EXHIBIT 10.1
CREDIT AGREEMENT
DATED AS OF MAY 15, 2003
AMONG
CASTLE DENTAL CENTERS, INC.,
THE OTHER CREDIT PARTIES SIGNATORY HERETO
THE LENDERS REFERRED TO HEREIN,
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS AGENT
ARTICLE I. DEFINITIONS.........................................................................................1
Section 1.1. Certain Defined Terms.................................................................1
Section 1.2. Accounting Terms and Determinations..................................................25
Section 1.3. Other Definitional Provisions........................................................26
ARTICLE II. THE FACILITIES.....................................................................................26
Section 2.1. The Facilities.......................................................................26
Section 2.2. Notes................................................................................27
Section 2.3. Method of Borrowing; Funding of Loans; Agent May Assume Funding; Failure to Fund.....28
Section 2.4. Interest on Loans....................................................................29
Section 2.5. Letters of Credit....................................................................30
Section 2.6. Reserved.............................................................................37
Section 2.7. Certain Fees.........................................................................37
Section 2.8. Mandatory Repayments and Prepayments.................................................38
Section 2.9. Optional Prepayments.................................................................39
Section 2.10. Application of Payments..............................................................40
Section 2.11. Reduction of Commitments.............................................................40
Section 2.12. Loan Account and Accounting..........................................................41
Section 2.13. Computation of Interest and Fees.....................................................41
Section 2.14. General Provisions Regarding Payments................................................41
Section 2.15. Maximum Interest.....................................................................41
ARTICLE III. CONDITIONS.........................................................................................43
Section 3.1. Conditions to Closing................................................................43
Section 3.2. Conditions to Each Extension of Credit...............................................44
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.....................................................................45
Section 4.1. Existence and Organizational Power; Compliance with Organizational Documents.........45
Section 4.2. Governmental Approvals, Compliance with Laws and Compliance with Agreements
with Third Parties...................................................................45
Section 4.3. Organizational and Governmental Approvals; No Contravention..........................45
Section 4.4. Binding Effect; Liens of Collateral Documents........................................46
Section 4.5. Financial Statements.................................................................46
Section 4.6. Material Adverse Effect..............................................................47
Section 4.7. Litigation...........................................................................47
Section 4.8. No Material Misstatements............................................................47
Section 4.9. No Adverse Fact......................................................................47
Section 4.10. Ownership of Property, Liens.........................................................47
Section 4.11. Environmental Laws...................................................................47
Section 4.12. ERISA................................................................................48
Section 4.13. Subsidiaries; Capitalization.........................................................48
Section 4.14. Government Regulations...............................................................48
Section 4.15. Margin Regulations...................................................................48
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Section 4.16. Taxes................................................................................49
Section 4.17. Intellectual Property................................................................49
Section 4.18. Solvency.............................................................................49
Section 4.19. Insurance............................................................................49
Section 4.20. Brokers..............................................................................49
Section 4.21. Compliance with Laws.................................................................49
Section 4.22. Compliance with HIPAA................................................................49
Section 4.23. Third Party Reimbursement............................................................50
Section 4.24. Employment Shareholders and Subordination Agreements.................................50
Section 4.25. Dormant Entities.....................................................................50
ARTICLE V. REPORTING COVENANTS................................................................................51
Section 5.1. Financial Statements and Reports.....................................................51
Section 5.2. Collateral Reports...................................................................54
Section 5.3. Accuracy of Financial Statements and Information.....................................54
ARTICLE VI. AFFIRMATIVE COVENANTS..............................................................................55
Section 6.1. Payment of Obligations...............................................................55
Section 6.2. Conduct of Business and Maintenance of Existence.....................................56
Section 6.3. Maintenance of Assets and Properties.................................................56
Section 6.4. Insurance; Damage to or Destruction of Collateral....................................56
Section 6.5. Compliance with Laws.................................................................57
Section 6.6. Inspection of Property, Books and Records............................................57
Section 6.7. Supplemental Disclosure..............................................................58
Section 6.8. Use of Proceeds......................................................................58
Section 6.9. Further Assurances...................................................................58
Section 6.10. Historical Fees......................................................................59
Section 6.11. Environmental Matters................................................................59
Section 6.12. Landlord and Warehouseman Waivers....................................................60
Section 6.13. Mortgages on Real Property; Title Insurance and Survey...............................60
Section 6.14. Additional Subsidiaries..............................................................60
Section 6.15. Cash Management Systems..............................................................61
Section 6.16. Federal Tax Liens....................................................................61
ARTICLE VII. NEGATIVE COVENANTS.................................................................................61
Section 7.1. Indebtedness.........................................................................61
Section 7.2. Liens; Negative Pledges..............................................................62
Section 7.3. Guaranteed Obligations...............................................................62
Section 7.4. Capital Stock; Nature of Business....................................................63
Section 7.5. Restricted Payments..................................................................63
Section 7.6. No Restrictions on Subsidiary Distributions to Borrower..............................64
Section 7.7. ERISA................................................................................64
Section 7.8. Consolidations, Mergers and Sales of Assets..........................................64
Section 7.9. Purchase of Assets; Investments......................................................65
Section 7.10. Transactions with Affiliates.........................................................65
Section 7.11. Amendments or Waivers................................................................65
Section 7.12. Fiscal Year..........................................................................65
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Section 7.13. Capital Expenditures.................................................................65
Section 7.14. Leverage Ratio.......................................................................66
Section 7.15. Interest Coverage....................................................................66
Section 7.16. Fixed Charge Coverage Ratio..........................................................66
Section 7.17. Senior Leverage Ratio................................................................66
Section 7.18. Dormant Entities.....................................................................66
Section 7.19. Cash Management Systems..............................................................67
ARTICLE VIII. EVENTS OF DEFAULT..................................................................................67
Section 8.1. Events of Default....................................................................67
Section 8.2. Remedies.............................................................................71
Section 8.3. Waivers by Credit Parties............................................................71
ARTICLE IX. EXPENSES AND INDEMNITIES...........................................................................72
Section 9.1. Expenses.............................................................................72
Section 9.2. Indemnity............................................................................72
Section 9.3. Taxes................................................................................73
Section 9.4. Capital Adequacy; Increased Costs; Illegality; Funding Losses........................74
ARTICLE X. THE AGENT..........................................................................................76
Section 10.1. Appointment and Authorization........................................................76
Section 10.2. Delegation of Duties.................................................................76
Section 10.3. Agent and Affiliates.................................................................76
Section 10.4. Action by Agent......................................................................77
Section 10.5. Consultation with Experts............................................................77
Section 10.6. Liability of Agent...................................................................77
Section 10.7. Indemnification......................................................................77
Section 10.8. Credit Decision......................................................................77
Section 10.9. Successor Agent......................................................................78
Section 10.10. Reliance by Agent....................................................................78
Section 10.11. Notice of Default....................................................................79
ARTICLE XI. MISCELLANEOUS......................................................................................79
Section 11.1. Survival.............................................................................79
Section 11.2. No Waivers; Remedies Cumulative......................................................79
Section 11.3. Notices..............................................................................79
Section 11.4. Severability.........................................................................81
Section 11.5. Amendments and Waivers...............................................................81
Section 11.6. Successors and Assigns; Registration.................................................81
Section 11.7. Setoff and Sharing of Payments.......................................................83
Section 11.8. Collateral...........................................................................83
Section 11.9. Headings.............................................................................83
Section 11.10. Governing Law; Submission To Jurisdiction............................................83
Section 11.11. Notice of Breach by Agent or Lender..................................................84
Section 11.12. Waiver Of Jury Trial.................................................................84
Section 11.13. Counterparts.........................................................................84
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Section 11.14. Confidentiality; Press Release.......................................................84
Section 11.15. Reinstatement........................................................................85
Section 11.16. Advice of Counsel....................................................................85
Section 11.17. No Strict Construction...............................................................86
Section 11.18. Conflict of Terms....................................................................86
Section 11.19. Entirety.............................................................................86
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EXHIBIT A - Revolving Note
EXHIBIT B - Term Loan Note
EXHIBIT C - Notice of Borrowing
EXHIBIT D - Borrower Pledge Agreement
EXHIBIT E - Borrower Security Agreement
EXHIBIT F - Subsidiary Guaranty
EXHIBIT G - Subsidiary Pledge Agreement
EXHIBIT H - Subsidiary Security Agreement
EXHIBIT I - Reserved
EXHIBIT J - Authorized Signatory Letter
EXHIBIT K - Closing Checklist
EXHIBIT L - Assignment Agreement
EXHIBIT 5.1 - Compliance Certificate
DISCLOSURE SCHEDULE 4.5(a) - Financial Statements
DISCLOSURE SCHEDULE 4.5(b) - Pro Forma Balance Sheet
DISCLOSURE SCHEDULE 4.5(c) - Borrower's Financial Projections
DISCLOSURE SCHEDULE 4.7 - Litigation
DISCLOSURE SCHEDULE 4.13 - Subsidiaries, Other Equity Investments
DISCLOSURE SCHEDULE 4.19 - Insurance Policies
DISCLOSURE SCHEDULE 4.24 - Employment, Shareholder and Subscription
Agreements
DISCLOSURE SCHEDULE 7.1 - Indebtedness
DISCLOSURE SCHEDULE 7.2 - Closing Date Liens
DISCLOSURE SCHEDULE 7.9 - Existing Investments
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of May 15, 2003, among CASTLE DENTAL
CENTERS, INC., THE OTHER CREDIT PARTIES SIGNATORY HERETO, the LENDERS listed on
the signature pages hereof, and GENERAL ELECTRIC CAPITAL CORPORATION, as Agent.
INTRODUCTORY STATEMENT
A. The Borrower desires that Lenders extend a term loan and a revolving
credit facility to the Borrower to refinance existing indebtedness, to pay costs
and expenses of the Related Transactions, to provide working capital financing
for the Borrower and to provide funds for other general corporate purposes of
the Borrower;
B. The Borrower desires to secure all of its Obligations (as
hereinafter defined) under the Loan Documents (as hereinafter defined) by
granting to the Agent, for the benefit of the Agent and Lenders, a security
interest in and lien upon substantially all of its personal and Real Property
including a pledge of the capital stock of all of its Subsidiaries; and
C. Each of the Borrower's Subsidiaries is willing to guaranty all of
the Obligations of the Borrower to Lenders under the Loan Documents and to grant
to Agent, for the benefit of the Agent and Lenders, a security interest in and
lien upon substantially all of its personal and Real Property to secure the
Obligations.
The parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. CERTAIN DEFINED TERMS. The following terms used herein
shall have the following meanings:
"Account Debtor" means any Person who may become obligated to a Credit
Party under, with respect to, or on account of an Account of such Credit Party
(including without limitation any guarantor of the payment or performance of an
Account).
"Advance" means either a LIBOR Loan Advance or a Base Rate Advance, as
applicable.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially or as a trustee,
guardian or other fiduciary: (i) with respect to Borrower, its Subsidiaries and
each other Credit Party, ten percent (10%) or more of the Stock of such Person,
and (ii) with respect to each other Person, five percent (5%) or more of the
Stock of such Person (b) each Person that controls, is controlled by or is under
common control with such Person, (c) each of such Person's officers, directors,
joint venturers and partners and (d) in the case of the Borrower, the immediate
family members, spouses and lineal descendants of individuals who are Affiliates
of the Borrower. For the purposes of this definition, "control" of a
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Person means the possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies, whether through the ownership
of voting securities, by contract or otherwise; provided, however, that the term
"Affiliate" when used with respect to any Credit Party shall specifically
exclude each Lending Party.
"Agent" means GE Capital in its capacity as Agent for the Lenders
hereunder and under the Loan Documents, and its successors in such capacity.
"Aggregate L/C Exposure" means, at any time, the sum, without
duplication, of (a) the aggregate amount that is (or may thereafter become)
available for drawing under all Letters of Credit outstanding at such time plus
(b) the aggregate unpaid principal amount of all Reimbursement Obligations
outstanding at such time.
"Agreement" means this Credit Agreement, including all schedules and
exhibits hereto as the same may be amended, modified, supplemented or restated
from time to time.
"Applicable Law" means, anything in Section 11.10 to the contrary
notwithstanding, (i) all applicable common law and principles of equity and (ii)
all applicable provisions of all (A) constitutions, statutes, rules, regulations
and orders of Governmental Authorities, (B) Governmental Approvals and (C)
orders, decisions, judgments and decrees of all courts and arbitrators.
"Applicable Margin" means: (a) 4.50% per annum for LIBOR Loan Advances
and 3.25% per annum for Base Rate Advances, (b) 4.50% per annum for the Letter
of Credit Fee Applicable Margin and (c) 0.375% for the Unused Line Fee
Applicable Margin.
"Asset Disposition" means any disposition, whether by sale, lease,
transfer, loss, damage, destruction, casualty, condemnation or otherwise
(including any such transaction effected by way of merger or consolidation), of
any Stock or other property (whether real, personal or mixed) of any Credit
Party, but excluding (a) dispositions of inventory in the ordinary course of
business (b) dispositions of Temporary Cash Investments and cash payments
otherwise permitted under this Agreement, and (c) dispositions of equipment
which is obsolete or worn-out; provided that a disposition of assets not
excluded by clauses (a), (b) or (c) above during any Fiscal Year shall not
constitute an Asset Disposition unless and until (and only to the extent that)
the aggregate proceeds from such disposition, when combined with all other such
disposition previously made during such Fiscal Year, exceed $250,000.
"Assignment Agreement" has the meaning ascribed to it in Section
11.6(a).
"Authorized Signatory" means any Person or Persons designated as such
by the Borrower to the Agent in a writing in the form of Exhibit J.
"Base Rate" means, for any day, a floating rate equal to the greater of
(a) the rate publicly quoted from time to time by The Wall Street Journal as the
"Prime Rate" (or, if The Wall Street Journal ceases quoting a prime rate of the
type described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(b) the Federal Funds Rate plus 50 basis points per annum. Any change in the
Base Rate due to a change in the
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prime rate or the Federal Funds 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 Rate, respectively.
"Base Rate Advance" means a Revolving Credit Advance bearing interest
by reference to the Base Rate.
"Base Rate Borrowing" means a Borrowing that is constituted of Base
Rate Loans.
"Base Rate Loan" means that portion of a Loan, the interest on which
is, or is to be, as the context may require, computed on the basis of the Base
Rate.
"Benefit Arrangement" means, at any time, an employee benefit plan
within the meaning of Section 3(3) of ERISA that is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the Controlled Group.
"Borrower" means Castle Dental Centers, Inc., a Delaware corporation.
"Borrower Account" means the deposit account specified on the signature
pages hereof into which all Advances to the Borrower shall be made available, or
such other account as the Borrower shall from time to time specify by written
notice to the Agent.
"Borrower Pledge Agreement" means the Borrower Pledge Agreement dated
as of the date hereof between the Borrower and the Agent, substantially in the
form of Exhibit D.
"Borrower Security Agreement" means the Security Agreement dated as of
the date hereof between the Borrower and the Agent, substantially in the form of
Exhibit E.
"Borrowing" means the aggregation of Advances to be made to the
Borrower by the Lenders pursuant to Article II on the same day, all of which
Advances are of the same Type (subject to Article II) and, except in the case of
Base Rate Advances, have the same initial LIBOR Period. Borrowings are also
classified for purposes hereof by reference to the pricing of Advances
comprising such Borrowing (for example, a "LIBOR Borrowing" is a Borrowing
comprised of LIBOR Loan Advances).
"Borrowing Availability" means as of any date of determination as to
Borrower, the Maximum Commitment Amount minus the sum of the aggregate Revolving
Loans then outstanding.
"Budget" has the meaning ascribed to such term in Section 5.1(d).
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the States of Illinois
or Texas and, in reference to LIBOR Loans, means any such day that is also a
LIBOR Business Day.
"Capital Expenditures" is defined in the Compliance Certificate.
3
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee which would,
in accordance with GAAP, be required to be accounted for as a capital lease on
the balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of
any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Collateral Account" has the meaning ascribed to it in Section
2.5(k)(i).
"Cash Equivalents" means cash or cash equivalents reasonably acceptable
to Agent.
"Cash On Hand" means, at any time, all Cash Equivalents as reflected on
a consolidated balance sheet of Borrower and its Subsidiaries.
"Cash Floor Limit" has the meaning ascribed to such term in Section
2.8(d).
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.), as amended from
time to time, and the regulations promulgated thereunder.
"CHAMPVA" means, collectively, the Civilian Health and Medical Program
of the Department of Veteran Affairs, a program of medical benefits covering
retirees and dependents of former members of the armed services administered by
the United States Department of Veteran Affairs, and all laws, rules,
regulations, manuals, orders, guidelines or requirements pertaining to such
program including, without limitation, (a) all federal statutes (whether set
forth in 38 U.S.C. Section1713 or elsewhere) affecting such program or, to the
extent applicable to CHAMPVA and (b) all rules, regulations (including 38 C.F.R.
Section17.54), 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, supplemented or otherwise modified from time to time.
"CHAMPVA Account" means an Account payable pursuant to CHAMPVA.
"Change of Control" means any event, transaction or occurrence as a
result of which (a) the Sponsor, together with its Controlled Investment
Affiliates, ceases to own and control all of the economic and voting rights
associated with ownership of at least thirty five percent (35%) of the Stock of
all classes of the Borrower on a fully-diluted, as-converted basis (including,
for such purpose, the conversion of all Convertible Preferred), (b) Sponsor,
together with its Controlled Investment Affiliates, ceases to own and control at
least seventy five percent (75%) of the Stock of Borrower on a fully-diluted,
as-converted basis owned by it on the Closing Date (assuming for such purpose,
the conversion of all Convertible Preferred) or (c) Sponsor ceases for any
reason to have the right to appoint a majority of the members of the board of
directors of Borrower, (d) the Borrower ceases to own and control, directly or
indirectly, all of the economic and voting rights associated with the
outstanding Stock of all classes of any of its Subsidiaries or (e) a "Change of
Control" (as defined in the Series B Certificate of Designations shall occur.
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"Charges" means any and all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including taxes owed to the PBGC at
the time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business including, without limitation,
charges for necessary business permits and governmental authorizations.
"Class" defines an Extension of Credit by reference to the Commitment
and/or subfacility under which it is made.
"Closing Checklist" means the Closing Checklist in the form of Exhibit
K attached hereto.
"Closing Date" means May 15, 2003.
"CMS" means the Centers for Medicare and Medicaid Services, formerly
known as the Health Care Financing Administration or HCFA.
"Collateral" means the property covered by the Security Agreements and
the other Collateral Documents and any other property, real or personal,
tangible or intangible, now existing or hereafter acquired, that may at any time
be or become subject to a security interest or Lien in favor of Agent, on behalf
of itself and Lenders, to secure the Obligations.
"Collateral Documents" means the Security Agreements, the Pledge
Agreements, the Guaranty Agreements, and all similar agreements entered into
guaranteeing payment of, or granting a Lien upon property as security for, the
Obligations.
"Collateral Reports" means the reports with respect to the Collateral
referred to in Section 5.2.
"Collection Account" means that certain account of Agent, account
number 00-000-000 in the name of Agent at Deutsche Bank Trust Company Americas
in New York, New York ABA No. 000-000-000, or such other account as may be
specified in writing by Agent as the "Collection Account."
"Commitment" means (a) as to any Lender, such Lender's Revolving Credit
Commitment and Term Loan Commitment as set forth on the signature pages hereto
or in the most recent Assignment Agreement executed by such Lender and (b) as to
all Lenders, the aggregate of all of Lenders' Revolving Credit Commitments and
Term Loan Commitments, as such Commitments may be reduced, amortized or adjusted
from time to time in accordance with this Agreement.
"Commitment Termination Date" means the earliest of (a) November 15,
2007, (b) the date of termination of Lenders' obligations to make Advances and
to incur L/C Obligations or the date of acceleration of the maturity date of all
or any portion of the Obligations pursuant to Section 8.2(b), and (c) the date
of indefeasible payment in full by the Borrower of the Loans and the
cancellation and return of (or issuance of a stand-by guarantee with respect to)
all Letters of
5
Credit or the cash collateralization of all L/C Obligations pursuant to Section
2.5(k), and the permanent reduction of all Commitments to Zero Dollars ($0).
"Compliance Certificate" means a compliance certificate in the form of
Exhibit 5.1 attached hereto and delivered pursuant to Section 5.1(d).
"Continuation" has the meaning ascribed to it in Section 2.3(a).
"Controlled Group" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
is treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC or Section 4001 of ERISA.
"Controlled Investment Affiliates" means those investment funds and
investment partnerships which are controlled by or under common control with the
Sponsor which invest in equity securities in the ordinary course of their
businesses.
"Conversion" has the meaning set forth in Section 2.3(a).
"Convertible Preferred" means the Series B Convertible Preferred Stock
of the Borrower, with a par value of $0.001 per share.
"Credit Parties" means the Borrower and each Guarantor.
"Current Assets" means, with respect to any Person, all current assets
of such Person as of any date of determination calculated in accordance with
GAAP, but excluding cash, cash equivalents and debts due from Affiliates.
"Current Liabilities" means, with respect to any Person, all
liabilities that should, in accordance with GAAP, be classified as current
liabilities, and in any event shall include (a) all Indebtedness payable on
demand or within one (1) year from any date of determination without any option
on the part of the obligor to extend or renew beyond such year, but excluding
the current portion of long-term debt required to be paid within one (1) year,
and (b) the aggregate outstanding principal balance of the Revolving Loan.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived within any applicable grace or cure period, become an
Event of Default.
"Default Rate" means, subject to Section 2.15, the rate otherwise
applicable to an Obligation plus 2.00% per annum, or if no such rate is
provided, the Base Rate, plus the Applicable Margin for Base Rate Advances, plus
2.00%.
"Dollars" or "$" means lawful currency of the United States of America.
"Dormant Entities" means Castle Dental Centers of Austin, Inc., a Texas
corporation, Castle Dental Centers of Austin, PC, a Texas professional
corporation, Dental World, Inc., a Texas corporation, Dental Delivery Services
PC, a Texas professional corporation, Castle Dental
6
Associates of Florida, PA, a Florida professional association, Dentcor, Inc., a
Florida corporation, Ner H. Azuala, D.D.S., Inc., a California corporation,
Xxxxxxx Xxxxxxxxxx, D.D.S., Inc., a California corporation, Xxxx X. Grill
D.D.S., Inc., a California corporation, Xxxxx Xxxxxxxx, D.D.S., Inc., a
California corporation, Castle Dental Centers of Oklahoma, Inc., an Oklahoma
corporation, Castle Dental Centers of New York, Inc., a New York corporation,
JHC, DDS, Inc., a Texas corporation, and Family Dental Services of Texas, Inc.,
a Texas corporation, or any of them
"EBITDA" is defined in the Compliance Certificate.
"Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Without limiting the generality of the
foregoing, Environmental Laws include CERCLA, the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.), the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et
seq.), the Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.), the Toxic
Substance Control Act (15 U.S.C. Sections 2601 et seq.), the Clean Air Act (42
U.S.C. Sections 7401 et seq.), the Federal Water Pollution Control Act (33
U.S.C. Sections 1251 et seq.), the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.), and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.), and any rules and regulations promulgated thereunder, and all
analogous state, local and foreign counterparts or equivalents and any transfer
of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws or Environmental Permits or in connection
with any Release or threatened Release or the presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equity Documents" means: (a) that certain Preferred Stock and
Subordinated Note Purchase Agreement dated as of even date herewith by and
between the Borrower and Sentinel Capital Partners II, L.P., a Delaware limited
partnership, (b) that certain Stockholders Agreement dated as of even date
herewith by and among the Borrower, Sentinel Capital Partners II, L.P.
7
Xxxxxx Financial, Inc., a Delaware corporation, Midwest Mezzanine Fund II, L.P.,
a Delaware limited partnership, Xxxxx X. Xxxxx, an individual, and the other
Persons party thereto, (c) that certain Registration Agreement dated as of even
date herewith by and between the Borrower and Sentinel Capital Partners II,
L.P., a Delaware limited partnership, and (d) and all other agreements or
instruments executed in connection therewith.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rules and regulations promulgated thereunder.
"ERISA Event" means, with respect to any Credit Party or any member of
a Controlled Group, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan, (b) the withdrawal of any Credit Party or any member
of a Controlled Group from a Title IV Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA, (c) the complete or partial withdrawal of any Credit Party
or any member of a Controlled Group from any Multiemployer Plan, (d) the
termination of, the filing of a notice of intent to terminate a Title IV Plan or
the treatment of a plan amendment as a termination under Section 4041 of ERISA,
(e) the institution of proceedings to terminate a Title IV Plan or Multiemployer
Plan by the PBGC, (f) the failure by any Credit Party or any member of a
Controlled Group to make when due required contributions to a Multiemployer Plan
or Title IV Plan unless such failure is cured within thirty (30) days, (g) any
other event or condition that might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA, (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA, (i) the loss of a Qualified Plan's qualification or tax exempt status,
or (j) the termination of a Plan described in Section 4064 of ERISA.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Excess Cash Flow" means, without duplication, with respect to any
Fiscal Year of the Borrower and its Subsidiaries, consolidated net income of the
Borrower and its Subsidiaries on a consolidated basis for such Fiscal Year plus
(a) depreciation, amortization and Interest Expense to the extent deducted in
determining consolidated net income, plus decreases or minus increases (as the
case may be) (b) in Working Capital for such Fiscal Year, minus (c) Capital
Expenditures during such Fiscal Year, minus (d) Interest Expense paid in cash
and scheduled principal payments paid in respect of Funded Debt, plus or minus
(as the case may be) (e) extraordinary gains or losses which are cash items not
included in the calculation of net income, minus (f) mandatory prepayments paid
in cash pursuant to Section 2.8 other than mandatory prepayments made pursuant
to Sections 2.8(a) or 2.8(d), plus (g) taxes deducted in determining
consolidated net income to the extent not paid in cash. For purposes of this
definition, "Working Capital" means Current Assets minus Current Liabilities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any rules and regulations promulgated thereunder.
8
"Extension of Credit" means, as the context requires, (a) an Advance,
(b) the making of an Advance, (iii) the conversion of a Base Rate Loan to a
LIBOR Loan or the continuation of a LIBOR Loan as a LIBOR Loan for an additional
LIBOR Period, or (c) the issuance of any Letter of Credit or the incurrence of
any Reimbursement Obligation.
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as published for such day (or if such day
is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three (3) federal funds brokers of
recognized standing selected by the Agent, which determination shall be final,
binding and conclusive (absent manifest error).
"Fees" means any and all fees payable to Agent or any Lender pursuant
to this Agreement or any of the other Loan Documents.
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrower, ending on March 31, June 30, September 30 and December 31 of each
year.
"Fiscal Year" means any of the annual accounting periods of the
Borrower ending on December 31 of each year.
"Xxxxxxxxxxx" means Xxxxxx Xxxxxxxxxxx, an individual.
"Xxxxxxxxxxx Subordination Agreement" means that certain Subordination
and Intercreditor Agreement dated as of the Closing Date by and among Borrower,
Agent and Xxxxxxxxxxx.
"Fixed Charge Coverage Ratio" is defined in the Compliance Certificate.
"Fixed Charges" is defined in the Compliance Certificate.
"Funded Debt" means, with respect to any Person, without duplication,
(a) all Indebtedness for borrowed money and (b) all Indebtedness evidenced by
notes, bonds, debentures or similar instruments, or upon which interest payments
are customarily made, in each case, that by its terms matures more than one (1)
year from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one (1) year from, the date
of creation thereof, and specifically including, without limitation, Xxxxxxx
Obligations, Capital Lease Obligations, current maturities of long-term debt,
revolving credit and short-term debt extendible beyond one (1) year at the
option of the debtor, and also including, in the case of the Borrower, the
Obligations and, without duplication, Guaranteed Obligations in respect of
Funded Debt of other Persons.
"GAAP" has the meaning ascribed to it in Section 1.2.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
9
"Government Accounts" means, collectively, any and all Accounts which
are (a) Medicare Accounts, (b) Medicaid Accounts, (c) TRICARE Accounts, (d)
CHAMPVA Accounts, or (e) any other Account payable by a Governmental Authority
acceptable to the Agent in its reasonable discretion.
"Governmental Approval" means an authorization, consent, approval,
license or exemption of, registration or filing with, or report or notice to any
Governmental Authority.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Obligations" means as to any Person, without duplication,
any obligation of such Person guaranteeing, providing comfort or otherwise
supporting any Indebtedness, lease, dividend, or other obligation ("primary
obligation") of any other Person (the "primary obligor") in any manner,
including any obligation or arrangement of such Person to (a) purchase or
repurchase any such primary obligation, (b) advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency or any balance sheet condition of the primary obligor, (c)
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, (d) protect the beneficiary of such
arrangement from loss (other than product warranties given in the ordinary
course of business) or (e) indemnify the owner of such primary obligation
against loss in respect thereof; provided that the term Guaranteed Obligations
shall not include endorsements for collection or deposit in the ordinary course
of business. The amount of any Guaranteed Obligations at any time shall be
deemed to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Obligations is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Obligations, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guarantors" means each Subsidiary of the Borrower, and each other
Person, if any, that executes a Guaranty Agreement or other similar agreement in
favor of Agent, for itself and the ratable benefit of Lenders, in connection
with the transactions contemplated by this Agreement and the other Loan
Documents.
"Guaranty Agreements" means, collectively, the Subsidiary Guaranty and
any other guaranty now or hereafter executed by any Person in favor of Agent and
Lenders to guarantee the Obligations.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other
10
similar term or phrase under any Environmental Laws, or (b) petroleum or any
fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's), or
any radioactive substance.
"Healthcare Laws" means, collectively, any and all applicable federal,
state or local laws, rules, regulations and administrative manuals, orders,
guidelines and requirements issued under or in connection with Medicare,
Medicaid CHAMPVA, TRICARE, HIPAA or any government payment program or any law
governing the licensure of or regulating healthcare providers, professionals,
facilities or payors or otherwise governing or regulating the provision of, or
payment for, Medical Services, or the sale of medical supplies. Without limiting
the generality of the foregoing, Healthcare Laws include, without limitation,
Section 1128B(b) of the Social Security Act, as amended, 42 U.S.C. Section
1320a-7(b) (Criminal Penalties Involving Medicare or State Health Care
Programs), commonly referred to as the "Federal Anti-Kickback Statute," and the
Social Security Act, as amended, and Section 1877, 42 U.S.C Section 1395nn
(Prohibition Against Certain Referrals), commonly referred to as "Xxxxx
Statute".
"Xxxxxx" means Xxxxxx Financial Inc., a Delaware corporation.
"HIPAA" means the Health Insurance Portability and Accountability Act
of 1996, as amended from time to time, and any rules or regulations promulgated
from time to time thereunder.
"Indebtedness" of a Person means at any date, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person to pay the deferred purchase price of property or service incurred in the
ordinary course of business if the purchase price is due more than six (6)
months from the date the obligation is incurred, (d) all Capital Lease
Obligations of such Person, (e) any obligation under any lease (a "synthetic
lease") treated as an operating lease under GAAP and as a loan or financing for
United States income tax purposes or creditors rights purposes, (f) all
obligations of such Person to purchase securities (or other property) which
arise out of or in connection with the issuance or sale of the same or
substantially similar securities (or property), (g) all contingent or
non-contingent obligations of such Person to reimburse any bank or other Person
in respect of amounts paid under a letter of credit or similar instrument, (h)
all equity securities of such Person subject to repurchase or redemption
otherwise than at the sole option of such Person, (i) all "earnouts" and similar
payment obligations of such Person, (j) all indebtedness secured by a Lien on
any asset of such Person, whether or not such indebtedness is otherwise an
obligation of such Person, (k) all obligations of such Person under any foreign
exchange contract, currency swap agreement, interest rate swap, cap or collar
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in currency values or interest rates,
in each case whether contingent or matured, (l) all Guaranteed Obligations of
such Person and (m) Xxxxxxx Obligations.
"Indemnitees" has the meaning ascribed to it in Section 9.2.
"Information" means written data, reports, statements (including, but
not limited to, financial statements delivered pursuant to or referred to in
Sections 5.01 and 5.02), documents
11
and other information, whether, in the case of any such in writing, the same was
prepared by any Credit Party or any other Person on behalf of any Credit Party.
"Insurer" means a Person that insures a Patient against certain of the
costs incurred in the receipt by such Patient of Medical Services, or that has
an agreement with Borrower or any Subsidiary to compensate such Credit Party for
providing goods or services to a Patient.
"Intercompany Notes" has the meaning ascribed to it in Section 7.1(d).
"Interest Coverage Ratio" is defined in the Compliance Certificate.
"Interest Expense" is defined in the Compliance Certificate.
"Interest Payment Date" means (a) as to any Base Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding, and (b) as
to any LIBOR Loan, the last day of the applicable LIBOR Period; provided that in
the case of any LIBOR Period greater than three (3) months in duration, interest
shall be payable on the date that is three (3) months after the first day of
such LIBOR Period and on the last day of such LIBOR Period; and provided further
that, in addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date, shall be deemed to be an "Interest Payment
Date" with respect to any interest (including interest accruing at the Default
Rate) that has then accrued under this Agreement.
"Investment" means, with respect to any Person, any investment by such
Person in any other Person, whether by means of acquiring or holding Stock,
capital contribution, loan, advance, extension of credit, purchase of
Indebtedness, guarantee, deposit or otherwise, but excluding any trade account
receivable arising in the ordinary course of business.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time, and all regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"L/C Exposure" means, with respect to any Lender at any time, its
Percentage of the Aggregate L/C Exposure at such time.
"L/C Issuer" means (a) GE Capital and (b) any other Lender designated
as an "L/C Issuer" for purposes hereof in a notice to the Agent signed by the
Borrower and such Lender, acting in each case in the capacity of an L/C Issuer
under the letter of credit facility described in Section 2.5, and their
respective successors.
"L/C Limit" means $500,000.
"L/C Obligations" means all outstanding obligations incurred by L/C
Issuer and Revolving Lenders, whether direct or indirect, contingent or
otherwise, due or not due, in connection with the issuance of Letters of Credit
by Agent or another L/C Issuer or the purchase of a participation as set forth
in Section 2.5 with respect to any Letter of Credit. The amount of
12
such L/C Obligations shall equal the maximum amount that may be payable at such
time or at any time thereafter by Agent or Revolving Lenders thereupon or
pursuant thereto.
"L/C Payment Date" has the meaning ascribed to it in Section 2.5(f).
"Lenders" means GE Capital, the other Lenders named on the signature
pages of this Agreement, and, if any such Lender shall decide to assign all or
any portion of the Obligations, such term shall include any assignee of such
Lender.
"Lending Party" means the Agent, the Lenders and any Letter of Credit
Issuer.
"Letter of Credit Fee" has the meaning ascribed to it in Section
2.7(d).
"Letters of Credit" has the meaning ascribed to it in Section 2.5(a).
"Leverage Ratio" has the meaning set forth in the Compliance
Certificate.
"LIBOR Borrowing" means a Borrowing that is constituted of LIBOR Loans.
"LIBOR Business Day" means a Business Day on which banks in the City of
London, England are generally open for interbank or foreign exchange
transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Loan Advance" means a Revolving Credit Advance bearing interest
by reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day and ending one (1), two (2), three (3) or six
(6) months thereafter, in each case as selected by the Borrower's irrevocable
notice to Agent as set forth in Section 2.3; provided that the foregoing
provision relating to LIBOR Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is
not a LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be to
carry such LIBOR Period into another calendar month in which event such LIBOR
Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end two (2) LIBOR Business Days prior to such
date;
(c) any LIBOR Period that begins on the last LIBOR 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 LIBOR Period) shall end on the last
LIBOR Business Day of a calendar month;
(d) the Borrower shall select LIBOR Periods so as not to require a
payment or
13
prepayment of any LIBOR Loan during a LIBOR Period for such Loan;
(e) the Borrower shall select LIBOR Periods so that there shall be
no more than eight (8) separate LIBOR Loans in existence at any one time;
(f) no Interest Period for any portion of the Term Loan shall
extend beyond the date of the final scheduled installment thereof; and
(g) an Interest Period may not be selected for any portion of the
Term Loan if: (1) a scheduled installment of principal for such Term Loan is
payable during such Interest Period and (2) the portion of such Term Loan which
constitutes a Base Rate Loan after such Interest Period is selected and made
effective does not equal or exceed the amount of such scheduled installment of
principal.
"LIBOR Rate" means for each LIBOR Period, a rate of interest determined
by Agent equal to:
(a) the offered rate for deposits in Dollars for the applicable
LIBOR Period that appears on Telerate Page 3750 (or any successor or substitute
page) as of 11:00 a.m. (London time) on the second full LIBOR Business Day next
preceding the first day of such LIBOR Period (unless such date is not a Business
Day, in which event the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is two (2) LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic, supplemental, marginal and
emergency reserves under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board that are
required to be maintained by a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be determined by Agent. Notwithstanding the
foregoing, for purposes of this Agreement, in no event shall the LIBOR Rate be
less than one percent (1.00%) per annum.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien (statutory or other), charge, claim,
security interest, easement or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including any lease, conditional sale or title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or comparable law of any
jurisdiction).
"Litigation" has the meaning ascribed to it in Section 4.7.
"Loan Account" has the meaning ascribed to it in Section 2.12.
14
"Loan Documents" means this Agreement, the Notes, the Subordination
Agreements, the Collateral Documents, and all other agreements, instruments,
documents and certificates identified in the Closing Checklist executed and
delivered to, or in favor of, Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, and all
other written matter whether heretofore, now or hereafter executed by or on
behalf of any Credit Party, or any employee of any Credit Party, and delivered
to Agent or any Lender in connection with this Agreement or the transactions
contemplated thereby. Any reference in this Agreement or any other Loan Document
to a Loan Document shall include all appendices, exhibits or schedules thereto,
and all amendments, restatements, supplements or other modifications thereto,
and shall refer to this Agreement or such Loan Document as the same may be in
effect at any and all times such reference becomes operative.
"Loans" means any one or more of the Revolving Loan or the Term Loan,
as the context may require.
"Management Service Agreements" means, collectively: (i) that certain
Amended and Restated Management Services Agreement dated as of May 15, 2002 by
and between Castle Dental Centers of Texas, Inc., and Castle Dental Centers of
Texas, P.C. (formerly known as Xxxx X. Xxxxxx, D.D.S., P.C.), (ii) that certain
Amended and Restated Management Services Agreement dated as of January 1, 2000
by and between Castle Dental Centers of Florida, Inc. and Castle 1st Dental
Care, P.A., as amended through the Closing Date, (iii) that certain Management
Services Agreement dated as of May 31, 1996 by and between Castle Dental Centers
of Tennessee, Inc. and Castle Mid-South Dental, P.C. , as amended through the
Closing Date, and (iv) that certain Management Services Agreement dated as of
February 27, 2001 by and between Castle Dental Centers of California, L.L.C.,
and Xxxxxxx Dental Corp.
"Margin Stock" has the meaning assigned thereto in Regulation U of the
Federal Reserve Board, as the same may be amended, supplemented or modified from
time to time.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business or properties of the Credit Parties
taken as a whole, (b) the rights and remedies of the Agent or the Lenders under
the Loan Documents, or the ability of any Credit Party to perform its
obligations under the Loan Documents to which it is a party, as applicable, (c)
the legality, validity or enforceability of any Loan Document, or (d) the
existence, perfection or priority of any security interest granted in the Loan
Documents or the value of the Collateral (including its value to the Agent and
the Lenders as security for the Obligations).
"Maximum Commitment Amount" means, as of any date of determination, an
amount equal to the Revolving Credit Commitments of all Lenders as of that date.
"Maximum Lawful Rate" has the meaning ascribed to it in Section
2.15(b).
15
"Medicaid" means, collectively, the healthcare assistance program
established by Title XIX of the Social Security Act (42 U.S.C. Sections1396 et
seq.) and any statutes succeeding thereto, and all laws, rules, regulations,
manuals, orders, guidelines or requirements (whether or not having the force of
law) pertaining to such program, in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"Medicaid Account" means an Account payable pursuant to a Medicaid
Provider Agreement.
"Medicaid Certification" means certification of a facility by CMS or a
state agency or entity under contract with CMS that such healthcare facility
fully complies with all the conditions of Medicaid.
"Medicaid/Medicare Account Debtor" means any Account Debtor which is
(a) the United States of America acting under Medicaid or Medicare, (b) any
state or the District of Columbia acting pursuant to a health plan adopted
pursuant to Title XIX of the Social Security Act or (c) any agent, carrier,
administrator or intermediary for any of the foregoing.
"Medicaid Provider Agreement" means an agreement entered into between a
state agency or other entity administering Medicaid in such state and a health
care facility or physician under which the health care facility or physician
agrees to provide services or merchandise for Medicaid patients.
"Medical Services" means medical and/or health care services provided
to a Patient, including, but not limited to, medical and/or health care services
provided to a Patient and performed by a Credit Party which are covered by a
policy of insurance issued by an Insurer, and includes, without limitation,
physician services, nurse and therapist services, dental services, hospital
services, skilled nursing facility services, comprehensive outpatient
rehabilitation services, home health care services, residential and out-patient
behavioral healthcare services, and medicine or health care equipment provided
by a Credit Party to a Patient for a necessary or specifically requested valid
and proper medical or health purpose.
"Medicare" means, collectively, the health insurance program for the
aged and disabled established by Title XVIII of the Social Security Act (42
U.S.C. Sections1395 et seq.) and any statutes succeeding thereto, and all laws,
rules, regulations, manuals, orders or guidelines (whether or not having the
force of law) pertaining to such program, in each case as the same may be
amended, supplemented or otherwise modified from time to time.
"Medicare Account" means an Account payable pursuant to a Medicare
Provider Agreement.
"Medicare Certification" means certification of a facility by CMS or a
state agency or entity under contract with CMS that such healthcare facility
fully complies with all conditions for such facility's participation in
Medicare.
"Medicare Provider Agreement" means an agreement entered into between a
state agency or other entity administering Medicare in such state and a health
care facility or physician under
16
which the health care facility or physician agrees to provide services or
merchandise for Medicare patients.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, and to which any Credit Party or any member of a Controlled
Group is making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Net Cash Proceeds" means, with respect to any transaction, an amount
equal to the cash proceeds received by a Credit Party from or in respect of such
transaction (including any cash proceeds received as income and, as to any
non-cash proceeds of such transaction (including, but not limited to, promissory
notes), any cash proceeds as and when received by such Credit Party with respect
thereto), less (x) any commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such transaction,
including costs of collection, and payable by such Credit Party in connection
therewith (in each case, paid to non-Affiliates) and (y) in the case of an Asset
Disposition, any amounts payable to holders of senior Liens (to the extent such
Liens are permitted by Section 7.2) and any taxes paid or payable by such Person
(as reasonably estimated by the chief financial officer of Borrower giving
effect to the overall tax position of such Person) in respect of such Asset
Disposition and (z) the amount of any reasonable reserve established in
accordance with GAAP against any liabilities retained by such Person (other than
taxes deducted pursuant to the foregoing clause (y)) associated with the asset
disposed of in such Asset Disposition.
"Notes" means, collectively, the Revolving Notes and the Term Notes.
"Notice of Borrowing" has the meaning ascribed to it in Section 2.3(a).
"Obligations" means all Loans, fees, indebtedness, liabilities,
obligations, covenants and duties of any Credit Party to any Lending Party of
every kind, nature and description, direct or indirect, absolute or contingent,
due or not due, in contract or tort, liquidated or unliquidated, arising under
this Agreement, or under the other Loan Documents, by operation of law or
otherwise in connection with the transactions contemplated hereby, now existing
or hereafter arising, and whether or not for the payment of money or the
performance or non-performance of any act, including, but not limited to, all
damages that any Credit Party may owe to the Agent and/or the Lenders by reason
of any breach by any Credit Party of any representation, warranty, covenant,
agreement or other provision of this Agreement or any of the other Loan
Documents. Without limiting the generality of the foregoing, this term includes
all principal, interest (including all interest that accrues after the
commencement of any case or proceeding by or against any Credit Party in
bankruptcy, whether or not allowed in such case or proceeding), Fees, Charges,
expenses, attorneys' fees and any other sum payable by any Credit Party to a
Lending Party under this Agreement or any of the other Loan Documents.
"Officer's Certificate" means a certificate executed on behalf of a
Person by one or more of its chairman of the board (if an officer), chief
executive officer, president, chief financial officer or treasurer.
17
"Organizational Documents" means, for any corporation, the certificate
or articles of incorporation, the bylaws, or other similar organizational
documents, any certificate of designation or instrument relating to the rights
of preferred shareholders of such corporation, any shareholder rights agreement,
and all applicable resolutions of the board of directors (or any committee
thereof) of such corporation adopting, supplementing or modifying any of the
foregoing and, for any entity other than a corporation, the equivalent of the
foregoing, including, without limitations, the partnership agreement, and the
operating agreement (or comparable agreement) of any partnership or limited
liability company, respectively.
"Other Subordinated Notes" means the "Subordinated Notes," as defined
in the Other Subordination Agreements.
"Other Subordination Agreements" mean all Subordination and
Intercreditor Agreements by and among Agent, Borrower and other persons party to
that certain Preferred Stock and Subordinated Note Purchase Agreement dated as
of the closing Date (other than Sentinel and Xxxxxxxxxxx).
"Outstanding Amount" means, with respect to any Lender at any time, the
sum of (a) the aggregate outstanding principal amount of its Advances, plus (b)
its L/C Exposure, all determined at such time after giving effect to any prior
assignments by or to such Lender pursuant to Section 11.6.
"Patient" means any Person receiving Medical Services from any Credit
Party and all Persons legally liable to pay such Credit Party for such Medical
Services other than Insurers or Governmental Authorities.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Percentage" means, with respect to any Lender at any time, the
percentage which the amount of its Commitment for a particular Class at such
time represents of the aggregate amount of all the Commitments for such Class at
such time. At any time after the Commitments for a Class shall have terminated,
the term "Percentage" shall refer to a Lender's Percentage for that Class
immediately before such termination, adjusted to reflect any subsequent
assignments pursuant to Section 11.6.
"Permitted Contest" means, with respect to any Credit Party, a good
faith contest by such Credit Party, by appropriate proceedings, of the validity
or amount of any Charges, claims, obligations or liabilities of such Credit
Party; provided, that (a) such contest is maintained and prosecuted continuously
and with diligence and operates to suspend collection or enforcement of such
Charges, (b) no Lien shall be imposed to secure payment of such Charges, claims,
obligations or liabilities (other than payments to warehousemen and/or bailees)
that is superior to any of the Liens securing the Obligations and, (c) none of
the Collateral becomes subject to forfeiture or loss as a result of such
contest, (d) such Credit Party shall promptly pay or discharge such contested
Charges, claims, obligations, liabilities and all additional charges, interest,
penalties and expenses, if any, and shall deliver to Agent evidence reasonably
acceptable to
18
Agent of such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Credit Party or the conditions set forth above in
clause (a), (b) and (c) of this definition are no longer met, and (e) Agent has
not advised Borrower in writing that Agent reasonably believes that nonpayment
or nondischarge thereof would reasonably be expected to have, or result in, a
Material Adverse Effect.
"Permitted Encumbrances" means the following encumbrances (a) Liens for
taxes or assessments or other governmental Charges not yet due and payable or
which are the subject of a Permitted Contest, (b) pledges or deposits of money
securing statutory obligations under workmen's compensation, unemployment
insurance, social security or public liability laws or similar legislation
(excluding Liens under ERISA), (c) pledges or deposits of money securing bids,
tenders, contracts (other than contracts for the payment of money) or leases to
which any Credit Party is a party as lessee made in the ordinary course of
business, (d) inchoate and unperfected workers', mechanics' or similar liens
arising in the ordinary course of business, so long as such Liens attach only to
Equipment, Fixtures and/or Real Property, (e) carriers', warehousemen's,
suppliers' or other similar possessory liens arising in the ordinary course of
business and securing liabilities in an outstanding aggregate amount not in
excess of $250,000 at any time, so long as such Liens attach only to Inventory,
(f) deposits securing, or in lieu of, surety, appeal or customs bonds in
proceedings to which any Credit Party is a party; (g) any attachment or judgment
lien not constituting an Event of Default under Section 8.1(k), (h) zoning
restrictions, easements, licenses, or other restrictions on the use of any Real
Property or other minor irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Property; (i) presently existing or hereafter created
Liens in favor of Agent, on behalf of Lenders, and (j) Liens expressly permitted
under clauses (b) and (c) of Section 7.2 of this Agreement.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"Plan" means, at any time, an "employee benefit plan" as defined in
Section 3(3) of ERISA, that any Credit Party or any member of a Controlled Group
maintains, contributes to or has an obligation to contribute to or has
maintained, contributed to or had an obligation to contribute to at any time
within the past 7 years on behalf of participants who are or were employed by
any Credit Party or any member of a Controlled Group.
"Pledge Agreements" means, collectively, the Borrower Pledge Agreement,
the Subsidiary Pledge Agreement, and any pledge agreements entered into after
the Closing Date by any Credit Party (as required by this Agreement or any other
Loan Document).
"Prior Lender" means Bank of America, N.A., as administrative agent.
"Prior Lender Obligations" means the obligations and liabilities under
that certain Second Amended and Restated Credit Agreement dated as of July 19,
2002 among Borrower, Bank of America, N.A., as administrative agent and the
lenders signatory thereto.
19
"Pro Forma" means the unaudited consolidated balance sheet of Borrower
and its Subsidiaries as of March 31, 2003 after giving pro forma effect to the
Related Transactions.
"Projections" means Borrower's and its Subsidiaries'; forecasted: (a)
consolidated balance sheets; (b) consolidated profit and loss statements; and
(c) consolidated cash flow statements, each prepared in a manner consistent with
the historical financial statements of Borrower and its Subsidiaries, together
with appropriate supporting details and a statement of underlying assumptions.
"Qualified Assignee" means (a) any Lender, any Affiliate of any Lender
and, any investment fund that invests in commercial loans and that is managed or
advised by a Lender, an affiliate of a Lender, the same investment advisor as
such Lender or by an Affiliate of such investment advisor, and (b) any
commercial bank, savings and loan association or savings bank or any other
entity which is an "accredited investor" (as defined in Regulation D under the
Securities Act) that extends credit or buys loans as one of its businesses,
including insurance companies, mutual funds, lease financing companies and
commercial finance companies, and that in each case, has a rating of BBB or
higher from Standard & Poor's Rating Group and a rating of Baa2 or higher from
Xxxxx'x Investors Service, Inc. at the date that it becomes a Lender and that,
through its applicable lending office, is capable of lending to the Borrower
without the imposition of any withholding or similar taxes; provided that no
Person determined by Agent in good faith (or, in good faith and only for so long
as no Event of Default has occurred and is continuing, Borrower) to be acting in
the capacity of a vulture fund or distressed debt purchaser shall be a Qualified
Assignee, and no Person or Affiliate of such Person (other than a Person that is
already a Lender) holding Subordinated Debt or Stock issued by any Credit Party
shall be a Qualified Assignee.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Real Property" with respect to any Person, means all of such Person's
right, title and interest in and to any owned or leased real property and any
buildings and Fixtures located thereon.
"Refinancing" means the repayment by the Borrower of the Prior Lender
Obligations on the Closing Date, in full satisfaction of such Prior Lender
Obligations.
"Reimbursement Obligations" means, at any time, all obligations of the
Borrower to reimburse the L/C Issuers pursuant to Section 2.5 for amounts paid
by the L/C Issuers in respect of drawings under any Letters of Credit, including
any portion of any such obligation to which a Lender has become subrogated
pursuant to Section 2.5.
"Related Transactions" means the initial borrowing under the Revolving
Loan and the Term Loan on the Closing Date, the Refinancing, the issuance of
Subordinated Debt to Sponsor, and Xxxxxxxxxxx and certain other Persons pursuant
to and in accordance with the terms of the Subordinated Loan Documents, the
issuance of Convertible Preferred, and the payment of all fees, costs and
expenses associated with all of the foregoing and the execution and delivery of
all of the Related Transactions Documents.
20
"Related Transaction Documents" means the Loan Documents, the Equity
Documents, the Subordinated Debt Documents and all other agreements or
instruments executed in connection with the Related Transactions.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA other than a reportable event for which the requirement to provide
notice to the PBGC has been waived by regulation.
"Required Lenders" means Lenders having (a) more than 66-2/3% of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more
than 66-2/3% of the aggregate outstanding principal amount of all Loans and
Reimbursement Obligations.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock, (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly, (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Subordinated Debt, (d) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Credit
Party now or hereafter outstanding, (e) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of, any shares of such Credit Party's Stock or of a claim for
reimbursement, indemnification or contribution arising out of or related to any
such claim for damages or rescission, (f) any payment, loan, contribution, or
other transfer of funds or other property to any Dormant Entity or to any holder
of stock or equity interests of such Credit Party (other than payment of
compensation in the ordinary course of business to any holders of stock or
equity interests who are employees of such Person) or any Dormant Entity, and
(g) any payment of management fees (or other fees of a similar nature) by such
Credit Party to any holder of Stock of such Credit Party or its Affiliates (but
specifically excluding regularly scheduled management fees which become due and
payable under those certain Management Service Agreements in the ordinary course
of business.
"Revolving Credit Advance" has the meaning ascribed to it in Section
2.1(a).
"Revolving Credit Commitment" means (a) with respect to any Lender
listed on the signature pages hereof, the amount (if any) set forth thereon
opposite the name of such Lender under the heading "Revolving Credit
Commitment", (b) with respect to any assignee of a Revolving Credit Commitment,
the amount of the transferor Lender's Revolving Credit Commitment assigned to
such assignee pursuant to Section 11.6, and (c) as to all Lenders having
21
a Revolving Credit Commitment, the aggregate commitment of all Lenders to make
Revolving Credit Advances, which aggregate commitment shall be Three Million
Five Hundred Thousand and No/100 Dollars ($3,500,000) on the Closing Date, in
each case, as such amount may be reduced from time to time pursuant to Section
2.8 or changed as a result of an assignment pursuant to Section 11.6.
"Revolving Credit Commitments" means the sum of the Revolving Credit
Commitments of all Lenders in effect at such time.
"Revolving Credit Commitment Termination Date" means November 15, 2007.
"Revolving Lenders" means, as of any date of determination, Lenders
having a Revolving Credit Commitment.
"Revolving Loan" means, at any time, the sum of (a) the aggregate
amount of Revolving Credit Advances outstanding to the Borrower plus (b) the
aggregate L/C Obligations incurred on behalf of the Borrower. Unless the context
otherwise requires, references to the outstanding principal balance of the
Revolving Loan shall include the outstanding balance of L/C Obligations.
"Revolving Note" has the meaning ascribed to it in Section 2.2.
"Xxxxxxx Obligations" means all obligations owing to Xxxx X. Xxxxxxx,
D.M.D., Xxxx X. Xxxxxxx, D.M.D., Inc. and Xxxxxxx Acquisition Company
(collectively, "Xxxxxxx") under the Forbearance Agreement dated as of July 17,
2002.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations promulgated thereunder.
"Security Agreements" means collectively, the Borrower Security
Agreement, the Subsidiary Security Agreement, and any other security agreements
now or hereafter executed by any Person in favor of Agent and Lenders to secure
the Obligations.
"Senior Leverage Ratio" is defined in the Compliance Certificate.
"Sentinel Management Agreement" is defined in subsection 7.5(e).
"Sentinel Subordination Agreement" means that certain Subordination and
Intercreditor Agreement dated as of the Closing Date by and among Borrower,
Agent and Sponsor.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the assets of such Person, at a fair valuation, exceed its
liabilities, including contingent liabilities, (b) the remaining capital of such
Person is not unreasonably small to conduct its business and (c) such Person
will not have incurred debts, and does not have the present intent to incur
debts, beyond its ability to pay such debts as they mature. For purposes of this
definition, "debt" means
22
any liability on a claim, and "claim" means any (i) right to payment, whether or
not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured, or (ii) 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, unmatured,
disputed, undisputed, secured or unsecured. In computing the amount of
contingent liabilities of any Person on any date, such liabilities shall be
computed at the amount that, in the judgment of the Agent in light of all facts
and circumstances existing at such time, represents the amount of such
liabilities that reasonably can be expected to become actual or matured
liabilities.
"Sponsor" means Sentinel Capital Partners II, L.P., a Delaware limited
partnership.
"Stated Rate" has the meaning ascribed to it in Section 2.15(b).
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Exchange Act).
"Subordinated Debt" means Indebtedness of: (a) Borrower issued to
Sponsor, Xxxxxxxxxxx and certain other Persons in accordance with the terms of
and pursuant to the Subordinated Debt, Documents, provided all such indebtedness
is subordinated to the Obligations pursuant to a Subordination Agreement and (b)
any Credit Party subordinated to the Obligations in a manner and form
satisfactory to Agent and Lenders in their sole discretion, as to right and time
of payment and as to any other rights and remedies thereunder.
"Subordinated Debt Documents" means that certain Preferred Stock and
Subordinated Note Purchase Agreement dated as of the Closing Date by and among
Sponsor, Xxxxxxxxxxx, Borrower and certain other Persons party thereto, the
"Sentinel Subordinated Note" (as defined in the Sentinel Subordination
Agreement), the "Xxxxxxxxxxx Subordinated Note" (as defined in the Xxxxxxxxxxx
Subordination Agreement), and Other Subordinated Notes issued thereunder and the
Subordination Agreements, as in effect on the Closing Date and without giving
effect to any purported amendment thereof or modifications thereto which are not
made in accordance with the terms of the Subordination Agreements.
"Subordination Agreements" means, collectively, the Xxxxxxxxxxx
Subordination Agreement, the Sentinel Subordination Agreement and the Other
Subordination Agreements.
"Subsidiary" means, with respect to any Person, (a) any corporation of
which an aggregate of more than fifty percent (50%) of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent
23
(50%) or more of such Stock whether by proxy, agreement, operation of law or
otherwise, and (b) any partnership or limited liability company in which such
Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%) or of which any such Person is a
general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of the Borrower.
"Subsidiary Guaranty" means the Subsidiary Guaranty of even date
herewith executed by each Subsidiary of the Borrower in favor of Agent, on
behalf of itself and Lenders, substantially in the form of Exhibit F.
"Subsidiary Pledge Agreement" means the Subsidiary Pledge Agreement
dated as of the date hereof among Subsidiary Guarantors and Agent, substantially
in the form of Exhibit G.
"Subsidiary Security Agreement" means the Subsidiary Security Agreement
dated as of the date hereof among Subsidiary Guarantors and Agent, substantially
in the form of Exhibit H.
"Temporary Cash Investment" means any Investment in (a) direct
obligations of the United States or any agency thereof, or obligations fully
guaranteed by the United States or any agency thereof, (b) commercial paper
rated at least A-1 by Standard & Poor's Rating Group and P-1 by Xxxxx'x
Investors Service, Inc., (c) time deposits with, including certificates of
deposit issued by, any office located in the United States of any bank or trust
company which is organized under the laws of the United States or any State
thereof and has capital, surplus and undivided profits aggregating at least
$500,000,000 and which issues (or the parent of which issues) certificates of
deposit or commercial paper with a rating described in clause (b) above, (d)
repurchase agreements with respect to securities described in clause (a) above
entered into with an office of a bank or trust company meeting the criteria
specified in clause (c) above, provided in each case that such Investment
matures within one (1) year from the date of acquisition thereof by any Credit
Party or (e) any money market or mutual fund that invests only in the foregoing
and the manager of which and the liquidity of which is reasonably satisfactory
to the Agent.
"Term Loan" has the meaning ascribed to it in Section 2.1(b).
"Term Loan Commitment" means (a) as to any Lender listed on the
signature pages hereof, the amount (if any) set forth opposite the name of such
Lender under the heading "Term Loan Commitment", (b) with respect to any
assignee of a Term Loan Commitment, the amount of the transferor Lender's Term
Loan Commitment assigned to such assignee pursuant to Section 11.6, and (c) as
to all Lenders with a Term Loan Commitment, the aggregate commitment of all
Lenders to make the Term Loan, which aggregate commitment shall be Twelve
Million Five Hundred Thousand and No/100 Dollars ($12,500,000) on the Closing
Date. After advancing the Term Loan on the Closing Date, each reference to a
Lender's Term Loan Commitment shall refer to the outstanding principal amount of
that Lender's Term Loan.
"Term Loan Maturity Date" means November 15, 2007.
"Term Note" has the meaning set forth in Section 2.2(b).
24
"Title IV Plan" means a Pension Plan (other than a Multiemployer Plan),
that is covered by Title IV of ERISA, and that any Credit Party or any member of
a Controlled Group maintains, contributes to or has an obligation to contribute
to on behalf of participants who are or were employed by any of them.
"TRICARE" means, collectively, 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, which program was
formerly known as the Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS), and all laws, rules, regulations, 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, supplemented or
otherwise modified from time to time.
"TRICARE Account" means an Account payable pursuant to TRICARE.
"Type" defines a Loan by reference to whether such Loan is a LIBOR Loan
or Borrowing or a Base Rate Loan or Borrowing. Identification of a Borrowing or
group of Advances by Type indicates that such Borrowing or group of Advances is
comprised of Advances of the specified Type.
"Unfunded Pension Liability" means, at any time, the aggregate amount,
if any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, plus (b) for a period of five (5) years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any member of a Controlled Group as a result of such
transaction.
"Unused Line Fee" has the meaning ascribed to it in Section 2.7(b).
"Welfare Plan" means a Plan described in Section 3(3) of ERISA.
SECTION 1.2. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time in the
United States ("GAAP"), applied on a basis consistent (except for changes
concurred in by the Credit Parties' independent public accountants) with the
most recent audited consolidated financial statements of the Credit Parties
delivered to the Lenders; provided that, if: (a) the Borrower notifies the
Lenders that the Borrower wishes to amend any provision of any Loan Document to
eliminate the effect of any change in GAAP on the operation of such provision,
or (b) the Agent notifies the Borrower that the Required Lenders wish to amend
any provision of any Loan Document for such purpose, then compliance with such
provision shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP
25
became effective, until either such notice is withdrawn or such provision is
amended in a manner reasonably satisfactory to the Borrower and the Required
Lenders.
SECTION 1.3. OTHER DEFINITIONAL PROVISIONS. The terms "Accounts",
"Chattel Paper", "Code", "Contracts", "Deposit Accounts", "Documents",
"Fixtures", "Equipment", "General Intangibles", "Goods", "Intellectual
Property", "Instruments", "Inventory", "Investment Property", "Letter-of-Credit
Rights", "License" and "Software" have the meanings assigned to such terms in
Section 1 of the Borrower Security Agreement. References in this Agreement to
"Articles", "Sections", "Schedules" or "Exhibits" shall be to Articles,
Sections, Schedules or Exhibits of or to this Agreement unless otherwise
specifically provided. Any of the terms defined in Section 1.1 may, unless the
context otherwise requires, be used in the singular or plural depending on the
reference. "Include", "includes" and "including" shall be deemed to be followed
by "without limitation" whether or not they are in fact followed by such words
or words of like import. "Writing", "written" and comparable terms refer to
printing, typing and other means of reproducing words on paper. Except as
otherwise expressly provided herein, references to any agreement or contract are
to such agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof. References to any Person
include the successors and permitted assigns of such Person; provided that no
Credit Party may assign its rights or obligations under any Loan Document
without the prior written consent of the Agent and the Lenders. References
"from," "through" or "to" any date mean, unless otherwise specified, mean "from
and including," "through and including", and "to but excluding", respectively.
References to any statute and related regulation shall include any amendments,
modifications and supplements of the same and any successor statutes and
regulations.
ARTICLE II.
THE FACILITIES
SECTION 2.1. THE FACILITIES.
(a) Revolving Loans. Upon the terms and subject to the conditions
set forth herein, from time to time during the period from the Closing Date to
the Revolving Credit Commitment Termination Date, each Lender, severally and not
jointly, agrees to advance funds to the Borrower (each a "Revolving Credit
Advance"); provided that immediately after each such Advance is made (and after
giving effect to any substantially concurrent application of the proceeds
thereof to repay outstanding Advances or Reimbursement Obligations):
(i) such Lender's Outstanding Amount shall not exceed its
Revolving Credit Commitment, and
(ii) the aggregate Outstanding Amount of all the Lenders
shall not exceed the Maximum Commitment Amount then in effect.
Each Revolving Credit Advance shall be in a minimum amount of $100,000 or
integral multiples of $50,000 in excess thereof. The several Lenders shall make
each Revolving Credit Advance under this subsection ratably in proportion to
their respective Revolving Credit Commitments.
26
Within the limits specified in this subsection and subject to the conditions set
forth elsewhere in this Agreement, the Borrower may borrow pursuant to this
subsection, repay such Advances and reborrow pursuant to this subsection.
(b) Term Loans. Upon the terms and subject to the conditions set
forth herein, on the Closing Date each Lender, severally and not jointly, agrees
to advance funds to the Borrower (each a "Term Loan") in a principal amount
equal to its Term Loan Commitment. The several Lenders shall make the Term Loans
under this subsection ratably in proportion to their respective Term Loan
Commitments. Term Loans are not revolving in nature and any portion of such Loan
that is repaid or prepaid may not be reborrowed. The Borrower shall repay the
Term Loans in principal installments as set forth below:
AMORTIZATION TABLE
DATE INSTALLMENT AMOUNT
---- ------------------
December 31, 2003 $ 250,000
March 31, 2004 $ 375,000
June 30, 2004 $ 375,000
September 30, 2004 $ 375,000
December 31, 2004 $ 375,000
March 31, 2005 $ 625,000
June 30, 2005 $ 625,000
September 30, 2005 $ 625,000
December 31, 2005 $ 625,000
March 31, 2006 $ 750,000
June 30, 2006 $ 750,000
September 30, 2006 $ 750,000
December 31, 2006 $ 750,000
March 31, 2007 $ 750,000
June 30, 2007 $ 750,000
September 30, 2007 $ 750,000
Term Loan Maturity Date $ 3,000,000
(c) Letter of Credit Facility. The Revolving Lenders agree to
incur, or purchase participations in, L/C Obligations incurred by the L/C Issuer
upon the terms and subject to the conditions specified in Section 2.5.
SECTION 2.2. NOTES.
(a) Revolving Notes. The Revolving Loan of each Lender shall be
evidenced by a single revolving note, substantially in the form of Exhibit A
(each such note, a "Revolving
27
Note"), dated the Closing Date in an aggregate principal amount equal to the
amount of such Lender's Revolving Credit Commitment, duly executed and delivered
and payable by the Borrower to such Lender. Each Lender shall record the date
and amount of each Revolving Credit Advance made by it, and the date and amount
of each payment of principal made by the Borrower with respect thereto, and
prior to any transfer of its Revolving Note shall endorse on Schedule A thereto
(or any continuation thereof) forming a part thereof appropriate notations to
evidence the foregoing information with respect to such Revolving Loan then
outstanding; provided that the failure of any Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under any Revolving Note. Each Lender is hereby irrevocably
authorized by the Borrower to so endorse its Revolving Note and to attach to and
make a part of its Revolving Note a continuation of any such schedule as and
when required.
(b) Term Loan Notes. The Term Loan of each Lender shall be
evidenced by a term note substantially in the form of Exhibit B (each such note,
a "Term Note"), dated the Closing Date in a principal amount equal to the
initial principal amount of such Term Loan or the portion of such Term Loan
assigned to such Lender in accordance with Section 11.6, duly executed and
delivered by the Borrower and payable to the Lender of such Term Loan.
SECTION 2.3. METHOD OF BORROWING; FUNDING OF LOANS; AGENT MAY ASSUME
FUNDING; FAILURE TO FUND.
(a) Method of Borrowing. Whenever the Borrower desires to receive
an Advance, including the initial Advance, or to convert any portion of the
outstanding Base Rate Loans into one or more LIBOR Borrowings (a "Conversion"
and, with its correlative meaning, "Converted"), or to continue all or any
portion of an outstanding LIBOR Loan for another or additional LIBOR Period (a
"Continuation" and, with its correlative meaning, "Continued"), it shall give
the Agent notice in writing (by telecopy or by telephone confirmed immediately
in writing) in the form of a duly completed Exhibit C (a "Notice of Borrowing")
duly executed by an Authorized Signatory, in the case of an Advance or
Continuation of, or a Conversion into, a LIBOR Borrowing, three (3) Business
Days before the requested date of such Advance, Conversion or Continuation, and
in the case of an Advance of a Base Rate Borrowing, not later than 11:00 a.m.
(New York City time) on the Business Day before the requested date of such
Advance (which shall be a Business Day). Such Notice of Borrowing shall specify
(i) the requested date of the Advance, Conversion or Continuation, which shall
be a Business Day, (ii) in the case of a Conversion or Continuation, which
existing Borrowings include the Loans or portions thereof to be affected by such
Notice, (iii) the amount of the Advances to be incurred, and/or the Borrowings
to be created by such Conversion or Continuation, (iv) the Class of the Loans
comprising each requested Borrowing, (v) in the case of a LIBOR Advance,
Conversion or Continuation, the duration of the LIBOR Period of the requested
Borrowing and (vi) such other information as the Agent shall request. If a
request for a Conversion or Continuation is not timely made prior to the
expiration of a LIBOR Period, or is not made in accordance with this Section,
the portions of the Loans proposed to be affected thereby shall be converted
into, or continued as, Base Rate Loans. Any Notice of Borrowing received after
2:00 p.m. (New York City time) shall be deemed received on the following
Business Day. Each Notice of Borrowing shall be irrevocable upon receipt by the
Agent.
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(b) Funding of Loans. Promptly after receiving a Notice of
Borrowing, the Agent shall notify each Lender of the contents of such Notice of
Borrowing, of such Lender's Percentage of the Advances or Borrowings requested
by such Notice of Borrowing and, in the case of a LIBOR Borrowing, the
applicable LIBOR Period. In the case of an Advance, each Lender shall make
available to the Agent at the Agent's Office its Lender's Percentage of such
requested Advance, in lawful money of the United States of America in
immediately available funds, prior to 1:00 p.m. (New York City time) on the
specified date. The Agent shall, unless it shall have determined that one of the
conditions set forth in Article III has not been satisfied, by 3:00 p.m. (or in
the case of a LIBOR Borrowing, 12 p.m.) (New York City time) on such day, credit
the amounts received by it in like funds to the Borrower Account, to repay
Reimbursement Obligations, to pay expenses incurred by the Agent for the
Borrower's account or in such other manner as the Agent shall determine.
(c) Agent May Assume Funding. Unless the Agent shall have received
notice from a Lender prior to the date of any particular Advance that such
Lender will not make available to the Agent such Lender's Percentage of such
Advance, the Agent may assume that such Lender has made such amount available to
it on the date of such Advance in accordance with subsection (b) of this Section
2.3, and may (but shall not be obligated to), in reliance upon such assumption,
make available a corresponding amount for the account of the Borrower on such
date. If and to the extent that such Lender shall not have so made such amount
available to the Agent, such Lender and the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the day such amount is made available to the Borrower
until the day such amount is repaid to the Agent, at (i) in the case of the
Borrower, a rate per annum equal to the greater of (x) the Federal Funds Rate
and (y) the interest rate applicable thereto pursuant to Section 2.4, and (ii)
in the case of such Lender, a rate per annum equal to (x) for each day from the
day such amount is made available to the Borrower through the third succeeding
Business Day, the Federal Funds Rate for such day as determined by the Agent and
(y) for each day thereafter until the day such amount is repaid to the Agent,
the Base Rate for such day. If such Lender shall repay such corresponding amount
to the Agent, the amount so repaid shall constitute such Lender's Loan included
in such Borrowing for purposes of this Agreement.
(d) Lender's Failure to Fund. The failure of any Lender to make an
Advance on the date of any Borrowing shall not relieve any other Lender of its
obligation hereunder, if any, to make its Advance on that date. Neither the
Agent nor any Lender shall be responsible for the failure of any other Person to
make any Advance hereunder on the date required therefor.
SECTION 2.4. INTEREST ON LOANS.
(a) Interest. Each Loan shall bear interest on the outstanding
principal amount thereof from the date of the applicable Advance until repaid in
full, whether before or after default, judgment or the institution of
proceedings under any bankruptcy, insolvency or other similar law, as provided
in this Section 2.4. Unless the Default Rate has been imposed, each Loan shall
bear interest on the outstanding principal amount thereof until due at a rate
per annum equal to (i) to the extent and so long as it is a Base Rate Loan, the
Base Rate as in effect from time to time plus the Applicable Margin, and (ii) to
the extent and so long as it is a LIBOR Loan, the LIBOR Rate plus the Applicable
Margin.
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(b) Interest Options. Subject to the provisions hereof, all or
portions of the Loans, at the option of the Borrower, may be made or Continued
as, or Converted into, Base Rate Loans or one (1) or more LIBOR Loan, or any
combination thereof; provided that LIBOR Loans may not be Converted, but may be
Continued, and such Continuation may occur on (and only on) the last day of an
applicable LIBOR Period; and provided, further, that no Advances shall be made
as part of, and no Loans shall be Continued as, LIBOR Loans, and all existing
LIBOR Loans shall be Converted into Base Rate Loans on the last day of the
applicable LIBOR Period, so long as a Default shall have occurred and be
continuing. Each LIBOR Borrowing shall be in a minimum amount of $250,000 and in
greater whole multiples of $50,000. There shall at no time be in effect more
than eight (8) LIBOR Borrowings.
(c) Post-Default Interest. During the period that any Event of
Default shall have occurred and be continuing, at the election of the Agent (or
at the written request of Required Lenders), all Loans and other outstanding
Obligations shall bear interest at the Default Rate.
(d) Payments. Interest due pursuant to this Agreement shall be
payable (i) in the case of any Loans, on the Interest Payment Date, and (ii) in
the case of any other Obligation, when any portion of such Obligation shall be
due (whether at maturity, by reason of prepayment or acceleration or otherwise),
but only to the extent then accrued on the amount then so due. Interest at the
Default Rate shall be payable on demand.
(e) Determination. Each determination by the Agent of the interest
rate hereunder shall be conclusive and binding for all purposes, absent clear
and convincing evidence to the contrary.
SECTION 2.5. LETTERS OF CREDIT.
(a) Letters of Credit. Upon the terms and subject to the
conditions set forth herein, from time to time during the period commencing on
the Closing Date and ending on the date that is thirty (30) days prior to the
Revolving Credit Commitment Termination Date, the Revolving Credit Commitment
may, in addition to Advances under the Revolving Loan, be utilized, upon the
request of Borrower, for (i) the issuance of standby letters of credit for the
account of Borrower by GE Capital or any other L/C Issuer approved by the Agent,
(ii) the issuance of commercial letters of credit for the account of Borrower by
any L/C Issuer other than GE Capital approved by Agent or (iii) the issuance of
standby letters of credit or commercial letters of credit for the account of
Borrower under risk participation agreements entered into by GE Capital, as L/C
Issuer, with other banks or financial institutions (the letters of credit
described in clauses (i), (ii) and (iii) will be referred to hereinafter
collectively as "Letters of Credit"). Immediately upon the issuance by a L/C
Issuer of a Letter of Credit, and without further action on the part of Agent or
any of the Lenders, each Lender with a Revolving Credit Commitment shall be
deemed to have purchased from such L/C Issuer a participation in such Letter of
Credit (or in its obligation under a risk participation agreement with respect
thereto) equal to such Lender's Percentage of the aggregate amount available to
be drawn under such Letter of Credit. Immediately after each such Letter of
Credit is issued and participations therein are sold to the Lenders as provided
in this subsection:
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(i) the Aggregate L/C Exposure shall not exceed the L/C
Limit;
(ii) in the case of each Lender, its Outstanding Amount
shall not exceed its Revolving Credit Commitment; and
(iii) the aggregate Outstanding Amount of all the Lenders
shall not exceed the Maximum Commitment Amount then in effect.
If required to obtain such issuance by an L/C Issuer that is not Agent, an
affiliate or a subsidiary thereof or a Lender, Agent agrees to enter into risk
participation agreements with respect to the obligations of the Borrower under
the Letter of Credit pursuant to which Agent acquires the credit risk with
respect to the Borrower's payment and performance of its obligations arising
under and with respect to such Letter of Credit to the L/C Issuer. Upon any such
issuance and/or entering in to a risk participation agreement, without further
action by any party hereto, (x) each Revolving Lender shall be deemed to have
purchased from Agent and/or such L/C Issuer, and (y) such L/C Issuer and/or
Agent shall be deemed to have sold to each Revolving Lender, a participation in
the then existing or thereafter arising Reimbursement Obligations with respect
to such Letter of Credit, on the terms specified in this Agreement, in each case
equal to such Lender's Percentage thereof.
(b) Permitted Terms. Each Letter of Credit must (i) support a
transaction entered into in the ordinary course of business of the Borrower and
(ii) be in a form, for an amount and contain such terms and conditions as are
reasonably satisfactory to each of the L/C Issuer and the Agent. No Letter of
Credit shall have an expiration date later than the close of business on the
earlier of: (A) the date that is one (1) year after such Letter of Credit is
issued (or, in the case of any renewal or extension thereof, one (1) year after
the expiration of such renewal or extension) and (B) the date that is thirty
(30) Business Days prior to the Revolving Credit Commitment Termination Date.
Notwithstanding the foregoing, a Letter of Credit may provide for automatic
extensions of its expiration date for one (1) or more successive one year
periods; provided that the L/C Issuer that issued such Letter of Credit has the
right to terminate such Letter of Credit on each such annual expiration date and
no renewal term may extend the term of the Letter of Credit to a date that is
later than thirty (30) Business Days prior to the Revolving Credit Commitment
Termination Date.
(c) Request for Issuance of Letter of Credit. The Borrower shall
give Agent at least three (3) Business Days' prior written notice requesting the
issuance of any Letter of Credit. The notice shall be accompanied by the form of
the Letter of Credit (which shall be acceptable to the Agent and the L/C Issuer)
and such application and other agreements as Agent and the L/C Issuer may
reasonably request.
(d) Notice of Proposed Extensions of Expiration Dates. The L/C
Issuer or the Borrower shall give the Agent at least three (3) Business Days'
notice before such L/C Issuer extends (or allows an automatic extension of) the
expiration date of any Letter of Credit issued by it (whether such extension
results from a request therefor by the Borrower or, in the case of an evergreen
Letter of Credit, from the absence of a request by the Borrower for the
termination thereof). Such notice shall (i) identify such Letter of Credit, (ii)
specify the date on which such extension is to be made (or the last day on which
such L/C Issuer can give notice to prevent such
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extension from occurring) and (iii) specify the date to which such expiration
date is to be so extended. Upon receipt of such notice, the Agent shall promptly
notify each Lender of the contents thereof. No L/C Issuer shall extend (or allow
the extension of) the expiration date of any Letter of Credit if (x) the
extended expiration date would be after (A) the date that is one (1) year after
the date on which such Letter of Credit is to be extended or (B) the date that
is the thirty (30) Business Days before the Revolving Credit Commitment
Termination Date or (y) such L/C Issuer shall have been notified by the Agent or
the Required Lenders expressly to the effect that any condition specified in
Section 3.2 is not satisfied at the time such Letter of Credit is to be
extended, provided that, in the case of such notice from the Agent or Required
Lenders, such L/C Issuer receives such notice prior to the date notice of
non-renewal is required to be given by such L/C Issuer and such L/C Issuer has
had a reasonable period of time to act on such notice.
(e) Notice of Issuances. Promptly upon issuing any Letter of
Credit, the relevant L/C Issuer will notify the Agent of the date of such Letter
of Credit, the amount thereof, the beneficiary or beneficiaries thereof and the
expiration date. Upon receipt of such notice, the Agent shall promptly notify
each Revolving Lender of the contents thereof and the amount of such Revolving
Lender's participation in the relevant Letter of Credit. Promptly upon issuing
any Letter of Credit, the relevant L/C Issuer will send a copy of such Letter of
Credit to the Agent.
(f) Drawings. Upon receiving a demand for payment under any Letter
of Credit from the beneficiary thereof, the relevant L/C Issuer shall determine,
in accordance with the terms of such Letter of Credit, whether such demand for
payment should be honored. If such L/C Issuer determines that any such demand
for payment should be honored, such L/C Issuer shall (i) promptly notify the
Borrower and the Agent as to the amount to be paid by such L/C Issuer as a
result of such demand and the date on which such amount is to be paid (an "L/C
Payment Date") and (ii) on such L/C Payment Date make available to such
beneficiary in accordance with the terms of such Letter of Credit the amount of
the drawing under such Letter of Credit.
(g) Reimbursement and Other Payments by the Borrower. If any
amount is drawn under any Letter of Credit:
(i) the Borrower irrevocably and unconditionally agrees to
reimburse the relevant L/C Issuer for all amounts paid by such L/C
Issuer immediately upon such drawing. Such reimbursement payment shall
be due and payable on the relevant L/C Payment Date and Borrower hereby
authorizes and directs Agent, at Agent's option, to debit Borrower's
account (by increasing the outstanding principal balance of the
Revolving Loan) in the amount of any payment made by an L/C Issuer with
respect to any Letter of Credit; and
(ii) in addition, the Borrower agrees to pay to the relevant
L/C Issuer interest on any and all amounts not paid by the Borrower
when due hereunder with respect to a Letter of Credit (including,
without limitation, amounts due under clause (i) above not paid when
due), for each day from and including the date when such amount
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becomes due to but excluding the date such amount is paid in full,
payable on demand, at a rate per annum equal to the Default Rate.
Each payment to be made by the Borrower pursuant to this Section 2.5(g) shall be
made to the relevant L/C Issuer in federal or other funds immediately available
to it at its address specified in or pursuant to Section 11.3.
(h) Payments by Lenders with Respect to Letters of Credit. In the
event Agent elects not to debit Borrower's account for any Reimbursement
Obligations and the Borrower fails to reimburse the relevant L/C Issuer as and
when required by Section 2.5(g) above for all or any portion of any amount drawn
under a Letter of Credit issued by it:
(i) such L/C Issuer may notify the Agent of such unpaid
Reimbursement Obligation and request that the Revolving Lenders
reimburse such L/C Issuer for their respective Percentages thereof.
Upon receiving any such notice from an L/C Issuer, the Agent shall
promptly notify each Revolving Lender of such unpaid Reimbursement
Obligation and such Lender's Percentage thereof. Upon receiving such
notice from the Agent, each Lender shall make available to such L/C
Issuer, at its address specified in or pursuant to Section 11.3, an
amount equal to such Revolving Lender's Percentage of such unpaid
Reimbursement Obligation as set forth in such notice, in federal or
other funds immediately available to such L/C Issuer, by 3:00 p.m. (New
York City time) (A) on the day such Revolving Lender receives such
notice if it is received at or before 12:00 Noon (New York City time)
on such day or (B) on the first Business Day following such Lender's
receipt of such notice if it is received after 12:00 Noon (New York
City time) on the date of receipt, in each case together with interest
on such amount for each day from and including the relevant L/C Payment
Date to but excluding the day such payment is due from such Revolving
Lender at the Federal Funds Rate for such day. Upon payment in full
thereof, such Revolving Lender shall be subrogated to the rights of
such L/C Issuer against the Borrower to the extent of such Revolving
Lender's Percentage of such unpaid Reimbursement Obligation (including
interest accrued thereon). Nothing in this Section 2.5(h) shall affect
any rights any Revolving Lender may have against any L/C Issuer for any
action or omission for which such L/C Issuer is not indemnified under
Section 2.5(j); and
(ii) if any Revolving Lender fails to pay any amount
required to be paid by it pursuant to this Section 2.5(h) on the date
on which such payment is due, interest shall accrue on such Revolving
Lender's obligation to make such payment, for each day from and
including the date such payment became due to but excluding the date
such Lender makes such payment, at a rate per annum equal to (x) for
each day from the day such payment is due through the third succeeding
Business Day, inclusive, the Federal Funds Rate for such day as
determined by the relevant L/C Issuer and (y) for each day thereafter,
the Base Rate for such day. Any payment made by any Revolving Lender
after 3:00 p.m. (New York City time) on any Business Day shall be
deemed for purposes of the preceding sentence to have been made on the
next succeeding Business Day.
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If the Borrower shall reimburse any L/C Issuer for any drawing with respect to
which any Revolving Lender shall have made funds available to such L/C Issuer in
accordance with this Section 2.5(h), such L/C Issuer shall promptly upon receipt
of such reimbursement distribute to such Revolving Lender its Percentage
thereof, including interest, to the extent received by such L/C Issuer.
(i) Obligation Absolute. The obligation of the Borrower to
reimburse Agent and any applicable Revolving Lenders for payments made with
respect to any L/C Obligation shall be absolute, unconditional and irrevocable,
without necessity of presentment, demand, protest or other formalities, and the
obligation of each applicable Revolving Lender to make payments to Agent with
respect to Letters of Credit shall be unconditional and irrevocable. Such
obligations of the Borrower and Revolving Lenders shall be paid strictly in
accordance with the terms hereof under all circumstances including the
following:
(i) any lack of validity or enforceability of any Letter of
Credit or this Agreement or the other Loan Documents or any other
agreement relating to the Letter of Credit;
(ii) the existence of any claim, setoff, defense or other
right that any Credit Party or any of their respective Affiliates or
any Lender may at any time have against a beneficiary or any transferee
of any Letter of Credit (or any Persons or entities for whom any such
transferee may be acting), Agent, any Lender, or any other Person,
whether in connection with this Agreement, the Letter of Credit, the
transactions contemplated herein or therein or any unrelated
transaction (including any underlying transaction between the Credit
Party or any of their respective Affiliates and the beneficiary of the
Letter of Credit);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly
provided in paragraph (k)(ii)(C) below) or any L/C Issuer under any
Letter of Credit or L/C Obligation against presentation of a demand,
draft or certificate or other document that does not comply with the
terms of such Letter of Credit or L/C Obligation;
(v) any other circumstance or event whatsoever that is
similar to any of the foregoing;
(vi) the fact that a Default or an Event of Default has
occurred and is continuing;
(vii) any amendment or waiver of or any consent or departure
from all or any of the provisions of any Letter of Credit or any Loan
Document; or
(viii) any other act or omission to act or delay of any kind
of any L/C Issuer, Agent, any Lender or any other Person or any other
event or circumstance
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whatsoever that might, but for the provisions of this subsection,
constitute a legal or equitable discharge of Borrower's obligations
hereunder.
(j) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided in
this Agreement, the Borrower hereby agrees to pay and to protect,
indemnify and save harmless Agent and each Lender from and against any
and all claims, demands, liabilities, damages, losses, costs, charges
and expenses (including reasonable attorneys' fees and allocated costs
of internal counsel) that Agent or any Lender may incur or be subject
to as a consequence, direct or indirect, of (A) the issuance of any
Letter of Credit or the incurrence of any L/C Obligation in respect
thereof, or (B) the failure of Agent or any Lender seeking
indemnification or of any L/C Issuer to honor a demand for payment
under any Letter of Credit or of the Agent to make any payment under
any L/C Obligation as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent solely as
a result of the gross negligence or willful misconduct of Agent or such
Lender (as finally determined by a court of competent jurisdiction).
(ii) As between Agent and any Lender, on the one hand, and
the Borrower, on the other hand, the Borrower assumes all risks of the
acts and omissions of, or misuse of any Letter of Credit by,
beneficiaries of any Letter of Credit. In furtherance and not in
limitation of the foregoing, to the fullest extent permitted by law,
neither Agent nor any Lender shall be responsible for (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document issued by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be
in any or all respects invalid, insufficient, inaccurate, fraudulent or
forged, (B) the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or
in part, that may prove to be invalid or ineffective for any reason,
(C) the failure of the beneficiary of any Letter of Credit to comply
fully with conditions required to demand payment under such Letter of
Credit; provided that in the case of any payment by Agent under any
Letter of Credit or L/C Obligation, Agent shall be liable only to the
extent such payment was made solely as a result of its gross negligence
or willful misconduct (as finally determined by a court of competent
jurisdiction) in determining that the demand for payment under such
Letter of Credit or L/C Obligation complies on its face with any
applicable requirements for a demand for payment under such Letter of
Credit or any guaranty thereof, (D) errors, omissions, interruptions or
delays in transmission or delivery of any messages by mail, cable,
telegraph, telex or otherwise, whether or not they may be in cipher,
(E) errors in interpretation of technical terms, (F) any loss or delay
in the transmission or otherwise of any document required to make a
payment under any Letter of Credit or L/C Obligation, (G) the credit of
the proceeds of any drawing under any Letter of Credit or L/C
Obligation and (H) any consequences arising from causes beyond the
control of Agent or any Lender. None of the above shall affect, impair
or prevent the vesting of any of Agent's or any Lender's rights or
powers hereunder or under this Agreement.
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(iii) Nothing contained herein shall be deemed to limit or
expand any waivers, covenants or indemnities made by the Borrower in
favor of any L/C Issuer in any letter of credit application,
reimbursement agreement or similar document, instrument or agreement
between the Borrower and such L/C Issuer.
(k) Cash Collateral.
(i) If the Borrower is required to provide cash collateral
for any L/C Obligations pursuant to this Agreement prior to the
Commitment Termination Date, the Borrower will pay to Agent for the
ratable benefit of itself and the Revolving Lenders cash in an amount
equal to one hundred ten percent (110%) of the maximum amount then
available to be drawn under each applicable Letter of Credit. Such cash
shall be held by Agent in a cash collateral account (the "Cash
Collateral Account") maintained at a bank or financial institution
reasonably acceptable to Agent. The Cash Collateral Account shall be in
the name of the Borrower and shall be pledged to, and subject to the
control of, Agent, for the benefit of Agent and the Revolving Lenders,
in a manner reasonably satisfactory to Agent. The Borrower hereby
pledges and grants to Agent, on behalf of itself and the Revolving
Lenders, a security interest in all such funds and Cash Equivalents
held in the Cash Collateral Account from time to time and all proceeds
thereof, as security for the payment of all amounts due in respect of
the L/C Obligations and other Obligations, whether or not then due.
This Agreement, including the provisions of this Section 2.5(k),
Obligations shall constitute a security agreement under applicable law.
(ii) If any L/C Obligations, whether or not then due and
payable, shall for any reason be outstanding on the Commitment
Termination Date, the Borrower shall either (A) provide cash collateral
therefor in the manner described above, (B) cause all such Letters of
Credit and L/C Obligations, if any, to be canceled and returned, or (C)
deliver a stand-by letter (or letters) of credit in guaranty of such
L/C Obligations, which stand-by letter (or letters) of credit shall be
of like tenor and duration (plus thirty (30) additional days) as, and
in an amount equal to one hundred ten percent (110%) of the aggregate
maximum amount then available to be drawn under, the Letters of Credit
to which such outstanding L/C Obligations relate and shall be issued by
a Person, and shall be subject to such terms and conditions, as are
reasonably satisfactory to Agent.
(iii) From time to time after funds are deposited in the Cash
Collateral Account by the Borrower, whether before or after the
Commitment Termination Date, Agent may apply such funds or Cash
Equivalents then held in the Cash Collateral Account to the payment of
any amounts, and in such order as Agent may elect, as shall be or shall
become due and payable by the Borrower to Agent and the Revolving
Lenders with respect to such L/C Obligations and, upon the satisfaction
in full of all L/C Obligations, to any other Obligations of the
Borrower then due and payable.
(iv) Neither the Borrower nor any Person claiming on behalf
of or through the Borrower shall have any right to withdraw any of the
funds or Cash Equivalents held in the Cash Collateral Account, except
that upon the termination of all L/C Obligations and the payment of all
amounts payable by the Borrower to Agent and
36
Lenders in respect thereof, any funds remaining in the Cash Collateral
Account shall be applied to other Obligations then due and owing and
upon payment in full of such Obligations, any remaining amount shall be
paid to the Borrower or as otherwise required by law. Interest earned
on deposits in the Cash Collateral Account shall be for the account of
Agent.
SECTION 2.6. RESERVED.
SECTION 2.7. CERTAIN FEES.
(a) Agent Fees. On the Closing Date, GE Capital, individually
shall have earned a non-refundable closing fee of $100,000. The Borrower shall
pay to GE Capital, individually, (i) on the Closing Date, a portion of the
non-refundable closing fee in the amount of $50,000, (ii) on June 29, 2003, the
remaining portion of the non-refundable closing fee in the amount of $50,000 and
(iii) for so long as any Loans or Revolving Credit Commitments are outstanding
hereunder, on each anniversary of the Closing Date (other than the Commitment
Termination Date), a non-refundable annual administration fee of $25,000.
(b) Unused Line Fee. As additional compensation for the Revolving
Lenders, the Borrower shall pay to Agent, for the ratable benefit of such
Revolving Lenders, in arrears, on the first Business Day of each month prior to
the Commitment Termination Date and on the Commitment Termination Date, a fee
(the "Unused Line Fee") for the Borrower's non-use of available funds in an
amount equal to (i) the Applicable Margin (calculated on the basis of a 360 day
year for the number of actual days elapsed) multiplied by (ii) the difference
between (x) the Maximum Commitment Amount (as it may be reduced from time to
time) minus (y) the average for the period of the daily closing balances of the
aggregate Revolving Loans outstanding during the period for which such Fee is
due.
(c) Reserved.
(d) Letter of Credit Fee. (i) The Borrower agrees to pay to the
Agent for the ratable benefit of Revolving Lenders, with respect to the L/C
Obligations incurred hereunder, (A) for the benefit of the Agent and the L/C
Issuer, all costs and expenses incurred by the Agent and the L/C Issuer on
account of such L/C Obligations, (B) for the ratable benefit of the Revolving
Lenders, for each day during any month in which any L/C Obligation shall remain
outstanding, a fee (the "Letter of Credit Fee") in an amount equal to (x) the
Applicable Margin (calculated on the basis of a 360 day year for actual days
elapsed) multiplied by (y) the maximum amount available for drawing (whether or
not such day is a Business Day and whether or not the conditions for drawing
thereunder have been satisfied) under all Letters of Credit at the close of
business on such day, and (C) for the sole benefit of the L/C Issuer, a fronting
fee (the "Fronting Fee") in an amount to be agreed upon between Borrower and the
L/C Issuer. The Letter of Credit Fee shall be paid to Agent for the ratable
benefit of the Revolving Lenders monthly in arrears, on the first day of each
month and on the Commitment Termination Date. The Fronting Fee shall be paid to
the Administrative Agent, for the benefit of the L/C Issuer on the date of
issuance of the applicable Letter of Credit. In addition, the Borrower shall pay
to any L/C Issuer, on demand, such ordinary and customary fees (including all
per annum fees), charges and expenses of such L/C Issuer in respect of the
issuance, negotiation, acceptance, amendment,
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transfer and payment of any Letter of Credit or otherwise payable pursuant to
the application and related documentation under which any Letter of Credit is
issued. During any period during which the Default Rate shall have been imposed
pursuant Section 2.4(c), or, in the absence of such imposition, during any
period during which the Required Lenders could have imposed the Default Rate
pursuant to such Section and instead elect to impose the provisions of this
paragraph, the Letter of Credit Fee otherwise in effect pursuant to the
preceding paragraph shall be increased by two percent (2%) per annum.
(e) Comepensation for Services Rendered. The fees described in
this Section 2.7 represent compensation for services rendered and to be rendered
separate and apart from the lending of money or the provision of credit, and (i)
are not compensation for the use, detention, or forbearance of money, and (ii)
are in addition to, and not in lieu of, interest and expenses otherwise
described in this Agreement.
SECTION 2.8. MANDATORY REPAYMENTS AND PREPAYMENTS.
(a) Prepayment of Excess Outstanding Amount; Maturity of
Obligations. (i) If at any time the aggregate Outstanding Amount of all Lenders
exceeds the Maximum Commitment Amount, the Borrower shall immediately prepay
Revolving Loans in an aggregate principal amount sufficient to eliminate such
excess.
(ii) The Revolving Credit Commitment of each Lender shall
terminate at the opening of business on the Revolving Credit Commitment
Termination Date, and there shall become due and the Borrower shall pay
on the Revolving Credit Commitment Termination Date, the entire
outstanding principal amount of each Revolving Loan and of each L/C
Obligation, together with accrued and unpaid interest thereon to but
excluding the Revolving Credit Commitment Termination Date.
(iii) The entire outstanding principal amount of the Term
Loans, together with all accrued and unpaid interest thereon, shall
become due and payable in full upon the opening of business on the Term
Loan Maturity Date.
(b) Asset Dispositions. Immediately upon the receipt by the Borrower or
any of its Subsidiaries of Net Cash Proceeds of any Asset Disposition or any
sale of Stock of any Subsidiary of any Credit Party, the Borrower shall prepay
an aggregate principal amount of Loans (and to the extent that any Net Cash
Proceeds in excess of the outstanding principal amount of Loans, cash
collateralize L/C Obligations in accordance with Section 2.5(k)) equal to one
hundred percent (100%) of all such Net Cash Proceeds. Any prepayment under this
Section 2.8(b) shall be applied in accordance with Section 2.10(b).
Notwithstanding the foregoing, if Borrower delivers to the Agent a certificate,
signed by Borrower's chief financial officer, that it intends to reinvest all or
any portion of such Net Cash Proceeds in productive replacement assets of a kind
then used or usable in the business of a Credit Party and/or to repair, replace
or restore the property giving rise to such proceeds within 180 days of receipt
thereof, the Borrower may reinvest such Net Cash Proceeds or portion thereof in
the manner set forth in such certificate; provided that (i) the aggregate amount
of such Net Cash Proceeds to be reinvested shall not exceed $500,000, (ii) the
Borrower shall immediately apply such Net Cash Proceeds to reduce Revolving
Loans (without any reduction in the Revolving Credit Commitment) and
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(iii) any amounts not so used within the period set forth in such certificate
shall, on the first Business Day immediately following such period, be applied
as provided in Section 2.10(b).
(c) Stock Issuances. If any Credit Party issues Stock, immediately
upon receipt of the Net Cash Proceeds thereof (other than (i) proceeds of the
issuance of Stock by the Borrower received on or before the Closing Date, (ii)
proceeds from the issuance of Stock to members of the management of the
Borrower, (iii) proceeds of the issuance of Stock to the Borrower or any
Subsidiary of the Borrower and (iv) proceeds from the conversion of any
convertible security or exercise of any warrant), the Borrower shall prepay an
aggregate principal amount of Loans (and to the extent of any Net Cash Proceeds
in excess of the outstanding principal amount of Loans, cash collateralize L/C
Obligations in accordance with Section 2.5(k)) in an amount equal to one hundred
percent (100%) of all such Net Cash Proceeds. Any prepayment under this Section
2.8(c) shall be applied in accordance with Section 2.10(b).
(d) Excess Cash Flow. On the date that is thirty (30) days after
the earlier of (i) the date on which the Borrower's annual audited financial
statements for any Fiscal Year, commencing with the fiscal year ending December
31, 2003 are delivered pursuant to Section 5.1(c) or (ii) the date on which such
annual audited financial statements were required to be delivered for such
Fiscal Year pursuant to such Section, the Borrower shall prepay an aggregate
principal amount of the Loans (and to the extent of any Excess Cash Flow in
excess of the outstanding principal amount of Loans, cash collateralize L/C
Obligations in accordance with Section 2.5(k)) in an amount equal to fifty
percent (50%) of Excess Cash Flow for such Fiscal Year. Any prepayment of Loans
under this Section 2.8(d) shall be applied in accordance with Section 2.10(b)
and shall be accompanied by a certificate signed by the Borrower's chief
financial officer certifying the manner in which Excess Cash Flow and the
resulting prepayment were calculated, which certificate shall be in form and
substance reasonably satisfactory to Agent. Notwithstanding the foregoing, in
the event such Excess Cash Flow payment would cause the Cash On Hand of Borrower
to be less than $1,000,000, as determined as of the date upon which such Excess
Cash Flow payment is required to be made pursuant to the terms of this Section
2.8, (the "Cash Floor Limit"), then Borrower may defer payment of such portion
of such Excess Cash Flow payment as is necessary to maintain the Cash Floor
Limit, as provided in the following sentence. For so long as any portion of the
Excess Cash Flow payment remains unpaid as provided in the preceding sentence,
then on the last Business Day of each successive month, the Borrower shall pay
the deferred portion (if any) of such Excess Cash Flow payment in full, except
that if, after giving effect to such payment, the Borrower's Cash on Hand on the
date of such payment would be less than the Cash Floor Limit, then the Borrower
may further defer to the next month payment of such portion of such Excess Cash
Flow payment as is necessary to maintain the Cash Floor Limit.
SECTION 2.9. OPTIONAL PREPAYMENTS. The Borrower may prepay the Loans in
whole or in part (in minimum principal amounts of $50,000 or in any larger
integral multiple of $10,000, or the total remaining amount outstanding) upon at
least three (3) Business Days' (or, in the case of a Revolving Loan, one (1)
Business Day's) prior irrevocable written notice to the Agent and the payment of
any prepayment charges incurred pursuant to Section 9.4(d). The aggregate
principal amount of Loans designated for prepayment in any notice of optional
prepayment given pursuant to this section shall become due and payable on the
date fixed for prepayment as specified in such notice.
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SECTION 2.10. APPLICATION OF PAYMENTS. (a) Prepayments pursuant to
Section 2.9 may be applied to either Revolving Loans or Term Loans, at the
Borrower's election, provided that prepayments on Term Loans shall be applied as
provided in Section 2.10(b).
(a) With respect to the prepayments described in Sections 2.8(b),
2.8(c) and 2.8(d), such prepayments shall first be applied in payment of the
Term Loan pro rata against all remaining scheduled installments and, at any time
after the Term Loan shall have been prepaid in full, such prepayments shall be
applied to reduce the outstanding principal balance of the Revolving Loans and
as a corresponding permanent reduction of the Revolving Credit Commitment.
Considering each Type of Loan being prepaid separately, any such prepayment
shall be applied first to Base Rate Loans of the Type required to be prepaid
before application to LIBOR Loans of the Type required to be prepaid, in each
case in a manner which minimizes any resulting LIBOR breakage fee.
(b) Each payment or prepayment of less than all the outstanding
aggregate principal amount of the Loans of any Class shall be applied pro rata
to the Loans of that Class of all Lenders according to the respective
outstanding principal amounts of Loans of that Class held by each such Lender.
SECTION 2.11. REDUCTION OF COMMITMENTS. (a) The Revolving Credit
Commitment shall permanently reduce (i) by the amount of each payment made or
required to be made pursuant to Sections 2.8(b)(iii), 2.8(c) and 2.8(d) applied
to Revolving Loans or, to the extent directed by the Borrower, Section 2.11(b),
(ii) to Zero Dollars ($0) on the Commitment Termination Date, and (iii) to the
extent directed by the Borrower pursuant to the following Section 2.11(b).
(b) The Borrower shall have the right at any time to terminate in
whole the Revolving Credit Commitments and this Agreement, or from time to
time, irrevocably to reduce in part the amount of the Revolving Credit
Commitments upon at least three (3) days prior written notice to the Agent.
Such notice shall be irrevocable on the part of the Borrower and shall
specify the effective date of such reduction or termination, whether a
termination or reduction is being made, and, in the case of any reduction,
the amount thereof shall be in an amount of $100,000 or an integral multiple
$10,000 in excess thereof. Upon any such reduction, the Borrower shall
simultaneously prepay any outstanding Revolving Loans (without premium except
for the payment of any charges incurred pursuant to Section 9.4(d)) to the
extent necessary so that the aggregate outstanding principal amount of the
Revolving Loans does not exceed the amount of the Revolving Credit Commitment
after giving effect to any partial reduction thereof. The aforesaid prior
notice requirement shall not apply to the Agent's exercise of remedies under
Section 8.2. The amount of the Revolving Credit Commitment may not be
reinstated if it is reduced or if this Agreement is terminated by the
Borrower.
(c) In the event the Borrower exercises its rights under Section
2.11(b) to reduce the Revolving Credit Commitment or under Section 2.9 to
prepay any portion of any Term Loan, the Borrower agrees that any such
prepayment or reduction shall be accompanied by (i) in the case of a
prepayment in full and termination of this Agreement, the payment by the
Borrower to the Agent for the ratable account of the Lenders of all accrued
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and unpaid interest and all fees and other remaining Obligations hereunder,
and (ii) the payment of any breakage charges incurred pursuant to Section
9.4(d).
SECTION 2.12. LOAN ACCOUNT AND ACCOUNTING. The Agent shall maintain a
loan account (the "Loan Account") on its books to record all Loans, all payments
made by the Borrower, and all other debits and credits as provided in this
Agreement with respect to the Loans or any other Obligations. All entries in the
Loan Account shall be made in accordance with the Agent's customary accounting
practices as in effect from time to time. The balance in the Loan Account, as
recorded on the Agent's most recent printout or other written statement, shall,
absent clear and convincing evidence to the contrary, be presumptive evidence of
the amounts due and owing to each Lender and the Agent by the Borrower; provided
that any failure to so record or any error in so recording shall not limit or
otherwise affect the Borrower's duty to pay the Obligations. The Agent shall
render to the Borrower a monthly accounting of transactions with respect to the
Loans setting forth the balance of the Loan Account. Unless the Borrower
notifies the Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection), within thirty (30) days
after the date thereof, each and every such accounting shall (absent clear and
convincing error) be deemed final, binding and conclusive upon the Credit
Parties in all respects as to all matters reflected therein. Only those items
expressly objected to in such notice shall be deemed to be disputed by the
Borrower.
SECTION 2.13. COMPUTATION OF INTEREST AND FEES. Unused Line Fees
pursuant to Section 2.7(b), Letter of Credit Fees pursuant to Section 2.7(d) and
all interest hereunder and under the Notes shall be calculated for any period on
the basis of a 360-day year for the actual number of days elapsed during such
period, including the first day but excluding the last day of such period.
SECTION 2.14. GENERAL PROVISIONS REGARDING PAYMENTS. All payments
(including prepayments) to be made by the Credit Parties under any Loan
Document, including payments of principal of and interest on the Notes, fees,
expenses and indemnities, shall be made without set-off or counterclaim and in
immediately available funds to the Collection Account before 1:00 p.m. (New York
City time) on the date when due. If any payment hereunder becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day and, with respect to payments of principal,
interest thereon, shall be payable at the then applicable rate during such
extension. For purposes of computing interest and Fees, all payments shall be
deemed received on the Business Day on which immediately available funds
therefor are received in the Collection Account prior to 1:00 p.m. (New York
City time). Payments received after 1:00 p.m. (New York City time) on any
Business Day or on a day that is not a Business Day shall be deemed to have been
received on the following Business Day.
SECTION 2.15. MAXIMUM INTEREST. (a) In no event shall the interest
charged with respect to the Loans, the Notes or any other Obligations of any
Credit Party under the Loan Documents exceed the maximum amount permitted under
the laws of the jurisdiction whose law is specified as the governing law of this
document pursuant to Section 11.10 or of any other applicable jurisdiction. For
the purposes of making any such determination hereunder, the Loans hereunder
shall be deemed a single loan in the amount of the Commitments.
41
(b) Notwithstanding anything to the contrary herein or elsewhere,
if at any time the rate of interest payable for the account of any Lender
hereunder or any other Loan Document (the "Stated Rate") would exceed the
highest rate of interest permitted under any applicable law to be charged by
such Lender (the "Maximum Lawful Rate"), then for so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable for the
account of such Lender shall be equal to the Maximum Lawful Rate; provided
that if at any time thereafter the Stated Rate is less than the Maximum
Lawful Rate, the Borrower shall, to the extent permitted by law, continue to
pay interest for the account of such Lender at the Maximum Lawful Rate until
such time as the total interest received by such Lender is equal to the total
interest which such Lender would have received had the Stated Rate been (but
for the operation of this provision) the interest rate payable. Thereafter,
the interest rate payable for the account of such Lender shall be the Stated
Rate unless and until the Stated Rate again would exceed the Maximum Lawful
Rate, in which event this provision shall again apply.
(c) Regardless of any provision contained in any Loan Document, no
Lender is entitled to contract for, charge, take, reserve, receive, or apply,
as interest on all or any part of the Obligation, any amount in excess of the
Maximum Lawful Rate, and, if any Lender ever does so, then any excess shall
be treated as a partial prepayment of principal and any remaining excess
shall be refunded to the Borrower. In determining if the interest paid or
payable exceeds the Maximum Lawful Rate, the Borrower and Lenders shall, to
the maximum extent permitted under Applicable Law, (i) treat all Advances as
but a single extension of credit (and the Lenders and the Borrower agree that
is the case and that provision in this agreement for multiple Advances is for
convenience only), (ii) characterize any nonprincipal payment as an expense,
fee, or premium rather than as interest, (iii) exclude voluntary prepayment
and their effects, and (iv) amortize, prorate, allocate, and spread the total
amount of interest throughout the entire contemplated term of the
obligations. However, if the Obligations are paid in full before the end of
its full contemplated term, and if the interest received for its actual
period of existence exceeds the Maximum Lawful Amount, the Lenders shall
refund any excess (and Lenders may not, to the extent permitted by Applicable
Law, be subject to any penalties provided by any Applicable Laws for
contacting for, charging, taking, reserving, or receiving interest in excess
of the Maximum Lawful Amount). If the Applicable Laws of the State of Texas
apply for purposes of determining the "Maximum Lawful Rate", then such term
means the "weekly ceiling" from time to time in effect under Texas Finance
Code Section303.305. Borrower agrees that Chapter 346 of the Texas Finance
Code, as amended (which regulates certain revolving credit loan accounts and
revolving triparty accounts), does not apply to the Obligations.
(d) In computing interest payable with reference to the Maximum
Lawful Rate applicable to any Lender, such interest shall be calculated at a
daily rate equal to the Maximum Lawful Rate divided by the number of days in
the year in which such calculation is made.
(e) If any Lender has received interest hereunder in excess of the
Maximum Lawful Rate with respect to such Lender, such excess amount shall be
applied to the reduction of the outstanding principal balance of its Loans or
to other amounts
42
(other than interest) payable hereunder, and if no such principal or other
amounts are then outstanding, such excess or part thereof remaining shall be
paid to the Borrower.
ARTICLE III.
CONDITIONS
SECTION 3.1. CONDITIONS TO CLOSING. The obligation of each Lender to
make any Extension of Credit on the Closing Date or for the Agent or any Lender
to take, fulfill or perform any other action hereunder, shall be subject to
satisfaction of all of the following conditions in a manner satisfactory to
Agent:
(a) This Agreement or counterparts hereof, the Notes and the
Borrower Security Agreement shall have been duly executed by the Borrower, and
delivered to the Agent and Lenders; and Agent shall have received such
documents, instruments, agreements and legal opinions as Agent shall reasonably
request in connection with the transactions contemplated by this Agreement and
the other Related Transactions Documents, including an opinion of counsel to the
Credit Parties reasonably satisfactory to Agent and the other documents,
instruments agreements and opinions listed in the Closing Checklist attached
hereto as Exhibit K, each in form and substance reasonably satisfactory to the
Agent;
(b) (i) Agent shall have received a fully executed original of a
pay-off letter reasonably satisfactory to Agent confirming that all of the Prior
Lender Obligations will be satisfied in full upon receipt by the Prior Lender of
proceeds of the Term Loan and the initial Revolving Credit Advance in an amount
not in excess of $16,500,000 (exclusive of amounts necessary to repay Prior
Lender Obligations owing to Xxxxxx) and all Liens upon any of the property of
the Borrower or any of its Subsidiaries in favor of Prior Lender shall be
terminated by Prior Lender immediately upon such payment, (ii) all letters of
credit issued or guaranteed by Prior Lender shall have been cash collateralized,
supported by a guaranty of Agent or supported by a Letter of Credit issued
pursuant to this Agreement, as mutually agreed upon by Agent and the Borrower,
(iii) with respect to the warrants heretofore issued to senior lenders (other
than Xxxxxx Financial, Inc.): (A) Borrower shall have entered into an agreement
with such senior lenders which is in form and substance reasonably satisfactory
to Agent and provides that all such warrants will be cancelled, repurchased or
otherwise terminated, for an aggregate price, or at an aggregate cost to
Borrower, not to exceed $625,000, such warrants to be cancelled, repurchased or
otherwise terminated, and such payments to be made, in accordance with the
following schedule:
Date of payment Amount of payment % of warrants terminated
--------------- ----------------- ------------------------
Closing Date $ 450,000 0.00
Thirty (30) days past
Closing Date $ 100,000 0.00
July 15, 2003 $ 75,000 100.00
43
and (B) Borrower shall have paid at least $350,000 to such senior lenders in
respect of such warrants and such senior lenders shall have cancelled,
repurchased or otherwise terminated such proportionate share of such warrants
for such price;
(c) Agent shall have received (i) evidence satisfactory to it in
its sole discretion that the Credit Parties have obtained all required consents
and approvals of all Persons including all requisite Governmental Authorities,
to the execution, delivery and performance of this Agreement and the other Loan
Documents and the consummation of the Related Transactions or (ii) an Officer's
Certificate in form and substance satisfactory to Agent affirming that no such
consents or approvals are required;
(d) Agent shall have received the Fees required to be paid by the
Borrower on the Closing Date in the respective amounts specified in Section 2.7,
and Borrower shall have reimbursed the Agent for all fees, costs and expenses of
closing presented as of the Closing Date;
(e) The organizational and capital structure of each Credit Party
and the terms and conditions of all Indebtedness of each Credit Party shall be
reasonably acceptable to Agent;
(f) Agent shall have received fully executed copies of each of the
other Related Transactions Documents, each of which shall be in form and
substance satisfactory to Agent and its counsel in their sole discretion. The
Related Transactions shall have been consummated in accordance with the terms of
the Related Transactions Documents, including, without limitation, Sponsor
having purchased Convertible Preferred for not less than $6,000,000 in cash and
that certain $7,000,000 Subordinated Promissory Note issued by Borrower to
Sponsor for not less than $7,000,000 in cash, in each instance, on terms and
conditions reasonably acceptable to Agent;
(g) The ratio of Funded Debt as of the Closing Date after giving
effect to the Related Transactions to EBITDA for the twelve month period ending
March 31, 2003, shall not be greater than 3.0.
SECTION 3.2. CONDITIONS TO EACH EXTENSION OF CREDIT. The obligation of
any Lender to make any Extension of Credit (including on the Closing Date), is
subject to the satisfaction of the following additional conditions:
(a) receipt by the Agent of a Notice of Borrowing in accordance
with Section 2.3;
(b) no event or circumstance having a Material Adverse Effect
shall have occurred since the date of this Agreement as determined by the Agent
and the Required Lenders;
(c) immediately before and after giving effect to such Extension
of Credit, (i) no Default or Event of Default shall have occurred and be
continuing and (ii) the ratio of Funded Debt as of such date, to EBITDA for the
most recent 12 month period for which financial statements are available, shall
not be greater than the maximum Leverage Ratio then in effect pursuant to
Section 7.14 hereof.
44
(d) the representations and warranties of the Credit Parties
contained in the Loan Documents shall be true and correct in all respects (or,
in all material respects if such representation or warranty is not by its terms
already qualified as to materiality) on and as of the date of and after giving
effect to such Extension of Credit, except for such changes therein as are
expressly permitted by the terms of this Agreement and except to the extent that
such representations and warranties are expressly stated to be made as of an
earlier date, in which case they shall be true as of such earlier date.
Each Extension of Credit hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of such Extension of
Credit as to the facts specified in clauses (b), (c) and (d) of this Section.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
To induce each Lending Party to enter into the Loan Documents and to
make Extensions of Credit, the Credit Parties, jointly and severally, make the
following representations and warranties to each Lending Party, each and all of
which shall survive the execution and delivery of this Agreement:
SECTION 4.1. EXISTENCE AND ORGANIZATIONAL POWER; COMPLIANCE WITH
ORGANIZATIONAL DOCUMENTS. Each Credit Party (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) is duly qualified to conduct its business and is in good
standing in each other jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not reasonably be expected to result in a
Material Adverse Effect, (c) has the requisite power and authority and the legal
right to own, pledge, mortgage or otherwise encumber and operate its properties,
(d) has all organizational powers necessary for the conduct of its business as
now conducted or hereafter proposed to be conducted, and (e) is in compliance in
all material respects with all provisions of its Organizational Documents.
SECTION 4.2. GOVERNMENTAL APPROVALS, COMPLIANCE WITH LAWS AND
COMPLIANCE WITH AGREEMENTS WITH THIRD PARTIES. Each Credit Party possesses in
full force and effect all Governmental Approvals necessary for the conduct of
its business and is in compliance with all provisions of all Applicable Law,
except where the failure to possess such Governmental Approval or of such
Governmental Approval to be in full force and effect or the failure to comply
with Applicable Law would not reasonably be expected to have a Material Adverse
Effect. No Credit Party is in breach of or default under or with respect to any
contract, agreement, lease or other instrument to which it is a party or by
which any of its property is bound or affected, which breach or default would
reasonably be expected to have a Material Adverse Effect.
SECTION 4.3. ORGANIZATIONAL AND GOVERNMENTAL APPROVALS; NO
CONTRAVENTION. The execution, delivery and performance by each Credit Party of
the Loan Documents and Related Transaction Documents to which it is a party, and
the consummation of the transactions contemplated to occur thereunder, (a) are
within its organizational powers, have been duly
45
authorized by all necessary organizational action, (b) require no Governmental
Approval (other than the filing of UCC-1 financing statements, and such other
filings as have been made and are in full force and effect), (c) do not
contravene, or constitute a default under (i) any provision of Applicable Law
the violation of which would reasonably be expected to have a Material Adverse
Effect, (ii) the Organizational Documents of such Credit Party or (iii) any
agreement, judgment, injunction, order, decree or other instrument binding upon
any Credit Party, the violation of which would reasonably be expected to have a
Material Adverse Effect and (d) do not result in the creation or imposition of
any Lien (other than the Liens created by the Collateral Documents) on any asset
of any such Credit Party.
SECTION 4.4. BINDING EFFECT; LIENS OF COLLATERAL DOCUMENTS. (a) Each
Loan Document and each Related Transaction Document to which any Credit Party,
is a party constitutes a valid and binding agreement of such Credit Party in
each case enforceable in accordance with its terms, subject to (i) the effect of
any applicable bankruptcy, fraudulent transfer, moratorium, insolvency,
reorganization or other similar laws affecting the rights of creditors generally
and (ii) the effect of general principles of equity whether applied by a court
of equity or law.
(b) The Collateral Documents create valid security interests in
the Collateral purported to be covered thereby, which security interests are
perfected security interests, prior to all other Liens other than Permitted
Prior Liens.
SECTION 4.5. FINANCIAL STATEMENTS. (a) The financial information set
forth in the financial statements listed on Disclosure Schedule 4.5(a) present
fairly, in all material respects, in accordance with GAAP, the consolidated
balance sheet of Borrower and its Subsidiaries as at their respective dates and
the consolidated income, shareholders' equity and cash flows of Borrower and its
Subsidiaries for the respective periods to which such statements relate (except
in the case of unaudited interim financial statements for the absence of
footnotes and normally recurring year-end adjustments). Any information other
than financial information presented in such statements is true, correct and
complete in all material respects. Except as disclosed or reflected in such
financial statements or in Disclosure Schedule 4.5(a), no Credit Party has any
liabilities, contingent or otherwise, nor any unrealized or anticipated losses,
that, singly or in the aggregate, have had or might have a Material Adverse
Effect.
(b) The Pro Forma delivered on the date hereof and attached hereto
as Disclosure Schedule 4.5(b) was prepared by the Borrower giving pro forma
effect to the Related Transactions, was based on the unaudited consolidated
balance sheets of the Borrower and its Subsidiaries dated March 31, 2003, and
was prepared in accordance with GAAP, with only such adjustments thereto as
would be required in accordance with GAAP (except for the absence of footnotes).
(c) The Projections delivered on the date hereof and attached
hereto as Disclosure Schedule 4.5(c) have been prepared by the Borrower in light
of the past operations of its businesses, but including future payments of known
contingent liabilities reflected on the Pro Forma, and reflect projections for
the five (5) year period beginning on January 1, 2003. The Projections are based
upon estimates and assumptions stated therein, all of which the Borrower
believes to be reasonable and fair in light of current conditions and current
facts known to the
46
Borrower and, as of the Closing Date, reflect the Borrower's good faith and
reasonable estimates of the future financial performance of the Borrower and its
Subsidiaries and of the other information projected therein for the period set
forth therein. Agent and Lenders recognize that the Projections are not to be
viewed as fact and that actual results may vary materially from such projections
and Borrower does not make any representation that such projections will be
realized.
SECTION 4.6. MATERIAL ADVERSE EFFECT. Since December 31, 2002, no act,
event, condition or occurrence has occurred or failed to occur, that has had or
reasonably could be expected to have, a Material Adverse Effect.
SECTION 4.7. LITIGATION. Except as disclosed on Disclosure Schedule
4.7, there is no action, suit, investigation or proceeding (collectively,
"Litigation") pending or, to the knowledge of any Credit Party, threatened
against or affecting any Credit Party or its property before any court or
arbitrator or any Governmental Authority which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect. There is no Litigation
pending or, to the best knowledge of any Credit Party, threatened against or
affecting, any party to this Agreement or any of the Related Transaction
Documents before any court or arbitrator or any Governmental Authority which
questions or challenges the validity of this Agreement or any of the other
Related Transaction Documents or any transaction contemplated herein or therein.
SECTION 4.8. NO MATERIAL MISSTATEMENTS. No written information,
statement, exhibit, certificate, document or report furnished to the Agent and
the Lenders (or any of them) by the borrower or any subsidiary in connection
with this Agreement contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the statement contained
therein not materially misleading in light of the circumstances in which made
and with respect to the Borrower and its Subsidiaries taken as a whole.
SECTION 4.9. NO ADVERSE FACT. No fact or circumstance is known to any
Credit Party that, either alone or in conjunction with all other such facts and
circumstances, has had or reasonably would be expected in the future to have a
Material Adverse Effect, that has not been set forth or referred to in the
financial statements referred to in Section 4.5 or in a writing specifically
captioned "Disclosure Statement" and delivered to the Agent prior to the
Agreement Date.
SECTION 4.10. OWNERSHIP OF PROPERTY, LIENS. Each Credit Party is the
lawful owner of, has good and marketable title (unless such property is located
in Texas, in which case Credit Party has good and indefeasible title) to and is
in lawful possession of, or has valid leasehold interests in, all properties and
other assets (real or personal, tangible, intangible or mixed) purported to be
owned, leased, subleased or used as the case may be, by such Credit Party on the
most recent balance sheet referred to in Section 4.5 or, if more recent,
delivered pursuant to Section 5.1, and none of such Credit Party's properties or
assets is subject to any Liens, except Liens permitted pursuant to Section 7.2.
SECTION 4.11. ENVIRONMENTAL LAWS. Each Credit Party and its respective
operations are (a) in compliance with the requirements of all Environmental Laws
and (b) not the subject of any investigation by any Governmental Authority
evaluating whether any remedial action is needed
47
to respond to a Release of any Hazardous Material into the environment or the
work place or the use of any such substance in any of its products or
manufacturing operations, in each case unless such noncompliance or remedial
action would not reasonably be expected to have a Material Adverse Effect.
SECTION 4.12. ERISA. Each member of the Controlled Group has fulfilled
its obligations under the minimum funding standards of ERISA and the IRC with
respect to each Plan and is in compliance in all material respects with the
presently applicable provisions of ERISA and the IRC with respect to each Plan.
No member of the Controlled Group has (a) sought a waiver of the minimum funding
standard under Section 412 of the IRC in respect of any Plan, (b) failed to make
any contribution or payment to any Plan or Multiemployer Plan or in respect of
any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could reasonably be expected to result in the
imposition of a Lien or the posting of a bond or other security under ERISA or
the IRC or (c) incurred any liability under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA, except to the
extent such action could not reasonably be expected to have a Material Adverse
Effect.
SECTION 4.13. SUBSIDIARIES; CAPITALIZATION. Borrower has no
Subsidiaries on the Closing Date other than as set forth on Disclosure Schedule
4.13. Disclosure Schedule 4.13 sets forth the correct legal name and
jurisdiction of organization of each of Borrower and its Subsidiaries. The
authorized Stock of each of the Credit Parties are as set forth on Disclosure
Schedule 4.13. All issued and outstanding Stock of each of the Credit Parties
are duly authorized and validly issued, fully paid, nonassessable, free and
clear of all Liens other than those in favor of Agent for the benefit of the
Lending Parties, and such Stock was issued in compliance with all Applicable
Laws. The identity of the holders of the Stock of each of the Credit Parties
(other than public shareholders of Borrower) and the percentage of their fully
diluted ownership of the Stock of each of the Credit Parties is set forth on
Disclosure Schedule 4.13. No Stock of any Credit Party, other than that
described above, is issued and outstanding. Except as provided in Disclosure
Schedule 4.13, there are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for the
purchase or acquisition from any Credit Party of any Stock of any such entity.
No Credit Party has any outstanding Indebtedness and Guaranteed Obligations
except those expressly permitted hereunder.
SECTION 4.14. GOVERNMENT REGULATIONS. No Credit Party is an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940. No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any other federal
or state statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder.
SECTION 4.15. MARGIN REGULATIONS. No Credit Party is engaged, nor will
it engage, principally or as one of its activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" as such
terms are defined in Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect (such securities being referred to herein as
"Margin Stock"). No Credit Party owns any Margin Stock and none of the proceeds
from the Loans have been or will be used, directly or indirectly, for the
purpose of
48
purchasing or carrying any Margin Stock, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any Margin
Stock or for any other purpose which might cause any of the loans under this
Agreement to be considered a "purpose credit" within the meaning of Regulations
T, U or X of the Board of Governors of the Federal Reserve Board. No Credit
Party will take or permit to be taken any action that might cause any Loan
Document to violate any regulation of the Federal Reserve Board.
SECTION 4.16. TAXES. All material tax returns, reports and statements,
including information returns, required by any Governmental Authority to be
filed by any Credit Party have been filed with the appropriate Governmental
Authority and all Charges have been paid prior to the date on which any material
fine, penalty, interest or late charge may be added thereto for nonpayment
thereof (or any such fine, penalty, interest, late charge or loss has been
paid), excluding Charges or other amounts which are the subject of a Permitted
Contest. To the Borrower's knowledge, proper and accurate amounts have been
withheld by each Credit Party from its respective employees for all periods in
compliance in all material respects with Applicable Laws and such withholdings
have been timely paid to the respective Governmental Authorities.
SECTION 4.17. INTELLECTUAL PROPERTY. Each Credit Party owns or has
rights to use all Intellectual Property material to the conduct of its business
as now or heretofore conducted by it or proposed to be conducted by it, without
actual or claimed infringement upon the rights of third parties.
SECTION 4.18. SOLVENCY. After giving effect to (a) the Extensions of
Credit to be made or extended on the Closing Date or such other date as
Extensions of Credit requested hereunder are made or extended, the issuance of
the guaranties of the Obligations and the pledge of assets as security therefor
by all of the Credit Parties, (b) the disbursement of the proceeds of such
Extensions of Credit pursuant to the instructions of the Credit Parties, (c) the
consummation of the transactions contemplated in the Related Transactions
Documents, and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each Credit Party is Solvent.
SECTION 4.19. INSURANCE. Disclosure Schedule 4.19 lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each such
policy.
SECTION 4.20. BROKERS. Other than Xxxxxxx Securities, Inc., no broker
or finder acting on behalf of any Credit Party brought about the obtaining,
making or closing of the Loans, and no Credit Party has any obligation to any
Person in respect of any finder's or brokerage fees in connection therewith,
other than those fees which are payable (and which shall be paid) by Borrower on
the Closing Date to Xxxxxxx Securities, Inc., pursuant to the terms of that
certain letter agreement dated as of February 11, 2003 by and between Xxxxxxx
Securities, Inc. and Borrower, as in effect on the Closing Date without giving
effect to any amendments of other modifications.
SECTION 4.21. COMPLIANCE WITH LAWS. Each Credit Party is in compliance
in all material respects with all Applicable Laws, including Healthcare Laws.
49
SECTION 4.22. COMPLIANCE WITH HIPAA. To the extent that and for so long
as any Credit Party is a "covered entity" within the meaning of or otherwise
subject to HIPAA, each Credit Party (i) has undertaken or will promptly
undertake 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 and/or that could be adversely
affected by the failure of such Credit Party to be HIPAA Compliant (as defined
below), (ii) has developed or will promptly develop a detailed plan and time
line for becoming HIPAA Compliant (a "HIPAA Compliance Plan"), and (iii) has
implemented or will implement those provisions of such HIPAA Compliance Plan in
all material respects necessary to ensure that such Credit Party is or becomes
HIPAA Compliant. For purposes hereof, "HIPAA Compliant" means that such Credit
Party (x) is or will be in 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 and could not
reasonably be expected to become, 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) that could result in any
of the foregoing or that could reasonably be expected to have a Material Adverse
Effect.
SECTION 4.23. THIRD PARTY REIMBURSEMENT. If any Credit Party is or has
been audited by Medicare, Medicaid, TRICARE, CHAMPVA or similar governmental
payors, (i) none of such audits provides for adjustments in reimbursable costs
or asserts claims for reimbursement or repayment by such Credit Party of costs
and/or payments theretofore made by such governmental payor that, if adversely
determined, could reasonably be expected to have or result in a Material Adverse
Effect.
SECTION 4.24. EMPLOYMENT SHAREHOLDERS AND SUBORDINATION AGREEMENTS.
Except as set forth on Disclosure Schedule 4.24, there are no (a) employment
agreements covering executive officers of Borrower, (b) agreements for
managerial, consulting or similar services to which any Credit Party is a party
or by which any Credit Party is bound or (c) agreements regarding any Credit
Party, its assets or operations or any investment therein to which any of its
equity holders is a party or by which it is bound.
SECTION 4.25. DORMANT ENTITIES. Each Dormant Entity has: (a) been
dissolved in accordance with the laws of its jurisdiction of organization, (b)
forfeited its charter under the laws of its state of organization, (c) been
merged out of existence, (d) been suspended or deemed "inactive" under the laws
of its state of organization with no intention by any Credit Party to reinstate,
or (e) all of its Stock or other equity securities outstanding issued to and
held by Persons other than Borrower and the other Credit Parties. No Credit
Party is party to any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) or has any contractual
relationship with any Dormant Entity, nor does any Credit Party have any plans
to enter into any such transaction or contractual relationship with any Dormant
Entity.
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ARTICLE V.
REPORTING COVENANTS
So long as any Lending Party has any Commitment hereunder or any
Extension of Credit or other Obligation remains outstanding, each Credit Party
shall comply with each of the provisions in this Article V:
SECTION 5.1. FINANCIAL STATEMENTS AND REPORTS. The Credit Party shall
deliver the following to Agent:
(a) Monthly Financials. As soon as available, but in any event
within thirty five (35) days after the end of each fiscal month (including,
without limitation, the last fiscal month of each Fiscal Year):
(i) consolidated balance sheets of Borrower and its
Subsidiaries as of the close of such fiscal month, and related
consolidated statements of income and cash flows for such fiscal month
and for that portion of the Fiscal Year ending as of the close of such
fiscal month, in each case setting forth in comparative form the
figures for the corresponding period in the prior year and the figures
contained in the Budget (for the statements of income only) for such
Fiscal Year; and
(ii) a Compliance Certificate in the form of Exhibit 5.1(a);
provided, however, notwithstanding anything contained in such form of
Compliance Certificate, Borrower shall not be required to deliver
evidence of financial covenant calculations together therewith.
(b) Quarterly Financials. As soon as available, but in any event
within fifty (50) days after the end of each Fiscal Quarter (including, without
limitation, the last Fiscal Quarter of each Fiscal Year):
(i) consolidated balance sheets of Borrower and its
Subsidiaries as of the close of such Fiscal Quarter and the related
consolidated statements of income and consolidated cash flow for such
Fiscal Quarter and for that portion of the Fiscal Year ending as of the
close of such Fiscal Quarter, in each case setting forth, in
comparative form, the figures for the corresponding period in the prior
year and the figures contained in the Budget (for the statements of
income only) for such Fiscal Year;
(ii) a management discussion and analysis that includes a
comparison to Budget for such Fiscal Quarter and a comparison of
performance for such Fiscal Quarter to the corresponding period in the
prior year; and
(iii) a Compliance Certificate.
(c) Annual Financials. As soon as available, but in any event
within one hundred five (105) days after the end of each Fiscal Year:
51
(i) audited consolidated balance sheets and related audited
consolidated and consolidating statements of income, consolidated
retained earnings and consolidated cash flows for Borrower and its
Subsidiaries, setting forth in comparative form, in each case the
figures for the previous Fiscal Year and, beginning with deliveries
made with respect to financial information for the fiscal year ending
December 31, 2003, reported on without a "going concern" or other
qualification or exception by an independent certified public
accounting firm of national standing reasonably acceptable to Agent;
provided, however, if and only to the extent such deliveries are also
required by law to be delivered to the Securities and Exchange
Commission and the Borrower obtains an extension from the Securities
and Exchange Commission to make such deliveries at a date later than
one hundred five (105) days after the end of the applicable Fiscal Year
without penalty of any kind, the Borrower shall instead make the
deliveries described in this clause (i) to Agent at any time on or
before such extended deadline;
(ii) a management discussion and analysis that includes a
comparison to Budget for such Fiscal Year and a comparison of
performance for such Fiscal Year to the prior year;
(iii) a Compliance Certificate;
(iv) a report in form and substance reasonably satisfactory
to Agent and subject only to standard qualifications required by
nationally recognized accounting firms, signed by the accounting firm
auditing the financial statements, (A) showing the calculations used to
determine compliance with each of the financial covenants set forth
herein, and (B) stating that, in connection with their audit
examination, nothing has come to their attention to cause them to
believe that a Default has occurred (or specifying those Defaults that
they became aware of), it being understood that such audit examination
extended only to accounting matters and that no special investigation
was made with respect to the existence of Defaults; and
(v) the annual letters collected by such accountants in
connection with their audit examination detailing contingent
liabilities and material litigation matters.
(d) Annual Budgets. As soon as available following the end of each
Fiscal Year, but in any event not later than thirty (30) days after the end of
such Fiscal Year, an annual operating plan for Borrower and its Subsidiaries
(the "Budget"), approved by the Board of Directors of the Borrower, for the
following Fiscal Year, which (i) includes a statement of all of the material
assumptions on which such plan is based, and (ii) includes monthly consolidated
balance sheets, consolidated and consolidating income statements and
consolidated statements of cash flows for the following year, all prepared on
the same basis and in similar detail as that on which operating results are
reported (and in the case of cash flow projections, representing management's
good faith estimates of future financial performance based on historical
performance), and including plans for Capital Expenditures.
(e) Management Letters. Within ten (10) Business Days after
receipt thereof by any Credit Party, copies of all management letters, exception
reports or similar letters or reports received by such Person from its
independent certified public accountants.
52
(f) Defaults and other Material Events. As soon as practicable,
and in any event within five (5) Business Days after the Chief Executive Officer
or Chief Financial Officer of any Credit Party obtains knowledge of the
existence of any event that could reasonably be expected to have a Material
Adverse Effect or of any Event of Default, telephonic or telecopied notice
specifying the nature of such event or Event of Default, including the
anticipated effect thereof.
(g) Litigation. As soon as practicable, and in any event within
five (5) Business Days after any executive or financial officer of any Credit
Party obtains knowledge of any Litigation commenced or threatened against any
Credit Party that (i) seeks damages in excess of $500,000, (ii) seeks injunctive
relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its
assets or against any Credit Party or any member of a Controlled Group in
connection with any Plan, (iv) alleges criminal misconduct by any Credit Party,
(v) alleges material violations of any Healthcare Laws, (vi) alleges the
material violation of any law regarding, or seeks remedies in connection with,
any Environmental Liabilities, or (vii) if adversely determined against any
Credit Party, would reasonably be expected to have a Material Adverse Effect.
(h) Other Securities Reports. Promptly upon their becoming
available, copies of (i) all financial statements, reports, notices and proxy
statements sent by any Credit Party to its security holders, (ii) all regular
and periodic reports and all registration statements and prospectuses, if any,
filed by any Credit Party with any securities exchange or with the Securities
and Exchange Commission or any governmental or private regulatory authority and
(iii) all press releases and other statements made available by any Credit Party
to the public concerning material changes or developments in the business of any
such Credit Party.
(i) Notices. As soon as practicable, copies of all material
written notices given or received by any Credit Party with respect to any Stock
of such Person, and within two (2) Business Days after any Credit Party obtains
knowledge of any matured event of default with respect to any Subordinated Debt,
notice of such event of default.
(j) Supplemental Disclosures. Supplemental disclosures, if any,
required by Section 6.7.
(k) Damage to Collateral. Disclosure of any loss, damage, or
destruction to the Collateral in the amount of $250,000 or more individually for
any occurrence or event, in the aggregate, whether or not covered by insurance.
(l) Defaults under Material Agreements. Promptly upon receipt,
copies of any notice to any Credit Party of claimed default by any third party
to any Credit Party with respect to or by any Credit Party of any material lease
or other material agreement to which any Credit Party is a party that involves
payments in excess of $250,000 individually or in the aggregate per annum or
involves property of any Credit Party having a value in excess of $250,000
individually or in the aggregate.
53
(m) Other Documents. Promptly upon request, such other financial
and other information respecting any Credit Party's business or financial
condition as Agent or any Lender shall from time to time reasonably request.
SECTION 5.2. COLLATERAL REPORTS. Each Credit Party shall deliver to
Agent or to Agent and Lenders, as required, the various Collateral Reports at
the times and in the manner set forth below:
(a) To Agent, within ten (10) days of its reasonable request
therefor:
(i) a monthly trial balance showing Accounts outstanding
aged from invoice date as follows: one (1) to thirty (30) days;
thirty-one (31) to sixty (60) days; sixty-one (61) to ninety (90) days
and ninety-one (91) days or more, accompanied by such supporting detail
and documentation as shall be requested by Agent in its reasonable
discretion;
(ii) Collateral reports including all additions and
reductions (cash and non-cash) with respect to Accounts in each case
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion each of which shall be
prepared as of the last day of the immediately preceding month;
(iii) an aging of accounts payable and a reconciliation of
such accounts payable aging to the general ledger and monthly financial
statements delivered pursuant to Section 5.1(a), in each case
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(b) To Agent, at the time of delivery of each of the quarterly
financial statements delivered pursuant to Section 5.1(b) a list of any
applications for the registration of any patent, trademark or copyright filed by
any Credit Party with the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in the prior Fiscal
Quarter;
(c) To Agent, such appraisals of the Borrower's assets as Agent
may request at any time after the occurrence and during the continuance of an
Event of Default, such appraisals to be conducted by an appraiser, and in form
and substance reasonably satisfactory to Agent;
(d) To Agent, within five (5) Business Days after receipt thereof,
copies of (i) any and all default notices received under or with respect to any
leased location or public warehouse where any material Collateral is located,
and (ii) such other notices or documents with respect to any owned or leased
Real Property of any Credit Party as Agent may reasonably request; and
(e) Such other reports, statements and reconciliations with
respect to the Collateral or Obligations of any or all Credit Parties as Agent
shall from time to time request in its reasonable discretion.
54
SECTION 5.3. ACCURACY OF FINANCIAL STATEMENTS AND INFORMATION.
(a) Future Financial Statements. All financial statements
delivered pursuant to Section 5.1(a), (b), or (c), shall (i) in the case of the
financial information set forth therein, present fairly, in all material
respects, in accordance with GAAP the consolidated financial position of the
Credit Parties, as at their respective dates and the consolidated and
consolidating income, consolidated shareholders' equity, and consolidated cash
flows of Borrower and its Subsidiaries for the respective periods to which such
statements relate (subject, in the case of the financial statements delivered
pursuant to Section 5.1(a) and (b), to the absence of footnotes and normally
recurring year-end adjustments) and (ii) in the case of any other information
presented, be true, correct and complete as to the information presented therein
so as not to make the information presented materially misleading, and the
furnishing of the same to the Lending Parties shall constitute a representation
and warranty by Borrower and its Subsidiaries made on the date the same are
furnished to the Lending Parties to that effect.
(b) Future Information. All Information furnished to any Lending
Party by or on behalf of any Credit Party on and after the Agreement Date in
connection with or pursuant to this Agreement or any other Loan Document or in
connection with or pursuant to any amendment or modification of, or waiver
under, this Agreement or any other Loan Document, shall, at the time the same is
so furnished, but in the case of Information dated as of a prior date, as of
such date, (i) in the case of any such information prepared in the ordinary
course of business, be complete and correct in all material respects in the
light of the purpose prepared, and, in the case of any such Information required
by the terms of this Agreement or the preparation of which was requested by any
Lending Party, be complete and correct in all material respects to the extent
necessary to give true and accurate knowledge of the subject matter thereof, and
(ii) not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements contained therein, in light of
the circumstances in which they are made, not materially misleading, and the
furnishing of the same to any Lending Party shall constitute a representation
and warranty by the Credit Parties made on the date the same are so furnished to
the effect specified in clauses (i) and (ii).
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lending Party has any Commitment hereunder or any
Extension of Credit or other Obligation remains outstanding, Borrower shall, and
shall cause each Credit Party to, comply with each of the covenants in this
Article VI:
SECTION 6.1. PAYMENT OF OBLIGATIONS. Each Credit Party (a) shall pay
and discharge, at or before maturity, all of its respective obligations and
liabilities, including Charges, the non-payment or discharge of which would
reasonably be expected to have a Material Adverse Effect except where the same
is the subject of a Permitted Contest, (b) shall maintain, in accordance with
GAAP, appropriate reserves for the accrual of any of the same and (c) shall not
breach in any respect, or permit to exist any default under, the terms of any
lease, commitment, contract, instrument or obligation to which it is a party, or
by which its properties or assets are bound, the breach of or default under
which would reasonably be expected to have a Material Adverse Effect, subject to
Permitted Contests.
55
SECTION 6.2. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Each
Credit Party will continue to conduct its business substantially as now
conducted by the Credit Parties or as otherwise permitted hereunder, and will
preserve, renew and keep in full force and effect its corporate existence and
its rights, privileges and franchises necessary or desirable in the normal
conduct of business.
SECTION 6.3. MAINTENANCE OF ASSETS AND PROPERTIES. Each Credit Party
will keep all material assets and properties useful and necessary in its
business in good working order and condition, ordinary wear and tear excepted,
and will cause to be made all appropriate repairs, renewals and replacements
thereof.
SECTION 6.4. INSURANCE; DAMAGE TO OR DESTRUCTION OF COLLATERAL. (a) The
Credit Parties shall, at their sole cost and expense, maintain: (i) the policies
of insurance described on Disclosure Schedule 4.19 as in effect on the date
hereof or (ii) similar policies of insurance which are otherwise in form and
amounts and with insurers reasonably acceptable to Agent. Such policies of
insurance (or the loss payable and additional insured endorsements delivered to
Agent) shall contain provisions pursuant to which the insurer agrees to provide
thirty (30) days prior written notice to Agent in the event of any non-renewal,
cancellation or amendment of any such insurance policy. If any Credit Party at
any time or times hereafter shall fail to obtain or maintain any of the policies
of insurance required above, or to pay all premiums relating thereto, Agent may
at any time or times thereafter obtain and maintain such policies of insurance
and pay such premiums and take any other action with respect thereto that Agent
deems reasonably advisable; provided that Agent shall have no obligation to
obtain insurance for any Credit Party or pay any premiums therefor, but to the
extent it does obtain such insurance or pay such premiums, Agent shall not be
deemed to have waived any Default arising from any Credit Party's failure to
maintain such insurance or pay any premiums therefor. All sums so disbursed by
Agent hereunder, including reasonable attorneys' fees, court costs and other
charges related thereto, shall be payable on demand by the Borrower to Agent and
shall constitute additional Obligations hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change in any
Credit Party's risk profile (including any change in the product mix maintained
by any Credit Party or any laws affecting the potential liability of such Credit
Party) to require additional forms and limits of insurance to, in Agent's
reasonable opinion, adequately protect both Agent's and Lender's interests in
all or any portion of the Collateral and to ensure that each Credit Party is
protected by insurance in amounts and with coverage customary for its industry.
If reasonably requested by Agent, each Credit Party shall deliver to Agent from
time to time a report of a reputable insurance broker, reasonably satisfactory
to Agent, with respect to its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and
substance reasonably satisfactory to Agent, endorsements to (i) all "All Risk"
and business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) all general liability and other liability
policies naming Agent, on behalf of itself and Lenders, as additional insured.
Each Credit Party irrevocably makes, constitutes and appoints Agent (and all
officers, employees or agents designated by Agent), so long as any Event of
Default has occurred and is continuing or the anticipated insurance proceeds
exceed $500,000, as such Credit Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of such Credit Party
on any check or other item of payment for the proceeds of such "All Risk"
policies of insurance and for making all determinations and decisions with
respect to such "All
56
Risk" policies of insurance; provided that Agent shall have no duty to exercise
any rights or powers granted to it pursuant to the foregoing power-of-attorney.
After deducting from such proceeds the expenses, if any, incurred by Agent in
the collection or handling thereof and provided no Default or Event of Default
has occurred and is continuing, Agent shall permit the applicable Credit Party
to replace, restore, repair or rebuild the property; provided that if such
Credit Party shall not have completed or entered into binding agreements to
complete such replacement, restoration, repair or rebuilding within 180 days of
such casualty, Agent may apply such insurance proceeds to the Obligations in
accordance with Section 2.8(b). All insurance proceeds that are to be made
available to any Credit Party to replace, repair, restore or rebuild the
Collateral shall be applied by Agent to reduce the outstanding principal balance
of the Revolving Loan (which application shall not result in a permanent
reduction of the Revolving Credit Commitment) and upon such application, Agent
shall establish a reserve in an amount equal to the amount of such proceeds so
applied. Thereafter, such funds shall be made available to that Credit Party to
provide funds to replace, repair, restore or rebuild the Collateral as follows:
(x) the Borrower shall request a Revolving Credit Advance be made to such Credit
Party in the amount requested to be released; (y) so long as the conditions set
forth in Section 3.2 have been met, Revolving Lenders shall make such Revolving
Credit Advance and (z) in the case of insurance proceeds applied against the
Revolving Loan, the reserve established with respect to such insurance proceeds
shall be reduced by the amount of such Revolving Credit Advance. To the extent
not used to replace, repair, restore or rebuild the Collateral, such insurance
proceeds shall be applied in accordance with Section 2.8(b).
SECTION 6.5. COMPLIANCE WITH LAWS. Each Credit Party will (a) comply
with all Applicable Laws if noncompliance with any such law, rule, regulation,
order or restriction would reasonably be expected to have a Material Adverse
Effect, (b) conform with and duly observe in all material respects all laws,
rules and regulations and all other valid requirements of any regulatory
authority with respect to the conduct of its business, including without
limitation Titles XVIII and XIX of the Social Security Act, Medicare
Regulations, Medicaid Regulations, and all laws, rules and regulations of
Governmental Authorities, pertaining to the business of the Credit Parties, and
(c) obtain and maintain all licenses, permits, certifications and approvals of
all applicable Governmental Authorities as are required for the conduct of its
business as currently conducted and herein contemplated, including without
limitation professional licenses, CLIA certifications, Medicaid Certifications
and Medicare Certifications, if failure to do so would reasonably be expected to
have a Material Adverse Effect. Specifically, but without limiting the
foregoing, and except where any such failure to comply would not reasonably be
expected to have a Material Adverse Effect (i) each Credit Party's billing
policies, arrangements, protocols and instructions will comply with
reimbursement requirements under Medicare, Medicaid and other medical
reimbursement programs; and (ii) each Credit Party's medical director
compensation arrangements and other arrangements with referring physicians will
comply with applicable state and federal self-referral and anti-kick-back laws,
including, without limitation, 42 U.S.C. Section 1320a-7b(b)(1) - (b)(2) 42
U.S.C. and 42 U.S.C. Section 2395nn.
SECTION 6.6. INSPECTION OF PROPERTY, BOOKS AND RECORDS. Each Credit
Party will keep proper books of record and account in which full, true and
correct entries shall be made of
57
all dealings and transactions in relation to its business and activities and
will permit the Agent, who may be accompanied by the representatives of any
Lender upon such Lender's written request, to visit and inspect any of its
properties, to examine and make abstracts or copies from any of its books and
records, to conduct a collateral audit and analysis of its inventories and
accounts receivable and to discuss its affairs, finances and accounts with its
officers, employees and independent public accountants, all at such reasonable
times and as often as may reasonably be desired (but not more than twice a year
unless an Event of Default exists); provided that, so long as no Default or
Event of Default shall have occurred and be continuing, the Agent shall have
provided the appropriate Credit Party with reasonable prior notice and shall
conduct such visit in a manner that does not unreasonably interfere with the
conduct of such Credit Party's business. Representatives of each Lender will be
permitted to accompany representatives of Agent during each visit, inspection
and discussion referred to in the immediately preceding sentence. Without in any
way limiting the foregoing, Borrower will participate and will cause the chief
executive officer and the chief financial officer of the Borrower and such other
officers of the Credit Parties as the Agent shall designate to participate in a
meeting with Agent and Lenders to discuss the financial results and condition of
the Credit Parties at least once during each year, which meeting shall be held
at such time and such place as may be reasonably requested by Agent.
SECTION 6.7. SUPPLEMENTAL DISCLOSURE. From time to time as may be
reasonably requested by Agent (which request will not be made more frequently
than once each year absent the occurrence and continuance of an Event of
Default), the Credit Parties shall supplement each Disclosure Schedule hereto,
or any representation herein or in any Loan Document, with respect to any matter
hereafter arising that, if existing or occurring as of the date of this
Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or that is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall amend,
supplement or otherwise modify any Disclosure Schedule or representation, or be
deemed a waiver of any Default resulting from the matters disclosed therein,
except as consented to by Agent and Required Lenders in writing, and (b) no
supplement shall be required or permitted as to representations and warranties
that relate solely to the Closing Date.
SECTION 6.8. USE OF PROCEEDS. The proceeds of Revolving Loans shall be
used by the Credit Parties solely to refinance the Prior Lender Obligations and
to pay costs and expenses of the Related Transactions, to provide working
capital financing and to provide funds for general corporate purposes. The
proceeds of the Term Loans shall be used solely to refinance the Prior Lender
Obligations and to pay costs and expenses of the Related Transactions, to
provide working capital financing and to provide funds for general corporate
purposes. Letters of Credit shall be used solely for general corporate purposes.
No Extension of Credit and none of the proceeds of any Extension of Credit will
be used in violation of any Applicable Law.
SECTION 6.9. FURTHER ASSURANCES. Each Credit Party shall, at its own
cost and expense, cause to be promptly and duly taken, executed, acknowledged
and delivered all such further acts, documents and assurances (a) as may from
time to time be necessary or as the Agent
58
may from time to time reasonably request to carry out the intent and purposes of
the Loan Documents and the transactions contemplated thereby, including all such
actions to establish, preserve, protect and perfect the estate, right, title and
interest of the Agent to the Collateral (including Collateral acquired after the
date hereof), including first priority Liens thereon, subject only to Liens
permitted by Section 7.2, and (b) as the Agent may from time to time reasonably
request, to establish, preserve, protect and perfect first priority Liens in
favor of the Agent on any and all assets of the Credit Parties and the proceeds
thereof, now owned or hereafter acquired, that do not constitute Collateral on
the date hereof. The Borrower shall promptly give notice to the Agent of the
acquisition after the Closing Date by any Credit Party of any Real Property
(including material leaseholds in respect of Real Property) or any trademark,
copyright or patent.
SECTION 6.10. HISTORICAL FEES. Borrower shall pay to Agent, for the
benefit of Xxxxxx, reimbursement for historical legal fees and expenses incurred
by Xxxxxx, the amounts and on the dates set forth below:
Date Amount
July 15, 2003 $ 25,000
August 15, 2003 $ 50,000
September 15, 2003 $ 75,000
June 15, 2004 $200,000
SECTION 6.11. ENVIRONMENTAL MATTERS. Each Credit Party shall and shall
cause each Person within its control to (a) conduct its operations and keep and
maintain its Real Property in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect,
(b) implement any and all investigative, remedial, removal and response actions
that are appropriate or necessary to comply with Environmental Laws and
Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of the Real Property of any Credit
Party, and (c) promptly forward to Agent a copy of any order, notice, request
for information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that would reasonably be
expected to result in Environmental Liabilities in excess of $100,000, in each
case whether or not any Governmental Authority has taken or threatened any
action in connection with any violation, Release or other matter. If Agent at
any time has a reasonable basis to believe that there may be a violation of any
Environmental Laws or Environmental Permits by any Credit Party or any
Environmental Liability arising thereunder, or a Release of Hazardous Materials
on, at, in, under, above, to, from or about any of the Real Property of any
Credit Party, that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect, then each Credit Party shall, upon
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at the Borrower's expense, as Agent may from time to time
reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Agent and shall
59
be in form and substance reasonably acceptable to Agent, and (ii) permit Agent
or its representatives to have access to all Real Property for the purpose of
conducting such environmental audits and testing as Agent deems reasonably
appropriate, including subsurface sampling of soil and groundwater; provided
that the Borrower shall reimburse Agent for the costs of such audits and tests
and the same will constitute a part of the Obligations secured hereunder.
SECTION 6.12. LANDLORD AND WAREHOUSEMAN WAIVERS. At Agent's reasonable
request therefor, the Credit Parties shall use commercially reasonable efforts
to deliver to the Agent waivers of contractual and statutory landlord's,
mortgagee's or warehouseman's Liens in form and substance reasonably
satisfactory to the Agent under each lease, mortgage, warehouse agreement or
similar agreement to which any Credit Party is a party.
SECTION 6.13. MORTGAGES ON REAL PROPERTY; TITLE INSURANCE AND SURVEY.
Within thirty (30) days after the acquisition of any Real Property having a fair
market value in excess of $250,000 by any Credit Party, such Credit Party will
furnish the Agent with a Mortgage covering each parcel of Real Property acquired
by such Credit Party (the "Mortgaged Property"), together with an ALTA extended
coverage lender's policy of title insurance in a policy amount equal to one
hundred percent (100%) of the greater of (x) the purchase price of such acquired
property (including any liabilities assumed in connection with the acquisition)
or (y) the fair market value of such property, insuring such Mortgage as a
valid, enforceable first Lien on the Credit Party's interest in the Mortgaged
Property covered thereby, subject only to Permitted Encumbrances and to such
other exceptions as are reasonably satisfactory to the Agent, together with an
ALTA survey with respect to each parcel of the Mortgaged Property acquired, in
form and substance reasonably satisfactory to the Agent, and legible copies of
all documents affecting title, which shall show all recording information. The
policy, including each of the exceptions to coverage contained therein, shall be
subject to the reasonable approval of the Agent, and shall be issued by a title
company reasonably acceptable to the Agent. Attached to the policy shall be any
and all endorsements reasonably required by the Agent.
SECTION 6.14. ADDITIONAL SUBSIDIARIES. Contemporaneously with the
creation or acquisition of any Subsidiary by any Credit Party, such Credit Party
shall execute and deliver or cause to be executed and delivered (a) such
documents and instruments as the Agent shall reasonably require to cause such
new Subsidiary to become a party to the Subsidiary Guaranty and Subsidiary
Security Agreement, (b) a pledge of all of the Stock of any domestic Subsidiary
pursuant to a Pledge Agreement from the parent of such Subsidiary (c) in the
case of any Subsidiary organized outside of the United States of America and its
territories (a "Foreign Subsidiary"), a pledge of sixty-five percent (65%) of
the Stock of such Foreign Subsidiary, or one hundred percent (100%) of the Stock
of such Foreign Subsidiary in the event of any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase in of, any
law or regulation, directive or guideline of any Governmental Authority that
results in such Credit Party not being required under Section 956(a)(l) of the
IRC to include in its gross income for United States federal income tax purposes
any portion of the earnings of such Foreign Subsidiary as a result of such
Credit Party's pledge of more than 65% of the Stock of such Foreign Subsidiary
and (c) such other related stock certificates, stock powers, financing
statements, opinions of counsel and other documents as the Agent may reasonably
request, all in form and substance reasonably satisfactory to the Agent.
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SECTION 6.15. CASH MANAGEMENT SYSTEMS. As soon as possible and in no
event later than June 15, 2003, the Credit Parties shall and shall cause each of
their Subsidiaries to enter into tri-party agreements regarding each of their
deposit accounts pursuant to which the applicable deposit banks acknowledge the
security interest of Agent in the applicable bank accounts, agrees to comply
with instructions originated by Agent directing disposition of the funds in the
applicable bank accounts without further consent from such Credit Party or
Subsidiary, and agrees to subordinate and limit any security interest the bank
may have in the applicable bank accounts on terms reasonably satisfactory to
Agent; provided, however, Credit Parties and their Subsidiaries may maintain up
to and at no time more than $500,000 in the aggregate in bank accounts which are
not subject to tri-party agreements of the type described above.
SECTION 6.16. FEDERAL TAX LIENS. As soon as reasonably possible and in
any event within (90) days following the Closing Date, the Credit Parties shall
deliver to Agent evidence of termination with respect to each Federal tax Lien
described on Disclosure Schedule 7.2, which has been file-stamped by the
applicable Governmental Authority and is otherwise in form and substance
reasonably satisfactory to Agent.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender has any Commitment hereunder or any Extension of
Credit or other Obligation remains outstanding (other than contingent
obligations to the extent no unsatisfied claim in respect thereof has been
asserted), Borrower shall, and shall cause each Credit Party to, comply with
each of the covenants in this Article VII:
SECTION 7.1. INDEBTEDNESS. No Credit Party will, and no Credit Party
will permit any Subsidiary to, directly or indirectly, create, incur, assume,
guarantee or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness, except for:
(a) Indebtedness outstanding on the date of this Agreement to the
extent set forth in Disclosure Schedule 7.1; and any refinancings thereof,
provided that no such refinancing shall with respect to the Indebtedness being
refinanced, increase the principal amount thereof, increase the interest rate
thereon to an amount in excess of reasonable market rates, shorten the maturity
or otherwise impose more burdensome restrictions on the Credit Parties and their
Subsidiaries that those existing under the Indebtedness being refinanced.
(b) Indebtedness under the Loan Documents;
(c) Indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring any asset (including through Capital
Leases) in an aggregate principal amount outstanding not greater than $1,000,000
at any time; provided that such Indebtedness is incurred within ninety (90) days
following such purchase and does not exceed one hundred percent (100%) of the
purchase price of the subject assets;
(d) Indebtedness of a Credit Party to another Credit Party,
provided that: (i) in the event any Credit Party has executed and delivered (or
does execute and deliver) to another
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Credit Party a demand note (collectively, the "Intercompany Notes") to evidence
any such intercompany Indebtedness owing at any time by such Credit Party to
such other Credit Party, such Intercompany Notes shall be in form and substance
reasonably satisfactory to Agent and shall be pledged and delivered to Agent
pursuant to the applicable Pledge Agreement or Security Agreement as additional
collateral security for the Obligations; (ii) each Credit Party shall record all
intercompany transactions on its books and records in a manner reasonably
satisfactory to Agent; (iii) the obligations of each Credit Party under any such
Intercompany Notes shall be subordinated to the Obligations of such Credit Party
hereunder in a manner reasonably satisfactory to Agent; and (iv) no Event of
Default would occur and be continuing after giving effect to any such proposed
intercompany loan;
(e) Indebtedness consisting of Guaranteed Obligations to the
extent that the underlying Indebtedness being guaranteed is expressly permitted
pursuant to this Section 7.1;
(f) Xxxxxxx Obligations; and
(g) the Subordinated Debt issued by Borrower to Sponsor,
Xxxxxxxxxxx and other Persons pursuant to and in strict accordance with the
terms of the Subordinated Debt Documents.
SECTION 7.2. LIENS; NEGATIVE PLEDGES. No Credit Party shall create,
incur, assume or permit to exist any Lien on or with respect to any of its
properties or assets (whether now owned or hereafter acquired), including but
not limited to the Collateral, except for:
(a) Permitted Encumbrances;
(b) Liens in existence on the date hereof and summarized on
Disclosure Schedule 7.2 securing the Indebtedness described on Disclosure
Schedule 7.1 and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided that the principal
amount of the Indebtedness so secured is not increased and the Lien does not
attach to any other property or assets of any Credit Party;
(c) Liens created after the date hereof by conditional sale or
other title retention agreements (including Capital Leases) or in connection
with Indebtedness permitted by Section 7.1(c), provided that such Liens attach
only to the assets subject to such purchase money debt.
In addition, no Credit Party shall become a party to any agreement, note,
indenture or instrument, or take any other action, that would prohibit the
creation of a Lien on any of its properties or other assets in favor of Agent,
on behalf of itself and Lenders, in each case entered into in the ordinary
course of business, except operating leases, Capital Leases or Licenses which
prohibit Liens upon the assets or properties that are subject to such operating
lease, Capital Lease or License.
SECTION 7.3. GUARANTEED OBLIGATIONS. No Credit Party shall create,
incur, assume or permit to exist any Guaranteed Obligations except (a) by
endorsement of instruments or items of payment for deposit to the general
account of any Credit Party, and (b) for Guaranteed
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Obligations incurred for the benefit of any other Credit Party if the primary
obligation is expressly permitted by this Agreement.
SECTION 7.4. CAPITAL STOCK; NATURE OF BUSINESS. No Credit Party shall
(a) make any change in its capital structure as described in Disclosure Schedule
4.13, including the issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms of its
outstanding Stock; provided that the Borrower may issue or sell shares of its
Stock and options therefor so long as the proceeds thereof are applied in
prepayment of the Obligations if and as required by Section 2.8(c) and no Change
of Control occurs after giving effect thereto, or (b) amend its Organizational
Documents in a manner that would adversely affect Agent or Lenders or such
Credit Party's duty or ability to repay the Obligations. No Credit Party shall
engage in any business other than the businesses currently engaged in by it on
the Closing Date or businesses reasonably incidental thereto.
SECTION 7.5. RESTRICTED PAYMENTS. No Credit Party shall make any
Restricted Payment, except
(a) intercompany loans between Credit Parties to the extent
permitted by Section 7.1;
(b) dividends and distributions by Subsidiaries of any Credit
Party paid to such Credit Party;
(c) employee loans permitted under Section 7.10(b);
(d) payments of principal and interest of Intercompany
Indebtedness issued in accordance with Section 7.1;
(e) payments of management fees pursuant to that certain Sentinel
Management Agreement dated as of May 15, 2003 (the "Sentinel Management
Agreement") by and between Borrower and Sentinel Capital Partners,
L.L.C., not to exceed $275,000 per annum (increased to $300,000 from
and after the date on which EBITDA for Borrower calculated on a
trailing twelve (12) month basis, exceeds $10,000,000) payable in
advance in equal quarterly installments on the last Business Day of
each February, May, August and November of each year), provided all of
the following conditions are satisfied:
(i) no Default or Event of Default has occurred and is
continuing, nor would any Default or Event of Default occur or arise
upon the making of such Restricted Payment;
(ii) after giving effect to such Restricted Payment,
Borrower is in compliance on a pro forma basis with the covenants set
forth in Sections 7.13 through 7.16, recomputed for the most recent
month for which financial statements have been delivered;
(f) regularly-scheduled, non-accelerated cash payments of interest
with respect to the Subordinated Debt issued by Borrower to Sponsor,
Xxxxxxxxxxx and other
63
Persons pursuant to and in strict accordance with the terms of the
Subordinated Debt Documents at the aggregate cash pay interest rate of
ten percent (10%) per annum stated therein and which is otherwise made
in compliance with the terms of the Subordination Agreements;
(g) Borrower may make distributions to its shareholders to
repurchase the Stock of Borrower owned by such Persons, provided all of
the following conditions are satisfied:
(i) no Default or Event of Default has occurred and is
continuing, nor would any Default or Event of Default occur or arise
upon the making of such Restricted Payment; and
(ii) after giving effect to such Restricted Payment,
Borrower is in compliance on a pro forma basis with the covenants set
forth in Sections 7.13 through 7.16, recomputed for the most recent
month for which financial statements have been delivered; and
(iii) the Borrower shall have Borrowing Availability of at
least $500,000.
SECTION 7.6. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO BORROWER.
Except as provided in this Agreement, the Borrower will not and will not permit
any of its Subsidiaries directly or indirectly to create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Subsidiary to (a) pay dividends or make any
other distribution on any of such Subsidiary's Stock owned by the Borrower or
any other Subsidiary, (b) pay any Indebtedness owed to the Borrower or any other
Subsidiary, (c) make loans or advances to the Borrower or any other Subsidiary
or (d) transfer any of its property or assets to the Borrower or any other
Subsidiary.
SECTION 7.7. ERISA. No Credit Party shall, or shall cause or permit any
member of a Controlled Group to, cause or permit to occur an event that could
result in the imposition of a Lien under Section 412 of the IRC or Section 302
or 4068 of ERISA or cause or permit to occur an ERISA Event to the extent such
ERISA Event could reasonably be expected to have a Material Adverse Effect.
SECTION 7.8. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. No Credit
Party will (a) consolidate or merge with or into any other Person other than the
merger of a wholly owned Subsidiary of the Borrower with and into another wholly
owned Subsidiary of the Borrower that is a Guarantor or (b) sell, lease or
otherwise transfer, or grant any Person an option to acquire, directly or
indirectly, any of its properties or assets or consummate any Asset Disposition,
other than (i) sales of Inventory for fair value in the ordinary course of
businesses, (ii) dispositions of Temporary Cash Investments, (iii) licensing of
Intellectual Property in the ordinary course of business, (iv) exchange of
equipment for other equipment used in the business of such Credit Party, and (v)
dispositions for cash and fair value of Equipment, Fixtures, and other assets;
provided that (x) immediately after any such disposition the aggregate fair
market value of all such assets disposed of pursuant to this clause (b)(v) after
the date hereof does not exceed
64
$1,000,000 and the aggregate fair market value of all such assets disposed of
during the Fiscal Year in which such disposition is made does not exceed
$500,000, (y) the net proceeds of all such Asset Dispositions under clause
(b)(v) are applied to prepay the Loan if required by Section 2.8(b).
SECTION 7.9. PURCHASE OF ASSETS; INVESTMENTS. No Credit Party will
acquire all or substantially all of the assets of, engage in any joint venture
or Partnership with any Person, or make, acquire or own any Investment other
than (a) Temporary Cash Investments, (b) Investments in another Credit Party,
(c) Investments existing on the Closing Date and described on Disclosure
Schedule 7.9, (d) intercompany Indebtedness and Loans to employees permitted
hereunder, (e) investments in securities of account debtors received pursuant to
any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of such account debtor and (f) other Investments not exceeding
$250,000 in the aggregate at any time outstanding. Without limiting the
generality of the foregoing, no Credit Party will (i) acquire or create any
Subsidiary without the consent of the Required Lenders or (ii) engage in any
joint venture or partnership with any other Person.
SECTION 7.10. TRANSACTIONS WITH AFFILIATES. (a) Except as otherwise
permitted hereunder, no Credit Party will, directly or indirectly, enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange
of any property or the rendering of any service) with any Affiliate of any
Credit Party on terms that are less favorable to such Credit Party than those
which might be obtained at the time from a Person who is not an Affiliate of
such Credit Party.
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
respective employees in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and similar
purposes up to a maximum of $250,000 in the aggregate at any one time
outstanding.
SECTION 7.11. AMENDMENTS OR WAIVERS. No Credit Party will agree to (a)
any material amendment to or waiver of any material contract constituting a part
of the Collateral, or (b) any amendment or waiver of any document governing any
Subordinated Debt except to the extent permitted pursuant to the subordination
agreement with respect thereto, including, without limitation, the Subordination
Agreements.
SECTION 7.12. FISCAL YEAR. The Borrower and its Subsidiaries shall not
change their Fiscal Year from a Fiscal Year ending December 31.
SECTION 7.13. CAPITAL EXPENDITURES. The Credit Parties will not make or
commit to make any Capital Expenditures in the aggregate in any Fiscal Year in
excess of $3,000,000 (the "Capex Limit"). Notwithstanding the foregoing, in the
event Borrower and its Subsidiaries do not expend the entire Capex Limit
permitted in any Fiscal Year, Borrower and its Subsidiaries may carry forward to
the immediately succeeding Fiscal Year fifty percent (50%) of the unutilized
portion of the Capex Limit. All Capital Expenditures made by Borrower and its
Subsidiaries shall first be applied to reduce the applicable Capex Limit and
then to reduce the carry forward from the previous Fiscal Year, if any.
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SECTION 7.14. LEVERAGE RATIO. The Borrower shall not permit the
Leverage Ratio calculated as of the last day of any Fiscal Quarter during any of
the periods set forth below for the twelve (12) fiscal month period ending on
such date to be greater than the ratio set forth below for such period:
PERIOD AMOUNT
------ ------
July 1, 2003 through September 30, 2004 3.00
October 1, 2004 through September 30, 2005 2.75
October 1, 2005 through September 30, 2006 2.25
October 1, 2006 and the last day of each Fiscal 2.00
Quarter thereafter.
SECTION 7.15. INTEREST COVERAGE. The Borrower shall not permit the
Interest Coverage Ratio (as defined and calculated under the Compliance
Certificate) for the twelve (12) fiscal months ending on the last day of any
Fiscal Quarter to be less than 3.50.
SECTION 7.16. FIXED CHARGE COVERAGE RATIO. The Borrower shall not
permit the Fixed Charge Coverage Ratio (as defined and calculated in accordance
with the terms of the Compliance Certificate calculated as of the last day of
any Fiscal Quarter during any of the periods set forth below for the twelve (12)
fiscal month period ending on such date to be less than the ratio set forth
below for such period:
PERIOD AMOUNT
------ ------
July 1, 2003 through September 30, 2005 1.10
October 31, 2005 and the last day of each Fiscal
Quarter thereafter 1.15
SECTION 7.17. SENIOR LEVERAGE RATIO. The Borrower shall not permit the
Senior Leverage Ratio calculated as of the last day of any Fiscal Quarter during
any of the periods set forth below for the twelve (12) fiscal month period
ending on such date to be greater than the ratio set forth below for such
period:
PERIOD AMOUNT
------ ------
July 1, 2003 through September 30, 2004 1.90
October 1, 2004 through September 30, 2005 1.60
October 1, 2005 through September 30, 2006 1.25
October 1, 2006 and the last day of each Fiscal
Quarter thereafter 1.00
SECTION 7.18. DORMANT ENTITIES. Neither Borrower nor any other Credit
Party will: (a) become party to any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) or establish
any contractual relationship with any Dormant Entity, (b) reinstate any Dormant
Entity, or (c) purchase all or any portion of the Stock or other equity
securities of any Dormant Entity.
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SECTION 7.19. CASH MANAGEMENT SYSTEMS. The Credit Parties shall not and
shall not cause or permit their Subsidiaries to[ establish any new bank accounts
without prior written notice to Agent and unless Agent and the bank at which the
account is to be opened] enter into a tri-party agreement regarding such bank
account pursuant to which such bank acknowledges the security interest of Agent
in such bank account, agrees to comply with instructions originated by Agent
directing disposition of the funds in the bank account without further consent
from such Credit Party or Subsidiary, and agrees to subordinate and limit any
security interest the bank may have in the bank account on terms reasonably
satisfactory to Agent; provided, however, Credit Parties and their Subsidiaries
may maintain up to and at no time more than $500,000 in the aggregate in bank
accounts which are not subject to tri-party agreements of the type described
above.
ARTICLE VIII.
EVENTS OF DEFAULT
SECTION 8.1. EVENTS OF DEFAULT. The occurrence of any one or more of
the following events for any reason whatsoever (whether voluntary or
involuntary, by operation of law or otherwise) shall constitute an event of
default hereunder (each, an "Event of Default"):
(a) The Borrower (i) fails to make any payment of principal when
due and payable, (ii) fails to make any payment of interest on, or Fees owing in
respect of, the Loans or any of the other Obligations within five (5) days of
when due and payable, or (iii) fails to pay or reimburse Agent or Lenders for
any expense reimbursable hereunder or under any other Loan Document within ten
(10) days following Agent's or any Lender's demand for such reimbursement or
payment of expenses;
(b) any Credit Party shall fail to observe or perform any covenant
applicable to it contained in Section 6.1, Section 6.2 (so far as it requires
each Credit Party to maintain its existence), Section 6.6, Section 6.8 or
Article VII hereof;
(c) any Credit Party shall fail to observe or perform any covenant
or agreement contained in the Loan Documents (other than those covered by clause
(a) or (b) above) and such failure shall have continued for a period of thirty
(30) days after notice thereof has been given to the Borrower by the Agent;
(d) any representation, warranty, certification or statement made
by any Credit Party in any Related Transactions Documents or in any certificate,
disclosure schedule, financial statement or other document delivered pursuant to
the Related Transactions Documents shall prove to have been incorrect in any
respect (or in any material respect if such representation, warranty,
certification or statement is not by its terms already qualified as to
materiality) when made (or deemed made);
(e) any Credit Party shall fail to make any payment in respect of
any Indebtedness (other than the Obligations) the aggregate outstanding
principal amount of which Indebtedness, either individually or in the aggregate
with all other Indebtedness with respect to which the Credit Parties have failed
to make a payment, equals or exceeds $250,000;
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(f) any event or condition shall occur which (i) results in the
acceleration of the maturity of Indebtedness of any Credit Party in an
outstanding principal amount in excess of $250,000, individually or in the
aggregate with all other Indebtedness of the Credit Parties (other than the
Obligations), or (ii) enables the holder or holders of Indebtedness of any
Credit Party in an outstanding principal amount in excess of $250,000,
individually or in the aggregate with all other Indebtedness of the Credit
Parties (other than the Obligations), or any Person acting on such holder's
behalf to accelerate the maturity of any such Indebtedness, or (iii) results in
a violation of, or a default under, any provision of the Organizational
Documents of any Credit Party that could adversely affect Agent or the Lenders
or impair the ability of any Credit Party to perform its Obligations under this
Agreement or any of the other Loan Documents;
(g) any Credit Party shall (i) commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its properties or assets, (ii) consent to any such relief or to the appointment
of or taking possession by any such official in an involuntary case or other
proceeding commenced against it, (iii) cease to be solvent (as represented in
Section 4.18) or make a general assignment for the benefit of creditors or (iv)
fail generally, not be able or admit in writing its inability to pay its debts
as they become due, or take any action in furtherance of, or indicating its
consent to, or approval of or acquiescence in any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against any Credit Party seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of sixty (60) days, or an
order for relief shall be entered against any Credit Party under any bankruptcy
laws as now or hereafter in effect, or any Credit Party shall take any action in
furtherance of, or indicating its consent to, or approval of or acquiescence in
any of the foregoing;
(i) institution of any steps by Borrower or any member of the
Controlled Group or any other Person to terminate a Pension Plan if, as a result
of such termination, Borrower or any member of the Controlled Group could
reasonably be expected to be required to make a contribution to such Pension
Plan, or could incur a liability or obligation to such Pension Plan, in excess
of $250,000, (ii) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302 of ERISA, (iii) there shall
occur any withdrawal or partial withdrawal from a Multiemployer Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Plans as a
result of such withdrawal (including any outstanding withdrawal liability that
Borrower and the members of the Controlled Group have incurred on the date of
such withdrawal) exceeds $250,000, (iv) with respect to any Plan, Borrower or
any member of the Controlled Group shall incur an accumulated funding deficiency
or request a funding waiver from the IRS, or (v) there shall occur an ERISA
Event or a non-exempt prohibited transaction within the meaning of Section 406
of ERISA or IRC Section 4975; provided, that the events listed in clauses (iv)
and (v) hereof shall constitute Events of Default
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only if the liability, deficiency or waiver request, whether or not assessed,
could reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect;
(j) (i) Any member of a Controlled Group shall engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the IRC) 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 (other than a
Permitted Encumbrance) shall arise on the assets of the Borrower or any
Controlled Group, (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, with
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) the
Borrower, any of its subsidiaries or any member of any Controlled Group shall,
or in the reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal form, or the insolvency or
reorganization of, any Multiemployer Plan or (vi) any other similar 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 reasonably be expected to have a
Material Adverse Effect;
(k) a judgment or order for the payment of money (other than those
judgments and orders otherwise disclosed on Disclosure Schedule 7.2), which,
individually or when aggregated with other such judgments or orders, equals or
exceeds $500,000, shall be rendered against any Credit Party and such judgment
or order shall continue unsatisfied and unstayed for a period of thirty (30)
days or any judgment (other than those judgments otherwise disclosed on
Disclosure Schedule 7.2) shall be rendered against any Credit Party that exceeds
by more than $500,000 any insurance coverage applicable thereto as to which the
insurance company has acknowledged coverage and such judgment or order shall
continue unsatisfied and unstayed for a period of thirty (30) days;
(l) a Change of Control shall occur;
(m) the auditor's report or reports on the audited statements
delivered pursuant to Section 5.1(c) shall include any material qualification
(including with respect to the scope of audit) or exception or any adverse
statement as to the ability of any Credit Party to continue as a going concern;
(n) any material provision of any Related Transactions Documents
shall for any reason cease to be valid, binding and enforceable against any
Credit Party for any reason, or any Credit Party shall so assert in writing or
the Lien created by any of the Collateral Documents shall at any time fail to
constitute a valid and perfected first priority Lien subject to no prior or
equal Lien except Permitted Encumbrances on any portion of the Collateral
purported to be secured thereby which is deemed material by the Agent, or any
Credit Party shall so assert in writing;
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(o) any Credit Party shall be prohibited, enjoined or otherwise
materially restrained from conducting the business theretofore conducted by it
by virtue of any determination, ruling, decision, decree or order of any
Governmental Authority and such determination, ruling, decision, decree or order
remains unstayed and in effect for any period of ten (10) days beyond any period
for which any business interruption insurance policy of the Credit Parties shall
provide full coverage to such Credit Party with respect to any losses and lost
profits; or
(p) any of the Related Transactions Documents (other than the Loan
Documents) shall for any reason fail to constitute the valid and binding
agreement of any party thereto, or any such party shall so assert in writing, or
refuse or fail to perform in any material respect its obligations thereunder;
(q) any Credit Party fails to (i) obtain or maintain any operating
licenses or Environmental Permits required by environmental authorities, (ii)
begin, continue or complete any remediation activities as required by any
environmental authorities, (iii) store or dispose of any hazardous materials in
accordance with applicable environmental laws and regulations, or (iv) comply
with any environmental laws, in each case, if any such failure in clauses (i)
through (iv) above, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect;
(r) any material damage to, or loss, theft or destruction of, any
Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which
causes, for more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of any
Credit Party, if any such event or circumstance, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;
(s) the loss, suspension or revocation of, or failure to renew,
any license or permit now held or hereafter acquired by any Credit Party, in
each case, if such loss, suspension, revocation or failure to renew,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect;
(t) any Credit Party shall be suspended or excluded from (i) any
Medicaid Provider Agreement, Medicaid Certification, Medicare Provider
Agreement, Medicare Certification or (ii) any medical reimbursement program,
where such exclusion or suspension arises from fraud or other claims or
allegations that could reasonably be expected to have a Material Adverse Effect;
or
(u) to the extent such event may result in a Material Adverse
Effect: (i) (A) any material provision of any Management Services Agreement
shall for any reason cease to be valid, binding and enforceable against any
person party thereto (other than the Credit Parties) for any reason, or (B) any
default or event of default shall occur under any Management Service Agreement
or (ii) any Liens which are in effect as of the Closing Date and are created by
the Management Service Agreements or other agreements or documents related
thereto shall at any time fail to constitute a valid or perfected first priority
Lien (to the extent any such Lien was a valid or perfected first priority Lien
as of the Closing Date) in favor of the applicable Credit
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Party subject to no prior or equal Lien on any portion of the collateral
purported to be secured thereby.
SECTION 8.2. REMEDIES.
(a) If any Default or Event of Default has occurred and is
continuing, Agent may, and at the written request of the Required Lenders shall,
without notice or demand, suspend the Revolving Credit Commitment with respect
to additional Advances and/or the incurrence of additional L/C Obligations,
whereupon any additional Advances and additional L/C Obligations shall be made
or incurred in Agent's sole discretion (or in the sole discretion of the
Required Lenders, if such suspension occurred at their direction) so long as
such Event of Default is continuing. If any Event of Default has occurred and is
continuing, Agent may (and at the written request of Required Lenders shall),
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Loans and other outstanding Obligations.
(b) If any Event of Default has occurred and is continuing, Agent
may, and at the written request of the Required Lenders shall, without notice or
demand (i) terminate the Revolving Credit Commitment with respect to further
Advances or the incurrence of further L/C Obligations (ii) declare all or any
portion of the Obligations, including all or any portion of any Loan, to be
forthwith due and payable, and require that the L/C Obligations be either cash
collateralized as provided in Section 2.5(k) or fully supported by a back-up
letter of credit (other than a Letter of Credit issued under this Agreement)
issued for the benefit of Agent, in form and substance satisfactory to Agent,
from an issuer satisfactory to Agent, all without presentment, demand, protest
or further notice of any kind, all of which are expressly waived by the Borrower
and each other Credit Party, or (iii) exercise any rights and remedies provided
to Agent under the Loan Documents, the other Related Transactions Documents or
at law or equity, including all remedies provided under the Code; provided that
upon the occurrence of an Event of Default specified in Sections 8.1(g) or
8.1(h), the Revolving Credit Commitment shall be immediately terminated and all
of the Obligations, including the outstanding Loans, shall become immediately
due and payable without declaration, notice or demand by any Person.
SECTION 8.3. WAIVERS BY CREDIT PARTIES. Except as otherwise provided
for in this Agreement or by applicable law, each Credit Party waives (a)
presentment, demand and protest and notice of presentment, dishonor, notice of
intent to accelerate, notice of acceleration, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Agent on which any Credit Party may in
any way be liable, and hereby ratifies and confirms whatever Agent may do in
this regard, (b) all rights to notice and a hearing prior to Agent's taking
possession or control of, or to Agent's replevy, attachment or levy upon the
Collateral or any bond or security that might be required by any court prior to
allowing Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.
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ARTICLE IX.
EXPENSES AND INDEMNITIES
SECTION 9.1. EXPENSES. The Credit Parties, jointly and severally, agree
(a) to pay on demand all fees, costs and expenses (including reasonable
attorneys' fees and expenses and the allocated cost of internal legal staff)
incurred by Agent and any appraisers, auditors and consultants retained by the
Agent in connection with (i) the examination, review, due diligence
investigation, documentation, negotiation, closing and syndication of the
transactions contemplated herein and in the Related Transactions Documents and
in connection with the continued administration of the Loan Documents including
any amendments, modifications, consents and waivers, (ii) creating, perfecting
and maintaining Liens pursuant to the Loan Documents, including filing and
recording fees and expenses, the costs of any bonds required to be posted in
respect of future filing and recording fees and expenses, and title
investigations and (iii) any matters contemplated by or arising out of the Loan
Documents, including Agent's customary field audit charges and the reasonable
fees, expenses and disbursements of the Agent or any accountants or other
experts retained by the Agent (including any affiliate of Agent as shall be
engaged for such purpose) in connection with accounting and collateral audits or
reviews of the Credit Parties and their affairs, (b) to promptly pay reasonable
documentation charges assessed by Agent for amendments, waivers, consents and
any of the documentation prepared by Agent's internal legal staff, and (c) to
promptly pay all fees, costs and expenses (including reasonable attorneys' fees
and expenses and the allocated cost of internal legal staff) incurred by Agent
and Lenders in connection with any action to enforce any Loan Document or to
collect any payments due from Borrower or any other Credit Party. All fees,
costs and expenses for which any Credit Party is responsible under this Section
9.1 shall be deemed part of the Obligations when incurred, and shall payable on
demand in accordance with Section 2.14.
SECTION 9.2. INDEMNITY. Whether or not the transactions contemplated
hereby are consummated, the Credit Parties, jointly and severally, agree to
indemnify, pay and hold harmless each Lending Party and any subsequent holder of
any of the Notes or any other Obligation, and each of such Person's officers,
directors, employees, attorneys, agents and Affiliates (collectively, the
"Indemnitees") from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including the fees and
disbursements of counsel for such Indemnitee and the allocated cost of internal
legal staff) in connection with any claim, investigative, administrative or
judicial proceeding, whether or not such Indemnitee shall be designated a party
thereto and including any such proceeding initiated by or on behalf of any
Credit Party, and the expenses of investigation by experts, engineers,
environmental consultants and similar technical personnel and any commission,
fee or compensation claimed by any broker (other than any broker retained by any
Lending Party) asserting any right to payment for the transactions contemplated
hereby, which may be imposed on, incurred by or asserted against such Indemnitee
as a result of or in connection with the transactions contemplated hereby or by
the Loan Documents or the other Related Transactions Documents (including,
without limitation, (i)(A) as a direct or indirect result of the presence on or
under, or Release from, any Real Property now or previously owned, leased or
operated by any Credit Party of any Hazardous Materials or any Hazardous
Materials contamination, (B) arising out of or relating to the offsite disposal
of any
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Hazardous Materials generated or present on any such Real Property or (C)
arising out of or resulting from the environmental condition of any such Real
Property or the applicability of any governmental requirements relating to
Hazardous Materials, whether or not occasioned wholly or in part by any
condition, accident or event caused by any act or omission of any Credit Party,
and (ii) proposed and actual Extensions of Credit under this Agreement) and the
use or intended use of any Extension of Credit or the proceeds thereof, except
that the Credit Parties shall have no obligation hereunder to an Indemnitee with
respect to any liability to the extent resulting from the gross negligence or
willful misconduct of such Indemnitee as finally determined by a court of
competent jurisdiction. To the extent that the undertaking set forth in the
immediately preceding sentence may be unenforceable, each Credit Party shall
contribute the maximum portion which it is permitted to pay and satisfy under
Applicable Law to the payment and satisfaction of all such indemnified
liabilities incurred by the Indemnitees or any of them. Without limiting the
generality of any provision of this Section, to the fullest extent permitted by
law, each Credit Party hereby waives all rights for contribution or any other
rights of recovery with respect to liabilities, losses, damages, costs and
expenses arising under or relating to Environmental Laws that it might have by
statute or otherwise against any Indemnitee, except to the extent that such
items are finally determined by a court of competent jurisdiction to have
resulted solely from the gross negligence or willful misconduct of such
Indemnitee.
SECTION 9.3. TAXES.
(a) The Credit Parties jointly and severally agree to pay each
Lending Party, promptly following demand therefor, all Charges (excluding income
or other similar taxes imposed on any Lender or any holder of a Note by the
jurisdictions under the laws of which such Person seeking payment is organized
or conducts business or any political subdivision thereof), including any
interest or penalties thereon, at any time payable or ruled to be payable in
respect of the existence, execution or delivery of this Agreement, the Related
Transactions Documents or the making of any Extension of Credit, and to
indemnify and hold each Lending Party, and each and every holder of the Notes or
any other Obligation harmless against liability in connection with any such
Charges.
(b) Each Lender organized under the laws of a jurisdiction outside
the United States (a "Foreign Lender") as to which payments to be made under
this Agreement or under the Notes are exempt from United States withholding tax
or are subject to United States withholding tax at a reduced rate under an
applicable statute or tax treaty shall provide to the Borrower and Agent (i) a
properly completed and executed Internal Revenue Service Form W-8BEN or Form
W-8ECI or other applicable form, certificate or document prescribed by the
Internal Revenue Service of the United States certifying as to such Foreign
Lender's entitlement to such exemption or reduced rate of withholding with
respect to payments to be made to such Foreign Lender under this Agreement and
under the Notes (a "Certificate of Exemption") or (ii) a letter from any such
Foreign Lender stating that it is not entitled to any such exemption or reduced
rate of withholding (a "Letter of Non-Exemption"). Prior to becoming a Lender
under this Agreement and within fifteen (15) days after a reasonable written
request of the Borrower or Agent from time to time thereafter, each Foreign
Lender that becomes a Lender under this Agreement shall provide a Certificate of
Exemption or a Letter of Non-Exemption to the Borrower and Agent. If a Foreign
Lender is entitled to an exemption with respect to payments to be made to such
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Foreign Lender under this Agreement (or to a reduced rate of withholding) and
does not provide a Certificate of Exemption to the Borrower and Agent within the
time periods set forth in the preceding paragraph, the Borrower shall withhold
taxes from payments to such Foreign Lender at the applicable statutory rates and
the Borrower shall not be required to pay any additional amounts as a result of
such withholding, provided that all such withholding shall cease upon delivery
by such Foreign Lender of a Certificate of Exemption to the Borrower and Agent.
SECTION 9.4. CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY; FUNDING
LOSSES.
(a) If any Lender shall have determined that the introduction of
or any change in after the date hereof of any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy, reserve requirements or similar requirements or compliance by any
Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law)
from any central bank or other Governmental Authority increases or would have
the effect of increasing the amount of capital, reserves or other funds required
to be maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then the
Borrower shall from time to time upon demand by such Lender (with a copy of such
demand to the Agent) promptly pay to the Agent, for the account of such Lender,
additional amounts sufficient to compensate such Lender for such reduction. A
certificate as to the amount of such reduction that, at a minimum, shows the
basis of the computation thereof submitted by such Lender to the Borrower and to
the Agent shall be conclusive and binding on the Borrower for all purposes,
absent manifest error.
(b) If, as a result of either (i) the introduction of or any
change in any law or regulation (or any change in the interpretation thereof) or
(ii) the compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or making, funding or
maintaining any Loan, then the Borrower shall from time to time, upon demand by
such Lender (with a copy of such demand to the Agent), promptly pay to the Agent
for the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to the Borrower and to the Agent by such Lender, shall be
conclusive and binding on the Borrower for all purposes, absent manifest error.
(c) Notwithstanding anything to the contrary contained herein, if
the introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any Loan based on LIBOR,
then, unless that Lender is able to make or to continue to fund or to maintain
such LIBOR Loan at another branch or office of that Lender without, in that
Lender's opinion, adversely affecting it or its Loans or the income obtained
therefrom, on notice thereof and demand therefor by such Lender to the Borrower
through the Agent, (i) the obligation of such Lender to agree to make or to make
or to continue to fund or maintain LIBOR Loans shall terminate and (ii) the
Borrower shall forthwith prepay in full all outstanding LIBOR Loans owing to
such Lender, together with interest accrued thereon, unless the Borrower, within
five
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(5) Business Days after the delivery of such notice and demand, converts
all such Loans into Base Rate Loans.
(d) To induce Lenders to permit LIBOR Loans on the terms provided
herein, if (i) any LIBOR Loan is repaid in whole or in part prior to the last
day of any applicable LIBOR Period (whether that repayment is made pursuant to
any provision of this Agreement or any other Loan Document or is the result of
acceleration, by operation of law or otherwise), (ii) the Borrower shall default
in payment when due of the principal amount of or interest on any LIBOR Loan,
(iii) the Borrower shall default in making any borrowing of, Conversion into or
Continuation of any LIBOR Loan after the Borrower has given notice requesting
the same in accordance herewith, or (iv) the Borrower shall fail to make any
prepayment of a LIBOR Loan after the Borrower has given a notice thereof in
accordance herewith, then the Borrower shall indemnify and hold harmless each
Lender from and against all losses, costs and expenses resulting from or arising
from any of the foregoing. Such indemnification shall include any loss (but
excluding loss of margin) or expense arising from the reemployment of funds
obtained by it or from fees payable to terminate deposits from which such funds
were obtained. For the purpose of calculating amounts payable to a Lender under
this subsection, each Lender shall be deemed to have actually funded its
relevant LIBOR Loan through the purchase of a deposit bearing interest at the
LIBOR Rate in an amount equal to the amount of such LIBOR Loan and having a
maturity comparable to the relevant LIBOR Period; provided, that each Lender may
fund each of its LIBOR Loans in any manner it sees fit, and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this subsection. As promptly as practicable under the circumstances, each Lender
shall provide the Borrower with its written calculation of all amounts payable
pursuant to this Section 9.4(d), and such calculation shall be conclusive and
binding on the Borrower for all purposes, absent manifest error. The Borrower
shall pay to Lenders all amounts required to be paid by it hereunder promptly
upon demand therefor.
(e) Within fifteen (15) days after receipt by the Borrower of
written demand from any Lender (an "Affected Lender") for payment of additional
amounts or increased costs as provided in Sections 9.3, 9.4(a) or 9.4(b), the
Borrower may, at its option, notify Agent and such Affected Lender of its
intention to replace the Affected Lender. So long as no Default or Event of
Default has occurred and is continuing, the Borrower, with the consent of Agent,
may obtain, at the Borrower's expense, a replacement Lender ("Replacement
Lender") for the Affected Lender, which Replacement Lender must be reasonably
satisfactory to Agent. If the Borrower obtains a Replacement Lender within
ninety (90) days following notice of its intention to do so, the Affected Lender
must sell and/or assign its Loans and Commitments to such Replacement Lender for
an amount equal to the principal balance of all Loans held by the Affected
Lender and all accrued interest and Fees with respect thereto through the
effective date of such sale and/or assignment; provided that the Borrower shall
have reimbursed such Affected Lender for the additional amounts or increased
costs that it is entitled to receive under this Agreement through the effective
date of such sale and assignment. Notwithstanding the foregoing, the Borrower
shall not have the right to obtain a Replacement Lender if the Affected Lender
rescinds its demand for increased costs or additional amounts within fifteen
(15) days following its receipt of the Borrower's notice of intention to replace
such Affected Lender. Furthermore, if the Borrower gives a notice of intention
to replace and does not so replace such Affected Lender within ninety (90) days
thereafter, the Borrower's rights under this Section 9.4(d) shall terminate
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and the Borrower shall promptly pay all increased costs or additional amounts
demanded by such Affected Lender pursuant to Sections 9.3, 9.4(a) or 9.4(b).
(f) Each Lender agrees that, upon the occurrence of any event
giving rise to the operation of Sections 9.3, 9.4(a) or 9.4(b), 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
officer(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 Borrowers or the rights of any Lender pursuant to
Sections 9.3, 9.4(a) or 9.4(b).
ARTICLE X.
THE AGENT
SECTION 10.1. APPOINTMENT AND AUTHORIZATION. L/C Issuer and each Lender
hereby irrevocably designates and appoints as the Agent of L/C Issuer and
Lenders under this Agreement, and L/C Issuer and each such Lender irrevocably
authorizes as the Agent for L/C Issuer and Lenders, 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 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 Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with L/C Issuer or any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement, the other Loan Documents or otherwise exist against the
Agent. In performing its functions and duties under this Agreement, Agent shall
act solely as agent of Lenders and the L/C Issuer and does not assume and shall
not be deemed to have assumed any obligation toward or relationship of agency or
trust with or for the Borrower or any other Credit Party.
SECTION 10.2. DELEGATION OF DUTIES. The 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 Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care. Without limiting the foregoing, the Agent may appoint one of
its affiliates as its agent to perform the functions of the Agent hereunder
relating to the advancing of funds to the Borrower and distribution of funds to
L/C Issuer and the Lenders and to perform such other related functions of the
Agent hereunder as are reasonably incidental to such functions.
SECTION 10.3. AGENT AND AFFILIATES. Agent shall have the same rights
and powers under the Loan Documents as any other Lender and may exercise or
refrain from exercising the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include the Agent in its individual capacity. The
Agent and its Affiliates may lend money to and generally engage
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in any kind of business with any Credit Party or Affiliate thereof as if it were
not an Agent hereunder.
SECTION 10.4. ACTION BY AGENT. The duties of Agent shall be mechanical
and administrative in nature. Agent shall not have by reason of this Agreement a
fiduciary relationship to any Lending Party or any other Person. The obligations
of the Agent hereunder are only those expressly set forth herein and under the
other Loan Documents. Without limiting the generality of the foregoing, the
Agent shall not be required to take any action with respect to any Default,
except as expressly provided in Article VIII.
SECTION 10.5. CONSULTATION WITH EXPERTS. The Agent may consult with
legal counsel (who may be counsel for the Borrower), accountants and other
experts selected by it and shall not be liable for (a) any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts, or (b) any negligence or misconduct of any of
its legal counsel, accountants or other experts, provided that Agent has
exercised due care in the selection of such Persons.
SECTION 10.6. LIABILITY OF AGENT. Neither the Agent nor any of its
directors, officers, agents, representatives, employees or Affiliates shall be
liable for any action taken or not taken by it in connection with the Loan
Documents (a) with the consent or at the request or direction of the Required
Lenders, or (b) in the absence of its own gross negligence or willful
misconduct. Neither the Agent nor any of its directors, officers, agents,
representatives, employees or Affiliates shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made under or in connection with any Loan Document or any
Extension of Credit hereunder, (ii) the performance or observance of any of the
covenants or agreements of any Credit Party, (iii) the satisfaction of any
condition specified in Article III, except to confirm receipt of items required
to be delivered to the Agent, (iv) the validity, effectiveness, sufficiency or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith, or (v) the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any of the Loan Documents or for any failure of
the Borrower or any other Credit Party to perform its obligations under this
Agreement or any other Loan Document. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) or conversation believed by it to be genuine or to be signed by the
proper party or parties.
SECTION 10.7. INDEMNIFICATION. The L/C Issuer and each Lender shall,
ratably in accordance with its Revolving Credit Commitment or Term Loan
Commitment (whether or not such Commitments have been terminated), indemnify the
Agent (to the extent not reimbursed by the Credit Parties) against any cost,
expense (including counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from the Agent's gross negligence or willful
misconduct) that the Agent may suffer or incur in connection with the Loan
Documents or any action taken or omitted by the Agent under this Agreement or
any other Loan Document. The agreements in this Section 10.7 shall survive the
termination of this Agreement and payment of the Notes and all other amounts
payable hereunder.
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SECTION 10.8. CREDIT DECISION. L/C Issuer and each Lender acknowledges
that neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representation or warranty to it
and that no act by the Agent hereinafter taken, including any review of the
affairs of the Borrower or any other Credit Party, shall be deemed to constitute
any representation or warranty by the Agent to L/C Issuer or any Lender. L/C
Issuer and each Lender acknowledges that it has, independently and without
reliance upon the Agent, L/C Issuer or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and to make the Extensions of
Credit hereunder. L/C Issuer and each Lender also acknowledges that it will,
independently and without reliance upon the 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 decisions in connection with its taking or not
taking any action under the Loan Documents. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide L/C
Issuer or any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower or any other Credit Party which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.
SECTION 10.9. SUCCESSOR AGENT. The Agent may resign at any time by
giving thirty (30) days' prior written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Agent which, absent the occurrence and continuance of a
Default, must be acceptable to the Borrower (such acceptance not to be
unreasonably withheld or delayed). If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent gives notice of resignation,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be an institution organized or licensed under the laws of the
United States of America or of any State thereof. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
SECTION 10.10. RELIANCE BY AGENT. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it in good faith 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, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the Agent. The Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless (a) a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent and (b) the Agent shall have received the written
agreement of such assignee to be bound hereby as fully and to the same extent as
if such assignee were an original Lender party hereto, in each case in form
satisfactory to the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement unless it shall first receive
such advice or concurrence of the Required Lenders as it deems appropriate or
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it shall first be indemnified to its satisfaction by the L/C Issuer and Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under any of the Loan
Documents in accordance with a request of the Required Lenders or all of the
Lenders, as may be required under this Agreement, 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 Notes.
SECTION 10.11. NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender 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 Agent
receives such a notice, the Agent shall give prompt notice thereof to the L/C
Issuer and the Lenders. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided, that unless and until the Agent shall have received such
directions, the 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 L/C Issuer and
Lenders except to the extent that this Agreement expressly requires that such
action be taken, or not taken, only with the consent or upon the authorization
of the Required Lenders, or all of the Lenders, as the case may be.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1. SURVIVAL. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Agreement and the
other Loan Documents. The provisions of Article IX and the indemnities contained
in this Agreement and the other Loan Documents shall survive the termination of
this Agreement.
SECTION 11.2. NO WAIVERS; REMEDIES CUMULATIVE. No failure or delay by
the Agent, the L/C Issuer or any Lender in exercising any right, power or
privilege under any Loan Document shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein and therein provided shall be cumulative and not exclusive of
any rights or remedies provided by law, by other agreement or otherwise.
SECTION 11.3. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and shall be given to such party at
its address or facsimile number set forth in this Section or on the signature
pages hereof (or, in the case of any such Lender who becomes a Lender after the
date hereof, in a notice delivered to the Borrower and the Agent by the assignee
Lender forthwith upon such assignment) or at such other address or facsimile
number as such party may hereafter specify in writing for the purpose by notice
to the Agent and the Borrower. Each such notice, request or other communication
shall be effective (a) if given by facsimile, when transmitted to the facsimile
number specified in this Section and confirmation of receipt is
79
received by the sender, (b) if given by mail, upon the earlier of actual receipt
and five (5) Business Days after deposit in the United States Mail, registered
or certified mail, return receipt requested, properly addressed and with proper
postage prepaid, (c) one (1) Business Day after deposit with a reputable
overnight courier property addressed and with all charges prepaid or (d) when
received, if by any other means.
Notices shall be addressed as follows:
If to the Borrower: Castle Dental Centers, Inc.
0000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
Facsimile No.: 713.490.8420
Telephone No.: 000.000.0000
With a copy to each of: Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: 214.200.0720
Telephone No.: 000.000.0000
Sentinel Capital Partners, L.L.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mssrs. Xxxx X. Xxxxxx and
Xxxxx X. Xxxxx
Facsimile No.: 212.688.6513
Telephone No.: 000.000.0000
and
Xxxxxxxx & Xxxxx
Citigroup Center, 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxxx Xxxxx, Esq.
Facsimile No.: 212.446.4900
Telephone No.: 000.000.0000
If to Agent, L/C Issuer
or GE Capital: General Electric Capital Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Castle Dental Account Manager
Facsimile No.: 312.441.7598
Telephone No.: 000.000.0000
With a copy to: GE Healthcare Financial Services
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0 Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Legal Department
Facsimile No.: 301.664.9866
Telephone No.: 000.000.0000
If to L/C Issuer or a Lender: To the address set forth on the signature page
hereto or in the applicable Assignment Agreement.
SECTION 11.4. SEVERABILITY. In case any provision of or obligation
under this Agreement or any other Loan Document shall be invalid, illegal or
unenforceable in any applicable jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 11.5. AMENDMENTS AND WAIVERS. Any provision of this Agreement
or any other Loan Document may be amended or waived only if such amendment or
waiver is in writing and is signed by the Borrower and the Agent (if authorized
by the Required Lenders) or the Required Lenders (and, if the rights or duties
of the Agent or the L/C Issuer are affected thereby, by the Agent or L/C Issuer
as applicable); provided, that no such amendment or waiver shall, unless signed
by all the Lenders (i) increase or decrease any Commitment of any Lender (except
for a ratable decrease in the Commitments of all Lenders) or subject any Lender
to any additional obligation, (ii) reduce the principal of or rate of interest
on any Obligation or the amount of any Fees payable hereunder, (iii) postpone
the date fixed for any (A) payment of (1) principal of any Loan or Reimbursement
Obligation pursuant to Section 2.8, (2) of interest on any Loan or Reimbursement
Obligation or (3) any fees hereunder, or (B) termination of any Commitment, (iv)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Loans and Reimbursement Obligations which shall be required for
the Lenders or any of them to take any action under this Section or any other
provision of this Agreement, (e) release all or substantially all of the
Collateral, (f) release any Guarantors or (g) amend this Section 11.5 or the
definition of "Required Lenders."
SECTION 11.6. SUCCESSORS AND ASSIGNS; REGISTRATION. (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 (including any transferee of
any Note or other Obligation), except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all Lenders. Notwithstanding the foregoing, in the absence of
an Event of Default, each Lender covenants for the benefit of the Borrower that
it will not assign Loans, Obligations or the Commitments (or any combination
thereof) except with the prior written consent of the Borrower and the Agent (in
each instance which consent shall not be unreasonably withheld or delayed and
which consent of Borrower shall not be required if an Event of Default has
occurred and is continuing), provided, that each Lender retains the unrestricted
right to transfer, sell or assign any or all of its interest and obligations in
the Loans and the Commitments without respect to this sentence in the following
cases: (i) to any other Lender or any Affiliate of any Lender; (ii) to any
Person to the extent required to comply with any order, directive or request
from any Governmental Authority; (iii) to any Person in
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connection with the sale by any Lender of all or any substantial portion of such
Lender's corporate finance or healthcare capital portfolio; or (iv) to a
Qualified Assignee. Any assignment made pursuant to this Section 11.6 shall be
made pursuant to an Assignment Agreement substantially in the form of Exhibit L
(each such agreement referred to herein as an "Assignment Agreement").
(b) Any such assignee Lender shall, upon its registration in the
Note Register referred to below, become a "Lender" for all purposes hereunder.
The Agent shall receive a fee of $3,500 in connection with any such assignment,
including, without limitation, an assignment to an existing Lender (such fee
shall not be deemed payable by the Borrower or any other Credit Party). Upon any
such assignment, the assignor Lender shall be released from its Commitments to
the extent assigned to and assumed by the assignee Lender.
(c) Upon any assignment of any Note(s), the assigning Lender shall
surrender its Note(s) to the Borrower for exchange or registration of transfer,
and the Borrower will promptly execute and deliver in exchange therefor a new
Note or Note(s) of the same tenor and registered in the name of the assignor
Lender (if less than all of such Lender's Notes are assigned) and the name of
the assignee Lender.
(d) Each Lender may sell participations in all or any part of the
Loans, its Notes, its Commitments or its L/C Exposure. Any participation by a
Lender shall be made with the understanding that all amounts payable by the
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder.
Neither the Borrower nor any other Credit Party shall have any obligation or
duty to any participant. Neither the Agent, L/C Issuer nor any Lender (other
than the Lender selling a participation) shall have any duty to any participant
and may continue to deal solely with the Lender selling a participation as if no
such sale had occurred. No Lender shall, as between the Borrower and that
Lender, or Agent and/or L/C Issuer and that Lender, be relieved of any of its
obligations hereunder as a result of any participation in all or any part of the
Loans, its Note, its Commitments or other Obligations.
(e) The Agent shall maintain a register (the "Note Register") of
the Lenders and all assignee Lenders that are the holders of all the Notes and
other Obligations issued pursuant to this Agreement. Upon five (5) Business
Days' prior written notice to the Agent, the Agent will allow any Lender to
inspect and copy such list at the Agent's principal place of business during
normal business hours. Prior to the due presentment for registration of transfer
of any Note or other Obligation, the Agent may deem and treat the Person in
whose name a Note or Other Obligation is registered as the absolute owner of
such Note or Obligation for the purpose of receiving payment of principal of and
premium and interest on such Note or Obligation and for all other purposes
whatsoever, and the Agent shall not be affected by notice to the contrary.
(f) If any Note becomes mutilated and is surrendered by the Lender
with respect thereto to the Borrower, or if any Lender claims that any of its
Notes have been lost, destroyed or wrongfully taken, the Borrower shall execute
and deliver to such Lender a replacement Note(s), upon the affidavit of such
Lender attesting to such loss, destruction or
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wrongful taking with respect to such Note(s) and such lost, destroyed,
mutilated, surrendered or wrongfully taken Note(s) shall be deemed to be
canceled for all purposes hereof. Such affidavit shall be accepted as
satisfactory evidence of the loss, wrongful taking or destruction thereof and no
indemnity shall be required as a condition of the execution and delivery of a
replacement Note. Any costs and expenses of the Borrower in replacing any Note
shall be for the account of such Lender.
SECTION 11.7. SETOFF AND SHARING OF PAYMENTS. Upon the occurrence and
during the continuance of any Event of Default, each Lender (and each of its
Affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness any time owing by such Lender (or any of its affiliates) to
or for the credit or the account of any Credit Party against any and all of the
Obligations held by such Lender, irrespective of whether such Lender shall have
made any demand under this Agreement or any Note or such Obligations and
although such Obligations my be unmatured. Each Lender agrees promptly to notify
the Borrower and Agent after any such set-off and application made by such
Lender; provided, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have. If any Lender (a
"Benefited Lender") shall at any time receive any payment of all or part of the
Loans or other Obligations or other amounts owing to it hereunder, or interest
thereon, or receive any Collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, or otherwise), in a greater proportion than any such
payment to or Collateral received by any other Lender, if any, in respect of
such other Lender's Loans, Obligations or other amounts owing to it hereunder,
or interest thereon, such Benefited Lender shall purchase for cash from the
other Lender(s) a participating interest in such portion of each such other
Lender's Loans and other Obligations owing to it, or shall provide such other
Lender(s) with the benefits of any such Collateral, or the proceeds thereof, as
shall be necessary to cause such Benefited Lender to share the excess payment or
benefits of such Collateral or proceeds ratably with each of the Lenders;
provided, that if all or any such purchase shall be rescinded, and the purchase
price and benefits are thereafter recovered from such Benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. Each Credit Party agrees that
any Lender so purchasing a participation from any other Lender pursuant to this
Section 11.7 may, to the fullest extent permitted by law, and notwithstanding
the provisions of Section 11.6(d), exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such purchasing Lender were the direct creditor of such Credit Party in the
amount of such participation.
SECTION 11.8. COLLATERAL. Each of the Lenders represents to the Agent
and each of the other Lenders that it in good faith is not relying upon any
Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 11.9. HEADINGS. Headings and captions used in the Loan
Documents (including all exhibits and schedules thereto) are included herein and
therein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
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SECTION 11.10. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES. EACH OF THE BORROWER AND THE OTHER CREDIT PARTIES PARTY HERETO
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS STATE COURT
SITTING IN CHICAGO, ILLINOIS FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
OF THE BORROWER AND THE OTHER CREDIT PARTIES PARTY HERETO IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.3. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 11.11. NOTICE OF BREACH BY AGENT OR LENDER. The Credit Parties
party hereto agree to give the Agent and the Lenders notice of any action or
inaction by the Agent or any Lender or any agent or attorney of the Agent or any
Lender in connection with this Agreement or any other Loan Document or the
Obligations of the Credit Parties under this Agreement or any other Loan
Document that may be actionable against the Agent or any Lender or any agent or
attorney of the Agent or any Lender or a defense to payment of any Obligations
of the Credit Parties under this Agreement or any other Loan Document for any
reason, including commission of a tort or violation of any contractual duty or
duty implied by law. The Credit Parties party hereto agree, to the fullest
extent that they may lawfully do so, that unless such notice is given promptly
(and in any event within ten (10) days after any Credit Party has knowledge, or
with the exercise of reasonable diligence could have had knowledge, of any such
action or inaction), no Credit Party shall assert, and each Credit Party shall
be deemed to have waived, any claim or defense arising therefrom to the extent
that the Agent or any Lender could have mitigated such claim or defense after
receipt of such notice.
SECTION 11.12. WAIVER OF JURY TRIAL. EACH OF THE CREDIT PARTIES PARTY
HERETO, AGENT, L/C ISSUER AND LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND TO THE FULLEST EXTENT
PERMITTED BY LAW WAIVES ANY RIGHTS THAT IT MAY HAVE TO CLAIM OR RECEIVE
CONSEQUENTIAL OR SPECIAL DAMAGES IN CONNECTION WITH ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
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SECTION 11.13. COUNTERPARTS. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto.
SECTION 11.14. CONFIDENTIALITY; PRESS RELEASE. (a) Any information from
time to time delivered to the Agent and/or the Lenders by the Borrower or any
other Credit Party which is identified as confidential and which is not in the
public domain shall be held by the Agent or such Lender as confidential;
provided, that the Agent and each Lender may make disclosure of such information
(i) to its independent accountants and legal counsel (which Persons shall be
likewise bound by the provisions of this Section 11.14), (ii) pursuant to
statutory and regulatory requirements, (iii) pursuant to any mandatory court
order or subpoena or in connection with any legal process, (iv) pursuant to any
written agreement hereafter made between the Agent, any Lender and the Borrower
or any other Credit Party to which such information relates, which agreement
permits such disclosure, (v) as necessary in connection with the exercise of any
remedy by Agent or any Lender under the Loan Documents, (vi) consisting of
general portfolio information that does not identify any Credit Party, (vii)
which was heretofore been publicly disclosed or is otherwise available to such
Agent and/or Lender on a non-confidential basis from a source that is not, to
its knowledge, subject to a confidentiality agreement with any Credit Party,
(viii) in connection with any litigation to which Agent or any Lender or its
Affiliates is a party, or (ix) subject to an agreement containing provisions
substantially the same as those set forth in this Section 11.14, to any assignee
of or participant in, or prospective assignee of or participant in, any of the
Obligations.
(b) No Credit Party nor GE Capital will (or cause any of their
respective Affiliates to) in the future issue any press releases or other public
disclosure using the name of such other Person (or group of Persons, as
applicable) or its Affiliates or any other Lender or its Affiliates or referring
to this Agreement or the other Loan Documents without at least two (2) Business
Days prior notice to such other Person (or group of Persons, as applicable) and
without the prior written consent of such other Person (or group of Persons, as
applicable) unless (and only to the extent that) such other Person (or group of
Persons, as applicable) or Affiliate is required to do so under law and then, in
any event, such disclosing party will (and use its best efforts to cause each of
its applicable Affiliates to) consult with such other Person (or group of
Persons, as applicable) before issuing such press release or other public
disclosure. Each Credit Party consents to the publication by Agent or any Lender
of a tombstone or similar advertising material relating to the financing
transactions contemplated by this Agreement. Agent reserves the right to provide
to industry trade organizations information necessary and customary for
inclusion in league table measurements.
SECTION 11.15. REINSTATEMENT. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against any Credit Party for liquidation or reorganization, should any Credit
Party become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any Credit Party's assets or properties, and shall continue
to be effective or to be reinstated, as the case may be, if at any time payment
and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a "voidable
85
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
SECTION 11.16. ADVICE OF COUNSEL. Each of the parties represents to
each other party hereto that it has discussed this Agreement and the other Loan
Documents and, specifically, the provisions of Sections 9.2, 11.10 and 11.12,
with its counsel.
SECTION 11.17. NO STRICT CONSTRUCTION. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement and the
other Loan Documents. In the event any ambiguity or question of intent or
interpretation arises, this Agreement and the other Loan Documents shall be
construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement. Section 11.18. Conflict of
Terms. Except as otherwise provided in this Agreement or any of the other Loan
Documents by specific reference to the applicable provisions of this Agreement,
if any provision contained in this Agreement conflicts with any provision in any
of the other Loan Documents, the provision contained in this Agreement shall
govern and control.
SECTION 11.19. ENTIRETY. THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE CREDIT PARTIES, LENDERS, AND AGENT AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed by their respective authorized representatives on
the date first above written.
CASTLE DENTAL CENTERS, INC.,
a Delaware corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Borrower Account Information:
Bank's Name and Address:
--------------------------------------------
--------------------------------------------
--------------------------------------------
Account #
-----------------------------------
ABA #
---------------------------------------
Ref #
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OTHER CREDIT PARTIES:
CASTLE DENTAL CENTERS OF TENNESSEE, INC.,
a Tennessee corporation
By:
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Name:
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Title:
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CASTLE DENTAL CENTERS OF FLORIDA, INC.,
a Florida corporation
By:
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Name:
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Title:
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CDC OF CALIFORNIA, INC.
a Delaware corporation
By:
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Name:
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Title:
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Credit Agreement
CASTLE TEXAS HOLDINGS, INC.,
a Delaware corporation
By:
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Name:
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Title:
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CASTLE DENTAL CENTERS OF CALIFORNIA, L.L.C.,
a Delaware limited liability company
By:
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Name:
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Title:
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CASTLE DENTAL CENTERS OF TEXAS, INC.,
a Texas corporation
By:
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Name:
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Title:
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Credit Agreement
AGENT AND LENDERS:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Lender and as Agent
By:
Revolving Credit -----------------------------------------
Commitment: $3,500,000 Name:
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Term Loan Its: Duly Authorized signatory
Commitment: $12,500,000
Credit Agreement
