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EXHIBIT 10.2
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SECOND AMENDED AND RESTATED
LOAN AGREEMENT
between
DVI Financial Services Inc.,
The Banks Signatory to this Loan Agreement
and
Fleet Bank N.A.,
as Agent
$128,000,000 Facility
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TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 General Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 1.3 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 2. COMMITMENTS; LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.1 Loans; Credit Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.2 Changes in Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.3 Borrowing Notice; Borrowing Base Report . . . . . . . . . . . . . . . . . . . . 32
Section 2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.5 Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.6 Disbursement of Loan Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.7 Conversions of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.8 Mandatory and Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.10 Principal Repayment Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.11 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.12 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.13 Time and Method of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.14 Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.15 Minimum Borrowings, Conversions and Prepayments . . . . . . . . . . . . . . . . 37
Section 2.16 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.17 Limitation on Types of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 2.18 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 2.19 Forced Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 2.20 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.21 Security Documents; Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.22 Forms of Borrower Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.23 Required Borrowing Documentation . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 2.24 Lock-Box Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 2.25 Pro Rata Treatment Among Banks . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 2.26 Non-Receipt of Funds by the Agent . . . . . . . . . . . . . . . . . . . . . . . 45
Section 2.27 Sharing of Payments and Set-Off Among Banks . . . . . . . . . . . . . . . . . . 45
Section 2.28 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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Section 2.29 Release of Agent's Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 2.30. Pre-Funding Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 3.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 3.2 Power, Authority, Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 3.3 No Violation of Law or Agreements . . . . . . . . . . . . . . . . . . . . . . . 53
Section 3.4 Due Execution, Validity, Enforceability . . . . . . . . . . . . . . . . . . . . 53
Section 3.5 Properties, Priority of Liens . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 3.6 Judgments, Actions, Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 3.7 No Defaults, Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . 54
Section 3.8 Burdensome Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 3.9 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 3.10 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 3.11 Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 3.12 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 3.13 Name Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 3.14 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 3.15 Labor Disputes; Collective Bargaining Agreements; Employee Grievances . . . . . 56
Section 3.16 Condition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 3.17 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 3.18 Non-Recourse Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 3.19 Finders or Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 3.20 Investment Company Act; Public Utility Holding Company Act . . . . . . . . . . . 57
Section 3.21 Borrowing Base Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 3.22 Licenses and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 3.23 Independent Credit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE 4. CONDITIONS TO THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 4.1 Conditions to Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 4.2 Conditions to Subsequent Loans . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 5. DELIVERY OF FINANCIAL REPORTS, DOCUMENTS AND OTHER INFORMATION . . . . . . . . . . . . . . . . 59
Section 5.1 Annual Financial Statements and Budgets . . . . . . . . . . . . . . . . . . . . 59
Section 5.2 Quarterly Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 5.3 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 5.4 No Default Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 5.5 Copies of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 5.6 Notices of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 5.7 ERISA Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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Section 5.8 Borrowing Base Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.1 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.3 Maintenance and Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.4 Continuance of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.5 Copies of Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.6 Perform Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.7 Notice of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.9 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 6.10 Reportable Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 6.11 Comply with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.12 Upgrades and Add-ons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.13 Possession of Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.14 Obligor Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 6.15 Preservation and Perfection of Agent's Liens . . . . . . . . . . . . . . . . . . 67
Section 6.16 Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 6.17 Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 6.18 Credit Underwriting Standards . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 7.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.3 Mergers, Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 7.4 Redemptions; Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 7.5 Stock Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 7.6 Changes in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 7.7 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 7.8 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 7.9 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 7.10 ERISA Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 7.11 Amendment of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 7.12 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 7.13 Rental Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 7.14 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 7.15 Changes in Calculation of Net Book Value . . . . . . . . . . . . . . . . . . . . 77
Section 7.16 Non-DVI Generated Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
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Section 8.1 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.2 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.3 Other Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.4 Other Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.5 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.6 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.7 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 8.8 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 8.9 Ownership of Stock of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 8.10 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 8.11 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 8.12 Parent Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 8.13 Warehouse Loan Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE 9. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 9.1 Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . . 82
Section 9.2 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 9.3 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 9.4 Rights as a Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 9.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 9.6 Non-Reliance on Agent and other Banks . . . . . . . . . . . . . . . . . . . . . 84
Section 9.7 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 9.8 Resignation or Removal of Agent . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 9.9 Sharing of Collateral and Payments . . . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE 10. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 10.1 Fees and Expenses; Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 10.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 10.3 No Set-Off of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 10.4 Survival of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 10.5 Lien on and Set-off of Deposits . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 10.6 Modifications, Consents and Waivers; Entire Agreement . . . . . . . . . . . . . 88
Section 10.7 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 10.8 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 10.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 10.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 10.11 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial . . . . . . . . . . 91
Section 10.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 10.13 Binding Effect; No Assignment by Borrower . . . . . . . . . . . . . . . . . . . 93
Section 10.14 Assignments and Participations by Banks . . . . . . . . . . . . . . . . . . . . 93
Section 10.15 Scope of Agent's Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
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Section 10.16 Waiver of Relief from Bankruptcy Code Stay . . . . . . . . . . . . . . . . . . . 95
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SCHEDULES:
1. States of Incorporation and Qualification, and Capitalization and
Ownership of Stock, of DVI and its Subsidiaries
2. Consents, Waivers, Approvals; Violation of Agreements
3. Judgments, Actions, Proceedings
4. Defaults; Compliance with Laws, Regulations and Agreements
5. Burdensome Documents
6. Patents, Trademarks, Trade Names, Service Marks and Copyrights
7. Name Changes, Mergers, Acquisitions; Location of Collateral
8. Labor Disputes; Collective Bargaining Agreements; Employee Grievances
9. Existing Non-Recourse and Partial Recourse Debt
10. Conditions Precedent to Original Agreement
11. Permitted Recourse Indebtedness
12. Guaranties of Obligations of Affiliates
13. Certain Restricted Investments
14. List of ADAC Contracts
EXHIBITS:
A Form of Amended and Restated Note
B Form of Amended and Restated Pre-Funding Note
C Form of Borrowing Notice
D Form of Borrowing Base Report
E Form of Assignment and Acceptance
F Form of DBC Financing Agreements
G Form of Eligible Progress Payment Agreements
H Form of Intercompany Note
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SECOND AMENDED AND RESTATED
LOAN AGREEMENT
This SECOND AMENDED AND RESTATED LOAN AGREEMENT, dated June
14, 1991 and amended and restated as of March 28, 1995 and February 28, 1997
(as amended and restated, this "Agreement"), is between DVI Financial Services
Inc., a Delaware corporation (the "Borrower"), the banks that have executed a
signature page to this Agreement (the "Banks"), Fleet Bank N.A. and CoreStates
Bank, N.A. ("CoreStates"), as Pre-Funding Lenders pursuant to the terms of
Section 2.30 (in such capacity, the "Pre-Funding Lenders"), and Fleet Bank N.A.
as agent for the Banks and Pre-Funding Lenders pursuant to the terms of Article
9 (in such capacity, the "Agent").
RECITALS:
(1) The Borrower, the Banks, the Pre-Funding Lenders and
the Agent are parties to the Loan Agreement, dated June 14, 1991 and amended
and restated as of March 28, 1995, as heretofore amended, modified and
supplemented (the "Original Agreement"), pursuant to which the Borrower
obtained commitments for loans from the Banks in the aggregate principal sum of
$116,500,000.
(2) The Borrower, the Banks and the Agent wish to amend
the Original Agreement to increase the maximum available loans to $128,000,000
and to make certain other changes in the terms of the Original Agreement, and
to restate the Original Agreement as amended by such amendments for their
convenience.
(3) Following such restatement, this Agreement will set
forth the definitive terms and conditions of the agreement of the Borrower, the
Banks, the Pre-Funding Lenders and the Agent regarding the matters covered by
this Agreement as of and after the date the Original Agreement is restated, and
the Original Agreement will continue to govern such terms prior to such date.
NOW, THEREFORE, in consideration for the foregoing agreements
and for other good and valuable consideration whose receipt and sufficiency are
acknowledged,
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the Borrower, the Banks, the Pre-Funding Lenders and the Agent agree to the
following terms.
ARTICLE 1. DEFINITIONS
Section 1.1 General Definitions. In addition to the
terms defined elsewhere in this Agreement, the following terms shall have the
following meanings for purposes of this Agreement:
"AADAC Contract" - means one of the Contracts listed on the
attached Schedule 14 so long as (i) such Contract meets all of the criteria for
being an Eligible Contract other than paragraphs (g), (j), (l) and (t) of the
definition of "Eligible Contract", and (ii) the Equipment subject to such
Contract meets all of the criteria for being Eligible Equipment other than
paragraph (c) of the definition of "Eligible Equipment".
"Additional Costs" - as defined in Section 2.16.
"Affiliate" - as to any Person, any other Person that directly
or indirectly controls, is under common control with or is controlled by such
Person. As used in this definition, "control", "under common control with" and
"controlled by" mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); provided that (i) any Person that owns, directly or indirectly, 20%
or more of the securities having ordinary voting power for the election of
directors or other governing body of a corporation, or 20% or more of the non-
limited partnership or other ownership interests of any other Person, will be
deemed to control such Person, and (ii) each shareholder, director and officer
of the Borrower shall be deemed to be an Affiliate of the Borrower.
"Agent's Lien" - the Liens granted to the Agent for the
ratable benefit of the Banks pursuant to the Security Documents.
"Applicable Law" - all applicable (i) laws, treaties and
international agreements of any national government, (ii) laws of any state,
province, territory, locality or other political subdivision of a national
government, and (iii) rules, regulations,
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judgments, decrees, orders, injunctions, writs, directives, ordinances,
licenses and permits of any government, governmental agency, court or
arbitration authority.
"Applicable Lending Office" - with respect to each type of
Loan for each Bank, the lending office designated for such type of Loan on such
Bank's signature page to this Agreement, or such other office as such Bank may
specify from time to time to the Borrower, as the office at which its Loans of
such type are to be made and maintained.
"Applicable Margin": at any time during the Credit Period, the
following amounts based on the Leverage Ratio most recently reported by
Borrower pursuant to the Financial Statements: (A) if the Leverage Ratio is
less than 2:1, 0.0% for Prime Rate Loans and 1.20% for Eurodollar Loans, (B) if
the Leverage Ratio is equal to or more than 2:1 and less than or equal to 4:1,
0.0% for Prime Rate Loans and 1.35% for Eurodollar Loans, (C) if the Leverage
Ratio is more than 4:1, 0.0% for Prime Rate Loans and 1.50% for Eurodollar
Loans, and (D) regardless of the Leverage Ratio, for the portion of the unpaid
principal amount of any Loan whose proceeds were advanced by the Borrower to
DBC for the DBC Financed amount of Eligible Healthcare Receivables, 0.125% for
such portion of Prime Rate Loans and 1.65% for such portion of Eurodollar
Loans.
"Assignment and Acceptance" - an Assignment and Acceptance
agreement in the form attached as Exhibit E.
"Assignment of Agreements" - the Assignment of Agreements,
dated June 14, 1991, between Borrower and Agent, as confirmed by the
Confirmation.
"Assignment of Leases" - the Assignment of Leases, dated June
14, 1991, between Borrower and Agent, as confirmed by the Confirmation.
"Balance of Payments" - at any date, the total unpaid
regularly scheduled rental payments under a Lease or the total unpaid regularly
scheduled payments under an Equipment Note, CSA or Third Party Note, in each
case due or to become due during the next succeeding 84 months or the
remainder, whichever is less, of the Initial Term of the applicable Eligible
Contract, but not in any event including payments or amounts due directly or
indirectly on account of user, sales or property taxes, maintenance, repairs,
management fees, insurance and similar items and net of any credits, customer
deposits, rebates, offsets, holdbacks or other adjustments or commissions
payable to third parties
-3-
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that are adjustments to such payments, and provided that the Balance of
Payments with respect to an item of related Equipment is that portion of the
Balance of Payments attributable to such item of Equipment.
"Borrowing Availability" - the difference between (a) the
Borrowing Capacity, minus (b) the aggregate outstanding balance of all Loans
and all Pre-Funding Loans.
"Borrowing Base" - as defined in Section 1.2(a).
"Borrowing Base Report" - a report in the form attached as
Exhibit D that includes a Borrowing Base computation.
"Borrowing Capacity" - as defined in Section 2.1.
"Borrowing Notice" - a notice in the form attached as Exhibit
C, as further described in Section 2.3.
"Business Day" - any day other than Saturday, Sunday or other
day on which commercial banks in the city where the Principal Office is located
are authorized or required to close under the laws of the State where the
Principal Office is located.
"Capitalized Lease Obligations" - obligations (determined in
accordance with GAAP) of a Person to pay rent or other amounts under a lease
(or other agreement conveying the right to use) of real or personal property
that is required to be classified and accounted for as a capital lease under
GAAP.
"Cash Operating Expenses" - as of any date of determination,
the sum of the following items actually paid in cash by the Borrower and
arising out of the conduct of its business in the ordinary course: (i)
interest expense on recourse debt; (ii) selling, general and administrative
expenses and sales commissions, excluding amortization of initial direct costs
but including any initial direct costs actually paid in cash during the current
accounting period; and (iii) all other expenses paid in cash; provided,
however, that "Cash Operating Expenses" shall not include any bad debt expense.
-4-
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"Cash Receipts" - as of any date of determination, the sum of
the following items actually received in cash by the Borrower and arising out
of the conduct of the business of the Borrower in the ordinary course: (i) cash
payments received under CSAs, Equipment Notes and Third Party Notes before
Securitization; (ii) cash proceeds from the sale of lease streams net of
repayment of Indebtedness; (iii) all cash payments from leases held in the
portfolio of the Borrower before Securitization; (iv) cash interest income,
including cash profits or losses from hedging activities; (v) cash proceeds
from sales of residuals net of repayment of Indebtedness; (vi) dividends or
other such payments from the lessees of the Affiliate Leases pursuant to profit
sharing agreements or arrangements between the Borrower and such Affiliates,
and (vii) fees, commissions and other miscellaneous income actually received in
cash.
"Code" - the Internal Revenue Code of 1986.
"Collateral" - the collateral covered by each of the Security
Documents.
"Commitment" - as to each Bank, the amount set forth opposite
such Bank's name on its signature pages to this Agreement under the caption
"Commitment", as reduced pursuant to Sections 2.1 and 2.2.
"Commitment Fee" - as defined in Section 2.4.
"Confirmation" - the Confirmation, dated February 28, 1997,
between the Borrower, DVI, DBC, the Banks, the Pre-Funding Lenders and the
Agent.
"Contract" - a Lease, Equipment Note, CSA or Third Party Note,
and "related Contract" means, with reference to any Equipment, the Contract
covering or secured by such Equipment.
"Contract Payments" - the aggregate amount payable under a
Contract by the Obligor thereunder as rental, debt service or installment
payments, including all security deposits, advance rentals, indemnity payments,
insurance proceeds, purchase price payments, principal, interest, payments in
connection with any purchase, renewal, termination, option or obligation and
other amounts at any time made, due or to become due, whether or not earned by
performance, under or pursuant to a Contract.
-5-
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"Contract Receivables Clause" - Section 1.2(a)(i).
"Controlled Group" - all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414(b), 414(c) or 414(m) of the Code and Section
4001(a)(2) of ERISA.
"Credit Period" - the period commencing on June 14, 1991 and
ending on the Final Maturity Date.
"CSA" - a conditional sale agreement or similar arrangement
providing for the sale of Equipment by the Borrower, as vendor, to an Obligor
and for the retention of a Lien on such Equipment to secure amounts payable by
such Obligor under such CSA.
"DBC" - DVI Business Credit Corporation, a Delaware
corporation and wholly-owned subsidiary of DVI.
"DBC Financed Amount" - at any date of determination, the sum
of (i) with respect to all Eligible Healthcare Receivables purchased by DBC,
the aggregate purchase price paid by DBC for such Eligible Healthcare
Receivables, and (ii) with respect to all Eligible Healthcare Receivables in
which a Healthcare Provider has granted a security interest and assigned its
rights and interests to DBC, the then outstanding principal amount advanced by
DBC with respect to, and secured by, such Eligible Healthcare Receivables, in
each case as reported by the Borrower on a Borrowing Base Report.
"DBC Financing Agreement" - an agreement between DBC and a
Healthcare Provider substantially in one of the forms attached as Exhibit F or
as otherwise approved pursuant to Section 2.22 pursuant to which the Healthcare
Provider has or will either (i) sell Eligible Healthcare Receivables to DBC for
a purchase price not exceeding 80% of the face value of such Eligible
Healthcare Receivables on their date of purchase, or (ii) grant a security
interest and assign to DBC all of its rights and interests in Eligible
Healthcare Receivables in connection with the borrowing from DBC of an amount
not exceeding 80% of the face value of such pledged Eligible Healthcare
Receivables.
-6-
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"DBC Guaranty" - the Guaranty Agreement, dated December 29,
1994, from DBC to the Agent, as confirmed by the Confirmation.
"DBC Promissory Note" - the Promissory Note, dated December
29, 1994, from DBC to the Borrower and endorsed to the Agent.
"DBC Security Agreement" - the Security Agreement, dated
December 29, 1994, from DBC to the Agent, as confirmed by the Confirmation.
"Default" - an event that with notice or lapse of time or both
would constitute an Event of Default.
"Dollars" and "$" - lawful money of the United States of
America.
"DVI" - DVI, Inc., a Delaware corporation and the parent of
the Borrower.
"Eligible Assignee" - a commercial bank or other financial
institution having a combined capital and surplus of at least $50,000,000.
"Eligible Contract" - a Contract that meets each of the
following requirements at all times:
(a) no Contract Payment is more than 60 days past due,
and no other material default exists by the Obligor under such Contract or
under any security or other documents executed in connection with such Contract
or by any other Obligor of its obligations with respect to such Contract;
(b) it has not been rejected or refused as unacceptable
for inclusion in a Securitization under any Warehousing Loan Agreement except
on the basis of concentration issues only (including geographical, equipment
type and Dollar amount);
(c) it arises in the ordinary course of the Borrower's
business, is the legal, valid, binding and enforceable obligation of the
Obligor under such Contract, is in full force and effect and complies with all
Applicable Laws, and the obligations of the Obligor have been duly authorized
and have not been canceled or terminated;
-7-
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(d) its Initial Term has commenced and is continuing, it
is noncancellable during its Initial Term and it provides that the Obligor
under such Contract will pay all amounts due without setoff, counterclaim,
defense or abatement;
(e) no setoffs, counterclaims, defenses or disputes
exist with the Obligor or any Affiliate of the Obligor with respect to such
Contract, the Obligor has not denied liability under such Contract in whole or
in part, the payment of amounts due under such Contract is subject to no
conditions precedent that are unsatisfied, and no agreement relating to such
Contract imposes any obligation on the Borrower (other than a warranty of
title) that if not performed would give rise to a right of offset, counterclaim
or any other defense on the part of such Obligor to payment of any part of such
Contract;
(f) the forms of Contracts, including all related
security documents, (i) constitute a non-cancelable Lease or a non- prepayable
and non-cancelable Equipment Note, CSA or Third Party Note, (ii) can be
assigned as collateral by the Borrower without Obligor consent, (iii) cannot be
assigned or transferred by the Obligor except as permitted by Section 7.2, (iv)
are marked in accordance with Section 6.13; and (v) include an obligation on
the part of the Obligor to maintain or cause to be maintained the Equipment at
the Obligor's expense in good condition, repair and working order;
(g) all Equipment covered by such Contract is at all
times Eligible Equipment;
(h) no bankruptcy or insolvency proceeding shall have
been commenced by or against the Obligor under such Contract, such Obligor
shall not have taken any corporate action relating to any such proceeding and
no foreclosure or similar proceeding shall have been commenced by any holder of
a Lien on the Equipment related to such Contract;
(i) any Lease is a net-net lease with no more than 96
remaining months in the Initial Term, and any Equipment Note, CSA or Third
Party Note has a final maturity date not more than 96 months in the future;
(j) the Agent has received or has available to it for
inspection pursuant
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to Section 6.2 a photocopy of the file stamped "acknowledgment copy" (or,
before receipt of the acknowledgment copy from the UCC filing office, a
photocopy of the filing) containing the recording information of Financing
Statements filed with respect to such Contract in all appropriate and necessary
offices naming the Obligor as debtor or lessee, the Borrower as Secured Party
or lessor and the Agent as assignee;
(k) the Obligor under such Contract is not, and any
lessee under a Third Party Lease is not, the United States of America, any
agency or instrumentality of the United States of America, any entity entitled
to full or partial sovereign immunity or any entity as to which an assignment
of claims is subject to consent;
(l) each Obligor under such Contract and each lessee
under a Third Party Lease is an entity duly organized and existing under the
laws of its jurisdiction of organization in, or an individual legally and
permanently residing in, the United States of America or a U.S. Territory;
provided that the foregoing shall not preclude a Lessee or the lessee under a
Third Party Lease that has no right to terminate or discontinue from making
payments in the event of nonappropriation of funds by any governmental agency
or body;
(m) payment under such Contract is to be made in
Dollars, and if such Contract is a Lease either (i) the rental payments are not
determined wholly or partly by the volume of use of the related Equipment, or
(ii) if the rental payments are determined partly by the volume of use of the
related Equipment, then only the guaranteed or fixed rental payments are
included in computing the Borrowing Base;
(n) the Borrower knows of no fact or circumstance that
might render such Contract less valuable than it purports to be, and the
Borrower has not taken any action that will impair the value of such Contract,
the related Equipment or the rights of any party with respect to such Contract
or the related Equipment;
(o) such Contract has not been amended or rewritten in
any respect, except for an Eligible Twelve-Month Restructured Lease or an
upgrade;
(p) the Obligor under such Contract and any lessee under
a Third Party Lease are not Affiliates of the Borrower, except that a Lessee
may be an Affiliate of the
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Borrower in accordance with Section 7.14(c);
(q) in the case of a Lease, the Borrower holds good and
marketable title to the Contract, all related Contract Payments and all
Equipment covered by such Contract, and has granted to the Agent a valid first
priority perfected Lien on all of the Borrower's right, title and interest in
such Contract, Contract Payments and Equipment, subject to no Liens other than
Permitted Liens, and such Lease constitutes chattel paper;
(r) in the case of an Equipment Note or CSA, the
Borrower holds good and marketable title to the Contract and all related
Contract Payments, the Borrower has a valid first priority perfected Lien on
all Equipment securing or covered by such Contract, and the Borrower has
granted to the Agent a first priority perfected Lien on all of the Borrower's
right, title and interest in such Contract, Contract Payments and Equipment,
subject to no Liens other than Permitted Liens, and any CSA constitutes chattel
paper;
(s) in the case of a Third Party Note, the Borrower
holds good and marketable title to the Contract and all related Contract
Payments, the Borrower has a valid first priority perfected Lien on the Third
Party Lease (including all payments to be made to the Obligor under the Third
Party Lease) and all Equipment covered by such Third Party Lease, and the
Borrower has granted to the Agent a valid first priority perfected Lien on all
of the Borrower's right, title and interest in such Third Party Note, Third
Party Lease and Equipment, subject to no Liens other than Permitted Liens, and
the related Third Party Lease constitutes chattel paper; and
(t) the Borrower's and Agent's Lien on the Equipment
related to any such Contract is created under and pursuant to the UCC of an
applicable jurisdiction, except that for motor vehicles the appropriate
endorsement on the certificate of title in favor of the Agent shall have been
effected if more than six motor vehicles are included in computation of the
Borrowing Base at that time or, if six or less motor vehicles are then included
in computation of the Borrowing Base, the Agent has requested in writing that
such endorsement be effected.
"Eligible Equipment" - any item of Equipment that meets each
of the following requirements at all times:
-10-
18
(a) such Equipment is personalty and does not constitute
fixtures except for fixtures that are immaterial in type or quantity;
(b) such Equipment is not used primarily for personal,
family or household purposes and is not consumer goods;
(c) such Equipment is located at all times in one of the
United States of America, a U.S. Territory in which the UCC is in effect or
Washington, D.C.;
(d) such Equipment is located at either the Borrower's
premises (if it constitutes inventory) or the related Obligor's premises,
except for Equipment with a Net Book Value of up to $3,000,000 at any time that
is covered by a UCC-1 Financing Statement filed by the Borrower against the
warehouseman, manufacturer or other Person in possession of such Equipment;
(e) such Equipment is not installed in or affixed to
other equipment which is not Collateral;
(f) such Equipment is in good condition, repair and
working order and is insured in accordance with this Agreement and the Security
Documents;
(g) if such Equipment is software, the Borrower has or
will have after foreclosure against the related Obligor the right to remarket
such Equipment with the associated software remaining in place without
obtaining any consent or approval from the licensor of such software; and
(h) if such Equipment is a motor vehicle, it is a truck,
trailer or tractor-trailer in or on which major medical imaging Equipment has
been installed, or it is an ambulance or is otherwise used in connection with
the health care industry;
and "related Equipment" shall mean, when used with reference to any Contract,
the Eligible Equipment covered by or securing the repayment of obligations
under such Contract.
"Eligible Healthcare Receivable" - a Healthcare Receivable
that meets each
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of the following requirements at all times:
(a) it is a liability of a commercial insurance company,
Blue Cross/Blue Shield plan, health maintenance organization, preferred
provider organization or hospital corporation organized under the laws of any
jurisdiction in, and having its principal office in, the United States of
America;
(b) the Obligor of which is not an Affiliate of its
related Healthcare Provider or any Loan Party;
(c) the Obligor of which is not subject to any actions
or proceedings of the type described in Section 8.6;
(d) it is not a receivable arising in whole or in part
under or whose payment is wholly or partially administered under (i) the health
insurance program for the aged and disabled established by Title XVIII of the
Social Security Act (42 U.S.C. Section 1395 et seq.) and any succeeding statutes
(i.e., Medicare), (ii) the medical assistance program established by Title XIX
of the Social Security Act (42 U.S.C. Section 1396 et seq.) and any succeeding
statutes (i.e., Medicaid), or (iii) the Civilian Health and Medical Program of
the Uniformed Services established by 10 U.S.C. Section 1071 et seq. (i.e.,
CHAMPUS);
(e) it is denominated and payable in Dollars in the
United States of America;
(f) it was sold to DBC by a Healthcare Provider or in
which a Healthcare Provider granted a security interest and assigned all of its
rights and interests to DBC pursuant to a DBC Financing Agreement;
(g) a security interest in all of DBC's right, title and
interest in it has been granted to the Agent pursuant to the DBC Security
Agreement, which security interest has been perfected by the filing of
Financing Statements listing DBC as "Debtor" and the Agent as "Secured Party"
and covering such Eligible Healthcare Receivable;
(h) it is in full force and effect and constitutes the
legal, valid and
-12-
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binding obligation of the Obligor thereon enforceable against such Obligor in
accordance with its terms;
(i) it has not been satisfied, has not been and is not
subject to being compromised, adjusted, modified, subordinated or rescinded and
is net of contractual allowances;
(j) it is not past due more than 60 days; and
(k) it is paid or caused to be paid into a lockbox
account established pursuant to Section 2.24.
"Eligible Lease" - an Eligible Contract which is a Lease.
"Eligible Progress Payment Agreement" - an agreement either
(a) between the Borrower and a Lessee pursuant to which (i) the Borrower agrees
to purchase Equipment that will be leased to the Lessee under a Lease and to
make Progress Payments to the vendors of such Equipment before delivery and
acceptance of such Equipment under such Lease, and (ii) the Lessee agrees to
reimburse the Borrower for all such Progress Payments or to accept delivery of
the Equipment under the Lease, in either case within nine months of the first
Progress Payment, and to pay a daily rental charge calculated on the basis of
an agreed upon rate of interest on all unreimbursed Progress Payments from time
to time, or (b) between the Borrower and an Obligor pursuant to which (i) the
Borrower agrees to make loans to such Obligor whose proceeds will be used by
such Obligor solely to make Progress Payments to the vendors of Equipment
pursuant to purchase agreements between such vendors and such Obligor, (ii) the
Obligor agrees to reimburse the Borrower for all such Progress Payments or to
purchase such Equipment and subject such Equipment to an Equipment Note or a
Third Party Note, in either case within nine months of the first Progress
Payment, and to pay an agreed rate of interest on all unreimbursed Progress
Payments from time to time, and (iii) the Obligor has granted to the Borrower a
duly perfected first priority Lien on all of its right, title and interest in
its purchase agreements with such vendors, and in the case of either (a) or (b)
the agreement meets the following additional requirements at all times:
(a) the Lease, Equipment Note or Third Party Note meets
all of the requirements of the definition of an "Eligible Contract" applicable
to a Lease, Equipment
-13-
21
Note or Third Party Note except clause (c) as to the Lease, Equipment Note or
Third Party Note not yet being in full force and effect, clause (d) as to the
Initial Term having commenced, and clause (f) as to title to the Leased
Property;
(b) the Equipment subject to such agreement meets all of
the requirements of the definition of "Eligible Equipment" except that such
Equipment is work-in-progress of the manufacturer and therefore does not meet
the requirements of clause (f) of the definition of "Eligible Equipment";
(c) the Obligor is not in default of any of its
obligations under such agreement;
(d) no setoffs, disputes, counterclaims or defenses
exist by or with the vendor of such Equipment; and
(e) such agreement is substantially in the form attached
as Exhibit H or as otherwise approved pursuant to Section 2.22.
"Eligible Six-Month Restructured Lease" - at any date, a Lease
(i) under which the Borrower previously agreed to a suspension of or a
substantial reduction in three or more regularly scheduled consecutive rental
payments due or to become due during the Initial Term, (ii) under which all
amounts payable have been paid within 15 days of the date when due for a period
of at least six consecutive months following the date of commencement of
payment under the restructured terms, and (iii) that meets all of the
requirements of an Eligible Lease. Notwithstanding the foregoing, Eligible
Six-Month Restructured Leases do not include any Eligible Twelve-Month
Restructured Leases.
"Eligible Three-Month Restructured Lease" - at any date, a
Lease (i) under which the Borrower previously agreed to a suspension of or a
substantial reduction in three or more regularly scheduled consecutive rental
payments due or to become due during the Initial Term, (ii) under which all
amounts payable have been paid within 15 days of the date when due for a period
of at least three consecutive months or for a period containing three
consecutive contractual payments, whichever period is longer, following the
commencement of payment under the restructured terms, and (iii) that meets all
of the
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requirements of an Eligible Lease. Notwithstanding the foregoing, Eligible
Three-Month Restructured Leases do not include any Eligible Six-Month
Restructured Leases nor any Eligible Twelve-Month Restructured Leases.
"Eligible Twelve-Month Restructured Lease" - an Eligible
Six-Month Restructured Lease (i) under which all amounts payable have been paid
within 15 days of the date when due for a period of at least 12 consecutive
months following the date of commencement of payment under the restructured
terms, and (ii) the Borrower has given the Agent notice that it has elected to
include such Lease in the Contract Receivables Clause.
"Environmental Laws and Regulations" - all Applicable Laws
relating to Environmental Matters, health and safety applicable to the any Loan
Party.
"Environmental Liability" - any liability under any Applicable
Law for any release of a hazardous substance caused by the seeping, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of hazardous wastes or other chemical
substances, pollutants or contaminants into the environment, and any liability
for the costs of any clean-up or other remedial action including costs arising
out of security fencing, alternative water supplies, temporary evacuation and
housing and other emergency assistance undertaken by any environmental
regulatory body having jurisdiction over any Loan Party to prevent or minimize
any actual or threatened release by any Loan Party of any hazardous wastes or
other chemical substances, pollutants and contaminants into the environment
that would endanger the public health or the environment.
"Environmental Matter" - a release of any toxic or hazardous
waste or other chemical substance, pollutant or contaminant into the
environment or the generation, treatment, storage or disposal of any toxic or
hazardous wastes or other chemical substances.
"Environmental Proceeding" - any judgment, action, proceeding
or investigation pending before any court or governmental authority, bureau or
agency, including any environmental regulatory body, with respect to or
threatened against or affecting the Borrower or any other Loan Party or
relating to the assets or liabilities of
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23
any of them, including in respect of any "facility" owned, leased or operated
by any of them under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or under any state, local or municipal
statute, ordinance or regulation in respect thereof, in connection with any
release of any toxic or hazardous waste or other chemical substance, pollutant
or contaminant into the environment, or with the generation, storage or
disposal of any toxic or hazardous wastes or other chemical substances.
"Equipment" - medical equipment and computer equipment that is
used in the care, treatment, hospitalization, diagnosis or testing of patients
in a medical setting, furniture and office equipment located at such hospital
or medical setting and used in connection with such care, and trailers, trucks,
vans and transportable buildings used in conjunction with diagnostic testing,
therapeutic or other equipment in a medical setting.
"Equipment Note" - a loan agreement, security agreement and
any related agreement setting forth (i) an Obligor's agreement either to
purchase Equipment from the Borrower or to repay a loan from the Borrower the
proceeds of which were used to purchase Equipment from the Borrower and all
other obligations of such Obligor in connection with such purchase or
repayment, and (ii) granting to Borrower a security interest in such Equipment
to secure all such obligations; provided that such agreements shall not include
a promissory note or other instrument the possession of which is required for
perfection of the Agent's Lien on such Equipment Note.
"ERISA" - the Employee Retirement Income Security Act of 1974
and the regulations thereunder.
"Eurodollar Base Rate" - for any Interest Period, the rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) quoted by one
of Fleet's international banking facilities selected by Fleet at approximately
10:00 a.m. New York time (or as soon thereafter as practicable) two Business
Days prior to the first day of such Interest Period for the offering by Fleet
to leading banks in the Eurodollar interbank market of Dollar deposits having a
term comparable to such Interest Period and in an amount comparable to the
principal amount of the Eurodollar Loan made by the Banks to which such
Interest Period relates.
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"Eurodollar Business Day" - a Business Day on which dealings
in Dollar deposits are carried out in the Eurodollar interbank market.
"Eurodollar Loans" - Loans or portions of Loans the interest
on which is determined on the basis of rates referred to in the definition of
"Eurodollar Rate".
"Eurodollar Rate" - for any Interest Period, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by
the Agent to be equal to (x) the Eurodollar Base Rate for such Interest Period;
divided by (y) 1 minus the Reserve Requirement for such Interest Period. The
Agent shall use its best efforts to advise the Borrower of the Eurodollar Rate
as soon as practicable after each change in the Eurodollar Rate; provided,
however, that any failure of the Agent to so advise the Borrower shall not
affect the rights of the Banks or the Agent or the obligations of the Borrower
under this Agreement.
"Event of Default" - as defined in Article 8.
"Federal Funds Rate" - for any day, the weighted average of
the rates on overnight federal funds transactions with member banks of the
Federal Reserve System arranged by federal funds brokers as published by the
Federal Reserve Bank of New York for such day or, if such day is not a Business
Day, for the next preceding Business Day (or, if such rate is not so published
for any such day, the average rate charged to the Agent on such day on such
transactions as reasonably determined by the Agent).
"Fees" - the Commitment Fee and all other fees payable by the
Borrower to the Agent, the Banks or the Pre-Funding Lenders.
"Final Maturity Date" - shall be December 31, 1998.
"Financial Statements" - on any date, the most recent annual
financial statements delivered pursuant to Section 5.1 and, and as amended by,
the most recent quarterly financial statement delivered pursuant to Section
5.2.
"Financing Statements" - UCC-form financing statements duly
executed and completed and in the form necessary for perfection of a security
interest under the
-17-
25
UCC of an applicable jurisdiction when filed in the appropriate filing offices
prescribed by the UCC of such jurisdiction.
"Fleet" - Fleet Bank N.A. in its individual capacity.
"GAAP" - generally accepted accounting principles as in effect
from time to time and, subject to changes in such principles from time to time,
consistently applied in accordance with the past practices of a Person.
"Guaranty" - the Guaranty Agreement, dated June 14, 1991, from
DVI to the Agent, as confirmed by the Confirmation.
"Healthcare Provider" - a Person that has provided services or
sold merchandise to an Obligor and sold and/or granted a security interest in
the resulting Healthcare Receivable to DBC pursuant to a DBC Financing
Agreement.
"Healthcare Receivable" - (a) an account receivable billed by
a Healthcare Provider arising from the provision of health care services (and
any services or sales ancillary thereto) by the Healthcare Provider or
physicians or other professionals employed thereby including the right to
payment of any interest or finance charges and other obligations with respect
to such account receivable;
(b) all security interests or liens and the property
subject thereto from time to time purporting to secure payment of such account
receivable;
(c) all guarantees, indemnities and warranties and
proceeds thereof, proceeds of insurance policies, Financing Statements and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such account receivable;
(d) all cash collections with respect to any of the
foregoing;
(e) all Records with respect to any of the foregoing;
and
(f) all proceeds of any of the foregoing.
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A Healthcare Receivable is considered to be "due" for payment 120 days after
being invoiced.
"Healthcare Receivables Clause" - Section 1.2(a)(v).
"Indebtedness" - with respect to any Person, all (i)
liabilities or obligations, direct and contingent, that in accordance with GAAP
would be included in determining total liabilities as shown on the liability
side of a balance sheet of such Person, including contingent liabilities that
in accordance with GAAP would be set forth in a specific Dollar amount on the
liability side of such balance sheet and Capitalized Lease Obligations, (ii)
liabilities or obligations of others for which such Person is directly or
indirectly liable by way of direct guaranty, suretyship, discount, endorsement,
reimbursement of amounts drawn under letters of credit, take-or-pay agreement,
agreement to purchase or advance or keep in funds, other agreements having the
effect of a guaranty (other than endorsements of negotiable instruments for
deposit or collection in the ordinary course of business) or otherwise, whether
or not such liabilities would be included in determining total liabilities as
shown on a balance sheet in accordance with GAAP, (iii) obligations in respect
of interest rate exchange, swap, cap and other agreements or arrangements
designed to provide protection against fluctuations in interest rates, (iv)
without duplication, liabilities or obligations secured by liens on any assets
of such Person, whether or not such liabilities or obligations have been
assumed by it, and (v) liabilities or obligations of such Person, direct or
contingent, with respect to letters of credit issued for the account of such
Person and bankers acceptances created for such Person.
"Initial Term" - as of any date of determination, (i) with
respect to a Lease the period from and including the commencement date of such
Lease and ending on the last day of the then current lease term that is
non-cancelable by the Lessee, and (ii) with respect to any other Contract the
period commencing on the date which is comparable to the commencement date
under a lease and ending on the then last scheduled non-cancelable installment
or maturity date.
"Intangibles" - good will and other items shown as intangible
on the Borrower's balance sheet.
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"Interest Expense" - at any date, the sum of all payments of
interest on Indebtedness of the Borrower that were paid during the 12-month
period immediately preceding such date, excluding interest on Non-Recourse
Debt.
"Interest Period" - with respect to any Eurodollar Loan, each
period commencing on the date such Eurodollar Loan is made or converted from a
Loan or Pre-Funding Loan of another type, or the last day of the next preceding
Interest Period with respect to such Eurodollar Loan, and ending on the same
day in the 1st, 2nd or 3rd calendar month thereafter as the Borrower may select
as provided in Section 2.3 (subject to availability of funds), except that each
such Interest Period which commences on the last Eurodollar Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last
Eurodollar Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) any Interest Period which commences prior
to a Payment Date shall end no later than such Payment Date if the aggregate
principal amount of the Eurodollar Loans or portions thereof to which such
Interest Period would be applicable would include any portion of the aggregate
principal amount of the Loans which are due and payable on such Payment Date;
(ii) each Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day (or, in the case of
an Interest Period for Eurodollar Loans, if such next succeeding Eurodollar
Business Day falls in the next succeeding calendar month, on the next preceding
Eurodollar Business Day); (iii) no more than 15 Interest Periods for Eurodollar
Loans shall be in effect at the same time; and (iv) notwithstanding clause (i)
above, no Interest Period shall have a duration of less than one month. In the
event that the Borrower fails to select the duration of any Interest Period for
any Eurodollar Loan as provided in Section 2.7, such Loan will be automatically
converted into a Prime Rate Loan on the last day of the preceding Interest
Period for such Eurodollar Loan.
"Inventory and Per Procedure Clause" - Section 1.2(a)(iii).
"Investment" - in any Person by the Borrower:
(a) the amount paid or committed to be paid, or the
value of property or services contributed or committed to be contributed, by
the Borrower for or in connection
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with the acquisition by the Borrower of any stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of such Person;
and
(b) the amount of any advance, loan or extension of
credit to, or guaranty or other similar obligation with respect to any
Indebtedness of, such Person by the Borrower and (without duplication) any
amount committed to be advanced, loaned or extended to, or the payment of which
is committed to be assured by a guaranty or similar obligation for the benefit
of, such Person by the Borrower.
"Invoiced Cost" - of any item of Eligible Equipment, the cost
of such Eligible Equipment to the Borrower including sales and excise taxes,
and all installation and delivery costs, as evidenced by invoice(s) of the
vendor(s) of such Eligible Equipment; provided that the Invoiced Cost of
Eligible Equipment subject to an Equipment Note or CSA and sold by the vendor
directly to the Obligor shall be the cost charged by the vendor to such
Obligor.
"IRS" - Internal Revenue Service.
"Lease" - any document evidencing an agreement (including all
amendments, addenda or supplements) pursuant to which the Borrower leases
Eligible Equipment to a Lessee. Such term includes in its meaning both unitary
leases as well as individual lease schedules that incorporate all terms and
conditions of a master lease.
"Leased Property" - all items of Eligible Equipment covered by
or leased under a Lease, and all replacements and substitutions for such
Eligible Equipment, and all additions, parts and accessories to such Eligible
Equipment and all proceeds of such Eligible Equipment.
"Lessee" - the Obligor leasing Leased Property from the
Borrower under a Lease.
"Leverage Ratio" - with respect to the Borrower, the ratio of
(x) Total Recourse Liabilities to (y) Tangible Net Worth plus Subordinated Debt
not due within the twelve-month period immediately following any date of
computation.
"Lien" - any mortgage, deed of trust, pledge, security
interest,
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encumbrance, lien or charge of any kind (including any conditional sale or
other title retention agreement, any lease in the nature of a security
interest, and the filing of any Financing Statement intended as security under
the UCC of any jurisdiction) and any agreement to give any of the foregoing.
"Loans" - as defined in Section 2.1. Loans of different types
made or converted from Loans of other types on the same day (or of the same
type but having different Interest Periods) shall be deemed to be separate
Loans for all purposes of this Agreement. Loans do not include Pre-Funding
Loans.
"Loan Documents" - this Agreement, the Notes, the Guaranty,
the DBC Guaranty, the Security Documents, the Pre-Funding Notes, the
Confirmation, any interest rate swaps or other derivative agreements limiting
interest rate exposure on the Loans and the Pre-Funding Loans and all other
documents executed and delivered at any time in connection with such
agreements.
"Loan Party" - the Borrower, DVI, DBC and any other Person
that from time to time executes and delivers to the Banks or the Agent any Loan
Document then in effect.
"Majority Banks" - at any time that no Loans are outstanding,
Banks having at least 66% of the aggregate amount of the Commitments, and at
any time that Loans are outstanding, Banks holding at least 66% of the
aggregate principal amount of the Loans then outstanding.
"Monthly Dates" - the last day of each calendar month
commencing with the first such day after the date of this Agreement or, if any
Eurodollar Loans are then outstanding and the last day of any calendar month is
not a Eurodollar Business Day, the relevant Monthly Date shall be the next
preceding Eurodollar Business Day.
"Net Book Value" - with respect to Eligible Equipment, the
Invoiced Cost of such Eligible Equipment minus accumulated depreciation with
respect to such Eligible Equipment in accordance with GAAP; provided, however,
that with respect to Eligible Equipment subject to CSAs or leases that do not
constitute operating leases (as defined in Financial Accounting Standards Board
Statement No. 13), the lesser of the carrying value
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of such Eligible Equipment in the Financial Statements in accordance with GAAP
or the Present Value of the Unfunded Balance of Payments under such CSA or
non-operating lease.
"Non-Current Portion" - at any date of determination, the
portion of Indebtedness that matures, or at the option of the obligor may
mature, more than one year after such date.
"Non-Recourse Debt" - Indebtedness of any Person for borrowed
money that, at all times, (i) is secured by Liens on specific assets of such
Person and the proceeds of such assets that constitute the sole source of
repayment to the lender or obligee of such Indebtedness, and (ii) as to which
such Person is not otherwise liable for repayment in the event of a deficiency
or default in payment except for liability for misrepresentations by such
Person, defects in title caused by such Person or impairment of the obligee's
or lender's Lien caused by such Person.
"Note" - as defined in Section 2.12.
"Notes Assignment Agreement" - the Notes Assignment Agreement,
dated June 14, 1991, between Borrower and Agent, as confirmed by the
Confirmation.
"Obligations" - all of the Indebtedness, liabilities and
obligations of the Borrower to the Banks, the Pre-Funding Lenders and the
Agent, whether now existing or hereafter arising under the Loan Documents.
"Obligor" - any Lessee or other Person obligated in respect of
a Lease, any maker of an Equipment Note, any vendee under a CSA, any obligor of
a Third Party Note or any other Person obligated in respect of a Lease,
Equipment Note, CSA or Third Party Note or obligated under any other asset
included in the Borrowing Base other than the Borrower.
"Parent Senior Notes" - the 9 7/8% Senior Notes due 2004 in
the aggregate principal amount of $100,000,000 issued by DVI pursuant to the
Indenture, dated as of January 27, 1997, as supplemented, between DVI and First
Trust National Association.
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"Parent Subordinated Debt" - as defined in Section 7.4(b)(ii).
"Partial Recourse Debt" - Indebtedness of any Person for which
such Person has only partial liability for repayment of any deficiency and the
balance of which is Non-Recourse Debt.
"PBGC" - Pension Benefit Guaranty Corporation.
"Permitted Liens" - as defined in Section 7.2.
"Person" - an individual, corporation, partnership, joint
venture, trust or unincorporated organization, joint stock company or other
similar organization, government or political subdivision of a government,
court or any other legal entity, whether acting in an individual, fiduciary or
other capacity.
"Plan" - at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower, or by the
Borrower for any other member of such Controlled Group or (ii) maintained
pursuant to a collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which the Borrower or
any member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.
"Post-Default Rate" - a rate per annum equal to (i) for each
Eurodollar Loan, 2% above the rate of interest in effect for such Eurodollar
Loan on the date the Post-Default Rate commences until the end of the then
current Interest Period for such Eurodollar Loan, and thereafter 2% above the
Prime Rate as in effect from time to time plus the Applicable Margin for Prime
Rate Loans, and (ii) for Prime Rate Loans and for all other amounts payable by
the Borrower under the Loan Documents, 2% above the Prime Rate as in effect
from time to time plus the Applicable Margin for Prime Rate Loans.
"Pre-Funding Commitment" - at any date of determination, the
agreement of the Pre-Funding Lenders to make Pre-Funding Loans in an amount
equal to the lesser
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of (i) the difference between the Total Commitment as in effect on such date
and the then aggregate outstanding principal amount of all Loans plus
Pre-Funding Loans and (ii) $25,000,000.
"Pre-Funding Commitment Fee" - as defined in Section
2.30(f)(iv).
"Pre-Funding Lenders" - refers to Fleet, with a Pre-Funding
Commitment in the aggregate amount not to exceed $15,000,000, and CoreStates,
with a Pre-Funding Commitment in the aggregate amount not to exceed
$10,000,000;
"Pre-Funding Loan" - as defined in Section 2.30.
"Pre-Funding Note" - as defined in Section 2.30(d)(i).
"Present Value" - on any date of computation of the Borrowing
Base, the present value of the Balance of Payments under an Unfunded Eligible
Contracts computed by discounting at a rate per annum equal to the interest
rate then applicable to Prime Rate Loans.
"Prime Rate" - the interest rate established from time to time
by Fleet as its prime rate at the Principal Office. Notwithstanding the
foregoing, the Borrower acknowledges the fact that Fleet may regularly make
domestic commercial loans at rates of interest less than the rates of interest
referred to in the preceding sentence. Each change in any interest rate under
this Agreement resulting from a change in the Prime Rate shall take effect at
the time of such change in the Prime Rate.
"Prime Rate Loans" - Loans or Pre-Funding Loans, or portions
thereof, that bear interest at a rate based upon the Prime Rate.
"Principal Office" - the principal office of Fleet, presently
located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or, if a successor Agent
is named, the office of the successor Agent designated by notice of the
successor Agent to the Banks and the Borrower.
"Progress Payments" - amounts paid by the Borrower to vendors
of Equipment subject to a Lease pursuant to an Eligible Progress Payment
Agreement, net of
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any credits, rebates, offsets, holdbacks or other adjustments or commissions
payable to third parties that are adjustments to such payments.
"Progress Payments Clause" - Section 1.2(a)(ii).
"Records" - all agreements pursuant to or under which an
Obligor shall be obligated to pay for services rendered or merchandise sold to
patients of the Healthcare Providers and all other documents, books, records
and other information (including computer programs, tapes, disks, punch cards,
data processing software and related property and rights) prepared and
maintained by the Healthcare Providers or DBC with respect to the Healthcare
Receivables and the related Obligors.
"Recourse Debt" - Indebtedness of any Person as to which such
Person is liable for repayment in full in the event of a deficiency or default
in payment.
"Regulation D" - Regulation D of the Board of Governors of the
Federal Reserve System.
"Regulatory Change" - any change after February 28, 1995 in
United States federal, state or foreign laws or regulations or the adoption or
making after such date of any interpretations, directives or requests applying
to a class of banks including any of the Banks of or under any United States
federal, state, or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Relationship Contract" - a Contract that (i) meets at all
times all of the requirements of an Eligible Contract other than one or more of
the requirements set forth in paragraphs (b), (f)(iii), (g), (j), (l) and (t)
of the definition of "Eligible Contract", (ii) meets each of the following
requirements at all times:
(a) no Contract Payment is more than 30 days past
due;
(b) all Equipment covered by such Contract meets
all of the requirements of Eligible Equipment other than the
requirements set forth in paragraph (c) of the definition of "Eligible
Equipment";
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(c) any Lease is a net-net lease with no more
than 84 remaining months in the Initial Term, and any Equipment Note,
CSA or Third Party Note has a final maturity date not more than 84
months in the future;
(d) if the equipment is located in the United
States of America, the Agent has received or has available to it for
inspection a photocopy of the file stamped "acknowledgment copy" (or,
before receipt of the acknowledgment copy from the UCC filing office,
a photocopy of the filing) containing the recording information of
Financing Statements filed with respect to such Contract in all
appropriate and necessary offices naming the Obligor as debtor or
lessee, the Borrower as Secured Party or lessor and the Agent as
assignee;
(e) if the equipment is located in a country
other than the United States of America, the Agent has received or has
available to it for inspection a photocopy of the file stamped
"acknowledgement copy" (or, before receipt of the acknowledgment copy,
a photocopy of the filing) containing such country's equivalent of the
recording information of UCC financing statements, filed with respect
to such Contract in all appropriate and necessary offices in such
country naming the Obligor as debtor or lessee, the Borrower as
Secured Party or lessor and the Agent as assignee; and
(f) if the Obligor or the Equipment is located in
a country other than the United States of America, an Obligor, vendor
or guarantor located in the United States of America will exist to
provide a form of recourse;
and (iii) has been approved in writing by the Agent in its sole and absolute
discretion for inclusion in the Relationship Contract Clause.
"Relationship Contract Clause" - Section 1.2(a)(vi).
"Reserve Requirement" - for any Eurodollar Loans for any
Interest Period, (i) the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
under Regulation D by member banks of the Federal Reserve System in New York
City with deposits exceeding $1,000,000,000
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against "Eurocurrency liabilities" (as such term is used in Regulation D), and
(ii) any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (a) any category of liabilities which
includes deposits by reference to which the Eurodollar Rate for Eurodollar
Loans is to be determined as provided in the definition of "Eurodollar Rate" in
this Section 1.1, or (ii) any category of extensions of credit or other assets
which include Eurodollar Loans.
"Restricted Investments" - as defined in Section 7.8(c).
"Restructured Lease Clause" - Section 1.2(a)(iv).
"Risk-Adjusted Leverage Ratio" - with respect to the Borrower,
the ratio of (i) Total Recourse Liabilities to (ii) Tangible Net Worth plus
Subordinated Debt not due within the twelve-month period immediately following
any date of computation, minus the greater of (a) $1,000,000 or (b) the lesser
of (1) the sum of Borrower's retained interest in the Securitized accounts (the
so-called "C" piece) or (2) the product resulting from multiplying (A) the
Borrower's actual loss experience (meaning Borrower's trailing 12-months
charge-offs divided by the average servicing portfolio over such 12 months),
expressed as a decimal, times (B) five, times (C) the Borrower's period-end
servicing portfolio (meaning the Borrower's actual servicing portfolio plus any
servicing that was sold with recourse to Borrower).
"SEC" - the U.S. Securities and Exchange Commission.
"Securitization" - the transfer of legal ownership in leases
and other obligatory contracts and the equipment related to such contracts to a
corporation (which may be an Affiliate of the transferor), trust or other
bankruptcy-remote special purpose entity that either uses such assets to
collateralize the issuance of debt obligations or sells securities that
evidence undivided interests in such assets.
"Securitized" - with respect to assets, such assets after
being the subject of a Securitization.
"Security Agreement" - the Security Agreement, dated June 14,
1991, between Borrower and Agent, as confirmed by the Confirmation.
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"Security Documents" - the Security Agreement, Assignment of
Leases, Assignment of Agreements, DBC Security Agreement, Notes Assignment
Agreement and such other agreements, instruments and documents as the Agent may
reasonably require in order to effect the purposes of the Security Agreement,
Assignment of Leases, Assignment of Agreements, Notes Assignment Agreement and
DBC Security Agreement.
"Subordinated Debt" - unsecured Indebtedness for money
borrowed that permits payments of its principal and interest only on a basis
that is subordinate to the prior payment of the Obligations on terms
satisfactory in form and substance to the Majority Banks as evidenced by the
Agent's written consent given before the incurrence of such Indebtedness.
"Subsidiary" - with respect to any Person at any time, (i) any
corporation of which a majority of the securities having ordinary voting power
for the election of directors (other than securities having such power only by
reason of the happening of a contingency) are at the time owned by such Person
and one or more Subsidiaries of such Person, and (ii) any partnership or joint
venture in which such Person is a general partner or joint venturer of which a
majority of the partnership or other ownership interests are at the time owned
by such Person and one or more of its Subsidiaries.
"Super-Majority Banks" - at any time that no Loans are
outstanding, Banks having at least 75% of the aggregate amount of the
Commitments, and at any time that Loans are outstanding, Banks holding at least
75% of the aggregate principal amount of the Loans then outstanding.
"Supporting Documents" - as defined in Section 5.8(a).
"Tangible Net Worth" - the sum of additional capital, retained
earnings, earned surplus and capital stock minus Intangibles and treasury
stock.
"Third Party Lease" - any document evidencing an agreement
(including any amendments, addenda, or supplements thereto) pursuant to which
an Obligor, as lessor, leases Equipment to another Person. Such term includes
in its meaning both unitary leases and individual lease schedules which
incorporate into such schedules all
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terms and conditions of a master lease pursuant to which such schedule is
executed.
"Third Party Note" - a non-recourse loan and security
agreement, and all related agreements, setting forth obligations of an Obligor
to the Borrower to repay a loan from the Borrower the proceeds of which were
used to finance Equipment subject to a Third Party Lease and as collateral for
which the Borrower has a first priority perfected Lien (that has been assigned
to the Agent) on all right, title and interest of the Obligor in such Equipment
and such Third Party Lease.
"Total Commitment" - the aggregate sum of the Commitments of
the Banks.
"Total Recourse Liabilities" - at any time, as to the
Borrower, the sum (without duplication) of (i) all liabilities which, in
accordance with GAAP, would be shown as liabilities on the Borrower's balance
sheet, including all accounts payable but excluding (to the extent included
therein) Non-Recourse Debt, Subordinated Debt not due within the next 12
months, deferred income taxes payable and accrued expenses, (ii) all
liabilities for which the Borrower is contingently liable, plus (iii) the
recourse portion of all Partial Recourse Debt.
"UCC" - the Uniform Commercial Code as in effect from time to
time in the State of New York unless otherwise indicated.
"Unfunded" - with respect to any Contract, Contract Payment or
other obligation of any Obligor, such Contract, Contract Payment or other
obligation has not been sold, discounted or otherwise financed by the Borrower
or granted as a Lien by the Borrower to secure any obligations (whether with or
without recourse) to or with any Person other than under this Agreement and the
Security Documents.
"Unused Commitment" - at any date, the difference between (i)
the amount of the Total Commitment as in effect on such date, and (ii) the then
aggregate outstanding principal amount of all Loans.
"Warehousing Lender" - the lender to the Borrower under a
Warehousing Loan Agreement.
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"Warehousing Loan Agreement" - a loan agreement, security
agreement, custody agreement and all related documents providing for advances
to the Borrower with a repayment term, including all extensions and renewals,
not exceeding 12 months for the purpose of financing the Borrower's acquisition
of assets or of refinancing existing assets of the Borrower in preparation for
the Securitization of such assets or other similar transactions.
Section 1.2 Borrowing Base. (a) At any date of
determination, the sum of the following clauses (i) through (vi) minus clause
(vii) shall constitute the "Borrowing Base":
(i) Contract Receivables Clause - 95% of the
Present Value of the Balance of Payments under Unfunded Eligible
Contracts, and 80% of the Present Value of the Balance of Payments
under Unfunded ADAC Contracts; plus.
(ii) Progress Payments Clause - 95% of Unfunded
Progress Payments, provided that Unfunded Progress Payments may not be
included under this Section 1.2(a)(ii) from and after the earliest to
occur of (1) the last day of the month during which the Borrower
receives a certificate of delivery and acceptance relating to the
subject Equipment, or (2) the Borrower receives full reimbursement of
such Progress Payments; plus
(iii) Inventory and Per Procedure Clause - 70% of
the Net Book Value of all Eligible Equipment owned by the Borrower,
provided that (1) the aggregate amount included under this Section
1.2(a)(iii) shall not exceed 10% of the Total Commitment on any date,
(2) Equipment included in this Section 1.2(a)(iii) must be depreciated
according to GAAP, and (3) the Borrower must have an appraisal from an
independent appraiser supporting the Net Book Value of Equipment
included in this Section 1.2(a)(iii) that has been repossessed from a
lessee; plus
(iv) Restructured Lease Clause - (1) 75% of the
Net Book Value of Eligible Equipment subject to an Unfunded Eligible
Six-Month Restructured Lease; and (2) 75% of the Net Book Value of
Eligible Equipment subject to an Unfunded Eligible Three- Month
Restructured Lease, provided that the aggregate
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amount included under this Section 1.2(a)(iv)(2) shall not exceed
$5,000,000; plus.
(v) Healthcare Receivables Clause - 85% of the
DBC Financed Amount of Eligible Healthcare Receivables, provided that
the aggregate amount included under this Section 1.2(a)(v) shall not
exceed $18,000,000 (or, if the aggregate amount of Loans included
under this Section 1.2(a)(v) has not been less than $7,000,000 for at
least 30 days during the preceding 12 months, $7,000,000);
(vi) Relationship Contract Clause. - 70% of the
Present Value of the Balance of Payments under Unfunded Relationship
Contracts, provided that the aggregate amount included under this
Section 1.2(a)(vi) shall not exceed $5,000,000; minus
(vii) Excludable Recourse Liabilities - 100% of the
amount by which (1) all accrued but unpaid federal, state and local
taxes (not including deferred taxes or taxes reimbursable by an
Obligor), and all recourse liabilities, contingent or otherwise,
constituting equipment payables in respect of Equipment included in
any clause of the Borrowing Base, exceed (2) the amount of the
Borrower's unrestricted cash greater than $500,000.
(b) The Borrowing Base under Section 1.2(a) shall be
calculated in accordance with the following principles:
(i) Multiple Inclusion. At no time shall assets
covered by any of the clauses of the Borrowing Base be included under
any other clause.
(ii) Assets and Values. At no time shall the
amount originally included under any clause of the Borrowing Base with
respect to any Eligible Contract exceed the lesser of the Invoiced
Cost or the Net Book Value of any item of Equipment individually or
items of Equipment in the aggregate covered by such Eligible Contract.
At no time shall the amount originally included under any clause of
the Borrowing Base with respect to any Eligible Contract purchased by
the Borrower exceed the purchase price of such Eligible Contract. At
no time shall the amount included under any clause of the Borrowing
Base with respect to
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any Eligible Contract that includes a refinancing exceed the amount
refinanced plus the Invoiced Cost of any upgrade or other newly
purchased Equipment.
(iii) Concentration Limits. At no time shall
amounts included in the Borrowing Base under all Eligible Contracts
between the Borrower and a single Obligor exceed 20% of the Borrower's
Tangible Net Worth at such time, and at no time shall amounts included
in the Borrowing Base under all Relationship Contracts between the
Borrower and a single Obligor exceed $2,500,000. In addition, at no
time shall amounts included in the Borrowing Base under all Eligible
Contracts originated by and purchased from a Person not an Affiliate
of the Borrower exceed 20% of the Borrower's Tangible Net Worth at
such time, except that any individual Contracts approved by the Credit
Committee in accordance with criteria applicable to
Borrower-originated Contracts will be excluded from this limitation so
long as, if such Contract was acquired concurrently with other
Contracts from a seller or its Affiliates, all such Contracts have
been individually approved or disapproved by the Credit Committee.
(iv) Transactions with Affiliates. At no time
shall Eligible Leases with Affiliates included in clauses (i), (ii)
and (iv) of the Borrowing Base exceed $5,000,000 in the aggregate.
(v) No Liens. Assets included in the Borrowing
Base shall be subject to no Liens other than the Agent's Lien and
Permitted Liens.
(vi) Representation as to No Adverse Selection.
Inclusion of any assets in computation of the Borrowing Base shall be
deemed to constitute a continuing representation and warranty by the
Borrower to the Banks and the Agent that no selection procedures
believed by the Borrower to be materially adverse to the interest of
the Banks have been or are being or shall be used in selecting any
contracts to be provided under any Warehousing Loan Agreement, and
such contracts were and shall continue to be selected at random.
(vii) Defaults by DBC. At no time shall any
amounts be included under the Healthcare Receivables Clause if one or
more of the following events shall have occurred and be continuing:
(1) DBC shall fail to perform or observe
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any material term, condition or covenant of any agreement to which it
is a party, including any provision obligating DBC for the payment of
money in excess of $500,000; or (2) any judgment shall be rendered
against DBC or any attachment, levy or execution against any of its
properties for any amount in excess of $100,000 shall remain unpaid,
unstayed on appeal, undischarged, unbonded or undismissed for a period
of 30 days or more.
Section 1.3 Interpretation.
(a) All accounting terms used but not specifically
defined in this Agreement shall have the meanings customarily given to them in
accordance with GAAP.
(b) All terms used in Article 9 of the UCC and not
specifically defined in this Agreement are used in this Agreement as defined in
Article 9 of the UCC.
(c) Unless otherwise indicated, any Applicable Law
defined or referred to in this Agreement is intended to mean or refer to such
Applicable Law as amended from time to time or any successor Applicable Law as
amended from time to time.
(d) Unless otherwise indicated, any agreement defined or
referred to in this Agreement means or refers to such agreement as amended or
supplemented from time to time or as the terms of such agreement are waived or
modified in accordance with its terms.
(e) Unless otherwise indicated, any definition or
reference to a Person (other than an individual) in this Agreement means or
refers to such Person and all divisions of such Person, regardless of their
tradename or "doing business" names, and all successors and permitted assigns
from time to time.
(f) Terms defined in this Agreement in the singular
include the plural of such terms, and terms defined in this Agreement in the
plural include the singular of such terms.
(g) The term "including", when used in this Agreement,
means "including without limitation" and "including but not limited to".
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(h) Unless otherwise indicated, any reference to a
specified "article", "section", "subsection", "clause", "exhibit" or "schedule"
shall refer to such article, section, subsection, clause, exhibit or schedule
of this Agreement.
(i) The captions and headings of this Agreement are for
convenience only and shall not affect the construction or interpretation of
this Agreement.
(j) Unless otherwise indicated, all hourly references in
this Agreement shall refer to New York City time or, in the event that the
Principal Office is in a time zone other than New York City's time zone, the
time in the time zone in which the Principal Office is located.
ARTICLE 2. COMMITMENTS; LOANS
Section 2.1 Loans; Credit Period. Each Bank hereby
agrees, on the terms and subject to the conditions of this Agreement, to make
loans (the "Loans") to the Borrower during the Credit Period in an aggregate
principal amount at any one time outstanding up to, but not exceeding, the
lesser of the Commitment of such Bank as then in effect or such Bank's pro rata
share of the Borrowing Base based on the proportion that such Bank's Commitment
as then in effect bears to the Total Commitment (such lesser amount in the
aggregate with respect to all of the Banks is hereinafter referred to as the
"Borrowing Capacity"), and in no event may the aggregate outstanding principal
amount of all Loans plus all Pre-Funding Loans exceed the lesser of the Total
Commitment and the Borrowing Base. Subject to the terms of this Agreement,
during the Credit Period the Borrower may borrow, prepay (as provided in
Section 2.8) and reborrow the amount of the Total Commitment by means of Prime
Rate Loans or Eurodollar Loans, and during the Credit Period the Borrower may
convert Loans of one type into Loans of another type as provided in Section
2.7.
Section 2.2 Changes in Commitment. The Borrower shall be
entitled at its option to reduce permanently the Total Commitment provided that
the Borrower shall give notice of such reduction to the Banks as provided in
Section 2.3 and that any partial reduction of the Total Commitment shall be in
an amount equal to $1,000,000 or an
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integral multiple. The Borrower shall be entitled at its option to terminate
the Total Commitment on 30 days prior notice to the Banks and the Agent. Any
such termination or reduction shall be permanent and irrevocable once notice is
given to any Bank or the Agent.
Section 2.3 Borrowing Notice; Borrowing Base Report. (a)
The Borrower shall give the Agent written notice of each reduction of the Total
Commitment, each borrowing of a Pre-Funding Loan, each conversion or prepayment
of a Loan and the duration of each Interest Period applicable to each
Eurodollar Loan by the delivery to the Agent of a Borrowing Notice. Each such
Borrowing Notice shall be effective only if received by the Agent not later
than noon on the date which is:
(i) in the case of each notice of the borrowing,
reduction or prepayment of Pre-Funding Loans and the prepayment of
Eurodollar Loans, on the date of the requested borrowing, reduction or
prepayment;
(ii) in the case of each notice of the borrowing,
reduction or prepayment of, or the conversion into, Prime Rate Loans,
one Business Day before the date of the requested borrowing,
reduction, prepayment or conversion; and
(iii) in the case of each notice of the borrowing
of or conversion into, or of the duration of an Interest Period for,
Eurodollar Loans, two Eurodollar Business Days before the date of the
requested prepayment or conversion or the first day of such Interest
Period.
Each such notice of borrowing, conversion or prepayment shall specify the
amount (subject to Section 2.1) of the Pre-Funding Loans to be borrowed, the
amount and type of the Loans and Pre-Funding Loans to be converted or prepaid
(and, in the case of a conversion, the type of Loans to result from such
conversion), and the date of borrowing, conversion or prepayment (which shall
be a Business Day in the case of each borrowing, prepayment or conversion of or
into Prime Rate Loans and a Eurodollar Business Day in the case of each
borrowing, prepayment or conversion of or into Eurodollar Loans). Each notice
of the duration of an Interest Period shall specify the Eurodollar Loans to
which such Interest Period is to relate.
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(b) Each Borrowing Notice requesting a Loan or
Pre-Funding Loan shall include a representation by the Borrower that the
borrowing requested shall not on the date of borrowing exceed the Borrowing
Availability, as measured by the most recent Borrowing Base Report delivered to
the Banks and the Agent in accordance with the terms of this Agreement,
provided that any Borrowing Notice requesting an amount exceeding the Borrowing
Availability reported on the most recent Borrowing Base Report delivered to the
Agent as a result of an increase in the Borrowing Base since the most recent
Borrowing Base Report shall be accompanied either by a new Borrowing Base
Report or by such additional Borrowing Base information and Supporting
Documents as shall evidence the increase in the Borrowing Availability from the
most recent Borrowing Base Report and that after giving effect to the Loans and
Pre-Funding Loans requested the outstanding principal amount of Loans and
Pre-Funding Loans do not exceed the Borrowing Capacity as of such date.
Section 2.4 Fees. (a) The Borrower shall pay to the
Agent for the account of each Bank a non-refundable commitment fee (the
"Commitment Fee") on the daily average amount of the Unused Commitment for the
period from the date this Agreement is restated to and including the earlier of
the date such Bank's Commitment is terminated or the Final Maturity Date, at
the rate of (i) 1/4 of 1% per annum on that portion of the Unused Commitment
equal to or less than, in Dollar amount, one-third of the Total Commitment then
in effect, and (ii) 1/2 of 1% per annum on the balance of the Unused
Commitment.
(b) The accrued Commitment Fee shall be payable
quarterly in arrears on the last day of each calendar quarter and on the
earlier of the date the Commitments are terminated or the Final Maturity Date,
and, in the event the Borrower reduces the Commitment as provided in Section
2.2, on the effective date of such reduction.
(c) The Borrower shall pay to the Agent for the account
of each Bank (i) a non-refundable fee of .00075 of each such Bank's respective
Total Commitment then outstanding at the time of the execution and delivery of
this amended and restated Agreement, and (ii) hereafter a non-refundable fee of
$5,000 per Bank for each amendment to this Agreement and each waiver or consent
granted by the Banks pursuant to this Agreement.
Section 2.5 Lending Offices. The Loans of each type made
by each Bank
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shall be made and maintained at such Bank's Applicable Lending Office for Loans
of such type.
Section 2.6 Disbursement of Loan Proceeds. The Borrower
shall give the Agent notice of each borrowing hereunder as provided in Section
2.3. Not later than 2:30pm on the date specified for each borrowing under this
Agreement, each Bank shall transfer to the Agent by wire transfer or otherwise,
but in any event in immediately available funds, the amount of the Loan to be
made by it on such date, and the Agent, upon its receipt of each such amount,
shall disburse such amount to the Borrower by depositing it in an account of
the Borrower designated by the Borrower and maintained with the Agent.
Section 2.7 Conversions of Loans. The Borrower shall
have the right to convert Loans of one type into Loans of another type from
time to time, provided that: (i) the Borrower shall give the Agent notice of
each such conversion as provided in Section 2.3; (ii) Eurodollar Loans may be
converted only on the last day of an Interest Period for such Loans; and (iii)
no Prime Rate Loan may be converted into a Eurodollar Loan if on the proposed
date of conversion a Default or an Event of Default exists.
Section 2.8 Mandatory and Optional Prepayments. (a)
Notwithstanding any other provisions of this Agreement but in addition to the
provisions of Section 2.8(b) below, in the event that at any time the
outstanding principal amount of the Loans and Pre-Funding Loans shall at any
time exceed the Borrowing Base, the Borrower shall, within three Business Days
following the date on which such excess first exists (or, if sooner,
concurrently with delivery of the Borrowing Base Report next due to be
delivered following the date on which such excess first exists), (i) prepay any
outstanding Pre-Funding Loans and then any outstanding Loans, (ii) so long as
no Default or Event of Default shall then have occurred and be continuing,
include additional assets in the Borrowing Base and deliver to the Agent a new
Borrowing Base Report and the other documents required to be delivered to the
Banks and the Agent in connection with a Borrowing Base Report under Section
2.3(b), or (iii) a combination of the actions permitted by the preceding
clauses (i) and (ii), in any case including computations that show such
prepayment, substitution or both are in an amount or of a value sufficient that
the above-described excess under the Borrowing Base no longer exists.
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(b) The Borrower shall have the right to prepay the
Loans and any Pre-Funding Loans from time to time in whole or in part upon
notice to the Agent in accordance with Section 2.3. Any Loans and Pre-Funding
Loans repaid during the Credit Period may be reborrowed during the Credit
Period in accordance with the terms and conditions of this Agreement.
(c) All prepayments of Eurodollar Loans shall include
payment of all interest accrued on the principal amount prepaid. No premium or
penalty is required to be made with any prepayment except as otherwise provided
in Section 2.20.
(d) Prepayments shall be applied first to installments
of the Prime Rate Loans and second to installments of Eurodollar Loans, in each
case in the order of their maturity, and the Borrower shall be liable for any
payments due under Section 2.20 as a result of any prepayment.
Section 2.9 Use of Proceeds. The proceeds of the Loans
and Pre-Funding Loans may be used solely for:
(a) repayment of all outstanding Recourse Debt as more
specifically set forth on the attached Schedule 12;
(b) financing Eligible Contracts, Eligible Equipment and
the other assets described in the Borrowing Base;
(c) Investments permitted under Section 7.8;
(d) other working capital purposes; and
(e) in the case of Loans, the conversion of Pre-Funding
Loans.
Section 2.10 Principal Repayment Schedule. (a) Subject to
Section 2.8, the Borrower shall pay to the Agent for the account of each Bank
the principal of the Loans made by such Bank that is outstanding at the close
of business on the Final Maturity Date.
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(b) Except as set forth in Sections 2.16 through 2.19,
all repayments made pursuant to this Section 2.10 shall be applied first to
outstanding Prime Rate Loans and second to Eurodollar Loans.
Section 2.11 Interest. (a) The Borrower shall pay to the
Agent for the account of each Bank interest on the unpaid principal amount of
each Loan for the period commencing on the date of such Loan until such Loan
shall be paid in full at the following rates per annum:
(i) during such periods such Loan is a Prime Rate
Loan, the Prime Rate plus the Applicable Margin; and
(ii) during such periods such Loan is a Eurodollar
Loan, for each Interest Period relating to such Eurodollar Loan, the
Eurodollar Rate for such Loan for such Interest Period plus the
Applicable Margin.
Accrued interest on each Loan shall be payable in arrears (i) on each Monthly
Date commencing with the Monthly Date for June 1991, and (ii) on any date of
payment or prepayment of such Loan (other than a conversion of such Loan into a
Loan of another type) but only on the principal amount paid or prepaid;
provided, however, that within three Business Days after each such Monthly
Date, the Borrower shall (1) deliver a report to each Bank and the Agent
setting forth the average weighted portion of the Loans outstanding during the
preceding month whose proceeds were advanced by the Borrower to DBC for the DBC
Financed Amount of Eligible Healthcare Receivables, and (2) pay to the Agent
any additional amount of interest due and payable on such portion of the Loans
as a result of the Applicable Margin for such portion being 0.125% (for such
portion of Prime Rate Loans) or 1.65% (for such portion of Eurodollar Loans),
as the case may be, instead of the Applicable Margin specified in clauses
(i)(A) through (i)(C) of the definition of 'Applicable Margin'.
(b) Notwithstanding Section 2.11(a), if an Event of
Default occurs the Borrower shall pay interest at the applicable Post-Default
Rate on all Loans and on any other amount (other than interest) payable by the
Borrower under this Agreement for the period commencing on the date the Event
of Default occurred and ending on the earlier of the date the Event of Default
is cured or the date all Loans and other amounts are paid in
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full. Interest payable at the Post-Default Rate shall be payable from time to
time on demand of the Agent.
(c) Promptly after the establishment or change of any
interest rate provided for in this Agreement, the Agent will notify the Banks
and the Borrower of such interest rate or change in interest rate, but the
failure of the Agent to so notify the Borrower or the Banks shall not affect
the obligations of the Borrower under this Agreement or the Notes in any
respect.
(d) The obligation of the Borrower to make payments of
interest shall be subject at all times to the limitation that payments of
interest shall not be required to be made to any Bank to the extent that such
Bank's receipt of such interest payments would not be permissible under
Applicable Laws limiting rates of interest that may be charged or collected by
such Bank. Any such payments of interest that are not made as a result of the
limitation referred to in the preceding sentence shall be made by the Borrower
to such Bank on the earliest interest payment date or dates on which the
receipt of such payments would be permissible under Applicable Laws limiting
rates of interest that may be charged or collected by such Bank.
Section 2.12 Notes. The Loans made by each Bank shall be
evidenced by a promissory note of the Borrower in substantially the form
attached as Exhibit A (the "Notes"), each dated the date of the initial
borrowing of Loans from such Bank, payable to the order of such Bank in a
principal amount equal to such Bank's Commitment and otherwise duly completed.
The Notes shall be subject to repayment as provided in Sections 2.1, 2.10 and
2.11. All Loans made by each Bank under this Agreement, all payments and
prepayments made on account of the principal of such Loans and all conversions
of such Loans shall be recorded by each Bank on the schedule attached to its
Note, but any failure by any Bank to make any such recordation shall not affect
the obligations of the Borrower under this Agreement or the Notes to repay the
Loans in accordance with their respective terms. Upon payment in full of any
Note, the Bank shall xxxx the Note "Paid" and return it to the Borrower.
Section 2.13 Time and Method of Payments. All payments of
principal, interest, Fees, indemnities and other amounts payable by the
Borrower under the Loan Documents shall be made in Dollars, in immediately
available funds, to the Agent at the
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Principal Office not later than noon on the date on which such payment shall
become due, and the Agent or any Bank for whose account any such payment is to
be made may, but shall not be obligated to, debit the amount of any such
payment that is not made by such time to any ordinary deposit account of the
Borrower with the Agent or such Bank. Any payment made on any date after such
time shall, if the amount paid bears interest, be deemed to have been made on,
and interest shall continue to accrue and be payable until, the next succeeding
Business Day. If any payment of principal or interest becomes due on a day
other than a Business Day, such payment may be made on the next succeeding
Business Day and such extension shall be included in computing interest in
connection with such payment. Each payment received by the Agent for the
account of a Bank shall be paid promptly to such Bank, in like funds, for the
account of such Bank's Applicable Lending Office for the Loan in respect to
which such payment is made.
Section 2.14 Computations. Interest on all Loans,
Pre-Funding Loans and Fees shall be computed on the basis of a year of 360 days
and the actual days elapsed (including the first day but excluding the last) in
the period for which payable.
Section 2.15 Minimum Borrowings, Conversions and
Prepayments. Except for borrowings of the remaining amount of the Total
Commitment, conversions and prepayments of all Loans of a particular type,
conversions made pursuant to Section 2.19, conversions under Section 2.30(c)
and mandatory prepayments under Section 2.8, each borrowing, conversion of
Loans of one type into another and each repayment or prepayment of the
principal of Loans shall be in an amount at least equal to $2,000,000, any
Prime Rate Loans shall be in an amount of at least $2,000,000 and any
Eurodollar Loans shall be in an amount equal to $2,000,000 or an integral
multiple of $100,000 in excess of $2,000,000 (borrowings, conversions and
prepayment of different types of Loans at the same time are deemed separate
borrowings, conversions and prepayments for purposes of this Section 2.15, one
for each type).
Section 2.16 Additional Costs. (a) In the event that any
existing or future law, regulation or guideline or interpretation thereof by
any court or administrative or governmental authority charged with the
administration thereof, or the compliance by any Bank with any request or
directive (whether or not having the force of law) of any such authority shall
impose, modify, deem applicable or result in the application of any capital
maintenance, capital ratio or similar requirement against loan commitments made
by any
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Bank, and the result is to impose upon any Bank or increase any capital
requirement applicable as a result of the making or maintenance of such Bank's
Commitment or the obligation of the Borrower under this Agreement with respect
to its Commitment (which imposition of capital requirements may be determined
by each Bank's reasonable allocation of the aggregate of such capital increases
or impositions), then, upon demand made by such Bank as promptly as practicable
after it obtains knowledge that such law, regulation, guideline,
interpretation, request or directive exists and determines to make such demand,
the Borrower shall immediately pay to such Bank from time to time as specified
by such Bank additional amounts sufficient to compensate such Bank for such
imposition of or increase in capital requirements together with interest on
each such amount commencing five days from the date payment of such additional
costs is demanded until payment in full is made at the Post-Default Rate. A
certificate setting forth in reasonable detail the amount necessary to
compensate such Bank as a result of an imposition of or increase in capital
requirements submitted by such Bank to the Borrower shall be conclusive as to
the amount of such compensation, absent manifest error. For purposes of this
Section 2.16(a), in calculating the amount necessary to compensate any Bank for
any imposition of or increase in capital requirements, such Bank shall be
deemed to be entitled to a rate of return on capital (after federal, state and
local taxes) of 15% per annum and all references to any "Bank" shall be deemed
to include any participant in such Bank's Commitment.
(b) In the event that any Regulatory Change shall (i)
change the basis of taxation of any amounts payable to any Bank under this
Agreement or the Notes in respect of any Loans (other than taxes imposed on the
overall net income of such Bank for any Loans by the United States or the
jurisdiction in which such Bank has its principal office), (ii) impose or
modify any reserve, Federal Deposit Insurance Corporation premium or
assessment, special deposit or similar requirements relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of,
such Bank (including any of such Loans or any deposits referred to in the
definition of "Eurodollar Rate" in Section 1.1), or (iii) impose any other
conditions affecting this Agreement in respect of Loans (or any of such
extensions of credit, assets, deposits or liabilities), and the result of any
event referred to in clause (i), (ii) or (iii) above shall be to increase such
Bank's costs of making or maintaining any Loans or its Commitment or to reduce
any amount receivable by such Bank under this Agreement in respect of its
Eurodollar Loans or its Commitment (such increases in costs and reductions in
amounts receivable are
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hereinafter referred to as "Additional Costs"), in each case only to the extent
that such Additional Costs are not included in the Eurodollar Rate applicable
to such Eurodollar Loans, then upon demand made by such Bank as promptly as
practicable after it obtains knowledge that such a Regulatory Change exists and
determines to make such demand (a copy of which demand shall be delivered to
the Agent), the Borrower shall pay to such Bank from time to time as specified
by such Bank additional amounts sufficient to compensate such Bank for such
Additional Costs from the date of such change, together with interest on each
such amount from the date demanded until payment in full at the Post-Default
Rate. All references to any "Bank" shall be deemed to include any participant
in such Bank's Commitment.
(c) Without limiting the effect of the foregoing
provisions of this Section 2.16, in the event that, by reason of any Regulatory
Change, any Bank either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or other
liabilities of such Bank which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement
or a category of extensions of credit or other assets of such Bank which
includes Eurodollar Loans, or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets which it may hold, then if
such Bank so elects by notice to the Borrower (with a copy to the Agent), the
obligation of such Bank to make, and to convert Loans of any other type into,
Loans of such type hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect and all Loans of such type then outstanding shall
be converted into Prime Rate Loans or into Eurodollar Loans of another
duration, as the case may be, in accordance with Sections 2.7 and 2.19. Such
Bank shall promptly notify the Borrower and the Agent if such Regulatory Change
ceases to be in effect.
(d) Determinations by any Bank for purposes of this
Section 2.16 of the effect of any Regulatory Change on its costs of making or
maintaining Loans or on amounts receivable by it in respect of Loans, and of
the additional amounts required to compensate such Bank in respect of any
Additional Costs, when set forth in a written notice to the Borrower shall be
conclusive, absent manifest error.
Section 2.17 Limitation on Types of Loans. Anything
herein to the contrary notwithstanding, if on or prior to the determination of
an interest rate for any
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Eurodollar Loans for any Interest Period any Bank determines (which
determination shall be conclusive) that:
(a) by reason of any event affecting the money
markets in the United States or the interbank Eurodollar market,
quotations of interest rates for the relevant deposits are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining the rate of interest for such Eurodollar Loans
under this Agreement; or
(b) the rates of interest referred to in the
definition of "Eurodollar Base Rate" in Section 1.1 do not accurately
reflect the cost to such Bank of making or maintaining such Eurodollar
Loans for such Interest Period;
then upon notification by such Bank to the Agent, the Agent shall give the
Borrower and each Bank prompt notice of such condition and, so long as such
condition remains in effect, the Banks shall be under no obligation to make new
Eurodollar Loans or to convert Prime Rate Loans or refinance Pre-Funding Loans
into Eurodollar Loans. If such condition remains in effect, on the last day of
each then current Interest Period for the outstanding Eurodollar Loans the
Borrower shall either prepay such Eurodollar Loans in accordance with Section
2.8 or convert such Eurodollar Loans into Prime Rate Loans in accordance with
Section 2.7. The Agent shall give the Borrower and each Bank prompt notice of
the cessation of such condition.
Section 2.18 Illegality. Notwithstanding any other
provision in this Agreement, in the event that it becomes unlawful for any Bank
or its Applicable Lending Office to (i) honor its obligation to make new
Eurodollar Loans, or (ii) maintain existing Eurodollar Loans, then such Bank
shall promptly notify the Borrower (with a copy to the Agent) describing such
illegality in reasonable detail. Upon giving such notice to the Borrower, such
Bank's obligation to make new Eurodollar Loans and to convert Prime Rate Loans
into Eurodollar Loans shall be suspended until such time as such Bank may again
make and maintain Eurodollar Loans, and such Bank's outstanding Eurodollar
Loans shall be converted into Prime Rate Loans in accordance with Sections 2.7
and 2.19. Such Bank shall promptly notify the Borrower and the Agent of the
cessation of such illegality.
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Section 2.19 Forced Conversions. If any Loans of any Bank
are to be converted pursuant to Section 2.16(c) or 2.18, such Loans shall be
converted into Loans of another type or duration, as the case may be, on the
last day of the then current Interest Period for such Loan or on such earlier
date as such Bank may specify to the Borrower. Until the Bank gives notice as
provided in Section 2.16(c) or 2.18 that the circumstances that gave rise to
such conversion no longer exist, such Bank shall not be required to make new
Loans, or convert existing Loans into Loans, of the particular type to be
converted pursuant to Section 2.16(c) or 2.18.
Section 2.20 Indemnification. The Borrower shall pay to
the Agent, upon the request of each Bank, such amount or amounts as shall
compensate such Bank for any loss (including loss of profit), cost or expense
incurred by such Bank (as reasonably determined by such Bank) as a result of:
(a) any payment, prepayment or conversion of a
Eurodollar Loan held by such Bank on a date other than the last day of
an Interest Period for such Eurodollar Loan; or
(b) any failure by the Borrower to borrow a
Eurodollar Loan from such Bank on the date specified in a Borrowing
Notice delivered under Section 2.3;
such compensation to include an amount equal to (i) any loss or expense
suffered by such Bank during the period from the date of receipt of such early
payment or prepayment or the date of such conversion or date of intended
borrowing to the last day of such Interest Period if the rate of interest
obtainable by such Bank upon the redeployment of an amount of funds equal to
such payment, prepayment or conversion or failure to borrow or convert is less
than the rate of interest applicable to such Eurodollar Loan for such Interest
Period, or (ii) any loss or expense suffered by such Bank in liquidating
Eurodollar or other deposits prior to maturity which correspond to the payment,
prepayment, conversion, failure to borrow or failure to convert. The
determination by each Bank of the amount of any such loss or expense, when set
forth in a written notice to the Borrower containing such Bank's calculation of
such loss in reasonable detail, shall be presumed correct in the absence of
manifest error.
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Section 2.21 Security Documents; Guaranties. In order to
secure the due payment and performance by the Borrower of the Obligations, the
Borrower has entered into or caused to be entered into the Security Documents,
DVI has entered into the Guaranty and DBC has entered into the DBC Guaranty.
The Borrower shall execute and deliver, or cause to be executed and delivered,
such other agreements, instruments and documents as the Agent may reasonably
require in order to effect the purposes of the Security Documents, the Guaranty
and the DBC Guaranty.
Section 2.22 Forms of Borrower Agreements. The forms of
DBC Financing Agreements and Eligible Progress Payment Agreements used by the
Borrower and DBC are attached as Exhibits F and G, respectively, to this
Agreement. From time to time either the Borrower or the Agent may propose
amendments to such forms, or new forms, of agreements for purposes of any
future transactions entered into by the Borrower or DBC that require such forms
of agreements. Upon the giving by either the Borrower or the Agent of such
notice, the Borrower and the Agent shall cooperate in good faith to amend such
forms or to agree upon new forms of agreements within 30 days after such
notice.
Section 2.23 Required Borrowing Documentation. On or
before the date of delivery of a Borrowing Base Report and with respect to the
assets included in the Borrowing Base:
(a) Contract Receivables Clause. The Borrower shall
have and maintain possession of:
(i) all original master leases for Eligible
Leases;
(ii) the original chattel paper copy of each
Eligible Lease schedule and all executed originals of such Lease
schedules other than the counterparts held by the Lessee;
(iii) an original of each Equipment Note, CSA and
Third Party Note, including the original security and financing
documents and each original schedule relating to each Equipment Note
and CSA and the original chattel paper copy of each Third Party Lease;
and
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(iv) an original of each other related document or
instrument executed by an Obligor relating to an Eligible Contract or
to its related Equipment.
(b) Progress Payments Clause. The Borrower shall have
and, except to the extent forwarded to the Agent, maintain possession of:
(i) each Eligible Progress Payment Agreement, as
originally executed by the Borrower and the Lessee;
(ii) the original of the Borrower's purchase
order, manufacturer's or other vendor's invoice and evidence of
payment thereof, and bills of sale from the manufacturer of the
Equipment and all owners of the related Equipment prior to the
Borrower; and
(iii) each check evidencing payment of a Progress
Payment.
(c) Inventory and Per Procedure Clause. The Borrower
shall have and maintain possession of:
(i) warehouse receipts and other written evidence
of the return of Equipment to a location under the control of the
Borrower; and
(ii) the original chattel paper copy of each
operating lease covering Eligible Equipment included under the
Inventory and Per Procedure Clause, and all executed originals of such
operating leases other than the counterparts held by the lessee.
(d) Restructured Leases Clause. The Borrower shall have
and maintain possession of:
(i) all original master leases for Eligible
Six-Month Restructured Leases; and
(ii) the original chattel paper copy of each
Eligible Six-Month Restructured Lease schedule and all executed
originals of such schedules other
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than the counterparts held by the Lessee.
(e) Healthcare Receivables Clause. The Borrower shall
have and maintain possession of all documents to be delivered to DBC pursuant
to the DBC Financing Agreements.
(f) Relationship Loan Clause. The Borrower shall have
and maintain possession of all documents of the type covered by Section 2.23(a)
for Eligible Contracts.
(g) With respect to the documents listed in Sections
2.23(a)-(f), the Borrower shall have and maintain original executed copies of
all exhibits, schedules, annexes, amendments and supplements relating to such
documents.
(h) With respect to the Contract Receivables Clause,
Progress Payments Clause, Restructured Lease Clause and Relationship Contract
Clause of the Borrowing Base, the Borrower shall have and maintain photocopies
(and acknowledgment copies when received) of the Financing Statements
(informational or otherwise) filed by the Borrower as Lessor/secured party
against the Obligor covering the related Equipment, Contract Payments and other
assets, as appropriate, and assigned to the Agent. With respect to the
Healthcare Receivables Clause, the Borrower shall have and maintain photocopies
(and acknowledgment copies when received) of the Financing Statements
(informational or otherwise) filed by DBC as purchaser/secured party against a
Healthcare Provider or the Obligor under an Eligible Healthcare Receivable, as
the case may be, and assigned to the Agent. All of such Financing Statements
shall have been filed in the appropriate filing offices as necessary for
perfection of a security interest in favor of the Borrower or DBC, as the case
may be, and the Agent as assignee prior to the date of inclusion of any related
asset in the Borrowing Base. The Borrower shall also maintain copies of
letters sent to Lessees, other obligors and issuers of insurance policies as
required by Section 6.14, and originals of loss payee endorsements received in
response.
(i) The Agent may, at any time, in the exercise of its
sole discretion, require the Borrower to deliver to the Agent originals or
photocopies of all of the agreements, instruments and documents referred to in
this Section 2.23.
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Section 2.24 Lock-Box Arrangements. (a) At its own
expense, the Borrower shall establish and maintain at all times with the Agent
or any of the Banks lock-box arrangements into which the Borrower shall deposit
all payments made under contracts included in the Borrowing Base, and notify
forthwith all Obligors or other obligors who have obligations in respect of
assets included in the Borrowing Base to make payments only to the
above-mentioned lock-box accounts; except that (i) the Borrower may establish
and maintain lock-box arrangements with other banks if such other banks have
entered into a written agreement satisfactory to the Agent pursuant to which
such other bank acknowledges the Lien of the Agent and waives its rights of
set-off with respect to such deposits, and (ii) DBC may establish and maintain
lock-box or other collection arrangements with other banks or collection agents
acceptable to the Agent if such other banks or collection agents have entered
into a written agreement satisfactory to the Agent. Amounts deposited in the
lock-box accounts shall be disbursed to the Borrower so long as (1) any Event
of Default that had occurred and has been cured to the satisfaction of the
Majority Banks, and (2) after the Final Maturity Date, the obligations of the
Borrower under Section 2.8 are then satisfied in full, whether from amounts
deposited in the lock-box or otherwise. The Banks and the Agent acknowledge
that payments delivered to a lock-box account under this Section 2.24(a) that
are payable to third parties (such as user taxes, maintenance, repairs,
management fees (other than to Affiliates) and insurance) are not entitled to
be retained by the Banks and the Agent.
(b) The Borrower and each Bank confirm and acknowledge
that any payments received by any Bank pursuant to lock-box arrangements
existing prior to the date of this Agreement shall be received by each such
Bank as agent for the Agent to be held in escrow for application and direction
exclusively pursuant to the terms and conditions of this Agreement (including
for application to repayment of the Loans as directed from time to time by the
Agent in a manner not inconsistent with the provisions of this Agreement).
Notwithstanding the provisions of Section 2.24(a), at the request of the Agent
all such payments shall be turned over to the Agent from and after the date of
notice to such effect given by the Agent in its sole discretion following the
occurrence of any Event of Default, and the Borrower and each Bank, if so
required by the Agent's notice, shall forthwith deliver notices to all Obligors
and other obligors under assets included in the Borrowing Base that all
payments shall be delivered directly to the lock-box accounts maintained with
the Agent.
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Section 2.25 Pro Rata Treatment Among Banks. Except as
otherwise provided in this Agreement: (a) each borrowing from the Banks under
Section 2.1 will be made from the Banks and each payment of the Commitment Fee
(but not the Pre-Funding Commitment Fee) shall be made for the account of the
Banks pro rata according to their respective Unused Commitments; (b) each
partial reduction of the Total Commitment shall be applied to the Commitments
of the Banks pro rata according to each Bank's Commitment; (c) each conversion
of Loans of a particular type under Section 2.7 (other than conversions
provided for by Section 2.18) will be made pro rata among the Banks holding
Loans of such type according to the respective principal amounts of such Loans
held by such Banks; (d) each payment and prepayment of principal of or interest
on Loans of a particular type will be made to the Agent for the account of the
Banks holding Loans of such type pro rata in accordance with the respective
unpaid principal amounts of such Loans (but not Pre-Funding Loans) held by such
Banks; and (e) Interest Periods for Eurodollar Loans shall be allocated among
the Banks holding Eurodollar Loans pro rata according to the respective
principal amounts of such Eurodollar Loans held by such Banks.
Section 2.26 Non-Receipt of Funds by the Agent. Unless
the Agent shall have been notified by a Bank or the Borrower prior to the date
on which such Bank is to make payment to the Agent of the proceeds of a Loan or
the Borrower is to make a payment to the Agent for the account of one or more
of the Banks, that such Bank or the Borrower does not intend to make the
required payment, the Agent may assume that the required payment has been made
and may, in reliance upon such assumption, make the amount thereof available to
the intended recipient on such date and, if such Bank or the Borrower, as the
case may be, has not in fact made the required payment, the recipient of such
payment shall on demand repay to the Agent the amount made available to it
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the Agent until the
date the Agent recovers such amount at a rate per annum equal to the Federal
Funds Rate for such day (when the recipient is a Bank) or equal to the rate of
interest applicable to such Loan (when the recipient is the Borrower).
Section 2.27 Sharing of Payments and Set-Off Among Banks.
The Borrower agrees that in addition to and without limiting any right of
set-off, banker's lien or counterclaim a Bank may otherwise have, each Bank
shall be entitled, at its option, to
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offset balances held by it at any of its offices (including under any lock-box
arrangements) against any principal of or interest on any of its Loans or
Pre-Funding Loans or any Fee payable to it that is not paid when due
(regardless of whether such balances are then due to the Borrower), in which
case it shall promptly notify the Borrower and the Agent of such offset
although its failure to give such notice shall not affect the validity of such
offset. If a Bank shall effect payment of any principal of or interest on its
Loans through the exercise of any right of set-off, banker's lien, counterclaim
or similar right, it shall promptly purchase from the other Banks
participations in their Loans in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all the Banks shall
share the benefit of such payment pro rata in accordance with the unpaid
principal and interest on their Loans and each Bank shall have a Lien on its
ratable portion of the amounts received from the Borrower. To such end the
Banks shall make appropriate adjustments among themselves (by the resale of
participations or otherwise) if such payment is rescinded or must otherwise be
restored. The Borrower agrees that any Bank so purchasing a participation in
the Loans held by the other Banks may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as
fully as if such Bank were a direct holder of Loans in the amount of such
participation. Nothing contained in this Section 2.27 shall require any Bank
to exercise any such right or shall affect the right of any Bank to exercise
and retain the benefits of exercising any such right with respect to any other
indebtedness or obligation of the Borrower.
Section 2.28 Several Obligations. The failure of any Bank
to make any Loan to be made by it on the date specified for such Loan shall not
relieve the other Banks of their respective obligations to make their Loans on
such date, but no Bank shall be responsible for the failure of the other Banks
to make Loans to be made by such other Banks.
Section 2.29 Release of Agent's Lien. The Borrower may
finance, or any Affiliate that owns properties or assets covered by the Agent's
Lien may finance, specific properties or assets with Indebtedness permitted
under this Agreement. In such event, on any date that the Borrowing Base
exceeds the outstanding principal amount of all Loans and Pre-Funding Loans,
then subject to the other terms and conditions of this Agreement the Agent
shall at its election either release or subordinate the Agent's lien on and
security interest in such properties and assets proposed to be used as
collateral for such
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indebtedness, and such assets and properties shall be excluded from the
Borrowing Base, upon and subject to the following conditions:
(a) no Default or Event of Default then exists or
would exist after giving effect to the proposed release or
subordination;
(b) the Borrower shall provide the Agent with at
least three Business Days' prior written notice of any such proposed
incurrence of Indebtedness and shall provide the Agent with (i) the
lender's identity, (ii) the amount and terms of the proposed
Indebtedness, including whether such Indebtedness is Non-Recourse
Debt, Partial Recourse Debt or Recourse Debt, (iii) the specific
Leases and Leased Property being financed by such Indebtedness, and
(iv) such other information as the Agent may reasonably request;
(c) the Borrower shall cause to be delivered to
the Agent in sufficient time before any proposed release or
subordination for the Agent to review all UCC-3 amendment statements
(if appropriate) and any other agreements, instruments and documents
necessary, desirable or requested by the Agent in connection with such
release or subordination, and all of the foregoing shall be
satisfactory in form and substance to the Agent;
(d) the Borrower shall bear and pay on demand all
costs and expenses, including legal fees and expenses, incurred by the
Agent and the Banks in connection with the review, preparation and
filing of any of the foregoing; and
(e) in connection with any Indebtedness incurred
by DBC, the Agent shall receive from the lender to DBC such agreements
as are reasonably satisfactory to the Agent confirming that such
lender will not contest the enforceability or priority of the Agent's
Lien in the properties and assets of DBC.
Section 2.30. Pre-Funding Loans. (a) Intent. The
obligations of the Banks under this Section 2.30 shall be absolute and
unconditional and shall not be affected by any circumstance including any
set-off, counterclaim, recoupment, defense or other right which such Bank may
have against the Pre-Funding Lenders or the Borrower, the occurrence or
continuance of a Default or Event of Default, any adverse change in the
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business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, any breach of any Loan Document by the
Borrower, or any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
(b) Pre-Funding Commitment. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties set forth in this Agreement, the Pre-Funding Lenders agree to make
advances (the "Pre-Funding Loans") to the Borrower from time to time until but
excluding the Final Maturity Date in an aggregate principal amount not to
exceed the Pre-Funding Commitment as then in effect. The Pre-Funding Lenders
are not obligated to make Pre-Funding Loans during the continuation of a
Default or Event of Default.
(c) Borrowings. During the Credit Period, the Borrower
may borrow, repay and reborrow Pre-Funding Loans in accordance with and subject
to the terms and conditions of this Section 2.30. Minimum borrowings of
Pre-Funding Loans shall be in a principal amount of not less than $100,000 or,
if less, the remaining Pre-Funding Commitment. All Pre-Funding Loans shall be
Prime Rate Loans. Pre-Funding Loans shall be entitled to all of the guaranties
and securities applicable to Loans under the Loan Documents.
(d) Refinancing. Each Pre-Funding Loan shall be
refinanced by Loans made pursuant to Section 2.1, without demand on or notice
to the Borrower, on the earliest to occur of (i) the Final Maturity Date or any
earlier termination of the Commitments or the Pre-Funding Commitment, (ii) the
occurrence of a Default or an Event of Default, (iii) the election of either
Pre-Funding Lender as set forth in Section 2.30(i), or (iv) the election of the
Borrower given by delivery of a Borrowing Notice in accordance with Section
2.3. Each such refinancing shall be for the full outstanding principal amount
of the Pre-Funding Loans. The advances to be made by the Banks under this
Section 2.30(d) shall be in the amounts set forth in Section 2.30(i) and such
amounts shall be advanced to the Agent for the account of the Pre-Funding
Lenders. All such advances by the Banks pursuant to this Section 2.30 shall
constitute Loans under the Total Commitment. Any Pre-Funding Loan not
refinanced as set forth in this Section 2.30 (despite the absolute obligations
of refinancing set forth in this Section 2.30) shall be due and payable in full
by the Borrower on demand by the Pre-Funding Lender and shall,
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if the Loans are then due and payable, be repaid to the Pre-Funding Lenders
prior to repayment of the Loans to the Banks.
(e) Pre-Funding Loan Note and Records. The Pre-Funding
Loans shall be evidenced by two promissory notes of the Borrower (the
"Pre-Funding Loan Notes") one in substantially the form attached as Exhibit B,
dated the date of this Agreement, in the principal amount of $15,000,000
payable to Fleet as a Pre-Funding Lender, and the other in substantially the
form attached as Exhibit B, in the principal amount of $10,000,000 payable to
CoreStates as a Pre-Funding Lender, dated the date of this Agreement, and
otherwise duly completed. The Pre-Funding Lenders shall maintain records in
which appropriate entries will be made from time to time showing the unpaid
principal of the Pre-Funding Loans made, the interest accrued on the
Pre-Funding Loans, payments made in respect of the principal of and interest on
the Pre-Funding Loans and debits and credits in respect of other amounts
payable by the Borrower to each Pre-Funding Lender pursuant to this Agreement.
The entries made by the Pre-Funding Lenders in such record shall constitute
prima facie evidence of (i) the Borrower's obligations in respect of the
Pre-Funding Loans, (ii) payments of principal and interest made by the Borrower
in respect of the Pre-Funding Loans, and (iii) any other amounts owing by the
Borrower to each Pre-Funding Lender under this Agreement and payments made on
such amounts, but the failure by the Pre-Funding Lenders to make such entries
shall not affect the rights of the Pre-Funding Lenders or the obligations of
the Borrower under this Agreement.
(f) Application for Pre-Funding Loan. (1) Application
for a Pre-Funding Loan (a "Pre-Funding Borrowing Notice") shall be made to the
Agent by telecopy notice which must be received by the Agent before 1:00pm on
the Business Day of the requested date for borrowing (i) setting forth the
amount requested to be borrowed, and (ii) otherwise in compliance with the
requirements of a Borrowing Notice under Section 2.3(b). On the date for
borrowing proposed in a Pre-Funding Borrowing Notice, subject to satisfaction
of the applicable conditions precedent set forth in Section 4.2, the
Pre-Funding Lenders will advance to the Borrower their respective pro-rata
share of the amount requested up to the aggregate amount of the Pre-Funding
Commitment and each such Pre-Funding Lenders' Pre-Funding Commitment, and the
Borrower will borrow from the Pre-Funding Lenders, the amount specified in such
Pre-Funding Borrowing Notice and the Borrower will then be indebted to the
Pre-Funding Lenders in the amount of their respective pro-rata shares of such
principal amount. The Pre-Funding Lenders
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will credit the amount of the Pre-Funding Loan to an account on its books in
the name of the Borrower or will transmit such amount upon the Borrower's
order.
(2) Subject to Section 2.30(i) below, not later than
1:00 p.m. on the date specified for each borrowing of a Pre-Funding Loan under
this Agreement, each Pre-Funding Lender shall transfer to the Agent by wire
transfer or otherwise but, in any event, in immediately available funds, the
amount of each Pre-Funding Loan to be made by it on such date, and the Agent
upon its receipt of each such amount shall disburse such amount to the Borrower
by depositing it in an account of the Borrower designated by the Borrower and
maintained with the Agent.
(3) Whenever request is made by the Borrower for a
Pre-Funding Loan, any obligation of the Pre-Funding Lenders to fund such loans,
shall be in the pro rata amount of their respective share of the Pre-Funding
Commitment, with Fleet funding three-fifths of each Pre-Funding Loan and
CoreStates funding two-fifths of each Pre-Funding Loan up to the aggregate
amount of their respective pro rata share of the Pre-Funding Commitment.
(g) Interest on Pre-Funding Loans. So long as no Event
of Default has occurred and is continuing, the Borrower shall pay to the
Pre-Funding Lenders interest on the unpaid principal amount of each Pre-Funding
Loan for the period commencing on the date of such Pre-Funding Loan until such
Pre-Funding Loan is paid in full at a rate per annum equal to the Prime Rate.
If an Event of Default occurs, the Borrower shall pay interest at the
Post-Default Rate for Prime Rate Loans on the Pre-Funding Loans and on any
other amount payable by the Borrower under this Section 2.30 for the period
commencing on the date such Event of Default occurred and ending on the earlier
of the date the Event of Default is cured or the date all Pre-Funding Loans and
other amounts are paid in full. Interest on each Pre-Funding Loan shall be
payable monthly in arrears commencing on the first Monthly Date following the
making of each Pre-Funding Loan and on the date of payment in full, except that
unpaid interest accrued on a Pre-Funding Loan through any date of refinancing
by Loans shall be payable on the last day of the calendar month in which such
refinancing occurs.
(h) Prepayments of Pre-Funding Loans. Subject to the
provisions of this Section 2.30(h), the Borrower shall be permitted to repay
and prepay Pre-Funding
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Loans in whole or in part from time to time without premium or penalty.
Partial prepayments may not be less than $50,000 or an integral multiple of
$50,000 unless the Pre-Funding Loans are paid in full. The Borrower shall
prepay the Pre-Funding Loans when required, and in the manner required, by
Section 2.8. All prepayments shall be made to the Agent in respect of a
Pre-Funding Loan shall be applied pro-rata to the Pre-Funding Loans then
outstanding for the Pre-Funding Lender, and shall be made together with
interest accrued on the amount prepaid and any additional amount payable
pursuant to Section 2.16, Section 2.20 or otherwise.
(i) Refinancing by Banks at Election of Either
Pre-Funding Lender. (i) At any time (whether or not a Default or an
Event of Default exists) either Pre-Funding Lender may, in its sole
discretion, determine that it desires, to convert the Pre-Funding
Loans into Loans under Section 2.1 and desires, the Banks to refinance
the Pre-Funding Loans. At such time, either Pre-Funding Lender shall
notify the Borrower and the Agent of such fact, the Agent shall then
notify the Banks of such determination and thereafter the Banks shall
on the second Business Day after the giving of such notice by the
Pre-Funding Lender advance funds to the Agent for the account of the
Pre-Funding Lenders in an amount equal to the product of (1) a
fraction in which the numerator is such Bank's Commitment then in
effect and the denominator is the Total Commitment then in effect,
multiplied by (ii) the aggregate outstanding principal balance of the
Pre-Funding Loans to be refinanced, which funds shall be remitted by
the Agent to the Pre-Funding Lenders to be applied by the Pre-Funding
Lenders to refinance the Pre-Funding Loans; provided, however, that no
Bank shall be required to advance funds to the Agent in an aggregate
amount in excess of the amount of such Bank's Unused Commitment as in
effect on such date.
(ii) If prior to the making of a Loan pursuant to
Section 2.30(i)(i) one of the events described in Section 8.6 shall
occur, each Bank shall, on the date such Loan was to have been made,
purchase an undivided participation interest equal to the product of
(1) a fraction in which the numerator is such Bank's Commitment then
in effect and the denominator is the Total Commitment then in effect,
multiplied by (ii) the aggregate outstanding principal balance of all
Pre-Funding Loans. Each Bank will immediately transfer to the Agent
on behalf of the Pre-Funding Lenders, in immediately available funds,
the amount of its
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participation and upon receipt of such amount the Agent will deliver
to such Bank a participation certificate dated the date of receipt of
such funds and in such amount.
(iii) At any time after the Pre-Funding Lenders
have received from any Bank such Bank's participating interest in a
Pre-Funding Loan pursuant to Section 2.30(i)(ii) that either
Pre-Funding Lender receives any payment on account of the Pre-Funding
Loans, such Pre-Funding Lender will distribute to such Bank its
participating interest in such amount (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which
such Bank's participating interest was outstanding and funded) in like
funds as received; provided, however, that in the event that such
payment received by such Pre-Funding Lender is required to be
returned, such Bank will return to such Pre-Funding Lender any portion
thereof previously distributed by such Pre-Funding Lender to it in
like funds as such payment is required to be returned by such
Pre-Funding Lender.
(i) Pre-Funding Commitment Fee. The Borrower shall pay
to each Pre-Funding Lender a commitment fee (the "Pre-Funding Commitment Fee")
on the daily average unused amount of the Pre-Funding Commitment of such
Pre-Funding Lender at 1/4 of 1% per annum on the unused Pre-Funding Commitment
for the period from March 28, 1995, with respect to Fleet, and for the period
from December 29, 1995, with respect to CoreStates, to and including the
earlier of the date on which the Pre-Funding Commitment is terminated or the
Final Maturity Date. Such fee shall be payable quarterly in arrears on the
last day of each calendar quarter and on the earlier of the date the
Pre-Funding Commitment is terminated or the Final Maturity Date.
(j) Pre-Funding Loans Pro-Rata. Except as otherwise
provided in this Agreement (i) each borrowing from the Pre-Funding Lenders
under Section 2.30 will be made from the Pre-Funding Lenders and each
refinancing or partial repayment of a Pre-Funding Commitment Fee shall be made
for the account of the Pre-Funding Lenders= pro rata according to their
respective share of the Pre-Funding Commitment.
(k) Pro-Rata Sharing of Payments. Each payment and
pre-payment of
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principal of or interest on each such Pre-Funding Loan will be made to the
Agent for the account of the Pre-Funding Lenders holding such Pre-Funding Loan
pro rata in accordance with the respective unpaid principal amounts of each
such loan held by each such Pre-Funding Lenders.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Banks and the
Agent that:
Section 3.1 Organization. (a) Each of DVI and its
Subsidiaries is duly organized and validly existing under the laws of its state
of organization and has the power to own its assets and to transact the
business in which it is presently engaged and in which it proposes to be
engaged. The attached Schedule 1 lists each of the Subsidiaries of DVI, the
state of incorporation of DVI and each of its Subsidiaries, the authorized and
outstanding shares of common stock of each such corporation, the owners of the
outstanding shares of common stock of the Borrower and the other Subsidiaries
of DVI and the business in which each of such entities is engaged. All of the
issued and outstanding shares of capital stock of the Borrower and the other
Subsidiaries of DVI have been duly and validly issued, are fully paid and
non-assessable and are owned by DVI free and clear of any Lien except as stated
on the attached Schedule 1. Except as set forth on the attached Schedule 1, no
warrants, options, contracts or commitments of any kind are outstanding
entitling any Person to purchase or otherwise acquire any shares of capital
stock of the Borrower or any other subsidiaries of DVI, and no securities are
outstanding that are convertible into or exchangeable for any shares of capital
stock of the Borrower or any other subsidiaries of DVI.
(b) Each of the Borrower, DVI and DBC is in good
standing in its state of incorporation and in each state in which it is
qualified to do business. There are no jurisdictions other than as set forth
on the attached Schedule 1 in which the character of the properties owned by
the Borrower or in which the transaction of the business of the Borrower as now
conducted requires or will require the Borrower to qualify to do business,
except jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Collateral or the business, operations,
financial condition or assets of the Borrower.
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Section 3.2 Power, Authority, Consents. (a) Each Loan
Party has the power to execute, deliver and perform the Loan Documents to be
executed by it, (b) the Borrower has the power to borrow under this Agreement
and has taken all necessary corporate action to authorize borrowing on the
terms and conditions of this Agreement, and (c) each Loan Party has taken all
necessary action, corporate or otherwise, to authorize the execution, delivery
and performance of the Loan Documents to be executed by it. No consent or
approval of any Person (including the stockholder of the Borrower or any other
Loan Party), no consent or approval of any landlord or mortgagee, no waiver of
any Lien or right of distraint or other similar right and no consent, license,
approval, authorization or declaration of any governmental authority, bureau or
agency is or will be required in connection with the execution, delivery or
performance by any Loan Party or for the validity, enforcement or priority of
the Loan Documents or the Agent's Lien except as set forth on the attached
Schedule 2, each of which either has been duly and validly obtained on or prior
to the date of the restatement of this Agreement and is now in full force and
effect or is designated on the attached Schedule 2 as waived by the Majority
Banks.
Section 3.3 No Violation of Law or Agreements. The
execution, delivery and performance by each Loan Party of each Loan Document to
which it is a party does not and will not violate any provision of law and does
not and will not, except as set forth on the attached Schedule 2, conflict with
or result in a breach of any order, writ, injunction, ordinance, resolution,
decree or other similar document or instrument of any court or governmental
authority, bureau or agency, domestic or foreign, or any certificate of
incorporation or by-laws of such Loan Party, or create (with or without the
giving of notice or lapse of time, or both) a default under or breach of any
agreement, instrument, document, bond, note or indenture to which such Loan
Party is a party or by which it or any of its properties or assets is bound or
affected, or result in the imposition of any Lien upon any of the properties or
assets owned by or used in connection with the business of such Loan Party,
except for the Liens created and granted pursuant to the Security Documents.
Section 3.4 Due Execution, Validity, Enforceability.
Each Loan Document to which any Loan Party is a party has been duly executed
and delivered by such Loan Party and constitutes the valid and legally binding
obligation of such Loan
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Party enforceable in accordance with its terms, except that the remedy of
specific performance and other equitable remedies are subject to judicial
discretion and except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the enforcement of creditors'
rights generally, but such laws shall not materially interfere with the
practical benefits of the Security Documents or the Liens created by the
Security Documents except for (a) possible delay, (b) situations which may
arise under Chapter 11 of the Bankruptcy Code, and (c) equitable orders of a
Bankruptcy Court.
Section 3.5 Properties, Priority of Liens. All of the
properties and assets owned by the Borrower are owned by it free and clear of
any Lien except as provided for in the Security Documents and Permitted Liens.
The Liens created and granted by the Security Documents constitute valid,
perfected Liens on the Collateral subject to no prior or equal Liens except
Permitted Liens.
Section 3.6 Judgments, Actions, Proceedings. Except as
set forth on the attached Schedule 3, no judgments, actions or proceedings are
pending before any court or governmental authority, bureau or agency or, to the
best of the Borrower's knowledge, threatened against or affecting the Borrower
involving a claim in excess of $1,000,000 individually or $2,500,000 in the
aggregate, to the best of the Borrower's knowledge no reasonable basis exist
for the institution of any such action or proceeding which is probable of
assertion, and the Borrower is not a plaintiff or complainant in any such
actions or proceedings.
Section 3.7 No Defaults, Compliance With Laws. Except as
set forth on the attached Schedule 4, the Borrower is not in default under any
agreement, ordinance, resolution, decree, bond, note, indenture, order or
judgment to which it is a party or by which it is bound or under any other
agreement or instrument by which any of the properties or assets owned by it or
used in the conduct of its business is affected, and the Borrower has complied
and is in compliance in all respects with all Applicable Laws the default or
non-compliance with which could have a material adverse effect on the business,
operations, financial condition or assets of the Borrower or on the ability of
any Loan Party to perform its obligations under the Loan Documents to which it
is a party.
Section 3.8 Burdensome Documents. Except as set forth on
the attached
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Schedule 5, no Loan Party is a party to or bound by, nor are any of the
properties or assets owned by the Borrower used in the conduct of its
businesses affected by, any agreement, ordinance, resolution, decree, bond,
note, indenture, order or judgment which materially and adversely affects its
business, assets or condition, financial or otherwise.
Section 3.9 Financial Statements. Each of the Financial
Statements is correct and complete, presents fairly the financial position of
the Borrower at its date and has been prepared in accordance with GAAP.
Neither DVI nor the Borrower has any material obligation, liability or
commitment, direct or contingent, which is not reflected in the Financial
Statements. No material adverse change in the financial position or operations
of DVI or the Borrower has occurred since the date of the latest balance sheet
included in the Financial Statements. The fiscal year of both DVI and the
Borrower is the twelve-month period ending on June 30 in each year.
Section 3.10 Tax Returns. Each of DVI, the Borrower and
DBC has filed all federal, state and local tax returns required to be filed by
it and has paid all taxes, interest and penalties required on or before their
respective due dates except for (i) taxes being contested in good faith by
appropriate proceedings for which adequate reserves have been provided in
DVI's, the Borrower's or DBC's financial statements according to GAAP and, to
the extent required by GAAP then in effect, proper and adequate reserves are
established by the Borrower and a bond is filed if necessary to avoid the
creation of a Lien against any properties of DVI, the Borrower and DBC, and
(ii) taxes whose nonpayment will not have a material adverse effect on the
condition, financial or otherwise, of DVI, the Borrower or DBC. Except to the
extent that reserves therefor are reflected in the Financial Statements, (a) no
material federal, state or local tax liabilities of DVI, the Borrower or DBC
are due or to become due for any tax year ended on or prior to the date of the
latest balance sheet included in the Financial Statements relating to such
entity, whether incurred in respect of or measured by the income of such
entity, which are not properly reflected in the Financial Statements, and (b)
no material claims are pending or, to the knowledge of the Borrower, proposed
or threatened against DVI, the Borrower or DBC for past federal, state or local
taxes except those as to which proper reserves are reflected in the Financial
Statements.
Section 3.11 Intangible Assets. The Borrower possesses,
owns or has rights to use all necessary patents, trademarks, service marks,
trademark and service xxxx
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rights, trade names, trade name rights and copyrights to conduct its business
as now conducted and as proposed to be conducted, without any conflict with the
patents, trademark, service xxxx, trademark and service xxxx rights, trade
names, trade name rights and copyrights of any other Person, a complete listing
of which is set forth on the attached Schedule 6.
Section 3.12 Regulation U. No part of the proceeds
received by the Borrower from the Loans or the Pre-Funding Loans will be used
directly or indirectly for (a) any purpose other than as set forth in Section
2.9, or (b) the purpose of purchasing or carrying, or for payment in full or in
part of Indebtedness incurred for the purpose of purchasing or carrying,
"margin stock" as such term is defined in Section 221.3 of Regulation G or
Regulation U of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II, Part 221.
Section 3.13 Name Changes. Except as set forth on the
attached Schedule 7, the Borrower has not within the six years immediately
preceding the date of restatement of this Agreement changed its name, been the
surviving entity of a merger or consolidation or acquired all or substantially
all of the assets of any Person. Schedule 7 also lists all locations of the
Borrower at which the Borrower may store Equipment constituting Collateral from
time to time.
Section 3.14 Full Disclosure. None of the Financial
Statements, nor any certificate, opinion or any other statement made or
furnished in writing to the Agent or any Bank by or on behalf of the Borrower,
DVI or DBC in connection with this Agreement or the transactions contemplated
in this Agreement, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make such statements not misleading
as of the date such statement was made. The Borrower knows of no fact that has
or would in the now foreseeable future have a material adverse effect on the
business, prospects or condition, financial or otherwise, of the Borrower, DVI
or DBC which fact has not been set forth in this Agreement, in the Financial
Statements or in a certificate, opinion or other written statement made or
furnished to the Agent and the Banks.
Section 3.15 Labor Disputes; Collective Bargaining
Agreements; Employee Grievances. Except as set forth on the attached Schedule
8, (a) no collective
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bargaining agreements or other labor contracts exist covering the Borrower, (b)
no union or other labor organization is seeking to organize, or to be
recognized as bargaining representative for, a bargaining unit of employees of
the Borrower, (c) no strike, work stoppage, material unfair labor practice
claim or charge, arbitration or other material labor dispute against or
affecting the Borrower or its representative employees has occurred during the
five years prior to the date of the restatement of this Agreement or is pending
or threatened, and (d) no actions, suits, charges, demands, claims,
counterclaims or proceedings are pending or, to the best of the Borrower's
knowledge, threatened against the Borrower by or on behalf of, or with, its
employees other than employee grievances arising in the ordinary course of
business which are not, in the aggregate, material.
Section 3.16 Condition of Assets. (a) All of the assets
and properties of the Borrower which are reasonably necessary for the operation
of its business are in good working condition, ordinary wear and tear excepted,
and are able to serve the function for which they are currently being used.
(b) All of the assets and properties of the Borrower
subject to a Lease are in good working condition, ordinary wear and tear
excepted, and are able to serve the function for which they are currently being
used.
Section 3.17 ERISA. (a) The Borrower does not have and
has never had any Plan in connection with which there could arise a direct or
contingent liability of the Borrower to the PBGC, the Department of Labor or
the IRS. The Borrower is not a participating employer in any Plan under which
more than one employer makes contributions, as described in Sections 4063 and
4064 of ERISA, or a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.
(b) All references to the Borrower in this Agreement
relating to ERISA shall be deemed to refer to the Borrower and all other
entities which are, together with the Borrower, part of a Controlled Group.
Section 3.18 Non-Recourse Debt. Except as set forth on
the attached Schedule 9, none of the loan documents relating to any
Non-Recourse Debt or Partial Recourse Debt of the Borrower provide that (a) the
Lien of a lender of Non-Recourse Debt or Partial Recourse Debt in any
equipment, leases and receivables will not be released until the Borrower has
fully repaid Indebtedness owed to such lender not
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incurred to finance such equipment, leases and receivables, or (b) a default
under such loan documents will constitute a default for the benefit of such
lender under any other loan documents of the Borrower.
Section 3.19 Finders or Brokers. None of the Borrower,
DVI or DBC has employed or agreed to employ or made use of the services of any
investment banker, broker, finder, intermediary or similar Person in connection
with the transactions contemplated by the Loan Documents who might be entitled
to a fee or any commission that has not been paid.
Section 3.20 Investment Company Act; Public Utility
Holding Company Act. None of the Borrower, DVI or DBC is (i) an "investment
company" or a company controlled by an "investment company" within the meaning
of the Investment Company Act of 1940, or (ii) a "public utility holding
company" or a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935.
Section 3.21 Borrowing Base Reports. The information set
forth in each Borrowing Base Report is true, correct and complete and each
asset included in the Borrowing Base conforms with and satisfies the
requirements for such item set forth in this Agreement, including under the
respective definitions applicable to such assets.
Section 3.22 Licenses and Approvals. The Borrower has all
necessary licenses, permits and governmental authorizations, including
licenses, permits and authorizations relating to Environmental Matters, to own
and operate its properties and to carry on its business as now conducted.
Section 3.23 Independent Credit Committee. The Borrower's
Credit Committee has and shall continue to, in practice, exercise its judgment
and reach determinations independently from those officers of the Borrower
responsible for the generation and marketing of business for the Borrower.
ARTICLE 4. CONDITIONS TO THE LOANS
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Section 4.1 Conditions to Initial Loans. The conditions
precedent fulfilled in connection with the obligation of each Bank to make the
initial Loans under this Agreement are set forth on the attached Schedule 10,
and the Borrower, the Agent and each of the Banks has copies of the documents
referred to on Schedule 10.
Section 4.2 Conditions to Subsequent Loans. After the
initial Loan has been made under this Agreement, the obligation of each Bank or
each Pre-Funding Lender to make a Loan or a Pre-Funding Loan, respectively, is
subject to the fulfillment (to the satisfaction of the Agent) of the following
conditions precedent:
(a) The Agent shall have received a Borrowing Notice,
and, with respect to Loans that exceed the Borrowing Availability as reported
in the most recent Borrowing Base Report delivered to the Agent, a Borrowing
Base Report or the additional Borrowing Base information and Supporting
Documents required by Section 2.3(b), and all other documents required to be
delivered in connection with a Borrowing Notice and Borrowing Base Report (if
applicable).
(b) The Borrower shall have complied and shall then be
in compliance with all the terms, covenants and conditions of this Agreement
and the other Loan Documents.
(c) No Default or Event of Default shall have occurred
and be continuing.
(d) The representations and warranties contained in
Article 3 shall be true with the same effect as though such representations and
warranties had been made at the time of the making of such Loan, except for
changes which were made in the ordinary course of business, not material and
not prohibited by this Agreement.
(e) The Agent shall have received a certificate, dated
the date of such Loan and effective as of such date, certifying that the
conditions set forth in Sections 4.2(b)-(d) are satisfied as of such date,
except that such certificate shall not be required in connection with a
conversion of a Loan from one type into another type that does not result in an
increase in the outstanding principal amount of the Loans.
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(f) All legal matters incident to such proposed Loan
shall be satisfactory to the Agent and counsel to the Agent.
ARTICLE 5. DELIVERY OF FINANCIAL REPORTS, DOCUMENTS AND OTHER
INFORMATION
So long as the Commitments are outstanding, any Loan remains
outstanding, the Borrower is indebted to the Banks or the Agent, the Notes have
not been paid in full or the Obligations have not been fully and completely
performed, the Borrower shall deliver the following documents:
Section 5.1 Annual Financial Statements and Budgets. (a)
The Borrower shall deliver to each Bank and the Agent, as soon as available but
in any event within 95 days after the last day of each fiscal year, audited
consolidated and unaudited consolidating balance sheets of DVI and its
Subsidiaries as at the last day of such fiscal year, and audited consolidated
and unaudited consolidating statements of income and retained earnings and
statements of cash flow for such fiscal year, each prepared in accordance with
GAAP and certified without qualification by Deloitte & Touche L.L.P. or another
firm of independent certified public accountants satisfactory to the Agent as
fairly presenting the financial position and the results of operations of DVI
and its Subsidiaries at the end of and for such fiscal year and as having been
prepared in accordance with GAAP.
(b) The Borrower shall also deliver to each Bank and the
Agent, as soon as available, DVI's Annual Report on Form 10-K as filed with the
SEC for each fiscal year.
(c) Promptly upon receipt, the Borrower shall deliver to
each Bank and the Agent copies of all other reports submitted to DVI or the
Borrower by DVI's independent accountants in connection with any annual or
interim audit or review of the books of DVI or the Borrower made by such
accountants.
Section 5.2 Quarterly Financial Statements. The Borrower
shall deliver to each Bank and the Agent, as soon as available but in any event
within 50 days after the
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end of each of the first three fiscal quarters,
(a) DVI's Quarterly Report on Form 10-Q as filed
with the SEC for such fiscal quarter; and
(b) a consolidating balance sheet of DVI and its
Subsidiaries as of the last day of such quarter and consolidating
statements of income and retained earnings and consolidating
statements of cash flow for such fiscal quarter and on a comparative
basis figures for the corresponding period of the immediately
preceding fiscal year all in reasonable detail, each such statement to
be certified in a certificate of Borrower's chief financial officer or
chief accounting officer as fairly presenting the financial position
and the results of operations of the entity to which such statement
relates as at its date and for such quarter (subject to year-end audit
adjustments) and as having been prepared in accordance with GAAP.
Section 5.3 Other Information. Promptly after a written
request, the Borrower shall deliver to each Bank and the Agent such other
financial information evidencing compliance with the requirements of the Loan
Documents or otherwise relating to the business, affairs and conditions of DVI
or any Subsidiary as the Agent or any Bank may reasonably request from time to
time, including as they become available financial information and other
business data on new lines of business (such as DVI Vendor) or Subsidiaries.
Section 5.4 No Default Certificate. At the same time it
delivers the financial statements required under Sections 5.1 and 5.2, the
Borrower shall deliver to each Bank and the Agent a certificate of Borrower's
chief financial officer, chief accounting officer or chief credit officer to
the effect that no Event of Default exists, no default exists under any other
agreement to which the Borrower is a party or by which it or, to the best of
its knowledge, any of its properties or assets, taken as a whole, is bound or
may be materially affected, and no event which, with the giving of notice or
the lapse of time or both would constitute an Event of Default or such a
default exists, or, if such cannot be so certified, specifying in reasonable
detail the exceptions, if any, to such statement. Such certificate shall
include a detailed calculation indicating compliance with the covenants
contained in Sections 6.9, 7.12 and 7.13 and shall be in such form as Borrower
and Agent shall agree from time to time; provided that Agent shall be permitted
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to have Borrower include in such certificate such additional detail indicating
compliance by Borrower with its covenants under this Agreement, including
Articles 6 and 7, as Agent may reasonably request.
Section 5.5 Copies of Documents. Promptly upon their
becoming available, copies of any (a) financial statements, projections,
non-routine reports, notices other than routine correspondence, requests for
waivers and proxy statements delivered by the Borrower, DVI or DBC to any
lending institution other than the Banks, (b) correspondence or notices
received by the Borrower, DVI or DBC from any federal, state or local
governmental authority that regulates the operations of the Borrower, DVI or
DBC relating to an actual or threatened change or development which would be
materially adverse to the Borrower, DVI or DBC, (c) registration statements and
any amendments and supplements thereto, and any regular and periodic reports,
filed by DVI with any securities exchange or with the SEC, (d) letters of
comment or correspondence sent to DVI by any such securities exchange or the
SEC in relation to the affairs of DVI, the Borrower or DBC, (e) written reports
submitted to DVI, the Borrower or DBC by DVI's independent accountants in
connection with any annual or interim audit of the books of DVI, the Borrower
or DBC made by such accountants, and (f) any appraisals received by DVI, the
Borrower or DBC with respect to the properties or assets of DVI, the Borrower
or DBC.
Section 5.6 Notices of Defaults. The Borrower shall
deliver promptly to the Agent notice of the occurrence of a Default, an Event
of Default or an event which would constitute or cause a material adverse
change in the condition, financial or otherwise, of the operations of the
Borrower, DVI or DBC.
Section 5.7 ERISA Notices. (a) Concurrently with such
filing, the Borrower shall deliver to the Agent a copy of each Form 5500 which
is filed with respect to each Plan with the IRS.
(b) The Borrower shall also deliver to the Agent,
promptly upon their becoming available, copies of (i) all correspondence with
the PBGC, the Secretary of Labor or any representative of the IRS with respect
to any Plan relating to an actual or threatened change or development which
would be materially adverse to the Borrower, (ii) copies of all actuarial
valuations received by the Borrower with respect to any Plan,
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and (iii) copies of any notices of Plan termination filed by any Plan
Administrator (as those terms are used in ERISA) with the PBGC and of any
notices from PBGC to the Borrower with respect to the intent of the PBGC to
institute involuntary termination proceedings.
Section 5.8 Borrowing Base Reports. (a) The Borrower
shall deliver to each Bank and the Agent, as soon as available but in any event
within 45 days after the end of each calendar month, a Borrowing Base Report
with respect to such calendar month that is certified as accurate and complete
by the Borrower's chief financial officer, chief accounting officer, chief
credit officer or the current Vice President-Structured Finance and that also
contains the following additional information (collectively, the "Supporting
Documents"):
(i) a list of all motor vehicles included in the
Borrowing Base as of the last day covered in such Borrowing Base
Report;
(ii) a list of all Contracts included in the
Borrowing Base as of the last day covered in such Borrowing Base
Report setting forth with respect to each Contract the name and lease
number of the Obligor, the start and end dates and the monthly rentals
and equipment cost;
(iii) a list of all Eligible Equipment delivered
off-premises for repair or storage included in the Borrowing Base as
of the last day covered in such Borrowing Base Report and all related
Financing Statements, as applicable;
(iv) aging reports and total delinquencies as of
the last day covered in such Borrowing Base Report for all receivables
included in the Borrowing Base and for the Borrower as a whole;
(v) a list of all Progress Payments included in
the Borrowing Base as of the last day covered in such Borrowing Base
Report, including the date on which such item was included in the
Borrowing Base; and
(vi) evidence satisfactory to the Banks and the
Agent that the provisions of this Agreement have been complied with in
respect of such assets, in each case dated the date of delivery, and
all such other documents and information
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required to be delivered in connection therewith.
(b) In addition to the monthly Borrowing Base Reports to
be delivered pursuant to Section 5.8(a), the Borrower shall deliver to each
Bank and the Agent, at the same time it delivers the annual financial
statements pursuant to Section 5.1, a Borrowing Base Report for the last month
of the Borrower's fiscal year based on the Borrower's audited financial
statements and containing the same information required under Section 5.8(a).
(c) Upon request of the Agent, the Borrower shall
deliver to each Bank and the Agent a copy of the most recent monthly report
required to be prepared by the Borrower under any Warehousing Loan Agreement.
(d) Each month, the Borrower shall deliver to the Agent
a copy of a summary report of pertinent information that it delivers to
trustees in its role as servicer of Securitizations in which it has an interest
or, if the Borrower is replaced as servicer in any such Securitization, all
monthly servicing reports from the replacement servicer to the extent
obtainable by Borrower.
ARTICLE 6. AFFIRMATIVE COVENANTS
So long as the Commitments are outstanding, any Loan remains
outstanding, the Borrower is indebted to the Banks or the Agent, the Notes have
not been paid in full or the Obligations have not been fully and completely
performed:
Section 6.1 Books and Records. The Borrower shall keep
proper books of record and account in a manner reasonably satisfactory to the
Agent in which full, true and correct entries shall be made of all dealings or
transactions in relation to its business and activities.
Section 6.2 Inspections and Audits. The Borrower shall
permit the Banks and the Agent to make or cause to be made inspections and
audits of any books, records and papers of any Loan Party, to make extracts
from and copies of such books, records and papers, and to make inspections and
examinations of any properties and facilities of any Loan Party on reasonable
notice, all at such reasonable times and as often as the Agent or any Bank may
reasonably require, in order to assure that the Borrower and each
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Loan Party is and will be in compliance with its obligations under the Loan
Documents or to evaluate the Banks' investment in the then outstanding Notes.
In addition, the Borrower shall, and shall cause any other Loan Party to,
during all business hours, provide the Banks, the Agent and the Agent's
representatives full access to all of the agreements, instruments and documents
referred to in Section 2.23. The Banks and the Agent, on the one hand, and the
Loan Parties, on the other hand, shall bear the costs and expenses of their
employees and personnel in connection with such inspections and audits, except
that the Borrower shall bear the reasonable costs and expenses incurred by the
Banks and the Agent in connection with (a) one annual audit of the Borrower to
be performed at the request of the Agent, (b) one annual audit of DBC to be
performed at the request of the Agent, and (c) any inspection, audit or
examination conducted after the occurrence of and during the continuance of an
Event of Default."
Section 6.3 Maintenance and Repairs. The Borrower shall
maintain or cause to be maintained by the Lessees in good repair, working order
and condition, subject to normal wear and tear, all material properties from
time to time owned by it and used in or necessary for the operation of its
business, and make or cause to be made all reasonable repairs, replacements,
additions and improvements to such properties.
Section 6.4 Continuance of Business. The Borrower shall
do or cause to be done all things reasonably necessary to preserve and keep in
full force and effect its corporate existence and all permits, rights and
privileges necessary for the proper conduct of its business, and shall continue
to engage in the same line of business (as required by Section 7.6), including
the qualification of the Borrower to do business as a foreign corporation in
each jurisdiction in which failure to so qualify could have a material adverse
effect on the business, operations, financial conditions or properties of the
Borrower, and shall comply in all material respects with all Applicable Laws.
Section 6.5 Copies of Corporate Documents. Subject to
the prohibitions set forth in Section 7.11, the Borrower shall promptly deliver
to the Agent copies of any amendments or modifications to its, DVI's or DBC's
certificate of incorporation and by-laws, certified with respect to the
certificate of incorporation by the Secretary of State of its state of
incorporation and, with respect to the by-laws, by the secretary or assistant
secretary of the corporation.
Section 6.6 Perform Obligations. (a) The Borrower shall
pay and
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discharge all of its obligations and liabilities, including all taxes,
assessments and governmental charges upon its income and properties, when due
except to the extent that such obligations, liabilities, taxes, assessments and
governmental charges are contested in good faith and by appropriate proceedings
and, to the extent required by GAAP then in effect, proper and adequate
reserves are established by the Borrower and a bond is filed if necessary to
avoid the creation of a Lien against any of its properties.
(b) The Borrower shall perform all its obligations under
each of the Contracts and the Relationship Contracts.
Section 6.7 Notice of Litigation. The Borrower shall
promptly notify the Agent in writing of any litigation, legal proceeding or
dispute involving amounts in excess of $1,000,000 individually or $2,500,000 in
the aggregate affecting the Borrower, DVI or DBC, whether or not fully covered
by insurance and regardless of the subject matter (excluding any actions
relating to workmen's compensation claims or negligence claims relating to the
use of motor vehicles, if fully covered by insurance, subject to deductibles).
Section 6.8 Insurance. (a) The Borrower shall maintain
with or at responsible insurance companies such insurance on such of its
properties, in such amounts and against such risks as is customarily maintained
by similar businesses, including maintaining or causing Lessees to maintain
all-risk insurance on each item of Leased Property in an amount at least equal
to the replacement value of such item. Each such policy (i) shall have a loss
payable endorsement naming each of the Agent (c/o the Agent's Leasing
Division), the Borrower or the Borrower's assigns as loss payee as its
interests may appear, (ii) shall name the Agent as an additional named insured
in respect of liability insurance, and (iii) shall state that the insurers
shall give the Agent prompt written notice of any nonpayment of premiums on
such policy when due and 30 days prior written notice of an cancellation or
material adverse change in such policy, all in form and substance satisfactory
to the Agent with such additional provisions as the Agent may reasonably
request. The Borrower shall file with the Agent upon its request a detailed
list of the insurance then in effect, stating the names of the insurance
companies, the amounts and rates of the insurance, the dates of policy
expiration and the properties and risks covered by such insurance, and within
10 days after notice in writing from the Agent shall obtain such additional
insurance as the Agent may reasonably request.
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(b) The Borrower shall carry all insurance available
through the PBGC or any private insurance companies covering its obligations to
the PBGC.
Section 6.9 Financial Covenants. The Borrower shall
maintain the following financial covenants:
(a) Tangible Net Worth. The Borrower shall have at the
end of each fiscal quarter Tangible Net Worth in an amount equal to or greater
than the sum of (i) $80,641,828, plus (ii) 75% of net income (with no deduction
for losses) for the period commencing with the first day of the calendar
quarter beginning January 1, 1997 and each subsequent quarter on a cumulative
basis, plus (iii) 100% of any new issuance of equity.
(b) Leverage Ratio. The Borrower shall maintain at all
times a Leverage Ratio not greater than 5:1.
(c) Risk-Adjusted Leverage Ratio. The Borrower shall
maintain at all times a Risk-Adjusted Leverage Ratio not greater than 5:1.
(d) Debt Service Coverage. At the end of each fiscal
quarter with respect to the 12-month period then ended, the Borrower shall have
a ratio of (i) the sum of Cash Receipts minus Cash Operating Expenses plus
Interest Expense, to (ii) Interest Expense of not less than 1.75:1.
Section 6.10 Reportable Events. (a) The Borrower shall
promptly notify the Agent in writing of the occurrence of any Reportable Event,
as defined in Section 4043 of ERISA, if a notice of such Reportable Event is
required under ERISA to be delivered to the PBGC within 30 days after its
occurrence, together with a description of such Reportable Event, a statement
of the action the Borrower intends to take with respect to such Reportable
Event and a copy of the notice given to the PBGC.
(b) The Borrower shall promptly notify the Agent in
writing if any Loan Party receives (i) any notice of any violation or
administrative or judicial complaint or order having been filed or about to be
filed against such Loan Party alleging violations
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of any Environmental Law and Regulation, or (ii) any notice from any
governmental body or any other Person alleging that such Loan Party is or may
be subject to any Environmental Liability, and promptly upon receipt of any
such notice the Borrower shall provide the Agent with a copy of such notice
together with a statement of the action such Loan Party intends to take with
respect to such matter.
Section 6.11 Comply with ERISA. The Borrower shall comply
with all applicable provisions of ERISA now or hereafter in effect.
Section 6.12 Upgrades and Add-ons. The Borrower shall
deliver to the Agent, not later than simultaneously with any upgrade of or
add-on to any Equipment included in the Borrowing Base, from any lender which
has a Lien on such Equipment but does not finance such upgrade or add-on, the
written agreement of such lender to the effect that such lender's Lien in the
lease payment or receivables arising in connection with such Equipment
inclusive of such upgrades and add-on shall not include the payments or
receivables attributable to such upgrade or add-on.
Section 6.13 Possession of Contracts. The Borrower shall
clearly and conspicuously xxxx each file folder and sticker or otherwise label
the first page of each Equipment schedule (each such schedule itself a Contract
incorporating the terms of a Master Lease) included in the Contract Receivables
Clause, Inventory and Per Procedure Clause, Restructured Lease Clause or
Relationship Contract Clause of the Borrowing Base to indicate that a Lien in
the Contract to be perfected by possession may only be perfected by possession
of the chattel paper original copy. The Borrower shall at all times maintain
possession of the chattel paper original copy of each Contract included in the
Contract Receivables Clause, Inventory and Per Procedure Clause, Restructured
Lease Clause or Relationship Contract Clause of the Borrowing Base. The
Borrower shall also maintain in each Master Lease a statement to the effect
that only the chattel paper original copy of the Equipment schedule, and not
such Master Lease, constitutes chattel paper the possession of which can
perfect a security interest. The Borrower shall eliminate all legends stamped
on any Contract included in any of the Contract Receivables Clause, Inventory
and Per Procedure Clause, Restructured Lease Clause or Relationship Contract
Clause of the Borrowing Base indicating any interests of any Person in such
Contract other than the Agent upon inclusion of such Contract in the Borrowing
Base, and shall endorse each such Contract file and Equipment schedule (each
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such schedule itself a Contract incorporating the terms of a Master Lease),
upon inclusion in the Borrowing Base, with a legend substantially as follows:
"THIS CONTRACT (AND EQUIPMENT SCHEDULE AND MASTER LEASE THE TERMS OF
WHICH IT INCORPORATES) HAS BEEN ASSIGNED TO, IS SUBJECT TO THE
SECURITY INTEREST OF AND IS HELD IN TRUST FOR THE BENEFIT OF FLEET
BANK N.A., AS AGENT, PURSUANT TO THE TERMS AND CONDITIONS OF A
SECURITY AGREEMENT DATED JUNE 14, 1991 AND RELATED DOCUMENTS, AS
AMENDED FROM TIME TO TIME."
Section 6.14 Obligor Insurance Policies. The Borrower
shall deliver, simultaneously with inclusion of any asset in the Borrowing
Base, a written notice to each Obligor or other obligor who is required to
maintain insurance on any asset in the Borrowing Base and to its insurance
policy issuer stating that such asset has been assigned as collateral to the
Agent and that a loss payee endorsement shall be delivered immediately to the
Borrower naming the Agent, the Borrower and the Borrower's assigns as loss
payees as their respective interest may appear.
Section 6.15 Preservation and Perfection of Agent's Liens.
Without limiting any general or specific requirements set forth in this
Agreement or in any of the Security Documents, the Borrower shall take all such
actions as shall be necessary or desirable to maintain the Agent's Lien as a
first priority perfected Lien in the Collateral, subject to no Liens other than
Permitted Liens, including with respect to Equipment the filing (and
continuation) of Financing Statements in all locations in which Collateral is
located naming the Borrower as Debtor and the Agent as secured party and with
respect to Contracts the filing of Financing Statements in all applicable
locations naming the related Obligor as debtor, the Borrower as secured party
and the Agent as assignee.
Section 6.16 Environmental Compliance. The Borrower shall
operate all property owned or leased by it such that no obligation, including a
clean-up obligation, shall arise under any Environmental Law and Regulation,
which obligation would constitute a Lien on any property of any Loan Party;
provided, however, that in the event that any such claim is made or any such
obligation arises, such Loan Party shall, at its own cost and expense,
immediately satisfy such claim or obligation.
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Section 6.17 Management. Each of the chief executive
officer and chief financial officer (currently Xxxxxxx X'Xxxxxx and Xxxxxx
Xxxxxxxxx, respectively) and at least three of the other executive officers of
Borrower (currently Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxxxx Xxxx and Xxx Fear) shall continue in their current offices and shall
perform their current duties, unless a successor satisfactory to the Majority
Banks in their reasonable judgment, as evidenced by a written consent signed by
the Majority Banks, shall have been elected or appointed within 60 days after
any such officer ceases to hold her or his current office and perform her or
his current duties, and thereafter this Section 6.17 shall apply to such
successor.
Section 6.18 Credit Underwriting Standards. The Borrower
shall notify the Agent in writing of any change in the underwriting standards
of the Credit Committee, setting forth in such notice in reasonable detail the
new standards.
ARTICLE 7. NEGATIVE COVENANTS
So long as the Commitments are outstanding, any Loan remains
outstanding, the Borrower is indebted to the Banks or the Agent, the Notes have
not been paid in full or the Obligations have not been fully and completely
performed:
Section 7.1 Indebtedness. The Borrower shall not create,
incur, permit to exist or have outstanding any Indebtedness except:
(a) Indebtedness to the Banks, the Pre-Funding Lender
and the Agent under this Agreement;
(b) taxes, assessments and governmental charges,
non-interest bearing accounts payable, Equipment payables not more than 90 days
past due from the original due date thereof, accrued liabilities and
non-interest bearing deferred liabilities other than for borrowed money (e.g.,
prepaid income, deferred compensation and deferred taxes), in each case
incurred and continuing in the ordinary course of business;
(c) Indebtedness secured by the security interests
referred to in Section 7.2(d) and Capitalized Lease Obligations, in each case
incurred in accordance with the limitations set forth in Section 7.12;
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(d) Subordinated Debt;
(e) the Recourse Debt listed on the attached Schedule
11, and any additional Recourse Debt incurred after the date of the restatement
of this Agreement so long as (i) such Recourse Debt has a term, including all
extensions and renewals, not exceeding one year, (ii) such Recourse Debt
complies with the last sentence of this Section 7.1, (iii) after giving effect
to the incurrence of such Recourse Debt no Default or Event of Default will
have occurred, (iv) the Agent shall have received copies of the documents
providing for such Recourse Debt at least two Business Days before its
incurrence, and (v) such Recourse Debt is either unsecured or is not secured by
any assets subject to the Agent's Lien;
(f) the Non-Recourse Debt and Partial Recourse Debt
listed on the attached Schedule 9 and Non-Recourse Debt and Partial Recourse
Debt hereafter incurred;
(g) the Borrower may guarantee the obligations of any
Person (i) by the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business, (ii) as set forth in the
attached Schedule 12 in respect of guaranties by the Borrower of obligations of
its Affiliates, or (iii) otherwise up to a maximum aggregate obligation of
$3,000,000 (for purposes of this clause, "guarantee" includes any agreement,
whether contingent or otherwise, to assume, endorse, be or become liable for,
purchase, repurchase or otherwise acquire Indebtedness of any other Person or
to purchase, sell or lease, as lessee or lessor, property or services, in any
such case primarily for the purpose of enabling another person to make payment
of Indebtedness or to make any payment (whether as an advance, capital
contribution, purchase of an equity interest or otherwise) to assure a minimum
equity, asset base, working capital or other balance sheet or financial
condition in connection with the Indebtedness of another Person, or to supply
funds to or in any manner invest in another Person in connection with such
Person's Indebtedness); and
(h) the Borrower may issue to DVI and make payments of
principal and interest to DVI on the unsecured promissory note, dated January
30, 1997 a copy of which is attached as Exhibit H (the "Intercompany Note").
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Notwithstanding the foregoing, the Borrower shall not create, incur, permit to
exist or have outstanding any Indebtedness on terms and conditions setting
forth affirmative or negative covenants of the Borrower or any Affiliate or
events of default that are more restrictive than the covenants set forth in
Articles 6 and 7 and the Events of Default, the breach of which could result in
a right of the lender under such Indebtedness to accelerate payment sooner than
the right of acceleration provided to the Agent and the Banks under this
Agreement, other than covenants or defaults under Non-Recourse Debt that permit
acceleration based on defaults under financed leases.
Section 7.2 Liens. The Borrower shall not create, assume
or permit to exist any Lien on any of the properties or assets of the Borrower,
whether now owned or hereafter acquired, except for the following
(collectively, "Permitted Liens"):
(a) only to the extent arising and continuing in the
ordinary course of business:
(i) pledges or deposits by the Borrower under
workmen's compensation laws, unemployment insurance laws, social
security laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment
of Indebtedness of the Borrower) or leases to which the Borrower is a
party as lessee, or deposits to secure public or statutory obligations
of the Borrower or deposits of cash or U.S. Government Bonds to secure
surety, appeal, performance or other similar bonds to which the
Borrower is a party, or deposits as security for contested taxes or
import duties or for the payment of rent,
(ii) Liens imposed by law, such as carriers',
warehousemen's, materialmen's and mechanics' liens, or Liens arising
out of judgments or awards against the Borrower or any Subsidiary with
respect to which the Borrower or any Subsidiary at the time shall
currently be prosecuting an appeal or proceedings for review,
(iii) Liens for taxes not yet subject to penalties
for non-payment and Liens for taxes the payment of which is being
contested as permitted by Section 6.6(a),
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(iv) minor survey exceptions, minor encumbrances,
easements or reservations of, or rights of others for rights of way,
highways and railroad crossings, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties,
(v) Liens incidental to the conduct of the
business of the Borrower or to the ownership of its property that were
not incurred in connection with Indebtedness of the Borrower or any
Subsidiary, including the rights of lessors under capitalized leases,
and
(vi) the rights of lessees under leases of
Equipment, the rights and equities of vendees under conditional sale
agreements of Equipment and the rights of any person claiming under or
through such lessees or vendees,
so long as all of the Liens referred to in this clause (a) do not individually
or in the aggregate materially detract from the value of the properties to
which they relate or materially impair their use in the operation of the
business, taken as a whole, of the Borrower;
(b) Liens incurred only upon compliance with the terms
and conditions of Section 2.29;
(c) the Liens of the Security Documents;
(d) purchase money security interests, conditional sale
arrangements and other similar Liens on motor vehicles and equipment acquired
by the Borrower with the proceeds of the Indebtedness referred to in this
Section 7.2(d) so long as:
(i) the transaction in which such a Lien is
proposed to be created is not then prohibited by this Agreement,
(ii) any such Lien shall attach only to the
property or asset acquired in such transaction and shall not extend to
or cover any other assets or properties of the Borrower, and
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(iii) the Indebtedness secured or covered by any
such Lien shall not exceed the lesser of the cost or fair market value
of the property or asset acquired and shall not be renewed, extended
or prepaid from the proceeds of any borrowing by the Borrower;
(e) Liens granted by the Borrower on Equipment acquired
by it within 90 days of the grant of such Lien so long as the other
requirements of Section 7.2(d) are met;
(f) Liens securing Non-Recourse Debt, Partial Recourse
Debt and Recourse Debt permitted under this Agreement;
(g) in the case of a Lease, the interests of the Lessee
under such Lease and Liens permitted by such Lease of the type set forth in
Section 7.2(a);
(h) in the case of an Equipment Note or CSA, the
interests of the Obligor in the Equipment securing or covered by such Equipment
Note or CSA, Liens permitted by such Equipment Note or CSA of the type set
forth in Section 7.2(a) and any other Lien in the Equipment granted by the
Obligor to another Person so long as such Lien is subordinate to the interests
of the Borrower and the Agent on terms such that the subordinate Lienholder
cannot exercise any remedies prior to payment in full of all of the Obligor's
obligations to the Borrower and, as assigned, the Agent;
(i) in the case of a Third Party Note, the interests of
the Obligor and lessee in the Third Party Lease, Liens permitted by such Third
Party Lease of the type set forth in Section 7.2(a) and any other Lien in the
Equipment granted by the Obligor to another Person so long as such Lien is
subordinate to the interests of the Borrower and the Agent on terms such that
the subordinate Lienholder cannot exercise any remedies prior to payment in
full of all of the Obligor's obligations to the Borrower and, as assigned, the
Agent;
(j) in the case of Equipment sold to the Borrower, with
or without a related Contract, a subordinate interest retained by the seller
upon the sale, on a discounted basis, of such Equipment and Eligible Contract
so long as the purchase agreement between the Borrower and such seller is
assignable to and has been assigned to
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the Agent and the interest of the seller is subordinate on terms such that the
seller cannot exercise any remedies prior to recovery in full of all interests
of the Borrower and, as assigned, the Agent in such Equipment and Eligible
Contract;
(k) Liens on items of Eligible Equipment covered by the
Progress Payments Clause in the form of a purchase money security interest held
by the vendor of such Equipment securing the full payment of the purchase price
of such Equipment, provided that such payment is made and such related purchase
money security interest is discharged upon the delivery of the certificate of
delivery and acceptance by the Lessee under the Lease related to such Equipment
or, if earlier, the due date of such payment in full; and
(l) Liens on Borrower's interest in the
over-collateralization portion of those certain Receivables covered by that
Receivables Purchase Agreement, dated as of November 30, 1994, among the
Borrower, as Seller, Falcon Asset Securitization Corporation, as Purchaser, and
the first National Bank of Chicago, as Agent, as the foregoing capitalized
terms are defined in that Agreement.
Section 7.3 Mergers, Acquisitions. The Borrower shall
not merge or consolidate with any Person (whether or not the Borrower is the
surviving entity) or become a general partner of any partnership or acquire all
or substantially all of the assets or any of the capital stock of any Person or
acquire any portion of the assets in the form of a lease portfolio of any
Person.
Section 7.4 Redemptions; Distributions. (a) The
Borrower shall not purchase, redeem, retire or otherwise acquire, directly or
indirectly, or make any sinking fund payments with respect to, any shares of
any class of stock of the Borrower now or hereafter outstanding, or set apart
any sum for any such purpose.
(b) The Borrower shall not declare or pay any dividends
or make any distribution of any kind on the Borrower's outstanding stock other
than dividends or distributions payable solely in shares of the Borrower's
common stock, or set aside any sum for any such purpose (each, a "Restricted
Dividend Action"), except that the Borrower may take a Restricted Dividend
Action if (i) no Default or Event of Default shall exist at the time of the
taking of such Restricted Dividend Action or would exist
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after giving effect thereto and (ii) (A) in the case of a Restricted Dividend
Action for the sole purpose of enabling DVI (the sole shareholder of the
Borrower) to make a scheduled interest or scheduled principal payment on
subordinated indebtedness of DVI (including the 9 1/8% Subordinated Notes due
2002 issued by DVI pursuant to that certain Note Purchase Agreement among DVI,
Inc. and certain Purchasers dated as of June 21, 1994) which indebtedness is in
an aggregate principal amount not greater than $22,000,000, and the incurrence
of which shall have occurred by July 31, 1994 and shall have been expressly
approved in advance in writing by the Agent alone (the "Parent Subordinated
Debt"), (1) all of the proceeds of the Parent Subordinated Debt (net of
customary expenses relating to the closing of the issuance of such Parent
Subordinated Debt) shall promptly upon the receipt by DVI of such proceeds be
contributed as capital to the Borrower, except that a portion of such proceeds
not exceeding Three Million ($3,000,000) Dollars may be contributed to the
capital of or loaned to DVI Inc.'s subsidiary, DVI Business Credit, Inc. (f/k/a
A/R Advantage, Inc., (2) such Restricted Dividend Action shall be taken on the
date of, and shall be in the amount of, such scheduled interest payment or
scheduled principal payment, as such payments are scheduled (not by
acceleration, redemption or otherwise) as shown in the above-described Note
Purchase Agreement as in effect on the date of the approval thereof granted by
the Agent as aforesaid, (3) the proceeds of such Restricted Dividend Action
shall be used by DVI solely for the concurrent payment of such scheduled
interest payment or scheduled principal payment in full on the due date
thereof, and shall not in any event be used for late payment or prepayment
thereof (provided that the term "late payment" in respect of interest shall be
deemed to exclude any particular interest payment made up to seven (7) days
later than the scheduled due date thereof if such lateness results exclusively
from administrative delay, but any such "administrative" late payments shall be
permitted only if no Default or Event of Default (each as defined in the
above-described Note Purchase Agreement) then exists under the Parent
Subordinated Debt (or if an Event of Default or Default exists thereunder
solely due to the lateness of such payment, such Event of Default or Default
has been waived) and if all conditions of this subsection (b) shall then have
been complied with in each case as of the actual proposed payment date), (4)
the making of such scheduled interest payment or scheduled principal payment
shall not then be prohibited by the terms of the Parent Subordinated Debt, (5)
the aggregate amount of such Restricted Dividend Action and all prior such
Restricted Dividend Actions in a single calendar year in respect of interest
payments relating to the Parent Subordinated Debt shall not exceed $1,825,000
in respect of the above-described 9
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1/8% Subordinated Notes due 2002 and shall not exceed, in respect of any other
Parent Subordinated Debt approved in advance in writing by the Agent, an amount
equal to the difference between $2,000,000 and the actual sum of the annual
scheduled interest payments due under the above-described 9 1/8% Subordinated
Notes due 2002 at the rate set forth therein and (B) in the case of a
Restricted Dividend Action other than a Restricted Dividend Action referred to
in clause (A) above (i.e., relating to matters other than Parent Subordinated
Debt), the aggregate amount of such other Restricted Dividend Action and all
prior such other Restricted Dividend Actions plus the aggregate cash investment
in all Restricted Investments shall not exceed $1,600,000, provided that not
less than five (5) Business Days prior to any such proposed Restricted Dividend
Action the Agent shall have received a certificate executed by the president or
chief executive officer of the Borrower certifying that: no Default or Event of
Default then exists hereunder and no default under any other agreement to which
the Borrower is a party or by which it is bound or by which any of its
properties or assets taken as a whole may be materially affected; the
representations and warranties contained in the Loan Agreement and other Loan
Documents are true and with the same effect as though made at the time of the
proposed Restricted Dividend Action (except for changes which were made in the
ordinary course of business, not material and not prohibited by the Loan
Documents); and the Borrower and the other Loan Parties shall have complied and
shall then be in compliance with all the terms, covenants and conditions of
this Agreement and the other Loan Documents; and such certification shall be
accompanied by a detailed calculation indicating compliance with the covenants
set forth in Sections 6.9, 7.4, 7.8, 7.12 and 7.13.
Section 7.5 Stock Issuance. The Borrower shall not issue
any additional shares or any right or option to acquire any shares, or any
security convertible into any shares, of the capital stock of the Borrower
except in connection with stock dividends as permitted under Section 7.4(b).
Section 7.6 Changes in Business. The Borrower shall not
(a) make any material change in its business or in the nature of its operation,
(b) engage in any business other than the purchase, leasing or financing of the
purchase of medical, diagnostic and therapeutic equipment (including
fee-for-service and joint venture arrangements under which the Borrower's
revenues will be dependent on utilization levels of the Equipment) or financial
advisory or consulting services relating to the foregoing, (c) liquidate or
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dissolve itself (or suffer any liquidation or dissolution), (d) convey, sell,
lease, assign, transfer or otherwise dispose of any of its property, assets or
business except in the ordinary course of business and for a fair
consideration, (e) dispose of any shares of its stock or any Indebtedness,
whether now owned or hereafter acquired, or (f) discount, sell, pledge,
hypothecate or otherwise dispose of any such stock or accounts receivable;
provided that the proceeds of any sale or lease of Equipment which results in
an obligation to make a prepayment under Section 2.8 shall be applied as and
within the period set forth in such Section 2.8.
Section 7.7 Prepayments. The Borrower shall not make any
voluntary or optional prepayment of any amounts outstanding under any
Indebtedness for borrowed money that is permitted to be incurred hereunder.
Section 7.8 Investments. The Borrower shall not make, or
suffer to exist, any Investment in any Person including any shareholder,
director, officer or employee of the Borrower except:
(a) Investments in:
(i) obligations issued or guaranteed by the
United States of America,
(ii) certificates of deposit, bankers acceptances
and other money market instruments issued by any bank or trust company
organized under the laws of the United States of America or any State
thereof and having capital and surplus in an aggregate amount not less
than $250,000,000,
(iii) open market commercial paper bearing the
highest credit rating issued by Standard & Poor's Corporation or by
another nationally recognized credit rating firm,
(iv) repurchase agreements entered into with any
bank or trust company organized under the laws of the United States of
America or any State thereof and having capital and surplus in an
aggregate amount not less than One Hundred Million ($100,000,000)
Dollars relating to United States of America government obligations,
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(v) shares of any money market fund having net
assets of not less than $100,000,000, and
(vi) interest rate swaps or other derivative
agreements limiting interest rate exposure on the Loans and the
Pre-Funding Loans entered into with the Agent or any Bank,
in the case of clause (i) through (v) maturing or being due or payable in full
not more than 180 days after the Borrower's acquisition thereof;
(b) Contracts entered into with Obligors in the ordinary
course of the Borrower's business;
(c) advances to DBC evidenced by the DBC Promissory Note
in an amount not to exceed the amounts set forth in the definition of "DBC
Financed Amount";
(d) the Investments listed in the attached Schedule 13;
and
(e) other Investments (the "Restricted Investments") so
long as (i) no Default or Event of Default shall exist at the time of the
making of such Restricted Investment or would exist after giving effect to such
Restricted Investment, and (ii) the aggregate cash investment in all Restricted
Investments plus the aggregate amount of all Restricted Dividend Actions other
than those referred to in Section 7.4(b)(ii)(A) shall not exceed $1,600,000;
provided, however, that (A) the Borrower shall not make, nor suffer to exist,
any Investment otherwise permitted under this Section 7.8(e) if the intent of
such Investment is directly or indirectly to enable DVI to make a payment on
any Parent Subordinated Debt, it being the intent of the parties hereto that
the terms of Section 7.4(b)(ii)(A) exclusively shall govern all distributions
and payments of any type by the Borrower relating directly or indirectly to the
Parent Subordinated Debt.
Section 7.9 Fiscal Year. The Borrower shall not change
its fiscal year.
Section 7.10 ERISA Obligations. (a) The Borrower shall
not be or become obligated to the PBGC other than in respect of annual premium
payments in excess of $50,000.
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(b) The Borrower shall not be or become obligated for
excise or other penalty taxes provided for in Section 4975 the Code in excess
of $50,000.
Section 7.11 Amendment of Documents. (a) The Borrower
shall not modify, amend, supplement or terminate, or agree to modify, amend,
supplement or terminate, its certificate of incorporation or by-laws, the
non-recourse provisions of any Non-Recourse Debt or any Partial Recourse Debt
or the Intercompany Note. In addition, the Borrower shall not permit the
Guarantor to modify, amend, supplement or terminate, or agree to modify, amend,
supplement or terminate, the terms of any Parent Subordinated Debt in a manner
that would result in an Event of Default under Section 8.12.
(b) The Borrower shall not permit DBC to modify, amend,
supplement or terminate, or agree to modify, amend, supplement or terminate,
the DBC Financing Agreement relating to any Eligible Healthcare Receivable
included in the Borrowing Base so as to adversely affect the Lien in such
Eligible Healthcare Receivable granted or assigned to the Agent.
Section 7.12 Capital Expenditures. The Borrower shall not
make or be or become obligated to make Capital Expenditures in the aggregate
for the Borrower and its Subsidiaries in excess of $5,000,000 in any single
fiscal year.
Section 7.13 Rental Obligations. The Borrower shall not
enter into, or permit to remain in effect, any lease as lessee (other than
Capitalized Leases which are governed by Section 7.12) if, after giving effect
to such lease, the aggregate amount of all rentals and other obligations,
including all percentage rents and additional rent, due from the Borrower in
any single calendar year would exceed $250,000.
Section 7.14 Transactions with Affiliates. Except as
expressly permitted by this Agreement, the Borrower shall not directly or
indirectly (a) make any Investment in an Affiliate except Restricted
Investments subject to Section 7.8(c), (b) transfer, sell, lease, assign or
otherwise dispose of any assets to an Affiliate, (c) merge into or consolidate
with or purchase or acquire assets from an Affiliate, or (d) enter into any
other transaction directly or indirectly with or for the benefit of any
Affiliate (including
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guarantees and assumptions of obligations of an Affiliate); provided, however,
that (i) payments on Investments expressly permitted by Section 7.8 may be
made, (ii) any Affiliate who is an individual may serve as an employee or
director of the Borrower and receive reasonable compensation for his services
in such capacity, (iii) the Borrower may enter into any transaction with an
Affiliate providing for the leasing of property, the rendering or receipt of
services or the purchase or sale of product, inventory and other assets in the
ordinary course of business if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Borrower as the
monetary or business consideration which would obtain in a comparable arm's
length transaction with a Person not an Affiliate, and (iv) the Borrower may
sell working capital loans made to customers and secured by Healthcare
Receivables to any Affiliate so long as the purchase price paid by such
Affiliate is substantially the same as the purchase price which would be
obtained in a comparable arm's length transaction with a Person not an
Affiliate.
Section 7.15 Changes in Calculation of Net Book Value.
The Borrower shall not change the basis on which DVI or the Borrower calculates
Net Book Value, depreciation policy, residual value estimations, expense
capitalization or other factors significantly affecting the calculation of Net
Book Value or Invoiced Cost with respect to Equipment unless such change is
required for compliance with GAAP.
Section 7.16 Non-DVI Generated Contracts. Permit the
aggregate contract receivables in the form of rental, installment or debt
service payments due under all Eligible Contracts in the Borrowing Base of the
Borrower derived from transactions originated other than by the Borrower when
such transactions commenced to exceed 15% at any one time of the total such
contract receivables under all Eligible Contracts in the Borrowing Base, except
that any individual Contracts approved by the Credit Committee in accordance
with criteria applicable to Borrower-originated Contracts will be excluded from
this limitation so long as such Contract has been individually approved or
disapproved by the Credit Committee.
ARTICLE 8. EVENTS OF DEFAULT
If any one or more of the following events ("Events of
Default") shall occur and be continuing, the Commitments shall terminate and
the entire unpaid balance of the
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principal of and interest on the Notes and the Pre-Funding Note outstanding and
all other obligations and Indebtedness of the Borrower to the Banks, the
Pre-Funding Lender and the Agent arising under the Loan Documents shall
immediately become due and payable upon written notice to that effect given to
the Borrower by the Agent (except that in the case of the occurrence of any
Event of Default described in Section 8.6 no such notice shall be required),
without presentment or demand for payment, notice of non-payment, protest or
further notice or demand of any kind, all of which are expressly waived by the
Borrower:
Section 8.1 Payments. Failure to make any payment or
mandatory prepayment of principal or interest upon any Notes or the Pre-Funding
Note or to make any payment of any Fee when due; or,
Section 8.2 Covenants. Failure to perform or observe any
of the agreements of the Borrower contained in Section 6.9 or Article 7; or,
Section 8.3 Other Covenants. (a) Failure by the
Borrower to perform or observe any other term, condition or covenant of any
Loan Documents to which it is a party, including this Agreement, the Notes, the
Pre-Funding Note or any of the Security Documents, which shall remain
unremedied for a period of 30 days after notice thereof shall have been given
to the Borrower by the Agent; or
(b) Failure by any Loan Party to perform or observe any
term, condition or covenant of any Loan Documents to which it is a party,
including the Security Documents and the Guaranty, which shall remain
unremedied for a period of 30 days after notice thereof shall have been given
to the Borrower by the Agent; or
Section 8.4 Other Defaults. (a) Failure to perform or
observe any term, condition or covenant of any bond, note, debenture, loan
agreement, indenture, guaranty, trust agreement, mortgage or similar instrument
to which the Borrower is a party or by which it is bound or by which any of its
properties or assets may be affected, or failure by DVI to perform or observe
any term, condition or covenant of the Parent Subordinated Debt or the Parent
Senior Notes (for purposes of this Section 8.4, each of the foregoing a "Debt
Instrument") so that, as a result of any such failure to perform, Indebtedness
in an aggregate amount at least equal to $3,000,000 included therein or
secured or covered
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thereby may be declared or may become due and payable prior to the date on
which such Indebtedness would otherwise become due and payable; or
(b) Any event or condition referred to in any Debt
Instrument shall occur or fail to occur so that, as a result, Indebtedness in
an aggregate amount at least equal to $3,000,000 included in or secured or
covered by such Debt Instrument may be declared or may become due and payable
prior to the date on which such Indebtedness would otherwise become due and
payable; or,
(c) Failure to pay any Indebtedness for borrowed money
due at final maturity or pursuant to demand under any Debt Instrument.
Section 8.5 Representations and Warranties. Any
representation or warranty made in writing to the Banks or the Agent in any of
the Loan Documents or in connection with the making of the Loans, or any
certificate, statement or report made or delivered in compliance with this
Agreement, shall have been false or misleading in any material respect when
made or delivered; or,
Section 8.6 Bankruptcy. (a) The Borrower, DVI or DBC
shall make an assignment for the benefit of creditors, file a petition in
bankruptcy, be adjudicated insolvent, petition or apply to any tribunal for the
appointment of a receiver, custodian, or any trustee for it or a substantial
part of its assets, or shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect, or the
Borrower, DVI or DBC shall take any corporate action to authorize any of the
foregoing actions; or there shall have been filed any such petition or
application, or any such proceeding shall have been commenced against it, which
remains undismissed for a period of 60 days or more, or any order for relief
shall be entered in any such proceeding, or the Borrower, DVI or DBC by any act
or omission shall indicate its consent to, approval of or acquiescence in any
such petition, application or proceeding or the appointment of a custodian,
receiver or any trustee for it or any substantial part of any of its
properties, or shall suffer any custodianship, receivership or trusteeship to
continue undischarged for a period of sixty (60) days or more; or,
(b) The Borrower, DVI or DBC shall generally not pay its debts as
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such debts become due; or,
(c) The Borrower, DVI or DBC shall have concealed,
removed or permitted to be concealed or removed any part of its property with
intent to hinder, delay or defraud its creditors or any of them, shall have
made or suffered a transfer of any of its property which may be fraudulent
under any bankruptcy, fraudulent conveyance or similar law, shall have made any
transfer of its property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid during any period while
either the Borrower, DVI or DBC is insolvent, or shall have suffered or
permitted, while insolvent, any creditor to obtain a Lien upon any of its
property through legal proceedings or distraint which is not vacated within 30
days from the date thereof; or,
Section 8.7 Judgments. Any judgment against the Borrower
or DVI or any attachment, levy or execution against any of its properties for
any amount in excess of $1,000,000 shall remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of 30 days or more; or,
Section 8.8 ERISA. (a) With respect to the Borrower or
DVI, the termination of any Plan or the institution by the PBGC of proceedings
for the involuntary termination of any Plan, in either case by reason of, or
which results or could result in, a "material accumulated funding deficiency"
under Section 412 of the Code; or,
(b) Failure by the Borrower or DVI to make required
contributions in accordance with the applicable provisions of ERISA to each of
the Plans hereafter established or assumed by it; or,
Section 8.9 Ownership of Stock of Borrower. (a) DVI
shall at any time own, beneficially and of record, less than 100% of all of the
issued and outstanding shares of capital stock of the Borrower having ordinary
voting rights for the election of directors; or,
(b) The Pritzker family, Xxxxxx Xxxx and members of his
immediate family, on a combined basis, shall at any time own, beneficially and
of record, less than the greater of (i) 20% of all of the issued and
outstanding shares of capital stock of DVI having ordinary voting rights for
the election of directors, or (ii) such greater percentage as is necessary so
that they constitute the single largest block of stockholders of such
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shares.
Section 8.10 Liens. Any of the Liens created and granted
to the Agent under the Security Documents shall fail to be valid, perfected
first priority Liens subject to no prior or equal Liens other than Permitted
Liens; or,
Section 8.11 Guaranty. DVI shall take any action to
rescind or revoke the Guaranty, or any court of law shall have found the
Guaranty to be invalid or unenforceable, or DBC shall take any action to
rescind or revoke the DBC Guaranty, or any court of law shall have found the
DBC Guaranty to be invalid or unenforceable; or,
Section 8.12 Parent Subordinated Debt. DVI shall modify,
amend, or supplement or agree to modify, amend or supplement the terms of the
Parent Subordinated Debt relating to or affecting subordination or any of the
repayment terms (including principal amount, interest rate, amortization
schedule, payment dates or maturity date), or permit or agree to permit the
Parent Subordinated Debt to be a secured obligation; or,
Section 8.13 Warehouse Loan Transactions. At any time
that Indebtedness is outstanding under a Warehousing Loan Agreement:
(a) delivery by any Warehousing Lender of any notice (i)
seeking the mandatory prepayment by the Borrower of all or a substantial
portion of the outstanding Indebtedness under such Warehousing Loan Agreement,
(ii) asserting that a material adverse change has occurred in the Borrower's
business or financial condition, (iii) stating that an "event of default" had
occurred and was continuing under such Warehousing Loan Agreement, or (iv)
seeking to terminate such Warehousing Loan Agreement; or
(b) failure by any Warehousing Lender to extend the
Indebtedness outstanding under such Warehousing Loan Agreement if any
Indebtedness shall remain outstanding after the termination or maturity date;
or
(c) such Warehousing Loan Agreement or any agreements,
instruments or documents executed or delivered in connection therewith or
pursuant thereto shall have been amended or any provision of any thereof shall
have been waived or forgiven or any
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indulgence thereunder shall have been granted, in each case without the prior
written consent of the Majority Banks, other than any extension of the maturity
date or termination date; or
(d) any original master lease of the Borrower shall have
been received or for any reason held by the Warehousing Lender in connection
with such Warehousing Loan Agreement or any Securitization or other transaction
derived therefrom (which is in any event subject to the prior written consent
of the Majority Banks) or by a custodian for a Warehousing Lender; or
(e) any "Default", "Event of Default" or their
equivalent shall occur under such Warehousing Loan Agreement without regard to
the giving of any notice thereunder or lapse of time or both.
ARTICLE 9. THE AGENT
Section 9.1 Appointment, Powers and Immunities. Each
Bank and each Pre-Funding Lender hereby irrevocably appoints and authorizes the
Agent to act as its agent under the Loan Documents with such powers as are
specifically delegated to the Agent by the terms of the Loan Documents,
together with such other powers as are reasonably incidental to such delegated
powers. The Agent shall have no duties or responsibilities except those
expressly set forth in the Loan Documents and shall not be a trustee for any
Bank. The Agent shall not be responsible to the Banks (a) for any recitals,
statements, representations or warranties contained in the Loan Documents, in
any certificate or other document referred to or provided for in, or received
by any of them under, the Loan Documents, (b) for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Loan Documents
or any other document referred to or provided for in the Loan Documents, (c)
for the collectibility of the Loans, (d) for the validity, effectiveness or
value of any interest or security covered by the Security Documents, (e) for
the value of any Collateral, (f) for the validity or effectiveness of any
assignment, mortgage, pledge, security agreement, financing statement, document
or instrument or for the filing, recording, re-filing, continuing or
re-recording of any thereof, or (g) for any failure by the Borrower or any
other Loan Party to perform any of its obligations under the Loan Documents,
except that the Agent shall undertake to file
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continuation statements for the Financing Statements filed naming the Agent as
secured party. In all its actions and duties, the Agent may employ agents and
attorneys-in-fact and shall not be answerable, except as to money or securities
received by it or its authorized agents, for the negligence or misconduct of
any such agents or attorneys-in-fact selected by it with reasonable care.
Neither the Agent nor any of its directors, officers, employees or agents shall
be liable or responsible for any action taken or omitted to be taken by it or
them under the Loan Documents or in connection with the Loan Documents except
for its or their own gross negligence or willful misconduct.
Section 9.2 Reliance by Agent. The Agent shall be
entitled to rely upon any certification, notice or other communication
(including by telephone, telex, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper
person or persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. As to any matters not
expressly provided for by the Loan Documents, the Agent shall in all cases be
fully protected in acting, or in refraining from acting, under the Loan
Documents in accordance with instructions signed by the Majority Banks, and
such instructions of the Majority Banks or other number of Banks as aforesaid
and any action taken or failure to act pursuant thereto shall be binding on all
of the Banks.
Section 9.3 Events of Default. The Agent shall not be
deemed to have knowledge of the occurrence of a Default (other than the
non-payment of principal of or interest on Loans) unless the Agent has received
notice from a Bank or the Borrower specifying such Default and stating that
such notice is a "Notice of Default". In the event that the Agent receives
such a notice of the occurrence of a Default, the Agent shall give notice
thereof to the Banks (and shall give each Bank notice of each such
non-payment). Subject to Section 9.7, the Agent shall take such action with
respect to such Default as shall be directed by the Majority Banks.
Section 9.4 Rights as a Bank. With respect to its
Commitments and the Loans made by it, the Agent in its capacity as a Bank shall
have the same rights and powers as any other Bank and may exercise the same as
though it were not acting as the Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to and
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generally engage in any kind of banking, trust or other business with the
Borrower or its Affiliates as if it were not acting as the Agent, and the Agent
may accept fees and other consideration from the Borrower or its Affiliates for
services in connection with any of the Loan Documents or otherwise without
having to account for the same to the Banks.
Section 9.5 Indemnification. The Banks shall indemnify
the Agent (to the extent not reimbursed by the Borrower under Sections 10.1 and
10.2) ratably in accordance with the aggregate principal amount of the Loans
made by the Banks (or, if no Loans are at the time outstanding, ratably in
accordance with their respective Commitments) for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of (a) the Loan Documents, (b) any other documents contemplated by or referred
to in the Loan Documents, (c) the transactions contemplated by or referred to
in the Loan Documents (including the costs and expenses which the Borrower is
obligated to pay under Sections 10.1 and 10.2 but excluding, unless a Default
has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties under the Loan Documents), or
(d) the enforcement of any of the terms of the Loan Documents or of any other
documents, provided that no Bank shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
Section 9.6 Non-Reliance on Agent and other Banks. (a)
Each Bank agrees that it has, independently and without reliance on the Agent
or any other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents.
(b) At the request of any Bank, Fleet shall provide it
with copies of any audit undertaken by it under this Agreement, and each Bank
acknowledges that any statements, written or oral, as to the financial
condition or creditworthiness of the Borrower, the value or composition of the
Collateral or any related matters made by the Borrower or Fleet in anticipation
of the restatement of this Agreement or made on or after
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the date of such restatement, including any audits or reviews of Borrowing Base
Reports and Supporting Documents, are and shall be based on documents and
material made available to Fleet by the Borrower and Persons affiliated with it
or acting on its behalf and, accordingly, the accuracy, completeness and
thoroughness of such documents and materials and the conclusions drawn
therefrom are the sole responsibility of the Borrower and persons acting on its
behalf. Any past or future review of these materials was and shall be
undertaken by Fleet for its own benefit and internal use as a Bank, and any
characterization of or conclusions drawn from such materials were, are or shall
be shared with other Banks solely as a courtesy. Fleet disclaims any
responsibility or liability, express or implied, for the data set forth in, any
characterization of or any conclusions drawn such data as to the financial
condition or credit analysis of the Borrower or any other Loan Party, the value
or composition of the Collateral and any appraisal of it or any other matter.
(c) The Agent shall not be required to keep itself
informed as to the performance or observance by the Borrower of the Loan
Documents or any other document referred to or provided for in the Loan
Documents, or to inspect the properties or books of the Borrower. Except for
notices, reports and other documents and information expressly required to be
furnished to the Banks by the Agent under the Loan Documents, the Agent shall
not have any duty or responsibility to provide any Bank with any credit or
other information concerning the affairs, financial condition or business of
the Borrower which may come into the possession of the Agent or any of its
Affiliates.
Section 9.7 Failure to Act. Except for action expressly
required of the Agent under the Loan Documents, the Agent shall in all cases be
fully justified in failing or refusing to act under the Loan Documents unless
it shall be indemnified to its satisfaction by the Banks against any and all
liabilities and expenses that may be incurred by it by reason of taking or
continuing to take any such action.
Section 9.8 Resignation or Removal of Agent. Subject to
the appointment and acceptance of a successor Agent as provided below, the
Agent may resign at any time by giving not less than 10 days prior written
notice to the Banks and the Borrower, and the Agent may be removed at any time
with or without cause by the Majority Banks. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a successor Agent.
If no successor Agent is appointed by the Majority Banks and accepts
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such appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, after consultation with the
Borrower, appoint a successor Agent which shall be one of the Banks. Upon the
acceptance of any appointment as Agent under the Loan Documents by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations the Loan
Documents. The Borrower, the Banks and the retiring Agent shall, at the
Borrower's expenses, thereupon execute, deliver and file Financing Statements
reflecting such change. After any retiring Agent's resignation or removal as
Agent, the provisions of this Article 9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent.
Section 9.9 Sharing of Collateral and Payments. In the
event that at any time any Bank shall obtain payment in respect of a Note or
interest thereon, or receive any collateral in respect thereof, whether
voluntarily or involuntarily, through the exercise of a right of banker's lien,
set-off or counterclaim against the Borrower or otherwise, in a greater
proportion than any such payment obtained by any other Bank in respect of the
corresponding Note held by it or interest thereon, then the Bank so receiving
such greater proportionate payment shall purchase for cash from the other Bank
or Banks such portion of each such other Bank's or Banks' Loan, or shall
provide such other Banks with the benefits of any such collateral or the
proceeds thereof, as shall be necessary to cause such Bank receiving the
proportionate over-payment to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Banks, each of which shall have
a Lien on its ratable portion of the amount described hereinafter obtained from
Borrower; provided, however, that if all or any portion of such excess payment
or benefits is thereafter recovered from the Bank which received the
proportionate over-payment, such purchase shall be rescinded and the purchase
price and benefits returned to the extent of such recovery, but without
interest.
ARTICLE 10. MISCELLANEOUS PROVISIONS
Section 10.1 Fees and Expenses; Indemnity. The Borrower
will promptly pay all costs of the Agent, the Pre-Funding Lenders and the Banks
in preparing the Loan
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Documents, including this restated Agreement, and all costs and expenses of the
issue of the Notes and the Pre-Funding Notes and of the Borrower's and the
other Loan Parties' performance of and compliance with all agreements and
conditions contained herein on its part to be performed or complied with
(including all costs of filing or recording any assignments, mortgages,
financing statements and other documents), and the reasonable fees and expenses
and disbursements of special counsel to the Agent, the Pre-Funding Lenders and
the Banks in connection with the preparation, execution, delivery,
administration, interpretation and enforcement of the Loan Documents, including
this restated Agreement, and all other agreements, instruments and documents
relating to this transaction, the consummation of the transactions contemplated
by all such documents, the preservation of all rights of the Agent, the
Pre-Funding Lenders and the Banks, the negotiation, preparation, execution and
delivery of any amendment, modification or supplement of or to, or any consent
or waiver under, any such document (or any such instrument which is proposed
but not executed and delivered) and with any claim or action threatened, made
or brought against the Agent, any Pre-Funding Lender or any of the Banks
arising out of or relating to any extent to the Loan Documents or the
transactions contemplated by the Loan Documents. In addition, the Borrower
shall promptly pay all costs and expenses (including reasonable fees and
disbursements of counsel) suffered or incurred by the Agent, the Pre-Funding
Lenders or the Banks in connection with their respective enforcement of the
payment of the Notes or the Pre-Funding Notes held by each of them or any other
sum due to them under the Loan Documents or any of its other rights under the
Loan Documents. In addition to the foregoing, the Borrower shall indemnify the
Agent, the Pre-Funding Lenders and the Banks against, and hold each of them
harmless from, any loss, liabilities, damages, claims, costs and expenses
(including reasonable attorneys' fees and disbursements) suffered or incurred
by it arising out of, resulting from or in any manner connected with the
execution, delivery and performance of each of the Loan Documents, the Loans
and any and all transactions related to or consummated in connection with the
Loans, including losses, liabilities, damages, claims, costs and expenses
suffered by the Agent, the Pre-Funding Lenders and the Banks in investigating,
preparing for or defending against, or providing evidence, producing documents
or taking any other action in respect of, any commenced or threatened
litigation, administrative proceeding or investigation under any Applicable Law
that is alleged to arise out of or is based upon (a) any untrue statement or
alleged untrue statement of any material fact of the Borrower and its
Affiliates in any document or schedule filed with the SEC or any other
governmental
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body, (b) any omission or alleged omission to state any material fact required
to be stated in such document or schedule, or necessary to make the statements
made therein, in light of the circumstances under which made, not misleading,
(c) any acts, practices or omission or alleged acts, practices or omissions of
the Borrower or its agents related to the making of any acquisition, purchase
of shares or assets pursuant thereto, financing of such purchases or the
consummation of any other transactions contemplated by any such acquisitions
which are alleged to be in violation of any federal securities law or of any
other statute, regulation or other law of any jurisdiction applicable to the
making of any such acquisition, the purchase of shares or assets pursuant
thereto, the financing of such purchases or the consummation of the other
transactions contemplated by any such acquisition, or (d) any withdrawals,
termination or cancellation of any such proposed acquisition for any reason
whatsoever. The indemnity set forth in this Section 10.1 shall be in addition
to any other obligations or liabilities of the Borrower to the Agent, the
Pre-Funding Lenders and the Banks under this Agreement, at common law or
otherwise. The provisions of this Section 10.1 shall survive the payment of
the Notes and the Pre-Funding Notes and the termination of this Agreement.
Section 10.2 Taxes. If under any law in effect on the
date of the closing of any Loan or under any retroactive provision of any law
subsequently enacted a Federal, state or local tax is determined to be payable
in respect of the issuance of any of the Notes or the Pre-Funding Notes, or in
connection with the filing or recording of any assignments, mortgages,
financing statements or other documents (whether measured by the amount of
indebtedness secured or otherwise) as contemplated by this Agreement, then the
Borrower shall pay any such tax and all interest and penalties, if any, and
shall indemnify the Banks, the Pre-Funding Lenders and the Agent against and
save each of them harmless from any loss or damage resulting from or arising
out of the nonpayment or delay in payment of any such tax. If any such tax or
taxes shall be assessed or levied against any Bank, any Pre-Funding Lender or
any other holder of its Note or Pre-Funding Note, such Bank, Pre-Funding
Lender or such other holder, as the case may be, may notify the Borrower and
make immediate payment of such tax together with interest or penalties in
connection with such tax, and shall thereupon be entitled to and shall receive
immediate reimbursement for such tax from the Borrower.
Section 10.3 No Set-Off of Payments. All payments under
this Agreement, the Note and the Pre-Funding Notes shall be made without
set-off or counterclaim and in
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such amounts as may be necessary in order that such payments will result in the
Banks, Pre-Funding Lenders or Agent, as the case may be, receiving the amounts
specified to be paid under this Agreement, the Notes and the Pre-Funding Notes
after withholding for or on account of (a) any present or future taxes, levies,
imposts, duties or other similar charges of whatever nature imposed by any
government or any political subdivision or taxing authority, other than any tax
(except those referred to in clause (b) below) on or measured by the net income
of the respective Bank, Pre-Funding Lender or the Agent to which such payment
is due pursuant to applicable federal, state and local income tax laws, and (b)
deduction of amounts equal to the taxes on or measured by the net income of
such Bank, such Pre-Funding Lender or the Agent payable with respect to the
amount by which the payments required to be made under this sentence exceed the
amounts specified to be paid in this Agreement, the Notes and the Pre-Funding
Notes.
Section 10.4 Survival of Agreements. All agreements,
representations and warranties made in the Loan Documents shall survive the
delivery and termination of this Agreement and the issuance and payment in full
of the Notes and the Pre-Funding Notes.
Section 10.5 Lien on and Set-off of Deposits. As security
for the due payment and performance of the Obligations, the Borrower hereby
grants to the Agent for the ratable benefit of the Banks and the Pre-Funding
Lenders a Lien on any and all deposits or other sums at any time credited by or
due from the Agent or any Bank to the Borrower, whether in regular or special
depository accounts or otherwise, and any and all monies, securities and other
property of the Borrower, and the proceeds thereof, now or hereinafter held or
received by or in transit to any Bank or the Agent from or for the Borrower,
whether for safekeeping, custody, pledge, transmission, collection or
otherwise, and any such deposits, sums, monies, securities and other property
may at any time after the occurrence and during the continuance of any Event of
Default be set-off, appropriated and applied by any Bank or the Agent against
any of the Obligations, whether or not any of such Obligations is then due or
is secured by any collateral or, if it is so secured, whether or not the
collateral held by the Agent is considered to be adequate.
Section 10.6 Modifications, Consents and Waivers; Entire
Agreement. (a) No modification, amendment or waiver of any provision of the
Loan Documents, any other agreement, instrument and document delivered pursuant
to the Loan Documents or
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consent to any departure by the Borrower from any of the terms or conditions of
the Loan Documents shall be effective unless it is in writing and signed by the
parties to such Loan Document or other agreement, instrument or document or, in
the case of this Agreement, by the Agent and by the requisite Banks as set
forth in Section 10.6(b). Any such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No consent to or
demand on the Borrower in any case shall, of itself, entitle it to any other or
further notice or demand in similar or other circumstances.
(b) The provisions of this Agreement may be modified,
amended or waived, or a consent given with respect to such provisions, if
signed by the Agent and the Majority Banks, except that:
(i) any modification, amendment, waiver or
consent that has the effect of changing or waiving the Commitment of
any Bank, the principal amount of the Loans to be borrowed or repaid,
the maturity of any Loans, the dates for and the amount of repayment
of any Loans, the interest rate or rates applicable to any Loans, a
material provision of Section 1.2 (unless the modification, amendment,
waiver or consent to Section 1.2 is administrative in nature) and the
provisions of this Section 10.6(b) shall require the agreement of the
Agent and all of the Banks;
(ii) any modification, amendment, waiver or
consent with respect to the Pre-Funding Loans shall require the
agreement of the Agent and the Pre-Funding Lender;
(iii) any modification or amendment that has the
effect of increasing the Total Commitment (but not the Commitment of
any Bank) shall require the agreement of the Agent and the
Super-Majority Banks; and
(iv) any modification, amendment, waiver or
consent with respect to the provisions of Section 1.2 shall require
the agreement of the Agent and all of the Banks;
(v) any modification, amendment, waiver or
consent with respect to the provisions of Articles 1 and 2 not covered
by the preceding Sections 10.6(b)(i) through (iv) shall require the
agreement of the Agent and the
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Super-Majority Banks; and
(vi) any waiver with respect to the perfection of
the Agent's Lien on specific motor vehicles shall require the
agreement of only the Agent.
(c) The Loan Documents embody the entire agreement and
understanding among the Banks, the Pre-Funding Lender, the Agent and the
Borrower and supersede all prior agreements and understandings relating to the
subject matter of the Loan Documents. Without limiting the generality of
Article 9, no Bank shall have any claim or right of action of any kind
whatsoever against the Agent in respect of any action or refraining from action
which the Agent is instructed to take or refrain from (including foreclosure on
the Agent's Lien) by the requisite Banks as set forth in this Section 10.6.
Section 10.7 Remedies Cumulative. Each and every right
granted to the Agent and each Bank under the Loan Documents or under any other
document delivered in connection with the Loan Documents, or allowed them by
law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of the Agent, any Bank or any holder of any Note or the
Pre-Funding Note to exercise, and no delay in exercising, any right shall
operate as a waiver of such right, nor shall any single or partial exercise of
any right preclude any other or future exercise of such right or the exercise
of any other right. The due payment and performance of the Borrower's
Obligations shall be without regard to any counterclaim, right of offset or
other claim that the Borrower may have against any Bank or the Agent and
without regard to any other obligation that any Bank or the Agent may have to
the Borrower, and no such counterclaim required under federal law or offset
shall be asserted by the Borrower in any action, suit or proceeding instituted
by any Bank or the Agent for payment or performance of the Borrower's
Obligations. Upon the occurrence of an Event of Default, the Agent on behalf
of the Banks shall be entitled, at its option, to place any contracts of the
Borrower in a Securitization.
Section 10.8 Further Assurances. At any time and from
time to time, upon the request of the Agent, the Borrower shall execute,
deliver and acknowledge, or cause to be executed, delivered and acknowledged,
such further documents and instruments and do such other acts and things as the
Agent may reasonably request in order to fully effect
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the purposes of the Loan Documents and any other agreements, instruments and
documents delivered pursuant to or in connection with the Loans, including
executing and delivering to the Agent mortgages in form and substance
satisfactory to the Agent covering all real property or interests therein
acquired by the Borrower (provided that any mortgage or owned property may be
subject to a first mortgage if herein permitted), and all leases of real
property entered into by the Borrower as tenant or lessee, after the date of
this Agreement, promptly after such acquisition or the entering into of any
such lease.
Section 10.9 Notices. All notices, requests, reports and
other communications pursuant to the Loan Documents shall be in writing and
shall be delivered by hand or commercial delivery service, sent by U.S. Postal
Service certified mail, return receipt requested (except for routine reports
delivered pursuant to Article 5 which may be sent by first-class mail), or
transmitted by telefax or telegram, addressed as follows:
(a) If to any Loan Party: "c/o DVI Financial Services Inc.
000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xx Xxxx Xxxxxxxxxx
Vice President
Telecopier No.: 000-000-0000".
(b) If to the Agent: Fleet Bank N.A.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Leasing Department
Telecopier No.: (000) 000-0000
with a copy (other than in the case of Borrowing Notices and reports and other
documents delivered in compliance with Article 5) to:
Feltman, Karesh, Major & Xxxxxxx
Limited Liability Partnership
Carnegie Hall Tower
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxxx X. Xxxxxx, Esq.
Telecopier No.: 000-000-0000
Any notice, request or communication hereunder shall be deemed to have been
given on the day on which it is telecopied to such party at the telecopier
number specified above, when delivered by hand or by commercial delivery
service to such party at its above address, on the third Business Day after the
day given to the U.S. Postal Service for certified mail addressed as aforesaid,
or when delivered to the telegraph company addressed as aforesaid. Any party
may change the person, address or telecopier number to whom or which notices
are to be given under the Loan Documents by notice duly given and actually
received by the addressee under this Section 10.9.
Section 10.10 Counterparts. This Agreement may be signed
in any number of counterparts with the same effect as if the signatures were
upon the same instrument.
Section 10.11 Governing Law; Consent to Jurisdiction;
Waiver of Jury Trial. (a) EACH OF THE LOAN DOCUMENTS AND ALL OTHER DOCUMENTS
AND INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THE LOAN DOCUMENTS
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS ENTERED INTO IN THE STATE OF NEW YORK BY
RESIDENTS OF SUCH STATE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
(b) THE BORROWER IRREVOCABLY CONSENTS THAT ANY LEGAL
ACTION OR PROCEEDING AGAINST IT UNDER, ARISING OUT OF OR IN ANY MANNER RELATING
TO ANY LOAN DOCUMENT MAY BE BROUGHT IN ANY COURT OF THE STATE OF NEW YORK OR
ANY U.S. DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK.
THE BORROWER, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY AND
IRREVOCABLY ASSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY OF SUCH
COURTS IN ANY SUCH ACTION OR PROCEEDING. THE BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS, NOTICE OR OTHER PROCESS
RELATING TO ANY SUCH ACTION OR PROCEEDING BY DELIVERY OF SUCH
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PROCESS TO IT IN ANY MANNER PROVIDED FOR IN SECTION 10.9. THE BORROWER
EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR
PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE,
FORUM NON CONVENIENS OR ANY SIMILAR BASIS. THE BORROWER SHALL NOT BE ENTITLED
IN ANY SUCH ACTION OR PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER
THE LAWS OF ANY STATE OTHER THAN THE STATE OF NEW YORK UNLESS SUCH DEFENSE IS
ALSO GIVEN OR ALLOWED BY THE LAWS OF THE STATE OF NEW YORK. NOTHING IN THIS
SECTION 10.11 SHALL AFFECT OR IMPAIR IN ANY MANNER OR TO ANY EXTENT THE RIGHT
OF THE AGENT OR ANY BANK TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE BORROWER IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW.
(c) THE BORROWER, EACH OF THE BANKS AND THE AGENT WAIVES
TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION
WITH OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS, ANY INSTRUMENT OR DOCUMENT
DELIVERED PURSUANT TO ANY LOAN DOCUMENT OR THE VALIDITY, PROTECTION,
INTERPRETATION, COLLECTION OR ENFORCEMENT OF ANY LOAN DOCUMENT.
Section 10.12 Severability. The provisions of this
Agreement are severable, and if any clause or provision of this Agreement is
held invalid or unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall affect only such clause, provision or
part in such jurisdiction and shall not in any manner affect such clause or
provision in any other jurisdiction, or any other clause or provision in this
Agreement in any jurisdiction. Each of the covenants, agreements and
conditions contained in this Agreement is independent, and compliance by the
Borrower with any of them shall not excuse noncompliance by the Borrower with
any other.
Section 10.13 Binding Effect; No Assignment by Borrower.
This Agreement shall be binding upon and inure to the benefit of the Borrower
and its successors and to the benefit of the Banks and the Agent and their
respective successors and assigns. The rights and obligations of the Borrower
under this Agreement shall not
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be assigned or delegated without the prior written consent of the Agent and all
Banks, and any purported assignment or delegation without such consent shall be
void.
Section 10.14 Assignments and Participations by Banks. (a)
Each Bank may assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment, the Loans and Pre-Funding Loans owing to it and the Notes or
Pre-Funding Notes held by it) by the execution and delivery to the Agent of an
Assignment and Acceptance; provided, however, that (i) each such assignment
shall be of a constant and not a varying percentage of all of the assigning
Bank's rights and obligations under this Agreement, (ii) the amount of the
Commitment of the assigning Bank being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 and shall
be an integral multiple of $1,000,000, and (iii) the Agent's consent to the
such assignment shall have been obtained. Upon such execution, delivery and
consent, (1) the assignee shall be a party to this Agreement and, to the extent
that rights and obligations under this Agreement have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations of
a Bank, and (2) the assigning Bank shall, to the extent that rights and
obligations under this Agreement have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an assigning Bank's rights and obligations under
this Agreement, such Bank shall cease to be a party to this Agreement).
(b) By executing and delivering an Assignment and
Acceptance, the assigning Bank and the assignee confirm to and agree with each
other, the other Banks, the Agent and the Borrower as follows: (i) other than
as provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant to this Agreement; (ii) such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under this Agreement or any other instrument
or document furnished pursuant to this
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Agreement; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of such financial statements and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such
assigning Bank or any other Bank and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Agent by the
terms of this Agreement, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Bank.
(c) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an assignee, together with any Note subject
to such assignment, the Agent shall (i) accept such Assignment and Acceptance,
and (ii) give prompt notice to the Borrower. Within five Business Days after
its receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Agent in exchange for the surrendered Note a new Note to the
order of such Eligible Assignee in an amount equal to the Commitment assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained a Commitment, a new Note to the order of the assigning Bank in an
amount equal to the Commitment retained by it. Such new Note shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form attached as
Exhibit A.
(d) Each Bank may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement, including all or a portion of its Commitment, the Loans and
Pre-Funding Loans owing to it and the Notes and Pre-Funding Notes held by it;
provided, however, that (i) such Bank's obligations under this Agreement
(including its Commitment) shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties to this Agreement for the performance
of such obligations, (iii) such Bank shall remain the holder of any such Note
for all purposes of this Agreement, and (iv) the Borrower, the Agent and the
other
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Banks shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement.
(e) Any Bank may, in connection with any assignment or
participation, or proposed assignment or participation, pursuant to this
Section 10.14, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Bank by
or on behalf of the Borrower; provided that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any confidential information relating to the
Borrower received by it from such Bank.
Section 10.15 Scope of Agent's Lien. Each Bank agrees that
the Agent's Lien on the Collateral shall secure only the Obligations and shall
not secure any other obligation, liability or indebtedness of the Borrower or
any other Loan Party having rights in the Collateral notwithstanding the
provisions of any agreement between any Bank and the Borrower or any other Loan
Party and whether or not the Agent or any of the other Banks are aware of such
agreement.
Section 10.16 Waiver of Relief from Bankruptcy Code Stay.
The Borrower agrees that, in the event that Borrower, DVI, DBC or any Affiliate
of such Persons shall (i) file with any bankruptcy court of competent
jurisdiction or be the subject of any petition under Chapter 11 of the
Bankruptcy Code, (ii) be the subject of any order for relief issued under the
Bankruptcy Code, (iii) file or be the subject of any petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency or other relief for debtors, (iv)
have sought or consented to or acquiesced in the appointment of any trustee,
receiver, conservator or liquidator, or (v) be the subject of any order,
judgment or decree entered by any court of competent jurisdiction approving a
petition filed against such party for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future federal or state act or law relating to bankruptcy,
insolvency or relief for debtors, the Banks and the Agent shall thereupon be
entitled and the Borrower irrevocably consents to immediate and unconditional
relief from any automatic stay imposed by Section 362 of the Bankruptcy Code,
or otherwise, on or against the exercise of the rights and remedies otherwise
available to the Banks and the Agent as provided for in this Agreement, the
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Notes, the Pre-Funding Loan Notes, the Security Agreement, the other Security
Documents and the other Loan Documents delivered in connection herewith and
therewith, as otherwise provided by law, and the Borrower hereby irrevocably
waives any right to object to such relief and will not contest any motion by
any Bank, any Pre-Funding Lender or the Agent, in any manner requested by any
Bank, any Pre-Funding Lender or the Agent, in its efforts to obtain relief from
any such stay or other prohibition.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Borrower, the Banks, the Pre-Funding
Lenders and the Agent have duly signed and delivered this Second Amended and
Restated Loan Agreement on the date first above written.
DVI FINANCIAL SERVICES INC.
By:__________________________
Name:
Title:
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118
Commitment: $29,500,000 FLEET BANK N.A.
Pre-Funding
Commitment: $15,000,000 By:_____________________________
Name:
Title:
Lending Office for Prime Rate and Eurodollar Loans:
Fleet Bank N.A.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Leasing Division
Address for Notices:
Fleet Bank N.A.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopier No. (000) 000-0000
-111-
119
Commitment: $18,000,000 FIRST BANK NATIONAL ASSOCIATION
By:_____________________________
Name:
Title:
Lending Office for Prime Rate and Eurodollar Loans:
First Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxxxx
Vice President
Address for Notices:
First Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxxxx
Vice President
Telex No. N/A
Answer Back Code: N/A
Telecopier No. (000) 000-0000
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120
Commitment: $15,000,000 BANK HAPOALIM B.M., SAN XXXXXXXXX XXXXXX
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
Lending Office for Prime Rate and Eurodollar Loans:
Bank Hapoalim B.M., San Xxxxxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx
Vice President
Address for Notices:
Bank Hapoalim B.M., San Xxxxxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx
Vice President
Telex No.: [188610]
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121
Answer-Back Code: (BHAPOLA UT)
Telecopier No. (000) 000-0000
Commitment: $15,000,000 SUMITOMO BANK OF CALIFORNIA
By:_____________________________
Name:
Title:
Lending Office for Prime Rate and
Eurodollar Loans for purposes of
advances, paydowns, interest
payments and fee payments, and
notices for such purposes:
Commercial Banking Division
Note Department
000 Xxxx 0xx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxx
Telex No. N/A
Answer Back Code: N/A
Telecopier No. (000) 000-0000
Lending Office for Prime Rate and
Eurodollar Loans for all other
purposes, and notices for all other
purposes:
Commercial Banking Division
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
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122
Attention: Xx. Xxxxxx X. Xxxx
Telex No. N/A
Answer Back Code: N/A
Telecopier No. (000) 000-0000
Commitment: $17,500,000 CORESTATES BANK, N.A.
Pre-Funding
Commitment: $10,000,000
By:_____________________________
Name:
Title:
Lending Office for Prime Rate and
Eurodollar Loans:
CoreStates Bank, N.A.
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxxxxx - 00xx Xx.
X.X. 0-0-00-00
Xxxxxxxxxxxx, XX 00000
Attention: Mr. Xxxx XxXxxxxx, AVP
Xxxxxx Xxxxx, Loan
Administrator
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
Address for Notices:
CoreStates Bank, N.A.
0000 Xxxxxx Xxxxxx
-115-
000
Xxxxxx Xxxxxx Xxxxxxxx - 00xx Xx.
X.X. 0-0-00-00
Xxxxxxxxxxxx, XX 00000
Attention: Mr. David D'Antonio
Vice President
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
Commitment: $18,000,000 PNC BANK NATIONAL ASSOCIATION (as
successor by merger to Midlantic
Bank N.A.)
By:__________________________
Name:
Title:
Lending Office for Prime Rate and
Eurodollar Loans:
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Vice President
Leasing Department
Telex No.:
Answer Back Code:
Telecopier No.: (000) 000-0000
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124
Address for Notices:
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Vice President
Leasing Department
Telex No.:
Answer Back Code:
Telecopier No.: (000)000-0000
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125
Commitment: $15,000,000 BHF-BANK AKTIENGESELLSCHAFT
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
Lending Office for Prime Rate and
Eurodollar Loans:
Grand Cayman Branch
c/o BHF-BANK AG
New York Branch
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Boston
Telex No.:
Answer Back Code:
Telecopier No.: 000-000-0000
Address for Notices:
Grand Cayman Branch
c/o BHF-BANK AG
New York Branch
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Boston
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126
Telex No.:
Answer Back Code:
Telecopier No.: 000-000-0000
-119-
