EXHIBIT 10.1
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$80,000,000
CREDIT AGREEMENT
among
MQ ASSOCIATES, INC.,
MEDQUEST, INC.,
as Borrower,
The Several Lenders from Time to Time Parties Hereto,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
Dated as of August 15, 2002
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GENERAL ELECTRIC CAPITAL CORPORATION and WACHOVIA SECURITIES, INC.,
as Joint Lead Arrangers and Bookrunners
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
1.1 Defined Terms....................................................................................1
1.2 Other Definitional Provisions...................................................................21
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 21
2.1 Revolving Commitments...........................................................................21
2.2 Procedure for Revolving Loan Borrowing..........................................................22
2.3 Swingline Commitment............................................................................23
2.4 Procedure for Swingline Borrowing; Refunding of Swingline Loans.................................23
2.5 Commitment Fees, etc............................................................................24
2.6 Termination or Reduction of Revolving Commitments...............................................24
2.7 Optional Prepayments............................................................................25
2.8 Mandatory Prepayments and Commitment Reductions.................................................25
2.9 Conversion and Continuation Options.............................................................26
2.10 Limitations on Eurodollar Tranches..............................................................26
2.11 Interest Rates and Payment Dates................................................................26
2.12 Computation of Interest and Fees................................................................27
2.13 Inability to Determine Interest Rate............................................................27
2.14 Pro Rata Treatment and Payments.................................................................28
2.15 Requirements of Law.............................................................................29
2.16 Taxes...........................................................................................30
2.17 Indemnity.......................................................................................31
2.18 Change of Lending Office........................................................................32
2.19 Replacement of Lenders..........................................................................32
SECTION 3. LETTERS OF CREDIT 32
3.1 L/C Commitment..................................................................................32
3.2 Procedure for Issuance of Letter of Credit......................................................33
3.3 Fees and Other Charges..........................................................................33
3.4 L/C Participations..............................................................................33
3.5 Reimbursement Obligation of the Borrower........................................................34
3.6 Obligations Absolute............................................................................34
3.7 Letter of Credit Payments.......................................................................34
3.8 Applications....................................................................................35
SECTION 4. REPRESENTATIONS AND WARRANTIES 35
4.1 Financial Condition.............................................................................35
4.2 No Change.......................................................................................36
4.3 Existence; Compliance with Law..................................................................36
4.4 Power; Authorization; Enforceable Obligations...................................................36
4.5 No Legal Bar....................................................................................36
4.6 Litigation......................................................................................36
4.7 No Default......................................................................................37
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Page
4.8 Ownership of Property; Liens....................................................................37
4.9 Intellectual Property...........................................................................37
4.10 Taxes...........................................................................................37
4.11 Federal Regulations.............................................................................37
4.12 Labor Matters...................................................................................37
4.13 ERISA...........................................................................................37
4.14 Investment Company Act; Other Regulations.......................................................38
4.15 Subsidiaries....................................................................................38
4.16 Use of Proceeds.................................................................................38
4.17 Environmental Matters...........................................................................38
4.18 Accuracy of Information, etc....................................................................39
4.19 Security Documents..............................................................................39
4.20 Solvency........................................................................................40
4.21 Senior Indebtedness.............................................................................40
4.22 Regulation H....................................................................................40
4.23 Certain Documents...............................................................................40
4.24 Inspections and Investigations..................................................................40
4.25 Medicare Participation..........................................................................41
4.26 Fraud and Abuse.................................................................................41
4.27 HIPAA Compliance................................................................................41
SECTION 5. CONDITIONS PRECEDENT 42
5.1 Conditions to Initial Extension of Credit.......................................................42
5.2 Conditions to Each Extension of Credit..........................................................44
SECTION 6. AFFIRMATIVE COVENANTS 45
6.1 Financial Statements............................................................................45
6.2 Certificates; Other Information.................................................................46
6.3 Payment of Obligations..........................................................................47
6.4 Maintenance of Existence; Compliance............................................................47
6.5 Maintenance of Property; Insurance..............................................................47
6.6 Inspection of Property; Books and Records; Discussions..........................................47
6.7 Notices.........................................................................................48
6.8 Environmental Laws..............................................................................48
6.9 Additional Collateral, etc......................................................................48
6.10 Matters Relating to Collateral..................................................................50
6.11 USA PATRIOT Act Compliance......................................................................51
SECTION 7. NEGATIVE COVENANTS 51
7.1 Financial Condition Covenants...................................................................51
7.2 Indebtedness....................................................................................53
7.3 Liens...........................................................................................54
7.4 Fundamental Changes.............................................................................56
7.5 Disposition of Property.........................................................................56
7.6 Restricted Payments.............................................................................57
7.7 Investments.....................................................................................58
7.8 Optional Payments and Modifications of Certain Debt Instruments.................................60
7.9 Transactions with Affiliates....................................................................60
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Page
7.10 Sales and Leasebacks............................................................................60
7.11 Changes in Fiscal Periods.......................................................................61
7.12 Negative Pledge Clauses.........................................................................61
7.13 Clauses Restricting Subsidiary Distributions....................................................61
7.14 Lines of Business...............................................................................61
7.15 Amendments to Recapitalization Documents........................................................61
7.16 Most-Favored Nation.............................................................................61
SECTION 8. EVENTS OF DEFAULT 62
SECTION 9. THE ADMINISTRATIVE AGENT 65
9.1 Appointment.....................................................................................65
9.2 Delegation of Duties............................................................................65
9.3 Exculpatory Provisions..........................................................................65
9.4 Reliance by Administrative Agent................................................................66
9.5 Notice of Default...............................................................................66
9.6 Non-Reliance on Administrative Agent and Other Lenders..........................................66
9.7 Indemnification.................................................................................67
9.8 Administrative Agent in Its Individual Capacity.................................................67
9.9 Successor Administrative Agent..................................................................67
9.10 Closing Agent...................................................................................68
SECTION 10. MISCELLANEOUS 68
10.1 Amendments and Waivers..........................................................................68
10.2 Notices.........................................................................................69
10.3 No Waiver; Cumulative Remedies..................................................................70
10.4 Survival of Representations and Warranties......................................................70
10.5 Payment of Expenses and Taxes...................................................................70
10.6 Successors and Assigns; Participations and Assignments..........................................71
10.7 Adjustments; Set-off............................................................................74
10.8 Counterparts....................................................................................74
10.9 Severability....................................................................................75
10.10 Integration.....................................................................................75
10.11 GOVERNING LAW...................................................................................75
10.12 Submission To Jurisdiction; Waivers.............................................................75
10.13 Acknowledgements................................................................................76
10.14 Releases of Guarantees and Liens................................................................76
10.15 Confidentiality.................................................................................76
10.16 WAIVERS OF JURY TRIAL...........................................................................77
10.17 Termination of Commitments......................................................................77
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ANNEX:
SCHEDULES:
1.1A Commitments
1.1B Mortgaged Property
1.1C Excluded Subsidiaries
3.1 Existing Letters of Credit
4.4 Consents, Authorizations, Filings and Notices
4.6 Litigation
4,9 Intellectual Property
4.15 Subsidiaries
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.7 Existing Investments
7.9 Permitted Affiliate Transactions
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Assumption
E-1 Form of Legal Opinion of X'Xxxxxxxx LLP
E-2 Form of Legal Opinion of Local Counsel to Loan Parties
F Form of Exemption Certificate
G Form of Solvency Certificate
H-1 Form of New Lender Supplement
H-2 Form of Increased Facility Activation Notice
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CREDIT AGREEMENT (this "AGREEMENT"), dated as of August 15, 2002,
among MQ ASSOCIATES, INC., a Delaware corporation ("HOLDINGS"), MEDQUEST, INC.,
a Delaware corporation (the "BORROWER"), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the
"LENDERS") and WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent (the
"ADMINISTRATIVE AGENT").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "PRIME RATE" shall mean the rate of interest per
annum publicly announced from time to time by Wachovia Bank, National
Association as its prime rate in effect at its principal office in Charlotte,
North Carolina, (the Prime Rate not being intended to be the lowest rate of
interest charged by Wachovia Bank, National Association in connection with
extensions of credit to debtors). Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"ABR LOANS": Loans the rate of interest applicable to which is based
upon the ABR.
"ADJUSTMENT DATE": as defined in the Pricing Grid.
"ADMINISTRATIVE AGENT": Wachovia Bank, National Association, together
with its affiliates, as the administrative agent for the Lenders under this
Agreement and the other Loan Documents, together with any of its successors.
"AFFILIATE": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"AGGREGATE EXPOSURE": with respect to any Lender at any time, an
amount equal to the amount of such Lender's Revolving Commitment then in effect
or, if the Revolving Commitments have been terminated, the amount of such
Lender's Revolving Extensions of Credit then outstanding.
"AGGREGATE EXPOSURE PERCENTAGE": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"AGREEMENT": as defined in the preamble hereto.
"APPLICABLE MARGIN": for (a) ABR Loans, 1.50% per annum and (b)
Eurodollar Loans, 2.50% per annum; PROVIDED, that on and after the first
Adjustment Date, the Applicable Margin will be determined pursuant to the
Pricing Grid.
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"APPLICATION": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"APPROVED FUND": as defined in Section 10.6(b).
"ASSET SALE": any Disposition of property or series of related
Dispositions of property that yields Net Cash Proceeds to any Group Member in
excess of $150,000; PROVIDED that the following shall be excluded from this
definition: (i) any Disposition permitted by clause (a), (b), (d) or (g) of
Section 7.5; (ii) any Disposition permitted by Section 7.5(c) except to the
extent such Disposition relates to Section 7.4(e); (iii) any Disposition of an
Investment permitted under Section 7.5(f) except to the extent such Disposition
relates to an Investment made pursuant to Section 7.7(j)(iii) or 7.7(l); and
(iv) any Disposition permitted by Section 7.5(h) to the extent that any Net Cash
Proceeds resulting from any such Disposition are not received, directly or
indirectly, by distribution, contribution or otherwise, by a Loan Party.
"ASSIGNEE": as defined in Section 10.6(b).
"ASSIGNMENT AND ASSUMPTION": an Assignment and Assumption,
substantially in the form of Exhibit D.
"AVAILABLE REVOLVING COMMITMENT": as to any Lender at any time, an
amount equal to the excess, if any, of (a) such Lender's Revolving Commitment
then in effect OVER (b) such Lender's Revolving Extensions of Credit then
outstanding; PROVIDED, that in calculating any Lender's Revolving Extensions of
Credit for the purpose of determining such Lender's Available Revolving
Commitment pursuant to Section 2.5(a), other than with respect to the Swingline
Lender, the aggregate principal amount of Swingline Loans then outstanding shall
be deemed to be zero.
"BENEFITTED LENDER": as defined in Section 10.7(a).
"BOARD": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"BORROWER": as defined in the preamble hereto.
"BORROWING DATE": any Business Day specified by the Borrower as a date
on which the Borrower requests the relevant Lenders to make Loans hereunder.
"BUSINESS": as defined in Section 4.17(b).
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte are authorized or required by law to close,
PROVIDED, that with respect to notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, such day is also a
day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.
"CAPITAL LEASE OBLIGATIONS": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
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"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation).
"CASH EQUIVALENTS": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by Xxxxx'x
Investors Service, Inc. ("MOODY'S"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than six months, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) money market mutual or similar funds that invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition; or (h) money market funds that (i) comply with the criteria set
forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended,
(ii) are rated AAA by S&P and Aaa by Moody's and (iii) have portfolio assets of
at least $5,000,000,000.
"CERTIFICATE OF NEED REGULATIONS": regulations issued by any
Governmental Authority requiring a service provider to demonstrate the need for
such services in the local area prior to operating such services.
"CHAMPUS": collectively, the Civilian Health and Medical Program of
the Uniformed Service and Tricare, a program of medical benefits covering former
and active members of the uniformed services and certain of their dependents,
financed and administered by the United States Departments of Defense, Health
and Human Services and Transportation, and all laws, rules, regulations,
manuals, order, guidelines or requirements pertaining to such program including
(a) all federal statutes (whether set forth in 10 U.S.C. Sections 1071-1106 or
elsewhere) affecting such program; and (b) all rules, regulations (include 32
C.F.R. Section 199), manuals, orders and administrative, reimbursement and other
guidelines of all Governmental Authorities promulgated in connection with such
program (whether or not having the force of law), in each case as the same may
be amended.
"CLO": as defined in Section 10.6(b).
"CLOSING AGENT": JPMorgan Chase Bank, together with its affiliates
(including, without limitation, X.X. Xxxxxx Securities Inc.), as the closing
agent.
"CLOSING DATE": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied, which date shall not be later than
October 31, 2002.
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"CMS": the Centers for Medicare and Medicaid Services, formerly known
as the Health Care Financing Administration, the entity within the United States
Department of Health and Human Services responsible for administering the
Medicare program and the federal aspects of the Medicaid programs, directly and
through its fiscal intermediaries and agents, and any successor entities.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL": all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
"COMMITMENT FEE RATE": 1/2of 1% per annum; PROVIDED, that on and after
the first Adjustment Date, the Commitment Fee Rate will be determined pursuant
to the Pricing Grid.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"CONDUIT LENDER": any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
PROVIDED, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender (including,
without limitation, all consents and waivers under Section 10.1), and PROVIDED,
FURTHER, that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 2.15, 2.16, 2.17 or 10.5 than the designating Lender
would have been entitled to receive in respect of the extensions of credit made
by such Conduit Lender (it being understood that the designating Lender shall
not be entitled to any such amount) or (b) be deemed to have any Revolving
Commitment.
"CONSOLIDATED EBITDA": for any period, Consolidated Net Income for
such period PLUS, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, amortization or writeoff of debt
discount and debt issuance costs and all commissions, discounts and other fees
and charges associated with Indebtedness (including the Loans, letters of
credit, bankers' acceptance financing), and net costs under Swap Agreements, (c)
depreciation and amortization expense, (d) amortization or write-off of
intangibles (including, but not limited to, goodwill) and organization costs,
(e) any non-cash expenses or losses, (f) with respect to any period that
includes the fiscal quarter ending March 31, 2002 (including, without
limitation, for the calculation required pursuant to Section 5.1(d)), a
$2,100,000 legal reserve relating to certain litigation matters, (g) any
non-cash expenses or charges resulting from the grant of stock options, equity
or profit related employment incentives, (h) any extraordinary, unusual or
non-recurring cash expenses or losses, which, together with any cash payments
made during such period in respect of items reflected as extraordinary, unusual
or non-recurring non-cash expenses or losses in the statement of Consolidated
Net Income in a prior period, shall not exceed an aggregate amount of $2,000,000
in any fiscal year, and (i) Excluded Charges and MINUS, (a) to the extent
included in the statement of such Consolidated Net Income for such period, the
sum of (i) interest income, (ii) any extraordinary, unusual or non-recurring
non-cash income or gains (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such period,
gains on
5
the sales of assets outside of the ordinary course of business) and (iii) any
other non-cash income and (b) any cash payments made during such period in
respect of items reflected as extraordinary, unusual or non-recurring non-cash
expenses or losses in the statement of Consolidated Net Income in a prior period
to the extent such non-cash expense or loss was previously included in the
calculation of Consolidated EBITDA and is in excess of the limitation set forth
in clause (h) above, all as determined on a consolidated basis. For the purposes
of calculating Consolidated EBITDA for any period of four consecutive fiscal
quarters (each, a "REFERENCE PERIOD") pursuant to any determination of the
Consolidated Leverage Ratio or the Consolidated Senior Leverage Ratio, (i) if at
any time during such Reference Period the Borrower or any Subsidiary shall have
made any Material Disposition, the Consolidated EBITDA for such Reference Period
shall, after giving Pro Forma Effect thereto, be reduced by an amount equal to
the Consolidated EBITDA (if positive) attributable to the property that is the
subject of such Material Disposition for such Reference Period or increased by
an amount equal to the Consolidated EBITDA (if negative) attributable thereto
for such Reference Period, in each case, to the same extent that the
Indebtedness attributable to such property was deducted from Consolidated Total
Debt in the determination of the Consolidated Leverage Ratio or the Consolidated
Senior Leverage Ratio, and (ii) if during such Reference Period the Borrower or
any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for
such Reference Period shall be calculated after giving Pro Forma Effect thereto.
As used in this definition, "Material Acquisition" means any acquisition of
property or series of related acquisitions of property that (a) constitutes
assets comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and (b)
involves the payment of consideration by the Borrower and its Subsidiaries in
excess of $300,000; and "Material Disposition" means any Disposition of property
or series of related Dispositions of property that yields total consideration to
the Borrower or any of its Subsidiaries in excess of $300,000.
"CONSOLIDATED EBITDAR": for any period, Consolidated EBITDA PLUS,
without duplication, Consolidated Lease Expense for such period.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": for any period, the ratio
of (a) Consolidated EBITDAR for such period to (b) Consolidated Fixed Charges
for such period.
"CONSOLIDATED FIXED CHARGES": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
Consolidated Lease Expense for such period (c) income tax expenses for the
Borrower and its Subsidiaries for such period paid in cash and (d) scheduled
payments made during such period on account of principal of Indebtedness of the
Borrower or any of its Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE": for any period, (a) total cash
interest expense (including that attributable to Capital Lease Obligations) of
the Borrower and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Swap Agreements
in respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP) MINUS (b) total cash interest income of the
Borrower and its Subsidiaries for such period.
"CONSOLIDATED LEASE EXPENSE": for any period, (a) the aggregate amount
of fixed and contingent rentals payable in cash by the Borrower and its
Subsidiaries for such period with respect to operating leases of real and
personal property, determined on a consolidated basis in accordance with GAAP
MINUS (b) the aggregate amount of rental income under leases of real and
personal property, determined on a consolidated basis in accordance with GAAP.
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"CONSOLIDATED LEVERAGE RATIO": as at the last day of any period of
four consecutive fiscal quarters, the ratio of (a) Consolidated Total Debt on
such day to (b) Consolidated EBITDA for such period.
"CONSOLIDATED NET INCOME": for any period, the consolidated net income
(or loss) of the Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; PROVIDED that there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"CONSOLIDATED SENIOR DEBT": all Consolidated Total Debt other than the
Senior Subordinated Notes, the Senior Subordinated Loans and other subordinated
debt.
"CONSOLIDATED SENIOR LEVERAGE RATIO": as of the last day of any period
of four consecutive fiscal quarters, the ratio of (a) Consolidated Senior Debt
on such day to (b) Consolidated EBITDA for such period.
"CONSOLIDATED TOTAL DEBT": at any date, the aggregate principal amount
of all Indebtedness, without duplication, of the Borrower and its Subsidiaries
at such date, determined on a consolidated basis in accordance with GAAP, but
excluding Indebtedness of the type described in clause (f) of the definition
thereof and, to the extent relating to such clause (f), the types described in
clauses (h) and (i) of the definition thereof, unless such Indebtedness has been
fully liquidated and is no longer a contingent obligation.
"CONTINUING DIRECTORS": the directors of Holdings on the Closing Date,
after giving effect to the Recapitalization and the other transactions
contemplated hereby, and each other director, if, in each case, such other
director either (i) was nominated or recommended for election or appointed to
the board of directors of Holdings by a majority of the then Continuing
Directors or by the Permitted Investors, (ii) receives the vote of the Permitted
Investors in his or her election by the shareholders of Holdings, or (iii) was
nominated or elected pursuant to the terms of the Stockholders Agreement.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any material agreement, instrument or other
legally binding undertaking to which such Person is a party or by which it or
any of its property is bound.
"CONTROL INVESTMENT AFFILIATE": as to any Person, any other Person
(including, without limitation, any fund or investment vehicle) that (a)
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person and (b) is organized by such Person primarily for the
purpose of making equity or debt investments in one or more companies. For
purposes of this definition, "control" of a Person means the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise or acts as investment advisor or
manager.
"COPYRIGHTS": as defined in the Guarantee and Collateral Agreement.
7
"DEFAULT": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"DEFAULTING LENDER": at any time, any Lender that, at such time, has
failed to make a Loan required to be made by such Lender pursuant to the terms
of this Agreement.
"DE NOVO FACILITY": as of any time of determination, any Health Care
Facility that has been acquired (solely to the extent relating to a new
construction or development), developed or constructed by, or on behalf of, any
Group Member.
"DISPOSITION": with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms "DISPOSE" and "DISPOSED OF" shall have correlative meanings.
"DISQUALIFIED CAPITAL STOCK": any Capital Stock that is not Qualified
Capital Stock.
"DOLLARS" and "$": dollars in lawful currency of the United States.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, lawful requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health from environmental or
workplace hazards or the protection of the environment, as now or may at any
time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Telerate screen (or otherwise on such screen),
the "EURODOLLAR BASE RATE" shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent or, in the absence of such availability, by
reference to the rate at which the Administrative Agent is offered Dollar
deposits at or about 11:00 A.M., Charlotte time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market where its
eurodollar and foreign currency and exchange operations are then being conducted
for delivery on the first day of such Interest Period for the number of days
comprised therein.
8
"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
--------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans
having Interest Periods which begin on the same date and end on the same later
date (whether or not such Loans shall originally have been made on the same
day).
"EVENT OF DEFAULT": any of the events specified in Section 8, PROVIDED
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"EXCLUDED CHARGES": without duplication, all (i) transaction fees,
costs and expenses incurred in connection with the Recapitalization Transactions
and (ii) with respect to any Permitted Acquisition or any Disposition of assets
outside of the ordinary course of business permitted by Section 7.5, all
adjustments (including, without limitation, operating and expense reductions and
other synergistic benefits) as would be permitted pursuant to Regulation S-X
under the Securities Act of 1933, as amended.
"EXCLUDED FOREIGN SUBSIDIARY": (i) any Foreign Subsidiary designated
as such on Schedule 4.15 in respect of which either (a) the pledge of all of the
Capital Stock of such Subsidiary as Collateral or (b) the guaranteeing by such
Subsidiary of the Obligations, would, in the good faith judgment of the
Borrower, result in material adverse tax consequences to the Borrower, and (ii)
any Subsidiary of an Excluded Foreign Subsidiary as designated on Schedule 4.15.
"EXISTING LETTERS OF CREDIT": the letters of credit listed on Schedule
3.1.
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of
New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by Wachovia Bank from three
federal funds brokers of recognized standing selected by it.
"FEE PAYMENT DATE": (a) the last day of each March, June, September
and December and (b) the last day of the Revolving Commitment Period.
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"FUNDING OFFICE": the office of the Administrative Agent specified in
Section 10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time, except that for purposes of Section 7.1, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent audited
financial statements referred to in Section 4.1(b). In the event that any
"Accounting Change" (as
9
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to reflect equitably such
Accounting Changes with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting Changes"
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative functions of or pertaining to
government, and, with respect to any Lender, including any central bank, any
securities exchange and any self-regulatory organization (including the National
Association of Insurance Commissioners).
"GROUP MEMBERS": the collective reference to Holdings, the Borrower
and their respective Subsidiaries, other than those Subsidiaries listed on
Schedule 1.1C.
"GUARANTEE AND COLLATERAL AGREEMENT": the Guarantee and Collateral
Agreement to be executed and delivered by Holdings, the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
without duplication, any obligation of the guaranteeing person guaranteeing or
in effect guaranteeing (including through reimbursement, counterindemnity or
similar obligation) any Indebtedness, leases, dividends or other obligations
(the "PRIMARY OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR"),
including any issuing bank under any letter of credit, in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guarantee Obligation is made
unless such primary obligation for which such guaranteeing person may be liable
are not stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith.
"GUARANTORS": the collective reference to Holdings and the Subsidiary
Guarantors.
"HEALTH CARE FACILITY": any facility, whether licensed as a skilled
nursing facility, intermediate care facility, personal care facility,
out-patient clinic, diagnostic center or hospital (including, without
limitation, any long-term acute care hospital) which provides any level of
medical care, diagnostic or rehabilitative services or any products or services
reasonably related thereto.
10
"HEALTH CARE PERMITS": any and all licenses, provisional licenses,
JCAHO and/or other accreditations, franchising rights to conduct business,
approvals by a Governmental Authority, authorizations, certificates of need,
consents, qualifications, operating authority, and/or any other permit that is
related to the provision of health care services required by any applicable
Governmental Authority or otherwise necessary for any Group Member to operate
its business or to own, lease, operate or manage a Health Care Facility of any
Group Member.
"HIPAA": the Health Insurance Portability and Accountability Act of
1996, as the same may be amended, modified or supplemented from time to time,
and any successor statute thereto, and any and all rules or regulations
promulgated from time to time thereunder.
"HOLDINGS": as defined in the preamble hereto.
"INCREASED FACILITY ACTIVATION NOTICE": a notice substantially in the
form of Exhibit H-2.
"INCREASED FACILITY CLOSING DATE": any Business Day designated as such
in an Increased Facility Activation Notice.
"INDEBTEDNESS": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables and other current liabilities incurred in the ordinary course of such
Person's business and contingent purchase price adjustments), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations of such Person, (f)
all obligations of such Person, contingent or otherwise, as an account party or
applicant under or in respect of acceptances, letters of credit, surety bonds or
similar arrangements, (g) the liquidation value of all Disqualified Capital
Stock of such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above, (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation, and (j) for the purposes of
Section 8(e) only, all obligations of such Person in respect of Swap Agreements.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor.
"INITIAL LENDERS": General Electric Capital Corporation, Chase Lincoln
First Commercial Corp., UBS AG, Stamford Branch and Wachovia Bank, National
Association.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
11
licenses, technology, know-how and processes, and all rights to xxx at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding and
the final maturity date of such Loan, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest Period,
(c) as to any Eurodollar Loan having an Interest Period longer than three
months, each day that is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period and
(d) as to any Loan (other than any Revolving Loan that is an ABR Loan and any
Swingline Loan), the date of any repayment or prepayment made in respect
thereof.
"INTEREST PERIOD": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not later than 11:00 A.M., Charlotte time, on the date that
is three Business Days prior to the last day of the then current Interest Period
with respect thereto; PROVIDED that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) the Borrower may not select an Interest Period that would
extend beyond the Termination Date; and
(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month.
"INVESTMENTS": as defined in Section 7.7.
"ISSUING LENDER": Wachovia Bank, National Association or any affiliate
thereof, in its capacity as issuer of any Letter of Credit.
"JCAHO": the Joint Commission on Accreditation of Healthcare
Organizations.
"JOINT VENTURE": as to any Person, any other Person or any arrangement
in which such Person has any direct or indirect interest and that is not a
Subsidiary of such Person.
"JUNIOR CAPITAL": any Qualified Capital Stock of the Borrower or
Holdings and any subordinated Indebtedness of Holdings or the Borrower that has
a final maturity date at least 180 days after the Termination Date and no
payments in cash of principal or interest thereon (other than in the
circumstances described in the proviso of the definition of Qualified Capital
Stock) prior to the Termination Date issued to, or placed by, the Sponsor or its
Control Investment Affiliates.
"L/C COMMITMENT": $5,000,000.
12
"L/C OBLIGATIONS": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.5.
"L/C PARTICIPANTS": the collective reference to all the Lenders other
than the Issuing Lender.
"LENDERS": as defined in the preamble hereto; PROVIDED, that unless
the context otherwise requires, each reference herein to the Lenders shall be
deemed to include any Conduit Lender.
"LETTERS OF CREDIT": as defined in Section 3.1(a).
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or other security agreement of any kind or nature whatsoever (including
any conditional sale or other title retention agreement and any capital lease
having substantially the same economic effect as any of the foregoing).
"LOAN": any loan made by any Lender pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, the Security Documents, the Notes
and any other document related thereto to which a Loan Party is party which
expressly provides that such document is a Loan Document hereunder.
"LOAN PARTIES": Each Group Member other than the Excluded Foreign
Subsidiaries.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, property, operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos and polychlorinated
biphenyls.
"MEDICAID": collectively, the healthcare assistance program
established by Title XIX of the Social Security Act (42 U.S.C. Sections 1396 et
seq.) and any statutes succeeding thereto, and all laws, rules, regulations,
manuals, orders, guidelines or requirements pertaining to such program including
(a) all federal statutes (whether set forth in Title XIX of the Social Security
Act or elsewhere) regulating such program; (b) all state statutes, regulations
and plans for medical assistance enacted in connection with such program and
federal rules and regulations promulgated in connection with such program; and
(c) all applicable provisions of all rules, regulations, manuals, orders and
administrative, reimbursement, guidelines and requirements of all Governmental
Authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.
"MEDICAID PROVIDER AGREEMENT": an agreement entered into between a
Health Care Facility, supplier or physician and CMS or any federal or state
agency or other entity administering Medicaid in such state, or any other grant
of authority by CMS or any federal or state agency or other entity administering
Medicaid in such state, under which the Health Care Facility, supplier or
physician is
13
authorized to provide medical goods and services to Medicaid recipients and to
be reimbursed by Medicaid for such goods and services.
"MEDICARE": collectively, the health insurance program for the aged
and disabled established by Title XVIII of the Social Security Act (42 U.S.C.
Sections 1395 et seq.) and any statutes succeeding thereto, and all laws, rules,
regulations, manuals, orders or guidelines pertaining to such program including
(a) all federal statutes (whether set forth in Title XVIII of the Social
Security Act or elsewhere) regulating such program; and (b) all applicable
provisions of all rules, regulations, manuals, orders and administrative,
reimbursement, guidelines and requirements of all Governmental Authorities
promulgated in connection with such program (whether or not having the force of
law), in each case as the same may be amended, supplemented or otherwise
modified from time to time.
"MEDICARE PROVIDER AGREEMENT": an agreement entered into between a
Health Care Facility, supplier or physician and CMS or any federal or state
agency or other entity administering Medicare in such state, or other grant of
authority by CMS or any federal or state agency or other entity administering
Medicare in such state, under which the Health Care Facility, supplier or
physician is authorized to provide medical goods and services to Medicare
patients and to be reimbursed by Medicare for such goods and services.
"MORTGAGED PROPERTIES": the real properties listed on Schedule 1.1B,
as to which the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to the Mortgages.
"MORTGAGES": each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, in form and substance reasonably satisfactory to the
Administrative Agent.
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS": in connection with any Asset Sale or any Recovery
Event or any incurrence of Indebtedness, the proceeds thereof in the form of
cash and Cash Equivalents (including any such proceeds received by way of
deferred payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event or incurrence of Indebtedness,
net of (i) attorneys' fees, accountants' fees, investment banking fees and all
other professionals' and advisors' fees, (ii) all reasonable costs and expenses
arising therefrom (including, without limitation, all underwriting, brokerage,
commitment, arrangement, consent, title, filing, recording, and similar fees,
premiums, commissions and discounts), (iii) amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset that is the subject of such Asset Sale or Recovery Event, including,
without limitation, all premiums, penalties, breakage, indemnity, consent fees
and similar amounts in connection therewith, and distributions or other payments
required to be made to any minority interest holders in Subsidiaries (which
shall not exceed such holders' ratable interests), (iv) all reserves reasonably
established by the Borrower in respect of post-closing adjustments, payments,
indemnities and other contingent liabilities, PROVIDED that upon the date upon
which such reserve is no longer required to be maintained, the remaining amount
of such reserve shall then be deemed Net Cash Proceeds, and (v) all other
customary fees and expenses actually incurred in connection therewith and net of
taxes paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements).
"NON-EXCLUDED TAXES": as defined in Section 2.16(a).
14
"NON-U.S. LENDER": as defined in Section 2.16(d).
"NOTES": the collective reference to any promissory note evidencing
Loans.
"OBLIGATIONS": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender (or, in
the case of Specified Swap Agreements, any affiliate of any Lender), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit, any
Specified Swap Agreement (to the extent that, after giving effect to such
Specified Swap Agreement, the aggregate principal amount of outstanding Loans
and Senior Subordinated Notes (or Senior Subordinated Loans, as the case may be)
bearing interest at a fixed rate is not less than 35% of such aggregate
principal amount) or any other document made, delivered or given in connection
herewith or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise.
"OTHER TAXES": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"PATENTS": as defined in the Guarantee and Collateral Agreement.
"PARTICIPANT": as defined in Section 10.6(c).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"PERMITTED ACQUISITION": any acquisition of property or series of
related acquisitions of property that (a) constitutes assets constituting all or
substantially all of a business unit or constitutes all or substantially all of
the Capital Stock of a Person, and (b) is permitted by and consummated in
compliance with the requirements of Section 7.7(h).
"PERMITTED INVESTOR PREFERRED STOCK": the Series A Redeemable
Preferred Stock and the Series B Redeemable Preferred Stock of Holdings as set
forth in the Fourth Amended and Restated Certificate of Incorporation of
Holdings, as further amended and modified from time to time.
"PERMITTED INVESTORS": the collective reference to (i) the Sponsor and
its Control Investment Affiliates and (ii) senior management of Holdings and the
Borrower as of the Closing Date, together with any other members of such senior
management approved by the Board of Directors of Holdings or the Borrower, as
the case may be.
"PERSON": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
15
"PLAN": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PRICING GRID": the table set forth below.
Consolidated Applicable Margin for Applicable Margin for
Leverage Ratio Eurodollar Loans ABR Loans Commitment Fee Rate
--------------------------------------------------------------------------------------------------------
Greater than or equal 2.75% 1.75% .500%
to 4.0
Less than 4.0 but 2.50% 1.50% .500%
greater than or equal
to 3.25
Less than 3.25 but 2.25% 1.25% .500%
greater than 2.5
Equal to or less than
2.5 2.00% 1.00% .375%
For the purposes of the Pricing Grid, changes in the Applicable Margin
resulting from changes in the Consolidated Leverage Ratio shall become effective
on the date (the "ADJUSTMENT DATE") that is three Business Days after the date
on which financial statements are delivered to the Lenders pursuant to Section
6.1 and shall remain in effect until the next change to be effected pursuant to
this paragraph; PROVIDED that the first Adjustment Date shall occur no earlier
than six months after the Closing Date. If any financial statements referred to
above are not delivered within the time periods specified in Section 6.1, then,
until the date that is three Business Days after the date on which such
financial statements are delivered, the highest rate set forth in each column of
the Pricing Grid shall apply. In addition, at all times while an Event of
Default shall have occurred and be continuing, the highest rate set forth in
each column of the Pricing Grid shall apply. Each determination of the
Consolidated Leverage Ratio pursuant to the Pricing Grid shall be made in a
manner consistent with the determination thereof pursuant to Section 7.1.
"PRO FORMA BALANCE SHEET": as defined in Section 4.1(a).
"PRO FORMA EFFECT": with respect to any event or transaction occurring
during any period of four consecutive fiscal quarters, such event or transaction
(including any other transactions consummated in connection therewith or
required thereby) shall be deemed to have been made on the first day of such
period of four consecutive fiscal quarters.
"PROJECTIONS": as defined in Section 6.2(c).
"PROPERTIES": as defined in Section 4.17(a).
"QUALIFIED CAPITAL STOCK": any Capital Stock that by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable or exercisable) or upon the happening of any event does not provide
for scheduled payments of dividends in cash and does not (i) mature or becomes
mandatorily redeemable pursuant to a sinking fund obligation or otherwise; (ii)
become convertible or exchangeable at the option of the holder thereof for
Indebtedness or Capital Stock that is
16
not Qualified Capital Stock; or (iii) become redeemable at the option of the
holder thereof, in whole or in part, in each case, on or prior to the later of
(A) the date that is 180 days after the Termination Date and (B) the final
maturity date of the Senior Subordinated Notes (or, if applicable, the Senior
Subordinated Loans); PROVIDED, that any Capital Stock that would not constitute
Qualified Capital Stock solely because the holders thereof have the right to
require Holdings to repurchase such Capital Stock upon the occurrence of a
change of control or asset sale (each defined in a substantially similar manner
to the description of change of control in Section 8(k) of this Agreement and to
the corresponding definition of Asset Sale in this Agreement) shall nonetheless
constitute Qualified Capital Stock. Notwithstanding anything to the contrary,
the Permitted Investor Preferred Stock shall be deemed to be Qualified Capital
Stock.
"QUALIFIED PUBLIC OFFERING": any QPO as such term is defined in the
Fourth Amended and Restated Certificate of Incorporation of Holdings, as further
amended and modified from time to time.
"RECAPITALIZATION": as defined in Section 5.1.
"RECAPITALIZATION AGREEMENT": the Recapitalization Agreement among MQ
Investment Holdings, LLC, Holdings, the stockholders of Holdings signatory
thereto and Xxxx Xxxxxxx and Xxxxx Xxxx, as the stockholders' representatives,
dated as of July 16, 2002.
"RECAPITALIZATION DOCUMENTATION": collectively, the Recapitalization
Agreement and all schedules, exhibits and annexes thereto and all side letters
and agreements modifying or supplementing the terms thereof or entered into in
connection therewith.
"RECAPITALIZATION TRANSACTIONS": collectively, the Recapitalization,
the repayment of certain Indebtedness and the other transactions contemplated by
the Recapitalization Documentation, any other transactions consummated in
connection with any of the foregoing (including, without limitation, the payment
of transaction fees and expenses) and the financing of any of the foregoing.
"RECEIVABLE": as defined in the Guarantee and Collateral Agreement.
"RECOVERY EVENT": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of any Group Member.
"REFUNDED SWINGLINE LOANS": as defined in Section 2.4.
"REGISTER": as defined in Section 10.6(b).
"REGULATION U": Regulation U of the Board as in effect from time to
time.
"REIMBURSEMENT APPROVALS": with respect to all Third Party Payor
Arrangements, any and all certifications, provider numbers, provider agreements
(including, without limitation, Medicare Provider Agreements and Medicaid
Provider Agreements), participation agreements, accreditations (including JCAHO
accreditation) and/or any other agreements with or approvals by organizations
and Governmental Authorities.
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
17
"REINVESTMENT DEFERRED AMOUNT": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by any Group Member in
connection therewith that, as a result of the delivery of a Reinvestment Notice,
are not applied to prepay the Revolving Loans and, if applicable, reduce the
Revolving Commitments pursuant to Sections 2.8(b) and 2.8(c).
"REINVESTMENT EVENT": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"REINVESTMENT NOTICE": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and that
the Borrower (directly or indirectly through a Subsidiary) intends and expects
to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or
Recovery Event to acquire, maintain, develop, construct, improve, upgrade or
repair assets useful in the business of any Group Member (other than Holdings).
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire,
maintain, develop, construct, improve, upgrade or repair assets useful in the
business of any Group Member (other than Holdings).
"REINVESTMENT PREPAYMENT DATE": with respect to any Reinvestment
Event, the earlier of (a) the date occurring twelve months after such
Reinvestment Event and (b) the date on which the Borrower shall have determined
not to, or shall have otherwise ceased to, acquire, maintain, develop,
construct, improve, upgrade or repair assets useful in the business of any Group
Member (other than Holdings) with all or any portion of the relevant
Reinvestment Deferred Amount.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"REQUIRED LENDERS": at any time, the holders of more than 50% of the
Total Revolving Commitments then in effect or, if the Revolving Commitments have
been terminated, the Total Revolving Extensions of Credit then outstanding;
PROVIDED, HOWEVER, that if any Lender shall be a Defaulting Lender at such time,
then there shall be excluded from the determination of Required Lenders such
Defaulting Lender's Revolving Commitments, or after termination of the Total
Revolving Commitments, the Revolving Extensions of Credit of such Defaulting
Lender then outstanding.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or legally binding determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, president or chief
financial officer of the Borrower, but in any event, with respect to financial
matters, the chief financial officer of the Borrower.
"RESTRICTED PAYMENTS": as defined in Section 7.6.
18
"REVOLVING COMMITMENT": as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Swingline Loans and
Letters of Credit in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading "Revolving Commitment" opposite such Lender's
name on Schedule 1.1A or in the Assignment and Assumption pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original amount of the Total Revolving
Commitments is $80,000,000.
"REVOLVING COMMITMENT PERIOD": the period from and including the
Closing Date to the Termination Date.
"REVOLVING EXTENSIONS OF CREDIT": as to any Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Revolving
Loans held by such Lender then outstanding, (b) such Lender's Revolving
Percentage of the L/C Obligations then outstanding and (c) such Lender's
Revolving Percentage of the aggregate principal amount of Swingline Loans then
outstanding.
"REVOLVING LOANS": as defined in Section 2.1(a).
"REVOLVING PERCENTAGE": as to any Lender at any time, the percentage
which such Lender's Revolving Commitment then constitutes of the Total Revolving
Commitments or, at any time after the Revolving Commitments shall have expired
or terminated, the percentage which the aggregate principal amount of such
Lender's Revolving Loans then outstanding constitutes of the aggregate principal
amount of the Revolving Loans then outstanding, PROVIDED, that, in the event
that the Revolving Loans are paid in full prior to the reduction to zero of the
Total Revolving Extensions of Credit, the Revolving Percentages shall be
determined in a manner designed to ensure that the other outstanding Revolving
Extensions of Credit shall be held by the Lenders on a comparable basis.
"ROLLOVER STOCKHOLDERS": as defined in the Recapitalization Agreement.
"SALE-LEASEBACK TRANSACTION": as defined in Section 7.10.
"SEC": the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.
"SECURITY DOCUMENTS": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.
"SELLERS": the stockholders of Holdings which are parties to the
Recapitalization Agreement other than the Rollover Stockholders.
"SELLER SHARES": the Existing Common Stock, the Existing Class B
Common Stock, the Existing Series A Preferred Stock, and the Existing Series C
Preferred Stock, as such terms are defined in the Recapitalization Agreement.
"SENIOR SUBORDINATED
CREDIT AGREEMENT": the
Credit Agreement entered
into by the Borrower and certain of its Subsidiaries providing for the borrowing
of the Senior Subordinated Loans, together with all instruments and other
agreements (including the indenture relating to the Exchange Notes (as defined
in such
Credit Agreement)) which shall be entered into by the Borrower or any
other Group Member in connection therewith only if the Senior Subordinated Notes
are not issued on the Closing Date.
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"SENIOR SUBORDINATED LOANS": the loans made to the Borrower pursuant
to the Senior Subordinated
Credit Agreement and any Exchange Notes (as defined
in the Senior Subordinated
Credit Agreement) as contemplated therein.
"SENIOR SUBORDINATED NOTE INDENTURE": the Indenture to be entered into
by the Borrower and certain of its Subsidiaries in connection with the issuance
of the Senior Subordinated Notes, together with all instruments and other
agreements entered into by the Borrower or such Subsidiaries in connection
therewith.
"SENIOR SUBORDINATED NOTES": the subordinated notes of the Borrower
issued pursuant to the Senior Subordinated Note Indenture and any Exchange Notes
(as defined in the Senior Subordinated Note Indenture) as contemplated therein.
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title IV of ERISA,
but that is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"SPECIFIED CHANGE OF CONTROL": a "Change of Control" (or any other
defined term having a similar purpose) as defined in the Senior Subordinated
Credit Agreement or the Senior Subordinated Note Indenture.
"SPECIFIED SWAP AGREEMENT": any Swap Agreement entered into by the
Borrower and any Lender or affiliate thereof in respect of interest rates,
currency exchange rates or commodity prices, so long as any such Swap Agreement
is not entered into for speculative purposes.
"SPONSOR": X.X. Xxxxxx Partners (BHCA), L.P.
"STOCKHOLDERS AGREEMENT": the Stockholders' Agreement, dated as of
August 15, 2002, among Holdings and each of the stockholders party thereto, as
further amended and modified from time to time.
"SUBSIDIARY": as of any date of determination, as to any Person, a
corporation, partnership, limited liability company or other entity the accounts
of which would be consolidated with those of such Person in such Person's
consolidated financial statements prepared in accordance with GAAP as of such
date, as well as any other corporation, limited liability company, partnership,
association or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of general partnership interests,
20
more than 50% of the general partnership interests, are owned by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"SUBSIDIARY GUARANTOR": each Subsidiary of the Borrower other than any
Excluded Foreign Subsidiary and any Subsidiary that is not a Group Member.
"SUPERMAJORITY LENDERS": at any time, the holders of more than 75% of
the Total Revolving Commitments then in effect or, if the Revolving Commitments
have been terminated, the Total Revolving Extensions of Credit then outstanding;
PROVIDED, HOWEVER, that if any Lender shall be a Defaulting Lender at such time,
then there shall be excluded from the determination of Supermajority Lenders
such Defaulting Lender's Revolving Commitments, or after termination of the
Total Revolving Commitments, the Revolving Extensions of Credit of such
Defaulting Lender then outstanding.
"SWAP AGREEMENT": any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; PROVIDED that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Borrower or any of its Subsidiaries shall be a "Swap Agreement".
"SWINGLINE COMMITMENT": the obligation of the Swingline Lender to make
Swingline Loans pursuant to Section 2.3 in an aggregate principal amount at any
one time outstanding not to exceed $5,000,000.
"SWINGLINE LENDER": Wachovia Bank, National Association, in its
capacity as the lender of Swingline Loans.
"SWINGLINE LOANS": as defined in Section 2.3.
"SWINGLINE PARTICIPATION AMOUNT": as defined in Section 2.4.
"TERMINATION DATE": August 15, 2007.
"THIRD PARTY PAYOR ARRANGEMENTS": any and all arrangements with
Medicare, Medicaid, and any other Governmental Authority, or quasi-public
agency, Blue Cross, Blue Shield, any and all managed care plans and
organizations, including but not limited to health maintenance organizations and
preferred provider organizations, private commercial insurance companies,
employee assistance programs and/or any other third party arrangements, plans or
programs for payment or reimbursement in connection with health care services,
products or supplies.
"TOTAL REVOLVING COMMITMENTS": at any time, the aggregate amount of
the Revolving Commitments then in effect.
"TOTAL REVOLVING EXTENSIONS OF CREDIT": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Lenders outstanding at such
time.
"TRADEMARKS": as defined in the Guarantee and Collateral Agreement.
"TRANSFEREE": any Assignee or Participant.
21
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"UNITED STATES": the United States of America.
"WHOLLY OWNED SUBSIDIARY": as to any Person, any other Person, all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP, (ii) the words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation", (iii) the word "incur" shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer to exist (and the words
"incurred" and "incurrence" shall have correlative meanings), (iv) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights, and (v) references to agreements or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 REVOLVING COMMITMENTS. (a) Subject to the terms and conditions
hereof, each Lender severally agrees to make revolving credit loans ("REVOLVING
LOANS") to the Borrower from time to time during the Revolving Commitment Period
in an aggregate principal amount at any one time outstanding which, when added
to such Lender's Revolving Percentage of the sum of (i) the L/C Obligations then
outstanding and (ii) the aggregate principal amount of the Swingline Loans then
outstanding (except to the extent that such Revolving Loans are to be applied to
repay outstanding Swingline Loans), does not exceed the amount of such Lender's
Revolving Commitment. During the Revolving Commitment Period the Borrower may
use the Revolving Commitments by borrowing, prepaying the Revolving Loans in
whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.9.
(b) The Borrower and any one or more Lenders (including New Lenders)
may from time to time agree that such Lenders shall make, obtain or increase the
amount of such Lenders' Revolving Commitments by executing and delivering to the
Administrative Agent an Increased Facility Activation
22
Notice specifying (i) the amount of such increase and (ii) the applicable
Increased Facility Closing Date, PROVIDED, that (A) no Default or Event of
Default (and, if any Senior Subordinated Loans are outstanding, no default or
event of default under the Senior Subordinated
Credit Agreement) shall exist at
the time of or after giving effect to such increase and (B) if this Agreement is
being amended in connection therewith, upon the reasonable request of the
Administrative Agent, the Administrative Agent shall have received legal
opinions reasonably satisfactory to the Administrative Agent. Notwithstanding
the foregoing, without the consent of the Supermajority Lenders, (x) the
aggregate amount of incremental Revolving Commitments obtained pursuant to this
paragraph shall not exceed $40,000,000 and the Total Revolving Commitments shall
at no time exceed $120,000,000, and (y) each increase effected pursuant to this
paragraph shall be in a minimum amount of at least $20,000,000. Any incremental
Revolving Commitments shall be governed by this Agreement and the other Loan
Documents. No Lender shall have any obligation to participate in any increase
described in this paragraph unless it agrees to do so in its sole discretion.
(c) Any additional bank, financial institution or other entity that,
with the consent of the Borrower and the Administrative Agent (which consent
shall not be unreasonably withheld), elects to become a "Lender" under this
Agreement in connection with any transaction described in Section 2.1(b) shall
execute a New Lender Supplement (each, a "NEW LENDER SUPPLEMENT"), substantially
in the form of Exhibit H-1, whereupon such bank, financial institution or other
entity (a "NEW LENDER") shall become a Lender for all purposes and shall be
bound by and entitled to the benefits of this Agreement.
(d) On each Increased Facility Closing Date, the Borrower shall borrow
Revolving Loans under the increased Revolving Commitments from each Lender
participating in the relevant increase (i) if ABR Loans are outstanding on the
relevant Increased Facility Closing Date, in an amount of ABR Loans that will
result in each such participating Lender having ABR Loans outstanding in a
principal amount equal to its Revolving Percentage of the aggregate outstanding
principal amount of ABR Loans and (ii) if Eurodollar Loans are outstanding on
the relevant Increased Facility Closing Date, in an amount of Eurodollar Loans
on such date (if a Eurodollar Tranche is being continued for another Interest
Period on such date) and/or such later date on which a Eurodollar Tranche
outstanding on the Increased Facility Closing Date is continued for another
Interest Period that will result, in each case, in each such participating
Lender having Eurodollar Loans made by it included in such extended Eurodollar
Tranche in a principal amount equal to its Revolving Percentage of the aggregate
outstanding principal amount of Eurodollar Loans included in such Eurodollar
Tranche.
(e) The Borrower shall repay all outstanding Revolving Loans on the
Termination Date.
2.2 PROCEDURE FOR REVOLVING LOAN BORROWING. The Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, PROVIDED that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 11:00 A.M., Charlotte time, (a) three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business
Day prior to the requested Borrowing Date, in the case of ABR Loans), specifying
(i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested
Borrowing Date and (iii) in the case of Eurodollar Loans, the respective amounts
of each such Type of Loan and the respective lengths of the initial Interest
Period therefor; PROVIDED that the amount of Revolving Loans made on the Closing
Date shall not exceed $37,100,000, or such lesser amount as determined pursuant
to Section 5.1(b)(vii)(A). Each borrowing under the Revolving Commitments shall
be in an amount equal to (x) in the case of ABR Loans, $1,000,000 or a whole
multiple thereof (or, if the then aggregate Available Revolving Commitments are
less than $1,000,000, such lesser amount) and (y) in the case of Eurodollar
Loans, $2,000,000 or a whole multiple of $500,000 in excess thereof; PROVIDED,
that the Swingline Lender may request, on behalf of the Borrower, borrowings
under the Revolving Commitments that are ABR Loans in other amounts pursuant
23
to Section 2.4. Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each Lender thereof. Each Lender will
make the amount of its PRO RATA share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 2:00 p.m., Charlotte time, on the Borrowing Date requested by the Borrower in
funds immediately available to the Administrative Agent. Such borrowing will
then be made available to the Borrower by the Administrative Agent crediting the
account of the Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.
2.3 SWINGLINE COMMITMENT. (a) Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swing line loans ("SWINGLINE
LOANS") to the Borrower; PROVIDED that (i) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender's other outstanding
Revolving Loans, may exceed the Swingline Commitment then in effect) and (ii)
the Borrower shall not request, and the Swingline Lender shall not make, any
Swingline Loan if, after giving effect to the making of such Swingline Loan, the
aggregate amount of the Available Revolving Commitments would be less than zero.
During the Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swingline Loans shall be ABR Loans only.
(b) The Borrower shall repay to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the earlier of the Termination Date
and the first date after such Swingline Loan is made that is the 15th or last
day of a calendar month and is at least two Business Days after such Swingline
Loan is made; PROVIDED that on each date that a Revolving Loan is borrowed, the
Borrower shall repay all Swingline Loans then outstanding.
2.4 PROCEDURE FOR SWINGLINE BORROWING; REFUNDING OF SWINGLINE LOANS.
(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans
it shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swingline
Lender not later than 1:00 P.M., Charlotte time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing
Date (which shall be a Business Day during the Revolving Commitment Period).
Each borrowing under the Swingline Commitment shall be in an amount equal to
$250,000 or a whole multiple of $50,000 in excess thereof. Not later than 3:00
P.M., Charlotte time, on the Borrowing Date specified in a notice in respect of
Swingline Loans, the Swingline Lender shall make available to the Administrative
Agent at the Funding Office an amount in immediately available funds equal to
the amount of the Swingline Loan to be made by the Swingline Lender. The
Administrative Agent shall make the proceeds of such Swingline Loan available to
the Borrower on such Borrowing Date by depositing such proceeds in the account
of the Borrower with the Administrative Agent on such Borrowing Date in
immediately available funds.
(b) The Swingline Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), on one Business
Day's notice given by the Swingline Lender no later than 12:00 Noon, Charlotte
time, request each Lender to make, and each Lender hereby agrees to make, a
Revolving Loan, in an amount equal to such Lender's Revolving Percentage of the
aggregate amount of the Swingline Loans (the "REFUNDED SWINGLINE LOANS")
outstanding on the date of such notice, to repay the Swingline Lender. Each
Lender shall make the amount of such Revolving Loan available to the
Administrative Agent at the Funding Office in immediately available funds, not
later than 2:00 P.M., Charlotte time, one Business Day after the date of such
notice. The proceeds of such Revolving Loans shall be immediately
24
made available by the Administrative Agent to the Swingline Lender for
application by the Swingline Lender to the repayment of the Refunded Swingline
Loans. The Borrower irrevocably authorizes the Swingline Lender to charge the
Borrower's accounts with the Administrative Agent (up to the amount available in
each such account) in order to immediately pay the amount of such Refunded
Swingline Loans to the extent amounts received from the Lenders are not
sufficient to repay in full such Refunded Swingline Loans.
(c) If prior to the time a Revolving Loan would have otherwise been
made pursuant to Section 2.4(b), one of the events described in Section 8(f)
shall have occurred and be continuing with respect to the Borrower or if for any
other reason, as determined by the Swingline Lender in its sole discretion,
Revolving Loans may not be made as contemplated by Section 2.4(b), each Lender
shall, on the date such Revolving Loan was to have been made pursuant to the
notice referred to in Section 2.4(b), purchase for cash an undivided
participating interest in the then outstanding Swingline Loans by paying to the
Swingline Lender an amount (the "SWINGLINE PARTICIPATION AMOUNT") equal to (i)
such Lender's Revolving Percentage TIMES (ii) the sum of the aggregate principal
amount of Swingline Loans then outstanding that were to have been repaid with
such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has received from
any Lender such Lender's Swingline Participation Amount, the Swingline Lender
receives any payment on account of the Swingline Loans, the Swingline Lender
will distribute to such Lender its Swingline Participation Amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender's participating interest was outstanding and funded and, in
the case of principal and interest payments, to reflect such Lender's PRO RATA
portion of such payment if such payment is not sufficient to pay the principal
of and interest on all Swingline Loans then due); PROVIDED, HOWEVER, that in the
event that such payment received by the Swingline Lender is required to be
returned, such Lender will return to the Swingline Lender any portion thereof
previously distributed to it by the Swingline Lender.
(e) Each Lender's obligation to make the Loans referred to in Section
2.4(b) and to purchase participating interests pursuant to Section 2.4(c) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right that
such Lender or the Borrower may have against the Swingline Lender, the Borrower
or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Section 5; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower; (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
2.5 COMMITMENT FEES, ETC. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee for the
period from and including the date hereof to the last day of the Revolving
Commitment Period, computed at the Commitment Fee Rate on the average daily
amount of the Available Revolving Commitment of such Lender during the period
for which payment is made, payable quarterly in arrears on each Fee Payment
Date, commencing on the first such date to occur after the date hereof;
PROVIDED, that no Defaulting Lender shall be entitled to accrue or receive any
such commitment fee for so long as such Lender is a Defaulting Lender.
(b) The Borrower agrees to pay to the Administrative Agent the fees in
the amounts and on the dates previously agreed to in writing by the Borrower and
the Administrative Agent.
2.6 TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS. The Borrower
shall have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments;
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PROVIDED that no such termination or reduction of Revolving Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Loans and Swingline Loans made on the effective date thereof, the
Total Revolving Extensions of Credit would exceed the Total Revolving
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Revolving Commitments
then in effect.
2.7 OPTIONAL PREPAYMENTS. The Borrower may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent no later than 11:00
A.M., Charlotte time, three Business Days prior thereto, in the case of
Eurodollar Loans, and no later than 11:00 A.M., Charlotte time, one Business Day
prior thereto, in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR
Loans; PROVIDED, that if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to Section 2.17. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such
date on the amount prepaid. Partial prepayments of Revolving Loans shall be in
an aggregate principal amount of $1,000,000 or a whole multiple thereof. Partial
prepayments of Swingline Loans shall be in an aggregate principal amount of
$100,000 or a whole multiple thereof. Any Revolving Loans or Swingline Loans
prepaid hereunder may be reborrowed.
2.8 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) If any
Indebtedness shall be incurred by any Group Member (excluding any Indebtedness
incurred in accordance with Section 7.2 or permitted by the Required Lenders
pursuant to Section 10.1 (except as may be otherwise agreed to by the Required
Lenders in connection with their approval of such Indebtedness pursuant to
Section 10.1)), an amount equal to 100% of the Net Cash Proceeds thereof shall
be applied on the date of such incurrence toward the reduction of the Revolving
Commitments as set forth in Section 2.8(c).
(b) If on any date any Group Member shall receive Net Cash Proceeds
from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall
be delivered in respect thereof, such Net Cash Proceeds shall be applied on such
date toward the prepayment of the Revolving Loans and, if applicable, the
reduction of the Revolving Commitments as set forth in Section 2.8(c); PROVIDED,
that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Revolving Loans
and, if applicable, the reduction of the Revolving Commitments as set forth in
Section 2.8(c).
(c) Amounts to be applied pursuant to Section 2.8(a) shall be applied
to reduce permanently the Revolving Commitments. Amounts to be applied pursuant
to Section 2.8(b) shall be applied to prepay outstanding Revolving Loans and/or
Swingline Loans without reduction of the Revolving Commitments (and if no such
Loans are outstanding prior to such prepayment or after giving effect to a
portion of such prepayment, such excess proceeds may be applied by the Borrower
in any manner not prohibited by this Agreement); PROVIDED that notwithstanding
the foregoing, if the aggregate amount of prepayments pursuant to Section 2.8(b)
exceeds $20,000,000, any amount in excess thereof that would otherwise be
applied toward the prepayment of the Revolving Loans without reduction of the
Revolving Commitments shall instead be applied to reduce permanently the
Revolving Commitments. Any such reduction of the Revolving Commitments shall be
accompanied by prepayment of the Revolving Loans and/or Swingline Loans to the
extent, if any, that the Total Revolving Extensions of Credit exceed the amount
of the Total Revolving Commitments as so reduced, PROVIDED that, in the case of
any such permanent reduction of the Revolving Commitments, if the aggregate
principal amount of
26
Revolving Loans and Swingline Loans then outstanding is less than the amount by
which the Total Revolving Extensions of Credit exceeds the amount of Total
Revolving Commitments as so reduced (because L/C Obligations constitute a
portion thereof), the Borrower shall, if an Event of Default shall have occurred
and be continuing, to the extent of the balance of such excess, replace
outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral account established with the Administrative Agent for the benefit of
the Lenders on terms and conditions satisfactory to the Administrative Agent.
The application of any prepayment pursuant to Section 2.8 or Section 7.5(a)(v)
shall be made, FIRST, to ABR Loans and, SECOND, to Eurodollar Loans. Each
prepayment of the Loans under Section 2.8 or Section 7.5(a)(v) (except in the
case of Revolving Loans that are ABR Loans and Swingline Loans) shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid. Unless required as a result of the permanent reduction of Revolving
Commitments, any Revolving Loans prepaid hereunder may be reborrowed.
2.9 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent prior irrevocable notice of such election no later than
11:00 A.M., Charlotte time, on the Business Day preceding the proposed
conversion date, PROVIDED that any such conversion of Eurodollar Loans may only
be made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent prior irrevocable notice of such election no later than
11:00 A.M., Charlotte time, on the third Business Day preceding the proposed
conversion date (which notice shall specify the length of the initial Interest
Period therefor), PROVIDED that no ABR Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the
Administrative Agent or the Required Lenders have determined in its or their
sole discretion not to permit such conversions. Upon receipt of any such notice
the Administrative Agent shall promptly notify each Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, PROVIDED
that no Eurodollar Loan may be continued as such when any Event of Default has
occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined in its or their sole discretion not to permit such
continuations, and PROVIDED, FURTHER, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each Lender thereof.
2.10 LIMITATIONS ON EURODOLLAR TRANCHES. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $2,000,000 or a whole multiple of $500,000
in excess thereof and (b) no more than eight Eurodollar Tranches shall be
outstanding at any one time.
2.11 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
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(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section PLUS 2%
or (y) in the case of Reimbursement Obligations, the rate applicable to ABR
Loans PLUS 2%, and (ii) if all or a portion of any interest payable on any Loan
or Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to ABR Loans PLUS 2%, in each case,
with respect to clauses (i) and (ii) above, from the date of such non-payment
until such amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.12 COMPUTATION OF INTEREST AND FEES. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.11(a).
2.13 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the last day of the then-current Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
28
Eurodollar Loans shall be made or continued as such, nor shall the Borrower have
the right to convert Loans to Eurodollar Loans.
2.14 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Revolving Commitments of the Lenders
shall be made pro rata according to the respective Revolving Percentages of the
Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Loans shall be made PRO
RATA according to the respective outstanding principal amounts of the Revolving
Loans then held by the Lenders.
(c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 1:00 p.m.,
Charlotte time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(d) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon, at a
rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans, on
demand, from the Borrower.
(e) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment due to be made by the
Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective PRO RATA shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate.
29
Nothing herein shall be deemed to limit the rights of the Administrative Agent
or any Lender against the Borrower.
2.15 REQUIREMENTS OF LAW. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.16 and changes in the rate of tax
on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this paragraph, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error.
Notwithstanding anything to the contrary in this Section, the Borrower shall not
be required to compensate a Lender pursuant to this Section for any amounts
incurred more than six months prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor; PROVIDED
that, if the circumstances giving rise to such claim have a retroactive effect,
then such six-month period shall be extended to include the period of such
retroactive effect. The
30
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.16 TAXES. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes, branch profits and similar franchise
taxes, imposed on the Administrative Agent or any Lender as a result of a
present or former connection between the Administrative Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, PROVIDED, HOWEVER, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation), except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, the Borrower shall promptly send to the Administrative Agent for its
own account or for the account of the relevant Lender, as the case may be, a
certified copy of an original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or Other
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (a "NON-U.S. LENDER") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit G and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such
31
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, PROVIDED that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(f) If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Non-Excluded Taxes or Other
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts pursuant to this Section 2.16, it
shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
2.16 with respect to the Non-Excluded Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent or such
Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); PROVIDED, that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental Authority.
This paragraph shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to the Borrower or any other Person.
(g) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.17 INDEMNITY. The Borrower agrees to indemnify each Lender for, and
to hold each Lender harmless from, any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable
32
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.18 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.15 or 2.16(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; PROVIDED, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and PROVIDED, FURTHER, that nothing in this Section shall affect
or postpone any of the obligations of the Borrower or the rights of any Lender
pursuant to Section 2.15 or 2.16(a).
2.19 REPLACEMENT OF LENDERS. The Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.15 or 2.16(a) or (b) is a Defaulting Lender, with a replacement
financial institution; PROVIDED that (i) such replacement does not conflict with
any Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action under Section 2.18 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.15 or 2.16(a),
(iv) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.17 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.6 (PROVIDED that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.15 or 2.16(a), as the case may
be, and (ix) any such replacement shall not be deemed to be a waiver of any
rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Lenders set forth
in Section 3.4(a), agrees to issue letters of credit ("LETTERS OF CREDIT") for
the account of the Borrower on any Business Day during the Revolving Commitment
Period in such form as may be approved from time to time by the Issuing Lender;
PROVIDED that the Issuing Lender shall have no obligation to issue any Letter of
Credit if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Commitments would be less than zero. Each Letter of Credit shall (A)
be denominated in Dollars and (B) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date that is five Business
Days prior to the Termination Date, PROVIDED that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above). The Existing Letters of Credit shall be deemed to be Letters of
Credit for all purposes of this Agreement and the other Loan Documents.
(b) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit if such issuance would conflict with, or cause the Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
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3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Letter
of Credit (including the amount thereof).
3.3 FEES AND OTHER CHARGES. (a) The Borrower will pay a fee on all
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar Loans, shared ratably among the
Lenders and payable quarterly in arrears on each Fee Payment Date after the
issuance date. In addition, if requested by the Issuing Lender, the Borrower
shall pay to the Issuing Lender for its own account a fronting fee not to exceed
1/4 of one percent per annum on the undrawn and unexpired amount of each Letter
of Credit, payable quarterly in arrears on each Fee Payment Date after the
issuance date.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
3.4 L/C PARTICIPATIONS. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Lender, on
the terms and conditions set forth below, for such L/C Participant's own account
and risk an undivided interest equal to such L/C Participant's Revolving
Percentage in the Issuing Lender's obligations and rights under and in respect
of each Letter of Credit and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with the
Issuing Lender that, if a draft is paid under any Letter of Credit for which the
Issuing Lender is not reimbursed in full by the Borrower in accordance with the
terms of this Agreement, such L/C Participant shall pay to the Issuing Lender
upon demand at the Issuing Lender's address for notices specified herein an
amount equal to such L/C Participant's Revolving Percentage of the amount of
such draft, or any part thereof, that is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the Issuing Lender by such L/C
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Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans. A certificate of the Issuing Lender
submitted to any L/C Participant with respect to any amounts owing under this
Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its PRO
RATA share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its PRO RATA share thereof;
PROVIDED, HOWEVER, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER. If any draft is paid
under any Letter of Credit, the Borrower shall reimburse the Issuing Lender for
the amount of (a) the draft so paid and (b) any taxes, fees, charges or other
costs or expenses incurred by the Issuing Lender in connection with such
payment, not later than 1:00 p.m., Charlotte time, on (i) the Business Day
following the date that the Borrower receives notice of such draft, if such
notice is received on such day prior to 10:00 A.M., Charlotte time, or (ii) if
clause (i) above does not apply, the second Business Day immediately following
the day that the Borrower receives such notice. Each such payment shall be made
to the Issuing Lender at its address for notices referred to herein in Dollars
and in immediately available funds. Interest shall be payable on any such
amounts from the date on which the relevant draft is paid until payment in full
at the rate set forth in (x) until the Business Day next succeeding the date of
the relevant notice, Section 2.11(b) and (y) thereafter, Section 2.11(c).
3.6 OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Issuing Lender.
The Borrower agrees that any action taken or omitted by the Issuing Lender under
or in connection with any Letter of Credit or the related drafts or documents,
if done in the absence of gross negligence or willful misconduct and in
accordance with the standards of care specified in the Uniform Commercial Code
of the State of
New York, shall be binding on the Borrower and shall not result
in any liability of the Issuing Lender to the Borrower.
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under
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such Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, from and after the Closing Date, Holdings and the Borrower hereby
jointly and severally represent and warrant to the Administrative Agent and each
Lender that:
4.1 FINANCIAL CONDITION. (a) The unaudited PRO FORMA consolidated
balance sheet of Holdings and its consolidated Subsidiaries as at March 31, 2002
(including the notes thereto) (the "PRO FORMA BALANCE SHEET"), copies of which
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on such date) to (i) the consummation of the
Recapitalization, (ii) the Loans to be made and the Senior Subordinated Notes to
be issued or the Senior Subordinated Loans to be borrowed, as applicable, on the
Closing Date and the use of proceeds thereof and (iii) the payment of fees and
expenses in connection with the foregoing. The Pro Forma Balance Sheet has been
prepared based on the best information available to Holdings as of the date of
delivery thereof, and presents fairly on a PRO FORMA basis the estimated
financial position of Holdings and its consolidated Subsidiaries as at March 31,
2002, assuming that the events specified in the preceding sentence had actually
occurred at such date.
(b) (i) The audited consolidated balance sheet of Holdings as at
December 31, 2001, and the related consolidated statements of income and of cash
flows for the fiscal year ended on such date, reported on by and accompanied by
an unqualified report from PricewaterhouseCoopers, present fairly the
consolidated financial condition of Holdings as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
fiscal year then ended, (ii) the unaudited consolidated balance sheet of
Holdings as at March 31, 2002, and the related unaudited consolidated statements
of income and cash flows for the three-month period ended on such date, present
fairly the consolidated financial condition of Holdings as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
three-month period then ended (subject to normal year-end audit adjustments) and
(iii) all such financial statements, including any related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein and, in the case of clause (ii), except for
the absence of footnotes). As of the Closing Date, no Group Member has any
material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the
financial statements referred to in this paragraph, any financial statements for
any periods after March 31, 2002 delivered prior to the Closing Date, the
financial and due diligence reports and any revised projections or forecasts
delivered to each Initial Lender in writing prior to the Closing Date, or the
Offering Memorandum dated August 8, 2002 relating to the sale of the Senior
Subordinated Notes (it being understood that "material" shall be construed in
the context of all Group Members taken as a whole). During the period from
December 31, 2001 to and including the date hereof there has been no Disposition
by any Group Member of any material part of the business or property of the
Group Members taken as a whole.
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4.2 NO CHANGE. Since December 31, 2001, there has been no
development or event that has had or is reasonably expected to have a Material
Adverse Effect.
4.3 EXISTENCE; COMPLIANCE WITH LAW. Each Group Member (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification except to the extent that the
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect, and (d) is in compliance with all Requirements of Law
(including, without limitation, Certificate of Need Regulations and any
requirement to timely file reports, data and other information with any relevant
Governmental Authority) except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
4.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each Loan Party
has the power and authority to make, deliver and perform the Loan Documents to
which it is a party and, in the case of the Borrower, to obtain extensions of
credit hereunder. Each Loan Party has taken all necessary organizational action
to authorize the execution, delivery and performance of the Loan Documents to
which it is a party and, in the case of the Borrower, to authorize the
extensions of credit on the terms and conditions of this Agreement. No material
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Recapitalization and the extensions of credit hereunder or
with the execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents, except (i) consents, authorizations,
filings and notices described in Schedule 4.4, which consents, authorizations,
filings and notices have been obtained or made and are in full force and effect,
and (ii) the filings referred to in Section 4.19. Each Loan Document has been
duly executed and delivered on behalf of each Loan Party party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Health Care Permit, Reimbursement Approval, Requirement of Law or any
Contractual Obligation of any Group Member in any material respect and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
No Requirement of Law or Contractual Obligation applicable to the Borrower or
any of its Subsidiaries could reasonably be expected to have a Material Adverse
Effect.
4.6 LITIGATION. Except as set forth in Schedule 4.6, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of Holdings or the Borrower,
threatened by or against any Group Member or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.
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4.7 NO DEFAULT. No Group Member is in default under or with respect
to any of its Contractual Obligations in any respect that could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each Group Member has title in fee
simple to, or a valid leasehold interest in, all its material real property, and
good title to, or a valid leasehold interest in, all its other material
property, in each case, except for minor defects which do not materially
interfere with the conduct of the business of such Group Member, and none of
such property is subject to any Lien except as permitted by Section 7.3.
4.9 INTELLECTUAL PROPERTY. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, or as set forth on
SCHEDULE 4.9, (a) each Group Member owns, or is licensed or otherwise has the
right to use, all Intellectual Property necessary for the conduct of its
business as currently conducted, (b) no material claim has been asserted and is
pending by any Person challenging or questioning the use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property, nor does
Holdings or the Borrower know of any valid basis for any such claim, and (c) the
use of Intellectual Property by each Group Member does not infringe on the
rights of any Person in any material respect.
4.10 TAXES. Each Group Member has filed or caused to be filed all
Federal, material state and other material tax returns that are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any material assessments made against it or any of its property and all other
material taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the relevant Group Member); no tax Lien has been filed, and, to the
knowledge of Holdings and the Borrower, no claim is being asserted, with respect
to any such tax, fee or other charge.
4.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans, and
no other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
4.12 LABOR MATTERS. Except as, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against any Group Member pending or, to the knowledge of Holdings
or the Borrower, threatened; (b) hours worked by and payment made to employees
of each Group Member have not been in violation of the Fair Labor Standards Act
or any other applicable Requirement of Law dealing with such matters; and (c)
all payments due from any Group Member on account of employee health and welfare
insurance have been paid or accrued as a liability on the books of the relevant
Group Member.
4.13 ERISA. Except as could not reasonably be expected to have a
Material Adverse Effect: (a) neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code, (b) no termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period, (c) the present value of all accrued benefits under each
Single
38
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount, (d) neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in liability under ERISA, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any liability under ERISA if the Borrower or any
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made, and (e) no such Multiemployer
Plan is in Reorganization or Insolvent.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.15 SUBSIDIARIES. Except as disclosed to the Administrative Agent by
the Borrower in writing from time to time after the Closing Date, (a) Schedule
4.15 sets forth the name and jurisdiction of incorporation of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital Stock
owned by any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors' qualifying shares) of
any nature relating to any Capital Stock of the Borrower or any Subsidiary,
except as created by the Loan Documents.
4.16 USE OF PROCEEDS. The proceeds of the Revolving Loans, Swingline
Loans and the Letter of Credit shall be used to finance (a) a portion of the
Recapitalization and related fees and expenses and (b) the working capital needs
and general corporate purposes (including certain acquisitions permitted
pursuant to Section 7.8 of this Agreement) of the Borrower and its Subsidiaries
in the ordinary course of business.
4.17 ENVIRONMENTAL MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by any
Group Member (the "PROPERTIES") do not contain, and, to the knowledge of
Holdings and the Borrower, have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under circumstances that
constitute or constituted a violation of any Environmental Law;
(b) no Group Member has received or is aware of any written notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the business operated by any Group Member
(the "BUSINESS"), nor does Holdings or the Borrower have knowledge or reason to
believe that any such notice will be received or is being threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
that could reasonably be expected to give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Properties
in violation of, or in a manner that could reasonably be expected to give rise
to liability under, any applicable Environmental Law;
39
(d) no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of Holdings and the Borrower, threatened, under any
Environmental Law to which any Group Member is or, to the knowledge of Holdings
and the Borrower, will be named as a party with respect to the Properties or the
Business, nor are there, to the knowledge of Holdings and the Borrower, any
consent decrees or other decrees, consent orders, administrative orders or other
orders outstanding under any Environmental Law with respect to the Properties or
the Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of any Group Member in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in a
manner that could reasonably be expected to give rise to liability under
Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws; and
(g) no Group Member has contractually assumed any liability of any
other Person under Environmental Laws.
This Section 4.17 contains the sole representations and warranties of
Holdings and the Borrower concerning environmental matters.
4.18 ACCURACY OF INFORMATION, ETC. The information (other than
projections and PRO FORMA financial information) contained in this Agreement,
any other Loan Document or any other document, certificate or written statement
furnished by or on behalf of any Loan Party to the Administrative Agent or the
Lenders, or any of them, as modified and supplemented by other information so
furnished, taken as a whole, did not contain as of the date so furnished any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained herein or therein not materially misleading in
light of the circumstances under which the statements in such information were
made. The projections and PRO FORMA financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. As of the Closing
Date, to the knowledge of Holdings and the Borrower, the representations and
warranties contained in the Recapitalization Documentation are true and correct
in all material respects. There is no fact known to any Loan Party (including,
without limitation, proposed laws or rules in respect of healthcare regulations
that are generally considered to be reasonably likely to be passed or adopted)
that could reasonably be expected to have a Material Adverse Effect that has not
been expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
4.19 SECURITY DOCUMENTS. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof (except as expressly provided in the
Guarantee and Collateral Agreement). In the case of the Pledged Stock described
in the Guarantee and Collateral Agreement, when stock certificates representing
such Pledged Stock are delivered to the Administrative Agent, and in the case of
the other Collateral described in the Guarantee and Collateral Agreement, when
financing statements and other filings specified on Schedule 4.19(a) in
appropriate form are filed in the offices specified on Schedule 4.19(a), the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties
40
in such Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement), in each case prior and
superior in right to any other Person (except, in the case of Collateral other
than Pledged Stock, Liens permitted by Section 7.3).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
4.19(b), each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, as security for the Obligations
(as defined in the relevant Mortgage), in each case prior and superior in right
to any other Person. Schedule 1.1B lists, as of the Closing Date, each parcel of
owned real property located in the United States and held by the Borrower or any
of its Subsidiaries that has a value, in the reasonable opinion of the Borrower,
in excess of $300,000.
4.20 SOLVENCY. The Loan Parties, taken as a whole, after giving
effect to the Recapitalization and the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith are and will be
and will continue to be, Solvent.
4.21 SENIOR INDEBTEDNESS. The Obligations constitute "Senior
Indebtedness" and "Designated Senior Indebtedness" of the Borrower under and as
defined in the Senior Subordinated Note Indenture. The obligations of each
Subsidiary Guarantor under the Guarantee and Collateral Agreement constitute
"Guarantor Senior Indebtedness" of such Subsidiary Guarantor under and as
defined in the Senior Subordinated Note Indenture.
4.22 REGULATION H. No Mortgage encumbers improved real property that
is located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
4.23 CERTAIN DOCUMENTS. The Borrower has delivered to the
Administrative Agent a complete and correct copy of the Recapitalization
Documentation (as of the Closing Date) and the Senior Subordinated Note
Indenture or the Senior Subordinated
Credit Agreement, as the case may be,
including any amendments, supplements or modifications with respect to any of
the foregoing.
4.24 INSPECTIONS AND INVESTIGATIONS. Except as could not reasonably
be expected to have a Material Adverse Effect, (a) neither the Borrower's nor
any Subsidiary's right to receive reimbursements pursuant to any government
program or private program has been terminated or otherwise adversely affected
as a result of any investigation or action, whether by any Governmental
Authority or other third party; (b) neither the Borrower nor any Subsidiary has,
during the past three years, been the subject of any inspection, investigation,
survey, audit, monitoring, or other form of review by any Governmental Authority
based upon any alleged improper activity on the part of such Person, nor has the
Borrower or any Subsidiary received any notice of deficiency during the past
three years in connection with the operations of its business; (c) there are not
any outstanding deficiencies or work orders of any Governmental Authority having
jurisdiction over the Borrower or any Subsidiary, or requiring conformity to any
applicable agreement with any Governmental Authority or Requirement of Law; and
(d) there is not any notice of any claim, requirement, or demand of any
licensing or certifying agency or other third party supervising or having
authority over the Borrower or any Subsidiary to rework or redesign any part
thereof or to provide additional furniture, fixtures, equipment, appliances, or
inventory so as to conform to or comply with any existing Requirement of Law.
41
4.25 MEDICARE PARTICIPATION. Except as could not reasonably be
expected to have a Material Adverse Effect, the Borrower and its Subsidiaries
are qualified for participation in the Medicare and Medicaid programs, have
current and valid provider contracts with the Medicare and Medicaid programs,
are in compliance with all conditions of participation in such programs, and
have received all approvals or qualifications necessary for reimbursement.
4.26 FRAUD AND ABUSE. To the knowledge of Holdings and the Borrower,
no Group Member has engaged in any material activities that are prohibited under
federal Medicare and Medicaid statutes, including, but not limited to, 42 U.S.C.
Sections 1320a-7, 1320a-7a, 1320a-7b, 1395nn and 1396b, or 31 U.S.C. Sections
3729-3733, the federal statutes regulating CHAMPUS, or the regulations
promulgated thereunder pursuant to such statutes, or any similar federal, state,
or local statutes or regulations promulgated pursuant to such statutes,
including, but not limited to the following:
(a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment;
(b) knowingly and willfully making or causing to be made any false
statement or representation of a material fact for use in determining rights to
any benefit or payment;
(c) failing to disclose knowledge by a claimant of the occurrence of
any event affecting the initial or continued right to any benefit or payment on
its own behalf or on behalf of another, with intent to secure such benefit or
payment fraudulently; and
(d) knowingly and willfully soliciting or receiving any remuneration
(including any kickback, bribe, or rebate), directly or indirectly, overtly or
covertly, in cash or in kind, or offering to pay such remuneration (i) in return
for referring an individual to a person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare, Medicaid, or other applicable third party payors, or (ii) in
return for purchasing, leasing, or ordering or arranging for or recommending the
purchasing, leasing or order of any good, facility, service, or item for which
payment may be made in whole or in part by Medicare, Medicaid, or other
applicable third party payors.
4.27 HIPAA COMPLIANCE. To the extent that and for so long as (a) any
Group Member is a "covered entity" within the meaning of HIPAA or (b) any Group
Member and/or its business and operations are subject to or covered by the
so-called "Administrative Simplification" provisions of HIPAA, except as could
not reasonably be expected to have a Material Adverse Effect, such Group Member,
(i) has undertaken all necessary surveys, audits, inventories, reviews, analyses
and/or assessments (including any necessary risk assessments) of all areas of
its business and operations required by HIPAA; (ii) has developed a detailed
plan and time line for becoming HIPAA Compliant (as defined below) (a "HIPAA
Compliance Plan"); and (iii) has implemented those provisions of such HIPAA
Compliance Plan in all material respects necessary to ensure that such Group
Member is or becomes HIPAA Compliant. For purposes hereof, "HIPAA Compliant"
shall mean that such Group Member (x) is or will be in material compliance with
each of the applicable requirements of the so-called "Administrative
Simplification" provisions of HIPAA on and as of each date that any part
thereof, or any final rule or regulation thereunder, becomes effective in
accordance with its or their terms, as the case may be (each such date, a "HIPAA
Compliance Date") and (y) is not, as of any date following any such HIPAA
Compliance Date, the subject of any civil or criminal penalty, process, claim,
action or proceeding, or any administrative or other regulatory review, survey,
process or proceeding (other than routine surveys or reviews conducted by any
government health plan or other accreditation entity).
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SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:
(a) CREDIT AGREEMENT; GUARANTEE AND COLLATERAL AGREEMENT. The
Administrative Agent shall have received (i) this Agreement, executed and
delivered by the Administrative Agent, Holdings, the Borrower and each
Person listed on Schedule 1.1A, (ii) the Guarantee and Collateral
Agreement, executed and delivered by Holdings, the Borrower and each
Subsidiary Guarantor, and (iii) an Acknowledgement and Consent in the form
attached to the Guarantee and Collateral Agreement, executed and delivered
by each Issuer (as defined therein), if any, that is not a Loan Party.
(b) RECAPITALIZATION, ETC. The following transactions shall have been
consummated, in each case in accordance with the provisions of the
Recapitalization Documentation provided to the Initial Lenders on or prior
to the date hereof, as amended, modified and supplemented with the approval
of the Initial Lenders, such approvals not to be unreasonably withheld:
(i) the purchase by MQ Investment Holdings, LLC (together
with any other Control Investment Affiliates of the Sponsor) of equity
securities of Holdings representing approximately 70.5% of the post-closing
equity of Holdings and the exchange by the Rollover Stockholders of
existing equity in Holdings for newly issued shares in Holdings
representing approximately 29.5% of the post-closing equity of Holdings
(together with the transactions contemplated by clause (v) below, the
"RECAPITALIZATION"), in each case, in accordance with the Recapitalization
Agreement;
(ii) Holdings shall have contributed, transferred or
otherwise conveyed substantially all of its assets, including all material
assets, (free and clear of all Liens except as expressly permitted pursuant
to Section 7.3) to the Borrower;
(iii) Holdings shall have received at least (A) $107,900,000
in gross cash proceeds from equity issued by Holdings to MQ Investment
Holdings, LLC (together with any other Control Investment Affiliates of the
Sponsor) and (B) $45,100,000 in gross consideration in the form of
"rollover equity";
(iv) the Borrower shall have received at least $176,000,000
(less the amount of any Junior Capital) in gross cash proceeds from the
issuance of the Senior Subordinated Notes or the borrowing of the Senior
Subordinated Loans, as applicable;
(v) Holdings shall have redeemed or repurchased the Seller
Shares (other than the Seller Shares held by the Rollover Stockholders
exchanged for "rollover equity" as contemplated by clause (i) above) in
accordance with the Recapitalization Agreement;
(vi) the fees and expenses to be incurred in connection with
the Recapitalization and the financing thereof shall not exceed $15,500,000
unless the amount in excess thereof is funded with Junior Capital (without
duplication to the Junior Capital referred to in clause (iv) above); and
(vii) (A) substantially all of the Indebtedness of Holdings
and its Subsidiaries (other than the Existing Letters of Credit, capital
leases, purchase money obligations and similar
43
obligations specified in Schedule 7.2(d) which the Borrower determines in
its sole judgment would not be prudent to repay, which amount of such
Indebtedness shall (i) reduce the maximum amount of Revolving Loans that
may be borrowed on the Closing Date to the extent of such amount and (ii)
not exceed $37,100,000 without the prior written consent of the
Supermajority Lenders) shall have been repaid in full and (B) reasonably
satisfactory arrangements shall have been made for the termination of all
Liens granted in connection therewith.
(c) CONSOLIDATED EBITDA. The Initial Lenders shall have received
satisfactory evidence that Consolidated EBITDA for the twelve-month period
ending with each month ended after March 31, 2002 shall be higher than
Consolidated EBITDA for the twelve-month period ending with the comparable
month in the 2001 fiscal year and the Initial Lenders shall have received
support for such calculation in a manner consistent with the business
diligence report from Ernst & Young or otherwise of a nature that is
satisfactory to the Initial Lenders (and, in any event, in conformity with
Regulation S-X).
(d) FINANCIAL STATEMENTS. The Lenders shall have received unaudited
interim consolidated financial statements of Holdings (i) for each fiscal
month which has ended 21 or more days prior to the Closing Date, and (ii)
for each quarterly period in the 2002 fiscal year which has ended 45 or
more days prior to the Closing Date, and such financial statements and the
unaudited consolidated financial statements for the same period of the
prior fiscal year shall not reflect any material adverse change in the
consolidated financial condition of Holdings, as reflected in the financial
statements or projections previously furnished to the Lenders.
(e) APPROVALS. All governmental and third party approvals (including
Health Care Permits and Reimbursement Approvals) required by the
Recapitalization Documentation in connection with the Recapitalization
shall have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action being
taken or threatened by any competent authority that would restrain, prevent
or otherwise impose material adverse conditions on the Recapitalization.
All material governmental and third party approvals (including Health Care
Permits and Reimbursement Approvals) necessary in connection with the
financings contemplated hereby shall have been obtained and be in full
force and effect without any action being taken or threatened by any
competent authority that would restrain, prevent or otherwise impose
material adverse conditions on the financing contemplated hereby.
(f) FEES. The Lenders, the Administrative Agent and the Closing Agent
shall have received all fees required to be paid, and all expenses required
to be paid for which invoices have been presented (including the reasonable
fees and expenses of legal counsel), on or before the Closing Date. All
such amounts will be paid with proceeds of Loans made on the Closing Date
and will be reflected in the funding instructions given by the Borrower to
the Administrative Agent on or before the Closing Date.
(g) CLOSING CERTIFICATE; CERTIFIED CERTIFICATE OF INCORPORATION; GOOD
STANDING CERTIFICATES. The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Closing Date, substantially in
the form of Exhibit C, with appropriate insertions and attachments,
including the certificate of incorporation of each Loan Party that is a
corporation certified by the relevant authority of the jurisdiction of
organization of such Loan Party, and (ii) a long form good standing
certificate for each Loan Party from its jurisdiction of organization.
(h) LEGAL OPINIONS. The Administrative Agent shall have received (and
the Initial Lenders shall have received final forms of) the following
executed legal opinions:
44
(i) the legal opinion of X'Xxxxxxxx LLP, counsel to the
Borrower and the other Loan Parties, substantially in the form of
Exhibit E-1;
(ii) to the extent consented to by the relevant counsel, each
legal opinion, if any, delivered in connection with the
Recapitalization Agreement, accompanied by a reliance letter in favor
of the Lenders; and
(iii) the legal opinion of local counsel in each jurisdiction
where any Loan Party is incorporated, organized or formed,
substantially in the form of Exhibit E-2.
(i) PLEDGED STOCK; STOCK POWERS; PLEDGED NOTES. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) each
promissory note (if any) required to be pledged to the Administrative Agent
pursuant to the Guarantee and Collateral Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank)
by the pledgor thereof, in each case, to the extent required by Guarantee
and Collateral Agreement.
(j) FILINGS, REGISTRATIONS AND RECORDINGS. Each document (including
any Uniform Commercial Code financing statement) required by the Security
Documents or under law or reasonably requested by the Administrative Agent
to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien on
the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section
7.3), shall be in proper form for filing, registration or recordation.
(k) SOLVENCY CERTIFICATE. The Administrative Agent shall have received
(and the Initial Lenders shall have received final forms of) a solvency
certificate of the Borrower, dated the Closing Date, substantially in the
form of Exhibit G.
(l) INSURANCE. The Administrative Agent shall have received (and the
Initial Lenders shall have received final forms of) insurance certificates
satisfying the requirements of Section 6.5.
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date except to the extent such representations
and warranties expressly relate to an earlier date in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
45
(c) OTHER DOCUMENTS. In the case of any extension of credit made on an
Increased Facility Closing Date, the Administrative Agent shall have
received such documents and information as it may reasonably request.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
From and after the Closing Date, Holdings and the Borrower hereby
jointly and severally agree that, so long as the Revolving Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount
(other than any contingent or unliquidated obligations or liabilities) is owing
to any Lender or the Administrative Agent hereunder, each of Holdings and the
Borrower shall and shall cause each of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent and
each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case in comparative
form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by PricewaterhouseCoopers, Deloitte & Touche,
KPMG Peat Marwick, Ernst & Young, or other independent certified public
accountants of nationally recognized standing, reasonably satisfactory to
the Administrative Agent;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments and except for the absence of footnotes);
(c) as soon as available, but in any event not later than 10 days
after the date of delivery, any financial statements or other information
required to be provided to the holders of Senior Subordinated Loans
pursuant to the Senior Subordinated Credit Agreement while any Senior
Subordinated Loans are outstanding; and
(d) for the first twelve months after the Closing Date, as soon as
available, but in any event, not later than 30 days after the end of each
month (other than any month which is the end of a fiscal quarter or fiscal
year), a summary of any internal financial statements or reports prepared
for management.
All such financial statements (other than in respect of clause (d)) shall be
prepared in reasonable detail and in accordance with GAAP (except, in the case
of unaudited financial statements, for the absence of footnotes) applied (except
as approved by such accountants or officer, as the case may be, and disclosed in
reasonable detail therein) consistently throughout the periods reflected therein
and with prior periods.
46
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent and each Lender (or, in the case of clause (f), to the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the
case of quarterly or annual financial statements, (x) a Compliance
Certificate containing all information and calculations necessary for
determining compliance by the Borrower with the provisions of Section 7.1,
and (y) to the extent not previously disclosed to the Administrative Agent,
a description of any change in the jurisdiction of organization of any Loan
Party;
(c) as soon as available, and in any event no later than 45 days after
the end of each fiscal year of the Borrower, a detailed consolidated budget
for the following fiscal year prepared on a quarterly basis (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of the following fiscal year, the related consolidated
statements of projected cash flow, projected changes in financial position
and projected income and a description of the underlying assumptions
applicable thereto), and, as soon as available, significant revisions, if
any, of such budget and projections with respect to such fiscal year
(collectively, the "PROJECTIONS"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer stating that such
Projections are based on estimates, information and assumptions believed to
be reasonable when made;
(d) within five Business Days after the same are sent, copies of all
financial statements and reports that Holdings or the Borrower sends to the
holders of any class of its debt securities or public equity securities
and, within ten (10) days after the same are filed, copies of all financial
statements and reports that Holdings or the Borrower may make to, or file
with, the SEC;
(e) within five Business Days (i) after obtaining knowledge thereof,
the occurrence of any event that would (with the giving of notice, the
passage of time, or both) be a violation of any Health Care Permit
necessary for the lawful conduct of the business or operations of any Group
Member, including, without limitation, the ownership and operation of its
Health Care Facilities, (ii) after receipt thereof, any notice of any
violation of any Requirements of Law which would (with the giving of
notice, the passage of time, or both) cause any of the Health Care Permits
referred to in clause (i) to be modified, rescinded or revoked, (iii) after
receipt thereof, any notice, summons, citation or other proceeding seeking
to adversely modify in any material respect, revoke, or suspend any
Medicare Provider Agreement, Medicaid Provider Agreement, Medicare
certification or Medicaid certification applicable to any of the Health
Care Facilities of any Group Member, or (iv) after obtaining knowledge
thereof, any revocation or involuntary termination of any Medicare Provider
Agreement, Medicaid Provider Agreement, Medicare certification or Medicaid
certification applicable to any of the Health Care Facilities of any Group
Member, in each case, which could reasonably be expected to have a Material
Adverse Effect;
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request; and
(g) any accountants' management letters received by any Group Member.
47
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the relevant Group Member except to the extent that failure to pay, discharge or
otherwise satisfy such obligations could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
6.4 MAINTENANCE OF EXISTENCE; COMPLIANCE. (a) (i) Preserve, renew
and keep in full force and effect its organizational existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business (including, without limitation,
all Health Care Permits and Reimbursement Approvals reasonably necessary for the
lawful conduct of its business or operations where now conducted and as planned
to be conducted, including the ownership and operation of its Health Care
Facilities, pursuant to all Requirements of Law), except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of clause (ii) above,
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; (b) ensure that all Health Care Facilities owned,
leased, managed or operated by any Group Member are entitled to participate in,
and receive payment under, the appropriate Medicare, Medicaid and related
reimbursement programs, and any similar state or local government-sponsored
program, to the extent any Group Member has decided to participate in any such
program, and to receive reimbursement from private and commercial payers and
health maintenance organizations to the extent applicable thereto, except where
a failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all property useful
and necessary in its business in reasonable working order and condition,
ordinary wear and tear excepted, (b) if requested by the Initial Lenders,
maintain with financially sound and reputable insurance companies key man life
insurance on certain officers of the Borrower and (c) maintain with financially
sound and reputable insurance companies insurance on all its property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business. All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Administrative Agent of
written notice thereof, (ii) name the Administrative Agent as insured party or
loss payee, and (iii) be reasonably satisfactory in all other respects to the
Administrative Agent. The Borrower shall deliver to the Administrative Agent and
the Lenders a report of a reputable insurance broker with respect to such
insurance substantially concurrently with each delivery of the Borrower's
financial statements referred to in Section 6.1(a) and such supplemental reports
with respect thereto as the Administrative Agent may from time to time
reasonably request.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. (a) Keep
proper books of records and account in which full, true and correct entries in
all material respects are made of all dealings and transactions in relation to
its business and activities and (b) upon reasonable prior notice, permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired (so long as such visits and
inspections do not disrupt the business and operations of the Group Members) and
to discuss the business, operations, properties and financial and other
condition of the Group Members with officers and senior management of the Group
Members and with their independent certified public accountants (and the
Borrower shall be provided the opportunity to participate in any discussions
with such independent certified public accountants).
48
6.7 NOTICES. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of any Group Member or (ii) litigation, investigation or
proceeding that may exist at any time between any Group Member and any
Governmental Authority, that in either case, could reasonably be expected
to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Group Member (i) in
which the amount involved is $1,000,000 or more and not covered by
insurance, (ii) in which injunctive or similar relief is sought or (iii)
which relates to any Loan Document;
(d) the following events, as soon as practicable after a Responsible
Officer knows or has reason to know thereof: (i) the occurrence of any
Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a
Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Borrower
or any Commonly Controlled Entity or any Multiemployer Plan with respect to
the withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan; and
(e) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the relevant Group Member proposes to take with
respect thereto.
6.8 ENVIRONMENTAL LAWS. (a) Except as could not reasonably be
expected to have a Material Adverse Effect, (i) comply with, and ensure
compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and (ii) obtain and comply with and maintain, and ensure
that all tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Except as could not reasonably be expected to have a Material
Adverse Effect, conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws.
6.9 ADDITIONAL COLLATERAL, ETC. (a) With respect to any property
acquired after the Closing Date by any Group Member (other than (x) any property
described in paragraph (b), (c), (d) or (e) below, (y) any property subject to a
Lien expressly permitted by Section 7.3(g) or (l), and (z) property acquired by
any Excluded Foreign Subsidiary) as to which the Administrative Agent, for the
benefit of the Lenders, does not have a perfected Lien, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Administrative Agent
reasonably deems necessary or advisable to grant to the Administrative Agent,
for the benefit of the Lenders, a security interest in such property and (ii)
take all actions necessary or reasonably advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property, including the filing of Uniform Commercial
Code financing
49
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be reasonably requested by the
Administrative Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $300,000 acquired after
the Closing Date by any Group Member (other than (x) any such real property
subject to a Lien expressly permitted by Section 7.3(g) or (l) and (y) real
property acquired by any Excluded Foreign Subsidiary), promptly (i) execute and
deliver a first priority Mortgage, in favor of the Administrative Agent, for the
benefit of the Lenders, covering such real property, (ii) if requested by the
Administrative Agent, provide the Lenders with (A) title and extended coverage
insurance covering such real property in an amount at least equal to the
purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor's certificate and (B) any consents or
estoppels reasonably deemed necessary or advisable by the Administrative Agent
in connection with such Mortgage, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Closing Date by any Group Member
(which, for the purposes of this paragraph (c), shall include any existing
Subsidiary that ceases to be an Excluded Foreign Subsidiary), promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by any Group Member, (ii) deliver to the Administrative
Agent the certificates (if any) representing such Capital Stock, together with
(if applicable) undated stock powers, in blank, executed and delivered by a duly
authorized officer of the relevant Group Member, (iii) cause such new Subsidiary
(A) to become a party to the Guarantee and Collateral Agreement, (B) to take
such actions necessary or advisable to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest in the
Collateral described in the Guarantee and Collateral Agreement with respect to
such new Subsidiary, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent and (C) to deliver to the Administrative Agent a certificate of such
Subsidiary, substantially in the form of Exhibit C, with appropriate insertions
and attachments, and (iv) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by any Group Member (other than by any Group
Member that is an Excluded Foreign Subsidiary), promptly (i) execute and deliver
to the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by any such Group Member (PROVIDED that in no event shall more than 65% of
the total outstanding voting Capital Stock of any such new Subsidiary be
required to be so pledged), (ii) deliver to the Administrative Agent the
certificates (if any) representing such Capital Stock, together with (if
applicable) undated stock powers, in blank, executed and delivered by a duly
authorized officer of the relevant Group Member, and take such other action as
may be necessary or, in the reasonable opinion of the Administrative Agent,
desirable to perfect the Administrative Agent's security interest therein, (iii)
if requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
50
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent, and (iv) deliver to the Administrative Agent an updated
Schedule 4.15.
(e) Notwithstanding any of the foregoing provisions, the
Administrative Agent may, in its sole discretion, waive the requirements of
paragraphs (a) through (d) of this Section 6.9 with respect to any property
acquired after the Closing Date by any Group Member if the Administrative Agent
determines that the costs of obtaining a security interest in such property are
excessive in relation to the value of such property.
6.10 MATTERS RELATING TO COLLATERAL. (a) Promptly following (but in
any event no later than 20 Business Days after the occurrence thereof) the date
upon which any Loan Party changes its jurisdiction of organization or changes
its name, notify the Administrative Agent of such change and deliver to the
Administrative Agent all additional executed financing statements and other
documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein.
(b) Promptly deliver to the Administrative Agent a copy of each
material demand, notice or document received by any Loan Party that questions or
calls into doubt the validity or enforceability of more than the greater of (x)
$4,000,000 in net amount of outstanding Receivables and (y) 10% of the aggregate
net amount of the then outstanding Receivables.
(c) Except as could not reasonably be expected to have a Material
Adverse Effect, each Loan Party shall not (a) grant any extension of the time of
payment of any Receivable, (b) compromise or settle any Receivable for less than
the full amount thereof, (c) release, wholly or partially, any Person liable for
the payment of any Receivable, (d) allow any credit or discount whatsoever on
any Receivable or (e) amend, supplement or modify any Receivable in any manner
that could adversely affect the value thereof.
(d) Except as could not reasonably be expected to have a Material
Adverse Effect, each Loan Party (either itself or through licensees) will (i)
continue to use each material Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force free
from any claim of abandonment for non-use, (ii) maintain as in the past the
quality of products and services offered under such Trademark, (iii) use such
Trademark with the appropriate notice of registration and all other notices and
legends required by applicable Requirements of Law, (iv) not adopt or use any
xxxx which is confusingly similar or a colorable imitation of such Trademark
unless the Administrative Agent, for the ratable benefit of the Lenders, shall
obtain a perfected security interest in such xxxx pursuant to this Agreement,
and (v) not (and not permit any licensee or sublicensee thereof to) do any act
or knowingly omit to do any act whereby such Trademark may become invalidated or
impaired in any way.
(e) Except as could not reasonably be expected to have a Material
Adverse Effect, each Loan Party (either itself or through licensees) will not do
any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(f) Except as could not reasonably be expected to have a Material
Adverse Effect, each Loan Party (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. No Loan Party will (either itself or through licensees) do
any act whereby any material portion of the Copyrights may fall into the public
domain.
51
(g) Whenever any Loan Party, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any material Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office, such Loan Party shall
report such filing to the Administrative Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Such Loan Party
shall execute and deliver, and have recorded, any and all agreements,
instruments, documents, and papers as the Administrative Agent may reasonably
request to evidence the Administrative Agent's and the Lenders' security
interest in any material Copyright, Patent or Trademark and the goodwill and
general intangibles of such Loan Party relating thereto or represented thereby.
(h) Except as could not reasonably be expected to have a Material
Adverse Effect, each Loan Party will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
6.11 USA PATRIOT ACT COMPLIANCE. Holdings and the Borrower shall, and
shall cause each of their Subsidiaries and Affiliates to, provide, to the extent
commercially reasonable, such information and take such actions as are
reasonably requested by the Administrative Agent or any Lenders in order to
assist the Administrative Agent and the Lenders in maintaining compliance with
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 or similar laws, rules or
regulations.
SECTION 7. NEGATIVE COVENANTS
From and after the Closing Date, Holdings and the Borrower hereby
jointly and severally agree that, so long as the Revolving Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount
(other than any contingent or unliquidated obligations or liabilities) is owing
to any Lender or the Administrative Agent hereunder, each of Holdings and the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
52
Consolidated
Fiscal Quarters Ending Leverage Ratio
------------------------ ----------------
September 30, 2002 4.75
December 31, 2002 4.75
March 31, 2003 4.75
June 30, 2003 4.50
September 30, 2003 4.50
December 30, 2003 4.50
March 31, 2004 4.25
June 30, 2004 4.25
September 30, 2004 4.25
December 31, 2004 4.25
March 31, 2005 4.25
June 30, 2005 4.25
September 30, 2005 4.25
December 31, 2005 4.25
March 31, 2006 4.00
June 30, 2006 4.00
September 30, 2006 4.00
December 31, 2006 4.00
March 31, 2007 3.75
(b) CONSOLIDATED SENIOR LEVERAGE RATIO. Permit the Consolidated Senior
Leverage Ratio for any period of four consecutive fiscal quarters of the
Borrower ending with any fiscal quarter set forth below to exceed the ratio set
forth below opposite such fiscal quarter:
Consolidated Senior
Fiscal Quarters Ending Leverage Ratio
------------------------ ---------------------
September 30, 2002 2.50
December 31, 2002 2.50
March 31, 2003 2.50
June 30, 2003 2.25
September 30, 2003 2.25
December 30, 2003 2.25
March 31, 2004 and
thereafter 2.00
(c) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of the Borrower ending with any fiscal quarter set forth below to be less than
the ratio set forth below opposite such fiscal quarter:
Consolidated Fixed
Fiscal Quarter Ending Charge Coverage Ratio
----------------------- -----------------------
September 30, 2002 1.25
December 31, 2002 1.25
March 31, 2003 1.25
53
Consolidated Fixed
Fiscal Quarter Ending Charge Coverage Ratio
----------------------- -----------------------
June 30, 2003 1.35
September 30, 2003 1.35
December 31, 2003 1.35
March 31, 2004 1.45
June 30, 2004 1.45
September 30, 2004 1.45
December 31, 2004 1.45
March 31, 2005 1.45
June 30, 2005 1.45
September 30, 2005 1.45
December 31, 2005 1.45
March 31, 2006 1.50
June 30, 2006 1.50
September 30, 2006 1.50
December 31, 2006 1.50
March 31, 2007 1.55
7.2 INDEBTEDNESS. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of (i) Holdings to the Borrower in connection with
Investments permitted in Section 7.7(g)(i), (ii) any Loan Party (other than
Holdings) to the Borrower or any Subsidiary, (iii) any Subsidiary that is
not a Loan Party to (x) any Loan Party (other than Holdings) to the extent
such Investment is permitted under Section 7.7(g), and (y) any Person that
is not a Loan Party, PROVIDED that Indebtedness incurred under this clause
(y) shall not exceed $10,000,000 at any one time outstanding, and (iv) the
Borrower to Holdings as consideration for the transactions contemplated by
Section 5.1(b)(ii) hereof so long as such Indebtedness is repaid and/or
capitalized on the Closing Date and Holdings shall have used the repayment
proceeds thereof to effect the Recapitalization Transactions;
(c) Guarantee Obligations incurred in respect of any Indebtedness
permitted hereunder;
(d) Indebtedness outstanding on the date hereof and listed on Schedule
7.2(d) and any refinancings, refundings, renewals or extensions thereof
(without increasing, or shortening the maturity of, the principal amount
thereof);
(e) Indebtedness incurred to finance the acquisition, construction,
development, maintenance, upgrade or improvement of any assets (including,
without limitation, Capital Lease Obligations and as incurred pursuant to
Sale-Leaseback Transactions), which may be secured by Liens permitted by
Section 7.3(g), in an aggregate principal amount, when aggregated with the
amount of Indebtedness outstanding under clause (ii) of Section 7.2(i) at
such time, not to exceed $25,000,000 at any one time outstanding;
(f) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes or the Senior Subordinated Loans in an aggregate
principal amount not to exceed $200,000,000 and (ii)
54
Guarantee Obligations of any Subsidiary Guarantor in respect of such
Indebtedness, PROVIDED that such Guarantee Obligations are subordinated to
the same extent as the obligations of the Borrower in respect of the Senior
Subordinated Notes or the Senior Subordinated Loans, as applicable;
(g) additional subordinated Indebtedness of the Borrower that (i) has
a final maturity date at least 180 days after the Termination Date and no
scheduled payments of principal thereon prior to the Termination Date and
(ii) is subject to terms (other than as to interest rate and equity
components, which shall be consistent with transactions of a similar nature
conducted at such time) substantially similar to (or less restrictive taken
as a whole to the Loan Parties than) the Senior Subordinated Notes so long
as after giving effect to the incurrence thereof, the Borrower would be in
compliance with the covenants set forth in Section 7.1 after giving Pro
Forma Effect to the incurrence of such Indebtedness and the use of the
proceeds thereof;
(h) Indebtedness arising from agreements of the Borrower or any
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations incurred or assumed in connection with Permitted
Acquisitions or any Disposition permitted under Section 7.5;
(i) Indebtedness of any Person that becomes a Subsidiary Guarantor in
connection with a Permitted Acquisition after the Closing Date and any
refinancings, refundings, renewals or extensions thereof (without
increasing the principal amount thereof) in an aggregate principal amount
not to exceed $20,000,000 at any one time outstanding; PROVIDED that such
Indebtedness (i) exists at the time such Person becomes a Subsidiary
Guarantor and is not created in contemplation of or in connection with such
Person becoming a Subsidiary Guarantor and (ii) may exceed $20,000,000 to
the extent that the aggregate principal amount of such additional
Indebtedness, when aggregated with the amount of Indebtedness outstanding
under Section 7.2(e) at such time, does not exceed $25,000,000 at any one
time outstanding;
(j) Indebtedness with respect to surety, appeal and performance bonds
and similar arrangements in the ordinary course of business; and
(k) unsecured Indebtedness (including, without limitation, overdraft
facilities) not otherwise permitted hereunder in an aggregate principal
amount not exceeding $5,000,000 at any time outstanding.
7.3 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired, except:
(a) Liens for taxes and other charges of a Governmental Authority not
yet due or that are being contested in good faith by appropriate
proceedings, PROVIDED that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlords' or other like Liens arising in the ordinary course of business
that are not overdue for a period of more than 90 days or that are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
55
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations and arrangements of a like nature incurred in the
ordinary course of business;
(e) (i) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries and (ii) as permitted in the reasonable
discretion of the Administrative Agent, Liens disclosed on any title policy
in respect of a Mortgaged Property and any other Lien permitted by a
Mortgage;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
PROVIDED that no such Lien is spread to cover any additional property after
the Closing Date and that the amount of obligations secured thereby is not
increased (other than in respect of assets financed by the same financing
source);
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(e); PROVIDED that (i) such
Liens shall be created not later than six months following the acquisition,
construction, development, maintenance, upgrade or improvement of the
assets financed with such Indebtedness (PROVIDED, that such Liens may be
created at any time with respect to real property), (ii) such Liens do not
at any time encumber any assets other than the assets financed by such
Indebtedness except for other assets financed by the same financing source,
and (iii) the amount of Indebtedness secured thereby is not increased
except in respect of other asset financings from the same financing source;
(h) Liens created pursuant to the Security Documents;
(i) (i) any interest or title of a lessor under any lease entered into
by the Borrower or any other Subsidiary in the ordinary course of its
business and covering only the assets so leased, and (ii) leases and
licenses of assets (including, without limitation, intellectual property
rights) in the ordinary course of business which do not interfere in any
material respect with the conduct of business;
(j) Liens in respect of judgments that do not constitute an Event of
Default under Section 8(h) (other than judgments in excess of $2,000,000
which have been stayed or bonded pending appeal solely as a result of the
imposition of such Liens);
(k) Liens of a collection bank arising in the ordinary course of
business under Section 4-208 of the Uniform Commercial Code in effect in
the relevant jurisdiction;
(l) any Lien existing on any asset prior to the acquisition thereof by
the Borrower or any Subsidiary or on any asset of any Person that becomes a
Subsidiary; provided that (i) such Lien is not created in contemplation of,
or in connection with, such acquisition or such Person becoming a
Subsidiary Guarantor and (ii) such Liens shall not apply to any other
assets except assets financed by the same financing source);
(m) any Lien of a Group Member (i) in favor of any Loan Party, and
(ii) if such Group Member is not a Loan Party, in favor of any other
Person, PROVIDED that the aggregate fair market value (determined as of the
date such Lien is incurred) of the assets encumbered by such Liens under
this clause (ii) shall not exceed $10,000,000 at any one time;
56
(n) any Liens securing obligations under Specified Swap Agreements (to
the extent not otherwise secured pursuant to clause (h) above) so long as
such Liens are subject and subordinate to any Liens created pursuant to the
Security Documents; and
(o) Liens not otherwise permitted by this Section so long as neither
(i) the aggregate outstanding principal amount of the obligations secured
thereby nor (ii) the aggregate fair market value (determined as of the date
such Lien is incurred) of the assets subject thereto exceeds (as to the
Borrower and all Subsidiaries) $5,000,000 at any one time.
7.4 FUNDAMENTAL CHANGES. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business, except that:
(a) (i) any Subsidiary of the Borrower may be merged, consolidated,
amalgamated, or liquidated with or into the Borrower (PROVIDED that the
Borrower shall be the continuing or surviving entity) or with or into any
Loan Party (PROVIDED that the Loan Party shall be the continuing or
surviving entity), and (ii) any Subsidiary of the Borrower which is not a
Loan Party may be merged, consolidated or liquidated with or into any other
Subsidiary of the Borrower which is not a Loan Party;
(b) (i) any Subsidiary of the Borrower may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) (A) to any Loan Party
(other than Holdings), and (B) if such Subsidiary is not a Loan Party, to
any other Subsidiary, and (ii) Holdings may Dispose of all of its assets to
the Borrower on or prior to the Closing Date;
(c) any Disposition permitted by Section 7.5;
(d) any Investment expressly permitted by Section 7.7 may be
structured as a merger, consolidation or amalgamation (including, without
limitation, any Disposition resulting in an Investment permitted under
Section 7.7); and
(e) any Subsidiary may liquidate, wind-up or dissolve if the Borrower
determines in good faith, and the Administrative Agent concurs with such
determination if such Subsidiary has contributed more than 5% to
Consolidated EBITDA in the immediately preceding twelve months, that such
liquidation, winding-up or dissolution is in the best interests of the
Borrower and is not adverse to the interests of the Lenders hereunder in
any material respect, PROVIDED that any remaining assets of such Subsidiary
are transferred to a Loan Party or are otherwise disposed of in accordance
with to Section 7.5.
7.5 DISPOSITION OF PROPERTY. Dispose of any of its property, whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of (i) obsolete or worn out property in the
ordinary course of business, (ii) equipment which the Borrower determines
in good faith is no longer useful to the conduct of business, (iii) assets
subject to a Recovery Event, (iv) assets consisting of trade-ins and
exchanges for similar assets, and (v) within twelve months after the
consummation of a Permitted Acquisition, assets acquired in connection with
such Permitted Acquisition so long as the Borrower applies the Net Cash
Proceeds of the Disposition of such assets acquired in connection with such
Permitted Acquisition to repay any outstanding Revolving Loans and/or
Swingline Loans (without reduction of the Revolving Commitments);
57
(b) in the ordinary course of business, (i) the sale of inventory and
supplies, (ii) leases and licenses of assets (including, without
limitation, intellectual property rights) which do not interfere in any
material respect with the conduct of business, and (iii) the Disposition of
accounts receivable in connection with the compromise, settlement or
collection thereof;
(c) Dispositions permitted by Sections 7.4(a), (b) and (e);
(d) the sale or issuance of any Subsidiary's Capital Stock (i) to the
Borrower or any Loan Party, and (ii) to the extent such sale or issuance is
an Investment permitted by Section 7.7(g), to any other Subsidiary;
(e) the Disposition of other property (including, without limitation,
Capital Stock of Subsidiaries) so long as the aggregate fair market value
of all property Disposed of pursuant to this paragraph (e), after giving
effect to such Disposition, does not exceed (i) in any fiscal year, 15% of
the consolidated tangible assets of the Borrower and its Subsidiaries for
such fiscal year as determined immediately prior to the time of such
Disposition and (ii) at any time, 25% of the greater of (x) consolidated
tangible assets of the Borrower and its Subsidiaries as determined
immediately prior to the time of such Disposition, and (y) consolidated
tangible assets of the Borrower and its Subsidiaries at the Closing Date;
(f) the Disposition of Investments permitted pursuant to clauses (b),
(j), (k), (l) and (m) of Section 7.7;
(g) the Disposition of assets in connection with Sale-Leaseback
Transactions permitted by Section 7.10;
(h) the Disposition of foreign assets and Dispositions by Excluded
Foreign Subsidiaries; and
(i) the Disposition of (i) surplus property in the ordinary course of
business and (ii) equipment which the Borrower determines in good faith is
uneconomic.
7.6 RESTRICTED PAYMENTS. Declare or pay any dividend (other than
dividends payable solely in shares of Qualified Capital Stock or equivalent
equity interests) on, or make any payment on account of, or set apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of any Group Member,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of any Group Member (collectively, "Restricted Payments"), except
that:
(a) any Subsidiary may make Restricted Payments (i) to the Borrower or
any other Loan Party, (ii) as may be required by applicable law, or (iii)
in the case of Excluded Foreign Subsidiaries, to its immediate
stockholders, and (iv) in the case of any Subsidiary which is not a Loan
Party, to its immediate stockholders solely on a ratable basis in
accordance with the equity interests therein;
(b) so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may pay dividends and distributions to Holdings
to permit Holdings to, and Holdings may, purchase Holdings' Capital Stock
or options in respect of Qualified Capital Stock from present or former
directors, officers, employees or consultants of any Group Member in
connection with the death, disability, or termination of employment or
engagement of such
58
director, officer, employee or consultant, PROVIDED, that the aggregate
amount of payments under this paragraph (b) after the date hereof (net of
any proceeds received by Holdings after the date hereof in connection with
resales of any Capital Stock or options so purchased) shall not exceed
$5,000,000 in the aggregate; PROVIDED, FURTHER, that, notwithstanding the
foregoing, additional payments may be made under this Section 7.6(b) after
the date hereof so long as the Consolidated Senior Leverage Ratio, after
giving effect to any such payment, does not exceed the ratio set forth in
Section 7.1(b) for the period in which such payment is made MINUS 0.25 and
the aggregate of all such payments made pursuant to this Section 7.6(b)
does not exceed $15,000,000 in the aggregate;
(c) the Borrower may pay dividends to Holdings to permit Holdings to
(i) pay corporate overhead expenses incurred in the ordinary course of
business not to exceed $1,000,000 in any fiscal year, (ii) pay any taxes
that are due and payable by Holdings and the Borrower as part of a
consolidated group, (iii) consummate the Recapitalization Transactions and
Holdings shall be permitted to make Restricted Payments in respect thereof,
and (iv) pay purchase price adjustments, indemnities and similar
obligations pursuant to the Recapitalization Documentation and Holdings
shall be permitted to make such payments;
(d) the Borrower may make Restricted Payments with Qualified Capital
Stock (or equivalent equity interests), including, without limitation, the
conversion, exchange, exercise, surrender or similar transaction of any
Qualified Capital Stock or any option or similar right in respect thereof,
PROVIDED that Restricted Payments with Qualified Capital Stock shall not be
permitted to the extent such a payment would result in a Default under
Section 8(k)(iv);
(e) so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, Holdings may redeem or repurchase
the Permitted Investor Preferred Stock to the extent such redemption or
repurchase is made with the proceeds of the sale or issuance of any
Qualified Capital Stock of Holdings; and
(f) so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may pay dividends to Holdings to permit
Holdings to, and Holdings may, purchase Holdings' Capital Stock or options
from present or former directors, officers, employees or consultants of any
Group Member upon the death of such director, officer, employee or
consultant from the proceeds of any "key-man" life insurance policies with
respect to such person received by the Borrower or Holdings.
7.7 INVESTMENTS. Make any advance, loan, extension of credit (by way
of guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) (i) Guarantee Obligations in respect of Indebtedness permitted by
Section 7.2 and other Guarantee Obligations in the ordinary course of
business, and (ii) payment in respect of such Guarantee Obligations,
together with any repayment, reimbursement, indemnification or similar
right arising out of such payment;
59
(d) loans and advances to employees of any Group Member (i) in the
ordinary course of business (including for travel, entertainment and
relocation expenses) in an aggregate amount for all Group Members not to
exceed $1,000,000 at any one time outstanding, and (ii) for the purpose of
acquiring Capital Stock of Holdings; PROVIDED, that if such acquisition of
Capital Stock by such employee is from a party other than a Group Member
then such loans and advances shall not exceed an aggregate amount for all
Group Members of $1,000,000 at any one time outstanding;
(e) the Recapitalization;
(f) Investments in assets useful in the business of the Borrower and
its Subsidiaries made by the Borrower or any of its Subsidiaries with the
proceeds of any Reinvestment Deferred Amount;
(g) Investments by (i) the Borrower in Holdings to permit Holdings to
(A) consummate the Recapitalization Transactions and (B) make any
Restricted Payment permitted under Section 7.6, (ii) any Loan Party in any
other Loan Party (other than Holdings), (iii) any Subsidiary which is not a
Loan Party in any other Subsidiary or Joint Venture, and (iv) Holdings in
the Borrower in connection with Indebtedness permitted by Section
7.2(b)(iv);
(h) the Borrower and any Subsidiary Guarantor may make Permitted
Acquisitions, and may create and make Investments in Subsidiaries to own,
directly or indirectly, the property acquired thereby; PROVIDED that (i)
any acquisition of Capital Stock results in the issuer thereof becoming a
Subsidiary, (ii) any Domestic Subsidiary created or acquired in connection
therewith shall become a Subsidiary Guarantor and the requirements of
Section 6.9 shall be satisfied prior to or concurrently with the
consummation of such Permitted Acquisition, (iii) no Permitted Acquisition
shall be consummated unless, after giving Pro Forma Effect to such
Permitted Acquisition (and the related Indebtedness incurred or assumed),
the Borrower and its Subsidiaries would be in compliance with the covenants
contained in Section 7.1 during such period (as demonstrated by delivery to
the Administrative Agent of a certificate to such effect showing such
calculation in reasonable detail), (iv) no Default or Event of Default
exists at the time thereof or would result therefrom, (v) immediately prior
to and after giving effect to any such Permitted Acquisition, the Borrower
and its Subsidiaries shall be in compliance with the provisions of Section
7.14 hereof, (vi) each such Permitted Acquisition shall be made on a
consensual (meaning, in the case of a Person to be acquired, approved by
the majority in interest of the board of directors or analogous governing
body of such Person) basis between the Borrower and its Subsidiaries, on
the one hand, and the Person or Persons being so acquired and the seller or
sellers of such assets or such business, on the other hand and (viii)
immediately after giving effect to such Permitted Acquisition, there shall
be at least $5,000,000 of availability under the Total Revolving
Commitments;
(i) Investments in receivables and other trade payables owing to the
Borrower or any of its Subsidiaries and loans and advances made to
customers and suppliers, in each case, if created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms;
(j) Investments received in connection with (i) the bankruptcy,
insolvency or reorganization of suppliers and customers, (ii) in settlement
of delinquent obligations of, and other disputes with, or judgments against
customers and suppliers arising in the ordinary course of business and
(iii) the Disposition of assets permitted under Section 7.5 (other than
Section 7.5(g); PROVIDED, that the consideration for any such Disposition
under Section 7.5(e) shall consist
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of at least 75% cash and cash equivalents (for purposes of this clause (j),
assumption of any Indebtedness related to the assets subject to such
Disposition shall be deemed to be cash);
(k) (i) Investments under Swap Agreements, so long as any such Swap
Agreement is not entered into for speculative purposes, and (ii) pledges,
deposits and similar arrangements with respect to leases and utilities in
the ordinary course of business or arising out of Liens permitted under
Sections 7.3(c) and (d);
(l) Investments (i) existing on the Closing Date and set forth on
SCHEDULE 7.7 attached hereto, and (ii) of any Person existing at the time
such Person becomes a Subsidiary of the Borrower or consolidates or merges
with the Borrower or any of its Subsidiaries (including, without
limitation, in connection with a Permitted Acquisition) so long as such
Investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger; and
(m) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or any of its Subsidiaries in an
aggregate amount(net of all repayments, returns, interest, distributions,
income, profits and similar amounts realized therefrom) not to exceed
$10,000,000 at any time outstanding.
7.8 OPTIONAL PAYMENTS AND MODIFICATIONS OF CERTAIN DEBT INSTRUMENTS.
(a) Make or offer to make any optional or voluntary payment, prepayment,
repurchase or redemption of or otherwise optionally or voluntarily defease or
segregate funds with respect to the Senior Subordinated Notes or the Senior
Subordinated Loans (provided that the Senior Subordinated Loans may be repaid
with proceeds of (i) the Senior Subordinated Notes and (ii) if the Senior
Subordinated Notes are not issued, any Indebtedness permitted under Section
7.2(g) and the proceeds of any Qualified Capital Stock); (b) amend, modify,
waive or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of the Senior Subordinated Notes or
the Senior Subordinated Loans if the effect thereof could reasonably be expected
to be adverse or disadvantageous to the Lenders in any material respect; (c)
amend, modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of any Disqualified
Capital Stock or Permitted Investor Preferred Stock if the effect thereof could
reasonably be expected to be adverse or disadvantageous to the Lenders in any
material respect; or (d) designate any Indebtedness (other than obligations of
the Loan Parties pursuant to the Loan Documents) as "Designated Senior
Indebtedness" (or any other defined term having a similar purpose) for the
purposes of the Senior Subordinated Note Indenture.
7.9 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than any Group Member) unless such transaction is (a) otherwise
permitted under this Agreement and (b) upon terms no less favorable to the
relevant Group Member than it would obtain in a comparable arm's length
transaction with a Person that is not an Affiliate; provided, that
notwithstanding the foregoing, Holdings and its Subsidiaries may enter into the
transactions set forth in Schedule 7.9 attached hereto.
7.10 SALES AND LEASEBACKS. Enter into any arrangement with any Person
providing for the leasing by any Loan Party of personal property that has been
or is to be sold or transferred by such Loan Party to such Person or to any
other Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of such Loan Party (a
"Sale-Leaseback Transaction") other than as permitted pursuant to Section
7.2(e); PROVIDED that in the case of any Sale-Leaseback Transaction resulting in
an operating lease, solely for purposes of determining whether such lease would
be permitted pursuant to Section 7.2(e) as contemplated by this Section 7.10,
the present
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value of the rent payments during the term of such lease shall be deemed to
constitute Capital Lease Obligations.
7.11 CHANGES IN FISCAL PERIODS. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the Borrower's method
of determining fiscal quarters.
7.12 NEGATIVE PLEDGE CLAUSES. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of any Group Member
to create, incur, assume or suffer to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired, other than (a) this Agreement
and the other Loan Documents, (b) any agreements governing (i) any purchase
money Liens or Capital Lease Obligations otherwise permitted hereby (in which
case, any prohibition or limitation shall only be effective against the assets
financed thereby together with any other assets financed by the same financing
source), (ii) any Indebtedness permitted under Sections 7.2(f), (g) and (i), and
(iii) the Permitted Investor Preferred Stock, (c) any document governing any
Lien permitted under Section 7.3 so long as such restriction is limited to the
assets subject to such Lien, (d) customary provisions in leases, licenses, and
similar arrangements in the ordinary course of business, (e) customary
provisions in agreements for the Disposition of assets pending the consummation
of such Disposition, (f) as imposed by any Requirement of Law, and (g) as
relating to the assets of any Excluded Foreign Subsidiary.
7.13 CLAUSES RESTRICTING SUBSIDIARY DISTRIBUTIONS. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary,
(iii) any restrictions existing under any agreements governing (x) any
Indebtedness permitted under Section 7.2(f), (g) and (i), and (y) the Permitted
Investor Preferred Stock, (iv) as imposed by any Requirement of Law, and (v) as
relating to any Excluded Foreign Subsidiary.
7.14 LINES OF BUSINESS. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement (after giving effect
to the Recapitalization) or that are reasonably related, incidental or ancillary
to diagnostic imaging services (other than any businesses acquired as a result
of a Permitted Acquisition, which other businesses, if not permitted under this
Section 7.14, shall be disposed of in accordance with Section 7.5(a)(v)).
7.15 AMENDMENTS TO RECAPITALIZATION DOCUMENTS. Amend, supplement or
otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of
the Recapitalization Documentation, (a) if effective prior to the Closing Date,
without the consent of the Initial Lenders, such approval not to be unreasonably
withheld, and (b) if effective after the Closing Date, in a manner which could
reasonably be expected to have a Material Adverse Effect.
7.16 MOST-FAVORED NATION. To the extent the Borrower is subject to
more restrictive financial covenants (but excluding incurrence tests based on
financial conditions or ratios) pursuant to the Senior Subordinated Credit
Agreement than are set forth in this Agreement, the Borrower shall be deemed to
be bound by such covenants to the same extent pursuant hereto as if such
covenants were set forth in this Agreement.
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SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five Business Days after any such interest or other amount
becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) any Loan Party shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 6.4(a) (with
respect to Holdings and the Borrower only), Section 6.6(b), Section 6.7(a),
6.10(a) or Section 7 of this Agreement; or
(d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days after notice
to the Borrower from the Administrative Agent or the Required Lenders; or
(e) any Group Member shall (i) default in making any payment of any
principal of any Indebtedness (including any Guarantee Obligation of any
Group Member in respect thereof, but excluding the Loans) on the scheduled
or original due date with respect thereto beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness
was created; or (ii) default in making any payment of any interest on any
such Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or (iii)
default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of
any such Indebtedness constituting a Guarantee Obligation) to become
payable; PROVIDED, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $2,000,000; or
(f) other than in connection with any transaction permitted under
Section 7.4(e) (so long as such transaction does not affect any other Group
Member and the value of the Subsidiary subject to such transaction, when
aggregated with the value of all other Subsidiaries liquidated, wound up or
dissolved pursuant to Section 7.4(e) does not exceed 5% of the consolidated
total assets of the Group Members), (i) any Group Member shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating
63
to bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or any Group
Member shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against any Group Member any case, proceeding
or other action of a nature referred to in clause (i) above that (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against any Group
Member any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for
any such relief that shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) any
Group Member shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) any Group Member shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of any
Group Member or any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement
of proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) any Group Member or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be expected
to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against any
Group Member involving in the aggregate a liability (not paid or fully
covered by insurance as to which the relevant insurance company has not
denied coverage) of $2,000,000 or more, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal
within 30 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported
to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
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(k) (i) at any time prior to the initial public offering of Holdings,
the Sponsor and its Control Investment Affiliates, collectively, shall
cease to have the power to vote or direct the voting of securities having a
majority of the ordinary voting power for the election of directors of
Holdings (determined on a fully diluted basis); (ii) at any time after the
initial public offering of Holdings, (x) the Sponsor shall cease to be the
"beneficial owner" (as defined in Rules 13(d)-3 and 13(d) -5 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), directly
or indirectly, of at least 20% of the outstanding common stock of Holdings
having ordinary voting power for the election of directors of Holdings, or
(y) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), excluding the Sponsor and its Control
Investment Affiliates, shall become the "beneficial owner" (as defined in
Rules 13(d)-3 and 13(d)-5 of the Exchange Act), directly or indirectly, of
more than 35% of the outstanding common stock of Holdings having ordinary
voting power for the election of directors of Holdings and the Sponsor and
its Control Investment Affiliates, collectively, shall own beneficially and
of record a lesser amount of common stock of Holdings having ordinary
voting power for the election of directors of Holdings; (iii) the board of
directors of Holdings shall cease to consist of a majority of Continuing
Directors; (iv) Holdings shall cease to own and control, of record and
beneficially, directly, 100% of each class of outstanding Capital Stock of
the Borrower free and clear of all Liens (except Liens created by the
Guarantee and Collateral Agreement); or (v) a Specified Change of Control
shall occur; or
(l) Holdings shall (i) conduct, transact or otherwise engage in, or
commit to conduct, transact or otherwise engage in, any business or
operations other than those (x) incidental to its ownership of the Capital
Stock of the Borrower and beneficial ownership of the other Group Members,
and (y) relating to the administration of the businesses of the Group
Members taken as a whole, including, without limitation the engagement of
professionals, advisors and consultants, (ii) incur, create, assume or
suffer to exist any Indebtedness or other material liabilities or financial
obligations, except (v) parent guarantees and similar arrangements of a
parent company for the benefit of its subsidiaries, (w) nonconsensual
obligations imposed by operation of law (including, without limitation, any
judgments, orders, decrees, writs or injunctions), (x) obligations pursuant
to the Loan Documents to which it is a party, (y) obligations expressly
permitted or contemplated for it by Section 7 of this Agreement and (z)
obligations with respect to its Capital Stock, or (iii) own, lease, manage
or otherwise operate any properties or assets (including cash (other than
cash received in connection with dividends made by the Borrower in
accordance with Section 7.6 pending application in the manner contemplated
by said Section) and cash equivalents) other than the ownership of shares
of Capital Stock of the Borrower or otherwise in connection with or
incidental to any of the foregoing; or
(m) the Senior Subordinated Notes, the Senior Subordinated Loans or
the guarantees thereof shall cease, for any reason, to be validly
subordinated to the Obligations or the obligations of the Subsidiary
Guarantors under the Guarantee and Collateral Agreement, as the case may
be, as provided in the Senior Subordinated Note Indenture or the Senior
Subordinated Credit Agreement, as applicable, or any Loan Party, the
trustee in respect of the Senior Subordinated Notes, the administrative
agent in respect of the Senior Subordinated Loans or the holders of at
least 25% in aggregate principal amount of the Senior Subordinated Notes or
the Senior Subordinated Loans shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Revolving Commitments shall immediately terminate and the
Loans (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required
65
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Revolving Commitments to be
terminated forthwith, whereupon the Revolving Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) to be due and payable forthwith, whereupon the
same shall immediately become due and payable. With respect to all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents (other than any
contingent or unliquidated obligations or liabilities) shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the Borrower (or such other Person as may be lawfully entitled thereto). Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived by the Borrower.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
9.2 DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
66
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
9.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to Holdings or the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
discretionary action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required Lenders (or, if
so specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.
9.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender, Holdings or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereafter taken, including any review of the affairs of
a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the
67
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
any Loan Party or any affiliate of a Loan Party that may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
9.7 INDEMNIFICATION. The Lenders severally agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
Holdings or the Borrower and without limiting the obligation of Holdings or the
Borrower to do so), ratably according to their respective Aggregate Exposure
Percentages in effect on the date on which indemnification is sought under this
Section (or, if indemnification is sought after the date upon which the
Revolving Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with such Aggregate Exposure Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time (whether
before or after the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of, the
Revolving Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though it
were not Administrative Agent. With respect to its Loans made or renewed by it
and with respect to any Letter of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not an Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as
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Administrative Agent by the date that is 30 days following a retiring
Administrative Agent's notice of resignation, then the retiring Administrative
Agent may, on behalf of the Lenders and after consulting with the Lenders,
appoint a successor Administrative Agent, which successor agent shall (unless an
Event of Default under Section 8(a) or Section 8(f) with respect to the Borrower
shall have occurred and be continuing) be subject to approval by the Borrower
(which approval shall not be unreasonably withheld or delayed). If no successor
to the Administrative Agent has accepted appointment as Administrative Agent by
the date that is forty-five (45) days following a retiring Administrative
Agent's notice of resignation, the retiring Administrative Agent's resignation
shall nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such time,
if any, as the Required Lenders appoint a successor agent as provided for above.
After any retiring Administrative Agent's resignation as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents.
9.10 CLOSING AGENT. XX Xxxxxx Xxxxx Bank and its affiliates, in their
capacity as Closing Agent shall be entitled to the protections, rights and
benefits of this Section 9 to the same extent as Wachovia Bank, National
Association and its affiliates in their capacity as the Administrative Agent.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
Termination Date, reduce the stated rate of any interest or fee payable
hereunder (except (x) in connection with the waiver of applicability of any
post-default increase in interest rates (which waiver shall be effective with
the consent of the Required Lenders) and (y) that any amendment or modification
of defined terms used in the financial covenants in this Agreement shall not
constitute a reduction in the rate of interest or fees for purposes of this
clause (i)) or extend the scheduled date of any payment thereof, or increase the
amount or extend the expiration date of any Lender's Revolving Commitment, in
each case without the written consent of each Lender directly affected thereby;
(ii) eliminate or reduce the voting rights of any Lender under this Section 10.1
without the written consent of such Lender (other than through an increase of
the Revolving Commitments of other Lenders or with respect to any Defaulting
Lender); (iii) reduce any percentage specified in the definitions of Required
Lenders or Supermajority Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or a material portion of the Collateral (other than
in connection with any transaction permitted pursuant to Section 7.5) or release
any significant Guarantor from its obligations under the Guarantee and
Collateral Agreement (other than in connection with any transaction permitted
pursuant to Section 7.5), in each case without the written consent of all
Lenders (other than Defaulting Lenders); (iv) modify Section 2.1(b) without the
consent of the Supermajority Lenders; (v) amend, modify or waive any provision
of Section 9 without the written consent of the Administrative Agent; (vi)
amend, modify or waive any provision of Section 2.3 or 2.4 without the written
consent of the Swingline Lender; or (vii) amend, modify or waive any provision
of Section 3 without the written consent
69
of the Issuing Lender and PROVIDED, further, that except as otherwise provided
therein, the consent of the Lenders shall not be required for any increase in
Revolving Commitments pursuant to Section 2.1(b). Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the Lenders
and shall be binding upon the Loan Parties, the Lenders, the Administrative
Agent and all future holders of the Loans. In the case of any waiver, the Loan
Parties, the Lenders and the Administrative Agent shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or five Business Days after being
deposited in the mail, postage prepaid; or, in the case of courier via
guaranteed next-day delivery, the next Business Day; or, in the case of telecopy
notice, when received, addressed as follows in the case of Holdings, the
Borrower and the Administrative Agent, and as set forth in an administrative
questionnaire delivered to the Administrative Agent in the case of the Lenders,
or to such other address as may be hereafter notified by the respective parties
hereto:
Holdings: MQ Associates, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: J. Xxxxxxx Xxxx, President
Telecopy: 000-000-0000
Telephone: 000-000-0000
with a copy to:
X'Xxxxxxxx LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
XX, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxxx, Esq.
Telecopy: 000-000-0000
Borrower: MedQuest, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: J. Xxxxxxx Xxxx, President
Telecopy: 000-000-0000
Telephone: 000-000-0000
with a copy to:
X'Xxxxxxxx LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
XX, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxxx, Esq.
Telecopy: 000-000-0000
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Administrative Agent: Wachovia Bank, National Association
Syndication Agency Services
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telecopy: 000-000-0000
Telephone: 000-000-0000
with a copy to:
Wachovia Securities, Inc.
Healthcare Portfolio Management
000 Xxxxxxxxx Xxxxxx X.X.
Mail Code GA8050
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; PROVIDED that the foregoing shall not
apply to notices pursuant to Section 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; PROVIDED that approval of such procedures may be
limited to particular notices or communications.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and the Closing Agent for all its
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and the Closing Agent and
filing and recording fees and expenses, with statements with respect to the
foregoing to be submitted to the Borrower prior to the Closing Date (in the case
of
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amounts to be paid on the Closing Date) and from time to time thereafter on a
quarterly basis or such other periodic basis as the Administrative Agent and the
Closing Agent shall deem appropriate, (b) to pay or reimburse each Lender and
the Administrative Agent for all its costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, the
other Loan Documents and any such other documents, including the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Lender and of counsel to the Administrative Agent, (c) to pay,
indemnify, and hold each Lender and the Administrative Agent harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
that may be payable or determined to be payable in connection with the execution
and delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender and
the Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "Indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of any Group Member or
any of the Properties and the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against any
Loan Party under any Loan Document (all the foregoing in this clause (d),
collectively, the "Indemnified Liabilities"), PROVIDED, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities resulted from the gross
negligence or willful misconduct of such Indemnitee. All amounts due under this
Section 10.5 shall be payable not later than 10 days after written demand
therefor. Statements payable by the Borrower pursuant to this Section 10.5 shall
be submitted to J. Xxxxxxx Xxxx (Telephone No. 000-000-0000) (Telecopy No.
770-246-0202), at the address of the Borrower set forth in Section 10.2, or to
such other Person or address as may be hereafter designated by the Borrower in a
written notice to the Administrative Agent. The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any affiliate of the Issuing Lender that issues any Letter of
Credit), except that (i) the Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees (each, an "ASSIGNEE") all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Revolving Commitments and the Loans at the time owing to it)
with the prior written consent (such consent not to be unreasonably withheld)
of:
(A) the Borrower, PROVIDED that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund (as defined below) or, if an Event of Default has occurred
and is continuing, any other Person; and
(B) the Administrative Agent, PROVIDED that no consent of the
Administrative Agent shall be required for an assignment to a Lender or an
Affiliate of a Lender.
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(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund or an assignment of the entire remaining amount
of the assigning Lender's Revolving Commitments or Loans, the amount of the
Revolving Commitments or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, PROVIDED that (1) no such consent
of the Borrower shall be required if an Event of Default under Sections
8(a), (f) or (k) has occurred and is continuing and (2) such amounts shall
be aggregated in respect of each Lender and its Affiliates or Approved
Funds, if any;
(B) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500;
(C) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire; and
(D) in the case of an assignment to a CLO (as defined below), the
assigning Lender shall retain the sole right to approve any amendment,
modification or waiver of any provision of this Agreement and the other
Loan Documents, PROVIDED that the Assignment and Assumption between such
Lender and such CLO may provide that such Lender will not, without the
consent of such CLO, agree to any amendment, modification or waiver that
(1) requires the consent of each Lender directly affected thereby pursuant
to the proviso to the second sentence of Section 10.1 and (2) directly
affects such CLO.
For the purposes of this Section 10.6, the terms "Approved Fund" and
"CLO" have the following meanings:
"APPROVED FUND" means (a) a CLO and (b) with respect to any Lender
that is a fund which invests in bank loans and similar extensions of
credit, any other fund that invests in bank loans and similar extensions of
credit and is managed by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"CLO" means any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary
course of its business and is administered or managed by a Lender or an
Affiliate of such Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Assumption the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
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(iv) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Revolving Commitments of, and principal
amount of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "REGISTER"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent, the Issuing
Lender and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Lender and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an Assignee, the Assignee's completed
administrative questionnaire (unless the Assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "PARTICIPANT") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Revolving Commitments
and the Loans owing to it); PROVIDED that (A) such Lender's obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; PROVIDED that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver that (1) requires the consent of each Lender directly affected thereby
pursuant to the proviso to the second sentence of Section 10.1 and (2) directly
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.7(b) as though it were a Lender, PROVIDED such
Participant shall be subject to Section 10.7(a) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. Any Participant that is a Non-U.S. Lender
shall not be entitled to the benefits of Section 2.16 unless such Participant
complies with Section 2.16(d).
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; PROVIDED that any such pledge or assignment
(other than to secure obligations to a Federal Reserve Bank) shall be in
connection with a bona fide pledge or assignment of a security interest in all
or a substantial portion of such Lender's lending portfolio;
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PROVIDED FURTHER that no such pledge or assignment of a security interest shall
release a Lender from any of its obligations hereunder or substitute any such
pledgee or Assignee for such Lender as a party hereto.
(e) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (d) above.
(f) Notwithstanding the foregoing, any Conduit Lender may assign any
or all of the Loans it may have funded hereunder to its designating Lender
without the consent of the Borrower or the Administrative Agent and without
regard to the limitations set forth in Section 10.6(b). Each of Holdings, the
Borrower, each Lender and the Administrative Agent hereby confirms that it will
not institute against a Conduit Lender or join any other Person in instituting
against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding under any state bankruptcy or similar law, for one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Conduit Lender; PROVIDED, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.
10.7 ADJUSTMENTS; SET-OFF. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders, if any Lender (a "Benefitted Lender") shall, at any time
after the Loans and other amounts payable hereunder shall immediately become due
and payable pursuant to Section 8, receive any payment of all or part of the
Obligations owing to it, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 8(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of the Obligations owing to such other Lender, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, upon the occurrence and during the continuance of an Event of Default, each
Lender shall have the right, without prior notice to Holdings or the Borrower,
any such notice being expressly waived by Holdings and the Borrower to the
extent permitted by applicable law, upon any amount becoming due and payable by
Holdings or the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise), to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of Holdings or the Borrower,
as the case may be. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
PROVIDED that the failure to give such notice shall not affect the validity of
such setoff and application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart
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hereof. A set of the copies of this Agreement signed by all the parties shall be
lodged with the Borrower and the Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the entire agreement of Holdings, the Borrower, the Administrative
Agent and the Lenders with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. Each of Holdings and the
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of
New York, the courts of the United States for the Southern
District of
New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to Holdings
or the Borrower, as the case may be at its address set forth in Section
10.2 or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
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10.13 ACKNOWLEDGEMENTS. Each of Holdings and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to Holdings or the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and
Holdings and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among Holdings, the Borrower and the Lenders.
10.14 RELEASES OF GUARANTEES AND LIENS. (a) Notwithstanding anything
to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 10.1) to take any action requested by the Borrower having the effect
of releasing any Collateral or Guarantee Obligations (i) to the extent necessary
to permit consummation of any transaction not prohibited by any Loan Document or
that has been consented to in accordance with Section 10.1 or (ii) under the
circumstances described in paragraph (b) below.
(b) At such time as the Loans, the Reimbursement Obligations and all
fees due and owing under the Loan Documents shall have been paid in full, the
Revolving Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created by the
Security Documents, and the Security Documents and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent
and each Loan Party under the Security Documents shall terminate, all without
delivery of any instrument or performance of any act by any Person.
10.15 CONFIDENTIALITY. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party pursuant to this Agreement that is designated by such Loan Party
as confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate thereof, (b) subject to
an agreement to comply with the provisions of this Section, to any actual or
prospective Transferee or any direct or indirect counterparty to any Swap
Agreement (or any professional advisor to such counterparty), (c) on a
confidential basis, to its employees, directors, agents, attorneys, accountants
and other professional advisors or those of any of its affiliates, (d) upon the
request or demand of any Governmental Authority, (e) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (f) if requested or required to do so in
connection with any litigation or similar proceeding, (g) that has been publicly
disclosed other than by the Administrative Agent, any Lender or their respective
affiliates, (h) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender's investment portfolio in connection with
ratings issued with respect to such Lender, or (i) in connection with the
exercise of any remedy hereunder or under any other Loan Document. Each Initial
Lender shall have the right to review and approve any public announcement made
after the date hereof relating to such Initial Lender or any of its affiliates
or to any matters contemplated hereby, before any such announcement is made
(such approval not to be unreasonably withheld or delayed); provided that this
paragraph shall not
77
apply to the extent any such disclosure may be compelled in a judicial or
administrative proceeding or as otherwise required by law (including any filings
required by the SEC) except that to the extent that General Electric Capital
Corporation or any of its affiliates is directly referred to in the offering
memorandum in respect of the Senior Subordinated Notes, General Electric Capital
Corporation will be afforded the opportunity to review such references prior to
the filing of the offering memorandum with the SEC.
10.16 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.17 TERMINATION OF COMMITMENTS. Each Lender may, by delivering a
written notice to the Administrative Agent and the Borrower, declare its
Revolving Commitments to be terminated forthwith, whereupon such Lender's
Revolving Commitments shall terminate, if (a) the Closing Date does not occur by
October 31, 2002, or (b) the Recapitalization Agreement has been terminated.
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
MQ ASSOCIATES, INC.
By: /s/ XXXX X. XXXX
-----------------------------
Xxxx X. Xxxx
President
MEDQUEST, INC.
By: /s/ XXXX X. XXXX
-----------------------------
Xxxx X. Xxxx
President
JPMORGAN CHASE BANK, AS CLOSING AGENT
By: /s/ XXXXXX XXXXXXXXX
-----------------------------
Xxxxxx Xxxxxxxxx
Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ XXXX XXXXXXXX
-----------------------------
Xxxx Xxxxxxxx
Assistant Vice President
CHASE LINCOLN FIRST COMMERCIAL CORP.,
as a Lender
By: /s/ XXXXXX XXXXXXXXX
-----------------------------
Xxxxxx Xxxxxxxxx
Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, as a Lender
By: /s/ XXX X. XXX
-----------------------------
Xxx X. Xxx
Duly Authorized Signatory
UBS AG, STAMFORD BRANCH, as a Lender
By: /s/ XXXXXX X. XXXXXXX
-----------------------------
Xxxxxx X. Xxxxxxx
Banking Products Services, US
By: /s/ XXXXX X. XXXXXXXX
-----------------------------
Xxxxx X. Xxxxxxxx
Banking Products Services, US
