PROPERTY" or "PROPERTIES" means any interest in any kind of property,
whether real, personal, or mixed, or tangible or intangible.
"PROVIDER" means an oncologist, hematologist, radiologist or other medical
doctor whose specialty is complementary to the practice of oncology or
hematology and who performs professional services respecting a Practice that is
either managed by Borrower or the assets of which are owned by Borrower.
"PURCHASE MONEY DEBT" means a Liability that is secured by a Purchase Money
Security Interest.
"PURCHASE MONEY SECURITY INTEREST" means an Encumbrance on specific
equipment (including the Encumbrance arising under a Capital Lease), provided
that (i) the Liability secured by any such Encumbrance shall have arisen at the
time of the acquisition thereof and shall not exceed 100% of the cost of the
equipment to the entity acquiring the same, and (ii) each such Encumbrance shall
attach only to the equipment so acquired with the proceeds of the Liability
secured thereby.
"REQUIRED LENDERS" means Lenders holding at least 66 2/3% of the total
Commitments for the Credit Facilities; provided, however, if at a time of
determination there are principal amounts outstanding under either or both of
the Credit Facilities, and if any Lender has failed to fund any unrepaid Loan
that was funded by any other Lender or Lenders, this determination shall be made
according to Lenders holding the required percentage of principal amounts of the
Credit Facilities rather than by the outstanding Commitments.
"SEAFIELD POSITION" means the equity interest of Seafield Capital
Corporation in Borrower.
"SELLER" means the former owner of a Practice that is acquired by a
Consolidated Entity.
"SELLER DEBT" means a Liability incurred in favor of one or more Sellers
representing part of the purchase price of a Practice.
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"SERVICE AGREEMENT" means one of those service or management agreements now
in effect or hereafter entered into by Borrower and Providers in connection with
the management of oncology practices and/or IMPACT Centers.
"SIGNIFICANT CONSOLIDATED ENTITY" means (i) Borrower, or (ii) any
Consolidated Entity other than Borrower that accounts for more than five percent
(5%) of either Borrower's total assets determined on a consolidated basis as of
the end of the most recent fiscal quarter or of Borrower's Consolidated EBITDA
for the most recent fiscal quarter, from time to time; provided, however, that
for as long as any facts that would otherwise constitute Events of Default exist
with respect to more than one Consolidated Entity at any time, such that the
total contribution of all affected Consolidated Entities exceeds more than five
percent (5%) of either Borrower's total assets determined on a consolidated
basis as of the end of the most recent fiscal quarter or of Borrower's
Consolidated EBITDA for the most recent fiscal quarter, each Consolidated Entity
shall be considered a Significant Consolidated Entity.
"SOLVENT" shall mean, as to any Person, that as of any date of
determination, (i) the then fair value of the assets of such Person is (a)
greater than the then total amount of liabilities (including subordinated
liabilities) of such Person and (b) greater than the amount that will be
required to pay such Person's probable liability on such Person's then existing
debts as they become absolute and matured, (ii) such Person's capital is not
unreasonably small in relation to its business, and (iii) such Person has not
incurred and does not intend to incur, or believe or reasonably should believe
that it will incur, debts beyond its ability to pay such debts as they become
due.
"SUBORDINATED DEBT" means any unsecured Liability that is subordinated as
to payment, liquidation, collection and collection in bankruptcy to the
obligations of Borrower to Lenders pursuant to subordination documentation in
form and substance acceptable to Agent and which has a maturity of no earlier
than six (6) months following the latest applicable Maturity Date. The Miami
Debt shall be regarded as Subordinated Debt for all purposes in this Agreement
at any time that the average (mean) closing bid price for Borrower's stock is
greater than Seventeen and 50/100 Dollars ($17.50) for the ten market days prior
to the date of determination.
"SUBSIDIARY" means any present or future corporation, joint venture,
limited liability company, or partnership, at least a majority of whose
outstanding voting stock or other voting securities or interests shall at the
time be owned directly or indirectly by Borrower.
"TAXES" means all taxes and assessments, whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, which at any time may be
assessed, levied, confirmed or imposed on the Consolidated Entities or on any of
their properties or assets or any part thereof or in respect of any of their
franchises, businesses, income or profits.
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"TOTAL FUNDED DEBT" means all obligations for borrowed money, including,
but not limited to, advances under the Credit Facilities, all Seller Debt and
all Capitalized Leases, whether short-term or long-term. Subordinated Debt is
not included in Total Funded Debt.
"UCC" means the Uniform Commercial Code as adopted in Tennessee, as it may
be amended from time to time.
"UNION PLANTERS" means Union Planters National Bank, its successors and
assigns.
"UNMATURED DEFAULT" means any event or condition that, but for the giving
of any required notice by Agent and/or the passing of time, would be an Event of
Default hereunder.
"WORKING CAPITAL LOAN" means the revolving credit facility described in
Sections 2.4 and 2.5 hereof.
1.2 Terms Generally.
1.2.1 Computations; Accounting Principles. Where the character or
amount of any asset or liability or item of income or expense is required
to be determined, or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, such determination
or calculation, to the extent applicable and except as otherwise specified
in this Agreement, shall be made in accordance with GAAP. If a change in
GAAP after the date of this Agreement would require a change affecting the
calculation of any requirement under this Agreement, then Agent and
Borrower shall negotiate in good faith for the amendment of the affected
requirements; provided, however, until and unless such an amendment is
agreed upon, the requirements of this Agreement shall remain as written and
compliance therewith shall be determined according to GAAP as in effect
prior to the change.
1.2.2 Gender and Number. Words used herein indicating gender or number
shall be read as context may require.
1.2.3 References Include Successors. References herein to specific
Laws, regulatory bodies, parties or agreements also refer to any successor
Laws, regulatory bodies, and parties, and to all modifications, extensions,
renewals and restatements of agreements.
1.2.4 References to This Agreement. "Herein," "hereof" and words of
similar import refer to this Agreement as a whole and not to any particular
provision hereof, unless otherwise expressly stated.
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1.2.5 Limitations of Knowledge. Certain representations and warranties
are made herein the Best of Borrower's Knowledge. These limitations reflect
only Borrower's special interest in disclosing that no targeted diligence
has been performed as to these matters in connection with this Agreement.
Should any matter so represented or warranted be discovered to be false,
then, irrespective of the knowledge qualification, the representation or
warranty shall be deemed breached and shall constitute an Event of Default
or Unmatured Default hereunder, as may apply.
II. LOANS
Concurrently with the execution of this Agreement, Lenders agree on a
several basis, and not on a joint basis, in accordance with their respective
Commitments, to make the Acquisition Loan and the Working Capital Loan to
Borrower, under the following terms and conditions:
2.1 Acquisition Loan. The principal indebtedness of Borrower to Lenders
under the Acquisition Loan shall not exceed the lesser of (i) Twenty-Two Million
and No/100 Dollars ($22,000,000.00), or (ii) the Credit Ceiling in effect from
time to time.
2.2 Use of Proceeds of Acquisition Loan. The proceeds of the Acquisition
Loan shall be used by Borrower for (i) Permitted Acquisitions, (ii) other
Capital Expenditures, and (iii) the development of IMPACT Centers.
2.3 Acquisition Loan Notes. Borrower's obligations under the Acquisition
Loan shall be evidenced by Acquisition Loan Notes in favor of the respective
Lenders in the form included as Exhibit 2.3 hereto payable to each Lender for
its Commitment under the Acquisition Loan.
2.4 Working Capital Loan. The principal indebtedness of Borrower to Lenders
under the Working Capital Loan shall not exceed the lesser of (i) Five Million
Five Hundred Thousand and No/100 Dollars ($5,500,000.00), or (ii) the Credit
Ceiling in effect from time to time.
2.5 Use of Proceeds of Working Capital Loan. The proceeds of Loans advanced
under the Working Capital Loan shall be used by Borrower for (i) working capital
purposes, and (ii) to the extent that the Acquisition Loan may be fully drawn,
for the same purposes permitted under the Acquisition Loan.
2.6 Working Capital Loan Notes. Borrower's obligations under the Working
Capital Loan shall be evidenced by Working Capital Loan Notes in favor of the
respective Lenders in the form included as Exhibit 2.6 hereto payable to each
Lender for its Commitment under the Working Capital Loan.
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2.7 Separate Commitments of Lenders. Borrower acknowledges that each
Lender's commitment to fund its portion of the Credit Facilities is made by each
Lender severally, and neither Agent nor any Lender shall be liable for the
failure of another Lender to timely perform under this Agreement.
2.8 Advances of Loans. Subject to the terms and conditions of this
Agreement, Borrower may borrow, repay and reborrow Loans under the Credit
Facilities, provided that the outstanding principal balance of the Acquisition
Loan and the Working Capital Loan, respectively, shall not at any time exceed
the amounts permitted under Sections 2.1 and 2.4 above. Loans shall be disbursed
as follows:
2.8.1 Loans Advanced Pursuant to Borrowing Notices.
2.8.1(a) Applicability. Loans under the Credit Facilities may be
LIBOR Loans, Prime Rate Loans, or a combination thereof, and the
funding thereof shall be subject to this Section 2.8.1.
2.8.1(b) Borrowing Notices. As long as Borrower meets the
conditions for funding stated in this Agreement, Borrower may submit
requests for Loans ("Borrowing Notices") to Agent. All requests shall
be made in writing (or by telephone, subject to such security
procedures as Agent may require from time to time, provided that all
telephonic notices shall be confirmed by written Borrowing Notices
within one (1) Business Day) and shall specify the proposed
disbursement date for the requested Loan; the Credit Facility from
which the Loan is requested; the amount of the Loan; the purpose of
the Loan (characterized in accordance with Sections 2.2 and 2.5
above); the type of Loan, i.e., LIBOR Loan or Prime Rate Loan; and if
a LIBOR Loan, the designated Interest Period. Each Borrowing Notice
shall irrevocably obligate Borrower to accept the Loan requested
thereby. Borrowing Notices shall be in the form of Exhibit 2.8.1(b)
hereto or such other form as Agent may from time to time require.
2.8.1(c) Funding of Loans. Lenders shall fund their respective
portions of requested Loans on the next following Banking Day after
the Banking Day of Agent's receipt of the Borrowing Notice, in the
case of Prime Rate Loans, and on the second (2nd) Banking Day
following the Banking Day of Agent's receipt of the Borrowing Notice,
in the case of LIBOR Loans. All funds shall be disbursed directly into
an account maintained by Borrower with Agent. Borrower agrees that if
any Lender elects to fund any requested Loan(s) sooner after requested
than is required hereunder, the Lender may nevertheless use the entire
response period allowed hereunder upon receipt of any subsequent
request, at the Lender's sole option.
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2.8.1(d) Prime Rate Loan Limitations. Individual Prime Rate Loans
shall be in the minimum amount of One Hundred Thousand and No/100
Dollars ($100,000.00) each. Any number of Prime Rate Loans may be
outstanding at any one time.
2.8.1(e) LIBOR Loan Limitations. Individual LIBOR Loans shall be
in the minimum amount of Five Hundred Thousand and No/100 Dollars
($500,000.00) each. No more than three (3) LIBOR Loans may be
outstanding under either of the Credit Facilities (for a maximum total
of six (6)) at any one time.
2.8.1(f) Additional Limitation on LIBOR Interest Periods.
Notwithstanding anything to the contrary in this Agreement, if an
Event of Default shall have occurred and be continuing, no additional
LIBOR Loans may be created or continued and no Prime Rate Loan may be
converted into a LIBOR Loan.
2.8.2 Conversion of Loans. Borrower shall have the right, on prior
irrevocable written notice to Agent given two (2) Banking Days prior to the
date of any requested conversion, to convert any Prime Rate Loan or LIBOR
Loan into a Loan of another type, or to continue any LIBOR Loan for another
Interest Period, subject in each case to the following:
2.8.2(a) Application of Loans. Each conversion shall be effected
by applying the proceeds of the new LIBOR Loan and/or Prime Rate Loan,
as the case may be, to the Loan (or portion thereof) being converted.
2.8.2(b) Notices of Conversions. Each notice pursuant to this
Section 2.8.2(b) shall be irrevocable and shall refer to this
Agreement and specify the identity and principal amount of the
particular Loan that Borrower requests be converted or continued; if
such notice requests conversion, the date of such conversion (which
shall be a Business Day); and if a Loan is to be converted to a LIBOR
Loan or a LIBOR Loan is to be continued, the Interest Period with
respect thereto. No LIBOR Loan shall be converted at any time other
than at the end of the Interest Period applicable thereto, except in
accordance with Section 2.9 hereof. Conversion notices shall be in the
form attached as Exhibit 2.8.1(b) hereto.
2.8.3 Absence of Election. If Borrower fails to give Agent notice to
continue any LIBOR Loan for a subsequent period, such LIBOR Loan (unless
repaid) shall automatically be converted into a Prime Rate Loan. If
Borrower fails to specify in any Borrowing Notice the type of borrowing or,
in the case of
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a LIBOR Loan, the applicable Interest Period, Borrower will be deemed to
have requested a Prime Rate Loan.
2.8.4 Implied Representations Upon Request for Loan. Upon making any
request for any Loan, Borrower shall be deemed to have warranted to Agent
and Lenders that all conditions to funding set forth in Article III hereof
are satisfied.
2.8.5 Advance Not Waiver. Either Lender's making of any Loan that it
is not obligated to make under any provision of Article III hereof or any
other provision hereof shall not be construed as a waiver of the Lender's
right to withhold future Loans, declare an Event of Default, or otherwise
demand strict compliance with this Agreement, acting through Agent as
permitted by the terms hereof.
2.8.6 Draws by Debit Memorandum. Agent may cause Lenders to draw
amounts that may be available under the Credit Facilities to pay any
Obligation that is not otherwise timely paid.
2.9 Interest. Interest shall accrue on each Loan as follows:
2.9.1 Prime Rate Loans. Interest shall accrue on each Prime Rate Loan
at an annual rate equal to the Prime Rate plus the Applicable Prime Rate
Margin, said rate to change contemporaneously with any change in the Prime
Rate.
2.9.2 LIBOR Loans. Interest shall accrue on each LIBOR Loan at a rate
equal to the LIBO Rate for the selected Interest Period plus the Applicable
LIBO Rate Margin.
2.9.3 Additional Interest on LIBOR Loans. In addition to the interest
described above, Borrower shall pay to Lenders, if and so long as Lenders
shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including LIBOR Liabilities, additional interest on
the unpaid principal amount of each LIBOR Loan, from the date of such
advance until said principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i)
the LIBO Rate for the Interest Period from (ii) the rate obtained by
dividing the LIBO Rate by a percentage equal to 100% minus the LIBO Rate
Reserve Percentage for such Interest Period. This additional interest shall
be payable on each date on which interest is payable. The amount of
additional interest shall be determined by each Lender, who shall notify
Borrower and Agent thereof and whose determination shall be conclusive,
absent manifest error.
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2.9.4 Calculation of Interest. Interest for both Prime Rate Loans and
LIBOR Loans shall be computed on the basis of a 360-day year counting the
actual number of days elapsed. Interest shall accrue on the Business Day a
Loan is extended and shall accrue through the Business Day on which it is
repaid.
2.9.5 Default Rate. Notwithstanding the foregoing, upon the occurrence
of an Event of Default and during the continuation of such Event of
Default, interest shall be charged at the Default Rate, regardless of
whether Lenders have elected to exercise any other remedies available to
Lender, including, without limitation, acceleration of the maturity of the
outstanding principal of the Credit Facilities. All such interest shall be
paid without demand on the Interest Payment Dates applicable to Prime Rate
Loans.
2.9.6 Payment of Interest. Interest for Prime Rate Loans and LIBOR
Loans shall be due and payable in arrears, without notice, on each Interest
Payment Date.
2.9.7 Usury Savings Provision. It is the intention of the parties that
all charges under or in connection with this Agreement and the Obligations,
however denominated, and including (without limitation) all interest,
commitment fees, late charges and loan charges, shall be limited to the
Maximum Lawful Amount. Such charges hereunder shall be characterized and
all provisions of the Loan Documents shall be construed as to uphold the
validity of charges provided for therein to the fullest possible extent.
Additionally, all charges hereunder shall be spread over the full permitted
term of the Obligations for the purpose of determining the effective rate
thereof to the fullest possible extent, without regard to prepayment of or
the right to prepay the Obligations. If for any reason whatsoever, however,
any charges paid or contracted to be paid in respect of the Obligations
shall exceed the Maximum Lawful Amount, then, without any specific action
by Lenders, Agent or Borrower, the obligation to pay such interest and/or
other charges shall be reduced to the Maximum Lawful Amount in effect from
time to time, and any amounts collected by Lenders that exceed the Maximum
Lawful Amount shall be applied to the reduction of the principal balance of
the Obligations and/or refunded to Borrower so that at no time shall the
interest or loan charges paid or payable in respect of the Obligations
exceed the Maximum Lawful Amount. This provision shall control every other
provision herein and in any and all other agreements and instruments now
existing or hereafter arising between Borrower and Lenders with respect to
the Obligations.
2.10 Alternate Rate of Interest if LIBOR Unavailable. In the event, and on
each occasion, that on the date of commencement of any Interest Period for a
LIBOR Loan, a Lender shall have determined (i) that dollar deposits in the
amount of the requested principal
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amount of such LIBOR Loan are not generally available in the London Interbank
Market; (ii) that the rate at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to the Lender of making or
maintaining such LIBOR Loan during such Interest Period; or (iii) that
reasonable means do not exist for ascertaining the LIBO Rate, the Lender shall,
as soon as practicable thereafter, give written or telephonic notice of such
determination to Borrower. In the event of any such determination, any request
by Borrower for a LIBOR Loan under this Agreement shall, until the circumstances
giving rise to such notice no longer exist, be deemed to be a request for a
Prime Rate Loan. Each determination by the Lender hereunder shall be conclusive
absent manifest error.
2.11 Change in Circumstances.
2.11.1 Imposition of Requirements. Notwithstanding any other provision
herein, if after the date of this Agreement any change in applicable Laws
or in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof
(whether or not having the force of Law) shall change the basis of taxation
of payments to a Lender under any LIBOR Loan made by the Lender or any
other fees or amounts payable hereunder (other than taxes imposed on the
overall net income, gross receipts or added value of a Lender by the
country in which the Lender is located, or by the jurisdiction in which a
Lender has its principal office, or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve
requirement, special deposit, insurance charge (including FDIC insurance on
LIBOR Liabilities) or similar requirement against assets of, deposits with
or for the account of, or credit extended by, a Lender or shall impose on a
Lender or the London Interbank Market any other condition affecting this
Agreement or LIBOR Loans made by a Lender, and the result of any of the
foregoing shall be to increase the cost to the Lender of making or
maintaining its LIBOR Loan or to reduce the amount of any sum received or
receivable by a Lender hereunder (whether of principal, interest or
otherwise) in respect thereof by an amount deemed by the affected Lender to
be material, then Borrower will pay to such Lender such additional amount
or amounts as will compensate the Lender for such additional costs of
reduction.
2.11.2 Other Changes. If either (i) the introduction of, or any change
in, or in the interpretation of, any United States or foreign Law; or (ii)
compliance with any directive, guidelines or request from any central bank
or other United States or foreign Governmental Authority (whether or not
having the force of law) promulgated or made after the date hereof, affects
or would affect the amount of capital required or expected to be maintained
by a Lender (or any lending office of a Lender) or any corporation directly
or indirectly owning or controlling a Lender (or any lending office of a
Lender) based upon the existence of this Agreement, and the Lender shall
have determined that such introduction, change or compliance has or would
have the effect of reducing the
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rate of return on the Lender's capital or on the capital of such owning or
controlling corporation as a consequence of its obligations hereunder
(including its commitment) to a level below that which the Lender or such
owning or controlling corporation could have achieved but for such
introduction, change or compliance (after taking into account that Lender's
policies or the policies of such owning or controlling corporation, as the
case may be, regarding capital adequacy) by an amount deemed by the Lender
(in its sole discretion) to be material, then, from time to time, Borrower
shall pay to the Lender such additional amount or amounts as will
compensate the Lender for such reduction attributable to making, funding
and maintaining its commitment and Loans hereunder.
2.11.3 Computation of Amounts. A certificate of a Lender setting forth
the basis and method of computation of such amount or amounts specified in
Sections 2.11.1 and 2.11.2 hereof as shall be necessary to compensate the
Lender (or its participating banks) as specified above, as the case may be,
shall be delivered to Borrower and shall be conclusive absent manifest
error; provided however, that Borrower shall be responsible for compliance
herewith and the payment of increased costs only to the extent that (i) any
change in Laws giving rise to increased costs occurs after the date of this
Agreement; and (ii) the Lender gives notice of the change giving rise to
increased costs within one hundred eighty (180) Business Days after the
Lender has, or with reasonable diligence should have had, knowledge of the
change, or else Lender can only collect costs from and after the date of
the notice. Subject to the foregoing, Borrower shall pay the affected
Lender the amount shown as due on any such certificate within ten (10)
Business Days after its receipt of such certificate.
2.11.4 No Duty to Contest. The protection of this Section 2.11 shall
be available to a Lender regardless of any possible contention of
invalidity or inapplicability of the Law or condition that shall have been
imposed. Should a Lender assess any charge to Borrower under this Section
2.11, and provided that Borrower pays the assessment to the Lender,
Borrower may thereafter undertake, at Borrower's own expense, any contest
of the matters giving rise to the charge that may, in the opinion of
Borrower's independent counsel issued to the affected Lender, and concurred
in by counsel to the Lender, have a reasonable chance of success, provided
further that the contest would not require the assertion of any position
contrary to a position taken by the Lender generally with taxing
authorities or any other involved parties and that there does not exist any
other circumstance that would disadvantage the Lender in the event of such
contest, as the affected Lender may determine in its discretion. The
affected Lender shall offer reasonable participation to Borrower for the
purpose of enabling Borrower to pursue the contest of such issue, with all
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expenses, including fees and expenses of the affected Lender's counsel, to
be paid by Borrower.
2.12 Change in Legality of LIBOR Loans. Notwithstanding anything to the
contrary herein contained, if any change in any Law or in interpretation thereof
by any Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for a Lender to make or maintain any LIBOR Loan
or to give effect to its obligations as contemplated hereby, then, by written
notice to Borrower, the Lender may (i) declare that LIBOR Loans will not
thereafter be made by the Lender hereunder, whereupon Borrower shall be
prohibited from requesting LIBOR Loans from the Lender hereunder unless such
declaration is subsequently withdrawn; and (ii) require that all outstanding
LIBOR Loans made by it be converted to Prime Rate Loans, in which event (a) all
such LIBOR Loans shall be automatically converted to Prime Rate Loans (but
without imposition of any additional charge that would normally become due under
Section 2.11 hereof) as of the effective date of such notice, and (b) all
payments and prepayments of principal that would otherwise have been applied to
repay the converted LIBOR Loans shall instead be applied to repay the Prime Rate
Loans resulting from the conversion of such LIBOR Loans. For purposes of this
Section 2.12, a notice to Borrower by the Lender pursuant to (a) above shall be
effective, if lawful, on the last day of the then current Interest Period; in
all other cases, such notice shall be effective on the date of receipt by
Borrower.
2.13 Principal Repayment. Principal payments under the Credit Facilities
shall become due immediately and without notice at such time that the
outstanding principal balance of the Credit Facilities may exceed the Credit
Ceiling, in an amount sufficient to reduce the outstanding principal balance to
an amount no greater than the Credit Ceiling. All remaining principal
outstanding under the Credit Facilities shall become due on the Maturity Date or
the earlier acceleration of the Credit Facilities in accordance with the terms
of this Agreement.
2.14 Prepayment of LIBOR Loans.
2.14.1 Notice of LIBOR Loan Prepayment. Borrower may, upon two (2)
Banking Days' prior written notice to Agent, and upon payment of all
applicable premiums set forth in Section 2.14.3 hereof, prepay any
outstanding LIBOR Loans prior to any Interest Payment Date for such LIBOR
Loans, in whole or in part. Each notice of prepayment of any LIBOR Loan
shall specify the date and amount of such prepayment and shall be
irrevocable.
2.14.2 Amount of LIBOR Loan Prepayment. Each partial prepayment of any
LIBOR Loan shall be in an aggregate principal amount which is the lesser of
(i) the then outstanding principal balance of the one or more LIBOR Loans
to be prepaid, or (ii) Five Hundred Thousand and No/100 Dollars
($500,000.00) or an integral multiple thereof. Interest on the amount
prepaid accrued to the prepayment date shall be paid on such date.
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2.14.3 LIBOR Loan Prepayment Premium. Upon prepayment of any LIBOR
Loan on a date other than the relevant Interest Payment Date for such
borrowing, Borrower shall pay to Lenders, in addition to all other payments
then due and owing Lenders, premiums which shall be equal to an amount, if
any, reasonably determined by Agent to be the difference between the rate
of interest then applicable to the relevant LIBOR Loan and the yield
Lenders would receive upon reinvestment of so much of the relevant LIBOR
Loans as is prepaid for the remainder of the term of the relevant LIBOR
Loan or Loans. Anything in this Section 2.14.3 to the contrary
notwithstanding, the premiums payable upon any such prepayment shall not
exceed the amount, if any, determined by Agent to be the difference between
the rate of interest then applicable to the relevant LIBOR Loan and the
yield that Lenders could receive upon reinvestment in the "Floor
Reinvestment" of so much of the relevant LIBOR Loan as is prepaid for the
remainder of the term of the relevant LIBOR Loan. For purposes hereof,
"Floor Reinvestment" shall mean an investment for the time period from the
date of such prepayment to the end of the relevant Interest Period
applicable to such LIBOR Loan at an interest rate per annum equal to the
federal funds "offered" rate as published in the Wall Street Journal on the
date of such prepayment. All determinations, estimates, assumptions,
allocations and the like required for the determination of such premiums
shall be made by Agent in good faith and shall be presumed correct absent
manifest error.
2.15 Prepayment of Prime Rate Loans. Borrower may at any time prepay any
outstanding Prime Rate Loans prior to the Maturity Date in whole or in part
without premium or penalty.
2.16 Fixed Commitment Fees. Borrower shall pay a commitment fee to Lenders
on a Pro Rata basis upon the execution of this Agreement (i) with respect to the
Acquisition Loan, in the amount of One Hundred Ten Thousand and No/100 Dollars
($110,000.00) and (ii) with respect to the Working Capital Loan, in the amount
of Thirteen Thousand Seven Hundred Fifty and No/100 Dollars ($13,750.00). An
additional commitment fee shall become due with respect to the Working Capital
Loan under certain circumstances as set forth in the definition of "Maturity
Date" above in this Agreement. These commitment fees are not refundable or
proratable.
2.17 Periodic Commitment Fee Based on Use of Facilities. Borrower shall pay
to Agent for distribution to Lenders Pro Rata an additional commitment fee for
the unused portion of the Credit Facilities. This fee shall be determined by
applying the Applicable Commitment Fee to the average daily unused balance of
the Credit Facilities. The commitment fee shall be paid in arrears on each
Interest Payment Date applicable to Prime Rate Loans. This commitment fee is not
refundable or proratable.
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2.18 Agent's Fee. On the Closing Date, and on each subsequent anniversary
thereof excepting only an anniversary corresponding to the Maturity Date,
Borrower shall pay to Agent a fee of Five Thousand and No/100 Dollars
($5,000.00) for each Lender (inclusive of Agent) then a party to this Agreement.
If any additional Lender becomes a party to this Agreement between anniversary
dates as to increase the total number of Lenders, a like fee shall be paid to
Agent with respect to that Lender upon its entry, prorated to reflect the
balance of the year remaining until the next anniversary of the Closing Date.
III. CONDITIONS PRECEDENT
3.1 Conditions to Initial Advance. Lenders shall not be obligated to make
their initial Loan pursuant to this Agreement unless and until Borrower
satisfies the following conditions:
3.1.1 Loan Documents. Borrower shall have delivered to Lenders and to
Agent the following documents, fully executed and in form and substance
acceptable to the Agent:
3.1.1(a) Loan Agreement. This Agreement.
3.1.1(b) Acquisition Loan Notes. The Acquisition Loan Notes made
by Borrower payable to the order of the respective Lenders in the
maximum principal amounts of Sixteen Million and No/100 Dollars
($16,000,000.00) and Six Million and No/100 Dollars ($6,000,000.00),
respectively.
3.1.1(c) Working Capital Loan Notes. The Working Capital Loan
Notes made by Borrower payable to the order of the respective Lenders
in the maximum principal amounts of Four Million and No/100 Dollars
($4,000,000.00) and One Million Five Hundred Thousand and No/100
Dollars ($1,500,000.00), respectively.
3.1.1(d) Guaranties of Subsidiaries. Unconditional Continuing
Guaranties executed by all Subsidiaries of Borrower other than
Non-Corporate Subsidiaries.
3.1.1(e) Pledge of Stock of Subsidiaries. Stock Pledge Agreement,
Irrevocable Proxies and Blank Stock Powers evidencing a first priority
perfected security interest in all of the stock of Borrower's
corporate Subsidiaries and all dividends, distributions and other
property related thereto, together with the original certificates
evidencing the pledged stock.
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3.1.1(f) Charters. Certified Copies of the Consolidated Entities'
corporate charters and all amendments thereto, issued by the
Secretaries of State for their states of domicile.
3.1.1(g) Bylaws. Certified Copies of Bylaws for the Consolidated
Entities.
3.1.1(h) Certificates of Good Standing. Certificates of good
standing or existence, as applicable, issued as to the Consolidated
Entities by the Secretaries of State for the states of their domicile.
3.1.1(i) Foreign Qualification. Certificates of Qualification
issued by the Secretaries of State for each state in which a
Consolidated Entity is required to qualify as a foreign corporation.
3.1.1(j) Resolutions. Certified Copies of Resolutions authorizing
the execution of all applicable Loan Documents on behalf of
Consolidated Entities.
3.1.1(k) Opinions of Borrower's Counsel. Opinions of counsel to
the Consolidated Entities addressed to Agent and Lenders, addressing
matters reasonably required by Lenders, Agent and their counsel.
3.1.1(l) UCC Searches. UCC search reports on Borrower from such
jurisdictions and filing offices as Lenders and Agent may require.
3.1.1(m) Closing Statement and Funding of Expenses. Loan Closing
Statement describing expenses and fees due in connection with the
closing of the Credit Facilities and payment thereof in immediately
available funds.
3.1.1(n) Other Documents. Such other documents as Lenders or
Agent may reasonably require.
3.1.1(o) Completion of Exhibits and Schedules. The completion of
all exhibits and schedules to this Agreement, which shall be
satisfactory to Agent, in its sole discretion.
3.1.2 Additional Conditions. Borrower shall have satisfied the
following additional conditions, to Lenders' and Agent's satisfaction:
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3.1.2(a) Warranties. All warranties made in the Loan Documents
must be true in all material respects and shall be true in all
material respects taking into account the funding of the requested
Loan.
3.1.2(b) Covenants. All covenants made in the Loan Documents must
have been complied with and shall have been complied with taking into
account the funding of the requested Loan.
3.1.2(c) Absence of Unmatured Default. No Event of Default or
Unmatured Default shall exist under this Agreement.
3.1.2(d) No Adverse Change. There must be no Material Adverse
Change since the date of the Financial Statements.
3.1.2(e) Regulatory Diligence. The completion of healthcare
regulatory diligence to the satisfaction of Agent and its counsel.
3.2 Conditions to Subsequent Loans. Lenders shall not be obligated to make
any Loan unless all of the following conditions are satisfied as of the time of
the request and of funding:
3.2.1 Conditions to Initial Advance. All of the conditions in Section
3.1 hereof must have been satisfied.
3.2.2 Warranties. All warranties made in the Loan Documents must be
true in all material respects and shall be true in all material respects
taking into account the funding of the requested Loan.
3.2.3 Covenants. All covenants made in the Loan Documents must have
been complied and shall have been complied with taking into account the
funding of the requested Loan.
3.2.4 Absence of Unmatured Default. No Event of Default or Unmatured
Default shall exist under this Agreement.
3.2.5 Material Adverse Change. There shall not have occurred a
Material Adverse Change.
IV. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders and Agent that:
4.1 Capacity. Each Consolidated Entity is a corporation or other entity as
set forth in Schedule 4.1 hereof, and is duly organized, validly existing and in
good standing
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under the laws of the state of its domicile as set forth in Schedule 4.1. Each
Consolidated Entity is qualified or authorized to do business in all
jurisdictions in which its ownership of property or conduct of business requires
such qualification or authorization or where the failure to be so qualified or
authorized would not have a Material Adverse Effect. Each Consolidated Entity
has the power and authority to own its Properties and to carry on its business
as now being conducted and as proposed to be conducted after the execution
hereof, to execute and deliver this Agreement and the other Loan Documents, and
to perform its obligations hereunder and under the other Loan Documents.
4.2 Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents by each Consolidated Entity executing
such documents has been duly authorized by all requisite action.
4.3 Binding Obligations. This Agreement is and the other Loan Documents,
when executed and delivered to Lender, will be, legal, valid and binding upon
each Consolidated Entity who is a party thereto, enforceable in accordance with
its respective terms, subject only to principles of equity and laws applicable
to creditors generally, including bankruptcy laws.
4.4 No Conflicting Law or Agreement. The execution, delivery and
performance of this Agreement and the other Loan Documents by each Consolidated
Entity does not constitute a breach of or default under, and will not violate or
conflict with, any provisions of the corporate charter or other constituent
documents of a Consolidated Entity; any contract, financing agreement, lease, or
other agreement to which a Consolidated Entity is a party or by which its
Properties may be affected, the violation of which could have a Material Adverse
Effect; or any Law to which a Consolidated Entity is subject or by which its
Properties may be affected, the violation of which could have a Material Adverse
Effect; nor will the same result in the creation or imposition of any
Encumbrance upon any Property of any Consolidated Entity, other than those
contemplated by the Loan Documents.
4.5 No Consent Required. The execution, delivery, and performance of this
Agreement and the other Loan Documents by the Consolidated Entities do not
require the consent or approval of or the giving of notice to any Person except
for those consents which have been duly obtained and are in full force and
effect on the date hereof and others, if any, which by their omission could not
result in a Material Adverse Effect.
4.6 Financial Statements. The Financial Statements are complete and
correct, have been prepared in accordance with GAAP, and present fairly the
financial condition and results of operations of the Consolidated Entities as of
the date and for the period stated therein, subject to year-end adjustments. No
Material Adverse Change has occurred since the date of the Financial Statements.
Borrower acknowledges that Lenders have advanced (or shall advance) the Credit
Facilities in reliance upon the Financial Statements.
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4.7 Fiscal Year. Each Consolidated Entity's fiscal year ends on December 31
of each year.
4.8 Litigation. Except as disclosed on Schedule 4.8 hereto, (i) there is no
litigation, arbitration, legal or administrative proceeding, tax audit,
investigation, or other action or proceeding of any nature pending against any
Consolidated Entity or any of its Properties, and (ii) there is no litigation,
arbitration, legal or administrative proceeding, tax audit, investigation, or
other action or proceeding of any nature threatened in writing against a
Consolidated Entity which, if adversely determined, could have a Material
Adverse Effect. No Consolidated Entity is subject to any outstanding court,
arbitral or administrative order, writ or injunction. To the Best of Borrower's
Knowledge, no facts exist under which third parties have unasserted claims
against any Consolidated Entity which, if adversely determined, could have a
Material Adverse Effect.
4.9 Taxes; Governmental Charges. Each Consolidated Entity has filed or
caused to be filed or has lawfully extended the deadline for filing all tax
returns and reports required to be filed. Each Consolidated Entity has paid, or
made adequate provision for the payment of, all Taxes that have or may have
become due pursuant to such returns or otherwise, or pursuant to any assessment
received by it, except such Taxes, if any, as are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided.
To the Best of Borrower's knowledge, there is no proposed material tax
assessment against any Consolidated Entity. No extension of time for the
assessment of federal, state or local taxes of any Consolidated Entity is in
effect or has been requested, except as disclosed in Schedule 4.9 hereto. Each
Consolidated Entity has timely made all required remittances of withholding
deposits and other assessments against payroll expenditures.
4.10 Title to Properties. Each Consolidated Entity has good and marketable
title to its Properties, free and clear of all Encumbrances except for Permitted
Encumbrances.
4.11 No Default. No Consolidated Entity is in default in any respect that
affects its business, Properties, operations, or condition, financial or
otherwise, under any indenture, mortgage, deed of trust, obligation to equity
holders, credit agreement, note, agreement, lease, sale agreement or other
instrument to which any Consolidated Entity is a party or by which its
Properties are bound, which default could have a Material Adverse Effect. To the
Best of Borrower's Knowledge, no other party to any contract with any
Consolidated Entity under which a default could have a Material Adverse Effect
is in default or breach thereof and no circumstances exist which, with the
giving of notice and/or the passing of time would constitute such default or
breach. No Event of Default or Unmatured Default exists under this Agreement.
4.12 Casualties; Taking of Properties. Neither the business nor the
Property of any Consolidated Entity is presently impaired as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or
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taking of property, cancellation of contracts, permits, concessions by any
domestic or foreign government or any agency thereof, riot, activities of armed
forces or acts of God or of any public enemy, in any case as could have a
Material Adverse Effect.
4.13 Compliance with Laws. No Consolidated Entity is in violation of any
Law to which it, its business or any of its Properties are subject, the
violation of which would likely have a Material Adverse Effect, and, to the Best
of Borrower's Knowledge, there are no outstanding citations, notices or orders
of noncompliance issued to any Consolidated Entity under any such Law, the
violation of which would likely have a Material Adverse Effect. Each
Consolidated Entity has obtained all licenses, permits, franchises, or other
governmental authorizations necessary to the ownership of its Properties or to
the conduct of its business, except for those which, if not obtained, could not
have a Material Adverse Effect.
4.14 Compliance with Fraud and Abuse Laws. Without limiting any other
provision of this Agreement, no Consolidated Entity and no Provider is in
violation of any Fraud and Abuse Law, the violation of which could have a
Material Adverse Effect.
4.15 ERISA. No ERISA Event has occurred with respect to any Plan or is
reasonably expected to occur with respect to any Plan.
4.16 Full Disclosure of Material Facts. Borrower has fully advised Lenders
of all matters involving the financial condition, business, operations and
Properties of the Consolidated Entities that would be reasonably expected to
have a Material Adverse Effect. No information, exhibit, or report furnished or
to be furnished by Borrower to Lenders in connection with this Agreement
contains, as of the date thereof, any misrepresentation of fact or failed or
will fail to state any material fact, the omission of which would render the
statements therein materially false or misleading.
4.17 Accuracy of Projections. With respect to all business plans and other
forecasts and projections furnished by or on behalf of Borrower and made
available to Lenders relating to the financial condition, business, operations
or Properties of the Consolidated Entities, all facts stated as such therein
were true and complete in all material respects as of the time made and all
estimates and assumptions were made in good faith and believed to be reasonable
at the time made. As of the Closing Date, nothing has since come to the
attention of Borrower that has changed its assessment of any such matters,
except for changes that could not have a Material Adverse Effect.
4.18 Investment Company Act. No Consolidated Entity is an "investment
company" under the Investment Company Act of 1940, as amended.
4.19 Personal Holding Company. No Consolidated Entity is a "personal
holding company" as defined in Section 542 of the IRC.
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4.20 Solvency. Each Consolidated Entity is Solvent as of the Closing Date
and will remain Solvent upon the consummation of the transactions contemplated
hereby.
4.21 Chief Executive Office. The address designated herein to which notices
are to be sent under this Agreement is the Borrower's chief executive office
within the meaning of Tennessee Code Annotated Section 47-9-103(3)(d).
4.22 Subsidiaries. Borrower has no Subsidiaries, except for those listed on
Schedule 4.22 hereto.
4.23 Ownership of Patents, Licenses, Etc. The Consolidated Entities own all
licenses, permits, franchises, registrations, patents, copyrights, trademarks,
trade names or service marks, or the rights to use the foregoing, that are
necessary for the continued operation of their business except for such
licenses, etc., which, if not held or owned, could not have a Material Adverse
Effect.
4.24 Environmental Compliance. Each Consolidated Entity has duly complied
with, and their Properties are owned and operated in compliance with, all
Environmental Laws, the violation of which could have a Material Adverse Effect.
There have been no citations, notices or orders of non-compliance issued to any
Consolidated Entity or, to the Best of Borrower's knowledge, relating to their
business or Properties pursuant to any Environmental Law. Each Consolidated
Entity has obtained all required federal, state and local licenses, certificates
or permits relating to them and their Properties as required by applicable
Environmental Laws, except for those which, if not obtained, could not have a
Material Adverse Effect
4.25 Labor Matters. No Consolidated Entity is subject to any collective
bargaining agreements or any decrees or orders requiring them to recognize, deal
with or employ any Person. No demand for collective bargaining has been asserted
against any Consolidated Entity by any union or organization. No Consolidated
Entity has experienced any strike, labor dispute, slowdown or work stoppage due
to labor dispute and, to the best knowledge of Borrower, there is no such
strike, dispute, slowdown or work stoppage threatened against any Consolidated
Entity. All Consolidated Entities are in compliance in all material respects
with the Fair Labor Standards Act of 1938, as amended.
4.26 OSHA Compliance. All Consolidated Entities are in compliance in all
material respects with the Federal Occupational Safety and Health Act, as
amended, and all regulations under the foregoing.
4.27 Regulation U. No Consolidated Entity is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System). No proceeds of any Loan will be used to purchase or carry any
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System) in violation of
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applicable law, including, without limitation, Regulation U issued by the Board
of Governors of the Federal Reserve System.
4.28 Affiliate Transactions. No Consolidated Entity is a party to any
transaction, contract or agreement with any Affiliate, except for Service
Agreements, lease agreements and other agreements among Borrower and its
Subsidiaries and those other agreements described in Schedule 4.28 hereof.
V. AFFIRMATIVE COVENANTS
Borrower covenants that, during the term of this Agreement (and thereafter
where expressly stated herein):
5.1 Payment of Obligations. Borrower shall pay all amounts owed under the
Obligations when due.
5.2 Maintenance of Existence and Business. Except for transactions among
Consolidated Entities permitted under this Agreement, each Consolidated Entity
shall maintain its fundamental existence, name, rights, and franchises, and
shall maintain its qualification and good standing in all states in which such
qualification is necessary, and shall continue to operate in the same type of
business as such Consolidated Entity engages in as of the date hereof.
5.3 Financial Statements and Reports. Borrower shall furnish to Agent the
following, all of which must be in form and substance satisfactory to Lender
(the financial reports below and all other reports required of Borrower under
this Agreement shall be delivered in sufficient counterparts that each Lender
and Agent may have an original counterpart thereof):
5.3.1 Monthly Financial Reports. As soon as available, and in any
event by the thirtieth (30th) day following the end of a month, Borrower
shall deliver to Agent a balance sheet, income statement and statement of
cash flows of Borrower for and as of the end of the preceding month, all
prepared by Borrower on a consolidated basis and certified by Borrower's
president or chief financial officer to be complete and correct and to
present fairly, in accordance with GAAP (excluding year-end adjustments and
required footnote disclosures), the consolidated financial condition of
Borrower as of the date of such statements and the consolidated results of
its operations and its cash flow for such period. Notwithstanding the
foregoing, if as of May 31, 1997, Borrower has met the Financial
Projections since the date hereof, the requirements of this Section 5.3.1
will terminate and monthly financial statements shall no longer be
required.
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5.3.2 Quarterly Financial Reports. As soon as available, and in any
event by the forty-fifth (45th) day of each fiscal quarter except the
fourth fiscal quarter, Borrower shall prepare and deliver to Agent a
consolidated balance sheet, income statement and statement of cash flows of
Borrower for and as of the end of the preceding fiscal quarter, certified
by Borrower's President or Chief Financial Officer to be complete and
correct and to present fairly, in accordance with GAAP (excluding year-end
adjustments and required footnote disclosures), the consolidated financial
condition of Borrower as of the date of such statements and the
consolidated results of its operations and its cash flow for such period.
Supplemental to such basic financial statements, Borrower shall deliver to
the Agent calculations of all financial ratios; the certification of
Borrower's President or Chief Financial Officer as to the absence of any
Event of Default or Unmatured Default; a Borrowing Base certificate; and
by- Practice financial summaries addressing Practice revenues, expenses and
fees to Consolidated Entities in form and substance acceptable to Agent.
5.3.3 Annual Financial Reports. As soon as available, and in any event
within ninety (90) days after the end of each fiscal year, Borrower shall
deliver to Agent the audited consolidated balance sheet of Borrower as of
the end of such year and the related audited consolidated statements of
income, retained earnings and cash flows for such year, together with
supporting schedules, all such statements prepared in accordance with GAAP
and accompanied by an unqualified audit report prepared by an independent
"big six" certified public accountant acceptable to Agent showing the
consolidated financial condition of Borrower at the close of such year and
the consolidated results of its operations, changes in its retained
earnings and its cash flows for such year. Supplemental to the audited
year-end financial statements, Borrower shall deliver to Agent calculations
of all financial ratios as determined based upon the audited financial
statements and the certification of Borrower's President or Chief Financial
Officer as to the absence of any Event of Default or Unmatured Default.
5.3.4 Accountant Reports. Promptly upon the receipt thereof, Borrower
shall deliver to Agent a copy of each other report (other than work papers)
submitted to Borrower or any Subsidiary by its accountants in connection
with any annual, interim or special audit made by them, but Borrower shall
be obligated to deliver such report only if (i) the report advises Borrower
of a material weakness in internal controls, or (ii) Agent has requested
the report in writing based upon Agent's good faith belief that, based upon
its review of Borrower's financial statements or other information relating
to the operations and condition of the Consolidated Entities, a copy of
such report is needed in order for Agent and/or Lenders to thoroughly
assess the financial condition of the Consolidated Entities and/or their
continued compliance with this Agreement.
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5.3.5 Acquisition Certification. In connection with any draw, Borrower
shall submit a Borrowing Base certificate to confirm the sufficiency of the
Borrowing Base for the requested advance.
5.3.6 Other Information. Borrower shall provide Agent with such
additional information regarding the financial condition, properties,
operations and prospects of the Consolidated Entities and their
consolidated entities as Agent may reasonably require.
5.4 Additional Information. Borrower shall provide such other information
respecting the condition or operations, financial or otherwise, of the
Consolidated Entities as Agent may from time to time reasonably request.
5.5 Certain Additional Reporting Requirements.
5.5.1 Owner Mailings. Promptly upon the sending thereof, Borrower
shall deliver to Agent a copy of each statement, report or notice sent to
its shareholders.
5.5.2 SEC Filings. Promptly upon the filing thereof, should such
filings become applicable, Borrower shall deliver to Agent copies of all
regular, periodic and special reports that any Consolidated Entity files
with the United States Securities and Exchange Commission or any successor
thereto, or any national securities exchanges or the National Association
of Securities Dealers.
5.5.3 Change in Accounting Policies. Borrower shall promptly notify
Agent in writing upon any material change in accounting policies or
financial reporting practices on the part of any Consolidated Entity.
5.5.4 Notice to Agent Upon Perceived Breach. Borrower agrees to give
Lender prompt written notice of any action or inaction by or on behalf of
Lender in connection with this Agreement or the Obligations that Borrower
believes may be actionable against Lenders or Agent or a defense to payment
of any or all Obligations for any reason, including, but not limited to,
commission of a tort or violation of any contractual duty or duty implied
by law provided, however, that Borrower's failure to give such notice, if
such failure is unintentional and does not arise from Borrower's gross
negligence, shall not foreclosure any such action or defense to be asserted
by Borrower.
5.5.5 Changes in Constituent Documents. Borrower shall promptly notify
Agent in writing of any change in the corporate charter or bylaws of
Borrower or the fundamental documents of any Subsidiary following the
encumbrance of the stock thereof in favor of Agent to secure Lenders as
required under this Agreement, and shall provide Agent with a copy of such
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change (Consolidated Entities are restricted in the adoption of such
amendments as provided elsewhere in the Loan Documents, and nothing
contained in this Section shall be deemed a waiver of such restrictions).
5.5.6 Notice of Litigation. Borrower shall give Agent prompt written
notice of any litigation, arbitration, tax audit, administrative proceeding
or investigation that may hereafter be instituted or threatened in writing
in which Borrower would be a party or which otherwise may affect any
Consolidated Entity or any of their business, operations or Properties,
except for (i) actions seeking only monetary damages in an amount of less
than the amount equal to one-half percent (1/2%) of Borrower's Consolidated
EBITDA for the most recent four (4) fiscal quarters for which Borrower has
submitted financial statements to Agent, as of the time of determination,
and (ii) matters arising from premises or vehicular liability seeking only
monetary damages and which are fully covered by insurance, subject only to
any applicable deductible.
5.5.7 Other Notices. Borrower shall promptly notify Agent in writing
if Borrower learns of the occurrence of (i) any event that constitutes an
Event of Default or an Unmatured Default, together with a detailed
statement of the steps being taken as a result thereof, or (ii) any
Material Adverse Change.
5.6 Taxes and Other Encumbrances. Each Consolidated Entity shall make due
and timely payment or deposit of all federal, state and local taxes, assessments
or contributions required of it by law, and execute and deliver to Agent, on
demand, appropriate certificates attesting to the payment or deposit thereof;
provided, however, that the Consolidated Entities shall not be required to pay
or discharge any such tax, assessment, charge or claim for as long as it is
being diligently contested in good faith by proper proceedings and for which
appropriate reserves are being maintained.
5.7 Payment of Liabilities. Each Consolidated Entity shall pay all of its
Liabilities as and when the same becomes due in accordance with its terms.
5.8 Compliance with Laws. Each Consolidated Entity shall observe and comply
with all Laws (including, but not limited to, Fraud and Abuse Laws), and shall
maintain all certificates, franchises, permits, licenses, and authorizations
necessary to the conduct of its business or the operation of its Properties,
except for such Laws, certificates, etc., which, if violated or not obtained and
full penalties were imposed for such violation, could not cause a Material
Adverse Effect. Each Consolidated Entity shall further use its best efforts to
assure the compliance by all Providers with all applicable Laws, including, but
not limited to, medical licensure and Fraud and Abuse Laws, relating to their
providing of professional services, except for those which, if violated and full
penalties were imposed for such violation, could not cause a Material Adverse
Effect.
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5.9 Maintenance of Property. All Consolidated Entities shall maintain their
Property (and any Property leased by or consigned or held under title retention
or conditional sales contracts) in good and workable condition at all times,
subject to ordinary wear and tear, normal discards and replacements due to
functional and useful-life obsolescence, and shall make all repairs,
replacements, additions, and improvements to their Property reasonably necessary
and proper to ensure that the business carried on in connection with their
Property may be conducted properly and efficiently at all times.
5.10 Compliance with Contractual Obligations. Each Consolidated Entity will
perform all of its obligations in respect of all material contracts to which it
is a party and will use its best efforts to keep, and to take all action to
keep, such contracts in full force and effect and not allow any such contract to
lapse or be terminated or any rights to renew such to be forfeited or canceled,
if such lapse, etc. could have a Material Adverse Effect; provided, however,
that any such contract may lapse or be terminated or such renewal rights may be
forfeited or canceled if in the reasonable business judgment of the Consolidated
Entities it is in their best interests to allow or cause such lapse,
termination, forfeiture or cancellation.
5.11 Further Assurances. The Consolidated Entities shall promptly cure any
defects in the creation, issuance, or delivery of the Loan Documents. The
Consolidated Entities at their expense will execute (or cause to be executed)
and deliver to Agent upon request all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements applicable to them in the Loan Documents, or to
evidence further and to describe more fully any Collateral intended as security
for the Obligations, or to correct any omissions in the Loan Documents, or to
state more fully the Obligations and agreements set out in any of the Loan
Documents, or to perfect, protect, or preserve any Encumbrances created pursuant
to any of the Loan Documents, or to make any recordings, to file any notices, or
to obtain any consents, all as may be reasonably necessary or appropriate in
connection therewith. Borrower appoints Agent as Borrower's attorney-in-fact to
execute any financing statements or other instruments of perfection with respect
to the Collateral.
5.12 Security Interest; Setoff. In order to further secure the payment of
the Obligations, Borrower hereby grants to Agent and to each Lender a security
interest and right of setoff against all of Borrower's presently owned or
hereafter acquired monies, items, credits, deposits and instruments (including
certificates of deposit) presently or hereafter in the possession of any Lender
or Agent. By maintaining any such accounts or other property with a Lender or
Agent, Borrower acknowledges that Borrower voluntarily subjects the property to
the security interest arising hereunder. Subject to the provisions in Article IX
hereof, a Lender may exercise its rights under this Section without prior notice
(but with prompt notice following the setoff) following an Event of Default.
Borrower agrees that neither Lenders nor Agent shall be liable for the dishonor
of any instrument after notice of setoff shall have been duly given resulting
from a Lender's exercise of its rights under this Section.
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5.13 Insurance.
5.13.1 General Insurance Requirements. In addition to the other
specific requirements set forth in this Agreement and in other Loan
Documents, the Consolidated Entities shall maintain insurance on all
insurable Properties now or hereafter owned by them against such risks and
to the extent customary in their industry, and shall maintain or cause to
be maintained public liability and worker's compensation insurance to the
extent customary in the industry.
5.13.2 Practice-Related Insurance Requirements. The Consolidated
Entities shall maintain insurance for claims, however characterized,
against them in connection with the provision of medical services by
Providers and/or ancillary services provided by them at Practices covered
by Service Agreements, in an amount of at least Five Hundred Thousand and
No/100 Dollars ($500,000.00) per occurrence and One Million and No/100
Dollars ($1,000,000.00) in the aggregate for Providers who are physicians,
which insurance shall name Lenders (or Agent on behalf of Lenders) as
additional insureds. The Consolidated Entities shall further cause each
Provider to maintain medical malpractice insurance of at least Five Hundred
Thousand and No/100 Dollars ($500,000.00) per occurrence and One Million
and No/100 Dollars ($1,000,000.00) in the aggregate.
5.14 Accounts and Records. The Consolidated Entities shall maintain current
books of record and account, in which full, true, and correct entries will be
made of all transactions.
5.15 Official Records. The Consolidated Entities shall maintain current
corporate and official records, minute books and stock ledgers and other records
appropriate to their form of organization.
5.16 Banking Relationships. The Consolidated Entities shall maintain their
deposit accounts with Lenders or with other FDIC-insured depository
institutions.
5.17 Right of Inspection. The Consolidated Entities shall permit any
officer, employee, or agent of a Lender or Agent to visit and inspect during
ordinary business hours any of the their Property, to examine their books of
record and accounts and corporate records, to take copies and extracts from such
books of record and accounts, and to discuss the affairs, finances, and accounts
of the Consolidated Entities with their respective officers, accountants, and
auditors, all at such reasonable times and as often as a Lender may reasonably
desire and upon reasonable advance notice absent an Event of Default. Without
limiting Agent's right to obtain equitable relief as to any other appropriate
right in this Agreement or in other Loan Documents, Borrower agrees that the
rights in this Section may be enforced by affirmative injunction and, to the
extent the right to review records may be
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denied, the right may be enforced by a restraining order prohibiting the
interference by Borrower with the exercise of rights to review of the records
pursuant to this Section. Absent an Event of Default or Unmatured Default, all
expenses of such inspections, etc. shall be paid by Lenders, and in the presence
thereof, all expenses shall be paid by Borrower.
5.18 ERISA Information and Compliance. The Consolidated Entities shall
comply with ERISA and all other applicable laws governing any pension or profit
sharing plan or arrangement to which they are a party. The Consolidated Entities
shall (i) upon request, provide Agent with copies of any annual report required
to be filed pursuant to ERISA with respect to any Plan or any other employee
benefit plan; (ii) notify Agent upon the occurrence of any ERISA Event or of any
additional act or condition arising in connection with any Plan which they
believe might constitute grounds for termination thereof by the PBGC or for the
appointment of a trustee to administer the Plan; and (iii) furnish to Agent,
promptly upon request, such additional information concerning any Plan or any
other employee benefit plan as Agent may request.
5.19 Indemnity; Expenses. Borrower agrees to indemnify, defend (with
counsel reasonably satisfactory to the indemnified party or parties) and hold
harmless Lenders and Agent against any loss, liability, claim or expense,
including reasonable attorneys' fees, that they may incur in connection with the
Loan Documents or the Obligations, except those losses, etc. that may result
from a Lender's or Agent's gross negligence or willful misconduct. Without
limiting the foregoing, upon demand by Agent, Borrower will reimburse Lenders
and/or Agent for the following reasonable expenses if not paid by Borrower
promptly after written demand by Agent:
5.19.1 Taxes. All taxes that Lenders or Agent may be required to pay
because of the Obligations or because of Lenders' or Agent's interest in
any property securing the payment of the Obligations, excepting taxes based
upon the net income of Lender or Agent.
5.19.2 Administration. All costs of the preparation of this Agreement
and any other related documents and the administration of the Obligations
(except for Lenders' and Agent's usual overhead incurred in the acceptance
and processing of payments, the routine review of financial statements,
certifications and reports, routine communications with Borrower, and other
ordinary activities that are not occasioned by an Unmatured Default, Event
of Default or by a request of Borrower to waive or vary the terms of this
Agreement).
5.19.3 Protection of Collateral. All costs of preserving, insuring,
preparing for sale (whether by improvement, repair or otherwise) or selling
any Collateral.
5.19.4 Costs of Collection. All court costs and other costs of
collecting any debt, overdraft or other obligation included in the
Obligations.
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5.19.5 Litigation. All reasonable costs arising from any litigation,
investigation, or administrative proceeding (whether or not Agent or a
Lender is a party thereto) that Agent or a Lender may incur as a result of
the Obligations or as a result of their association with any of the
Consolidated Entities, including, but not limited to, expenses incurred by
Agent or a Lender in connection with a case or proceeding involving any
Consolidated Entity under any chapter of the Bankruptcy Code or any
successor statute thereto.
5.19.6 Attorneys' Fees. Reasonable attorneys' fees incurred in
connection with any of the foregoing.
If a Lender or Agent pays any of the foregoing expenses, they shall become a
part of the Obligations and shall bear interest at the Maximum Lawful Amount.
This Section shall remain in full effect regardless of the full payment of the
Obligations, the purported termination of this Agreement, the delivery of the
executed original of this Agreement to Borrower, or the content or accuracy of
any representation made by Borrower to Lenders or Agent; provided, however,
Agent may terminate this Section by executing and delivering to Borrower a
written instrument of termination specifically referring to this Section.
5.20 Assistance in Litigation. Borrower covenants to, upon request,
cooperatively participate in any proceeding in which Borrower is not an adverse
party to Lenders or Agent and which concerns Lenders' or Agent's rights
regarding the Obligations or any Collateral.
5.21 Name Changes. Borrower shall give Agent at least thirty (30) days
prior written notice before any Consolidated Entity changes its name or begins
doing business under any trade name.
5.22 Estoppel Letters. Borrower covenants to provide Agent, within ten (10)
days after request, an estoppel letter stating (i) the balance of the
Obligations, (ii) whether Borrower has any defenses to payment of the
Obligations, and (iii) the nature of any defenses to payment of the Obligations.
Such balance as presented for confirmation and the nonexistence of defenses
shall be presumed if Borrower fails to respond to such a request within the
required period.
5.23 Environmental Matters.
5.23.1 Compliance With Environmental Laws. All Consolidated Entities
will (i) employ in connection with their operations, appropriate technology
and compliance procedures to maintain compliance with any applicable
Environmental Laws, the violation of which would reasonably be expected to
have a Material Adverse Effect, (ii) obtain and maintain any and all
materials permits or other permits required by applicable Environmental
Laws in connection with its operations, excepting only such permits, etc.
which could
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not by their absence cause a Material Adverse Effect, and (iii) dispose of
any and all Hazardous Substances only at facilities and with carriers
reasonably believed to possess valid permits under any applicable state and
local Environmental Laws. All Consolidated Entities shall use their best
efforts to obtain all certificates required by law to be obtained by them
from all contractors employed by them in connection with the transport or
disposal of any Hazardous Substances.
5.23.2 Remedial Work. If any investigation, site monitoring,
containment, clean-up, removal, restoration or other remedial work of any
kind or nature with respect to any Consolidated Entity's Properties is
required to be performed by them under any applicable local, state or
federal law or regulation, any judicial order, or by any governmental or
non-governmental entity or Person because of, or in connection with, the
current or future presence, suspected presence, release or suspected
release of a Hazardous Substance in or into the air, soil, groundwater,
surface water or soil vapor at, on, about, under, or within any of a
Consolidated Entity's Property (or any portion thereof), Borrower shall
within 30 days after written demand for performance thereof (or such
shorter period of time as may be required under applicable law, regulation,
order or agreement), commence and thereafter diligently prosecute to
completion, all such remedial work.
5.23.3 Indemnification of Lenders and Agent. Borrower agrees to
indemnify, defend (with counsel reasonably satisfactory to the indemnified
party or parties) and hold harmless Lenders and Agent against any loss,
liability claim or expense, including attorneys' fees, that Lender or Agent
may incur as a result of the violation or alleged violation of any
Environmental Law by a Consolidated Entity or with respect to any other
violation of Environmental Laws with respect to any Consolidated Entity's
Properties. This covenant shall survive the repayment of the Credit
Facilities.
5.24 Opinions of Counsel. Borrower agrees that Agent may from time to time,
but not more frequently than once per calendar year absent an Unmatured Default
or an Event of Default, request in writing the opinion of in-house counsel
and/or outside healthcare counsel to the Consolidated Entities as to the
absence, except as disclosed in the opinion, of such counsel's knowledge of any
actual, threatened or asserted violation of any Fraud and Abuse Law on the part
of any Consolidated Entity and/or the Providers, and the sufficiency of
documentation then in use for the acquisition of Practices as complying with
Fraud and Abuse Laws. Absent the existence of an Unmatured Default or and Event
of Default, such opinions shall require no special diligence on the part of the
opining attorney(s), but only requiring a report of matters then known to such
attorneys, unless Agent specifically inquires about facts that Agent reasonably
believes may raise a Fraud and Abuse Law issue. Such opinions shall be in form
and substance acceptable to Agent, shall be delivered to Agent at Borrower's
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expense within fifteen (15) days of the date of request and shall address
specifically any facts inquired of in Agent's request.
5.25 Additional Collateral Upon Certain Event. If Borrower's Total Funded
Debt to Consolidated EBITDA Ratio (as calculated in Section 7.3 hereof) exceeds
2.75 for any two (2) consecutive fiscal quarters, the Consolidated Entities and
all Subsidiaries of Borrower shall, upon demand by Agent, execute and deliver to
Agent such additional documents as Agent may require on behalf of Lenders to
grant to Lenders, or to Agent for the benefit of Lenders, as Agent may require,
a perfected security interest, subject only to Permitted Encumbrances, in all of
the Consolidated Entities' then owned and thereafter acquired real property,
personal property and fixtures, including, but not limited to, all such
equipment, inventory, accounts, general intangibles, instruments, documents,
chattel paper and fixtures, and all products and proceeds thereof (all as
defined in the UCC), including insurance proceeds. Additionally, Borrower shall
use its best efforts to cause to be executed and delivered to Borrower opinions
of Borrower's outside counsel in form and substance acceptable to Agent, Lenders
and their counsel addressing the sufficiency of the security documentation as to
attachment, perfection and priority of the security interest granted therein and
such other documents as Agent, Lenders or their counsel may require to evidence
the continued compliance of Borrower with all requirements of this Agreement.
All of Agent's usual diligence items relating to the applicable types of
property shall be conducted at Borrower's expenses, including, but not limited
to, environmental surveys, boundary surveys and other real estate diligence
procedures. All expenses of recordation of lien instruments, title insurance,
document preparation and other transaction costs, including, but not limited to,
the reasonable fees and expenses of Lenders' and Agent's attorneys, shall be
paid by Borrower.
VI. NEGATIVE COVENANTS
Borrower covenants and agrees that without the advance written consent of
Agent, until the Obligations are repaid in full:
6.1 Debts, Guaranties, and Other Obligations. No Consolidated Entity shall
incur, create, assume, or in any manner become or be liable with respect to any
Liability, except the following:
6.1.1 Obligations to Lenders. Any Obligations to Lenders under this
Agreement.
6.1.2 Existing Liabilities. Liabilities, direct or contingent, of
Consolidated Entities existing on the date of this Agreement that are
reflected in Schedule 6.1.2 hereof.
6.1.3 Endorsements. Endorsements of negotiable or similar instruments
for collection or deposit in the ordinary course of business.
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6.1.4 Trade Liabilities. Trade payables and accruals from time to time
incurred in the ordinary course of business.
6.1.5 Taxes. Taxes, assessments, or other governmental charges that
are not delinquent or are being contested in good faith by appropriate
action promptly initiated and diligently conducted, if Borrower has made
the reserve therefor required by GAAP.
6.1.6 Seller Debt. Seller Debt, which must be unsecured.
6.1.7 Purchase Money Debt. Purchase Money Debt, including Assumed
Debt, not to exceed (i) Six Million and No/100 Dollars ($6,000,000.00) in
the aggregate, including all Purchase Money Debt of all Consolidated
Entities, (ii) Three Million and No/100 Dollars ($3,000,000.00) in the
aggregate, excluding for this Section (ii) all Purchase Money Debt owed by
individual Practices that have total Purchase Money Debt of less than One
Hundred Thousand and No/100 Dollars ($100,000.00) per Practice, or (iii)
One Million and No/100 Dollars ($1,000,000.00) as to any single Practice,
absent the prior written approval of Agent as to this Section (iii).
6.1.8 Accounting Accruals. Liabilities arising from reserves and
accruals required by GAAP that do not reflect liquidated and mature
obligations to third parties, including, but not limited to, current
deferred income taxes.
6.1.9 Liabilities Among Consolidated Entities. Liabilities incurred to
other Consolidated Entities incurred in the ordinary course of business.
6.2 Change of Management. Borrower shall not allow or suffer any change of
management effecting a material change in the duties or change in the personnel
presently staffing the positions of Chief Executive Officer, President or Chief
Financial Officer, as set forth in Schedule 6.2 hereto. Notwithstanding the
foregoing, should any of the named managers cease such active participation in
Borrower's management due to their death or disability, Agent shall allow
Borrower a period of sixty (60) days thereafter in which a management succession
plan may be presented to Agent so that Agent may, in its discretion, elect to
accept new management in lieu of prior management, subject to such revisions of
this Agreement as Agent may require. Additionally, Lenders have been advised
that a change is pending regarding the office of Chief Financial Officer.
Borrower shall give Agent written notice of this change when a proposal is
available, and Agent shall allow Borrower a period of sixty (60) days thereafter
so that Agent may, in its discretion, elect to approve the proposed change in
management.
6.3 Change of Ownership. Borrower shall not cause or suffer to exist a
change of ownership or suffer the issuance of new stock or other event that
would result in the
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ownership of more than 25% of the stock of Borrower by any Person not presently
a shareholder thereof, except as may result from the sale or disposition of the
Seafield Position.
6.4 Distributions. No Consolidated Entity shall declare or pay any dividend
or other distribution or redeem any of its capital stock except for dividend
payments and other distributions from Subsidiaries to Borrower.
6.5 Encumbrances. No Consolidated Entity shall create, incur, assume, or
permit to exist any Encumbrance on any of its Property (now owned or hereafter
acquired) except for Permitted Encumbrances, and shall not undertake a
commitment of any kind in favor of any Person (other than Lenders) (i) requiring
that any or all of such Consolidated Entity's Property be or remain
unencumbered, or (ii) requiring that a Consolidated Entity grant an Encumbrance
(other than a Permitted Encumbrance) in favor of any Person (other than Lenders)
on a Consolidated Entity's Property under any circumstances whatsoever. No
Consolidated Entity shall sign or file under the Uniform Commercial Code a
financing statement that names such Consolidated Entity as debtor or the
equivalent or sign any security agreement authorizing any secured party
thereunder to file any such financing statement, except to secure Permitted
Encumbrances.
6.6 Investments. No Consolidated Entity shall make investments (including
but not limited to acquisitions or purchases of the obligations or stock of, or
any other or additional interest) in any person, firm, partnership, joint
venture or corporation except: (a) those investments in existence as of the
Closing Date, (b) general obligations of, or obligations unconditionally
guaranteed as to principal and interest by, the United States of America
maturing within fifteen (15) months of the date of purchase, (c) commercial
paper having a rating of not less than "A2" or "P2" from ▇▇▇▇▇'▇ or S &
P,respectively, (d) Permitted Acquisitions, (f) certificates of deposit and
bankers acceptances issued by a Lender or another banking institution with a
minimum net worth of Five Hundred Million and No/100 Dollars ($500,000,000.00)
and having a letter of credit rating of not less than "A" from ▇▇▇▇▇'▇ or S & P,
respectively, and (g) such other investments as Agent may approve, in its
discretion.
6.7 Sales and Leasebacks. No Consolidated Entity shall enter into any
arrangement, directly or indirectly, with any Person other than another
Consolidated Entity by which such Consolidated Entity shall sell or transfer any
of its Property, whether now owned or hereafter acquired, and by which a
Consolidated Entity shall then or thereafter rent or lease as lessee such
Property or any part thereof or other Property that it intends to use for
substantially the same purpose or purposes as the Property sold or transferred.
6.8 Change of Control. Borrower shall not suffer or permit the occurrence
of a Change of Control.
6.9 Nature of Business. No Consolidated Entity shall suffer or permit any
material changes to be made in the character of its business as carried on at
the Closing Date, except for the accomplishment of Permitted Acquisitions.
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6.10 Further Acquisitions, Mergers, Etc. Except for Permitted Acquisitions
and transactions involving only Consolidated Entities, no Consolidated Entity
shall enter into any agreement to merge, consolidate, or otherwise reorganize or
recapitalize, or sell, assign, lease, or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of their
Property (whether now owned or hereafter acquired).
6.11 Advances. No Consolidated Entity shall extend any loans to any other
Persons, except for (i) loans to other Consolidated Entities in the ordinary
course of business and (ii) advances to Providers not to exceed Five Hundred
Thousand and No/100 Dollars ($500,000.00) per Practice and Three Million and
No/100 Dollars ($3,000,000.00) in the aggregate at any one time.
6.12 Disposition of Assets. No Consolidated Entity shall dispose of any of
its assets other than in the ordinary course of their present business upon
terms standard in its industry.
6.13 Inconsistent Agreements. No Consolidated Entity shall enter into any
agreement containing any provision which would be violated or breached by the
performance by Borrower of the Obligations.
6.14 Fictitious Names. Borrower shall not use any name other than the name
used in executing this Agreement or any assumed or fictitious name.
6.15 Subsidiaries and Affiliates. No Consolidated Entity shall create or
acquire any direct or indirect Subsidiary or Affiliate or divest itself of any
material assets by transferring them to any existing Subsidiary or Affiliate
other than Permitted Subsidiaries; nor shall Borrower enter into any
partnership, joint venture, or similar arrangement, or otherwise make any
material change in its corporate structure, except that Borrower may acquire and
create Permitted Subsidiaries from time to time in the ordinary course of
business.
6.16 Place of Business. Borrower shall not transfer its executive offices,
or maintain records with respect to accounts at any locations other than at the
address for notices specified herein and at the locations of Practices
affiliated with Borrower, except as Agent may approve, in its reasonable
discretion.
6.17 Adverse Action With Respect to Plans. No Consolidated Entity shall
take any action to terminate any Plan which could reasonably result in a
material liability of a Consolidated Entity to any Person.
6.18 Transactions With Affiliates. No Consolidated Entity shall enter into
any transaction with any Affiliate except in the ordinary course of business and
on fair and reasonable terms no less favorable to the Consolidated Entity than
it would obtain in a comparable arms length transaction with a Person not an
Affiliate.
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6.19 Constituent Document Amendments. No Consolidated Entity shall amend
its corporate charter or bylaws, except as necessary to accomplish corporate
transactions that do not require Lenders' or Agent's specific approval or
transactions for which such approval is necessary and has been granted.
6.20 Adverse Transactions. No Consolidated Entity shall enter into any
transaction that materially and adversely affects or, to the best of its
knowledge, is likely to materially and adversely affect the Collateral or
Borrower's ability to repay the Obligations.
6.21 Margin Securities. No Consolidated Entity shall own, purchase or
acquire (or enter into any contract to purchase or acquire) any "margin
security" as defined by any regulation of the Federal Reserve Board as now in
effect or as the same may hereafter be in effect.
6.22 Accounting Changes. Borrower shall not change its fiscal year or make
any other significant change in consolidated or consolidating accounting
treatment and reporting practices, except as required or permitted by GAAP or
the Securities and Exchange Commission. Any change in fiscal year shall be
subject to Agent's prior written approval.
6.23 Action Outside Ordinary Course. No Consolidated Entity shall take any
other action outside the ordinary course of their business.
VII. FINANCIAL COVENANTS
7.1 Current Ratio. Borrower shall maintain a Consolidated Current Ratio of
not less than 2.00:1.00, tested as of the end of each fiscal quarter.
7.2 Total Funded Debt to Capital. Borrower shall maintain a ratio of Total
Funded Debt divided by Consolidated Capital of no greater than .50:1.00, tested
as of the end of each fiscal quarter.
7.3 Total Funded Debt to Consolidated EBITDA. Borrower shall maintain a
ratio of Total Funded Debt divided by Consolidated EBITDA, measured as of the
end of each fiscal quarter for the previous four consecutive fiscal quarters, of
no greater than 3.00:1.00.
7.4 Fixed Charge Coverage. Borrower shall maintain a Fixed Charge Coverage
Ratio of at least 1.25:1.00 for the previous four consecutive fiscal quarters
through the fiscal quarter ending December 31, 1996, and of at least 1.50:1.00
thereafter.
7.5 Net Worth. Borrower shall maintain a Consolidated Net Worth as of the
end of each fiscal quarter in an amount at least equal to the sum of Nineteen
Million Eight Hundred Forty-Three Thousand and No/100 ($19,843,000.00), plus any
Net Equity Proceeds, plus eighty-five percent (85%) of the amount of net income
for the fiscal quarter ending June 30, 1996 and for each fiscal quarter
thereafter, without adjustment for net losses.
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7.6 Capital Expenditures. Lender approval shall be required for Borrower to
expend Capital Expenditures in excess of 115% of an annual budget to be approved
by Lender. The proposed budget for each year shall be delivered to Lender no
later than sixty (60) days after the end of the previous fiscal year.
VIII. EVENTS OF DEFAULT
8.1 Events of Default. Any of the following events shall be considered an
Event of Default under this Agreement:
8.1.1 Payments. Borrower's failure to make payment of any amount of
the Obligations within five (5) days after the date due.
8.1.2 Representations and Warranties. Any representation or warranty
made by Borrower or any other party in any Loan Document having been
incorrect in any material respect as of the date thereof.
8.1.3 Negative Covenants. The failure of Borrower to comply with any
of the requirements of Article VI hereof; provided, however, as to any such
event that is both (i) the result of an act by a third party absent the
cooperation of any Consolidated Entity, and (ii) reasonably susceptible to
being cured, the event shall not constitute an Event of Default unless the
event remains uncured for a period of twenty (20) days following the
earlier of (i) Borrower's knowledge of the facts giving rise thereto or
(ii) Agent's written notice to Borrower given in accordance with the
provisions hereof.
8.1.4 Financial Covenants. The failure of Borrower to comply with any
of the requirements of Article VII hereof, unless, on or before the date
that is the earlier of (i) twenty (20) days after the date on which the
breach is timely reported to Agent, or (ii) if the financial statements
disclosing the breach were submitted to Agent later than required by this
Agreement, twenty (20) days after the date on which such financial
statements were due, Borrower provides Agent with additional financial
statements demonstrating that the breach has been cured, which statements
may be as of any other date after the reporting date for which the breach
occurred (provided that such interim statements prepared for this purpose
must be accompanied by the same certifications as quarterly financial
statements and shall not disclose any additional breach of a financial
covenant).
8.1.5 Reporting Requirements. The failure of Borrower or any other
party to timely perform any covenant in the Loan Documents requiring the
furnishing of notices, financial reports or other information to Lender
within twenty (20) days of when due; and provided, however, that during any
period
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of time that a report is delinquent, Agent may at its option increase the
Pricing Values to their highest levels permitted under this Agreement.
8.1.6 Other Covenants. The failure of Borrower to observe or perform
any covenant contained in any Loan Document, which covenant is not subject
to any specific provision in this Article VIII; provided, however, as to
any such breach that is reasonably susceptible to being cured, the
occurrence of such breach shall not constitute an Event of Default
hereunder if such breach is fully cured within twenty (20) days after the
earlier of Borrower's knowledge of the facts giving rise thereto or Agent's
written notice thereof to Borrower given in accordance with the provisions
hereof.
8.1.7 Involuntary Bankruptcy or Receivership Proceedings. The
appointment of a receiver, custodian, liquidator, or trustee for any
Significant Consolidated Entity, or for any of its Property, by the order
or decree of any court or agency or supervisory authority having
jurisdiction; or a Significant Consolidated Entity's adjudication as being
bankrupt or insolvent; or the sequestering of any of the Property of any
Significant Consolidated Entity by court order or the filing of a petition
against a Significant Consolidated Entity under any state or federal
bankruptcy, reorganization, debt arrangement, insolvency, readjustment of
debt, dissolution, liquidation, or receivership law of any jurisdiction,
whether now or hereafter in effect, and in each case without the
acquiescence of a Significant Consolidated Entity, unless dismissed within
sixty (60) days.
8.1.8 Voluntary Petitions. Any Significant Consolidated Entity's
filing of a petition in voluntary bankruptcy or to seek relief under any
provision of any bankruptcy, reorganization, debt arrangement, insolvency,
receivership, readjustment of debt, dissolution, or liquidation law of any
jurisdiction, whether now or hereafter in effect, or its acquiescence in
the filing of any petition against it under any such law.
8.1.9 Discontinuance of Business. Any Significant Consolidated
Entity's discontinuance of its usual business or its dissolution, except
pursuant to transactions permitted under this Agreement.
8.1.10 Default on Other Liabilities. Any Significant Consolidated
Entity's failure to make any payment when due on any Liabilities in excess
of One Hundred Thousand and No/100 Dollars ($100,000.00).
8.1.11 Undischarged Judgments. The existence of a final judgment or
judgments for the payment of money in excess of One Hundred Thousand and
No/100 Dollars ($100,000.00) by any court or other Governmental Authority
against a Significant Consolidated Entity, which is not paid, discharged,
stayed,
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dismissed through appropriate appellate proceedings or bonded within thirty
(30) days after entry.
8.1.12 Insolvency. Any Significant Consolidated Entity's no longer
being Solvent.
8.1.13 Attachment. The issuance of an attachment or other process
against any Property of any Significant Consolidated Entity, unless removed
(by bond or otherwise) within twenty (20) days.
8.1.14 Insurance. Any Consolidated Entity's failure to maintain any
insurance required herein or in any other Loan Document.
8.1.15 Contest. Any Consolidated Entity's challenge or contest of the
validity or enforceability of this Agreement or any other Loan Document or
the validity, priority or perfection of any security interest created
hereunder or under any other Loan Document in any action, suit or
proceeding.
8.1.16 Fraud and Abuse Laws. Receipt by one or more Consolidated
Entities of a notice from a Governmental Authority that it (i) intends to
disallow requested reimbursements, demand adjustment or repayment of past
reimbursements in excess of one-half of one percent (1/2%) of the gross
revenues of Borrower for the previous four (4) fiscal quarters in the
aggregate respecting amounts submitted for reimbursement or collected by
Borrower or a Provider, or (ii) intends to impose civil money penalties or
to seek to exclude Borrower or a Provider from participation in the
Medicare or Medicaid programs due to a failure to comply with Fraud and
Abuse Laws, if the gross revenues to Borrower arising from Borrower or
Provider exceed one-half of one percent (1/2%) of the gross revenues of
Borrower for the previous four (4) fiscal quarters in the aggregate.
8.2 Remedies. Upon the happening of any Event of Default:
8.2.1 Default Rate. Agent may declare the Obligations to thereafter
bear interest at the Default Rate.
8.2.2 Acceleration. Agent may declare the entire principal amount of
all Obligations then outstanding, including interest accrued thereon, to be
immediately due and payable without presentment, demand, protest, notice of
protest, or dishonor or other notice of default of any kind, all of which
are hereby expressly waived.
8.2.3 Setoff. Any Lender may exercise its lien upon and right of
setoff against any monies, items, credits, deposits or instruments that
such
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Lender may have in its possession and which belong to Borrower or to any
other person or entity liable for the payment of any or all of the
Obligations.
8.2.4 Other Remedies. Lenders and Agent may exercise any right that
they may have under any other document evidencing or securing the
Obligations or otherwise available to Lenders or Agent at law or equity.
8.2.5 Attorney-in-Fact. Borrower hereby irrevocably appoints Agent as
Borrower's attorney-in-fact to take any action to facilitate Agent's
exercise of remedies hereunder.
IX. AGENT
9.1 Appointment of Agent. Lenders hereby appoint Agent to act as specified
in this Article IX. Agent's duties hereunder are administrative and ministerial
in nature, and Agent's capacity is that of an independent contractor for
Lenders. Agent is not a trustee or other fiduciary for Lenders, and Agent has no
duties whatsoever to Lenders except as expressly set forth in this Agreement.
9.2 Powers of Agent.
9.2.1 Administration of Credit Facilities. Except as otherwise
provided in this Section 9.2, Agent shall have the exclusive power and
authority to (i) give all consents and approvals, issue waivers and
amendments, enforce the Loan Documents (including, but not limited to, the
power to enforce the Loan Documents in any relevant case under the
Bankruptcy Code) and otherwise take all actions permitted of Agent under
this Agreement or any other Loan Document, (ii) give all consents and
approvals, issue waivers and amendments, enforce the Loan Documents
(including, but not limited to, the power to enforce the Loan Documents in
any relevant case under the Bankruptcy Code) and otherwise take all actions
permitted of Lenders under this Agreement or any other Loan Document,
excepting only those matters that the Loan Documents specifically
reserve[d] for the respective Lenders severally (such as the computation of
LIBOR charges unique to the circumstances of a given Lender), (iii) receive
all payments, notices and other deliveries and communications to be given
Lenders or Agent under this Agreement or any other Loan Document, and (iv)
to perform such actions as are incidental to any of the foregoing.
9.2.2 Matters Reserved to Required Lenders. Absent the prior approval
of the Required Lenders, Agent shall not waive or amend any financial
covenant set forth in Article VII hereof or approve any acquisition for
which approval is necessary under the definition of Permitted Acquisitions
set forth in Article I hereof.
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9.2.3 Matters Reserved to all Lenders. Absent the prior approval of
all Lenders, Agent shall not forgive any principal included in the
Obligations; waive or amend any interest rate applicable to the
Obligations; waive or amend the Maturity Date; waive or amend the amount of
any Lender's Commitment; release or subordinate any security interest
securing the Obligations (other than releases thereof in connection with
transactions for which the approval of Lenders and/or Agent is not
required, such as the release of pledged stock of a Subsidiary in
connection with the merger of that Subsidiary into another Subsidiary);
waive an Event of Default arising from non-payment of any principal or
interest due on the Obligations; accelerate the maturity of the
Obligations; or amend the definitions of Pro Rata Share or Required
Lenders.
9.3 Duties of Agent.
9.3.1 Specific Duties of Agent; Standard of Care. Agent shall (i)
remit to each Lender, with reasonable promptness, the appropriate Pro Rata
Share of payments received or other amounts collected on account of the
Obligations, (ii) forward to Lenders, with reasonable promptness,
counterparts or copies of Borrowing Notices, financial reports and other
information that may be delivered to Agent by Borrower pursuant to the
requirements of the Loan Documents, (iii) notify Lenders of any Unmatured
Default or Event of Default known to Agent, in accordance with Section 9.7
below, and (iv) otherwise administer the Credit Facilities through the
exercise of such of the powers granted herein as Agent deems appropriate
from time to time. Agent shall have no liability to Lenders for any action
or inaction relating to this Agreement or the other Loan Documents, except
for actual losses caused by its gross negligence or reckless or willful
misconduct.
9.3.2 Limitations on Agent's Duties. Agent shall not be obligated to
take any action hereunder or under any other Loan Document (i) if such
action would, in the opinion of Agent, be contrary to applicable law, this
Agreement or the other Loan Documents, (ii) if it shall not first be
specifically indemnified to its satisfaction against any and all liability
and expense that may be incurred by it by reason of taking or continuing to
take any such action, (iii) if it would likely subject Agent to a tax in
any jurisdiction where it is not then subject to a tax, (iv) if it would
likely require Agent to qualify to do business in any jurisdiction where it
is not then so qualified, unless Agent receives security or indemnity
satisfactory to it against any tax or other liability in connection with
such qualification or resulting from the taking of such action in
connection therewith, or (v) if it would likely subject Agent to in
personam jurisdiction in any location where it is not then so subject.
9.3.3 Agent's Right to Require Instructions in Performance of Duties.
If Agent, in its sole and absolute discretion, requests instructions from
the
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Required Lenders with respect to any act or action (including the failure
to act) in connection with this Agreement or any other Loan Document for
which the approval of the Required Lenders or all Lenders is not otherwise
required, Agent shall be entitled, at its option, to refrain from such
action, or to continue such inaction, unless and until Agent shall have
received such instructions, and Agent shall incur no liability by reason of
so acting or refraining from action. No Lender shall have any right of
action whatsoever against Agent as a result of Agent's acting or refraining
from acting hereunder or under any other Loan Document in accordance with
the instructions of the Required Lenders in such a case.
9.3.4 Agent's Reliance on Others in Performance of Duties. Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, statement, consent, certificate, telex,
teletype or facsimile message, order or other documentary, teletransmission
or telephone message believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person. Agent may
consult with legal counsel (including counsel for Borrower), accountants
and other experts selected by it with respect to all matters pertaining to
this Agreement and the other Loan Documents and its duties hereunder and
thereunder and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel
(including counsel for Borrower), accountants or experts.
9.3.5 Sharing of Information. Except as otherwise expressly provided
in this Article IX, Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit
or other information concerning the business, prospects, operations,
properties, financial or other condition or creditworthiness of the
Consolidated Entities or any other Person that may come into its
possession, whether before the making of the initial Loans or at any time
or times thereafter. All notices to be given to Borrower by a Lender
hereunder shall be concurrently given to Agent and all other Lenders.
9.4 Indemnification of Agent. To the extent Agent is not reimbursed by or
on behalf of Borrower, and without limiting the obligation of Borrower to do so,
Lenders will reimburse and indemnify Agent, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees and expenses) or disbursements of any
kind or nature whatsoever that may at any time (including at any time following
the indefeasible repayment in full of the Loans) be imposed on, incurred by or
asserted against Agent in any way relating to or arising out of this Agreement
or any other Loan Document or the transactions contemplated thereby or any
action taken or omitted by Agent under or in connection with any of the
foregoing, and in particular will reimburse Agent for out-of-pocket expenses
promptly upon demand by Agent therefor; provided,
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however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements finally determined by a court of competent
jurisdiction and not subject to any appeal or pursuant to arbitration to have
resulted from Agent's gross negligence or reckless or willful misconduct. Agent
may offset any amounts due Agent by any Lender against obligations of Agent to
that Lender.
9.5 No Representations by Agent. Each Lender acknowledges that neither
Agent nor any of its officers, directors, employees, attorneys, accountants or
agents has made any representation or warranty to it regarding the Consolidated
Entities, the Credit Facilities, the Collateral or otherwise relating to this
Agreement. Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any other
Loan Document or in any document, instrument, certificate or other writing
delivered in connection herewith or therewith or for the execution,
effectiveness, genuineness, validity, enforceability, perfection, priority or
sufficiency of this Agreement or any other Loan Document or the financial
condition of the Consolidated Entities or any other Person, or be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any other Loan Document, or
the financial condition of the Consolidated Entities or any other Person or the
existence or possible existence of any Unmatured Default or Event of Default.
9.6 Independent Investigations by Lenders. Each Lender acknowledges that,
independently and without reliance upon Agent or any other Lender and based on
such documents and information as it has deemed and may deem appropriate, (i) it
has made its own appraisal of and investigation into the business, prospects,
operations, properties, financial and other condition and creditworthiness of
the Consolidated Entities in connection with its decision to enter into this
Agreement and extend credit to Borrower hereunder, and (ii) it will continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action hereunder.
9.7 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Default or Event of Default, other
than any Unmatured Default or Event of Default arising out of the failure to pay
any principal, interest, fees or other amounts payable to Agent for the account
of the Lenders, unless Agent has received written notice from Borrower or a
Lender describing such Unmatured Default or Event of Default and stating that
such notice is a "notice of default." In the event that Agent receives such a
notice, Agent shall give notice thereof to the Lenders as soon as reasonably
practicable; provided, however, that if any such notice has also been furnished
to the Lenders, Agent shall have no obligation to notify the Lenders with
respect thereto. Each Lender shall promptly give Agent such a notice upon its
actual knowledge of an Unmatured Default or an Event of Default; provided,
however, that the failure of any Lender to deliver such notice in the absence of
gross negligence or reckless or willful misconduct shall not affect its rights
hereunder or under the other Loan Documents.
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9.8 Funding of Loans Pursuant to Borrowing Notices. Promptly following
receipt of notice from Agent that a Borrowing Notice has been submitted, and
provided that all conditions to funding are believed to have been satisfied,
each Lender shall transfer to a designated account with Agent that Lender's Pro
Rata Share of the requested funding. The transfer of funds shall occur within
the time required for funding under this Agreement. Should any Lender fail to
timely fund its Pro Rata Share of a requested Loan, Agent may, but shall be
under no obligation whatsoever to, advance to Borrower the defaulted Lender's
Pro Rata Share of the requested Loan. If such an advance is made, it shall be
deemed an advance by Agent for the account of the defaulting Lender and shall
bear interest at the rate applicable to the Loan funded by the advance, payable
on demand.
9.9 Agent in its Individual Capacity. With respect to its Commitments, and
the Loans made by it, Agent shall have the same rights and powers under the Loan
Documents as any other Lender or holder of a Note and may exercise the same as
though it were not performing the duties specified herein; and the terms
"Lenders," "Required Lenders," and any similar terms shall, unless the context
clearly otherwise indicates, include Agent in its individual capacity as a
Lender. Agent may accept deposits from, lend money to and generally engage in
any kind of banking, trust, financial advisory or other business with the
Consolidated Entities or any of their respective Affiliates as if it were not
performing the servicing duties specified herein, and may accept fees and other
consideration from Borrower for services in connection with this Agreement and
otherwise without having to disclose or account for the same to Lenders.
9.10 Holders. Agent may deem and treat the payee of any Note as the holder
thereof and Lender hereunder for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof purportedly executed
by the payee, as the case may be, shall have been filed with Agent. Any request,
authority or consent of any Person that, at the time of making such request or
giving such authority or consent, is the holder of any Note according to Agent's
information, shall be conclusive and binding on any subsequent holder,
transferee, assignee or endorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
9.11 Successor Agent. Agent may resign at any time upon sixty (60) days'
prior written notice to Borrower and the Lenders. Agent may be removed upon
Agent's insolvency, liquidation or the appointment of a receiver for Agent, by
action of the Required Lenders, at any time upon sixty (60) days' prior written
notice to Borrower and Agent. Such resignation or removal, as the case may be,
shall take effect upon the appointment of a successor Agent as provided herein.
The Required Lenders will appoint from among the Lenders a successor Agent. If
no successor Agent shall have been appointed within such sixty (60) day period,
Agent may appoint, after consulting with the Lenders and Borrower, a successor
agent from among the Lenders, who shall serve as Agent until such time, if any,
as the Required Lenders shall have appointed a successor Agent as provided
hereinabove. Upon the written acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers,
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privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents. After any retiring Agent's resignation as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.
9.12 Sharing of Payments, etc. Each Lender agrees that if it shall, through
the exercise of a right of banker's lien, set-off, counterclaim or otherwise,
obtain payment with respect to the Obligations which results in its receiving
more than its Pro Rata Share of the aggregate payments with respect to all of
the Obligations, then (a) such Lender shall be deemed to have simultaneously
purchased from the other Lenders a share in the Obligations so that the amount
of the Obligations held by each of the Lenders shall continue to equal their
respective Pro Rata Shares, and (b) such other adjustments shall be made from
time to time as shall be equitable to insure that the Lenders share such
payments ratably. No Lender shall exercise its banker's lien, set-off or other
right to accomplish such payment absent Agent's prior consent.
9.13 Separate Liens on Collateral. Each Lender agrees with the other
Lenders that, with the exception of security interests in deposit accounts and
like property in the possession of a Lender as expressly provided for in this
Agreement, it will not take or permit to exist any Encumbrance in its favor on
any of the Collateral or other property of any of the Consolidated Entities
other than Encumbrances securing the Obligations due to all Lenders pursuant to
the Loan Documents.
9.14 Payments Between Agent and Lenders. All payments by Agent to any
Lender, and all payments by any Lender to Agent, under the terms of this
Agreement shall be made by wire transfer in immediately available funds to the
receiving party's address specified for notices in this Agreement. If any of the
Lenders fail to pay when due any sum payable to Agent, then, except as otherwise
provided in Section 9.8 hereof, such sum shall bear interest until paid at the
interest rate per annum for overnight borrowing by the payee from the Federal
Reserve Bank for the period commencing on the date such payment was due and
ending on, but excluding, the date such payment is made.
9.15 Assignments and Participations. Absent the approval of the other
Lenders, no Lender shall assign its interest in the Credit Facilities without
first offering to sell such Lender's interest to the other Lenders to be closed
Pro Rata to the Lender(s) who may elect to purchase such interest. Such offers
to sell shall be made in writing, shall provide the other Lenders ten (10) days
to accept or reject, and shall allow an additional ten (10) days to close.
Lenders may sell participation interests in their interests in the Credit
Facilities as long as the terms of such participations establish that no
participant will be regarded as a Lender under this Agreement.
9.16 Bankruptcy Provisions. Should any of the Consolidated Entities become
a party to a case under the Bankruptcy Code, each Lender shall be entitled to
file its own claim, to the extent such a filing may be necessary. Agent shall
review each claim before
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being filed by a Lender to assure that the claim is filed on a basis consistent
with Agent's records and Agent's legal positions taken pursuant to this
Agreement. Should any of the Consolidated Entities become a party to a
reorganization proceeding under the Bankruptcy Code, each Lender shall be
recognized as the holder of a separate claim for the purpose of the approval or
rejection of a Plan under 11 U.S.C. ss. 1126, may freely vote such claim, and
the provisions of that Section shall control the other provisions of this
Agreement that otherwise require the consent of the Required Lenders or all
Lenders in certain circumstances. Agent shall continue to administer the Credit
Facilities on behalf of Lenders, as they may be amended by any adopted Plan of
Reorganization.
9.17 Foreclosure of Collateral. In the event of a foreclosure of any
Collateral, Agent may issue a credit bid for the account of all Lenders, up to
the amount of the then outstanding Obligations. Any Property acquired at such a
foreclosure (or acquired by Agent through a conveyance in lieu of foreclosure)
shall be held and administered by Agent for the benefit of all Lenders pursuant
to the terms of this Article IX.
9.18 Procedures for Notices and Approvals. All notices given among Lenders
and Agent with respect to this Agreement or the other Loan Documents shall be
given in the manner provided in this Agreement. Additionally, should Agent
request Lenders' approval of any matter, each Lender shall respond in writing
within five (5) Business Days after the Business Day on which the request was
received. If a Lender fails to so respond, it shall be deemed to have approved
the action proposed by the Agent.
9.19 Amendments to Article IX. No provision of this Article IX may be
amended or waived absent the prior written consent of all Lenders and Agent.
Borrower's approval shall not be required for the amendment or waiver of any
provision of this Article IX; provided, however, Borrower's written consent
shall be required for any amendment of this Article IX that would eliminate the
position of Agent.
X. GENERAL PROVISIONS
10.1 Notices. All communications relating to this Agreement or any of the
other Loan Documents shall be in writing and shall effective when be delivered
by mail, overnight courier, special courier, telecopier or otherwise to the
following addresses:
if to Borrower:
Response Oncology, Inc.
Attn: ▇▇▇▇ ▇. Good
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy To:
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Baker, Donelson, Bearman & ▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to NationsBank or Agent:
NationsBank of Tennessee, N.A.
Attn: ▇▇▇▇▇ ▇. Wind
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy To:
Boult, Cummings, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Union Planters:
Union Planters National Bank
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy To:
------------------------
------------------------
------------------------
Any party may change its address for receipt of notice by written direction
to the other parties hereto.
10.2 Renewal, Extension, or Rearrangement. All provisions of this Agreement
relating to Obligations shall apply with equal force and effect to each and all
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promissory notes executed hereafter which in whole or in part represent a
renewal, extension for any period, increase, or rearrangement of any part of the
Obligations originally represented by any part of such other Obligations.
10.3 Application of Payments. Amounts received with respect to the
Obligations shall be applied (i) first, to any expenses due Lenders or Agent,
(ii) second, to accrued and unpaid interest under any of the Obligations, and
(iii) third, to reduce the unpaid principal portion of the Obligations, in such
manner as determined by Agent.
10.4 Counterparts. This Agreement may be executed in counterparts with all
signatures or by counterpart signature pages, and it shall not be necessary that
the signatures of all parties be contained on any one counterpart. Each
counterpart shall be deemed an original, but all of them together shall
constitute one and the same instrument.
10.5 Negotiated Document. This Agreement and the other Loan Documents have
been negotiated by the parties with full benefit of counsel and should not be
construed against any party as author.
10.6 Consent to Jurisdiction; Exclusive Venue. Borrower hereby irrevocably
consents to the jurisdiction of the United States District Court for the Middle
District of Tennessee and of all Tennessee state courts sitting in Davidson
County, Tennessee, for the purpose of any litigation to which Lenders or Agent
may be a party and which concerns this Agreement or the Obligations. It is
further agreed that venue for any such action shall lie exclusively with courts
sitting in Davidson County, Tennessee, unless Lenders and Agent agree to the
contrary in writing. This election applies only for the limited judicial
proceedings that may apply as set forth in the provision of this Agreement
electing binding arbitration for the resolution of disputes and does not impair
the effect of that provision in any way.
10.7 Not Partners; No Third Party Beneficiaries. The relationship of
Lenders and Borrower is that of lenders and borrower only, and neither is a
fiduciary, partner or joint venturer of the other for any purpose. This
Agreement has been executed for the sole benefit of Lenders, and no third party
is authorized to rely upon Lenders' rights or duties hereunder.
10.8 No Reliance on Lenders' Analysis. Borrower acknowledges and represents
that, in connection with the Obligations, Borrower has not relied upon any
financial projection, budget, assessment or other analysis by Lenders or Agent
upon any representation by Lenders as to the risks, benefits or prospects of
Borrower's business activities or present or future capital needs incidental
thereto, all such considerations having been examined fully and independently by
Borrower.
10.9 No Marshaling of Assets. Lenders and Agent may proceed against
collateral securing the Obligations and against parties liable therefor in such
order as they may elect, and neither Borrower nor any surety or guarantor for
Borrower nor any creditor of
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65
Borrower shall be entitled to require Lenders or Agent to marshal assets. The
benefit of any rule of law or equity to the contrary is hereby expressly waived.
10.10 Impairment of Collateral. Lenders or Agent may, in their sole
discretion, release any Collateral securing the Obligations or release any party
liable therefor. The defenses of impairment of collateral and impairment of
recourse and any requirement of diligence in collecting the Obligations are
hereby waived.
10.11 Business Days. If any payment date under the Obligations falls on a
day that is not a Business Day, or if the last day of any notice period falls on
such a day, the payment shall be due and the notice period shall end on the next
following Business Day.
10.12 Participations. Lenders may, from time to time, in their sole
discretion, and with concurrent notice to Borrower, sell participations in any
credit subject hereto to such other investors or financial institutions as it
may elect. Lenders and Agent may from time to time disclose to any participant
or prospective participant such information as they may have regarding the
financial condition, operations, and prospects of Borrower.
10.13 Standard of Care; Limitation of Damages. Lenders and Agent shall be
liable to Borrower only for matters arising from this Agreement or otherwise
related to the Obligations resulting from such Lender's or Agent's gross
negligence or reckless or willful misconduct, and liability for all other
matters is hereby waived. Lenders and Agent shall not in any event be liable to
Borrower for special or consequential damages arising from this Agreement or
otherwise related to the Obligations.
10.14 Incorporation of Schedules. All Schedules and Exhibits referred to in
this Agreement are incorporated herein by this reference.
10.15 Indulgence Not Waiver. Lenders' or Agent's indulgence in the
existence of a default hereunder or any other departure from the terms of this
Agreement shall not prejudice Lenders' or Agent's rights to declare a default or
otherwise demand strict compliance with this Agreement.
10.16 Cumulative Remedies. The remedies provided Lenders and Agent in this
Agreement are not exclusive of any other remedies that may be available to
Lenders and Agent under any other document or at law or equity.
10.17 Amendment and Waiver in Writing. No provision of this Agreement can
be amended or waived, except by a statement in writing signed by the party or
parties against whom enforcement of the amendment or waiver is sought. Waivers
and amendments may be executed by Agent on behalf of Lenders, subject to the
requirements of Article IX hereof requiring the consent of some or all of
Lenders under certain circumstances.
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10.18 Assignment. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of Borrower and Lenders, except
that Borrower shall not assign any rights or delegate any obligations arising
hereunder without the prior written consent of Lenders. Any attempted assignment
or delegation by Borrower without the required prior consent shall be void.
10.19 Entire Agreement. This Agreement and the other written agreements
among Borrower, Lenders and Agent represent the entire agreement between the
parties concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein. Provided, if there is a conflict between this
Agreement and any other document executed contemporaneously herewith with
respect to the Obligations, the provision in this Agreement shall control.
10.20 Severability. Should any provision of this Agreement be declared
invalid or unenforceable for any reason, the remaining provisions hereof shall
remain in full effect.
10.21 Time of Essence. Time is of the essence of this Agreement, and all
dates and time periods specified herein shall be strictly observed.
10.22 Applicable Law. The validity, construction and enforcement of this
Agreement and all other documents executed with respect to the Obligations shall
be determined according to the laws of Tennessee applicable to contracts
executed and performed entirely within that state.
10.23 Captions Not Controlling. Captions and headings have been included in
this Agreement for the convenience of the parties, and shall not be construed as
affecting the content of the respective Sections.
10.24 Arbitration. Any controversy or claim between or among the parties
hereto including but not limited to those arising out of or relating to this
instrument, agreement or document or any related instruments, agreements or
documents, including any claim based on or arising from an alleged tort, shall
be determined by binding arbitration in accordance with the Federal Arbitration
Act (or if not applicable, the applicable state law), the Rules of Practice and
Procedure for the Arbitration of Commercial Disputes of J.A.M.S./Endispute or
any successor thereof ("J.A.M.S."), and the "Special Rules" set forth below. In
the event of any inconsistency, the Special Rules shall control. Judgment upon
any arbitration award may be entered in any court having jurisdiction. Any party
to this Agreement may bring an action, including a summary or expedited
proceeding, to compel arbitration of any controversy or claim to which this
Agreement applies in any court having jurisdiction over such action.
10.24.1 Special Rules. The arbitration shall be conducted in
Nashville, Tennessee and administered by J.A.M.S who will appoint an
arbitrator; if J.A.M.S. is unable or legally precluded from administering
the arbitration, then
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the American Arbitration Association will serve. All arbitration hearings
will be commenced within 90 days of the demand for arbitration; further,
the arbitrator shall only, upon a showing of cause, be permitted to extend
the commencement of such hearing for up to an additional 60 days.
10.24.2 Reservation of Rights. Nothing in this arbitration provision
shall be deemed to (i) limit the applicability of any otherwise applicable
statutes of limitation or repose and any waivers contained in this
arbitration provision; or (ii) be a waiver by any Lender of the protection
afforded to it by 12 U.S.C. Sec. 91 or any substantially equivalent state
law; or (iii) limit the right of any Lender (a) to exercise self help
remedies such as (but not limited to) setoff, or (b) to foreclose against
any real or personal property collateral, or (c) to obtain from a court
provisional or ancillary remedies such as (but not limited to) injunctive
relief, writ of possession or the appointment of a receiver. Lenders and
Agent may exercise such self help rights, foreclose upon such property, or
obtain such provisional or ancillary remedies before, during or after the
pendency of any arbitration proceeding brought pursuant to this instrument,
agreement or document. Neither this exercise of self help remedies nor the
institution or maintenance of an action for foreclosure or provisional or
ancillary remedies shall constitute a waiver of the right of any party,
including the claimant in such action, to arbitrate the merits of the
controversy or claim occasioning resort to such remedies.
10.25 Facsimile Signatures. This Agreement may be executed by facsimile
signatures, and shall be effective when Agent has received telecopy
transmissions of the signature pages executed by all parties hereto; provided,
however, that all parties shall deliver original executed documents to Agent
promptly following the execution hereof.
Executed as of the date first written above.
RESPONSE ONCOLOGY, INC.
By:__________________________________
Title:_______________________________
NATIONSBANK OF TENNESSEE, N.A.
By:__________________________________
Title:_______________________________
68
UNION PLANTERS NATIONAL BANK
By:__________________________________
Title:_______________________________
69
EXHIBIT 1.2
Notice of Extension
[On letterhead of Borrower]
NationsBank of Tennessee, N.A., Agent
Attn: ▇▇▇▇▇ ▇. Wind
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Notice of Extension of Working Capital Loan Under Loan Agreement Among
NationsBank of Tennessee, N.A., Union Planters National Bank, Response
Oncology, Inc. and NationsBank of Tennessee, N.A., as Agent Dated as of May
31, 1996 (the "Loan Agreement")
Ladies and Gentlemen:
Please accept this letter as our notice that Response Oncology, Inc. hereby
elects to extend the Maturity Date of the Working Capital Loan, as defined in
the Loan Agreement, until May 31, 1998. The required extension fee is enclosed
herewith. This election shall have the effect of making applicable the optional
May 31, 1998 Maturity Date in the Loan Agreement and in the corresponding
Working Capital Notes, as provided for therein.
Your acceptance of the enclosed fee does not waive any Unmatured Default,
Event of Default or other matter that may exist with respect to the Loan
Agreement.
Very truly yours,
RESPONSE ONCOLOGY, INC.
By:__________________________
Title:________________________
cc: Boult, Cummings, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
70
EXHIBIT 2.8.1(B)
BORROWING/CONVERSION NOTICE
TO: NationsBank of Tennessee, N.A., Agent
LENDERS: NationsBank of Tennessee, N.A. Date: __________, 199_
Union Planters National Bank
BORROWER: Response Oncology, Inc.
This notice is delivered under the Loan Agreement (as renewed,
extended and amended, the "Loan Agreement") dated as of May __, 1996, between
Borrower and Lender. Terms defined in the Loan Agreement have the same meanings
when used -- unless otherwise defined -- in this request.
Borrower requests a Loan under the Loan Agreement as follows:
The requested draw is from (select one): _____ Acquisition Loan
_____ Working Capital Loan
Borrowing Date1 ___________, 199_
Amount of Borrowing $________________
Type of Borrowing2 _________________
For LIBOR Loans, the Interest Period3 __________ months
Select one:
____ The proceeds of the requested Loan shall be disbursed
to Borrower as provided in the Loan Agreement. The
purpose of the requested Loan is (select one for this
Loan):
_____ New advance for a Permitted Acquisition
_____ New advance for capital expenditures other than
Permitted Acquisitions
_____ New advance for IMPACT Center development
_____ New advance for working capital
____ The proceeds of the requested LIBOR Loan shall be
applied to the payment of Borrower's existing Prime
Rate Loan, this new Loan being a conversion of a
Prime Rate Loan to a LIBOR Loan
--------
1 Same Banking Day for Prime Rate Loans, second following Banking Day for
LIBOR Loans
2 LIBOR or Prime Rate Loan.
3 1, 2, 3, 6 or 12 months.
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____ The proceeds of the requested LIBOR Loan shall be
applied to the payment of the following LIBOR Loan,
subject to all requirements of the Loan Agreement,
this new Loan being a conversion of a LIBOR Loan to a
different LIBOR Loan:
Date:_______________________
Amount:_____________________
Interest Period:____________
____ The proceeds of the requested Prime Rate Loan shall
be applied to the payment of the following LIBOR
Loan, subject to all requirements of the Loan
Agreement, this new Loan being a conversion of a
LIBOR Loan to a Prime Rate Loan:
Date:______________________
Amount:____________________
Interest Period:___________
Date:______________________
Amount:____________________
Interest Period:___________
Borrower certifies that on the date hereof and on the date of
the above Borrowing Date -- after giving effect to the requested Loan -- (a) all
of the representations and warranties in the Loan Documents will be true and
correct in all material respects -- unless they speak to a specific date or the
facts on which they are based have been changed by transactions contemplated or
permitted by the Loan Agreement, (b) no Event of Default or Unmatured Default
will exist, and (c) all conditions to Borrower's right to receive the requested
Loan under the Loan Agreement have been satisfied.
RESPONSE ONCOLOGY, INC., Borrower
By:______________________________
(Name)___________________________
(Title)__________________________
72
FIRST AMENDMENT TO
LOAN AGREEMENT
This First Amendment to Loan Agreement ("Amendment") is entered into as of
the 18th day of June, 1996 by Response Oncology, Inc. ("Borrower"), a Tennessee
corporation; Union Planters National Bank, a national banking association; and
NationsBank of Tennessee, N.A. , a national banking association, in its
individual capacity and as Agent for itself and Union Planters.
R E C I T A L S:
WHEREAS, the parties hereto have previously executed that Loan Agreement
dated as of May 31, 1996 (the "Loan Agreement"); and
WHEREAS, the parties wish to amend the Loan Agreement in certain respects;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
1. The Loan Agreement is hereby amended by revising Section 7.3 thereof to
reflect a required value of 3.25:1 until August 19, 1996 and 3.00:1 thereafter.
A certification of compliance with this ratio shall be submitted as of July 31,
1996 for the prior twelve months, such report to be submitted no later than
August 31, 1996.
2. Borrower acknowledges that its $10,000,000.00 loan from Seafield Capital
Corporation has not been approved as Subordinated Debt under the Loan Agreement.
Executed as of the date written above.
RESPONSE ONCOLOGY, INC.
By:_________________________________
Title:______________________________
NATIONSBANK OF TENNESSEE, N.A.
By:_________________________________
Title:______________________________
UNION PLANTERS NATIONAL BANK
By:_________________________________
Title:______________________________
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SECOND AMENDMENT TO
LOAN AGREEMENT
This Second Amendment to Loan Agreement ("Amendment") is entered into as of
the first day of July, 1996 by Response Oncology, Inc. ("Borrower"), a Tennessee
corporation; Union Planters National Bank ("Union Planters"), a national banking
association; and NationsBank of Tennessee, N.A. , a national banking
association, in its individual capacity and as Agent for itself and Union
Planters.
R E C I T A L S:
WHEREAS, the parties hereto have previously executed that Loan Agreement
dated as of May 31, 1996, as amended by that First Amendment to Loan Agreement
(the "First Amendment") dated as of June 18, 1996 (the Loan Agreement, as
amended by the First Amendment, is referred to herein as the "Loan Agreement");
and
WHEREAS, the parties wish to further amend the Loan Agreement in certain
respects;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
1. The Loan Agreement is hereby amended by revising Section 7.3 thereof to
read in full as it existed prior to the execution of the First Amendment.
2. The Loan Agreement is hereby amended by revising the definition of
"Subordinated Debt" set forth in Article I thereof by adding the following
sentence at the end of the present definition:
The indebtedness evidenced by that Adjustable Rate Convertible Note
made by Borrower dated April 12, 1996, payable to the order of
Seafield Capital Corporation in the original principal amount of Ten
Million and No/100 Dollars ($10,000,000.00), as amended by letter
agreement dated June 3, 1996 and by First Amendment to Note dated July
1, 1996, shall also be regarded as Subordinated Debt hereunder, even
though its maturity date is August 1, 1998.
3. As amended hereby, the Loan Agreement remains in full effect, and all
agreements among the parties with respect to the subject hereof are represented
fully in this Amendment and the other written documents among the parties. The
validity, construction and enforcement hereof shall be determined according to
the substantive laws of the State of Tennessee.
74
Executed as of the date written above.
RESPONSE ONCOLOGY, INC.
By:___________________________________
Title:________________________________
NATIONSBANK OF TENNESSEE, N.A.
By:___________________________________
Title:________________________________
NATIONSBANK OF TENNESSEE, N.A.,
as Agent
By:___________________________________
Title:________________________________
UNION PLANTERS NATIONAL BANK
By:___________________________________
Title:________________________________
- 2 -
75
THIRD AMENDMENT TO
LOAN AGREEMENT
This Third Amendment to Loan Agreement ("Amendment") is entered into as of
the 29th day of August, 1996 by Response Oncology, Inc. ("Borrower"), a
Tennessee corporation; Union Planters National Bank ("Union Planters"), a
national banking association; and NationsBank of Tennessee, N.A. , a national
banking association, in its individual capacity and as Agent for itself and
Union Planters.
R E C I T A L S:
WHEREAS, the parties hereto have previously executed that Loan
Agreement dated as of May 31, 1996, as amended by that First Amendment to Loan
Agreement (the "First Amendment") dated as of June 18, 1996 and by that Second
Amendment to Loan Agreement (the "Second Amendment") dated as of July 1, 1996
(the Loan Agreement, as amended by the First Amendment and the Second Amendment,
is referred to herein as the "Loan Agreement"); and
WHEREAS, the parties wish to further amend the Loan Agreement in certain
respects;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
1. The parties agree that the first numbered paragraph of the Second
Amendment was included in the Second Amendment in error and agree that the first
numbered paragraph of the Second Amendment has been and hereby is retroactively
nullified as to be of no effect at any time.
2. The Loan Agreement is hereby amended by revising Section 7.3 thereof to
reflect a required value of Total Funded Debt to Consolidated EBITDA of no
greater than 3.50:1.00 until the occurrence of the Secondary Offering and no
greater than 3.00:1.00 thereafter.
3. The Loan Agreement is hereby amended by revising subsection (ii) of the
definition of "Borrowing Base" in Article I thereof to read "(ii) multiplied by
3.25 until the occurrence of the Secondary Offering, and multiplied by 3.00
thereafter."
4. The Loan Agreement is hereby amended by inserting the following
definition between the definitions of "Seafield Position" and "Seller" in
Article I:
"Secondary Offering" means an issuance of equity by Borrower after
August 20, 1996 yielding Net Proceeds in an amount of at least
$30,000,000.00.
5. The Loan Agreement is hereby amended by revising the first paragraph of
Section 2.8 thereof to read in full as follows:
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2.8 Advances of Loans. Subject to the terms and conditions of
this Agreement, Borrower may borrow, repay and reborrow Loans under
the Credit Facilities, provided that the outstanding principal balance
of the Acquisition Loan and the Working Capital Loan, respectively,
shall not at any time exceed the amounts permitted under Sections 2.1
and 2.4 above, and further provided that no new borrowings may be
obtained after January 1, 1997, if amortization of the Credit
Facilities is then required under Section 2.13 hereof. Loans shall be
disbursed as follows:
6. The Loan Agreement is hereby amended by revising Section 2.13 thereof to
read in full as follows:
2.13 Principal Repayment. Principal payments under the Credit
Facilities shall become due immediately and without notice at such
time that the outstanding principal balance of the Credit Facilities
may exceed the Credit Ceiling, in an amount sufficient to reduce the
outstanding principal balance to an amount no greater than the Credit
Ceiling. All remaining principal outstanding under the Credit
Facilities shall become due on the Maturity Date or the earlier
acceleration of the Credit Facilities in accordance with the terms of
this Agreement. Notwithstanding the foregoing, if the Secondary
Offering has not occurred on or before January 1, 1997, principal
payments shall become due on the first day of each month beginning
January 1, 1997, in the amount of one eighty-fourth (1/84th) of the
outstanding principal balance under each of the respective Credit
Facilities as of January 1, 1997.
7. It is a condition to the effect of this Amendment that the indebtedness
owed to Seafield Capital Corporation referenced in the definition of
"Subordinated Debt" be converted to equity.
8. It is a condition to the effect of this Amendment that Borrower pay to
Agent for distribution to Lenders a restructuring fee in the amount of
Seventy-six Thousand and No/100 Dollars ($76,000.00).
9. As amended hereby, the Loan Agreement remains in full effect, and all
agreements among the parties with respect to the subject hereof are represented
fully in this Amendment and the other written documents among the parties. The
validity, construction and enforcement hereof shall be determined according to
the substantive laws of the State of Tennessee.
- 2 -
77
Executed as of the date written above.
RESPONSE ONCOLOGY, INC.
By:_________________________________
Title:______________________________
NATIONSBANK OF TENNESSEE, N.A.
By:_________________________________
Title:______________________________
NATIONSBANK OF TENNESSEE, N.A.,
as Agent
By:_________________________________
Title:______________________________
UNION PLANTERS NATIONAL BANK
By:_________________________________
Title:______________________________
- 3 -
78
FOURTH AMENDMENT TO
LOAN AGREEMENT
This Fourth Amendment to Loan Agreement ("Amendment") is entered into as of
the 4th day of October, 1996 by Response Oncology, Inc. ("Borrower"), a
Tennessee corporation; Union Planters National Bank ("Union Planters"), a
national banking association; and NationsBank of Tennessee, N.A., a national
banking association, in its individual capacity and as Agent for itself and
Union Planters.
R E C I T A L S:
WHEREAS, the parties hereto have previously executed that Loan Agreement
dated as of May 31, 1996, as amended by that First Amendment to Loan Agreement
(the "First Amendment") dated as of June 18, 1996; by that Second Amendment to
Loan Agreement (the "Second Amendment") dated as of July 1, 1996; and by that
Third Amendment to Loan Agreement (the "Third Amendment") dated as of August 29,
1996 (the Loan Agreement, as amended by the First Amendment, Second Amendment
and Third Amendment, is referred to herein as the "Loan Agreement"); and
WHEREAS, the parties wish to further amend the Loan Agreement in certain
respects;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
1. Capitalized terms not defined herein have the meanings set forth in the
Loan Agreement.
2. The Loan Agreement is hereby amended by revising the definition of
"Subordinated Debt" set forth in Article I thereof by adding the following
sentence at the end of the present definition:
The indebtedness evidenced by that Adjustable Rate Convertible Note
made by Borrower dated October ___, 1996, payable to the order of
Seafield Capital Corporation in the original principal amount of
Twenty-Three Million Five Hundred Thousand and No/100 Dollars
($23,500,000.00) (the "October 1996 Seafield Debt") shall also be
regarded as Subordinated Debt hereunder, even though its final
maturity date is August 1, 1998.
3. The Loan Agreement is hereby amended by adding a Section 6.1.10 thereto,
stating in full as follows:
6.1.10 Certain Subordinated Debt. The October 1996 Seafield Debt.
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4. The Loan Agreement is hereby amended by deleting the period at the end
of Section 6.23 thereof, substituting a comma therefor, and adding the following
language:
[...,] except that the incurrence of the October ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
shall be permitted.
5. The Loan Agreement is hereby amended by revising Section 7.3 thereof to
reflect a required value of Total Funded Debt to Consolidated EBITDA of no
greater than 3.00:1.00.
6. The Loan Agreement is hereby amended by revising subsection (ii) of the
definition of "Borrowing Base" in Article I thereof to read "(ii) multiplied by
3.00."
7. The Loan Agreement is hereby amended by revising the following
definition in Article I to read in full as follows:
"Seafield Position" means the equity interest of Seafield Capital
Corporation borrower and the October 1996 Seafield Debt.
8. The Loan Agreement is hereby amended by adding the following definition
in Article I between "Seafield Position" and "Secondary Offering":
"Seafield Recapitalization" means a recapitalization of the Borrower's
Capital Stock which (i) provides (a) that the Capital Stock of the
Borrower owned by Seafield Capital Corporation immediately after
consummation of the recapitalization (which was derived from common
stock of the Borrower which immediately before consummation of the
recapitalization had been owned by Seafield Capital Corporation for at
least five years) constitutes common stock possession at least 80% of
the total combined voting power of all classes of common stock of the
Borrower entitled to vote and (b) that the Borrower will not have
authorized or outstanding any shares of the class of common stock which
are not voting stock, (ii) shall contain such other terms and
conditions necessary or appropriate in the opinion of Seafield Capital
Corporation's counsel or Borrower's counsel either to satisfy the
substantive requirements of the Internal Revenue Code of 1986, as
amended ('Code") and the regulations thereunder or other law or to
obtain advance administrative approval of the transactions by the
Internal Revenue Service, the National Association of Securities
Dealers, Inc. or other administrative authority, and (iii) makes no
changes in the capital structure of the Borrower except as necessary to
accomplish the foregoing. For purposes of this definition, "Capital
Stock" shall have the same meaning as the term "Stock" in Section
368(c) of the Code and the percentages of voting power shall be
determined in a manner consistent with requirements of Section 355 of
the Code. The Seafield Recapitalization shall not require the making of
any dividend of cash or debt or any other distribution of any cash or
debt by any Consolidated Entity.
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9. The Loan Agreement is hereby amended by deleting Section 6.4 in its
entirety and by substituting in lieu thereof:
6.4 Distributions. No Consolidated Entity shall declare or pay any
dividend or other distribution or redeem any of its capital stock
except (i) for dividend payments and other distributions from
Subsidiaries to Borrower or (ii) non-cash dividends or distributions in
connection with or pursuant to the Seafield Recapitalization, or (iii)
in the absence of an Unmatured Default or Event of Default, Borrower
may repurchase stock representing part of the Seafield Position for a
total price of up to Ten Million and No/100 Dollars ($10,000,000.00)
prior to January 1, 1997, provided that such payment is made from Net
Equity Proceeds received by Borrower after October 4, 1996.
10. The Loan Agreement is hereby amended by deleting the period at the end
of Section 6.10 and adding the following language:
[...,] except that the Seafield Recapitalization shall be permitted.
11. As amended hereby, the Loan Agreement remains in full effect, and all
agreements among the parties with respect to the subject hereof are represented
fully in this Amendment and the other written documents among the parties. The
validity, construction and enforcement hereof shall be determined according to
the substantive laws of the State of Tennessee.
12. This Amendment shall be effective upon the parties' exchange by
telecopier of copies hereof showing the signatures of the other parties;
provided, however, each party shall immediately forward an executed original
hereof to Agent. The failure of any party to so provide Agent with an original
hereof shall not impair the validity of this Amendment, but shall entitle Agent
to obtain specific performance of the obligation to provide an executed original
of this Amendment.
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Executed as of the date written above.
RESPONSE ONCOLOGY, INC.
By:________________________________
Title:_____________________________
NATIONSBANK OF TENNESSEE, N.A.
By:________________________________
Title:_____________________________
NATIONSBANK OF TENNESSEE,
N.A., as Agent
By:________________________________
Title:_____________________________
UNION PLANTERS NATIONAL BANK
By:________________________________
Title:_____________________________
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FIFTH AMENDMENT TO
LOAN AGREEMENT
This Fifth Amendment to Loan Agreement ("Amendment") is entered into as of
the 8th day of October, 1996 by Response Oncology, Inc. ("Borrower"), a
Tennessee corporation; Union Planters National Bank ("Union Planters"), a
national banking association; and NationsBank of Tennessee, N.A., a national
banking association, in its individual capacity and as Agent for itself and
Union Planters.
R E C I T A L S:
WHEREAS, the parties hereto have previously executed that Loan Agreement
dated as of May 31, 1996, as amended by that First Amendment to Loan Agreement
(the "First Amendment") dated as of June 18, 1996; by that Second Amendment to
Loan Agreement (the "Second Amendment") dated as of July 1, 1996; by that Third
Amendment to Loan Agreement (the "Third Amendment") dated as of August 29, 1996,
and by the Fourth Amendment to Loan Agreement (the "Fourth Amendment") dated as
of October 4, 1996 (the Loan Agreement, as amended by the First Amendment,
Second Amendment, Third Amendment and Fourth Amendment, is referred to herein as
the "Loan Agreement"); and
WHEREAS, the parties wish to further amend the Loan Agreement in certain
respects;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
1. Capitalized terms not defined herein have the meanings set forth in the
Loan Agreement.
2. The Loan Agreement is hereby amended by inserting the following language
as a new Section 2.19 thereof:
2.19. Letters of Credit. Subject to the terms and conditions of this
Agreement, the Lenders' respective Commitments for the Acquisition
Loan may be utilized, upon the request of the Borrower, for the
issuance by NationsBank of letters of credit (the "Letters of Credit")
for the account of the Borrower for uses that would be permitted for
the Acquisition Loan; provided that in no event shall (i) the
aggregate amount of all stated and undrawn amounts under Letters of
Credit (the "Letter of Credit Liabilities"), together with the
aggregate principal amount of the Loans advanced under the Acquisition
Loan, exceed the amount stated in Section 2.1 hereof, (ii) the
outstanding aggregate amount of all Letter of Credit Liabilities
exceed Seven Million Five
83
Hundred Thousand and No/100 Dollars ($7,500,000.00), and (iii) the
expiration date of any Letter of Credit extend beyond the Maturity
Date applicable to the Acquisition Loan. The following additional
provisions shall apply to Letters of Credit:
2.19.1. Procedure for Issuance. The Borrower shall give the Agent
at least three Business Days' irrevocable prior notice (effective
upon receipt) specifying the Business Day (which shall be no
later than 30 days preceding the Maturity Date applicable to the
Acquisition Loan) each Letter of Credit is to be issued and
describing in reasonable detail the proposed terms of such Letter
of Credit (including its beneficiary) and the nature of the
transactions or obligations proposed to be supported. The
Borrower shall be the account party for each Letter of Credit,
including Letters of Credit issuable to a beneficiary having a
claim or potential claim against a Subsidiary of the Borrower.
2.19.2. Participation Among Lenders. On each day during the
period commencing with the issuance by NationsBank of any Letter
of Credit and until such Letter of Credit shall have expired or
been terminated or, if drawn upon, until the resulting
obligations of reimbursement (the "Reimbursement Obligations")
have been satisfied in full by the Borrower (whether by a
borrowing under this Agreement or otherwise), the Commitment of
each Lender shall be deemed to be utilized for all purposes of
this Agreement (including, but not limited to, the calculation of
availability and the nonuse fee) in an amount equal to such
Lender's Pro Rata Share of the Letter of Credit Liabilities
associated with such Letter of Credit. Each Lender (other than
NationsBank) agrees that, upon the issuance of any Letter of
Credit, it shall automatically be deemed to have acquired a
participation in NationsBank's liability under such Letter of
Credit in an amount equal to such Lender's Pro Rata Share of such
liability, and each Lender (other than NationsBank) thereby shall
absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and shall be unconditionally obligated
to NationsBank to pay and discharge when due, its Pro Rata Share
of NationsBank's liability under such Letter of Credit.
2.19.3. Reimbursement Obligation. Upon receipt from the
beneficiary of any Letter of Credit of any demand for payment
under such Letter of Credit, NationsBank shall promptly notify
the Borrower of the amount to be paid by NationsBank as a result
of such demand and the date on which payment is to be made by
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84
NationsBank to such beneficiary in respect of such demand. The
Borrower hereby unconditionally agrees to pay and reimburse the
Agent for the account of NationsBank and the other Lenders Pro
Rata with respect to the amount of each demand for payment under
such Letter of Credit at or prior to the date on which payment is
to be made by NationsBank to the beneficiary under such Letter of
Credit, without presentment, demand, protest or other formalities
of any kind. Any amounts not so paid or borrowed as set forth in
Section 2.19.4 below shall bear interest at the rate(s) specified
in the documents relating to the issuance of the Letter of Credit
(the "Letter of Credit Documents") or, if higher, at the rate(s)
specified on the Notes (including the Default Rate, if
applicable).
2.19.4. Means of Reimbursement. Forthwith upon its receipt of a
notice referred to in Section 2.19.3 hereof, the Borrower shall
advise the Agent whether or not the Borrower intends to obtain a
Loan to finance its obligation to reimburse NationsBank for the
amount of the related demand for payment and, if it does, submit
a notice of such borrowing as provided in this Agreement. In the
event that the Borrower fails to so advise the Agent, and if the
Borrower fails to reimburse NationsBank for a demand for payment
under a Letter of Credit by the date of such payment, the Agent
shall give each Lender prompt notice of the amount of the demand
for payment, specifying such Lender's Pro Rata Share of the
amount of the related demand for payment, and the Borrower shall
be deemed in default hereunder for breaching Section 2.19.3
above.
2.19.5 Payments by Lenders. Each Lender (other than NationsBank)
shall pay to the Agent for the account of NationsBank in Dollars
and in immediately available funds, such Lender's Pro Rata Share
of any payment under a Letter of Credit upon notice by the Agent
to such Lender requesting such payment and specifying such amount
as provided in Section 2.19.4. Each such Lender's obligation to
make such payments to the Agent for the account of NationsBank
under this Section 2.19.5, and NationsBank's right to receive the
same, shall be absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the failure of
any other Lender to make its payment under this Section 2.19.5,
the financial condition of the Borrower, the existence of any
Unmatured Default or Event of Default or the termination of the
Commitments. Each such payment to NationsBank shall be made
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without any offset, abatement, withholding or reduction
whatsoever; provided, nothing contained in the foregoing shall
limit NationsBank's liability for its gross negligence or willful
misconduct in improperly honoring a draft drawn under a Letter of
Credit.
2.19.6 Settlement Among Lenders. Upon the making of each payment
by a Lender to NationsBank pursuant to Section 2.19.5 above in
respect of any Letter of Credit, such Lender shall, automatically
and without any further action on the part of the Agent,
NationsBank or such Lender, acquire (i) a participation in any
amount equal to such payment in the Reimbursement Obligation
owing to NationsBank by the Borrower under this Agreement and
under the Letter of Credit Documents relating to such Letter of
Credit and (ii) a participation in a percentage equal to such
Lender's Pro Rata Share in any interest or other amounts payable
by the Borrower under such Letter of Credit Documents and the
other Loan Documents in respect of such Reimbursement Obligation.
Upon receipt by NationsBank from or for the account of the
Borrower of any payment in respect of any Reimbursement
Obligation or any such interest or other amount (including by way
of set-off or application of proceeds of any collateral security)
NationsBank shall promptly pay to the Agent for the account of
each Lender who shall have previously assumed a participation in
such payment under clause (ii) above, such Lender's Pro Rata
Share of such payment, each such payment by NationsBank to be
made in the same money and funds in which received by
NationsBank. In the event any payment received by NationsBank and
so paid to the Lenders is rescinded or must otherwise be returned
by NationsBank, each Lender shall, upon the request of
NationsBank (through the Agent), repay to NationsBank (through
the Agent) the amount of such payment paid to such Lender, with
interest at the rate specified in Section 2.19.10.
2.19.7. Letter of Credit Fee. Borrower shall pay to the Agent for
the account of each Lender a letter of credit fee in respect of
each Letter of Credit on the daily average undrawn face amount of
such Letter of Credit for the period from and including the date
of issuance of such Letter of Credit to and including the date
such Letter of Credit is drawn in full, expires or is terminated
(such fee to be non-refundable, to be paid in arrears on the
first day of each calendar quarter and on the Maturity Date
applicable to the Acquisition Loan and to be
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86
calculated, for any day, after giving effect to any payments made
under such Letter of Credit on such day) in an amount equal to
the Applicable LIBO Rate Margin(s) in effect during the relevant
period. All calculations of Letter of Credit fees shall be based
on a 360 day year counting the actual number of elapsed days.
2.19.8. Letter of Credit Information. Upon the request of any
Lender from time to time, NationsBank shall deliver any
information reasonably requested by such Lender with respect to
each Letter of Credit then outstanding.
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87
2.19.9. Conditions Relating to Letters of Credit. The issuance by
NationsBank of each Letter of Credit shall be subject, in
addition to the conditions precedent set forth in Article III
hereof (as though the issuance of the Letter of Credit were the
making of a Loan), to the conditions precedent that (i) such
Letter of Credit shall be in such form, contain such terms and
support such transactions as shall be satisfactory to NationsBank
consistent with its then current practices and procedures with
respect to letters of credit of the same type and (ii) the
Borrower shall have executed and delivered such applications,
agreements and other instruments relating to such Letter of
Credit as NationsBank shall have reasonably requested consistent
with its then current practices and procedures with respect to
letters of credit of the same type; provided that in the event of
any conflict between any such application, agreement or other
instrument and the provisions of this Agreement, the provisions
of this Agreement shall control.
2.19.10. Payments Among Lenders. In the event that any Lender
fails to pay any amount required to be paid pursuant to this
Section 2.19 when due, such Lender shall pay interest to
NationsBank (through the Agent) on such amount from and including
such due date to but excluding the date such payment is made (i)
during the period form and including such due date to but
excluding the date three Business Days thereafter, at a rate per
annum equal to the federal funds rate (as in effect from time to
time as determined by Agent) and (ii) thereafter, at a rate per
annum equal to the Prime Rate plus 2.0%.
2.19.11. Modifications. The issuance by NationsBank of any
modification or supplement to any Letter of Credit shall be
subject to the same conditions applicable under this Section 2.19
to the issuance of new Letters of Credit, and no such
modification or supplement shall be issued unless either (x) the
respective Letter of Credit as affected by such action would have
complied with such conditions had it originally been issued in
such modified or supplemented form or (y) each Lender shall have
consented to such modification or supplement.
2.19.12 Absolute Obligations of Borrower. The obligations of the
Borrower under this Section 2.19 shall be unconditional and
absolute and shall not be affected, modified or impaired, upon
the happening at any time or from time to time of
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88
any event, including any of the following, whether or not with
notice to or the consent of the Borrower:
(1) the compromise, settlement, release, modification,
amendment (whether material or otherwise) or termination of
any or all of the obligations, conditions covenants or
agreements of any Person in respect of any of the Loan
Documents;
(2) the occurrence, or the failure by the Agent, any Lender
or any other Person to give notice to the Borrower of the
occurrence, of any Event of Default or any default under any
of the other Loan Documents;
(3) the waiver of the payment, performance or observance of
any of the obligations, conditions, covenants or agreements
of any Person contained in any of the Loan Documents;
(4) the extension of the time for performance of any other
obligations, covenants or agreements of any Person under or
arising out of any of the Loan Documents;
(5) the taking or the omission of any of the actions
referred to in any of the Loan Documents;
(6) any failure, omission or delay on the part of the Agent,
any Lender, the Borrower or the beneficiary of any Letter of
Credit to enforce, assert or exercise any right, remedy,
power or privilege conferred by this Agreement or any of the
Loan Documents, or any other act or acts on the part of the
Agent, any Lender, the Borrower or the beneficiary of any
Letter of Credit;
(7) the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the
assets of, the marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement,
composition with creditors or readjustment of, or other
similar proceedings which affect, the Borrower or any other
party to any of the Loan Documents;
(8) any lack of validity or enforceability of this
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89
Agreement, any Letter of Credit or any other Loan Document,
or any allegation of invalidity or unenforceability or any
contest of such validity or enforceability;
(9) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against the
Agent, any Lender or any beneficiary or any transferee of
any Letter of Credit (or any persons or entities for whom
the Lender or any such beneficiary or transferee may be
acting), or any other Person, whether in connection with
this Agreement or any of the other Loan Documents or any of
the transactions contemplated by any Loan Document or any
unrelated transaction;
(10) any statement in any certificate or any other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
such statement being untrue or inaccurate in any respect
whatsoever;
(11) payment by NationsBank under any Letter of Credit
against presentation of a demand or certificate which does
not comply with the terms of such Letter of Credit;
(12) the release or discharge by operation of law of the
Borrower form the performance or observance of any
obligation, covenant or agreement contained in any of the
Loan Documents; or
(13) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing.
2.19.13 Without affecting the Borrower's liability under any other
provision of this Agreement, the Borrower agrees to indemnify each of
NationsBank, the Agent and the Lenders and their respective
affiliates, directors, officers, employees, attorneys and agents from,
and hold each of them harmless against, any and all losses,
liabilities, damages or expenses incurred by any of them in connection
with or by reason of any actual or threatened investigation,
litigation or other proceeding (including, in respect of NationsBank
and the Agent, any such investigations, litigation or other proceeding
between
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NationsBank or the Agent and any Lender) relating to (a) the execution
and delivery of any Letter of Credit; (b) the use of the proceeds of
any drawing under any Letter of Credit; or (c) the transfer or
substitution of, or payment or failure to pay under, any Letter of
Credit, including the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or
other proceeding, but excluding damages, losses, liabilities or
expenses to the extent, but only to the extent, incurred by reason of
the willful misconduct or gross negligence of NationsBank in
determining whether a document presented under any Letter of Credit
complies with the terms of such Letter of Credit. It shall not be a
condition to any such indemnification that NationsBank, the Agent or
any Lender shall be a party to any such investigations, litigation or
other proceeding. Nothing in this Paragraph 2.19 is intended to limit
the Borrower's payment obligations under this Agreement.
2.19.14 The Borrower assumes all risks of the acts or omissions of any
beneficiary of any Letter of Credit with respect to the use of the
Letter of Credit. None of the Agent, any Lender nor any of their
respective affiliates, officers, directors, employees, attorneys or
agents shall be liable or responsible for: (a) the use which may be
made of the Letter of Credit or for any acts or omissions of any
beneficiary of any Letter of Credit in connection with such Letter of
Credit; (b) the validity, sufficiency or genuineness of documents
presented to NationsBank, or of any endorsement on such documents,
even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by
NationsBank against presentation of documents which do not comply with
the terms of any Letter of Credit, including failure of any documents
to bear any reference or adequate reference to such Letter of Credit;
or (d) any other circumstances whatsoever in making or failure to make
payment under any Letter of Credit; provided that the Borrower shall
have a claim against NationsBank to the extent, but only to the
extent, of any direct, as opposed to consequential, damages suffered
by the Borrower which the Borrower proves were caused by NationsBank's
willful misconduct or gross negligence in determining whether a
document presented under any Letter of Credit complies with the terms
of such Letter of Credit. In furtherance and not in limitation of the
foregoing, NationsBank may accept documents that appear on their face
to be in order, without responsibility for further investigation,
regardless of any notice or information to
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the contrary.
3. As amended hereby, the Loan Agreement remains in full effect, and all
agreements among the parties with respect to the subject hereof are represented
fully in this Amendment and the other written documents among the parties. The
validity, construction and enforcement hereof shall be determined according to
the substantive laws of the State of Tennessee.
4. This Amendment shall be effective upon the parties' exchange by
telecopier of copies hereof showing the signatures of the other parties;
provided, however, each party shall immediately forward an executed original
hereof to Agent. The failure of any party to so provide Agent with an original
hereof shall not impair the validity of this Amendment, but shall entitle Agent
to obtain specific performance of the obligation to provide an executed original
of this Amendment.
Executed as of the date written above.
RESPONSE ONCOLOGY, INC.
By:___________________________________
Title:________________________________
NATIONSBANK OF TENNESSEE, N.A.
By:___________________________________
Title:________________________________
NATIONSBANK OF TENNESSEE, N.A., as
Agent
By:___________________________________
Title:________________________________
UNION PLANTERS NATIONAL BANK
By:___________________________________
Title:________________________________
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