EXHIBIT 10.3
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CREDIT AGREEMENT
among
VANGUARD HEALTH SYSTEMS, INC.,
VARIOUS LENDERS,
BANC OF AMERICA SECURITIES LLC and
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as JOINT LEAD ARRANGERS AND BOOK MANAGERS,
BANK OF AMERICA, N.A.,
as ADMINISTRATIVE AGENT,
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as SYNDICATION AGENT,
and
FIRST UNION NATIONAL BANK and
GENERAL ELECTRIC CAPITAL CORPORATION,
as CO-DOCUMENTATION AGENTS
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Dated as of July 30, 2001
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit........................................1
1.01 The Commitments................................................1
1.02 Minimum Amount of Each Borrowing...............................4
1.03 Notice of Borrowing............................................4
1.04 Disbursement of Funds..........................................5
1.05 Notes..........................................................6
1.06 Conversions....................................................7
1.07 Pro Rata Borrowings............................................8
1.08 Interest.......................................................8
1.09 Interest Periods...............................................9
1.10 Increased Costs, Illegality, etc..............................10
1.11 Compensation..................................................12
1.12 Change of Lending Office......................................13
1.13 Incremental Term Loan Commitments.............................13
1.14 Replacement of Lenders........................................17
1.15 Additional Provisions Regarding the Incurrence of Eurodollar
Loans Prior to the Syndication Date.........................19
SECTION 2. Letters of Credit................................................19
2.01 Letters of Credit.............................................19
2.02 Maximum Letter of Credit Outstandings; Final Maturities.......20
2.03 Letter of Credit Requests; Minimum Stated Amount..............20
2.04 Letter of Credit Participation................................21
2.05 Agreement to Repay Letter of Credit Drawings..................23
2.06 Increased Costs...............................................23
SECTION 3. Fees; Reductions of Commitment...................................24
3.01 Fees..........................................................24
3.02 Voluntary Termination of Unutilized Commitments...............25
3.03 Mandatory Reduction of Commitments............................26
SECTION 4. Prepayments; Payments; Taxes.....................................27
4.01 Voluntary Prepayments.........................................27
4.02 Mandatory Repayments..........................................28
4.03 Method and Place of Payment...................................34
4.04 Net Payments; Taxes...........................................34
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SECTION 5A. Conditions Precedent to Effective Date..........................37
5A.01 Execution of Agreement; Notes................................37
5A.02 Fees, etc....................................................37
5A.03 Opinion of Counsel...........................................37
5A.04 Corporate Documents; Proceedings; etc........................37
5A.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Collective Bargaining Agreements; Existing
Indebtedness Agreements; Tax Sharing Agreements; Material
Leases.....................................................38
5A.06 Senior Subordinated Notes....................................39
5A.07 Refinancing..................................................39
5A.08 Pledge Agreement.............................................40
5A.09 Subsidiaries Guaranty........................................40
5A.10 Security Agreement...........................................40
5A.11 Mortgages; Title Insurance; Survey; etc......................41
5A.12 Adverse Change; Approvals; etc...............................41
5A.13 Litigation...................................................42
5A.14 Pro Forma Balance Sheet; Projections.........................42
5A.15 Solvency Certificate; Insurance Certificates.................42
5A.16 Maximum Leverage Ratio.......................................42
SECTION 5B. Conditions Precedent to each Incurrence of Incremental
Term Loans......................................................42
5B.01 Occurrence of Syndication Date...............................42
5B.02 Incremental Term Loan Commitment Agreement; Related
Documentation..............................................42
5B.03 Incremental Term Notes.......................................43
5B.04 Officer's Certificate........................................43
5B.05 Other Conditions Specified in the Relevant Incremental Term
Loan Commitment Agreement..................................43
SECTION 6. Conditions Precedent to All Credit Events........................43
6.01 No Default; Representations and Warranties....................43
6.02 Notice of Borrowing; Letter of Credit Request.................43
SECTION 7. Representations and Warranties...................................44
7.01 Corporate and Other Status....................................44
7.02 Corporate or Partnership Power and Authority..................44
7.03 No Violation..................................................45
7.04 Governmental Approvals........................................45
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc..............................45
7.06 Litigation....................................................46
7.07 True and Complete Disclosure..................................47
7.08 Use of Proceeds; Margin Regulations...........................47
7.09 Tax Returns and Payments......................................47
7.10 Compliance with ERISA.........................................48
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7.11 The Security Documents........................................49
7.12 Approvals; etc................................................49
7.13 Properties....................................................49
7.14 Capitalization................................................50
7.15 Subsidiaries..................................................50
7.16 Compliance with Statutes, etc.................................50
7.17 Investment Company Act........................................50
7.18 Public Utility Holding Company Act............................50
7.19 Environmental Matters.........................................50
7.20 Labor Relations...............................................51
7.21 Patents, Licenses, Franchises and Formulas....................51
7.22 Indebtedness..................................................52
7.23 Hospital Properties...........................................52
7.24 Subordination.................................................52
7.25 Legal Names; Organizational Identification Numbers; Jurisdiction
and Type of Organization; etc..............................52
7.26 No Director, Executive Officer or Principal Shareholder.......52
SECTION 8. Affirmative Covenants............................................52
8.01 Information Covenants.........................................53
8.02 Books, Records and Inspections................................55
8.03 Maintenance of Property; Insurance, Reserves..................56
8.04 Corporate Franchises..........................................56
8.05 Compliance with Statutes, etc.................................56
8.06 Compliance with Environmental Laws............................56
8.07 ERISA.........................................................57
8.08 End of Fiscal Years; Fiscal Quarters..........................58
8.09 Performance of Obligations....................................58
8.10 Payment of Taxes..............................................59
8.11 Accreditation and Licensing...................................59
8.12 Additional Security; Further Assurances.......................59
8.13 Use of Proceeds...............................................61
8.14 VHS Phoenix Health Plan, Inc..................................61
SECTION 9. Negative Covenants...............................................61
9.01 Liens.........................................................61
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc........64
9.03 Dividends.....................................................67
9.04 Indebtedness..................................................68
9.05 Advances, Investments and Loans...............................71
9.06 Transactions with Affiliates..................................73
9.07 Capital Expenditures..........................................74
9.08 Consolidated Interest Coverage Ratio..........................76
9.09 Consolidated Leverage Ratio...................................77
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9.10 Limitation on Payments of Certain Indebtedness; Modifications
of Certain Indebtedness and PIK Preferred Stock;
Modifications of Certificate of Incorporation, By-Laws and
Certain Agreements; etc....................................77
9.11 Limitation on Certain Restrictions on Subsidiaries............78
9.12 Limitation on Issuance of Capital Stock.......................79
9.13 Business......................................................79
9.14 Limitation on Creation of Subsidiaries and Health Care Joint
Ventures...................................................80
9.15 Changes To Legal Names; Organizational Identification Numbers,
Jurisdiction or Type of Organization.......................81
9.16 No Designation of Other Indebtedness as "Designated Senior
Indebtedness"..............................................82
9.17 Limitation on Assets Held By Non-Guarantor Subsidiaries.......82
SECTION 10. Events of Default...............................................82
10.01 Payments.....................................................82
10.02 Representations, etc.........................................82
10.03 Covenants....................................................82
10.04 Default Under Other Agreements...............................82
10.05 Bankruptcy, etc..............................................83
10.06 ERISA........................................................83
10.07 Security Documents...........................................84
10.08 Subsidiaries Guaranty........................................84
10.09 Judgments....................................................84
10.10 Change of Control............................................84
SECTION 11. Definitions and Accounting Terms................................85
11.01 Defined Terms................................................85
11.02 Certain Pro Forma Calculations..............................114
SECTION 12. The Agents and the Joint Lead Arrangers........................118
12.01 Appointment.................................................118
12.02 Nature of Duties............................................118
12.03 Lack of Reliance on the Agents and the Joint Lead Arrangers.119
12.04 Certain Rights of the Agents and the Joint Lead Arrangers...119
12.05 Reliance....................................................119
12.06 Indemnification.............................................119
12.07 The Agents and the Joint Lead Arrangers in their Individual
Capacities................................................120
12.08 Holders.....................................................120
12.09 Resignation by the Agents and the Joint Lead Arrangers......120
SECTION 13. Miscellaneous..................................................121
13.01 Payment of Expenses, etc....................................121
13.02 Right of Setoff.............................................122
13.03 Notices.....................................................123
13.04 Benefit of Agreement........................................124
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13.05 No Waiver; Remedies Cumulative..............................125
13.06 Payments Pro Rata...........................................126
13.07 Calculations; Computations..................................126
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL.................................127
13.09 Counterparts................................................128
13.10 Effectiveness...............................................128
13.11 Headings Descriptive........................................128
13.12 Amendment or Waiver; etc....................................128
13.13 Survival....................................................130
13.14 Domicile of Loans...........................................130
13.15 Confidentiality.............................................130
13.16 Register....................................................131
13.17 Limitation on Increased Costs...............................132
SCHEDULE I Commitments
SCHEDULE II Lender Addresses
SCHEDULE III Existing Letters of Credit
SCHEDULE IV Real Property
SCHEDULE V ERISA Matters
SCHEDULE VI Subsidiaries
SCHEDULE VII Intellectual Property
SCHEDULE VIII Existing Indebtedness
SCHEDULE IX Insurance
SCHEDULE X Existing Liens
SCHEDULE XI Existing Investments
SCHEDULE XII Legal Names; Organizational Identification Numbers; Jurisdiction
of Organization; Type of Organization; etc.
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Revolving Note
EXHIBIT B-2 Swingline Note
EXHIBIT B-3 Incremental Term Note
EXHIBIT C Incremental Term Loan Commitment Agreement
EXHIBIT D Letter of Credit Request
EXHIBIT E Section 4.04(b)(ii) Certificate
EXHIBIT X-0 Xxxxxxx xx Xxxxx, Xxxx & Xxxxxxxx, Special Counsel to the Credit
Parties
EXHIBIT F-2 Opinion of Xxxxxx X. Xxxxxxx, Esq., General Counsel to the
Credit Parties
EXHIBIT G Officers' Certificate
EXHIBIT H Pledge Agreement
EXHIBIT I Subsidiaries Guaranty
EXHIBIT J Security Agreement
EXHIBIT K Compliance Certificate
EXHIBIT L Solvency Certificate
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EXHIBIT M Intercompany Note
EXHIBIT N Subordination Agreement
EXHIBIT O Joinder Agreement
EXHIBIT P Assignment and Assumption Agreement
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CREDIT AGREEMENT, dated as of July 30, 2001, among VANGUARD HEALTH
SYSTEMS, INC., a Delaware corporation (the "Borrower"), the Lenders party
hereto from time to time, BANC OF AMERICA SECURITIES LLC and XXXXXX XXXXXXX
SENIOR FUNDING, INC., as Joint Lead Arrangers and Book Managers (in such
capacities, each a "Joint Lead Arranger" and, collectively, the "Joint Lead
Arrangers"), BANK OF AMERICA, N.A., as Administrative Agent (in such capacity,
the "Administrative Agent"), XXXXXX XXXXXXX SENIOR FUNDING, INC., as
Syndication Agent (in such capacity, the "Syndication Agent") and FIRST UNION
NATIONAL BANK and GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Documentation
Agents (in such capacities, each a "Co-Documentation Agent" and, collectively,
the "Co-Documentation Agents") (all capitalized terms used herein and defined
in Section 11 are used herein as therein defined).
W I T N E S S E T H:
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WHEREAS, subject to and upon the terms and conditions herein set
forth, the Lenders are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Lender with a Revolving Loan Commitment
severally agrees, at any time and from time to time on and after the Effective
Date and prior to the Revolving Loan Maturity Date, to make a revolving loan or
revolving loans (each, a "Revolving Loan" and, collectively, the "Revolving
Loans") to the Borrower, which Revolving Loans (i) shall, at the option of the
Borrower, be Base Rate Loans or, subject to Section 1.15, Eurodollar Loans,
provided that, except as otherwise specifically provided in Section 1.10(b),
all Revolving Loans comprising the same Borrowing shall at all times be of the
same Type, (ii) may be repaid and reborrowed at any time in accordance with the
provisions hereof, (iii) shall not exceed for any such Lender at any time
outstanding that aggregate principal amount which, when added to the product of
(A) such Lender's Percentage and (B) the sum of (I) the aggregate amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Revolving Loan
Commitment of such Lender at such time and (iv) shall not exceed for all
Lenders at any time outstanding that aggregate principal amount which, when
added to (I) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time and (II) the aggregate principal amount of all Swingline
Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence
of Revolving Loans) then outstanding, equals the Total Revolving Loan
Commitment at such time.
(b) Subject to and upon the terms and conditions set forth herein,
the Swingline Lender agrees to make, at any time and from time to time after
the Effective Date and prior to the Swingline Expiry Date, a revolving loan or
revolving loans (each a "Swingline Loan" and, collectively, the "Swingline
Loans") to the Borrower, which Swingline Loans (i) shall be made and maintained
as Base Rate Loans, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed in aggregate principal amount at any
time outstanding, when combined with the aggregate principal amount of all
Revolving Loans then outstanding and the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Swingline
Loans) at such time, an amount equal to the Total Revolving Loan Commitment at
such time, and (iv) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount. The Swingline Lender shall not be
obligated to make any Swingline Loans at a time when a Lender Default exists
unless the Swingline Lender has entered into an arrangement satisfactory to it
and the Borrower, to eliminate the Swingline Lender's risk with respect to the
Lender which is the subject of such Lender Default, including by cash
collateralizing the Lender's Percentage of the outstanding Swingline Loans.
Notwithstanding anything to the contrary contained in this Section 1.01(b), the
Swingline Lender shall not make any Swingline Loan after it has received
written notice from the Borrower or the Required Lenders stating that a Default
or an Event of Default exists and is continuing until such time as (A) the
Swingline Lender shall have received written notice (i) of rescission of all
such notices from the party or parties originally delivering such notice, or
(ii) of the waiver of such Default or Event of Default by the Required Lenders
or (B) the Administrative Agent in good faith believes that such Default or
Event of Default has ceased to exist.
(c) On any Business Day, the Swingline Lender may, in its sole
discretion, give notice to the Lenders with Revolving Loan Commitments that its
outstanding Swingline Loans shall be funded with one or more Borrowings of
Revolving Loans (provided that such notice shall be deemed to have been
automatically given upon the occurrence of a Default or an Event of Default
under Section 10.05 or upon the exercise of any of the remedies provided in the
last paragraph of Section 10), in which case one or more Borrowings of
Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all
such Lenders pro rata based on each such Lender's Percentage (determined before
giving effect to any termination of the Revolving Loan Commitments pursuant to
the last paragraph of Section 10) and the proceeds thereof shall be applied
directly by the Swingline Lender to repay the Swingline Lender for such
outstanding Swingline Loans. Each such Lender hereby irrevocably agrees to make
Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by the Swingline Lender notwithstanding
(i) the amount of the Mandatory Borrowing may not comply with the Minimum
Borrowing Amount otherwise required hereunder, (ii) whether any conditions
specified in Section 6 are then satisfied, (iii) whether a Default or an Event
of Default then exists, (iv) the date of such Mandatory Borrowing and (v) the
amount of the Total Revolving Loan Commitment at such time. In the event that
any Mandatory Borrowing cannot for any reason be
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made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower), then each such Lender hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on or after
such date and prior to such purchase) from the Swingline Lender such
participations in the outstanding Swingline Loans as shall be necessary to
cause such Lenders to share in such Swingline Loans ratably based upon their
respective Percentages (determined before giving effect to any termination of
the Total Revolving Loan Commitment pursuant to the last paragraph of Section
10), provided that (x) all interest payable on the Swingline Loans shall be for
the account of the Swingline Lender until the date as of which the respective
participation is required to be purchased and, to the extent attributable to
the purchased participation, shall be payable to the participant from and after
such date, (y) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Lender shall be required to pay the
Swingline Lender interest on the principal amount of participation purchased
for each day from and including the day upon which the Mandatory Borrowing
would otherwise have occurred to but excluding the date of payment for such
participation, at the overnight Federal Funds Rate for the first three days and
at the rate otherwise applicable to Revolving Loans maintained as Base Rate
Loans hereunder for each day thereafter and (z) whenever the Swingline Lender
receives a payment in respect of a Swingline Loan in which such a participation
has been purchased, the Swingline Lender shall pay to the Lenders which
acquired such participation an amount equal to such Lenders' share in such
Swingline Loan.
(d) Subject to Section 1.13, the other terms and conditions set forth
herein and the relevant Incremental Term Loan Commitment Agreement, each Lender
with an Incremental Term Loan Commitment severally agrees to make a term loan
or term loans (each, an "Incremental Term Loan" and, collectively, the
"Incremental Term Loans") to the Borrower, which Incremental Term Loans: (i)
only may be incurred on one or more Incremental Term Loan Borrowing Dates
(which dates, in any event (x) shall not be earlier than the Syndication Date
and (y) shall not be later than the Revolving Loan Maturity Date); (ii) except
as hereafter provided, shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that all Incremental Term Loans made as part of the same Borrowing
shall, unless otherwise specifically provided herein, consist of Incremental
Term Loans of the same Type; (iii) shall be made by each such Lender in that
aggregate principal amount which does not exceed the Incremental Term Loan
Commitment of such Lender (as set forth in the relevant Incremental Term Loan
Commitment Agreement) on the respective Incremental Term Loan Borrowing Date
and (iv) shall not exceed $150,000,000 in aggregate principal amount for all
Incremental Term Loans made by all Incremental Term Loan Lenders pursuant to
this Agreement and the various Incremental Term Loan Commitment Agreements,
provided that the aggregate principal amount of Incremental Term Loans may
exceed such $150,000,000 amount so long as at the time of the incurrence of
Incremental Term Loans in excess of such $150,000,000 amount the Consolidated
Senior Leverage Ratio (calculated on a Post-Test Period Pro Forma Basis and
assuming that all Incremental Term Loans to be incurred on such date or
pursuant to any other then existing Incremental Term Loan Commitment Agreements
have been incurred and the proceeds thereof have been applied in a manner as
certified to by an Authorized Officer of the Borrower to the Administrative
Agent) is less than
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2.50:1.00, provided further, however, that in no event shall the aggregate
principal amount of all Incremental Term Loans made by all Incremental Term
Loan Lenders pursuant to this Agreement and the various Incremental Term Loan
Commitment Agreements exceed $250,000,000. Once repaid, Incremental Term Loans
may not be reborrowed.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
of each Borrowing of Loans shall not be less than the Minimum Borrowing Amount
applicable thereto. More than one Borrowing may occur on the same date, but at
no time shall there be outstanding as Eurodollar Loans under any Tranche a
greater number of Borrowings than the Maximum Eurodollar Borrowing Number
applicable to such Tranche.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to incur
a Borrowing of Loans (excluding Swingline Loans and Revolving Loans incurred
pursuant to a Mandatory Borrowing), the Borrower shall give the Administrative
Agent at the Notice Office at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Base Rate Loan and at
least three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) of each Eurodollar Loan to be made hereunder, provided
that any such notice shall be deemed to have been given on a certain day only
if given before 1:00 P.M. (New York time) on such day. Each such written notice
or written confirmation of telephonic notice (each a "Notice of Borrowing"),
except as otherwise expressly provided in Section 1.10, shall be irrevocable
and shall be given by the Borrower in the form of Exhibit A, appropriately
completed to specify (i) the aggregate principal amount of the Loans to be
incurred pursuant to such Borrowing, (ii) the date of such Borrowing (which
shall be a Business Day) and (iii) whether the Loans being made pursuant to
such Borrowing shall constitute Revolving Loans or Incremental Term Loans (and,
if Incremental Term Loans, the Tranche under which such Incremental Term Loans
are to be made, as designated in the relevant Incremental Term Loan Commitment
Agreement) and whether the Loans being incurred pursuant to such Borrowing are
to be initially maintained as Base Rate Loans or Eurodollar Loans and, if
Eurodollar Loans, the initial Interest Period to be applicable thereto.
Notwithstanding anything to the contrary contained above, if Incremental Term
Loans are being extended which are being added to (and will form part of) an
existing Tranche of Incremental Term Loans, then the Incremental Term Loans
being so extended shall be added to the existing Borrowings of the respective
Tranche in accordance with the requirements of Section 1.13 and the respective
Notice of Borrowing shall be completed consistently therewith. The
Administrative Agent shall promptly give each Lender which is required to make
Loans of the Tranche specified in the respective Notice of Borrowing notice of
such proposed Borrowing, of such Lender's proportionate share thereof and of
the other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline
Loans hereunder, the Borrower shall give the Swingline Lender no later than
2:00 P.M. (New York time) on the date that a Swingline Loan is to be incurred,
written notice or telephonic notice promptly confirmed in writing of each
Swingline Loan to be incurred hereunder. Each such notice shall be irrevocable
and specify in each case (A) the date of Borrowing (which shall be a Business
Day) and (B) the aggregate principal amount of the Swingline Loans to be
incurred pursuant to such Borrowing.
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(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(c), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(c).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing or prepayment of
Loans, the Administrative Agent or the Swingline Lender, as the case may be,
may act without liability upon the basis of telephonic notice of such Borrowing
or prepayment believed by the Administrative Agent or the Swingline Lender, as
the case may be, in good faith to be from an Authorized Officer of the Borrower
prior to receipt of written confirmation. In each such case, the Borrower
hereby waives the right to dispute the Administrative Agent's or the Swingline
Lender's record of the terms of such telephonic notice of such Borrowing or
prepayment of Loans (absent manifest error).
1.04 Disbursement of Funds. No later than 2:00 P.M. (New York time)
on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, no later than 3:00 P.M. (New York time) on the date specified
pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no
later than 12:00 Noon (New York time) on the date specified in Section
1.01(c)), each Lender with a Commitment under the respective Tranche will
disburse its pro rata portion of each Borrowing requested to be made on such
date (or, in the case of Swingline Loans, the Swingline Lender will make
available the full amount thereof). All such amounts shall be disbursed in
Dollars and in immediately available funds at the Payment Office and the
Administrative Agent will promptly disburse to the Borrower at the Payment
Office, in Dollars and in immediately available funds, the aggregate of the
amounts so made available by the Lenders (other than in respect of Mandatory
Borrowings). Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to
disburse to the Administrative Agent such Lender's portion of any Borrowing to
be made on such date, the Administrative Agent may assume that such Lender has
disbursed such amount to the Administrative Agent on such date of Borrowing and
the Administrative Agent may, in reliance upon such assumption, disburse to the
Borrower a corresponding amount. If such corresponding amount is not in fact
disbursed to the Administrative Agent by such Lender, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Lender. If such Lender does not pay such corresponding amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower and the Borrower shall within three Business Days
thereafter pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover (without duplication) on
demand from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was disbursed by the Administrative Agent to the Borrower until the date
such corresponding amount is recovered by the Administrative Agent, at a rate
per annum equal to (i) if recovered from such Lender, the overnight Federal
Funds Rate for the first three days and the interest rate otherwise applicable
to such Loans for each day thereafter and (ii) if recovered from the Borrower,
the rate of interest applicable to the respective Borrowing, as determined
pursuant to Section 1.08. Nothing in this Section 1.04 shall be deemed to
relieve any Lender from its obligation to make Loans hereunder or to prejudice
any rights which the Borrower may have against any Lender as a result of any
failure by such Lender to make Loans hereunder.
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1.05 Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made by each Lender to the Borrower shall be
evidenced in the Register maintained by the Administrative Agent pursuant to
Section 13.16 and shall, if requested by such Lender, also be evidenced by (i)
if Revolving Loans, a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-1, with blanks appropriately
completed in conformity herewith (each, a "Revolving Note" and, collectively,
the "Revolving Notes"), (ii) if Swingline Loans, by a promissory note duly
executed by the Borrower substantially in the form of Exhibit B-2, with blanks
appropriately completed in conformity herewith (the "Swingline Note") and (iii)
if Incremental Term Loans, by a promissory note duly executed and delivered by
the Borrower substantially in the form of Exhibit B-3, with blanks
appropriately completed in conformity herewith and the relevant Incremental
Term Loan Commitment Agreement (each an "Incremental Term Note" and
collectively, the "Incremental Term Notes").
(b) The Revolving Note issued to each Lender that has a Revolving
Loan Commitment or outstanding Revolving Loans shall (i) be executed by the
Borrower, (ii) be payable to such Lender or its registered assigns and be dated
the Effective Date (or, if issued after the Effective Date, be dated the date
of the issuance thereof), (iii) be in a stated principal amount equal to the
Revolving Loan Commitment of such Lender (or, if issued after the termination
thereof, be in a stated principal amount equal to the outstanding Revolving
Loans of such Lender at such time) and be payable in the outstanding principal
amount of the Revolving Loans evidenced thereby, (iv) mature on the Revolving
Loan Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(c) The Swingline Note issued to the Swingline Lender shall (i) be
executed by the Borrower, (ii) be payable to the Swingline Lender or its
registered assigns and be dated the Effective Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in the
outstanding principal amount of the Swingline Loans evidenced thereby from time
to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(d) The Incremental Term Note issued to each Lender that has an
Incremental Term Loan Commitment or outstanding Incremental Term Loans of a
given Tranche shall (i) be executed by the Borrower, (ii) be payable to the
order of such Lender or its registered assigns and be dated the date of the
issuance thereof, (iii) be in a stated principal amount equal to the principal
amount of outstanding Incremental Term Loans of such Lender of the respective
Tranche on such date and be payable in the principal amount of Incremental Term
Loans evidenced thereby, (iv) mature on the Incremental Term Loan Maturity Date
of the respective Tranche, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to
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voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents. In connection with the foregoing, it
is understood and agreed that (x) any Lender that has Incremental Term Loans
outstanding pursuant to more than one Tranche shall be entitled, upon its
request, to receive an Incremental Term Note with respect to each Tranche of
its outstanding Incremental Term Loans and (y) if any Lender extends additional
Incremental Term Loans pursuant to an existing Tranche of Incremental Term
Loans where such Lender already had outstanding Incremental Term Loans, such
Lender shall be entitled to request a new Incremental Term Loan for such
Tranche reflecting the aggregate principal amount of Incremental Term Loans of
such Lender of such Tranche then outstanding.
(e) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any Note endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
(or any error in such notation) shall not affect the Borrower's obligations in
respect of such Loans.
(f) Notwithstanding anything to the contrary contained above in this
Section 1.05 or elsewhere in this Agreement, Notes shall only be delivered to
Lenders which at any time specifically request the delivery of such Notes. No
failure of any Lender to request or obtain a Note evidencing its Loans to the
Borrower shall affect or in any manner impair the obligations of the Borrower
to pay the Loans (and all related Obligations) incurred by the Borrower which
would otherwise be evidenced thereby in accordance with the requirements of
this Agreement, and shall not in any way affect the security or guaranties
therefor provided pursuant to the various Credit Documents. Any Lender which
does not have a Note evidencing its outstanding Loans shall in no event be
required to make the notations otherwise described in preceding clause (e). At
any time when any Lender requests the delivery of a Note to evidence its Loans
of a given Tranche or Tranches, the Borrower shall promptly execute and deliver
to the respective Lender the requested Note in the appropriate amount or
amounts to evidence such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on
any Business Day occurring after the Effective Date, all or a portion equal to
at least the applicable Minimum Borrowing Amount of the outstanding principal
amount of Loans (other than Swingline Loans which may not be converted pursuant
to this Section 1.06) of a given Tranche made to the Borrower into a Borrowing
or Borrowings (of the same Tranche) of another Type of Loan, provided that (i)
each conversion of Eurodollar Loans into Base Rate Loans on a day other than
the last day of an Interest Period applicable to such Eurodollar Loans shall be
subject to the provisions contained in Section 1.11 and no partial conversion
of a Borrowing of Eurodollar Loans shall reduce the outstanding principal
amount of such Eurodollar Loans made pursuant to a single Borrowing to less
than the Minimum Borrowing Amount applicable thereto, (ii) unless the Required
Lenders otherwise consent, Base Rate Loans may only be converted into
Eurodollar Loans if no Default or Event of Default is in existence on the date
of the conversion, (iii) no conversion pursuant to this Section 1.06 shall
result in a greater number of Borrowings of Eurodollar Loans than is permitted
under Section 1.02 and (iv) any conversions pursuant to this Section 1.06 shall
be subject to Section 1.15. Each such conversion shall be effected by the
Borrower by giving the Administrative Agent at the Notice Office prior to 1:00
P.M. (New York
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time) at least three Business Days' prior written notice (each a "Notice of
Conversion") specifying the Loans to be so converted, the Borrowing(s) pursuant
to which such Loans were made and, if to be converted into Eurodollar Loans,
the Interest Period to be initially applicable thereto. The Administrative
Agent shall give each Lender prompt notice of any such proposed conversion
affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans and
Incremental Term Loans of a particular Tranche under this Agreement shall be
incurred from the Lenders pro rata on the basis of their respective Revolving
Loan Commitments or Incremental Term Loan Commitments, as the case may be. It
is understood that no Lender shall be responsible for any default by any other
Lender of its obligation to make Loans hereunder and that each Lender shall be
obligated to make the Loans provided to be made by it hereunder, regardless of
the failure of any other Lender to make its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower or from the date of any conversion
to a Base Rate Loan pursuant to Sections 1.06, 1.09 or 1.10, as applicable,
until the earlier of (i) the maturity (whether by acceleration or otherwise) of
such Base Rate Loan and (ii) the conversion of such Base Rate Loan to a
Eurodollar Loan pursuant to Section 1.06, at a rate per annum which shall be
equal to the sum of the Applicable Margin in effect from time to time for the
Tranche under which such Loans were incurred, plus the Base Rate in effect from
time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof are
made available to the Borrower or from the date of any conversion to a
Eurodollar Loan pursuant to Section 1.06 until the earlier of (i) the maturity
(whether by acceleration or otherwise) of such Eurodollar Loan and (ii) the
conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section
1.06, 1.09 or 1.10, as applicable, at a rate per annum which shall, during each
Interest Period applicable thereto, be equal to the sum of the Applicable
Margin in effect from time to time during such Interest Period for the Tranche
under which such Loans were incurred, plus the Eurodollar Rate for such
Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall, in each case, bear interest at a rate
per annum equal to the greater of (x) 2% per annum in excess of the rate
otherwise applicable to Base Rate Loans of the respective Tranche from time to
time and (y) the rate which is 2% in excess of the rate otherwise applicable to
such Loans, and all other amounts payable hereunder and under any other Credit
Document shall bear interest at a rate per annum equal to the rate which is 2%
in excess of the rate applicable to Revolving Loans maintained as Base Rate
Loans from time to time. Interest which accrues under this Section 1.08(c)
shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest (other than overdue
interest described in preceding clause (c) which shall be payable as provided
in such preceding clause (c)) shall be payable (i) in respect of each Base Rate
Loan, quarterly in arrears on each Quarterly Payment Date, (ii) in respect of
each Eurodollar Loan, on the last day of each Interest Period
-8-
applicable thereto and, in the case of an Interest Period in excess of three
months, on each date occurring at three month intervals after the first day of
such Interest Period and (iii) in respect of each Loan, on any repayment or
prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period commencing two
Business Days thereafter and shall promptly notify the Borrower and the Lenders
thereof. Each such determination shall, absent manifest error, be final and
conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period
applicable thereto) or on the third Business Day prior to the expiration of an
Interest Period applicable to such Eurodollar Loan (in the case of any
subsequent Interest Period), the Borrower shall have the right to elect, by
giving the Administrative Agent notice thereof, the interest period (each an
"Interest Period") applicable to such Eurodollar Loan, which Interest Period
shall, at the option of the Borrower, be (i) a one, two, three or six-month
period or (ii) if deemed available in the sole discretion of the Administrative
Agent, a one-week or nine or twelve-month period or (iii) if available to each
of the Lenders of the respective Tranche, and selected in order to ensure
compliance with clause (vii) of this Section 1.09, any period between one week
and three months which ends on a Scheduled Incremental Term Loan Repayment
Date, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Eurodollar Loan
shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on
a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end
on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period
for a Eurodollar Loan would otherwise expire on a day which is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(v) unless the Required Lenders consent thereto, no Interest Period
may be selected at any time when a Default or an Event of Default is then
in existence;
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(vi) no Interest Period in respect of any Borrowing of any Tranche of
Loans shall be selected which extends beyond the Maturity Date of such
Tranche; and
(vii) no Interest Period in respect of any Borrowing of any Tranche
of Incremental Term Loans shall be selected which extends beyond any
Scheduled Incremental Term Loan Repayment Date applicable thereto if the
aggregate principal amount of such Tranche of Incremental Term Loans which
have Interest Periods which will expire after such date will be in excess
of the aggregate principal amount of such Tranche of Incremental Term
Loans then outstanding less the aggregate amount of the Scheduled
Incremental Term Loan Repayment with respect thereto which will be due on
such Scheduled Incremental Term Loan Repayment Date.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to
convert such Eurodollar Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
Lender shall have determined (which determination shall, absent manifest error,
be final and conclusive and binding upon all parties hereto but, with respect
to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any changes
arising after the Effective Date affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the Effective Date in
any applicable law or governmental rule, regulation, order, guideline or
request (whether or not having the force of law) or in the interpretation
or administration thereof and including the introduction of any new law or
governmental rule, regulation, order, guideline or request, such as, for
example, but not limited to: (A) a change in the basis of taxation of
payment to any Lender of the principal of or interest on such Eurodollar
Loan or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or net
profits of such Lender, or any franchise tax based on the net income or
net profits of a Lender, in either case pursuant to the laws of the
jurisdiction in which such Lender is organized or in which such Lender's
principal office or applicable lending office is located or any
subdivision thereof or therein), or (B) a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar
Rate and/or (y) other circumstances since the Effective Date affecting
such Lender or the interbank Eurodollar market or the position of such
Lender in such market; or
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(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Lender in good
faith with any governmental request (whether or not having force of law)
or (z) impracticable as a result of a contingency occurring after the
Effective Date which materially and adversely affects the interbank
Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to notice by the Administrative
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion
given by the Borrower with respect to Eurodollar Loans which have not yet been
incurred (including by way of conversion) shall be deemed a Notice of Borrowing
or Notice of Conversion for or into Base Rate Loans unless such Notice of
Borrowing or Notice of Conversion is rescinded by the Borrower prior to the
making of such Borrowing or such conversion, (y) in the case of clause (ii)
above, the Borrower shall, subject to the provisions of Section 13.17 (to the
extent applicable), pay to such Lender, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender in its sole discretion
shall determine) as shall be required to compensate such Lender for increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Lender, showing the basis for
the calculation thereof, submitted to the Borrower by such Lender in good faith
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto) and (z) in the case of clause (iii) above, the Borrower shall
take one of the actions specified in Section 1.10(b) as promptly as possible
and, in any event, within the time period required by law. Each of the
Administrative Agent and each Lender agrees that if it gives notice to the
Borrower of any of the events described in clause (i) or (iii) above, it shall
promptly notify the Borrower and, in the case of any such Lender, the
Administrative Agent, if such event ceases to exist. If any such event
described in clause (iii) above ceases to exist as to a Lender, the obligations
of such Lender to make Eurodollar Loans and to convert Base Rate Loans into
Eurodollar Loans on the terms and conditions contained herein shall be
reinstated. In addition, if the Administrative Agent gives notice to the
Borrower that the events described in clause (i) above cease to exist, then the
obligations of the Lenders to make Eurodollar Loans and to convert Base Rate
Loans into Eurodollar Loans on the terms and conditions contained herein (but
subject to clause (iii) above) shall also be reinstated.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) the Borrower shall) either (x) if the affected Eurodollar
Loan is then being made initially or pursuant to a conversion, cancel the
respective Borrowing by giving the Administrative Agent telephonic notice
(confirmed in writing) on the same date that the Borrower was notified by the
affected Lender or the Administrative Agent pursuant to Section 1.10(a)(ii) or
(iii) or (y) if the affected Eurodollar Loan is then outstanding, upon at least
three Business Days' written notice to the Administrative
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Agent, require the affected Lender to convert such Eurodollar Loan into a Base
Rate Loan, provided that, if more than one Lender is affected at any time, then
all affected Lenders must be treated the same pursuant to this Section 1.10(b).
(c) If at any time any Lender determines that, after the Effective
Date, the introduction of or any change in any applicable law or governmental
rule, regulation, order, guideline, directive or request (whether or not having
the force of law and including, without limitation, those announced or
published prior to the Effective Date) concerning capital adequacy, or any
change in interpretation or administration thereof by the NAIC or any
governmental authority, central bank or comparable agency, will have the effect
of increasing the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender based on the existence
of such Lender's Commitments hereunder or its Obligations hereunder, then the
Borrower shall, subject to the provisions of Section 13.17 (to the extent
applicable), pay to such Lender, upon its written demand therefor, such
additional amounts as shall be required to compensate such Lender or such other
corporation for the increased cost to such Lender or such other corporation or
the reduction in the rate of return to such Lender or such other corporation as
a result of such increase of capital. In determining such additional amounts,
each Lender will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable, provided that such Lender's
reasonable good faith determination of compensation owing under this Section
1.10(c) shall, absent manifest error, be final and conclusive and binding on
all the parties hereto. Each Lender, upon determining that any additional
amounts will be payable pursuant to this Section 1.10(c), will give prompt
written notice thereof to the Borrower, which notice shall show the basis for
calculation of such additional amounts. In addition, each such Lender, upon
determining that the circumstances giving rise to the payment of additional
amounts pursuant to this Section 1.10(c) cease to exist, will give prompt
written notice thereof to the Borrower.
1.11 Compensation. The Borrower shall compensate each Lender, upon
its written request (which request shall set forth the basis for requesting
such compensation), for all reasonable losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required
by such Lender to fund its Eurodollar Loans but excluding any loss of
anticipated profit) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any repayment (including any repayment made pursuant to Section 4.01 or
4.02 or as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any of the Borrower's Eurodollar Loans occurs on a date which is
not the last day of an Interest Period with respect thereto; (iii) if any
prepayment of any of the Borrower's Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; (iv) prior to the
Syndication Date in connection with the primary syndication of the Loans and/or
Commitments unless the Borrower has selected only one week Interest Periods
prior to such Syndication Date; or (v) as a consequence of (x) any other
default by the Borrower to repay its Loans when required by the terms of this
Agreement or the Note, if any, held by such Lender or (y) any election made
pursuant to Section 1.10(b).
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1.12 Change of Lending Office. Each Lender agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 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 and/or Letters of Credit affected by such event, provided
that such designation is made on such terms that such Lender and its lending
office suffer no material (as determined by such Lender in its sole discretion)
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Lender provided in Sections 1.10, 2.06 and 4.04.
1.13 Incremental Term Loan Commitments. (a) So long as no Default or
Event of Default then exists or would result therefrom, the Borrower shall, in
consultation with the Administrative Agent, have the right to request on one or
more occasions on and after the Syndication Date and prior to the Revolving
Loan Maturity Date that one or more Lenders (and/or one or more other Persons
which will become Lenders as provided below) provide Incremental Term Loan
Commitments under a given Tranche of Incremental Term Loans as designated (with
the approval of the Administrative Agent (which approval shall not be
unreasonably withheld or delayed if such designation is otherwise made in
accordance with the provisions of this Agreement)) in the Incremental Term Loan
Commitment Agreement and, subject to the terms and conditions contained in this
Agreement and the relevant Incremental Term Loan Commitment Agreement, make
Incremental Term Loans pursuant thereto, it being understood and agreed,
however, that:
(i) no Lender shall be obligated to provide an Incremental Term Loan
Commitment as a result of any such request by the Borrower, and until such
time, if any, as such Lender has agreed in its sole discretion to provide
an Incremental Term Loan Commitment and executed and delivered to the
Administrative Agent an Incremental Term Loan Commitment Agreement as
provided in clause (b) of this Section 1.13, such Lender shall not be
obligated to fund any Incremental Term Loans;
(ii) except as otherwise provided in clauses (ix) and (x) below, any
Lender (or, in the circumstances contemplated by clause (vii) below, any
other Person which is an Eligible Transferee) may so provide an
Incremental Term Loan Commitment without the consent of any other Lender;
(iii) each provision of Incremental Term Loan Commitments pursuant to
this Section 1.13 on a given date shall be in a minimum aggregate amount
(for all Lenders (including in the circumstances contemplated by clause
(vii) below, Eligible Transferees who will become Lenders)) of
$25,000,000;
(iv) the aggregate amount of all Incremental Term Loan Commitments
permitted to be provided pursuant to this Section 1.13 shall not exceed
$150,000,000, provided that the Borrower may request Incremental Term Loan
Commitments to be provided (as set forth in this Section 1.13) in excess
of $150,000,000 so long as at the time of such request and at the time of
the provision of such Incremental Term Loan Commitments the
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Consolidated Senior Leverage Ratio (calculated on a Post-Test Period Pro
Forma Basis and assuming that all Incremental Term Loans to be incurred
pursuant to such Incremental Term Loan Commitments (and any other then
existing Incremental Term Loan Commitments) have been incurred and the
proceeds thereof have been applied in a manner as certified to by an
Authorized Officer of the Borrower to the Administrative Agent) is less
than 2.50:1.00, provided further, however, that in no event shall the
aggregate amount of Incremental Term Loan Commitments permitted to be
provided pursuant to this Section 1.13 exceed $250,000,000;
(v) each Incremental Term Loan Commitment Agreement shall
specifically designate (with the approval of the Administrative Agent
(which approval shall not be unreasonably withheld or delayed if such
designation is otherwise made in accordance with the provisions of this
Agreement)) the Tranche of the Incremental Term Loan Commitments being
provided thereunder (which Tranche shall be a new Tranche (i.e., not the
same as any existing Tranche of Incremental Term Loans or Incremental Term
Loan Commitments) unless the requirements of following Section 1.13(c) are
satisfied);
(vi) each Lender agreeing to provide an Incremental Term Loan
Commitment pursuant to an Incremental Term Loan Commitment Agreement
shall, subject to the satisfaction of the relevant conditions set forth in
this Agreement, make Incremental Term Loans under the Tranche specified in
such Incremental Term Loan Commitment Agreement as provided in Section
1.01(d) and such Loans shall thereafter be deemed to be Incremental Term
Loans under such Tranche for all purposes of this Agreement and the other
Credit Documents;
(vii) if, within 10 Business Days after the Borrower has requested
the then existing Lenders (other than Defaulting Lenders) to provide
Incremental Term Loan Commitments pursuant to this Section 1.13 the
Borrower has not received Incremental Term Loan Commitments in an
aggregate amount equal to that amount of Incremental Term Loan Commitments
which the Borrower desires to obtain pursuant to such request (as set
forth in the notice provided by the Borrower as provided in clause (b) of
this Section 1.13), then the Borrower may, with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld or
delayed), request Incremental Term Loan Commitments from Persons which are
Eligible Transferees in an aggregate amount equal to such deficiency (and
with the fees and interest to be paid to such Eligible Transferee to be no
greater than that to be paid (or which was offered to) to the then
existing Lenders providing (or which were requested to provide) the
requested Incremental Term Loan Commitments);
(viii) all Incremental Term Loans to be incurred pursuant to
Incremental Term Loan Commitments provided in response to a particular
request for same made by the Borrower in accordance with clause (b) of
this Section 1.13 shall be incurred pursuant to Incremental Term Loan
Commitments provided pursuant to a single Incremental Term Loan Commitment
Agreement, which may be executed in counterparts;
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(ix) unless those Lenders holding (as outstanding Loans or existing
Revolving Loan Commitments, as the case may be) (x) a majority of the
aggregate principal amount of outstanding Incremental Term Loans having a
Maturity Date after such proposed Maturity Date plus (y) if such proposed
Maturity Date is to be prior to the Revolving Loan Maturity Date, more
than 66-2/3% of the Total Revolving Loan Commitment, expressly agree in
writing, in no event shall the Maturity Date of the Incremental Term Loans
to be provided pursuant to any Incremental Term Loan Commitment Agreement
be earlier than the Maturity Date of any other Tranche of Loans (or
Revolving Loan Commitment) outstanding at the time such Incremental Term
Loans are incurred;
(x) unless those Lenders holding (as outstanding Loans or existing
Revolving Loan Commitments, as the case may be) (x) a majority of the
aggregate principal amount of outstanding Incremental Term Loans having a
Weighted Average Life to Maturity which is longer than the Weighted
Average Life to Maturity of the Incremental Term Loans to be made pursuant
to the relevant Incremental Term Loan Commitments plus (y) if the proposed
Weighted Average Life to Maturity of the Incremental Term Loans to be made
pursuant to the respective Incremental Term Loan Commitment Agreement is
shorter than the Weighted Average Life to Maturity of the Revolving Loans,
more than 66-2/3% of the Total Revolving Loan Commitment, expressly agree
in writing, in no event shall the Weighted Average Life to Maturity of the
Incremental Term Loans to be provided pursuant to any Incremental Term
Loan Commitment Agreement be less than the Weighted Average Life to
Maturity of any other Tranche of Loans (or Revolving Loan Commitments)
outstanding at the time such Incremental Term Loans are incurred; and
(xi) all actions taken by the Borrower pursuant to this Section 1.13
shall be take in coordination with the Administrative Agent.
(b) At the time of any provision of Incremental Term Loan Commitments
of a given Tranche pursuant to this Section 1.13, (i) the Borrower, the
Administrative Agent and each Lender or other Eligible Transferee which agrees
to provide an Incremental Term Loan Commitment (each an "Incremental Term Loan
Lender") shall execute (which execution may be in counterparts) and deliver to
the Administrative Agent an Incremental Term Loan Commitment Agreement (it
being understood that a single Incremental Term Loan Commitment Agreement shall
be executed and delivered by all Incremental Term Loan Lenders providing
Incremental Term Loan Commitments in response to a particular request for same
made by the Borrower) substantially in the form of Exhibit C (appropriately
completed and with such modifications as may be reasonably acceptable to the
Administrative Agent), with the effectiveness of the Incremental Term Loan
Commitment(s) provided therein to occur on the date set forth in such
Incremental Term Loan Commitment Agreement and the payment of any fees required
in connection therewith; (ii) the Borrower and its Subsidiaries shall have
delivered such amendments, modifications and/or supplements to the Security
Documents as are necessary or, in the reasonable opinion of the Administrative
Agent, desirable to ensure that the additional Obligations to be incurred
pursuant to the Incremental Term Loan Commitments are secured by, and entitled
to the benefits of, the Security Documents; (iii) the Administrative Agent
shall receive an acknowledgment from the Credit Parties that the Incremental
Term Loans to be incurred pursuant to such Incremental Term Loan Commitments
are entitled to the benefits of the
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Subsidiaries Guaranty and the Security Documents, together with resolutions
executed by (x) the Borrower, authorizing the incurrence of such Incremental
Term Loans pursuant to such Incremental Term Loan Commitments and (y) each
other Credit Party, stating that the Incremental Term Loans to be incurred
pursuant to such Incremental Term Loan Commitments are entitled to benefits of
the Subsidiaries Guaranty and the Security Documents; (iv) the Administrative
Agent shall have received evidence satisfactory to it that the additional
Obligations to be incurred pursuant to the Incremental Term Loan Commitments
are permitted by, and constitute "Senior Indebtedness" and "Designated Senior
Indebtedness" (or any similar term) under, the Senior Subordinated Note
Documents and the Permitted Subordinated Note Documents (if any); and (v) the
Borrower shall deliver to the Administrative Agent an opinion or opinions, in
form and substance reasonably satisfactory to the Administrative Agent, from
counsel to the Borrower reasonably satisfactory to the Administrative Agent
(which, unless otherwise requested by the Administrative Agent or the Required
Lenders, may be the Borrower's General Counsel) and dated such date, covering
such of the matters set forth in the opinions of counsel delivered to the
Administrative Agent on the Effective Date pursuant to Section 5.03 as may be
reasonably requested by the Administrative Agent, and such other matters as the
Administrative Agent may reasonably request (including, without limitation, the
matters described in immediately preceding clause (iv)). The Administrative
Agent shall promptly notify each Lender as to the effectiveness of each
Incremental Term Loan Commitment Agreement, and shall deliver to each Lender a
copy of same, and (i) at such time Annex I shall be deemed modified to reflect
the Incremental Term Loan Commitments (including the Tranche or Tranches
thereof) of such Incremental Term Loan Lenders and (ii) to the extent requested
by such Incremental Term Loan Lenders, the appropriate Notes will be issued, at
the Borrower's expense, to such Incremental Term Loan Lenders, to be consistent
with the requirements of Section 1.05 (with appropriate modifications, to the
extent needed) to reflect the Incremental Term Loans made by such Incremental
Term Loan Lenders or such Incremental Term Loan Lender, as the case may be.
(c) Notwithstanding anything to the contrary contained above, the
Incremental Term Loan Commitments provided by an Incremental Term Loan Lender
or Incremental Term Loan Lenders, as the case may be, pursuant to each
Incremental Term Loan Commitment Agreement shall constitute a new Tranche,
which shall be separate and distinct from the existing Tranches pursuant to
this Agreement (with a designation reasonably satisfactory to the
Administrative Agent, which designation may be made in letters (i.e., A, B, C,
etc.), numbers (1, 2, 3, etc.) or a combination thereof (i.e., X-0, X-0, X-0,
X-0, etc.), provided that the parties to a given Incremental Term Loan
Commitment Agreement may specify therein that the respective Incremental Term
Loans made pursuant thereto shall constitute part of, and be added to, an
existing Tranche of Incremental Term Loans, so long as the following
requirements are satisfied:
(i) the Incremental Term Loans to be made pursuant to such
Incremental Term Loan Commitment Agreement shall have the same Maturity
Date and the same Weighted Average Life to Maturity as the Tranche of
Incremental Term Loans to which the new Incremental Term Loans are being
added, and shall bear interest at the same rates (i.e., have the same
Applicable Margins) applicable to such Tranche;
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(ii) the new Incremental Term Loans shall have the same Scheduled
Incremental Term Loan Repayment Dates as then remain with respect to the
Tranche to which such new Incremental Term Loans are being added (with the
amount of each Scheduled Incremental Term Loan Repayment applicable to
such new Incremental Term Loans to be the same (on a proportionate basis)
as is theretofore applicable to the Tranche to which such new Incremental
Term Loans are being added, thereby increasing the amount of each then
remaining Scheduled Incremental Term Loan Repayment of the respective
Tranche proportionately; and
(iii) on the date of the making of such new Incremental Term Loans,
and notwithstanding anything to the contrary set forth in Section 1.09,
same shall be added to (and form part of) each Borrowing of outstanding
Incremental Term Loans of the respective Tranche on a pro rata basis
(based on the relative sizes of the various outstanding Borrowings), so
that each Lender will participate proportionately in each then outstanding
Borrowing of Loans of the respective Tranche, and so that the existing
Lenders with respect to such Tranche continue to have the same
participation (by amount) in each Borrowing as they had before the making
of the new Incremental Term Loans of such Tranche.
To the extent the provisions of preceding clause (iii) require that
Lenders making new Incremental Term Loans add same to then outstanding
Borrowings of Eurodollar Loans, it is acknowledged that the effect thereof may
result in such new Incremental Term Loans having short Interest Periods (i.e.,
an Interest Period that began during an Interest Period then applicable to
outstanding Eurodollar Loans and which will end on the last day of such
Interest Period). In connection therewith, the Borrower may agree, in the
respective Incremental Term Loan Commitment Agreement, to compensate the
Lenders making the new Incremental Term Loans of the respective Tranche for
funding Eurodollar Loans during an existing Interest Period on such basis as
may be agreed by the Borrower and their respective Lender or Lenders.
1.14 Replacement of Lenders. (a) (x) If any Lender (i) becomes a
Defaulting Lender or otherwise defaults in its obligations to make Loans or
fund Unpaid Drawings or (ii) refuses to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement which have
been approved by the Required Lenders as provided in Section 13.12(b) or (y)
upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with
respect to any Lender which results in such Lender charging to the Borrower
increased costs in excess of those being generally charged by the other
Lenders, the Borrower shall have the right, in accordance with the requirements
of Section 13.04(b), if no Default or Event of Default will exist after giving
effect to such replacement, to replace such Lender (the "Replaced Lender") with
one or more other Eligible Transferee or Transferees, none of whom shall
constitute a Defaulting Lender at the time of such replacement (collectively,
the "Replacement Lender"), reasonably acceptable to the Administrative Agent
or, at the option of the Borrower, to replace only (A) the Revolving Loan
Commitment (and outstanding Revolving Loans pursuant thereto) of the Replaced
Lender with an identical Revolving Loan Commitment provided by the Replacement
Lender, or (B) in the case of a replacement as provided in Section 13.12(b)
where the consent of the respective Lender is required with respect to less
than all Tranches, the Commitments and/or outstanding Loans of
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such Lender in respect of each Tranche where the consent of such Lender would
otherwise be individually required, with identical Commitments and/or Loans of
the respective Tranche provided by the Replacement Lender; provided that, (i)
at the time of any replacement pursuant to this Section 1.13, the Replaced
Lender and the Replacement Lender shall enter into one or more Assignment and
Assumption Agreements pursuant to Section 13.04(b) (and with all fees payable
pursuant to said Section 13.04(b) to be paid by the Replacement Lender)
pursuant to which the Replacement Lender shall acquire all of the Commitments
and all of the outstanding Loans (or, in the case of the replacement of only
(a) the Revolving Loan Commitment, outstanding Revolving Loans and
participations in Letter of Credit Outstandings and Swingline Loans and/or (b)
a particular Tranche or Tranches of Incremental Term Loans, the outstanding
principal amount of such Tranche or Tranches of Incremental Term Loans) of, and
in each case (except for the replacements of only one or more Tranches of
Incremental Term Loans of a Replaced Lender) participations in Letters of
Credit and Swingline Loans by, the Replaced Lender and, in connection
therewith, shall pay to (A) the Replaced Lender in respect thereof an amount
equal to the sum of (1) an amount equal to the principal of all outstanding
Loans of the Replaced Lender (or, in the case of the replacement of only (i)
the Revolving Loan Commitment of the Replaced Lender, all outstanding Revolving
Loans of the Replaced Lender or (ii) the outstanding principal amount of a
particular Tranche or Tranches of Incremental Term Loans of the Replaced
Lender, all outstanding Incremental Term Loans of such Tranche or Tranches of
the Replaced Lender) and (2) except in the case of the replacement of only one
or more Tranches of Incremental Term Loans of a Replaced Lender, an amount
equal to all Unpaid Drawings that have been funded by (and not reimbursed to)
such Replaced Lender, (B) in the case of any replacement of Revolving Loan
Commitments, the respective Issuing Lender an amount equal to such Replaced
Lender's Percentage of any Unpaid Drawing relating to Letters of Credit issued
by such Issuing Lender (which at such time remains an Unpaid Drawing) to the
extent such amount was not theretofore funded by such Replaced Lender to such
Issuing Lender and (C) in the case of any replacement of Revolving Loan
Commitments, the Swingline Lender an amount equal to such Replaced Lender's
Percentage of any Mandatory Borrowing to the extent such amount was not
theretofore funded by such Replaced Lender to the Swingline Lender and (ii) all
obligations of the Borrower owing to the Replaced Lender (other than (a) those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid or (b) relating to any
Tranche of Loans and/or Commitments of the respective Replaced Lender which
will remain outstanding after giving effect to the respective replacement)
shall be paid in full to such Replaced Lender concurrently with such
replacement. All amounts of (i) interest in respect of all outstanding Loans of
any such Replaced Lender (or, in the case of the replacement of only (x) the
Revolving Loan Commitment of such Replaced Lender, in respect of all
outstanding Revolving Loans of such Replaced Lender or (y) the outstanding
principal amount of a particular Tranche or Tranches of Incremental Term Loans
of such Replaced Lender, in respect of all outstanding Incremental Term Loans
of such Tranche or Tranches of such Replaced Lender) which has accrued to the
date of such replacement and has not been paid as of such date shall be paid to
such Replaced Lender at the time such interest would otherwise be payable in
accordance with the provisions of Section 1.08(d) and (ii) all accrued, but
theretofore unpaid Fees owing to the Replaced Lender pursuant to the Section
3.01 at the time of such replacement (but only with respect to the relevant
Tranches, in the case of a replacement of less than all of the Tranches of the
respective Replaced Lender) shall be paid to
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such Replaced Lender at the time such fees would otherwise be payable in
accordance with the provisions of Section 3.01.
(b) Upon the execution of the respective Assignment and Assumption
Agreements, the payment of amounts referred to in clauses (i) and (ii) of
Section 1.13(a) and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by the Borrower,
the Replacement Lender shall become a Lender hereunder and, unless the
respective Replaced Lender continues to have a Revolving Loan Commitment or
outstanding Incremental Term Loans hereunder, the Replaced Lender shall cease
to constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 1.10,
1.11, 2.06, 4.04, 13.01 and 13.06), which shall survive as to such Replaced
Lender.
1.15 Additional Provisions Regarding the Incurrence of Eurodollar
Loans Prior to the Syndication Date. Notwithstanding anything to the contrary
contained in this Section 1 or elsewhere in this Agreement, prior to the
Syndication Date, the Borrower shall only be permitted to incur and/or maintain
Eurodollar Loans with an Interest Period of (A) subject to Section 1.09, one
week, and only so long as all Eurodollar Loans incurred and/or maintained prior
to such earlier date shall be subject to the same one week Interest Period or
(B) any other Interest Period otherwise permitted hereunder, but, in the case
of this clause (B), only so long as the Borrower compensates each Lender for
any and all expenses of the type described in Section 1.11 incurred by such
Lender in connection with the primary syndication of the Loans and/or
Commitments.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, the Borrower may request that any Issuing Lender
issue, at any time and from time to time on and after the Effective Date and
prior to the 30th day prior to the Revolving Loan Maturity Date, (x) for the
account of the Borrower and for the benefit of any holder (or any trustee,
agent or other similar representative for any such holders) of L/C Supportable
Obligations of the Borrower or any of its Subsidiaries, an irrevocable standby
letter of credit, in a form customarily used by such Issuing Lender or in such
other form as has been approved by such Issuing Lender (each such standby
letter of credit, a "Standby Letter of Credit") in support of such L/C
Supportable Obligations and (y) for the account of the Borrower and for the
benefit of sellers of goods and materials used in the ordinary course of
business of the Borrower or any of its Subsidiaries an irrevocable sight
commercial letter of credit in a form customarily used by such Issuing Lender
or in such other form as has been approved by such Issuing Lender (each such
commercial letter of credit, a "Trade Letter of Credit," and each such Trade
Letter of Credit and each Standby Letter of Credit, a "Letter of Credit") in
support of commercial transactions of the Borrower and its Subsidiaries. All
Letters of Credit shall be denominated in Dollars. It is acknowledged and
agreed that each of the letters of credit which were issued under the Existing
Credit Agreement and which remain outstanding on the Effective Date and are set
forth on Schedule III (each such letter of credit, an "Existing Letter of
Credit" and, collectively, the "Existing Letters of Credit") shall, from and
after the Effective Date, constitute a Letter of Credit for all purposes of
this Agreement and shall, for purposes of Sections 2.04 and 3.01, be deemed
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issued on the Effective Date. The Stated Amount of each Existing Letter of
Credit and the expiry date therefor, each as in effect on the Effective Date,
is set forth on Schedule III.
(b) Subject to and upon the terms and conditions set forth herein,
each Issuing Lender hereby agrees that it will, at any time and from time to
time on and after the Effective Date and prior to the 30th day prior to the
Revolving Loan Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for the account of the Borrower, one or more Letters of
Credit (x) in the case of Standby Letters of Credit, in support of such L/C
Supportable Obligations of the Borrower or any of its Subsidiaries as are
permitted to exist without giving rise to a Default or an Event of Default and
(y) in the case of Trade Letters of Credit, for the benefit of sellers of goods
or materials used in the ordinary course of business of the Borrower or any of
its Subsidiaries as referenced in Section 2.01(a), provided that the respective
Issuing Lender shall be under no obligation to issue any Letter of Credit of
the types described above if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Lender from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Lender or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over such Issuing Lender shall prohibit, or request that such
Issuing Lender refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon such Issuing
Lender with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuing Lender is not otherwise
promptly compensated by the Borrower) not in effect on the date hereof, or
any unreimbursed loss, cost or expense which was not applicable, in effect
or known to such Issuing Lender as of the date hereof and which such
Issuing Lender reasonably and in good xxxxx xxxxx material to it; or
(ii) such Issuing Lender shall have received notice from the Required
Lenders prior to the issuance of such Letter of Credit of the type
described in the second sentence of Section 2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the initial Stated Amount of which, when added
to the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid on the date of, and prior to the issuance of, the respective Letter of
Credit) at such time would exceed either (x) $50,000,000 or (y) when added to
the aggregate principal amount of all Revolving Loans then outstanding and the
aggregate principal amount of all Swingline Loans then outstanding, an amount
equal to the Total Revolving Loan Commitment at such time and (ii) each Letter
of Credit shall by its terms terminate on or before (A) in the case of Standby
Letters of Credit, the earlier of (x) the date which occurs 12 months after the
date of the issuance thereof (although any such Standby Letter of Credit may be
extendible for successive periods of up to 12 months, but not beyond the third
Business Day prior to the Revolving Loan Maturity Date, on terms acceptable to
the Issuing Lender thereof) and (y) the third Business Day prior to the
Revolving Loan Maturity Date and (B) in the case of Trade
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Letters of Credit, the earlier of (x) the date which occurs 360 days after the
date of issuance thereof and (y) 30 days prior to the Revolving Loan Maturity
Date.
2.03 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever
the Borrower desires that a Letter of Credit be issued for its account, the
Borrower shall give the Administrative Agent and the respective Issuing Lender
at least three Business Days' (or such shorter period as is acceptable to the
respective Issuing Lender) written notice thereof. Each notice shall be in the
form of Exhibit D (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.02. Unless the respective Issuing Lender has received notice from the
Required Lenders before it issues a Letter of Credit that one or more of the
conditions specified in Section 5 are not satisfied on the Effective Date or
Section 6 are not then satisfied, or that the issuance of such Letter of Credit
would violate Section 2.02, then such Issuing Lender shall issue the requested
Letter of Credit for the account of the Borrower in accordance with such
Issuing Lender's usual and customary practices. Upon the issuance of or
amendment or modification to a Letter of Credit, the respective Issuing Lender
shall promptly notify the Borrower and the Administrative Agent of such
issuance, amendment or modification and such notification shall be accompanied
by a copy of the issued Letter of Credit or amendment or modification.
(c) The initial Stated Amount of each Letter of Credit shall not be
less than $100,000 or such lesser amount as is acceptable to the respective
Issuing Lender.
2.04 Letter of Credit Participation. (a) Immediately upon the
issuance by the respective Issuing Lender of any Letter of Credit, such Issuing
Lender shall be deemed to have sold and transferred to each Lender, other than
such Issuing Lender (each such Lender, in its capacity under this Section 2.04,
a "Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Lender,
without recourse or warranty, an undivided interest and participation, to the
extent of such Participant's Percentage, in such Letter of Credit, each drawing
or payment made thereunder and the obligations of the Borrower under this
Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments of the
Lenders pursuant to Section 1.13 or 13.04, it is hereby agreed that, with
respect to all outstanding Letters of Credit and Unpaid Drawings, there shall
be an automatic adjustment to the participations pursuant to this Section 2.04
to reflect the new Percentages of the assignor and assignee Lender, as the case
may be.
(b) In determining whether to pay under any Letter of Credit,
the respective Issuing Lender shall have no obligation relative to the other
Lenders other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Lender under or
in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful mis-
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conduct, shall not create for such Issuing Lender any resulting liability to
the Borrower, any other Credit Party, any Lender or any other Person.
(c) In the event that any Issuing Lender makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to such Issuing Lender pursuant to Section 2.05(a), such Issuing Lender shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Lender the amount of such Participant's
Percentage of such unreimbursed payment in Dollars and in same day funds. If
the Administrative Agent so notifies, prior to 11:00 A.M. (New York time) on
any Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to such Issuing Lender in Dollars
such Participant's Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Participant shall not have so
made its Percentage of the amount of such payment available to such Issuing
Lender, such Participant agrees to pay to such Issuing Lender, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to such Issuing Lender at the overnight
Federal Funds Rate for the first three days and at the interest rate applicable
to Revolving Loans maintained as Base Rate Loans for each day thereafter. The
failure of any Participant to make available to such Issuing Lender its
Percentage of any payment under any Letter of Credit shall not relieve any
other Participant of its obligation hereunder to make available to such Issuing
Lender its Percentage of any Letter of Credit on the date required, as
specified above, but no Participant shall be responsible for the failure of any
other Participant to make available to such Issuing Lender such other
Participant's Percentage of any such payment.
(d) Whenever any Issuing Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Lender shall pay to each Participant
which has paid its Percentage thereof, in Dollars and in same day funds, an
amount equal to such Participant's share (based upon the proportionate
aggregate amount originally funded by such Participant to the aggregate amount
funded by all Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of the respective
participations.
(e) Upon the request of any Participant, each Issuing Lender shall
furnish to such Participant copies of any Letter of Credit issued by it and
such other documentation relating thereto as may reasonably be requested by
such Participant.
(f) The obligations of the Participants to make payments to each
Issuing Lender with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
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(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Participant, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrower or any Subsidiary of the
Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, 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) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the respective Issuing Lender, by making payment to
the Administrative Agent in immediately available funds at the Payment Office,
for any payment or disbursement made by such Issuing Lender under any Letter of
Credit issued by it (each such amount, so paid until reimbursed, an "Unpaid
Drawing"), immediately after, and in any event on the date of, such payment or
disbursement, with interest on the amount so paid or disbursed by such Issuing
Lender, to the extent not reimbursed prior to 3:00 P.M. (New York time) on the
date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date such Issuing Lender was reimbursed by the
Borrower therefor at a rate per annum which shall be the Base Rate in effect
from time to time plus the Applicable Margin for Revolving Loans maintained as
Base Rate Loans; provided, however, to the extent such amounts are not
reimbursed prior to 3:00 P.M. (New York time) on the third Business Day
following the receipt by the Borrower of notice of such payment or disbursement
or following the occurrence of a Default or an Event of Default under Section
10.05, interest shall thereafter accrue on the amounts so paid or disbursed by
such Issuing Lender (and until reimbursed by the Borrower) at a rate per annum
which shall be the Base Rate in effect from time to time plus the Applicable
Margin for Revolving Loans maintained as Base Rate Loans plus 2%, in each such
case, with interest to be payable on demand. The respective Issuing Lender
shall give the Borrower prompt written notice of each Drawing under any Letter
of Credit, provided that the failure to give any such notice shall in no way
affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse the respective Issuing Lender with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against any Lender
(including in its capacity as issuer of the Letter of Credit or as
Participant), including, without limitation, any defense based upon the failure
of any drawing under a Letter of Credit (each a "Drawing") to conform to the
terms of the Letter of Credit or any nonapplication or mis-
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application by the beneficiary of the proceeds of such Drawing; provided,
however, that the Borrower shall not be obligated to reimburse any Issuing
Lender for any wrongful payment made by such Issuing Lender under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or
gross negligence on the part of such Issuing Lender.
2.06 Increased Costs. If at any time after the Effective Date, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by the
NAIC or any governmental authority charged with the interpretation or
administration thereof, or compliance by any Issuing Lender or any Participant
with any request or directive by any such authority (whether or not having the
force of law), shall either (i) impose, modify or make applicable any reserve,
deposit, capital adequacy or similar requirement against letters of credit
issued by any Issuing Lender or participated in by any Participant, or (ii)
impose on any Issuing Lender or any Participant any other conditions relating,
directly or indirectly, to this Agreement; and the result of any of the
foregoing is to increase the cost to any Issuing Lender or any Participant of
issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by any Issuing Lender or any
Participant hereunder or reduce the rate of return on its capital with respect
to Letters of Credit (except for changes in the rate of tax on, or determined
by reference to, the net income or profits of such Issuing Lender or such
Participant pursuant to the laws of the jurisdiction in which it is organized
or in which its principal office or applicable lending office is located or any
subdivision thereof or therein), then, upon the delivery of the certificate
referred to below to the Borrower by such Issuing Lender or any Participant,
the Borrower shall, subject to the provisions of Section 13.17 (to the extent
applicable), pay to such Issuing Lender or such Participant such additional
amount or amounts as will compensate such Issuing Lender or Participant for
such increased cost or reduction in the amount receivable or reduction on the
rate of return on its capital. Any Issuing Lender or any Participant, upon
determining that any additional amounts will be payable pursuant to this
Section 2.06, will give prompt written notice thereof to the Borrower, which
notice shall include a certificate submitted to the Borrower by such Issuing
Lender or such Participant (a copy of which certificate shall be sent by such
Issuing Lender or such Participant to the Administrative Agent), setting forth
in reasonable detail the basis for the calculation of such additional amount or
amounts necessary to compensate such Issuing Lender or such Participant. In
determining such additional amounts, each Issuing Lender and each Participant
will act reasonably and in good faith, provided that the certificate required
to be delivered pursuant to this Section 2.06 shall, absent manifest error, be
final and conclusive and binding on the Borrower.
SECTION 3. Fees; Reductions of Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the Administrative Agent
for distribution to each Non-Defaulting Lender with a Revolving Loan Commitment
a commitment commission (the "Commitment Commission") for the period from the
Effective Date to but not including the Revolving Loan Maturity Date (or to but
not including such earlier date as the Total Revolving Loan Commitment shall
have been terminated), computed at a rate per annum for each day equal to 0.50%
on the Unutilized Revolving Loan Commitment of such Non-Defaulting Lender on
such day. Accrued Commitment Commission shall be due and payable quarterly in
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arrears on each Quarterly Payment Date and on the Revolving Loan Maturity Date
or such earlier date upon which the Total Revolving Loan Commitment is
terminated.
(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Lender with an Incremental Term Loan
Commitment such facility fees, commitment commission and other amounts, if any,
as are specified in the Incremental Term Loan Commitment Agreement pursuant to
which such Incremental Term Loan Commitment Agreement has been provided, with
such facility fees, commitment commission and other amounts, if any, to be
payable at the times set forth in such Incremental Term Loan Commitment
Agreement.
(c) The Borrower agrees to pay to the Administrative Agent for
distribution to each Lender (based on each such Lender's respective Percentage)
a fee in respect of each Letter of Credit issued hereunder (the "Letter of
Credit Fee"), for the period from and including the date of issuance of such
Letter of Credit to and including the date of termination or expiration of such
Letter of Credit, computed at a rate per annum equal to the Applicable Margin
for Revolving Loans maintained as Eurodollar Loans on the daily Stated Amount
of such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the first
day after the termination of the Total Revolving Loan Commitment upon which no
Letters of Credit remain outstanding.
(d) The Borrower agrees to pay to each Issuing Lender, for its own
account, a facing fee in respect of each Letter of Credit issued by such
Issuing Lender (the "Facing Fee") (x) in the case of each Standby Letter of
Credit, for the period from and including the date of issuance of such Standby
Letter of Credit to and including the date of the termination of such Standby
Letter of Credit, computed at a rate equal to 1/4 of 1% per annum (or such
lesser rate as is agreed on by the Borrower and the respective Issuing Lender)
of the daily Stated Amount of such Standby Letter of Credit and (y) in the case
of each Trade Letter of Credit, in an amount equal to 1/4 of 1% (or such lesser
rate as is agreed on by the Borrower and the respective Issuing Lender) of the
Stated Amount of such Trade Letter of Credit as of the date of issuance
thereof. Accrued Facing Fees payable with respect to Standby Letters of Credit
shall be due and payable quarterly in arrears on each Quarterly Payment Date
and upon the first day after the termination of the Total Revolving Loan
Commitment upon which no Standby Letters of Credit remain outstanding and all
Facing Fees payable with respect to each Trade Letter of Credit shall be due
and payable on the date of issuance of such Trade Letter of Credit.
(e) The Borrower agrees to pay, upon each drawing under, issuance of,
or amendment to, any Letter of Credit, such amount as shall at the time of such
event be the administrative charge and the reasonable expenses which the
applicable Issuing Lender is generally imposing in connection with such
occurrence with respect to letters of credit.
(f) The Borrower agrees to pay to the Joint Lead Arrangers and each
Agent, for their respective accounts, such other fees as have been agreed to in
writing by the Borrower with the Joint Lead Arrangers or such Agent, as the
case may be.
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3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at
least one Business Day's prior written notice to the Administrative Agent at
the Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Lenders), the Borrower shall have the right, at any
time or from time to time, without premium or penalty, to terminate or
partially reduce (i) the Total Unutilized Revolving Loan Commitment, in an
integral multiple of $1,000,000 in the case of partial reductions to the Total
Revolving Loan Commitment; provided that each such reduction shall apply
proportionately to permanently reduce the Revolving Loan Commitment of each
Lender with such a Commitment, and/or (ii) unless otherwise provided in the
respective Incremental Term Loan Commitment Agreement, the Incremental Term
Loan Commitments provided pursuant to any Incremental Term Loan Commitment
Agreement, in an integral multiple of $1,000,000 (or as may otherwise be
provided in the respective Incremental Term Loan Commitment Agreement) in the
case of partial reductions to the aggregate amount of Incremental Term Loan
Commitments provided pursuant to the respective Incremental Term Loan
Commitment Agreement; provided that each such reduction shall apply
proportionately to permanently reduce the Incremental Term Loan Commitments of
the various Lenders provided pursuant to the respective Incremental Term Loan
Commitment Agreement.
(b) In the event of certain refusals by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Lenders as provided in
Section 13.12(b), the Borrower may, subject to the requirements of said Section
13.12(b) and upon five Business Days' written notice to the Administrative
Agent at the Notice Office (which notice the Administrative Agent shall
promptly transmit to each of the Lenders) terminate the entire Revolving Loan
Commitment of such Lender so long as all Loans, together with accrued and
unpaid interest, Fees and all other amounts owing to such Lender (other than
amounts owing in respect of any Tranche of Incremental Term Loans of such
Lender, if such Tranche of Incremental Term Loans are not being repaid pursuant
to Section 13.12(b)) are repaid concurrently with the effectiveness of such
termination pursuant to this Section 3.02(b) (at which time Schedule I shall be
deemed modified to reflect such changed amounts) and, in the case of any
replacement of Revolving Loan Commitments, such Lender's Percentage of all
outstanding Letters of Credit is cash collateralized in a manner satisfactory
to the Administrative Agent and the respective Issuing Lenders, and at such
time, unless the respective Lender continues to have outstanding Incremental
Term Loans hereunder, such Lender shall no longer constitute a "Lender" for
purposes of this Agreement, except with respect to indemnifications under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04,
13.01 and 13.06), which shall survive as to such repaid Lender.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitments
(and each of the Commitments of each Lender) shall terminate in their entirety
on August 15, 2001, unless the Effective Date shall have occurred on or prior
to such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Lender) shall terminate in its entirety on the earlier
of (i) unless the Required Lenders otherwise agree in writing in their sole
discretion, the date on which a Change of Control occurs and (ii) the Revolving
Loan Maturity Date.
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(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall be permanently
reduced at the times, and in the amounts, required by Section 4.02(h).
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, (i) the Incremental Term Loan Commitment of each Lender
provided pursuant to a particular Incremental Term Loan Commitment Agreement
shall be permanently reduced on each Incremental Term Loan Borrowing Date on
which Incremental Term Loans are incurred pursuant to such Incremental Term
Loan Commitment Agreement in an amount equal to the aggregate principal amount
of Incremental Term Loans made by such Lender pursuant to such Incremental Term
Loan Commitment Agreement on such date, (ii) the Incremental Term Loan
Commitment of each Lender provided pursuant to a particular Incremental Term
Loan Commitment Agreement shall terminate at 5:00 P.M. (New York City time) on
the earlier of (i) the date specified in such Incremental Term Loan Commitment
and (ii) the Revolving Loan Maturity Date (whether or not any Incremental Term
Loans are incurred on either such date), (iii) the aggregate Incremental Term
Loan Commitments provided pursuant to any Incremental Term Loan Commitment
Agreement shall be permanently reduced at the times, and in the amounts,
required by Section 4.02(h) and (iv) unless the Required Lenders otherwise
agree in writing in their sole discretion, any then existing Incremental Term
Loan Commitments shall terminate in their entirety on the date on which a
Change in Control occurs.
(e) Each reduction to the Total Revolving Loan Commitment pursuant to
this Section 3.03 shall be applied proportionately to reduce the Revolving Loan
Commitment of each Lender with such a Commitment. Each reduction to Incremental
Term Loan Commitments provided pursuant to any Incremental Term Loan Commitment
Agreement pursuant to this Section 3.03 shall, except as otherwise expressly
provided above, be applied proportionately to reduce the Incremental Term Loan
Commitment of each Lender provided pursuant to the respective Incremental Term
Loan Commitment Agreement.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) the Borrower
shall give the Administrative Agent prior to 2:00 P.M. (New York time) at the
Notice Office (x) at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of the Borrower's intent to
prepay Base Rate Loans and (y) at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of the Borrower's
intent to prepay Eurodollar Loans, whether Revolving Loans, Swingline Loans or
one or more specified Tranches of Incremental Term Loans shall be prepaid, the
amount of such prepayment and the Types of Loans to be prepaid and, in the case
of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which
made, which notice the Administrative Agent shall promptly transmit to each of
the Lenders; (ii) each prepayment of Loans shall be in an aggregate principal
amount of at least $1,000,000 (or $100,000 in the case of Swingline Loans), and
thereafter, in integral multiples of $100,000, provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
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less than the Minimum Borrowing Amount applicable thereto, then such Borrowing
may not be continued as a Borrowing of Eurodollar Loans and any election of an
Interest Period with respect thereto given by the Borrower shall have no force
or effect; (iii) at the time of any prepayment of Eurodollar Loans pursuant to
this Section 4.01 on any date other than the last day of the Interest Period
applicable thereto, the Borrower shall pay the amounts required pursuant to
Section 1.11; (iv) each prepayment pursuant to this Section 4.01(a) in respect
of any Loans made pursuant to a Borrowing shall be applied pro rata among such
Loans, provided that at the Borrower's election in connection with any
prepayment of Revolving Loans, such prepayment shall not be applied to the
prepayment of Revolving Loans of a Defaulting Lender; (v) each voluntary
prepayment of Incremental Term Loans pursuant to this Section 4.01(a) shall be
applied pro rata to each Tranche of Incremental Term Loans, with each such
Tranche of Incremental Term Loans to be allocated its Relevant Incremental Term
Loan Percentage of such repayment; and (vi) the amount of each voluntary
prepayment of Incremental Term Loans made pursuant to this Section 4.01(a) and
applied to a particular Tranche of Incremental Term Loans as provided in
preceding clause (v) shall be applied (A) (1) first, to reduce the Scheduled
Incremental Term Loan Repayments of the respective Tranche which will become
due within twelve months after the date of such prepayment in direct order of
maturity of the dates of such Scheduled Incremental Term Loan Repayments and
(2) second, to the extent in excess of the amount required to be applied as
provided in the preceding clause (1), to reduce the then remaining Scheduled
Incremental Term Loan Repayments of the respective Tranche on a pro rata basis
(based on the then remaining principal amounts of such Scheduled Incremental
Term Loan Repayments), or (B) as otherwise provided in the Incremental Term
Loan Commitment Agreement pursuant to which such Incremental Term Loans are
made, or (C) in the case of any Tranche of Incremental Term Loans extended
pursuant to more than one Incremental Term Loan Commitment Agreement, as may
otherwise be provided in the first Incremental Term Loan Commitment Agreement
executed and delivered with respect to such Tranche.
(b) In the event of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as provided in
Section 13.12(b), the Borrower may, upon five Business Days' prior written
notice to the Administrative Agent at the Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders) repay all
Loans, together with accrued and unpaid interest, Fees, and all other amounts
owing to such Lender (or owing to such Lender with respect to the Tranche or
Tranches which gave rise to the need to obtain such Lender's individual
consent) in accordance with said Section 13.12(b) so long as (A) in the case of
the repayment of any Revolving Loans of any Lender pursuant to this Section
4.01(b), the Revolving Loan Commitment of such Lender is terminated
concurrently with such repayment pursuant to Section 3.02(b) (at which time
Schedule I shall be deemed modified to reflect the changed Revolving Loan
Commitment) and (B) the consents required by Section 13.12(b) in connection
with the repayment pursuant to this Section 4.01(b) have been obtained.
4.02 Mandatory Repayments. (a) On any day on which the sum of (I) the
aggregate outstanding principal amount of Revolving Loans, plus (II) the
aggregate outstanding principal amount of Swingline Loans plus (III) the Letter
of Credit Outstandings, exceeds the Total Revolving Loan Commitment as then in
effect, the Borrower shall prepay on such day principal of Swingline Loans and,
after all Swingline Loans have been repaid in full, Revolving
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Loans in an amount equal to such excess. If, after giving effect to the
prepayment of all outstanding Swingline Loans and Revolving Loans, the
aggregate amount of the Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall pay to the
Administrative Agent at the Payment Office on such day an amount of cash or
Cash Equivalents equal to the amount of such excess (up to a maximum amount
equal to the Letter of Credit Outstandings at such time), such cash or Cash
Equivalents to be held as security for all obligations of the Borrower
hereunder in a cash collateral account to be established by the Administrative
Agent.
(b) (i) In addition to any mandatory repayments or commitment
reductions pursuant to this Section 4.02, the Borrower shall be required to
repay the principal amount of Incremental Term Loans on the dates and in the
amounts set forth in the respective Incremental Term Loan Commitment Agreement
or Agreements relating to such Incremental Term Loans (each such repayment as
the same may be reduced as provided in Sections 4.01 and 4.02(h) and (i), a
"Scheduled Incremental Term Loan Repayment," and each such date a "Scheduled
Incremental Term Loan Repayment Date"), provided that if any Incremental Term
Loans are incurred which will be added to (and form part of) an existing
Tranche of Incremental Term Loans, the amount of the then remaining Scheduled
Incremental Term Loan Repayments of the respective Tranche shall be
proportionally increased (with the aggregate amount of increases to the then
remaining Scheduled Incremental Term Loan Repayments to equal the aggregate
principal amount of such new Incremental Term Loans then being incurred) in
accordance with the requirements of Section 1.13(c).
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, promptly, but in any event no later
than the third Business Day, after each date on or after the Effective Date
upon which the Borrower receives any cash proceeds from any Qualified Public
Offering, an amount equal to 50% of the Net Equity Proceeds therefrom shall be
applied as a mandatory repayment (and/or commitment reduction, as the case may
be), of outstanding Incremental Term Loans (if any) (and/or Incremental Term
Loan Commitments) in accordance with the requirements of Sections 4.02(h) and
(i).
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, promptly, but in any event no later
than the third Business Day, after each date on or after the Effective Date
upon which the Borrower or any of its Subsidiaries receives any cash proceeds
from any incurrence by the Borrower or any of its Subsidiaries of Indebtedness
for borrowed money (excluding Indebtedness for borrowed money permitted to be
incurred pursuant to Section 9.04), an amount equal to 100% of the Net Debt
Proceeds of the respective incurrence of Indebtedness shall be applied as a
mandatory repayment (and/or commitment reduction, as the case may be) of
outstanding Loans (and/or Commitments) in accordance with the requirements of
Sections 4.02(h) and (i).
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, promptly, but in any event no later
than the third Business Day, after each date on or after the Effective Date
upon which the Borrower or any of its Subsidiaries receives proceeds from any
sale or other disposition of assets, including sales or other dispositions of
capital stock, other Equity Interests and securities held by the Borrower or
any of
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its Subsidiaries, but excluding (A) sales or transfers of assets permitted by
Sections 9.02(ii), (v), (vi), (ix), (x), (xi), (xii), (xiii), (xv) and (xvi),
(B) sales or other dispositions of assets (other than those dispositions
described in clauses (A) and (C) of this Section 4.02(e)) the Net Sale Proceeds
of which do not exceed $5,000,000 in any fiscal year of the Borrower and (C) so
long as no Default or Event of Default then exists, sales or other dispositions
of assets (other than those dispositions described in clauses (A) and (B) of
this Section 4.02(e)), the Net Sale Proceeds of which do not exceed either
$20,000,000 in any fiscal year of the Borrower or $50,000,000 in the aggregate,
provided that in the case of preceding clause (C), such Net Sale Proceeds are
used to purchase or improve tangible assets for use in the business of the
Borrower and its Subsidiaries within 270 days following the receipt of such Net
Sale Proceeds and the Borrower delivers a certificate to the Administrative
Agent on or prior to such date of receipt stating that such Net Sale Proceeds
shall be used to purchase or improve such tangible assets within 270 days
following the date of the receipt of such Net Sale Proceeds (which certificate
shall set forth the estimates of the proceeds to be so expended), an amount
equal to 100% of the Net Sale Proceeds therefrom shall be applied as a
mandatory repayment (and/or commitment reduction, as the case may be) of
outstanding Loans (and/or Commitments) in accordance with the requirements of
Sections 4.02(h) and (i). To the extent Net Sale Proceeds are not required to
be applied pursuant to this Section 4.02(e) as a result of clause (C) contained
in the parenthetical appearing in the first sentence of this Section 4.02(e)
and all or any portion of such Net Sale Proceeds are not so reinvested in
tangible assets within such 270 day period, then the remaining portion of such
Net Sale Proceeds shall be applied on the last day of such applicable period as
otherwise required by this Section 4.02(e) (determined without regard to such
clause (C)). Without limiting the aforementioned provisions of this Section
4.02(e), to the extent that the Borrower is not otherwise required to apply Net
Sale Proceeds from any such asset sale or other disposition to repay Loans
and/or reduce Commitments hereunder and the Borrower is (or would be) required
to make an offer to prepay the Senior Subordinated Notes or any Permitted
Subordinated Notes with such Net Sale Proceeds, the Borrower shall instead
apply such Net Sale Proceeds as a mandatory repayment or commitment reduction
(as the case may be) of outstanding Loans or Commitments in accordance with the
requirements of Section 4.02(h) and (i) prior to the time when the Borrower
would otherwise be required to make any such offer to prepay the Senior
Subordinated Notes or any Permitted Subordinated Notes with such Net Sale
Proceeds.
(f) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each Excess Cash Payment Date, so
long as Excess Cash Flow for the relevant Excess Cash Payment Period exceeds
$1,000,000, an amount equal to 50% of the Excess Cash Flow in excess of
$1,000,000 for the relevant Excess Cash Payment Period shall be applied as a
mandatory repayment (and/or commitment reduction, as the case may be) of
outstanding Incremental Term Loans (if any) (and/or Incremental Term Loan
Commitments) in accordance with the requirements of Sections 4.02(h) and (i).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 10 days following each date on
or after Effective Date on which the Borrower or any of its Subsidiaries
receives any proceeds in excess of $1,000,000 from any Recovery Event, an
amount equal to 100% of the Net Insurance Proceeds (and not just the portion in
excess of $1,000,000) shall be applied as a mandatory repayment (and/or
commitment reduction, as the case may be) of outstanding Loans (and/or
Commitments) in accordance with
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Sections 4.02(h) and (i), provided that (i) so long as no Default or Event of
Default then exists and such Net Insurance Proceeds do not exceed $3,000,000,
such Net Insurance Proceeds shall not be required to be so applied on such date
of receipt to the extent that the Borrower has delivered a certificate to the
Administrative Agent on or prior to such date stating that such proceeds shall
be used or shall be committed to be used to replace or restore any properties
or assets in respect of which such proceeds were paid within 270 days following
the date of receipt of such proceeds (which certificate shall set forth the
estimates of the proceeds to be so expended) and (ii) so long as no Default or
Event of Default then exists and to the extent that (a) the amount of such Net
Insurance Proceeds exceeds $3,000,000, (b) the amount of such Net Insurance
Proceeds, together with other cash available to the Borrower and its
Subsidiaries and permitted to be spent by them on Capital Expenditures during
the relevant period, equals at least 100% of the cost of replacement or
restoration of the properties or assets in respect of which such Net Insurance
Proceeds were paid as determined by the Borrower and as supported by such
estimates or bids from contractors or subcontractors or such other supporting
information as the Administrative Agent may reasonably require, (c) the
Borrower has delivered to the Administrative Agent a certificate on or prior to
the date the certificate would otherwise be required pursuant to this Section
4.02(g) in the form described in clause (i) above and also certifying its
determination as required by preceding clause (b) and certifying the
sufficiency of business interruption insurance as required by succeeding clause
(d), and (d) the Borrower has delivered to the Administrative Agent such
evidence as the Administrative Agent may reasonably request in form and
substance satisfactory to the Administrative Agent establishing that the amount
of business interruption insurance which the Borrower has, if any, is
sufficient and that the Borrower will receive payment thereunder in such
amounts and at such times as, when combined with funds from operations and any
equity contributions received from Shareholders, may reasonably be expected to
be necessary to satisfy all obligations and expenses of the Borrower
(including, without limitation, all debt service requirements, including
pursuant to this Agreement), without any delay or extension thereof, for the
period from the date of the respective casualty, condemnation or other event
giving rise to the Recovery Event and continuing through the completion of the
replacement or restoration of respective properties or assets, then the entire
amount of the Net Insurance Proceeds of such Recovery Event and not just the
portion in excess of $3,000,000 shall be deposited with the Administrative
Agent pursuant to a cash collateral arrangement reasonably satisfactory to the
Administrative Agent whereby such proceeds shall be disbursed to the Borrower
from time to time as needed to pay or reimburse the Borrower or such Subsidiary
for the actual costs incurred by it in connection with the replacement or
restoration of the respective properties or assets (pursuant to such
certification requirements as may be established by the Administrative Agent),
provided further, that at any time while an Event of Default has occurred and
is continuing, the Required Lenders may direct the Administrative Agent (in
which case the Administrative Agent shall, and is hereby authorized by the
Borrower to, follow said directions) to apply any or all proceeds then on
deposit in such collateral account to the repayment (and/or the reduction of
commitments) of outstanding Loans (and/or Commitments) hereunder, and provided
further, that if all or any portion of such Net Insurance Proceeds not required
to be applied to the repayment of Loans pursuant to the second preceding
proviso (whether pursuant to clause (i) or (ii) thereof) are either (A) not so
used or committed to be so used within 270 days after the date of receipt of
such proceeds or (B) if committed to be used within 270 days after the date of
receipt of such Net Insurance Proceeds and not so used
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within 360 days after the date of receipt of such proceeds then, in either such
case, such remaining portion not used or committed to be used in the case of
preceding clause (A) and not used in the case of preceding clause (B) shall be
applied on the date occurring 270 days after the date of receipt of such
proceeds in the case of clause (A) above or the date occurring 360 days after
the date of receipt of such proceeds in the case of clause (B) above as a
mandatory repayment (and/or commitment reduction, as the case may be) of
outstanding Loans (and/or Commitments) in accordance with Sections 4.02(h) and
(i).
(h) Each amount required to be applied pursuant to any of Sections
4.02(c), (d), (e), (f) and (g) shall be applied as follows:
(i) Each amount required to be applied to repay Loans (and/or to
reduce Commitments) pursuant to any of Sections 4.02(c) and (f) shall be
applied (1) first, to repay the outstanding principal of Incremental Term
Loans and (2) second, to the extent such amount is in excess of the amount
required to be applied as provided in preceding clause (1), to permanently
reduce any then outstanding Incremental Term Loan Commitments (with the
amount of any such permanent reduction to the then outstanding Incremental
Term Loan Commitments being deemed to be an application of cash in such
amount, it being understood that, if the amount required to be applied
pursuant to this clause (i) exceeds the amount required to be applied to
repay outstanding principal of Incremental Term Loans pursuant to
preceding clause (1) and so long as any required reduction to Incremental
Term Loan Commitments is actually made as required by preceding clause
(2), the Borrower and its Subsidiaries may retain any excess cash
generated from the events described above in this clause (i) and use same
for their own purposes).
(ii) Each amount required to be applied to repay Loans (and/or to
reduce Commitments) pursuant to Sections 4.02(d), (e) and (g) shall be
applied (1) first, to repay outstanding Incremental Term Loans and
permanently reduce the Total Revolving Loan Commitment, with such
outstanding Incremental Term Loans to be allocated the Incremental Term
Loan Tranches Percentage of such amount and the Total Revolving Loan
Commitment to be reduced by the Revolving Loan Tranche Percentage of such
amount (it being understood that cash in an amount up to the Revolving
Loan Tranche Percentage of such amount shall be applied to the extent then
required pursuant to following clause (vi) and/or (without duplication)
Section 4.02(a), with any excess above the amount required to be so
applied to be retained by the Borrower and its Subsidiaries for their own
purposes), and (2) second, to the extent in excess of the amount required
to be applied as provided in preceding clause (1), to permanently reduce
any then outstanding Incremental Term Loan Commitments (it being
understood that the amount of any reduction to Incremental Term Loan
Commitments pursuant to this clause (2) shall be deemed an application of
cash, with the Borrower and its Subsidiaries permitted to retain the cash
so deemed applied for their own purposes).
(iii) The amount of each principal repayment of Incremental Term
Loans made as required by preceding clauses (i) and (ii) (and Sections
4.02(c), (d), (e), (f) and (g)) shall be applied pro rata to each Tranche
of then outstanding Incremental Term Loans, with
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each such Tranche of Incremental Term Loans to be allocated its Relevant
Incremental Term Loan Percentage of such payment.
(iv) The amount of each principal repayment of Incremental Term Loans
made as required by preceding clauses (i) and (ii) (and Sections 4.02(c),
(d), (e), (f) and (g)) and applied to a particular Tranche of Incremental
Term Loans as provided in preceding clause (iii) shall be applied (A) (1)
first, to reduce the Scheduled Incremental Term Loan Repayments of the
respective Tranche which will become due within twelve months after the
date of such repayment in direct order of maturity of the dates of such
Scheduled Incremental Term Loan Repayments and (2) second, to the extent
in excess of the amount required to be applied as provided in the
preceding clause (1), to reduce the then remaining Scheduled Incremental
Term Loan Repayments of the respective Tranche on a pro rata basis (based
on the then remaining principal amounts of such Scheduled Incremental Term
Loan Repayments), or (B) as otherwise provided in the Incremental Term
Loan Commitment Agreement pursuant to which such Incremental Term Loans
are made, or (C) in the case of any Tranche of Incremental Term Loans
extended pursuant to more than one Incremental Term Loan Commitment
Agreement, as may otherwise be provided in the first Incremental Term Loan
Commitment Agreement executed and delivered with respect to such Tranche.
(v) Each amount required to be applied to Incremental Term Loan
Commitments pursuant to preceding clauses (i) and (ii) (and by Sections
4.02(c), (d), (e), (f) and (g)) shall be applied pro rata to each Tranche
of then outstanding Incremental Term Loan Commitments, with each such
Tranche of Incremental Term Loan Commitments to be allocated its Relevant
Incremental Term Loan Commitment Percentage of such amount (and each
Incremental Term Loan Lender's Incremental Term Loan Commitments under
each such Tranche to be proportionately reduced based on the relative
amount of each such Incremental Term Loan Lender's Incremental Term Loan
Commitments under such Tranche).
(vi) At the time of each reduction to the Total Revolving Loan
Commitment as provided in clause (ii) of this Section 4.02(h), outstanding
principal of Swingline Loans and Revolving Loans (to the extent then
outstanding) shall be repaid in a like amount.
(i) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings pursuant to which made, provided that: (i) repayments
of Eurodollar Loans pursuant to this Section 4.02 shall be made on the last day
of an Interest Period applicable thereto unless all Eurodollar Loans with
Interest Periods ending on such date of required repayment and all Base Rate
Loans have been paid in full; (ii) if any repayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount applicable thereto, such Borrowing shall be converted at the end of the
then current Interest Period into a Borrowing of Base Rate Loans; and (iii)
each repayment of Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans
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of all Lenders. In the absence of a designation by the Borrower as described in
the preceding sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion. Notwithstanding the foregoing
provisions of this Section 4.02 (other than Section 4.02(a) and (b), which
Sections shall not have the benefits of this sentence), if at any time the
mandatory repayment of Loans pursuant to this Section 4.02 would result, after
giving effect to the procedures set forth above in this clause (i), in the
Borrower incurring breakage costs under Section 1.11 as a result of Eurodollar
Loans being repaid other than on the last day of an Interest Period applicable
hereto (any such Eurodollar Loans, "Affected Loans"), the Borrower may elect,
by written notice to the Administrative Agent, to have the provisions of the
following sentence be applicable so long as no Default or Event of Default then
exists. At the time any Affected Loans are otherwise required to be prepaid,
the Borrower may elect to deposit 100% (or such lesser percentage elected by
the Borrower as not being repaid) of the principal amounts that otherwise would
have been paid in respect of the Affected Loans with the Administrative Agent
to be held as security for the obligations of the Borrower hereunder pursuant
to a cash collateral agreement to be entered into in form and substance
satisfactory to the Administrative Agent, with such cash collateral to be
released from such cash collateral account (and applied to repay the principal
amount of such Eurodollar Loans) upon each occurrence thereafter of the last
day of an Interest Period applicable to such Eurodollar Loans (or such earlier
date or dates as shall be requested by the Borrower, with the amount to be so
released and applied on the last day of each Interest Period to be the amount
of such Eurodollar Loans to which such Interest Period applies (or, if less,
the amount remaining in such cash collateral account); provided, however, that
at any time while an Event of Default has occurred and is continuing, the
Required Lenders may direct the Administrative Agent (in which case the
Administrative Agent shall, and is hereby authorized by the Borrower to,
follows said directions) to apply any or all proceeds then on deposit in such
collateral account to the payment of such Affected Loans.
(j) Notwithstanding anything to the contrary contained elsewhere in
the Agreement, (i) all then outstanding Loans of any Tranche shall be repaid in
full on the respective Maturity Date for such Tranche of Loans, and (ii) unless
the Required Lenders otherwise agree in writing (in their sole discretion), all
then outstanding Loans shall be repaid in full on the date on which a Change of
Control occurs.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Lender or Lenders entitled
thereto not later than 2:00 P.M. (New York time) on the date when due and shall
be made in Dollars in immediately available funds at the Payment Office of the
Administrative Agent. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 Net Payments; Taxes. (a) All payments made by any Credit Party
hereunder or under any Note or other Credit Document will be made without
setoff, counterclaim or other
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defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of a
Lender, or any franchise tax based on the net income or net profits of a
Lender, in either case pursuant to the laws of the jurisdiction in which it is
organized or the jurisdiction in which the principal office or applicable
lending office of such Lender is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect to such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
(all such non-excluded taxes, levies, imposts, duties, fees, assessments or
other charges being referred to collectively as "Taxes"). Subject to Section
4.04(b), if any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Lender, promptly after the written request of such Lender, for
taxes imposed on or measured by the net income or net profits of such Lender,
or any franchise tax based on the net income or net profits of a Lender, in
either case pursuant to the laws of the jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Lender is organized or in
which the principal office or applicable lending office of such Lender is
located and for any withholding of income or similar taxes as such Lender shall
determine are payable by, or withheld from, such Lender in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence. The Borrower will furnish to the Administrative
Agent within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrower. The Borrower agrees to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Lender. All amounts payable pursuant to this
Section 4.04(a) shall be subject to the provisions of Section 13.17 (to the
extent applicable).
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Administrative Agent on or
prior to the Effective Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section 1.13 or
13.04 (unless the respective Lender was already a Lender hereunder immediately
prior to such assignment or transfer), on the date of such assignment or
transfer to such Lender, (i) two accurate and complete original signed copies
of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a
complete exemption under any income tax treaty) (or successor forms) certifying
to such Lender's entitlement as of such date to a complete exemption from
United States withholding tax with respect to payments to be made under this
Agreement and under any Note, or (ii) if the Lender is not a "bank" within the
meaning of Section 881(c)(3)(A)
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of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or
Form W-8BEN (with respect to a complete exemption under an income tax treaty)
(or successor forms) pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit E (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio
interest exemption) (or successor form) certifying to such Lender's entitlement
as of such date to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Lender agrees that from time to time after the
Effective Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, such
Lender will deliver to the Borrower and the Administrative Agent two new
accurate and complete original signed copies of Internal Revenue Service Form
W-8ECI, Form W-8BEN (with respect to the benefits of any income tax treaty),
Form W-8BEN (with respect to the portfolio interest exemption) and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrower and the Administrative Agent of its inability to deliver
any such form or certificate, in which case such Lender shall not be required
to deliver any such form or certificate pursuant to this Section 4.04(b).
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 13.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
Fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the Borrower U.S. Internal Revenue Service forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 4.04(a) to indemnify or pay
additional amounts to a Lender in respect of income or similar taxes imposed by
the United States if (I) such Lender has not provided to the Borrower the
Internal Revenue Service forms required to be provided to the Borrower pursuant
to this Section 4.04(b) or (II) in the case of a payment, other than interest,
to a Lender described in clause (ii) above, to the extent that such Forms do
not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 4.04 and except as set forth in Section 13.04(b), the
Borrower agrees to pay any additional amounts and to indemnify each Lender in
the manner set forth in Section 4.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence
as a result of any changes that are effective after the Effective Date in any
applicable law, treaty, governmental rule, regulation, guideline or order, or
in the interpretation thereof, relating to the deducting or withholding of
income or similar taxes.
(c) If the Borrower pays any additional amount under this Section
4.04 to a Lender and such Lender determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a "Tax Benefit"), such
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Lender shall pay to the Borrower an amount that the Lender shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was
obtained by the Lender in such year as a consequence of such Tax Benefit;
provided, however, that (i) any Taxes that are imposed on a Lender as a result
of a disallowance or reduction (including through the expiration of any tax
credit carryover or carryback of such Lender that otherwise would not have
expired) of any Tax Benefit with respect to which such Lender has made a
payment to the Borrower pursuant to this Section 4.04(c) shall be treated as a
Tax for which the Borrower is obligated to indemnify such Lender pursuant to
this Section 4.04 without any exclusions or defenses; (ii) nothing in this
Section 4.04(c) shall require the Lender to disclose any confidential
information to the Borrower (including, without limitation, its tax returns);
(iii) any Lender may determine in its sole discretion consistent with the
policies of such Lender whether to seek a Tax Benefit; and (iv) no Lender shall
be required to pay the Borrower any amount pursuant to this Section 4.04(c) for
so long as a Default or an Event of Default exists, until such Default or Event
of Default is no longer continuing.
(d) Each Lender and the Administrative Agent agrees that it will (i)
take all actions reasonably requested by the Borrower that are without risk or
material cost to such Lender or the Administrative Agent (as the case may be)
to maintain all exemptions available to it from withholding taxes (whether
available by treaty or existing administrative waiver), and (ii) to the extent
reasonable and without material cost to it, otherwise cooperate with the
Borrower to minimize any amounts payable by the Borrower under this Section;
provided, however, a Lender will not be obligated to deliver any tax returns,
income tax schedules or computations, or any other documentation that would
require such Lender to disclose any other information that would adversely
affect such Lender, as determined by such Lender in its sole discretion.
SECTION 5A. Conditions Precedent to Effective Date. The occurrence of
the Effective Date pursuant to Section 13.10 is subject to the satisfaction of
the following conditions:
5A.01 Execution of Agreement; Notes. On or prior to the Effective
Date, there shall have been delivered to the Administrative Agent for the
account of each of the Lenders that has requested same the appropriate
Revolving Note executed by the Borrower and to the Swingline Lender, the
Swingline Note executed by the Borrower, in each case in the amount, maturity
and as otherwise provided herein.
5A.02 Fees, etc. On or prior to the Effective Date, the Borrower
shall have paid to each Agent, the Joint Lead Arrangers and the Lenders all
Fees and all other reasonable costs, fees and expenses (including, without
limitation, reasonable legal fees and expenses) payable to each Agent, the
Joint Lead Arrangers and the respective Lenders to the extent then due.
5A.03 Opinion of Counsel. On the Effective Date, the Administrative
Agent shall have received (i) from Xxxxx, Xxxx & Xxxxxxxx, special counsel to
the Credit Parties, an opinion addressed to the Agents and each of the Lenders
and dated the Effective Date covering the matters set forth in Exhibit F-1 and
such other matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request, (ii) from Xxxxxx X. Xxxxxxx, Esq.,
General Counsel to the Credit Parties, an opinion addressed to the Agents and
each of the Lenders and dated the Effective Date covering the matters set forth
in Exhibit F-2 and
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such other matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request, and (iii) from local counsel in
the States of Illinois, Arizona and California, opinions each in form and
substance reasonably satisfactory to the Agents and addressed to the Agents,
the Collateral Agent and each of the Lenders and dated the Effective Date and
covering such matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request.
5A.04 Corporate Documents; Proceedings; etc. (a) On the Effective
Date, the Administrative Agent shall have received a certificate, dated the
Effective Date, signed by the chairman of the board, the president, any vice
president or the treasurer of the Borrower and each Credit Party, and attested
to by the secretary or any assistant secretary of the respective Credit Party,
in the form of Exhibit G with appropriate insertions, together with copies of
the certificate of incorporation and by-laws of such Credit Party, and the
resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be reasonably acceptable to the Agents.
(b) On or prior to the Effective Date, all corporate, and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents
shall be reasonably satisfactory in form and substance to the Agents, and the
Administrative Agent shall have received all information and copies of all
documents and papers, including records of corporate and partnership
proceedings, governmental approvals (to the extent required), good standing
certificates and bring-down telegrams, if any, which the Agents may have
reasonably requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate, or governmental authorities.
5A.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Collective Bargaining Agreements; Existing Indebtedness Agreements;
Tax Sharing Agreements; Material Leases. On or prior to the Effective Date,
there shall have been delivered to the Administrative Agent true and correct
copies of the following documents, in each case as same will be in effect on
the Effective Date:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information), and for each Plan
that is a "single-employer plan," as defined in Section 4001(a)(15) of
ERISA, the most recently prepared actuarial valuation therefor) and any
other "employee benefit plans," as defined in Section 3(3) of ERISA, and
any other material agreements, plans or arrangements, with or for the
benefit of current or former employees of the Borrower or any of its
Subsidiaries or any ERISA Affiliate (provided that the foregoing shall
apply in the case of any multiemployer plan, as defined in 4001(a)(3) of
ERISA, only to the extent that any document described therein is in the
possession of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate or reasonably available thereto from the sponsor or trustee of
any such plan) (collectively, the "Employee Benefit Plans");
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(ii) all material agreements entered into by the Borrower or any of
its Subsidiaries governing the terms and relative rights of its capital
stock and any agreements entered into by shareholders relating to any such
entity with respect to its capital stock (collectively, the "Shareholders'
Agreements"); provided, that at the Borrower's election, the Borrower may,
in the alternative, in cases where there are two or more instances of a
Shareholders' Agreement based upon a model form, deliver to the
Administrative Agent a copy of such model form, together with a
certificate, signed by an Authorized Officer of the Borrower, which lists
all Shareholders' Agreements based on that form other than those which the
Borrower has independently delivered to the Administrative Agent, together
with the parties to each such Shareholders' Agreement, the amounts of
shares subject to each such Shareholders' Agreement, and any material
divergence of each such Shareholders' Agreement from the model form of
Shareholders' Agreement delivered therewith;
(iii) all material agreements with members of, or with respect to,
the senior management of the Borrower or any of its Subsidiaries
(collectively, the "Management Agreements"); provided that at the
Borrower's election, the Borrow may, in the alternative, in cases where
there are two or more instances of a Management Agreement based upon a
model form, deliver to the Administrative Agent a copy of such model form,
together with a certificate, signed by an Authorized Officer of the
Borrower, which lists all Management Agreements based on that form other
than those which the Borrower has independently delivered to the
Administrative Agent, together with the parties to each such Management
Agreement, the amounts thereof, and any material divergence of each such
Management Agreement from the model form of Management Agreement delivered
therewith;
(iv) all collective bargaining agreements applying or relating to any
employee of the Borrower or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements");
(v) all agreements evidencing or relating to Indebtedness for
borrowed money of the Borrower or any of its Subsidiaries which is to
remain outstanding after giving effect to the Effective Date, other than
agreements in respect of Capitalized Lease Obligations to the extent such
Indebtedness is less than $100,000 (collectively, the "Existing
Indebtedness Agreements");
(vi) all tax sharing, tax allocation and other similar agreements
entered into by the Borrower or any of its Subsidiaries (collectively, the
"Tax Sharing Agreements"); and
(vii) all material leases under which the Borrower or any of its
Subsidiaries lease (as lessee) any real property (collectively, the
"Material Leases");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Collective Bargaining Agreements, Existing Indebtedness Agreements,
Tax Sharing Agreements and Material Leases shall be in full force and effect on
the Effective Date.
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5A.06 Senior Subordinated Notes. On the Effective Date, (i) the
Borrower shall have received gross cash proceeds of at least $150,000,000 from
the issuance by it of Senior Subordinated Notes and (ii) the Borrower shall
have utilized an amount of the net cash proceeds received from the issuance of
the Senior Subordinated Notes sufficient to effect the Refinancing without
utilizing any proceeds of the Loans for such purpose. There shall have been
delivered to the Agents and the Lenders true and correct copies of all Senior
Subordinated Note Documents, and all of the terms and conditions of the Senior
Subordinated Note Documents shall be in form and substance satisfactory to the
Agents. In addition, the Administrative Agent shall have received evidence, in
form and substance reasonably satisfactory to it, that the matters set forth in
this Section 5A.06 have been satisfied as of the Effective Date.
5A.07 Refinancing. On the Effective Date, the total commitments
pursuant to the Existing Credit Agreement shall have been terminated, and all
loans and notes with respect thereto shall have been repaid in full (together
with interest thereon), all letters of credit issued thereunder shall have been
terminated (or either incorporated as Letters of Credit hereunder or fully
supported with Letters of Credit issued hereunder) and all other amounts
(including premiums) owing pursuant to the Existing Credit Agreement shall have
been repaid in full. The creditors in respect of the Existing Credit Agreement
shall have terminated and released all security interests in and Liens on the
assets of the Borrower and its Subsidiaries created pursuant to the security
documentation relating to the Existing Credit Agreement, and such creditors
shall have returned all such assets to the Borrower or such Subsidiary, and the
Administrative Agent shall have received evidence, in form and substance
reasonably satisfactory to it, that the matters set forth in this Section 5A.07
have been satisfied as of the Effective Date.
5A.08 Pledge Agreement. On or prior to the Effective Date, each
Credit Party shall have duly authorized, executed and delivered a Pledge
Agreement in the form of Exhibit H (as modified, supplemented or amended from
time to time, the "Pledge Agreement") and shall have delivered to the
Collateral Agent, as Pledgee thereunder, all the certificated Pledge Agreement
Collateral, if any, referred to therein then owned by such Credit Party, (x)
endorsed in blank in the case of promissory notes constituting Pledge Agreement
Collateral and (y) together with executed and undated stock powers, in the case
of capital stock or other Equity Interests constituting Pledge Agreement
Collateral.
5A.09 Subsidiaries Guaranty. On or prior to the Effective Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered the
Subsidiaries Guaranty in the form of Exhibit I (as modified, supplemented or
amended from time to time, the "Subsidiaries Guaranty").
5A.10 Security Agreement. On or prior to the Effective Date, each
Credit Party shall have duly authorized, executed and delivered the Security
Agreement in the form of Exhibit J (as modified, supplemented or amended from
time to time, the "Security Agreement") covering all of such Credit Party's
present and future Security Agreement Collateral, together with:
(i) proper Financing Statements (Form UCC-1 or the equivalent) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be
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necessary or, in the reasonable opinion of the Collateral Agent, desirable
to perfect the security interests purported to be created by the Security
Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party or any of its Subsidiaries as debtor and that
are filed in the jurisdictions referred to in clause (i) above or in any
other jurisdiction which might result in the existence of perfected
security interests, together with copies of such other financing
statements that name any Credit Party or any of its Subsidiaries as debtor
(none of which shall cover any of the Collateral except to the extent
evidencing Permitted Liens or in respect of which the Collateral Agent
shall have received termination statements (Form UCC-3) or such other
termination statements as shall be required by local law fully executed
for filing); and
(iii) evidence of the completion of all other actions necessary or,
in the reasonable opinion of the Collateral Agent, desirable to perfect
the security interests intended to be created by the Security Agreement.
5A.11 Mortgages; Title Insurance; Survey; etc. On or prior to the
Effective Date, the Collateral Agent shall have received:
(i) fully executed counterparts of Mortgages, each in form and
substance reasonably satisfactory to the Agents, which Mortgages shall
cover the Real Property owned or leased by the Borrower and its
Subsidiaries on the Effective Date and designated as "Mortgaged Property"
on Schedule IV, together with evidence that counterparts of such Mortgages
have been delivered to the title insurance company insuring the Lien of
such Mortgages for recording in all places to the extent necessary or, in
the reasonable opinion of the Collateral Agent, desirable, to effectively
create a valid and enforceable mortgage lien on each such Mortgaged
Property in favor of the Collateral Agent (or such other trustee as may be
required or desired under local law) for the benefit of the Secured
Creditors; and
(ii) a mortgagee title insurance policy (or a binding commitment with
respect thereto) (each, a "Mortgage Policy") on the Mortgaged Properties
issued by a title insurer reasonably satisfactory to the Agents in amounts
satisfactory to the Agents assuring the Collateral Agent that the
Mortgages on such Mortgaged Properties are valid and enforceable mortgage
liens on the respective Mortgaged Properties, free and clear of all
defects and encumbrances except such defects and encumbrances as may be
reasonably acceptable to the Administrative Agent and such Mortgage
Policies shall otherwise be in form and substance reasonably satisfactory
to the Agents.
5A.12 Adverse Change; Approvals; etc. (a) Since June 30, 2000,
nothing shall have occurred (and no Agent nor any Lender shall have become
aware of any facts or conditions not previously known by, or disclosed in
writing to, such Agent or such Lender) which could reasonably be expected to
have a material adverse effect (i) on the rights or remedies of any Agent or
the Lenders, or on the ability of any Credit Party to perform its respective
obligations to any Agent or the Lenders under the Credit Documents or (ii) on
the business, property, assets,
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liabilities (actual or contingent), operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole.
(b) On or prior to the Effective Date, all necessary governmental
(domestic and foreign) and third party approvals and/or consents (if any)
required in connection with (i) the making of the Loans and (ii) the
transactions contemplated by the Credit Documents and otherwise referred to
herein or therein, in each case shall have been obtained and remain in effect,
except in the case of clause (ii) above for such consents and/or approvals the
failure of which to obtain could not reasonably be expected to have a material
adverse effect on the transactions contemplated by this Agreement or the other
Documents or on the business, property, assets, liabilities (actual or
contingent), operations or condition (financial or otherwise) of the Borrower
and its Subsidiaries taken as a whole and all applicable waiting periods shall
have expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the making of
the Loans and the transactions contemplated by the Credit Documents or
otherwise referred to herein or therein. Additionally, there shall not exist
any judgment, order, injunction or other restraint issued or filed or a hearing
seeking injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon the making of the Loans or the
consummation of the Transaction or the other transactions contemplated by the
Documents.
5A.13 Litigation. On the Effective Date, no litigation by any entity
(private or governmental) shall be pending or, to the best of the Borrower's
knowledge, threatened with respect to the Documents or any other documentation
executed in connection herewith or therewith or the transactions contemplated
hereby or thereby.
5A.14 Pro Forma Balance Sheet; Projections. On or prior to the
Effective Date, the Agents shall have received the pro forma financial
statements and the Projections referred to in Sections 7.05(b) and (e) which,
pro forma financial statements and Projections shall be in form and substance
reasonably satisfactory to the Agents.
5A.15 Solvency Certificate; Insurance Certificates. On or prior to
the Effective Date, there shall have been delivered to the Administrative
Agent:
(a) a solvency certificate in the form of Exhibit L, addressed to
each Agent and each of the Lenders and dated the Effective Date from the
chief financial officer of the Borrower; and
(b) certificates of insurance complying with the requirements of
Section 8.03 for the business and properties of the Borrower and its
Subsidiaries, in scope, form and substance reasonably satisfactory to the
Agents and stating that such insurance shall not be canceled or materially
changed without at least 30 days' prior written notice by the respective
insurer to the Administrative Agent.
5A.16 Maximum Leverage Ratio. On the Effective Date, (x) the
Consolidated Leverage Ratio (calculated after giving effect to the Transaction)
shall not be greater than 4.00:1.00 and (y) the Borrower shall have delivered
to the Administrative Agent a certificate
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showing the calculations required by preceding clause (x), and compliance
therewith, in reasonable detail.
SECTION 5B. Conditions Precedent to each Incurrence of Incremental
Term Loans. The obligation of each Lender party to any Incremental Term Loan
Commitment Agreement to make Incremental Term Loans as contemplated therein and
by this Agreement, is subject at the time of the making of such Incremental
Term Loans to the satisfaction of the following conditions:
5B.01 Occurrence of Syndication Date. The Syndication Date shall have
already occurred.
5B.02 Incremental Term Loan Commitment Agreement; Related
Documentation. The Administrative Agent shall have received the respective
Incremental Term Loan Commitment Agreement, executed by each party thereto
(which execution may be in counterparts), and the Administrative Agent shall
have received all related documentation in accordance with the requirements of
Section 1.13(b), in each case to the reasonable satisfaction of the
Administrative Agent.
5B.03 Incremental Term Notes. There shall have been delivered to the
Administrative Agent for the account of each of the relevant Lenders that has
requested same the appropriate Incremental Term Note executed by the Borrower
in the amount, with the maturity and in the form as otherwise provided herein.
5B.04 Officer's Certificate. On the date of each incurrence of
Incremental Term Loans, the Administrative Agent shall have received a
certificate, dated the date of such Incurrence, signed by the chairman of the
board, the president, any vice president or the treasurer of the Borrower
certifying that the Incremental Term Loans are being incurred in accordance
with all relevant requirements of this Agreement, including without limitation
Sections 1.01(d) and 1.13, and showing in reasonable detail calculations of
compliance with the requirements of clause (iv) of the first sentence of
Section 1.01(d) and clause (iv) of Section 1.13(a).
5B.05 Other Conditions Specified in the Relevant Incremental Term
Loan Commitment Agreement. If any other conditions precedent are specified in
the relevant Incremental Term Loan Commitment Agreement, such conditions
precedent shall be satisfied on the date of the incurrence of the respective
Incremental Term Loans.
SECTION 6. Conditions Precedent to All Credit Events. The obligation
of each Lender to make Loans (including any Loans made on the Effective Date or
at any time thereafter), and the obligation of each Issuing Lender to issue
Letters of Credit (including any Letters of Credit issued on the Effective
Date), is subject, at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit
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Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on the date
of the making of such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan (other than a Swingline Loan or a Revolving Loan made
pursuant to a Mandatory Borrowing), the Administrative Agent shall have
received a Notice of Borrowing meeting the requirements of Section 1.03(a).
Prior to the making of each Swingline Loan, the Swingline Lender shall have
received the notice referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Lender shall have received a
Letter of Credit Request meeting the requirements of Section 2.03.
The acceptance of the proceeds of each Loan and the making of each
Letter of Credit Request shall constitute a representation and warranty by the
Borrower to the Administrative Agent and each of the Lenders that all the
conditions specified in Section 5A (with respect to Credit Events on the
Effective Date), Section 5B (with respect to each incurrence of Incremental
Term Loans) and in this Section 6 (with respect to all Credit Events on and
after the Effective Date) and applicable to such Credit Event exist as of that
time. All of the Notes, certificates, legal opinions and other documents and
papers referred to in Section 5A, 5B and in this Section 6, unless otherwise
specified, shall be delivered to the Administrative Agent at the Notice Office
for the account of each of the Lenders and, except for the Notes, in sufficient
counterparts for each of the Lenders and shall be in form and substance
reasonably satisfactory to the Agents and the Required Lenders.
SECTION 7. Representations and Warranties. In order to induce the
Lenders to enter into this Agreement and to make the Loans and issue (or
participate in) the Letters of Credit as provided herein, the Borrower makes
the following representations, warranties and agreements, in each case after
giving effect to the transactions contemplated by this Agreement as consummated
on the Effective Date, all of which shall survive the execution and delivery of
this Agreement and the Notes and the making of the Loans and issuance of the
Letters of Credit, with the occurrence of each Credit Event on or after the
Effective Date being deemed to constitute a representation and warranty that
the matters specified in this Section 7 are true and correct on and as of the
Effective Date and on the date of each such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
7.01 Corporate and Other Status. The Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation,
partnership or limited liability company in good standing under the laws of the
jurisdiction of its organization or formation, (ii) has the corporate,
partnership or limited liability company power and authority, as the case may
be, to own its property and assets and to transact the business in which it is
engaged and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and, to the extent
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applicable, is in good standing in each jurisdiction where the conduct of its
business requires such qualifications except for failures to be so qualified
which, individually or in the aggregate, would not reasonably be expected to
have a material adverse effect on the business, property, assets, liabilities
(actual or contingent), operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole.
7.02 Corporate or Partnership Power and Authority. Each Credit Party
has the corporate, partnership or limited liability company power and
authority, as the case may be, to execute, deliver and perform the terms and
provisions of each of the Credit Documents to which it is a party and has taken
all necessary corporate, partnership or limited liability company action, as
the case may be, to authorize the execution, delivery and performance by it of
each of such Credit Documents. Each Credit Party has duly executed and
delivered each of the Credit Documents to which it is a party, and each of such
Credit Documents constitutes the legal, valid and binding obligation of such
Credit Party enforceable in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally
affecting creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, nor the consummation of the
transactions contemplated therein, (i) will contravene any provision of any
applicable law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the properties or
assets of the Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which the Borrower or any
of its Subsidiaries is a party or by which it or any of its property or assets
is bound or to which it may be subject or (iii) will violate any provision of
the certificate of incorporation or by-laws (or equivalent organizational
document(s)) of the Borrower or any of its Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made and which remain in full force and
effect), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Credit Document or
(ii) the legality, validity, binding effect or enforceability of any such
Credit Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheets of the
Borrower and its Subsidiaries for the fiscal years ended on June 30, 1998, June
30, 1999 and June 30, 2000 and the interim nine-month period ended March 31,
2001, and the related consolidated statements of income, cash flows and
shareholders' equity of the Borrower for the fiscal year or nine-month period
ended on such dates, copies of which have been furnished to the Lenders prior
to the Effective Date, present
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fairly in all material respects the consolidated financial position of the
Borrower and its Subsidiaries at the dates of such balance sheets and the
consolidated results of the operations of the Borrower and its Subsidiaries for
the periods covered thereby. All of the foregoing financial statements have
been prepared in accordance with GAAP (except, in the case of the
aforementioned interim financial statements, for normal year-end audit
adjustments and the absence of footnotes). After giving effect to the
Transaction (but for this purpose assuming the Transaction had occurred prior
to June 30, 2000), since June 30, 2000 nothing has occurred which has had, or
could reasonably be expected to have, a material adverse effect on the
business, property, assets, liabilities (actual or contingent), operations or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken
as a whole.
(b) The consolidated pro forma balance sheet of the Borrower and its
Subsidiaries at June 30, 2001 (calculated after giving effect to the
Transaction, and assuming that the Transaction had occurred on such date),
copies of which have been furnished to the Lenders prior to the Effective Date,
present fairly the pro forma financial position of the Borrower and its
Subsidiaries, and the related pro forma consolidated statements of income of
the Borrower and its Subsidiaries for the twelve-month period ended on June 30,
2001 (calculated after giving effect to the Transaction, and assuming that the
Transaction had occurred on July 1, 2000).
(c) On and as of the Effective Date and after giving effect to the
Transaction and to all Indebtedness (including the Senior Subordinated Notes
and the Loans (if any)) being incurred or assumed and Liens created by the
Credit Parties in connection therewith, (i) the sum of the assets, at a fair
valuation, of each of the Borrower on a stand alone basis and of the Borrower
and its Subsidiaries taken as a whole will exceed its debts; (ii) each of the
Borrower on a stand alone basis and the Borrower and its Subsidiaries taken as
a whole has not incurred and does not intend to incur, and does not believe
that it will incur, debts beyond its ability to pay such debts as such debts
mature; and (iii) each of the Borrower on a stand alone basis and the Borrower
and its Subsidiaries taken as a whole will have sufficient capital with which
to conduct its business. For purposes of this Section 7.05(c), "debt" means any
liability on a claim, and "claim" means (x) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right
to an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
(d) Except as fully disclosed in the financial statements delivered
pursuant to Section 7.05(a) or in other information delivered to the Lenders in
writing, there were as of the Effective Date no liabilities or obligations with
respect to the Borrower or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in aggregate, would reasonably be expected to be
material to the Borrower and its Subsidiaries taken as a whole.
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(e) On and as of the Effective Date, the Projections delivered to the
Administrative Agent and the Lenders prior to the Effective Date have been
prepared in good faith and are based on assumptions believed by the Borrower to
be reasonable, and there are no statements or conclusions in the Projections
which are based upon or include information known to the Borrower to be
misleading in any material respect or which fail to take into account material
information known to the Borrower regarding the matters reported therein. On
the Effective Date, the Borrower believes that the Projections are reasonable
and attainable, it being understood that the Projections include assumptions as
to future events that are not to be viewed as facts and there can be no
assurance that such assumptions, statements, estimates and Projections will be
realized and that actual results may differ from the projected results and such
differences may be material and adverse.
7.06 Litigation. There are no actions, suits or proceedings pending
or, to the Borrower's knowledge, threatened (i) with respect to any Credit
Document, (ii) on and as of the Effective Date with respect to the Transaction,
or (iii) with respect to any matter that could reasonably be expected to have a
material adverse effect on the business, property, assets, liabilities (actual
or contingent), operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information (taken as
a whole) regarding the Borrower or any of its Subsidiaries furnished by or on
behalf of the Borrower or any of its Subsidiaries in writing to the
Administrative Agent or any Lender (including, without limitation, all
information contained in the Credit Documents) for purposes of or in connection
with this Agreement, the other Credit Documents or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of the Borrower or any of its Subsidiaries
in writing to the Administrative Agent or any Lender will be, true and accurate
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided. It is understood that the Projections do not constitute factual
information for purposes of this Section 7.07.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
Revolving Loans and the Swingline Loans shall be used solely to finance
Permitted Acquisitions and for the working capital purposes, Capital
Expenditures and other general corporate purposes of the Borrower and its
Subsidiaries; provided that no Revolving Loans or Swingline Loans may be used
to make payments pursuant to the Refinancing or to pay the fees and expenses
incurred in connection therewith.
(b) All proceeds of Incremental Term Loans shall be used solely (i)
to finance Permitted Acquisitions, (ii) to finance Capital Expenditures and the
Borrower's and its Subsidiaries' other general corporate purposes and (iii) to
repay outstanding Revolving Loans.
(c) No part of any Credit Event (or the proceeds thereof) will be
used to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof nor the
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occurrence of any other Credit Event will violate or be inconsistent with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
7.09 Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material
tax returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those contested in good faith fully provided for on the financial statements of
the Borrower and its Subsidiaries in accordance with GAAP. The Borrower and
each of its Subsidiaries have at all times paid, or have provided adequate
reserves (in the good faith judgment of the management of the Borrower) for the
payment of, all federal, state and foreign income taxes applicable for all
prior fiscal years and for the current fiscal year to date. There is no action,
suit, proceeding, investigation, audit, or claim now pending or, to the
knowledge of the Borrower, threatened by any authority regarding any taxes
relating to the Borrower or any of its Subsidiaries that could reasonably be
expected to have a material adverse effect on the business, property, assets,
liabilities (actual or contingent), operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole. Neither the
Borrower nor any of its Subsidiaries has entered into an agreement or waiver
which is currently in effect or has pending a request to enter into an
agreement or waiver extending any statute of limitations relating to the
payment or collection of taxes of the Borrower or any of its Subsidiaries, or
is aware of any circumstances that would cause the taxable years or other
taxable periods of the Borrower or any of its Subsidiaries not to be subject to
the normally applicable statute of limitations.
7.10 Compliance with ERISA. Schedule V sets forth each Plan; each
Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including, without
limitation, ERISA and the Code; each Plan (and each related trust, if any)
which is intended to be qualified under Section 401(a) of the Code has received
a determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; except as would not result in any material liability, no
Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA)
is insolvent or in reorganization; no Plan has an Unfunded Current Liability
which, when added to the aggregate amount of Unfunded Current Liabilities with
respect to all other Plans, exceeds $250,000; no Plan which is subject to
Section 412 of the Code or Section 302 of ERISA has an accumulated funding
deficiency, within the meaning of such Sections of the Code or ERISA, or has
applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; except as would not result in any material
liability, all contributions required to be made with respect to a Plan have
been timely made; neither the Borrower nor any Subsidiary of the Borrower nor
any ERISA Affiliate has incurred any material liability (including any
indirect, contingent or secondary liability) to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or
expects to incur any such liability under any of the foregoing sections with
respect to any Plan; no condition exists which presents a material risk to the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of incurring
a material liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate or appoint a
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trustee to administer any Plan which is subject to Title IV of ERISA; no
action, suit, proceeding, hearing, audit or investigation with respect to the
administration, operation or the investment of assets of any Plan (other than
routine claims for benefits) is pending, expected or threatened; using
actuarial assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the aggregate liabilities of the Borrower and
its Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer
plans (as defined in Section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not
exceed $250,000; each group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) which covers or has covered employees or
former employees of the Borrower, any Subsidiary of the Borrower, or any ERISA
Affiliate has at all times been operated in material compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
Code; no lien imposed under the Code or ERISA on the assets of the Borrower or
any Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to
arise on account of any Plan; and the Borrower and its Subsidiaries do not
maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any Plan
the obligations with respect to which could reasonably be expected to have a
material adverse effect on the ability of the Borrower or any of its
Subsidiaries to perform its obligations under this Agreement or any other
Credit Document.
7.11 The Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein, and the Collateral Agent, for the
benefit of the Secured Creditors, has a fully perfected first lien on, and
security interest in, all right, title and interest in all of the Security
Agreement Collateral described therein, subject to no other Liens other than
Permitted Liens. The recordation of (x) the Grant of Security Interest in U.S.
Patents and (y) the Grant of Security Interest in U.S. Trademarks in the
respective form attached to the Security Agreement, in each case in the United
States Patent and Trademark Office, together with filings on Form UCC-1 made
pursuant to the Security Agreement, will create, as may be perfected by such
filings and recordation, a perfected security interest in the United States
trademarks and patents covered by the Security Agreement, and the recordation
of the Grant of Security Interest in U.S. Copyrights in the form attached to
the Security Agreement with the United States Copyright Office, together with
filings on Form UCC-1 made pursuant to the Security Agreement, will create, as
may be perfected by such filings and recordation, a perfected security interest
in the United States copyrights covered by the Security Agreement.
(b) The security interests created under the Pledge Agreement in
favor of the Collateral Agent, as Pledgee, for the benefit of the Secured
Creditors, constitute perfected security interests in the Pledge Agreement
Collateral described in the Pledge Agreement, subject to no security interests
of any other Person. No filings or recordings are required in order to perfect
(or maintain the perfection or priority of) the security interests created in
the Pledge Agreement Collateral under the Pledge Agreement other than with
respect to that portion of the Pledge Agreement Collateral constituting a
"general intangible" under the UCC.
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7.12 Approvals; etc. All consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to consummate the
transactions contemplated by this Agreement have been obtained, given, filed or
taken and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained), except such consents, approvals and
filings the failure of which to obtain or file could not reasonably be expected
to have a material adverse effect on the transactions contemplated by this
Agreement or on the business, operations, property, assets, liabilities (actual
or contingent), operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole. All transactions contemplated
hereby have been consummated in all material respects in accordance with the
documentation therefor and all applicable laws, and all actions pursuant to or
in furtherance of the transactions contemplated by this Agreement have been and
will be taken in compliance in all material respects with all applicable laws.
7.13 Properties. All Real Property owned or leased by the Borrower or
any of its Subsidiaries as of the Effective Date (other than any such leased
Real Property consisting of insignificant office or other spaces), and the
nature of the interest therein, is correctly set forth in Schedule IV. The
Borrower and each of its Subsidiaries have good and marketable title to all
material properties owned by them, including all property reflected in Schedule
IV and in the balance sheets referred to in Section 7.05(a) (except as sold or
otherwise disposed of since the date of such balance sheet in the ordinary
course of business or as permitted by the terms of this Agreement), free and
clear of all Liens, other than Permitted Liens.
7.14 Capitalization. On the Effective Date, the authorized capital
stock of the Borrower shall consist of (i) 600,000 shares of common stock,
$0.01 par value per share, 203,294 of which shall be issued and outstanding,
and (ii) 150,000 shares of preferred stock, $0.01 par value per share, 21,600
of which shares shall be designated as PIK Preferred Stock and be issued and
outstanding. All outstanding shares of such capital stock have been duly and
validly issued, are fully paid and nonassessable and are free of preemptive
rights. Except for certain options issued pursuant to employee and director
stock option plans and the provisions of the Shareholders' Agreements, on the
Effective Date the Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
7.15 Subsidiaries. The Borrower has no Subsidiaries other than (i)
those Subsidiaries listed on Schedule VI and (ii) new Subsidiaries created in
compliance with Section 9.14. Schedule VI correctly sets forth, as of the
Effective Date, the percentage ownership (direct or indirect) of the Borrower
in each class of capital stock or other equity of each of its Subsidiaries and
also identifies the direct owner thereof.
7.16 Compliance with Statutes, etc. The Borrower and each of its
Subsidiaries are in compliance with all applicable statutes, regulations and
orders of all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including applicable
Environmental Laws) except such noncompliances as could not, individ-
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ually or in the aggregate, reasonably be expected to have a material adverse
effect on the business, property, assets, liabilities (actual or contingent),
operations or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
7.17 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 Public Utility Holding Company Act. Neither the Borrower nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.19 Environmental Matters. (a) The Borrower and each of its
Subsidiaries have complied with all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There are no
pending or, to the Borrower's knowledge, threatened Environmental Claims
against the Borrower or any of its Subsidiaries or any Real Property owned,
leased or operated by the Borrower or any of its Subsidiaries. There are no
facts, circumstances, conditions or occurrences on any Real Property owned,
leased or operated by the Borrower or any of its Subsidiaries or, to the
Borrower's knowledge, on any property adjoining or in the vicinity of any such
Real Property that would reasonably be expected (i) to form the basis of an
Environmental Claim against the Borrower or any of its Subsidiaries or any such
Real Property or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property by the Borrower or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials are not being, and to the Borrower's best
knowledge after due inquiry, have not at any time previously been, generated,
used, treated or stored on, or transported to or from, or Released on or from,
any Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries except in compliance with all applicable Environmental Laws.
(c) Notwithstanding anything to the contrary in this Section 7.19,
the representations made in this Section 7.19 shall only be untrue if the
aggregate effect of all failures, noncompliances, activities, facts,
circumstances, conditions and occurrences of the types described above could
reasonably be expected to have a material adverse effect on the business,
property, assets, liabilities (actual or contingent), operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.
7.20 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a material adverse effect on the Borrower and its Subsidiaries
taken as a whole. There is (i) no unfair labor practice complaint pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of
the Bor-
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rower, threatened against any of them, before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Borrower or any of
its Subsidiaries or, to the best knowledge of the Borrower, threatened against
any of them, (ii) no strike, labor dispute, slowdown or stoppage pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of
the Borrower, threatened against any of them and (iii) no union representation
question exists with respect to the employees of the Borrower or any of its
Subsidiaries, except (with respect to any matter specified in clause (i), (ii)
or (iii) above, either individually or in the aggregate) such as could not
reasonably be expected to have a material adverse effect on the business,
property, assets, liabilities (actual or contingent), operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.
7.21 Patents, Licenses, Franchises and Formulas. Except as set forth
on Schedule VII hereto, each of the Borrower and each of its Subsidiaries owns
all the patents, trademarks, permits, service marks, trade names, copyrights,
licenses, franchises, proprietary information (including but not limited to
rights in computer programs and databases) and formulas, or rights with respect
to the foregoing, and has obtained assignments of all leases and other rights
of whatever nature, necessary for the present conduct of its business, without
any known conflict with the rights of others which, or the failure to obtain
which, as the case may be, could reasonably be expected to result in a material
adverse effect on the business, property, assets, liabilities (actual or
contingent), operations or condition (financial or otherwise) of the Borrower
and its Subsidiaries taken as a whole.
7.22 Indebtedness. Schedule VIII sets forth a true and complete list
of all Indebtedness of the Borrower and its Subsidiaries as of the Effective
Date (after giving effect to the Refinancing, but excluding the Loans, the
Letters of Credit and the Senior Subordinated Notes, the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any Credit Party or any of its
Subsidiaries which directly or indirectly guaranteed such Indebtedness.
7.23 Hospital Properties. The Borrower owns no Hospital Properties
directly, and on the Effective Date, each Hospital Property is owned by a
Wholly-Owned Subsidiary of the Borrower which is a Subsidiary Guarantor
organized under the laws of a state in the United States. Each Hospital
Property is located in the United States.
7.24 Subordination. (a) The subordination provisions contained in the
Senior Subordinated Note Documents are enforceable against the Borrower, the
Subsidiary Guarantors party thereto and the holders of the Senior Subordinated
Notes, and all Obligations hereunder and in the other Credit Documents are
within the definitions of "Senior Indebtedness" and "Designated Senior
Indebtedness" included in such subordination provisions.
(b) At all times from and after the issuance of any Permitted
Subordinated Notes, the subordination provisions contained in the Permitted
Subordinated Note Documents shall be enforceable against the Borrower, the
Subsidiary Guarantors party thereto and the holders of the Permitted
Subordinated Notes and all obligations hereunder and in the other Credit
Documents shall be within the definition of "Senior Indebtedness" and
"Designated Senior Indebtedness" (or any substantially similar terms) included
in such subordination provisions.
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7.25 Legal Names; Organizational Identification Numbers; Jurisdiction
and Type of Organization; etc. Schedule XII hereto sets forth a true and
correct list, as of the Effective Date, of the exact legal name of each Credit
Party, the organizational identification number (if any) of such Credit Party,
the jurisdiction of organization of such Credit Party and the type of
organization of such Credit Party.
7.26 No Director, Executive Officer or Principal Shareholder. No
director, executive officer or principal shareholder of the Borrower or any of
its Subsidiaries is a director, executive officer or principal shareholder of
any Lender that is a bank subject to Regulation O (or any similar law or
regulation restricting loans to insiders), unless the extensions of credit made
by such bank hereunder would not violate Regulation O, or such similar law or
regulation, as the case may be. For the purposes hereof, the terms "director,"
"executive officer" and "principal shareholder" (when used with reference to
any Lender) shall have the respective meanings assigned thereto in Regulation
O.
SECTION 8. Affirmative Covenants. The Borrower hereby covenants and
agrees that on and after the Effective Date and until the Total Commitments and
all Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other obligations incurred hereunder and
thereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to the
Administrative Agent (with sufficient copies for each of the Lenders, and the
Administrative Agent will promptly forward to each of the Lenders):
(a) Quarterly Financial Statements. Within 45 days after the close of
the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the related
consolidated statements of income and retained earnings and statement of cash
flows for such quarterly accounting period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly accounting period, in
each case setting forth comparative figures for the related periods in the
prior fiscal year, all of which shall be certified by the Chief Financial
Officer of the Borrower, subject to normal recurring adjustments and (ii) a
comparison of the performance of the Borrower and its Subsidiaries against the
current business plan of the Borrower.
(b) Annual Financial Statements. (i) Within 90 days after the close
of each fiscal year of the Borrower, (A) the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows for
such fiscal year setting forth comparative figures for the preceding fiscal
year and certified (without the inclusion of any "going concern" qualification)
by any of the "Big Five" independent certified public accountants or such other
independent certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent and (B) a comparison of the
performance of the Borrower and its Subsidiaries against the current business
plan of the Borrower.
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(ii) At the time of the delivery of the annual financial statements
pursuant to clause (i) above, a report of the applicable accounting firm
stating that in the course of its regular audit of the financial statements of
the Borrower and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge of any Default or Event of Default which has occurred and is
continuing under Sections 9.07, 9.08 or 9.09 or, if in the opinion of such
accounting firm such a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(c) Budgets; Business Plan. No later than 45 days after the
commencement of each fiscal year of the Borrower, a budget in form reasonably
satisfactory to the Administrative Agent (including, in any event, budgeted
statements of income and sources and uses of cash and balance sheets of cash
flow and budgeted debt and cash balances) for such fiscal year prepared by the
Borrower in reasonable detail and accompanied by the current business plan of
the Borrower and a statement of the Chief Financial Officer of the Borrower to
the effect that, to the best of such officer's knowledge, the budget is a
reasonable estimate of the period covered thereby.
(d) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.01(a) and (b), a compliance
certificate of the Chief Financial Officer of the Borrower in the form of
Exhibit K certifying on behalf of the Borrower that, to the best of such
officer's knowledge, no Default or Event of Default has occurred and is
continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which certificate shall
(x) set forth the calculations (in reasonable detail, and showing any
adjustments required pursuant to Section 11.02) required to establish (A) the
Applicable Margins for the respective Margin Reduction Period (and the
Consolidated Leverage Ratio for purposes of determining such Applicable
Margins) and (B) whether the Borrower and its Subsidiaries were in compliance
with the provisions of Sections 4.02(c), (d), (e), (f) and (g), 9.01, 9.02,
9.03, 9.04, 9.05, 9.07, 9.08, 9.09 and 9.17 at the end of such fiscal quarter
or year, as the case may be, (y) if delivered with the financial statements
required by Section 8.01(b), set forth the amount of (and the calculations
required to establish) Excess Cash Flow for the respective Excess Cash Payment
Period, and (z)(i) certify that no changes are required to be made to any of
Schedule XII hereto, Annexes A through I of the Security Agreement or Annexes A
through G of the Pledge Agreement, in each case so as to make the information
set forth therein accurate and complete as of the date of such certificate, or
(ii) to the extent that such information is no longer accurate and complete as
of such date, list in reasonable detail all information necessary to make such
Schedule and all such Annexes accurate and complete (at which time such
Schedule and/or such Annexes, as the case may be, shall be deemed modified to
reflect such information).
(e) Management Letters. Promptly after the Borrower's or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" received from
its certified public accountants.
(f) Notice of Default or Litigation. Promptly, and in any event
within five Business Days, after any executive officer of any Credit Party
obtains knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or an Event of Default and (ii) any litigation or
governmental investigation or proceeding pending or threatened (x) against the
Bor-
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rower or any of its Subsidiaries which, either individually or in the aggregate
could reasonably be expected to have a material adverse effect on the business,
property, assets, liabilities (actual or contingent), operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole
or (y) with respect to any Credit Document.
(g) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and other
information and reports with respect to the Borrower or any of its
Subsidiaries, if any, which the Borrower or any of its Subsidiaries shall file
with or furnish to the Securities and Exchange Commission or any successor
thereto (the "SEC") and copies of all material notices and reports which the
Borrower or its Subsidiaries shall deliver to holders of its Indebtedness
pursuant to the terms of the documentation governing such Indebtedness (or any
trustee, agent or other representative therefor).
(h) Environmental Matters. Promptly upon, and in any event within
fifteen Business Days after, any senior or executive officer of any Credit
Party obtaining knowledge thereof, notice of one or more of the following
environmental matters, unless such environmental matters could not,
individually or when aggregated with all other such environmental matters, be
reasonably expected to have a material adverse effect on the business,
property, assets, liabilities (actual or contingent), operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries that
(a) results in non-compliance by the Borrower or any of its Subsidiaries
with any applicable Environmental Law or (b) could reasonably be expected
to form the basis of an Environmental Claim against the Borrower or any of
its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned, leased
or operated by the Borrower or any of its Subsidiaries that could
reasonably be expected to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability by it or
any of its Subsidiaries of such Real Property under any Environmental Law;
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries as
required by any Environmental Law or any governmental or other
administrative agency; and
(v) all notices received by the Borrower or any of its Subsidiaries
from any government or governmental agency under, or pursuant to, CERCLA
which identify the Borrower or any of its Subsidiaries as potentially
responsible parties for remediation costs
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or which otherwise notify the Borrower or any of its Subsidiaries of
potential liability under CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's or such Subsidiary's response or proposed response thereto. In
addition, the Borrower and any of its Subsidiaries will provide the Lenders
with copies of all material communications with any governmental agency or
other third Person that is adverse to the Borrower or such Subsidiary relating
to material Environmental Claims required to be otherwise reported under this
clause (h), and such detailed reports of any such material Environmental Claim
as may reasonably be requested by the Administrative Agent or any Lender.
(i) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Borrower or its
Subsidiaries as the Administrative Agent may reasonably request.
8.02 Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. Upon reasonable notice, the Borrower will, and
will cause each of its Subsidiaries to, permit officers and designated
representatives of the Administrative Agent or any Lender (at the expense of
the Administrative Agent or Lender) to visit and inspect, under guidance of
officers of it or such Subsidiary, any of the properties of the Borrower or any
of its Subsidiaries, and to examine the books of account of the Borrower and
any of its Subsidiaries and discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with, and be advised as to the same by,
its and their officers and, so long as an officer of the Borrower or such
Subsidiary is present, independent accountants, all at such reasonable times
and intervals and to such reasonable extent as the Administrative Agent or such
Lender may reasonably request.
8.03 Maintenance of Property; Insurance, Reserves. Schedule IX sets
forth a true and complete listing of all insurance maintained by, or on behalf
of, the Borrower and its Subsidiaries as of the Effective Date. The Borrower
will, and will cause each of its Subsidiaries to, (i) keep all property
necessary to the business of the Borrower and its Subsidiaries in good working
order and condition, ordinary wear and tear excepted, (ii) maintain insurance
on all its property and assets which are of an insurable character in at least
such amounts and against at least such risks as is consistent and in accordance
with industry practice for a company similarly situated and are no less than
the full replacement value thereof, and otherwise in accordance with Schedule
IX, and (iii) furnish to the Administrative Agent, a certified copy of each
policy providing for such insurance (which policies shall name the Collateral
Agent as loss payee and/or additional insured), together with an endorsement
thereto providing that the insurance companies issuing such policies will give
the Administrative Agent at least 30 days' prior written notice of cancellation
or non-renewal. In addition, the Borrower shall maintain reserves during each
of its fiscal years for professional liability claims in an amount for each
such fiscal year not less than the amount determined as appropriate by the
Borrower's independent actuaries.
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8.04 Corporate Franchises. The Borrower will, and will cause each of
its Subsidiaries to, do or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises, licenses and patents; provided, however, that nothing in this
Section 8.04 shall prevent (i) any of the transactions permitted in accordance
with Section 9.02 or (ii) the withdrawal by the Borrower or any of its
Subsidiaries of its qualification as a foreign corporation in any jurisdiction,
or the dissolution or liquidation of Subsidiaries which hold no substantial
assets and do not operate any businesses, in each case where such withdrawal,
dissolution or liquidation could not reasonably be expected to have a material
adverse effect on the business, property, assets, liabilities (actual or
contingent), operations or condition (financial or otherwise) of the Borrower
and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. The Borrower will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including applicable
Environmental Laws), except such noncompliances as could not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
the business, property, assets, liabilities (actual or contingent), operations
or condition (financial or otherwise) of the Borrower and its Subsidiaries
taken as a whole.
8.06 Compliance with Environmental Laws. (a) The Borrower will
comply, and will cause each of its Subsidiaries to comply, with all
Environmental Laws applicable to the ownership, lease or use of its Real
Property now or hereafter owned, leased or operated by the Borrower or any of
its Subsidiaries (except such noncompliances as could not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
business, property, assets, liabilities (actual or contingent), operations or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken
as a whole), will promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance; provided that there shall be no
violation of any of the foregoing so long as any obligation to comply or pay is
being contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, and will keep or cause
to be kept all such Real Property free and clear of any Liens imposed pursuant
to such Environmental Laws except for Permitted Liens. Neither the Borrower nor
any of its Subsidiaries will generate, use, treat, store, Release or dispose
of, or knowingly permit the generation, use, treatment, storage, Release or
disposal of Hazardous Materials on any Real Property now or hereafter owned or
operated by the Borrower or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property except
for Hazardous Materials generated, used, treated, stored, released or disposed
of at any such Real Properties in compliance with all applicable Environmental
Laws (except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, property, assets, liabilities (actual or contingent), operations or
conditions (financial or otherwise) of the Borrower and its Subsidiaries taken
as a whole), and reasonably required in connection with the operation, use and
maintenance of the business or operations of the Borrower or any of its
Subsidiaries.
(b) To the extent any Credit Party delivers notice of the occurrence
of the environmental matters as described in Section 8.01(h), the Borrower will
provide, upon the written request of the Administrative Agent or the Required
Lenders, which request shall specify
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in reasonable detail the basis therefor, at its sole cost and expense, an
environmental site assessment report concerning the relevant Real Property now
or hereafter owned or operated by such Credit Party, prepared by an
environmental consulting firm reasonably approved by the Agents, indicating the
presence or absence of Hazardous Materials and, to the extent practicable, the
potential cost of any removal or remedial action in connection with any
Hazardous Materials on such Real Property. If the Borrower fails to provide the
same within 90 days after such request was made, the Agents may order the same,
and the Borrower shall grant and hereby grants, to the Agents and the Lenders
and their agents access to such Real Property and specifically grants the
Agents and the Lenders an irrevocable non-exclusive license, subject to the
rights of tenants, to undertake such an assessment, all at the Borrower's
reasonable expense.
8.07 ERISA. As soon as possible and, in any event, within ten (10)
days after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following (except
to the extent that the occurrence of any of the following could not reasonably
be expected to result in a liability, loss or claim exceeding $250,000), the
Borrower will deliver to the Administrative Agent a certificate of the chief
financial officer of the Borrower setting forth the full details as to such
occurrence and the action, if any, that the Borrower, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred
(except to the extent that the Borrower has previously delivered to the Lenders
a certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably
expected to occur with respect to such Plan within the following 30 days; that
an accumulated funding deficiency, within the meaning of Section 412 of the
Code or Section 302 of ERISA, has been incurred or an application may be or has
been made for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code or Section 303 or 304 of
ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability; that proceedings may be
or have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a
Plan; that the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
will or may incur any material liability (including any indirect, contingent,
or secondary liability) to or on account of the termination of or withdrawal
from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212(c) of
ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of
the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
the Code) under Section 4980B of the Code; or that the Borrower or any
Subsidiary of the Borrower may incur any material liability pursuant to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to
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retired employees or other former employees (other than as required by Section
601 of ERISA) or any Plan. The Borrower will deliver to the Administrative
Agent (i) upon request of the Administrative Agent a complete copy of the
annual report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service and (ii) copies of any records, documents or other information that
must be furnished to the PBGC with respect to any Plan pursuant to Section 4010
of ERISA. In addition to any certificates or notices delivered to the Lenders
pursuant to the first sentence hereof, any records, documents or other
information required to be furnished to the PBGC, and any material notices
received by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
with respect to any Plan shall be delivered to the Lenders no later than ten
(10) days after the date such records, documents and/or information has been
furnished to the PBGC or such notice has been received by the Borrower, the
Subsidiary or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. The Borrower will cause
(i) each of its, and each of its Subsidiaries', fiscal years to end on June 30
and (ii) each of its, and each of its Subsidiaries', fiscal quarters to end on
September 30, December 31, March 31 and June 30.
8.09 Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, deed of trust, indenture, security agreement, loan agreement or
credit agreement and each other material agreement, contract or instrument by
which it or any of its Real Property is bound, except such non-performances as
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, property, assets, liabilities (actual
or contingent), operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole.
8.10 Payment of Taxes. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits,
or upon any properties belonging to it, prior to the date on which penalties
attach thereto, and all lawful claims for sums that have become due and payable
which, if unpaid, might become a Lien not otherwise permitted under Section
9.01(i) provided that neither the Borrower nor any of its Subsidiaries shall be
required to pay any such tax, assessment, charge, levy or claim which is being
contested in good faith and by proper proceedings if it has maintained adequate
reserves with respect thereto in accordance with GAAP.
8.11 Accreditation and Licensing. The Borrower will (i) obtain and
maintain, and cause each of its Subsidiaries to obtain and maintain, all
permits, licenses and other governmental approvals as may be necessary for the
operation of each of its Hospital Properties, except for those permits,
licenses and approvals the failure of which to obtain and maintain could not,
individually or in the aggregate with all other failures pursuant to this
Section 8.11, reasonably be expected to have a material adverse effect on the
business, property, assets, liabilities (actual or contingent), operations or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken
as a whole, (ii) obtain and maintain, and cause each of its Subsidiaries to
obtain and maintain, its qualification for participation in any payment under
CHAMPUS, Medicare,
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Medicaid, Blue Cross, Blue Shield and any other private insurance programs of
similar broad application and any other federal, state and local governmental
programs providing for payment of reimbursement for services rendered which the
Borrower deems prudent in its reasonable discretion, except to the extent any
failure to maintain such qualification could not, individually or in the
aggregate with all other failures pursuant to this Section 8.11, reasonably be
expected to have a material adverse effect on the business, property, assets or
liabilities (actual or contingent), operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole, and (iii) use
its best efforts to cause each Hospital Property owned, leased or operated by
the Borrower or any Subsidiary of the Borrower to have at all times a valid
Certificate of Accreditation of the Joint Commission of Accreditation of Health
Care Organizations in full force and effect, except to the extent any failure
to have any such valid Certificate of Accreditation of the Joint Commission of
Accreditation of Health Care Organizations could not, individually or in the
aggregate with all other failures pursuant to this Section 8.11, reasonably be
expected to have a material adverse effect on the business, property, assets,
liabilities (actual or contingent), operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole.
8.12 Additional Security; Further Assurances. (a) The Borrower will,
and will cause each of the Subsidiary Guarantors to, grant to the Collateral
Agent security interests and mortgages in such assets and properties of the
Borrower and such Subsidiary Guarantors as are not covered by the original
Security Documents, and as may be reasonably requested from time to time by the
Administrative Agent or the Required Lenders (collectively, the "Additional
Security Documents"), provided that notwithstanding anything to the contrary
contained in this Agreement (i) Leasehold Mortgages shall not be required on
any Real Property other than Hospital Properties, large clinics and surgical
centers and other material Real Property, (ii) no landlord-lender agreements
shall be required on any Leasehold not subject to a Leasehold Mortgage and
(iii) at the Borrower's election (which election shall be made by delivering
written notice thereof to the Administrative Agent) neither the Borrower nor
any Subsidiary Guarantor shall be required to grant a security interest or
mortgage in any asset as otherwise required above pursuant to this Section
8.12(a) so long as the book value or fair market value (as determined in good
faith by the Borrower), whichever is greater, is less than $1,000,000 (although
in no event shall the aggregate book value or fair market value (as determined
in good faith by the Borrower), whichever is greater, of all assets so excluded
as provided in this clause (iii) exceed $5,000,000). Subject to the provisions
contained in the proviso appearing in the immediately preceding sentence,
within 30 days following the Administrative Agent's or the Required Lenders'
request therefor, the Borrower will, and will cause each of the Subsidiary
Guarantors to, grant to the Collateral Agent mortgages on any Hospital
Properties constructed or acquired by the Borrower or any Subsidiary Guarantor
following the Effective Date. All such security interests and mortgages shall
be granted pursuant to documentation reasonably satisfactory in form and
substance to the Administrative Agent and shall constitute valid and
enforceable perfected security interests and mortgages superior to and prior to
the rights of all third Persons and subject to no other Liens except for
Permitted Liens. The Additional Security Documents or instruments related
thereto shall have been duly recorded or filed in such manner and in such
places as are required by law to establish, perfect, preserve and protect the
Liens in favor of the Collateral
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Agent required to be granted pursuant to the Additional Security Documents and
all taxes, fees and other charges payable in connection therewith shall have
been paid in full.
(b) The Borrower will, and will cause each of the Subsidiary
Guarantors to, at the expense of the Borrower or such Subsidiary Guarantor,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral
Agent from time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers
of attorney, certificates, real property surveys, reports and other assurances
or instruments and take such further steps relating to the Collateral covered
by any of the Security Documents as the Collateral Agent may reasonably
require. Furthermore, the Credit Parties will use their reasonable best efforts
to cause to be delivered to the Collateral Agent such opinions of counsel,
title insurance and other related documents as may be reasonably requested by
the Administrative Agent to assure itself that this Section 8.12 has been
complied with.
(c) If the Administrative Agent or the Required Lenders reasonably
determine that they are required by law or regulation to have appraisals
prepared in respect of the Real Property of Borrower and the Subsidiary
Guarantors constituting Collateral, the Borrower will, at its own expense,
provide to the Administrative Agent appraisals which satisfy the applicable
requirements.
(d) The Borrower agrees that each action required above by this
Section 8.12 (other than actions described in the second sentence of clause (a)
of this Section 8.12) shall be completed as soon as possible, but in no event
later than 90 days after such action is either requested to be taken by the
Administrative Agent or the Required Lenders or required to be taken by the
Borrower or its Subsidiaries pursuant to the terms of this Section 8.12;
provided that in no event will the Borrower or any of its Subsidiaries be
required to take any action, other than using its best efforts, to obtain
consents from third parties with respect to its compliance with this Section
8.12.
8.13 Use of Proceeds. The Borrower will use the proceeds of the Loans
only as provided in Section 7.08.
8.14 VHS Phoenix Health Plan, Inc. The Borrower shall use
commercially reasonable efforts to (i) obtain all necessary governmental and
other third party approvals to permit VHS Phoenix Health Plan, Inc. to execute
and deliver, and (ii) thereafter cause VHS Phoenix Health Plan, Inc. to execute
and deliver, counterparts of the Subsidiaries Guaranty, the Security Agreement
and the Pledge Agreement, or a Joinder Agreement, and in connection therewith
take all action VHS Phoenix Health Plan, Inc. would have taken pursuant to
Section 5A if it had been a Subsidiary Guarantor on the Effective Date.
SECTION 9. Negative Covenants. The Borrower covenants and agrees that
on and after the Effective Date and until the Total Commitments and all Letters
of Credit have terminated and the Loans, Notes and Unpaid Drawings, together
with interest, Fees and all other Obligations incurred hereunder and under the
other Credit Documents, are paid in full:
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9.01 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable with recourse to the Borrower or any
Subsidiary of the Borrower), or assign any right to receive income or permit
the filing of any financing statement under the UCC or any other similar notice
of Lien under any similar recording or notice statute, provided that the
provisions of this Section 9.01 shall not prevent the creation, incurrence,
assumption or existence of the following Liens (collectively, "Permitted
Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with GAAP;
(ii) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money, such
as carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of the Borrower's
or such Subsidiary's property or assets or materially impair the use
thereof in the operation of the business of the Borrower or such
Subsidiary or (y) which are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to any such Lien;
(iii) Liens in existence on the Effective Date which are listed, and
the property subject thereto described, in Schedule X but only to the
respective date, if any, set forth in such Schedule X for the removal and
termination of any such Liens, plus renewals and extensions of such Liens,
provided that (x) the Indebtedness secured by such Liens is renewed or
extended on terms (taken in the aggregate) not materially less favorable
to the Borrower or its Subsidiary, as the case may be, than the terms of
the Indebtedness being renewed or extended (it being understood that
increases in interest rates and other pricing provisions with respect to
such Indebtedness which reflect market conditions existing at the time of
the renewal or extension of such Indebtedness shall not be considered
materially less favorable to the Borrower or the respective Subsidiary),
(y) the aggregate principal amount of the Indebtedness secured by such
Liens does not increase from that amount outstanding at the time of any
such renewal or extension (except for amounts required to pay accrued and
unpaid interest on, and premiums with respect to, such Indebtedness at the
time of such renewal or extension or reasonable fees and expenses incurred
in connection with such renewal or extension) and (z) any such renewal or
extension does not encumber any additional assets or properties of the
Borrower or any of its Subsidiaries;
(iv) Permitted Encumbrances;
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(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of the Borrower or any of its
Subsidiaries;
(vii) Liens (A) upon assets subject to Capitalized Lease Obligations,
(B) created pursuant to purchase money mortgages or security interests or
(C) placed upon real estate, equipment or machinery used in the ordinary
course of business of the Borrower or any of its Subsidiaries at the time
of acquisition thereof by the Borrower or any such Subsidiary or within 90
days thereafter to secure Indebtedness incurred to pay all or a portion of
the purchase price thereof, in each case to the extent such Capitalized
Lease Obligations or the other Indebtedness secured by Liens, as the case
may be, are permitted by Section 9.04(iii), provided that (x) such Liens
only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation, such purchase money mortgages or security
interests or incurred to finance the acquisition of such real estate,
equipment or machinery, as the case may be, and (y) the Lien encumbering
the real estate, equipment, machinery or asset giving rise to the purchase
money mortgage security interest or the asset giving rise to the
Capitalized Lease Obligation, as the case may be, does not encumber any
other asset of the Borrower or any of the Borrower's Subsidiaries;
(viii) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances, and minor title deficiencies, in
each case not securing Indebtedness and not materially interfering with
the conduct of the business of the Borrower or any of its Subsidiaries;
(ix) Liens arising from precautionary UCC financing statement filings
in respect of operating leases;
(x) statutory and common law landlords' liens under leases to which
the Borrower or any of its Subsidiaries is a party;
(xi) Liens (other than Liens created or imposed under ERISA) incurred
in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security,
or to secure the performance of tenders, statutory obligations, surety
bonds, bids, government contracts, performance and return-of-money bonds
and other similar obligations incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money);
(xii) Liens arising out of judgments or awards (including Liens
securing Contingent Obligations on surety and appeal bonds relating
thereto) in respect of which the Borrower or any of the Borrower's
Subsidiaries shall in good faith be prosecuting an appeal or proceedings
for review in respect of which there shall have been secured a subsisting
stay of execution pending such appeal or proceedings, provided that the
aggregate amount of all such judgments or awards does not exceed
$25,000,000 at any time outstanding;
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(xiii) Liens on property or assets acquired pursuant to a Permitted
Acquisition effected pursuant to Section 9.02(viii), or on property or
assets of a Subsidiary of the Borrower in existence at the time such
property or assets are acquired pursuant to such Permitted Acquisition,
provided that (i) any Indebtedness that is secured by such Liens is
permitted to exist under Section 9.04(vii) and (ii) such Liens are not
incurred in connection with or in anticipation of such Permitted
Acquisition and do not attach to any other asset of the Borrower or any of
its Subsidiaries;
(xiv) deposits required to be made in connection with any proposed
acquisition to the extent that the aggregate principal amount of all such
deposits outstanding at any time shall not exceed $5,000,000;
(xv) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (x) any Indebtedness that is secured by such
Liens is permitted to exist under Section 9.04(iii), and (y) such Liens
are not incurred in connection with, or in contemplation or anticipation
of, such Permitted Acquisition and do not attach to any other asset of the
Borrower or any of its Subsidiaries; and
(xvi) Liens not otherwise permitted by the foregoing clauses (i)
through (xv) provided that (i) the aggregate fair market value of all
assets subject to such Liens does not at any time exceed $2,500,000 and
(ii) the aggregate principal amount of (x) all Indebtedness plus (y) all
other liabilities secured by such Liens does not exceed $2,500,000 at any
time outstanding.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or enter into any sale-leaseback transactions, or purchase or otherwise
acquire (in one or a series of related transactions) any part of the property
or assets (other than purchases or other acquisitions of inventory, materials,
equipment and other assets in the ordinary course of business) of any Person,
except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall
be permitted to the extent not in violation of Section 9.07;
(ii) the Borrower and each of its Subsidiaries may in the ordinary
course of business, sell or otherwise dispose of inventory, materials,
equipment and other assets which, in the reasonable opinion of such
Person, are obsolete, uneconomic or no longer useful in the conduct of
such Person's business;
(iii) Investments may be made to the extent permitted by Section
9.05;
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(iv) the Borrower and each of its Subsidiaries may lease (as lessee)
real or personal property in the ordinary course of business (so long as
any such lease does not create a Capitalized Lease Obligation unless
permitted by Section 9.04(iii));
(v) the Borrower and each of its Subsidiaries may purchase and sell
inventory and supplies in the ordinary course of business;
(vi) the Borrower and its Subsidiaries may liquidate Cash Equivalents
in the ordinary course of business;
(vii) each of the Borrower and its Subsidiaries may sell or otherwise
dispose of other assets provided (i) no Default or Event of Default then
exists or would exist immediately after giving effect thereto, (ii) each
such sale or other disposition is in an arm's-length transaction and the
Borrower or the respective Subsidiary receives at least fair market value
(as determined in good faith by the Borrower or such Subsidiary, as the
case may be), (iii) at least 75% of the total consideration received by
the Borrower or such Subsidiary is cash and is received at the time of the
consummation of such sale or other disposition, (iv) the aggregate amount
of the proceeds received from all assets sold pursuant to this clause
(vii) shall not exceed either $20,000,000 in any fiscal year of the
Borrower or $50,000,000 in the aggregate, (v) the Net Sale Proceeds
therefrom are either applied as provided in Section 4.02(e) or reinvested
in assets to the extent permitted by Section 4.02(e) and (vi) in the case
of any such sale or other disposition of less than all of the Equity
Interests of any Subsidiary of the Borrower, if after giving effect
thereto such Subsidiary (x) becomes a Non-Guarantor Subsidiary, the
Borrower shall be in compliance with Section 9.17 after giving effect to
such sale or other disposition or (y) becomes a Person in which the
Borrower or one of its Subsidiaries retains a minority equity interest,
such retained equity interest shall be deemed to be an Investment and
shall be required to be justified under Section 9.05(xvi);
(viii) any Subsidiary of the Borrower may acquire one or more
Hospital Properties located in the United States and any Health Care
Assets which are complementary to the Borrower and its Subsidiaries'
businesses, or the Borrower or any Subsidiary of the Borrower may acquire
Equity Interests in any Person (which as a result of such acquisition
becomes a Subsidiary of the Borrower) all or substantially all of whose
assets consist of one or more Hospital Properties located in the United
States and any Health Care Assets located in the United States which are
complementary to the Borrower and its Subsidiaries' businesses (each such
acquisition, a "Permitted Acquisition" and, collectively, the "Permitted
Acquisitions"); provided that (w) no Default or Event of Default then
exists or would exist immediately after giving effect thereto, (x) to the
extent the purchase price for such Permitted Acquisition is $2,500,000 or
more, the Borrower shall deliver to the Administrative Agent a Permitted
Acquisition Compliance Certificate, no later than the date of the
consummation of such Permitted Acquisition, (y) at the time of, and after
giving effect to, each such Permitted Acquisition, the Borrower shall be
in compliance with Sections 9.08 and 9.09 on a Post-Test Period Pro Forma
Basis and shall be in compliance with Section 9.17 and (z) the aggregate
purchase price (including for this purpose any Acquisition CapEx and any
earn-outs in connection with such Permitted
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Acquisition (taking the good faith estimate of an Authorized Officer of
the Borrower as the amount which would become due in connection with such
earn-out)) for all such Permitted Acquisitions permitted under this clause
(viii) (determined, in each case, net of consideration in the form of, or
paid with the proceeds of, contemporaneous issuances of the Borrower's
common stock (to the extent such proceeds are not required to be applied
pursuant to Section 4.02(c)) shall not exceed $25,000,000 except to the
extent that the Borrower certifies to the Administrative Agent in the
respective Permitted Acquisition Certificate, in connection with any
Permitted Acquisition which would cause the foregoing limitation to be
exceeded, that such excess consideration does not exceed the Retained
Excess Cash Flow Amount as then in effect and which shall constitute a
utilization thereof, provided further, that clause (z) above shall not
apply so long as at the time of the respective Permitted Acquisition (and
after giving effect thereto), (I) the Consolidated Senior Leverage Ratio
determined on a Post-Test Period Pro Forma Basis (and after giving effect
to any Indebtedness incurred in connection with such Permitted Acquisition
or to finance same) is less than 2.50:1.00 and (II) the Consolidated
Debt/Total Capitalization Ratio determined on a Post-Test Period Pro Forma
Basis (and after giving effect to any Indebtedness incurred in connection
with such Permitted Acquisition or to finance same) is less than
0.50:1.00;
(ix) the Borrower and its Subsidiaries may transfer assets to a
Subsidiary Guarantor, and, so long as fair market value is received as
consideration, Subsidiaries of the Borrower that are not Credit Parties
may transfer assets to other Subsidiaries of the Borrower that are not
Credit Parties; and any Wholly-Owned Subsidiary of the Borrower may merge
with and into any Subsidiary Guarantor which is a Wholly-Owned Subsidiary,
in each case so long as the respective Subsidiary Guarantor, if any, is
the surviving entity of any such merger;
(x) so long as no Default or Event of Default then exists or would
exist immediately after giving effect thereto, the Borrower and the
Subsidiary Guarantors may transfer assets to Non-Guarantor Subsidiaries;
(xi) each of the Borrower and its Subsidiaries may (i) lease real or
personal property to physicians or other medical professionals in the
ordinary course of business, and (ii) otherwise grant leases or subleases
of real or personal property to other Persons not materially interfering
with the conduct of the business of the Borrower or any of its
Subsidiaries;
(xii) the Borrower and its Subsidiaries may enter into short-term
leases at any time with respect to (i) equipment not being utilized by any
Hospital Property at such time, so long as such equipment was not
purchased by the Borrower or any of its Subsidiaries for the purpose of
leasing such equipment, and (ii) durable medical equipment leased by the
Borrower and its Subsidiaries to its patients;
(xiii) sale-leaseback transactions shall be permitted to the extent
permitted by Section 9.04(iii);
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(xiv) the Borrower and its Subsidiaries may pre-pay rent under leases
and may purchase pre-paid insurance and services, in each case in the
ordinary course of business;
(xv) so long as the aggregate fair market value of all Real Property
disposed of pursuant to this clause (xv) does not, at the time of (and
giving effect to) any such disposition, exceed 2% of the Total Assets of
the Borrower and its Subsidiaries, the Borrower and its Subsidiaries shall
be permitted to make dispositions of substantially unimproved Real
Property to, or ground lease unimproved Real Property to, Persons who are
developers, for sale or lease consideration pursuant to overall
arrangements deemed by management of the Borrower to be fair and
reasonable, for the purpose of the respective transferee or lessee
building on such Real Property (A) a medical office building, (B) a
building to contain a healthcare business or (C) a parking garage to be
used in connection with a medical office building or a building containing
or to contain a healthcare business, and any such transaction may include,
if a ground lease, a subordination of the fee ownership interest of the
lessor to the lien of the lender for such developer (valued at the
aggregate fair market value of the Real Property sold or leased); and
(xvi) the Borrower and/or its Subsidiaries may, in the ordinary
course of business and consistent with past practices prior to the
Effective Date, sell or otherwise transfer receivables owing to it to
third parties for the purposes of collection of outstanding balances
thereunder.
To the extent the Required Lenders or all of the Lenders, as the case may be,
waive the provisions of this Section 9.02 with respect to the sale of any
Collateral (other than the sale of any Collateral to the Borrower or any
Subsidiary Guarantor), or any Collateral is sold or otherwise disposed of as
permitted by this Section 9.02 (other than any sale or any disposition to the
Borrower or any Subsidiary Guarantor), such Collateral shall be sold or
otherwise disposed of free and clear of the Liens created by the Security
Documents, and the Administrative Agent and the Collateral Agent shall be
authorized to take any actions deemed appropriate in order to effect or
evidence the foregoing. In addition, subject to continued compliance with
Section 9.17, upon the occurrence of any sale of all or less than all of the
Equity Interests of any Subsidiary Guarantor consummated in accordance with the
provisions of Section 9.02(vii), upon the receipt by the Administrative Agent
and the Collateral Agent of (i) a certificate of an Authorized Officer of the
Borrower certifying that (x) such Subsidiary is to be released from the
Subsidiaries Guaranty and the Security Documents to which it is a party as in
accordance with provisions hereof and thereof and (y) no Default or Event of
Default exists at the time of, or would exist immediately after giving effect
to, such release and (ii) evidence reasonably satisfactory to the
Administrative Agent and the Collateral Agent that such Subsidiary has been (or
will contemporaneously with the release described below, will be) released from
its guarantee (if any) of any and all Indebtedness under the Senior
Subordinated Notes and, after the issuance thereof, the Permitted Subordinated
Notes, such Subsidiary shall be released from the Subsidiaries Guaranty and the
Security Documents to which it is party, and the Administrative Agent and the
Collateral Agent shall be authorized to take any action deemed appropriate in
order to effect or evidence the foregoing.
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9.03 Dividends. The Borrower will not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to the
Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay Dividends to the Borrower
or to a Wholly-Owned Subsidiary of the Borrower;
(ii) the Borrower may redeem or repurchase the Borrower's capital
stock from present or former officers, employees and directors (or their
trusts or estates) of the Borrower or any of its Subsidiaries upon the
death, permanent disability, retirement or termination of employment of
any such Person or otherwise in accordance with any stock option plan, any
employee stock ownership plan or any Shareholders' Agreement, provided
that (x) no Default, and no Event of Default, exists under Section 10.01
or 10.05 or would arise therefrom and (y) the aggregate amount of all cash
paid in respect of all such shares so redeemed or repurchased in any
calendar year does not exceed the sum of (A) $1,000,000 plus (B) all
amounts obtained by the Borrower from the sale of such stock (or a
substantially concurrent issuance of the Borrower's capital stock) to
other present or former officers, employees and directors;
(iii) so long as there shall exist no Default under Section 10.01 or
Event of Default (both before and after giving effect to the payment
thereof) any non-Wholly-Owned Subsidiary of the Borrower may pay Dividends
to its shareholders or partners generally in the form of cash, Cash
Equivalents, common stock and preferred stock permitted to be issued
pursuant to Section 9.12(b), so long as the Borrower or its respective
Subsidiary which owns the equity interest or interests in the Subsidiary
paying such Dividends receives at least its proportionate share thereof
(based upon its relative holdings of equity interests in the Subsidiary
paying such Dividends and taking into account the relative preferences, if
any, of the various classes of equity interests in such Subsidiary);
(iv) the Borrower may purchase its common stock at fair market value
from officers, employees and directors of the Borrower or any of its
Subsidiaries to the extent necessary to cover the exercise price of
options and income tax withholding, provided that (x) no Default or Event
of Default is then in existence or would arise therefrom and (y) the
aggregate amount of cash paid in respect of all such shares so repurchased
in any calendar year does not exceed $500,000;
(v) the Borrower may make cash payments to officers, employees and
directors of the Borrower or any of its Subsidiaries in respect of stock
appreciation rights issued pursuant to a compensation plan approved by the
board of directors of the Borrower or by the compensation committee
thereof, provided that (x) no Default or Event of Default is then in
existence or would arise therefrom and (y) the aggregate amount of cash
paid pursuant to this clause (v) in any calendar year does not exceed
$500,000;
(vi) the Borrower may repurchase equity interests in non-Wholly-Owned
Subsidiaries and Health Care Joint Ventures, provided that (x) no Default
or Event of Default
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is then in existence or would arise therefrom and (y) the aggregate amount
of cash paid pursuant to this clause (vi) in any calendar year does not
exceed $500,000;
(vii) the Borrower may pay regularly accruing Dividends with respect
to PIK Preferred Stock (x) prior to January 1, 2008, solely through the
issuance of additional shares of PIK Preferred Stock (and not in cash) and
(y) thereafter, in cash so long as no Default or Event of Default then
exists or would arise therefrom, in the case of each of clauses (x) and
(y) pursuant to the Certificate of Designations, Preferences and Rights
relating thereto and as in effect on the Effective Date; and
(viii) so long as no Default or Event of Default is then in existence
or would arise therefrom, the Borrower may pay cash Dividends not
otherwise permitted in clauses (i) through (vii) above in an amount not to
exceed $750,000 per calendar year.
9.04 Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Existing Indebtedness to the extent the same is listed on
Schedule VIII, but no refinancings or renewals thereof other than such
refinancings and renewals which are on terms (taken in the aggregate) not
materially less favorable to the Borrower and its Subsidiaries than the
terms of the Indebtedness being refinanced or renewed (it being understood
that increases in interest rates and other pricing provisions with respect
to such Indebtedness which reflect market conditions existing at the time
of the refinancing or renewal of such Indebtedness shall not be considered
materially less favorable to the Borrower or the respective Subsidiary)
and which do not increase the outstanding principal amount of such
Indebtedness at the time of such refinancing or renewal (except for
amounts required to pay accrued and unpaid interest on and premiums with
respect to, such Indebtedness at the time of such refinancing or renewal
or reasonable fees and expenses incurred in connection with such
refinancing or renewal);
(iii) Indebtedness of the Borrower and its Subsidiaries (v)
consisting of Capitalized Lease Obligations to the extent permitted
pursuant to Section 9.07, (w) under sale-leaseback transactions, (x)
incurred pursuant to purchase money mortgages, (y) subject to Liens
permitted under Section 9.01(vii)(C) or, to the extent that such
Indebtedness does not constitute Indebtedness of a type described in
clause (i), (ii), (iii), (iv), (v) or (vi) of the definition of
Indebtedness, Liens permitted under Section 9.01(xi) or (xii) or (z)
assumed at the time of a Permitted Acquisition, provided that (I) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition and (II) such Indebtedness
does not constitute debt for borrowed money, it being understood and
agreed that Capitalized Lease Obligations and purchase money Indebtedness
shall not constitute debt for borrowed money for purposes of this clause
(z); provided that in no event shall the aggregate principal amount of
Capitalized Lease
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Obligations, sale-leaseback transactions and other Indebtedness permitted
by this clause (iii) exceed $25,000,000 at any time outstanding;
(iv) intercompany Indebtedness among the Borrower and the Subsidiary
Guarantors to the extent permitted by Section 9.05(iii);
(v) (A) Indebtedness of Non-Guarantor Subsidiaries owing to the
Borrower and the Subsidiary Guarantors to the extent permitted under
Section 9.05(iv), (B) Indebtedness of the Borrower and the Subsidiary
Guarantors owing to Non-Guarantor Subsidiaries to the extent permitted
under Section 9.05(v) and (C) intercompany Indebtedness among the
Non-Guarantor Subsidiaries to the extent permitted by Section 9.05(vi);
(vi) Indebtedness under Other Hedging Agreements providing protection
against fluctuations in currency values in connection with the Borrower's
or any Credit Party's ordinary course of business operations so long as
management of the Borrower or such Credit Party, as the case may be, has
determined in good faith that the entering into of such Other Hedging
Agreements are bona fide hedging activities;
(vii) unsecured senior subordinated Indebtedness of the Borrower (and
unsecured senior subordinated guarantees thereof by any Subsidiary
Guarantor for so long as such Person remains a Subsidiary Guarantor)
incurred pursuant to the Senior Subordinated Notes and the other Senior
Subordinated Note Documents, in an aggregate principal amount not to
exceed $300,000,000 less the amount of any repayments of principal thereof
after the Effective Date;
(viii) amounts constituting deferred purchase price or earnouts in
connection with Permitted Acquisitions; provided that the aggregate amount
of all Indebtedness permitted under this clause (vii) (taking the good
faith estimate of an Authorized Officer of the Borrower as the amount
which would become due in connection therewith) shall not exceed
$20,000,000 at any time outstanding;
(ix) amounts constituting deferred payment obligations resulting from
adjudications or settlements of any claims or litigation;
(x) Indebtedness owing to Subsidiaries of the Borrower in connection
with the cash management program of the Borrower;
(xi) Contingent Obligations of the Borrower and its Subsidiaries
constituting guarantees by the Borrower of Indebtedness of any Subsidiary
Guarantor (for so long as such Person remains a Subsidiary Guarantor) or
guarantees by any of the Subsidiary Guarantor (for so long as such Person
remains a Subsidiary Guarantor) of Indebtedness of any of the Borrower or
any other Subsidiary Guarantor (for so long as such Person remains a
Subsidiary Guarantor), but in each case only to the extent that the
Indebtedness being guaranteed is otherwise permitted by this Section 9.04,
provided that this clause (xi) shall not permit any Contingent Obligations
in respect of Senior Subordinated Notes
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or Permitted Subordinated Notes (with any guarantees thereof by Subsidiary
Guarantors to be permitted only in accordance with the provisions of
Section 9.04(vii) or (xv), as the case may be);
(xii) Contingent Obligations of the Borrower or any Subsidiary
Guarantor (for so long as such Person remains a Subsidiary Guarantor)
constituting guarantees of (i) obligations of Health Care Joint Ventures
under their operating leases and (ii) Indebtedness of Health Care Joint
Ventures in an aggregate principal amount for all such Indebtedness not
exceeding $5,000,000;
(xiii) Indebtedness of the Borrower consisting of deferred purchase
price for redemptions or repurchases of the Borrower's capital stock,
provided that the Borrower's payment obligations thereunder are limited to
the extent necessary to be in compliance with Section 9.03(ii);
(xiv) Indebtedness under Interest Rate Protection Agreements entered
into with respect to other Indebtedness permitted under this Section 9.04
so long as the entering into of such Interest Rate Protection Agreements
are bona fide hedging activities and are not for speculative purposes;
(xv) unsecured subordinated Indebtedness of the Borrower (and
unsecured subordinated guarantees thereof by any Subsidiary Guarantor (for
so long as such Person remains a Subsidiary Guarantor)) incurred under
Permitted Subordinated Notes and the other Permitted Subordinated Note
Documents in an aggregate principal amount not to exceed $100,000,000 so
long as (A) at least five Business Days prior to the issuance thereof, the
Borrower shall have delivered to the Administrative Agent and each Lender
substantially final drafts of the Permitted Subordinated Note Documents
and with any changes thereto made after the initial delivery of such
Permitted Subordinated Note Documents to be delivered to the
Administrative Agent at least two Business Days prior to the issuance of
any Permitted Subordinated Notes, (B) the final maturity date thereof is
no shorter than six months following the latest Incremental Term Loan
Maturity Date in effect at the time of the incurrence of any such
Permitted Subordinated Notes for then outstanding Incremental Term Loans,
(C) there are no scheduled amortization, mandatory redemption or sinking
fund provisions or similar provisions prior to the maturity of the
Permitted Subordinated Notes (other than provisions requiring an offer to
purchase Permitted Subordinated Notes to be made upon the occurrence of a
change in control or asset sale on terms not more onerous (from the
perspective of the Borrower) than those contained in the Senior
Subordinated Note Indenture as originally in effect), (D) the
subordination provisions applicable to the Permitted Subordinated Notes
shall be substantially identical to those contained in the Senior
Subordinated Notes (although at the option of the Borrower, the Senior
Subordinated Notes may be included as "Senior Debt", but not "Designated
Senior Debt", for purposes of the subordination provisions contained in
any issue of Permitted Subordinated Notes), (E) the interest rates
(calculated including any original issued discount in respect thereof) and
related premiums applicable to any issue of Permitted Subordinated Notes
shall be based on then market interest rates, (F) all other terms and
conditions of each issue of Permitted Subordinated Notes shall, in
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the aggregate, be no less favorable, in any material respect, to the
Borrower (and any Subsidiary Guarantors) and the Lenders than the terms
contained in the Senior Subordinated Notes and related Senior Subordinated
Note Documents, (G) no Default or Event of Default then exists or would
result from the issuance thereof, (H) prior to the issuance of any
Permitted Subordinated Notes, the Borrower shall have delivered to the
Administrative Agent and each of the Lenders a certificate of the
Borrower's Chief Financial Officer certifying (and showing the
calculations therefor in reasonable detail) that the Borrower and its
Subsidiaries shall be in compliance with Sections 9.08 and 9.09 on a
Post-Test Period Pro Forma Basis on the date of the respective issuance of
the Permitted Subordinated Notes and after giving effect thereto and the
application of the proceeds thereof on such date and (I) prior to the
issuance of any Permitted Subordinated Notes, the Borrower shall deliver
evidence satisfactory to the Administrative Agent, including a certificate
of the Chief Financial Officer of the Borrower (accompanied by any
required financial calculations in reasonable detail) and an opinion of
counsel for the Borrower, that the issuance of such Permitted Subordinated
Notes is permitted by the terms of the Senior Subordinated Notes (and
related Senior Subordinated Note Documents) and any other issue of
Permitted Subordinated Notes (and related Permitted Subordinated Note
Documents) then outstanding;
(xvi) Contingent Obligations of the Borrower or any of its
Subsidiaries arising from Physician Support Obligations to the extent same
are permitted under Section 9.05(xiv); and
(xvii) Indebtedness not otherwise permitted by the foregoing clauses
of this Section 9.04 not to exceed $5,000,000 in aggregate principal
amount at any time outstanding.
9.05 Advances, Investments and Loans. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables and prepaid expenses owing to any of them, if created or
acquired in the ordinary course of business and payable or dischargeable
in accordance with customary terms, and the Borrower and its Subsidiaries
may own Investments received in connection with the bankruptcy or
reorganization of suppliers, customers and others with whom it has done
business or against whom it has claims and in settlement of delinquent
obligations of, and other disputes with, customers, suppliers and others
with whom it has done business or against whom it has claims, in each case
arising in the ordinary course of business;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents;
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(iii) the Borrower and the Subsidiary Guarantors may make
intercompany loans and advances to one another, provided that (i) in the
case of each intercompany loan evidenced by a note, each such note shall
be in the form of Exhibit M and shall be pledged (and delivered) to the
Collateral Agent pursuant to (and to the extent required by) the Pledge
Agreement and (ii) in the event any such Subsidiary Guarantor that has
made such intercompany loans or advances and/or to which such intercompany
loans have been made ceases to constitute same, such intercompany loans
and advances shall only be permitted to the extent allowed under Section
9.05(iv), (v) or (vi), as applicable;
(iv) the Borrower or any Subsidiary Guarantor may make unsubordinated
loans and advances to Non-Guarantor Subsidiaries, provided that (i) no
Default or Event of Default then exists or would exist immediately after
giving effect thereto and (ii) in the case of any such loans or advances
evidenced by a note, each such note shall be in the form of Exhibit M and
shall be pledged (and delivered) to the Collateral Agent pursuant to (and
to the extent required by) the Pledge Agreement;
(v) Non-Guarantor Subsidiaries may make loans and advances to the
Borrower or any Subsidiary Guarantor, provided that such loan or advance
(other than any such loans or advances represented by short-term, open
account working capital notes entered into the ordinary course of business
for cash management purposes and consistent with past practices) shall be
expressly subordinated to the payment of the Obligations pursuant to duly
executed and delivered (by the respective borrower and lender)
Subordination Agreement in the form of Exhibit N;
(vi) Non-Guarantor Subsidiaries may make loans and advances to one
another;
(vii) the Borrower and its Subsidiaries may make loans and advances
in the ordinary course of business to their respective employees so long
as the aggregate principal amount thereof at any time outstanding
(determined without regard to any write-downs or write-offs of such loans
and advances) shall not exceed $500,000;
(viii) the Borrower and its Subsidiaries may enter into Other Hedging
Agreements to the extent permitted by Section 9.04(vi);
(ix) the Borrower and its Subsidiaries may receive non-cash
consideration in connection with any asset sale permitted by Section
9.02(vii) but only to the extent set forth in such Section 9.02(vii);
(x) Permitted Acquisitions may be effected in accordance with the
relevant requirements of Section 9.02(viii);
(xi) the Borrower and its Subsidiaries may hold Existing Investments,
provided that any further Investments with respect thereto shall be
independently justified under another clause of this Section 9.05;
(xii) the Borrower and its Subsidiaries may make capital
contributions in and to their respective Subsidiaries that are Subsidiary
Guarantors (which are Wholly-Owned
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Subsidiaries) to the extent in existence on the Effective Date or created
thereafter pursuant to Section 9.14;
(xiii) so long as no Default or Event of Default then exists or would
exist immediately after giving effect thereto, the Borrower and the
Subsidiary Guarantors may make Investments consisting of Equity
Investments in Non-Guarantor Subsidiaries;
(xiv) Investments constituting Physician Support Obligations in the
aggregate amount not to exceed at any time outstanding the sum of
$10,000,000 plus the Additional Physician Support Obligations Amount as
then in effect;
(xv) the Borrower may enter into Interest Rate Protection Agreements
to the extent permitted under Section 9.04(xiv); and
(xvi) the Borrower and its Subsidiaries may make additional
Investments not otherwise permitted by the foregoing clauses of this
Section 9.05 not to exceed an aggregate amount (determined using the book
value of such Investments when same are made) equal to $10,000,000 plus
the Additional Investment Amount as then in effect.
9.06 Transactions with Affiliates. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Borrower or any of its Subsidiaries, other than on terms
and conditions substantially as favorable to the Borrower or such Subsidiary as
would reasonably be obtained by the Borrower or such Subsidiary at that time in
a comparable arm's-length transaction with a Person other than an Affiliate,
except that notwithstanding the foregoing:
(i) Dividends may be paid to the extent provided in Section 9.03;
(ii) Investments may be made and other transactions may be entered
into by and among the Borrower and the Borrower's Subsidiaries to the
extent permitted by Section 9.02, 9.04 or 9.05;
(iii) customary fees may be paid to non-officer directors of the
Borrower or any of its Subsidiaries;
(iv) Subsidiaries of the Borrower may pay management and similar fees
to the Borrower or any Wholly-Owned Subsidiary of the Borrower;
(v) transactions may be entered into between the Borrower and any
Subsidiary Guarantor or among any Subsidiary Guarantors to the extent not
otherwise permitted in clauses (i) through (iv) above; and
(vi) Shareholders may enter into transactions with the Borrower to
purchase the capital stock of the Borrower in accordance with the
Shareholders' Agreements.
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9.07 Capital Expenditures. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures except in
accordance with this Section 9.07.
(b) Notwithstanding anything to the contrary contained in clause (a)
above, during any period set forth below, the Borrower and its Subsidiaries may
make Capital Expenditures in connection with their operations (but not in
connection with any Specified Construction Projects, except to the extent the
amount thereof is justified by the Borrower as described in the parenthetical
contained in Section 9.07(d)) so long as the aggregate amount of such Capital
Expenditures made (to the extent made) under this Section 9.07(b) does not
exceed in any such period set forth below the sum of (i) the amount set forth
opposite such period below plus (ii) the Additional Capital Expenditures Amount
for such period:
Period Amount
------ ------
Effective Date through June 30, 2002 $30,000,000
July 1, 2002 through June 30, 2003 $30,000,000
July 1, 2003 through June 30, 2004 $30,000,000
July 1, 2004 through June 30, 2005 $30,000,000
July 1, 2005 through the Revolving Loan Maturity Date $30,000,000
Each fiscal year of the Borrower ended after June 30, 2006 $30,000,000
(c) Notwithstanding anything to the contrary contained in clauses (a)
and (b) above and clause (d) below, to the extent that the aggregate amount of
Capital Expenditures made by the Borrower and its Subsidiaries pursuant to
Section 9.07(b) in any fiscal year of the Borrower (beginning with the fiscal
year ended June 30, 2002) are less than the amount of Capital Expenditures
permitted to be made by the Borrower and its Subsidiaries during such fiscal
year pursuant to such Section 9.07(b), the Borrower may elect (by notifying the
Administrative Agent in writing within 90 days following the end of such fiscal
year to either (i) carry forward (A) 50% of the amount of Capital Expenditures
permitted to be made by the Borrower and its Subsidiaries pursuant to such
Section 9.07(b) during such fiscal year but not made during such fiscal year
(with 100% of the amount of the Capital Expenditures permitted to be made by
the Borrower and its Subsidiaries pursuant to Section 9.07(b) during such
fiscal year but not made during such fiscal year being herein referred to as
the "Unused Capital Expenditures Amount") to make Capital Expenditures (but not
in connection with any Specified Construction Projects, except to the extent
the amount thereof is justified by the Borrower as described in the
parenthetical appearing in Section 9.07(d)) in the immediately succeeding
fiscal year but in no fiscal year thereafter (after the full amount of Capital
Expenditures otherwise permitted to be made under Section 9.07(b) in such
succeeding fiscal year, without regard to the provisions of this clause (c),
have been made), and (B) the remaining 50% of the Unused Capital Expenditures
Amount to make Capital Expenditures in connection with any Specified
Construction Project (to the extent the amount thereof is justified by the
Borrower as described in the parenthetical appearing in Section 9.07(d)) in any
fiscal year thereafter, or (ii) carry forward
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100% of the Unused Capital Expenditures Amount to make Capital Expenditures in
connsection with Specified Construction Projects (to the extent the amount
thereof is justified by the Borrower as described in the parenthetical
appearing in Section 9.07(d)) in any fiscal year thereafter.
(d) Notwithstanding anything to the contrary contained in clauses (a)
and (b) above, the Borrower and the Subsidiary Guarantors may make Capital
Expenditures to finance projects which at the time the respective Capital
Expenditures are made constitute Specified Construction Projects so long as (i)
the aggregate amount of all such Capital Expenditures made after the Effective
Date solely pursuant to this clause (d) does not exceed $75,000,000 (plus up to
an additional $25,000,000 of such Capital Expenditures, so long as the excess
Capital Expenditures contemplated by this parenthetical are permitted within
the limitations set forth pursuant to preceding Sections 9.07(b) and (c), in
which case such Capital Expenditures shall be counted for purposes of this
parenthetical and shall be deemed to constitute a utilization of the permitted
Capital Expenditure amounts set forth in said Sections 9.07(b) and/or (c), as
the case may be) and (ii) on the date of the making of any Capital Expenditure
pursuant to this clause (d), the Consolidated Senior Leverage Ratio for the
then most recently ended Test Period shall be less than 2.50:1.00. The Borrower
and the Subsidiary Guarantors shall also be permitted to make Capital
Expenditures in connection with the purchase of Real Property which at the time
of such purchase the Borrower in good faith expects to designate as a Specified
Construction Project within fifteen months following such purchase provided
that (i) the aggregate amount of all such Capital Expenditures made pursuant to
this sentence do not exceed $10,000,000 (net of Capital Expenditures for
projects that have theretofore been designated as Specified Construction
Projects under the definition thereof, without giving effect (solely for this
purpose) to the last sentence thereof) and (ii) such Capital Expenditures are
permitted within the limitations set forth in the immediately preceding
sentence, and shall be deemed to constitute a utilization of the permitted
Capital Expenditure amounts set forth in such preceding sentence.
(e) In addition to the Capital Expenditures permitted pursuant to
preceding clauses (b), (c) and (d), the Borrower and its Subsidiaries may make
additional Capital Expenditures (but not in connection with any Specified
Construction Projects, except in the case of following clause (ii) to the
extent proceeds of a Recovery Event with respect to a Specified Construction
Project are reinvested in the same Specified Construction Project) as follows:
(i) Capital Expenditures consisting of the reinvestment of Net Sale Proceeds of
asset sales (exclusive of asset sales of the types described in clause (A) of
Section 4.02(e)) not required to be applied to prepay the Loans and/or reduce
Commitments pursuant to Section 4.02(e) as a result of clauses (B) and/or (C)
contained therein, (ii) the reinvestment of proceeds of Recovery Events not
required to be applied to prepay the Loans and/or reduce Commitments pursuant
to Section 4.02(g), and (iii) Capital Expenditures made on any date so long as
same do not exceed the Retained Excess Cash Flow Amount as then in effect
(before giving effect to the respective Capital Expenditures), and so long as
the Borrower certifies to the Administrative Agent that the respective Capital
Expenditures constitute a utilization of (and shall reduce by the amount spent
pursuant to this clause (iii) on the respective Capital Expenditures) the
Retained Excess Cash Flow Amount.
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(f) In addition to the Capital Expenditures permitted pursuant to
preceding clauses (b), (c), (d) and (e), the Borrower and the Subsidiary
Guarantors may make additional Capital Expenditures in connection with
Specified Construction Projects to the extent such Capital Expenditures are
financed with the proceeds of issuances of the common stock of the Borrower not
required to be applied pursuant to Section 4.02(c), provided that at the time
of each such issuance, the Borrower certifies to the Administrative Agent in
reasonable detail the Capital Expenditures to be made with the proceeds
thereof.
9.08 Consolidated Interest Coverage Ratio. Solely as of the last day
of each Test period set forth below, the Borrower will not permit the
Consolidated Interest Coverage Ratio to be less than the ratio set forth
opposite the last day of such Test Period below:
Test Period Ending On Ratio
--------------------- -----
September 30, 2001 2.00:1.00
December 31, 2001 2.00:1.00
March 31, 2002 2.15:1.00
June 30, 2002 2.15:1.00
September 30, 2002 2.30:1.00
December 31, 2002 2.30:1.00
March 31, 2003 2.45:1.00
June 30, 2003 2.45:1.00
September 30, 2003 2.60:1.00
December 31, 2003 2.60:1.00
March 31, 2004 2.75:1.00
June 30, 2004 2.75:1.00
September 30, 2004 2.90:1.00
December 31, 2004 2.90:1.00
March 31, 2005 and thereafter 3.05:1.00
Notwithstanding anything to the contrary contained in this Section 9.08, all
calculations of compliance with this Section 9.08 shall be made on a Pro Forma
Basis.
9.09 Consolidated Leverage Ratio. Solely as of the last day of each
Test period set forth below, the Borrower will not permit the Consolidated
Leverage Ratio to be greater than the ratio set forth opposite the last day of
such Test Period below:
Test Period Ending On Ratio
--------------------- -----
September 30, 2001 4.75:1.00
December 31, 2001 4.75:1.00
March 31, 2002 4.75:1.00
June 30, 2002 4.75:1.00
September 30, 2002 4.50:1.00
December 31, 2002 4.50:1.00
March 31, 2003 4.25:1.00
June 30, 2003 4.25:1.00
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Test Period Ending On Ratio
--------------------- -----
September 30, 2003 4.00:1.00
December 31, 2003 4.00:1.00
March 31, 2004 3.75:1.00
June 30, 2004 3.75:1.00
September 30, 2004 3.50:1.00
December 31, 2004 3.50:1.00
March 31, 2005 3.25:1.00
June 30, 2005 3.25:1.00
September 30, 2005 and thereafter 3.00:1.00
Notwithstanding anything to the contrary contained in this Section 9.09, all
calculations of compliance with this Section 9.09 shall be made on a Pro Forma
Basis.
9.10 Limitation on Payments of Certain Indebtedness; Modifications of
Certain Indebtedness and PIK Preferred Stock; Modifications of Certificate of
Incorporation, By-Laws and Certain Agreements; etc. (a) The Borrower will not,
and will not permit any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption or acquisition for value of,
including, in each case without limitation, by way of depositing with the
trustee with respect thereto money or securities before due for the
purpose of paying when due, any Senior Subordinated Notes or, after the
issuance thereof by the Borrower, any Permitted Subordinated Notes;
(ii) amend or modify, or permit the amendment or modification of, any
provision of any Existing Indebtedness or any PIK Preferred Stock other
than amendments not adverse to the interests of the Lenders in any
material respect provided that a copy of such amendment or modification is
delivered to the Administrative Agent at least 10 Business Days prior to
the execution thereof by the Borrower or the relevant Subsidiary;
(iii) amend or modify, or permit the amendment or modification of any
provision of, any Senior Subordinated Note Document or, after the issuance
of any Permitted Subordinated Notes, any related Permitted Subordinated
Note Document other than (x) any such modification which releases a
Subsidiary of the Borrower, or adds a Subsidiary of the Borrower which is
(or concurrently therewith becomes) a Subsidiary Guarantor, as a guarantor
(on a subordinated basis in accordance with the Senior Subordinated Note
Documents or the Permitted Subordinated Note Documents, as the case may
be) of Indebtedness under the Senior Subordinated Notes or under any
outstanding Permitted Subordinated Notes and (y) technical amendments or
modifications to the Senior Subordinated Note Documents or such Permitted
Subordinated Note Documents which do not amend or modify the subordination
provisions contained therein and do not require the consent of any holder
of the Senior Subordinated Notes or any Permitted Subordinated Notes, as
the case may be, and are not, in any event, adverse to the interest of the
Lenders in any material respect;
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(iv) amend or modify, or permit the amendment or modification of, any
provision of, any Management Agreement or Shareholders' Agreement in any
manner materially adverse to the interests of the Lenders; or
(v) amend, modify or change its certificate of incorporation
(including, without limitation, by the filing or modification of any
certificate of designation), partnership agreement or limited liability
company or operating agreement or by-laws (or equivalent organizational
documents) or any agreement entered into by it with respect to its Equity
Interests, or enter into any new agreement with respect to its Equity
Interests, other than any amendments, modifications or changes or any such
new agreements which are not adverse in any material respect to the
interests of the Lenders.
(b) Without limiting the provisions of foregoing subclause (a)(i),
the Borrower shall take such actions as may be necessary, including, without
limitation, prepaying all of the Loans and other Obligations and terminating
the Total Commitments, in accordance with the terms of such Senior Subordinated
Notes or Permitted Subordinated Notes, as the case may be, to avoid the need to
purchase (whether because of change of control, asset sale or otherwise) any
Senior Subordinated Notes or, after the issuance thereof, any Permitted
Subordinated Notes at any time when the covenants contained in this Section 9
remain in effect in accordance with the introductory paragraph of this Section
9.
9.11 Limitation on Certain Restrictions on Subsidiaries. The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary of the Borrower
to (a) pay dividends or make any other distributions on its capital stock or
any other interest or participation in its profits owned by the Borrower or any
of its Subsidiaries, or pay any Indebtedness owed to the Borrower or any
Subsidiary of the Borrower, (b) make loans or advances to the Borrower or any
Subsidiary of the Borrower or (c) transfer any of its properties or assets to
the Borrower or any Subsidiary of the Borrower, except in each case for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) this Agreement, the other Documents, the Shareholders' Agreements as in
effect on the Effective Date and any Permitted Subordinated Note Document (so
long as such encumbrances and restrictions therein are no less favorable to the
Borrower than those contained in the Senior Subordinated Note Documents), (iii)
customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Borrower or any Subsidiary of the
Borrower, (iv) customary provisions restricting assignment of any licensing
agreement entered into by the Borrower or any Subsidiary of the Borrower in the
ordinary course of business and (v) customary provisions restricting the
transfer of assets subject to Liens permitted under Section 9.01(vii).
9.12 Limitation on Issuance of Capital Stock. (a) The Borrower will
not issue (i) any preferred stock (other than (x) the issuance of shares of PIK
Preferred Stock in payment of regularly accruing dividends on theretofore
outstanding shares of PIK Preferred Stock and (y) other preferred stock which
by its terms (A) is not exchangeable or convertible into any Indebtedness of
the Borrower or its Subsidiaries, (B) shall not have cash dividends declared,
is not subject to mandatory redemptions and shall not be voluntarily redeemed,
in any case prior to
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January 1, 2008, and (C) is otherwise issued in such amounts and subject to
such terms which are not materially adverse to the Borrower or the Lenders) or
(ii) any redeemable common stock.
(b) The Borrower will not permit any of its Subsidiaries to issue any
Equity Interests (including by way of sales of treasury stock) or any options
or warrants to purchase, or securities convertible into, Equity Interests,
except (i) for transfers and replacements of then outstanding shares of Equity
Interests, (ii) for stock splits, stock dividends and similar or additional
issuances which do not decrease the percentage ownership of the Borrower or any
of its Subsidiaries in any class of the Equity Interests of such Subsidiary,
(iii) to qualify directors to the extent required by applicable law, (iv) for
issuances by newly created or Wholly-Owned Subsidiaries of the Borrower created
or acquired in accordance with the terms of this Agreement, and (v) for
issuances of Equity Interests by any Subsidiary of the Borrower to the Borrower
or any other Person, provided that if the Person to which such Equity Interests
are issued (A) is the Borrower or a Subsidiary Guarantor, such Equity Interests
shall be pledged pursuant to the Security Documents and (B) is neither the
Borrower nor any Subsidiary Guarantor, (I) such Equity Interests are not
preferred stock or similarly preferred Equity Interests and (II) no Default or
Event of Default then exists or would result immediately after giving effect
thereto. Subject to continued compliance with Section 9.17, if, as a result of
any such issuances made pursuant to clause (v) in the immediately preceding
sentence, a Wholly-Owned Subsidiary which is a Subsidiary Guarantor ceases to
constitute a Wholly-Owned Subsidiary, upon the receipt by the Administrative
Agent and the Collateral Agent of (i) a certificate from an Authorized Officer
and the Borrower certifying that (x) such Subsidiary is to be released from the
Subsidiaries Guaranty and the Security Documents to which it is a party in
accordance with the provisions hereof and thereof and (y) no Default or Event
of Default exists at the time of, or would exist immediately after giving
effect to, such release and (ii) evidence reasonably satisfactory to the
Administrative Agent and the Collateral Agent and such Subsidiary has been (or
will contemporaneously with the release described below, will be) released from
its guaranty (if any) of any and all Indebtedness under the Senior Subordinated
Notes and, after the issuance thereof, the Permitted Subordinated Notes, such
Subsidiary shall, so long as no Default or Event of Default then exists or
would result therefrom, be released from the Subsidiaries Guaranty and the
Security Documents to which it is a party, and the Collateral Agent shall be
authorized to take any action deemed appropriate in order to effect or evidence
the foregoing.
9.13 Business. (a) The Borrower will not, and will not permit any of
its Subsidiaries to, engage (directly or indirectly) in any business other than
the business of owning and or operating Health Care Assets and activities that
are reasonably similar or reasonably related thereto.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Borrower will not operate any active businesses other than
through its Subsidiaries, and will not own or hold directly any Investments or
assets other than (i) proceeds of issuances of its capital stock or other
equity securities or Indebtedness permitted under Section 9.04 so long as any
such proceeds thereof received by the Borrower are promptly invested (to the
extent permitted under Section 9.05) in its Subsidiaries or Health Care Joint
Ventures as either (A) purchases of Equity Interests of such Subsidiaries or
Health Care Joint Ventures or (B) intercompany loans to such Subsidiaries or
Health Care Joint Ventures evidenced by Intercompany Notes or other promissory
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notes issued by a Health Care Joint Venture and payable to the Borrower, if the
Health Care Joint Venture is not a Subsidiary, (ii) equity interests in its
Subsidiaries and Health Care Joint Ventures, (iii) Intercompany Notes, and (iv)
Interest Rate Protection Agreements provided, that the Equity Interests or
notes permitted to be held pursuant to clauses (ii) and (iii) above shall be
permitted only to the extent such Equity Interests or notes required to be
pledged (and delivered) to the Collateral Agent pursuant to the Pledge
Agreement are so pledged (and delivered).
9.14 Limitation on Creation of Subsidiaries and Health Care Joint
Ventures. Notwithstanding anything to the contrary contained in this Agreement,
the Borrower will not, and will not permit any of its Subsidiaries to,
establish, create or acquire after the Effective Date any Subsidiary or Health
Care Joint Venture, provided that the Borrower and its Wholly-Owned
Subsidiaries shall be permitted to (i) establish or create one or more
Wholly-Owned Subsidiaries, or acquire a Person, which immediately upon such
acquisition will constitute a Wholly-Owned Subsidiary of the Borrower, in each
case so long as within a reasonable time from such establishment, creation or
acquisition (x) the capital stock, partnership or limited liability company
interests, as the case may be, of such new Wholly-Owned Subsidiary is pledged
pursuant to, and to the extent required by, the Pledge Agreement and the
certificates representing such Equity Interests (if any), together with
endorsements for transfer thereof duly executed in blank, are delivered to the
Collateral Agent for the benefit of the Secured Creditors, and (y) such new
Wholly-Owned Subsidiary executes a counterpart to the Subsidiaries Guaranty,
the Pledge Agreement and the Security Agreement or a Joinder Agreement
substantially in the form or Exhibit O (except that, if such Wholly-Owned
Subsidiary, as a result of a material contract with Arizona Health Care Cost
Containment System or similar regulator or healthcare provider existing at the
time of such acquisition and not entered into in contemplation thereof, is
prohibited from becoming a Subsidiary Guarantor (a "Pre-existing Material
Restriction"), then upon the receipt by the Administrative Agent of a
certificate of an Authorized Officer of the Borrower requesting that such
Subsidiary shall be a Non-Guarantor Subsidiary, and certifying that (x) such
Subsidiary is subject to a Pre-existing Material Restriction, (y) the Borrower
has used commercially reasonable efforts, in connection with the acquisition,
to obtain a waiver or amendment of such Pre-existing Material Restriction
sufficient to allow such Subsidiary to become a Subsidiary Guarantor but has
not been able to so obtain such waiver or amendment and (z) no Default or Event
of Default exists at the time of, or would exist immediately after giving
effect to the designation of such Subsidiary as a Non-Guarantor Subsidiary
(including without limitation under Section 9.17), such Subsidiary shall not be
required to become a Subsidiary Guarantor and take such other actions referred
to above provided for a Subsidiary Guarantor unless and until such later date,
if any, upon which such Pre-existing Material Restriction no longer prohibits
such result (without limitation of Section 9.17)) and (ii) to the extent
otherwise permitted under this Agreement, establish, create or enter into one
or more Health Care Joint Ventures, or acquire Equity Interests in a Person,
which immediately upon such acquisition will constitute a Health Care Joint
Venture, in each case so long as within a reasonable time from such
establishment, creation or acquisition, the Equity Interests held by the
Borrower or any of its Subsidiaries in any new Health Care Joint Venture that
(A) is a Subsidiary of the Borrower or (B) has Equity Interests owned by any
and all Credit Parties with an aggregate investment cost equal to or greater
than $2,000,000, in each case, are delivered for pledge pursuant to the Pledge
Agreement and the certificates representing such Equity Interests, if any,
together with
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endorsements for the transfer thereof duly executed in blank, are delivered to
the Collateral Agent for the benefit of the Secured Creditors. In addition, any
new Wholly-Owned Subsidiary shall execute and deliver, or cause to be executed
and delivered, all other relevant documentation (including, without limitation,
counterparts of the Subsidiaries Guaranty, the Pledge Agreement and the
Security Documents, or a Joinder Agreement substantially in the form of Exhibit
O) of the type described in Section 5A as such Wholly-Owned Subsidiary would
have had to deliver if such Wholly-Owned Subsidiary were a Credit Party on the
Effective Date.
9.15 Changes To Legal Names; Organizational Identification Numbers,
Jurisdiction or Type of Organization. No Credit Party shall change, or permit
any change to, its legal name until (i) it shall have given to the
Administrative Agent and the Collateral Agent not less then 15 days prior
written notice of its intention so to do, clearly describing such new name and
providing other information in connection therewith as the Administrative Agent
or Collateral Agent may reasonably request and (ii) with respect to such new
name, it shall have taken all action reasonably requested by the Administrative
Agent or Collateral Agent to maintain the security interests of the
Administrative Agent or Collateral Agent in the Collateral intended to be
granted pursuant to the Security Documents at all times fully perfected and in
full force and effect. In addition, to the extent that any Credit Party does
not have an organizational identification number on the date hereof and later
obtains one, or if there is any change in the organizational identification
number of any Credit Party, the Borrower or such Credit Party shall promptly
notify the Administrative Agent and the Collateral Agent of such new or changed
organizational identification number and shall take all actions reasonably
satisfactory to the Administrative Agent and the Collateral Agent to the extent
necessary to maintain the security interests of the Administrative Agent or
Collateral Agent in the Collateral intended to be granted pursuant to the
Security Documents fully perfected and in full force and effect. Furthermore,
no Credit Party shall change its jurisdiction of organization or its type of
organization until (i) it shall have given to the Administrative Agent and the
Collateral Agent not less than 15 days prior written notice of its intention so
to do, clearly describing such new jurisdiction of organization and/or type of
organization and providing such other information in connection therewith as
the Administrative Agent or Collateral Agent may reasonably request and (ii)
with respect to such new jurisdiction and/or type of organization, it shall
have taken all actions reasonably requested by the Administrative Agent or the
Collateral Agent to maintain the security interests of the Administrative Agent
or Collateral Agent in the Collateral intended to be granted pursuant to the
Security Documents at all times fully perfected and in full force and effect.
If at any time Schedule XII hereto is not true and correct (as of the date in
question, which may be after the Effective Date), whether because of changes
thereto or as a result of the creation or acquisition of additional Credit
Parties, the Borrower shall promptly furnish to the Administrative Agent and
the Collateral Agent a true and correct updated Schedule XII, which shall
contain the updated information required therein with respect to each Credit
Party as of the date of any change thereto.
9.16 No Designation of Other Indebtedness as "Designated Senior
Indebtedness". The Borrower will not, and will not permit any of its
Subsidiaries to, designate any Indebtedness (other than the Obligations) of
such Credit Party as "Designated Senior Indebtedness" for the purposes of the
Senior Subordinated Note Documents or any Permitted Senior Subordinated Note
Documents.
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9.17 Limitation on Assets Held By Non-Guarantor Subsidiaries. The
Borrower will not permit the Total Assets of all Non-Guarantor Subsidiaries to,
at any time, exceed 20% of the Total Assets of the Borrower and its
Subsidiaries.
SECTION 10. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any interest on any Loan or Note, any Unpaid Drawing or any Fees or any
other amounts notified hereunder owing hereunder or under any other Credit
Document; or
10.02 Representations, etc. Any representation or warranty made by
any Credit Party herein or in any other Credit Document or in any certificate
delivered to the Administrative Agent or any Lender pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made
or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 9.01 through 9.05, 9.07 through 9.10 or 9.12 through 9.16, (ii)
default in the due performance or observance by it of the provisions contained
in Section 9.17 and such default shall continue unremedied for a period of 30
days or (iii) default in the due performance or observance by it of any other
term, covenant or agreement contained in this Agreement or any other Credit
Document (other than as provided in Sections 10.01 and 10.02) and such default
in the case of this clause (iii) shall continue unremedied for a period of 30
days after written notice to the Borrower by the Administrative Agent or the
Required Lenders; or
10.04 Default Under Other Agreements. (i) The Borrower or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace or cure, if any, provided in the
instrument or agreement under which such Indebtedness was created or (y)
default in the observance or performance of any agreement or condition relating
to any Indebtedness (other than the Obligations) or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause
(determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity, or (ii) any
Indebtedness (other than the Obligations) of the Borrower or any of its
Subsidiaries shall be declared to be (or shall become) due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment
(including, without limitation, by reason of the occurrence of a change of
control or other similar event, but excluding by reason of any due-on-sale
clause contained in Indebtedness so long as the aggregate principal amount of
all such Indebtedness does not exceed $3,500,000), prior to the stated maturity
thereof, provided that it shall not be a Default or an Event of Default under
clauses (i) or (ii) of this Section 10.04 unless the aggregate outstanding
principal amount of all Indebtedness as described in such clauses (i) and (ii)
is at least $3,500,000; or
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10.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
the Borrower or any of its Subsidiaries and the petition is not controverted
within 15 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of the Borrower or
any of its Subsidiaries or the Borrower or any of its Subsidiaries commences
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries, or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days, or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by the Borrower or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to
occur with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed at the instance of the PBGC to administer such Plan, any Plan which
is subject to Title IV of ERISA is, shall have been or is likely to be
terminated or to be the subject of termination proceedings under ERISA, any
Plan shall have an Unfunded Current Liability, a contribution required to be
made with respect to a Plan or a Foreign Pension Plan has not been timely made,
the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate has
incurred or is likely to incur any liability to or on account of a Plan under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account of a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
the Code) under Section 4980B of the Code, or the Borrower or any Subsidiary of
the Borrower has incurred or is likely to incur liabilities pursuant to one or
more employee welfare benefit plans (as defined in Section 3(1) of ERISA) that
provide benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or Plans or Foreign Pension Plans; (b) there
shall result from any such event or events the imposition of a lien on, the
granting of a security interest by, or a liability or a material risk of
incurring a liability by, the Borrower, a Subsidiary of the Borrower or an
ERISA Affiliate; and (c) such lien, security interest or liability,
individually, and/or in the aggregate, in the reasonable opinion of the
Required Lenders, has had,
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or could reasonably be expected to have, a material adverse effect upon the
business, property, liabilities (actual or contingent), operations or condition
(financial or otherwise) of the Borrower or of the Borrower and its
Subsidiaries taken as a whole; or
10.07 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted
by Section 9.01), and subject to no other Liens (except as permitted by Section
9.01); or
10.08 Subsidiaries Guaranty. At any time after the execution and
delivery thereof, the Subsidiaries Guaranty or any provision thereof shall
cease to be in full force or effect as to any Subsidiary Guarantor, or any
Subsidiary Guarantor or any Person acting by or on behalf of such Subsidiary
Guarantor shall deny or disaffirm such Subsidiary Guarantor's obligations under
the Subsidiaries Guaranty or any Subsidiary Guarantor shall default in the due
performance or observance of any material term, covenant or agreement on its
part to be performed or observed pursuant to the Subsidiaries Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the aggregate for
the Borrower and its Subsidiaries a liability (to the extent not paid or not
covered by a reputable and solvent insurance company) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments and decrees (determined as
provided in the preceding parenthetical of this Section 10.09) exceeds
$3,500,000; or
10.10 Change of Control. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent, upon the written
request of the Required Lenders, shall by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of any
Agent, any Lender or the holder of any Note to enforce its claims against any
Credit Party (provided that, if an Event of Default specified in Section 10.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent to the Borrower as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Commitments terminated,
whereupon all of the Commitments of each Lender shall forthwith terminate
immediately and any Commitment Commission shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal of and
any accrued interest in respect of all Loans and the Notes and all Obligations
owing hereunder and thereunder to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by each Credit Party; (iii)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (iv) direct the Borrower to pay (and the Borrower agrees that upon
receipt of such notice, or upon the occurrence of an Event of Default
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specified in Section 10.05 with respect to the Borrower, it will pay) to the
Collateral Agent at the Payment Office such additional amount of cash, to be
held as security by the Collateral Agent, as is equal to the aggregate Stated
Amount of all Letters of Credit issued for the account of the Borrower and then
outstanding; (v) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents; and (vi) apply any cash
collateral held by the Administrative Agent pursuant to Section 4.02 to the
repayment of the Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acquisition" shall mean the acquisition by the Borrower or any of
its Subsidiaries (from a Person other than the Borrower or a Subsidiary
thereof) of Health Care Assets in accordance with the provisions of this
Agreement.
"Acquisition CapEx" shall mean, for any period, the aggregate amount
of all Capital Expenditures incurred or committed to be incurred by the
Borrower or any of its Subsidiaries within six months of the consummation of
any Permitted Acquisition, which expenditures have been identified by the
Borrower to the Administrative Agent as part of the aggregate value of all
consideration paid by the Borrower or such Subsidiary in respect of such
Permitted Acquisition.
"Additional Capital Expenditures Amount" shall mean, for any
fiscal year of the Borrower after its fiscal year ended June 30, 2001, an
amount (not less than $0) equal to the product of (a) .05 multiplied by the
remainder of (x) the consolidated net revenue for such fiscal year attributable
to Health Care Assets (other than health maintenance organizations) of the
Borrower and its Subsidiaries less (y) the consolidated net revenue for the
Borrower's fiscal year ended June 30, 2001 (determined on a pro forma basis in
a manner consistent with the methodology used in preparing the financial
statements referred to in Section 7.05(b)) attributable to Health Care Assets
(other than health maintenance organizations) of the Borrower and its
Subsidiaries (in each case as determined in good faith by an Authorized Officer
of the Borrower and set forth in reasonable detail in the Compliance
Certificate delivered by the Borrower to the Administrative Agent within 90
days following each fiscal year end of the Borrower pursuant to Section
8.01(d)).
"Additional Investment Amount" shall initially mean $0, provided that
from and including the first fiscal year of the Borrower for which Consolidated
EBITDA exceeds $55,000,000, the Additional Investment Amount shall mean an
amount equal to the greater of (i) 10% of such excess and (ii) 10% of the
highest amount by which Consolidated EBITDA for any subsequent fiscal year of
the Borrower exceeds $55,000,000.
"Additional Security Documents" shall have the meaning provided in
Section 8.12(a).
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"Additional Physician Support Obligations Amount" shall initially
mean $0; provided that, from and including the first fiscal year of the
Borrower for which Consolidated EBITDA exceeds $55,000,000, the Additional
Physician Support Obligation Amount shall mean an amount equal to the greater
of (i) 5% of such excess and (ii) 5% of the highest amount by which
Consolidated EBITDA for any subsequent fiscal year of the Borrower exceeds
$55,000,000.
"Adjusted Consolidated Net Income" shall mean for any period
Consolidated Net Income of the Borrower and its Subsidiaries for such period
plus, without duplication, the amount of all net non-cash charges (including,
without limitation, depreciation, amortization, deferred tax expense, non-cash
interest expense) and net non-cash losses which were included in arriving at
Consolidated Net Income for such period less the sum of the amount of all net
non-cash gains and gains from the sale or other disposition of assets (other
than sales of inventory in the ordinary course of business) which were included
in arriving at Consolidated Net Income for such period.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities at such time.
"Administrative Agent" shall mean Bank of America, N.A. in its
capacity as Administrative Agent (including in its capacity as Collateral
Agent) for the Lenders hereunder, and shall include any successor to the
Administrative Agent appointed pursuant to Section 12.09.
"Affected Loans" shall have the meaning provided in Section 4.02(i).
"Affiliate" shall mean, with respect to any Person, any other Person
(i) directly or indirectly controlling (including, but not limited to, all
directors, executive officers and general partners of such Person), controlled
by, or under direct or indirect common control with, such Person or (ii) that
directly or indirectly owns more than 15% of any class of the voting securities
or capital stock of or Equity Interests in such Person. A Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" shall mean and include any of the Administrative Agent
(including in its capacity as Collateral Agent), the Syndication Agent and,
solely for the purposes of Sections 12 and 13.01, each Co-Documentation Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed, refinanced or replaced from
time to time.
"Applicable Margin" shall mean, from and after any Start Date to and
including the corresponding End Date (a) with respect to Revolving Loans and
Swingline Loans, the respective percentage per annum set forth below under the
respective Type of Loans and opposite the respective Level (i.e., Xxxxx 0,
Xxxxx 0, Xxxxx 0, Xxxxx 4 or Level 5, as the case may be)
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indicated to have been achieved on the applicable Test Date (as shown on the
respective officer's certificate delivered pursuant to Section 8.01(d) or the
first proviso below):
Applicable Margins for Revolving Loans
--------------------------------------
Consolidated
Leverage Ratio
(calculated on a Pro
Forma Basis in
accordance with, and Revolving Loans
subject to the Revolving Loans maintained as
exceptions contained maintained as Base Rate Loans and
Level in, Section 11.02) Eurodollar Loans Swingline Loans
----- ------------------ ---------------- ---------------
1 Greater than or equal to
4.25:1.00 3.25% 2.25%
2 Greater than or equal to
3.75:1.00 but less than
4.25:1.00 3.00% 2.00%
3 Greater than or equal to
3.25:1.00 but less than
3.75:1.00 2.75% 1.75%
4 Greater than or equal to
2.75:1.00 but less than
3.25:1.00 2.50% 1.50%
5 Less than 2.75:1.00 2.25% 1.25%
; provided, however, that if the Borrower fails to deliver the financial
statements required to be delivered pursuant to Section 8.01(a) or (b)
(accompanied by the officer's certificate required to be delivered pursuant to
Section 8.01(d) showing the applicable Consolidated Leverage Ratio (as
calculated on a Pro Forma Basis in accordance with Section 11.02 for purposes
of determining Applicable Margins) on the relevant Test Date) on or prior to
the respective date required by such Sections, then Level 1 pricing shall apply
until such time, if any, as the financial statements required as set forth
above and the accompanying officer's certificate have been delivered showing
the pricing for the respective Margin Reduction Period is at a level which is
less than Level 1 (it being understood that, in the case of any late delivery
of the financial statements and officer's certificate as so required, any
reduction in the Applicable Margin shall apply only from and after the date of
the delivery of the complying financial statements and officer's certificate);
provided further, that (i) subject to following clause (ii), Level 2 pricing
shall apply for the period from the Effective Date to but not including the
date which is the first Start Date after the Borrower's fiscal quarter ending
on December 31, 2001 and (ii) Level 1 pricing shall apply at any time when any
Default or Event of Default is in existence.
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(b) with respect to any Tranche of Incremental Term Loans, the
respective percentages per annum relating to the respective Type of such
Tranche of Incremental Term Loans as set forth in the applicable Incremental
Term Loan Commitment Agreement (or, in the case of any Tranche of Incremental
Term Loans extended pursuant to more than one Incremental Term Loan Commitment
Agreement, as may be provided in the first Incremental Term Loan Commitment
Agreement executed and delivered with respect to such Tranche).
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit P (appropriately
completed).
"Authorized Officer" of any Credit Party shall mean any of the
President, the Chief Financial Officer or any Vice-President of such Credit
Party or any other officer of such Credit Party which is designated in writing
to the Administrative Agent by any of the foregoing officers of such Credit
Party as being authorized to give such notices under this Agreement.
"BAS" shall mean Banc of America Securities LLC, in its individual
capacity.
"Bank of America" shall mean Bank of America, N.A., in its individual
capacity.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the higher of (i) the rate which
is 1/2 of 1% in excess of the Federal Funds Rate and (ii) the Prime Lending
Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each
other Loan designated or deemed designated as such by the Borrower at the time
of the incurrence thereof or conversion thereto.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan from all the
Lenders (or from the Swingline Lender in the case of Swingline Loans) on a
given date (or resulting from a conversion or conversions on such date) having
in the case of Eurodollar Loans the same Interest Period, provided that Base
Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of the
related Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall
be in New York, New York a legal holiday or a day on which banking institutions
are authorized or required by law or other government action to close and (ii)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and
between banks in the London interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with GAAP
and reflected as either prop-
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erty, plant or equipment, and, without duplication, the amount of Capitalized
Lease Obligations incurred by such Person, provided that Capital Expenditures
shall not include (i) financing costs required to be capitalized, (ii) the
purchase price of Permitted Acquisitions to the extent paid during such period,
(iii) any Acquisition CapEx incurred or committed to be incurred during such
period, and (iv) interim costs incurred during such period in connection with a
proposed acquisition to the extent such costs would constitute a part of the
purchase price for such acquisition upon its consummation; provided that upon
the consummation of any such proposed acquisition, such interim costs shall be
included as Acquisition CapEx for such period; provided further, that at any
time such proposed acquisition is no longer expected to occur, all costs
excluded from this definition of Capital Expenditures pursuant to this clause
(iv) shall be reversed and expensed in the current period.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under GAAP, are or will be required to be capitalized on the
books of such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) Dollar denominated time
deposits and certificates of deposit of any commercial bank having, or which is
the principal banking subsidiary of a bank holding company having, capital in
excess of $500,000,000 with maturities of not more than one year from the date
of acquisition by such Person, (iii) repurchase obligations with a term of not
more than 30 days for underlying securities of the types described in clause
(i) above entered into with any bank meeting the qualifications specified in
clause (ii) above, (iv) commercial paper issued by any Person incorporated in
the United States rated at least A-2 or the equivalent thereof by S&P or at
least P-2 or the equivalent thereof by Xxxxx'x and in each case maturing not
more than 270 days after the date of acquisition by such Person, (v) other
Dollar denominated securities issued by any Person incorporated in the United
States rated at least "A-" or the equivalent by S&P or at least "A3" or the
equivalent by Xxxxx'x and in each case either (x) maturing not more than 90
days after the date of acquisition by such Person or (y) which are subject to a
repricing arrangement (such as a Dutch auction) not more than 270 days after
the date of acquisition by such Person which such Person believes in good faith
will permit such Person to sell such security at par in connection with such
repricing mechanism and (vi) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in
clauses (i) through (iv) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time
to time, 42 U.S.C.A. ss. 9601 et seq.
"Change of Control" shall mean (x) (i) at any time prior to the
consummation of a Qualified Public Offering, the Xxxxxx Xxxxxxx Holders shall
cease to own at least 50.1% of the voting interests in the Borrower's Equity
Interests, or (ii) at any time after the consummation of a Qualified Public
Offering, (A) the Xxxxxx Xxxxxxx Holders shall cease to own at least 30% of the
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voting interests in the Borrower's Equity Interests or (B) any Person or
"group" (within the meaning of Rules 13d-3 or 13d-5 under the Exchange Act (as
in effect on the Effective Date)) (for this purpose, excluding the Xxxxxx
Xxxxxxx Holders), shall have acquired beneficial ownership of a percentage of
the voting interest in the Borrower's Equity Interests which exceeds the
percentage ownership of the Xxxxxx Xxxxxxx Holders of the voting interests in
the Borrower's Equity Interests, (y) any Person or "group" (within the meaning
of Rules 13d-3 or 13d-5 of the Exchange Act (as in effect on the Effective
Date)) (for this purpose excluding the Xxxxxx Xxxxxxx Holders) shall have
obtained the power (whether or not exercised) to elect a majority of the
Borrower's directors, provided that no Person shall be deemed a member of any
such group merely by having become a party to any Shareholders' Agreement to
which Xxxxxx Xxxxxxx Capital Partners or its Affiliates is a party or (z) a
"Change of Control", as defined in the Senior Subordinated Note Documents,
shall occur under the Senior Subordinated Note Documents or a comparable event,
whether or not so titled, shall occur under any Permitted Subordinated Note
Document.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Co-Documentation Agents" shall have the meaning provided in the
first paragraph of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder. Section references to
the Code are to the Code, as in effect at the date of this Agreement, and to
any subsequent provision of the Code, amendatory thereof, supplemental thereto
or substituted therefor.
"Collateral" shall mean all property with respect to which any
security interests have been granted (or purported to be granted) pursuant to
any Security Document, including, without limitation, all Pledge Agreement
Collateral, all Security Agreement Collateral and the Mortgaged Properties.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5A.05.
"Commitment" shall mean any of the commitments of any Lender, i.e.,
whether the Revolving Loan Commitment or any Incremental Term Loan Commitment
of such Lender.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Consolidated Cash Interest Expense" shall mean, for any
period, the total consolidated cash interest expense, in each case, for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, that portion of Capitalized Lease Obligations of the
Borrower and its Subsidiaries representing the interest factor for such period
and capitalized interest for such period, but (i) excluding interest expense
not payable in cash by
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its terms (including amortization of discount, deferred financing costs to the
extent included in this definition of Consolidated Cash Interest Expense,
interest expense recognized on unfunded malpractice liability reserves and
interest on life insurance policies owned by the Borrower to the extent not
paid in cash) and (ii) subtracting from Consolidated Cash Interest Expense as
otherwise determined above for any period, the cash portion of interest income
actually received by the Borrower and its Subsidiaries during such period, all
as determined on a consolidated basis in accordance with GAAP.
"Consolidated Current Assets" shall mean, at any time, the amounts
that would be classified as consolidated current assets of the Borrower and its
Subsidiaries in accordance with GAAP in a classified balance sheet.
"Consolidated Current Liabilities" shall mean, at any time, the
amounts that would be classified as consolidated current liabilities of the
Borrower and its Subsidiaries at such time in accordance with GAAP in a
classified balance sheet, but excluding the current portion of any Indebtedness
under this Agreement and any other long-term Indebtedness which would otherwise
be included therein.
"Consolidated Debt" shall mean, at any time, (a) the principal amount
of all Indebtedness (excluding (x) Indebtedness of the type described in
clauses (iii), (v) or (vi) of the definition thereof to the extent such
Indebtedness would not appear on a consolidated balance sheet of the Borrower
and its Subsidiaries as debt or capital leases in accordance with GAAP and (y)
Indebtedness of the type described in clause (ii) of the definition thereof to
the extent such Indebtedness consists of undrawn amounts in respect of letters
of credit) of the Borrower and its Subsidiaries at such time (including any
Indebtedness incurred at such time), less (b) the amount of cash and Cash
Equivalents held by the Borrower and its Subsidiaries at such time and which
would appear on a consolidated balance sheet of the Borrower and its
Subsidiaries as part of the consolidated assets of the Borrower; provided that
if Revolving Loans or Swingline Loans are outstanding at such time then the
amount of cash and Cash Equivalents deducted pursuant to this clause (b) shall
not exceed the sum of (x) $25,000,000 and (y) the Required AHCCS Amount at such
time; provided further that cash or Cash Equivalents which are deposited with,
or held by, Subsidiaries of the Borrower that have a contract with the Arizona
Health Care Cost Containment System to arrange health care services for
Medicaid patients shall only reduce Consolidated Debt to the extent such cash
or Cash Equivalents, as the case may be, (x) are required by the Arizona Health
Care Cost Containment System (or the relevant governmental authorities having
jurisdiction over same) to remain with such Subsidiaries on the date for which
Consolidated Debt is being determined (which date for which Consolidated Debt
is being determined must be within seven days prior to or seven days after the
last day of any fiscal quarter of the Borrower or there shall be no reduction
to the amount of Consolidated Debt for cash or Cash Equivalents held by such
Subsidiaries) and (y) shall not be required by the Arizona Health Care
Containment System (or other relevant governmental authority) to remain with
such Subsidiary at any time other than during the period beginning seven days
prior to, and ending seven days after, the last day of any fiscal quarter of
the Borrower.
"Consolidated Debt/Total Capitalization Ratio" shall mean, at any
time, the ratio of Consolidated Debt at such time to Total Capitalization at
such time.
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"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income of the Borrower and its Subsidiaries plus, in each case to the extent
actually deducted in determining Consolidated Net Income for such period,
Consolidated Cash Interest Expense and provision for taxes for such period
adjusted to exclude for such period (x) any extraordinary gains or losses, (y)
any gains or losses from non-current assets held for divestiture or write-downs
of non-current assets relating to impairments or the sale of non-current assets
and (z) non-cash expenses incurred in connection with stock options, stock
appreciation rights or other similar equity rights.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT
for such period, adjusted by adding thereto the amount of all amortization and
depreciation that were deducted in arriving at Consolidated EBIT for such
period.
"Consolidated Interest Coverage Ratio" shall mean, for any period,
the ratio of Consolidated EBITDA for such period to Consolidated Cash Interest
Expense for such period.
"Consolidated Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Debt at such time to Consolidated EBITDA for the Test Period ended
on the date of determination or, if the date of determination is not the last
day of a Test Period, for the then most recently ended Test Period.
"Consolidated Net Income" shall mean, for any Person and period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis, provided that (i) in determining
Consolidated Net Income of the Borrower, the net income of any other Person
which is not a Subsidiary of the Borrower or a Subsidiary thereof or is
accounted for by the Borrower or a Subsidiary thereof by the equity method of
accounting shall be included only to the extent of the payment of dividends or
distributions by such other Person to the Borrower or a Subsidiary thereof
during such period, (ii) in determining Consolidated Net Income of the
Borrower, the net income of any Health Care Joint Venture shall not be included
to the extent that payment of dividends or distributions by such Health Care
Joint Venture to the Borrower or a Wholly-Owned Subsidiary are prohibited
pursuant to the organizational documents relating to such Health Care Joint
Venture, (iii) the net income (or loss) of any other Person acquired by such
specified Person or a Subsidiary of such Person in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded and (iv) to the extent Consolidated Net Income reflects amounts
attributable to minority interests in Subsidiaries that are not Wholly-Owned
Subsidiaries of the Borrower, Consolidated Net Income shall be reduced by the
amounts attributable to such minority interests.
"Consolidated Net Worth" shall mean, at any time, the consolidated
stockholders' equity of the Borrower at such time plus, to the extent not
otherwise included, any preferred stock of the Borrower, with the foregoing
determinations to be made in accordance with GAAP.
"Consolidated Senior Debt" shall mean, at any time, the remainder of
(x) Consolidated Debt at such time less (y) the sum of (i) the aggregate
principal amount of Senior Subordinated Notes outstanding at such time (to the
extent same are reflected in Consolidated Debt at such time), and (ii) the
aggregate principal amount of all Permitted
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Subordinated Notes outstanding at such time (to the extent same are reflected
in Consolidated Debt at such time).
"Consolidated Senior Leverage Ratio" shall mean, at any time, the
ratio of Consolidated Senior Debt at such time to Consolidated EBITDA for the
Test Period ended on the date of determination or, if the date of determination
is not the last day of a Test Period, for the then most recently ended Test
Period.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee (including, without
limitation, as a result of such Person being a general partner of the other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner) any Indebtedness, leases, dividends or other obligations
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (x) for the purchase or payment of
any such primary obligation or (y) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the holder of
such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note, the
Subsidiaries Guaranty, each Security Document, each Incremental Term Loan
Commitment Agreement and each Joinder Agreement.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit but shall not include the commencement of a new Interest
Period applicable to a Borrowing of Eurodollar Loans upon the expiration of the
Interest Period applicable thereto or the conversion of Loans of one Type into
Loans of the other Type, provided that, in any such case, the aggregate
outstanding principal amount of Loans is not increased as a result thereof.
"Credit Party" shall mean the Borrower and each Subsidiary Guarantor.
"Current Liabilities" shall mean, as to any Person, accrued expenses,
trade payables and insurance premiums payable within one year of the incurrence
thereof of such Person.
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"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Disposition" shall mean any sale, lease, sale and lease-back,
assignment, conveyance, transfer or other disposition by the Borrower or any of
its Subsidiaries (to a Person other than the Borrower or a Subsidiary thereof)
of any Health Care Assets.
"Dividends" with respect to any Person shall mean that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than common stock (or equivalent thereof) of
such Person) or cash to its stockholders, members or partners as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock or any other
Equity Interests outstanding on or after the Effective Date (or any options or
warrants issued by such Person with respect to its capital stock or other
Equity Interests), or set aside any funds for any of the foregoing purposes, or
shall have permitted any of its Subsidiaries to purchase or otherwise acquire
for a consideration any shares of any class of the capital stock or other
Equity Interests of such Person outstanding on or after the Effective Date (or
any options or warrants issued by such Person with respect to its capital stock
or other Equity Interests). Without limiting the foregoing, "Dividends" with
respect to any Person shall also include all payments (other than as excluded
above) made or required to be made by such Person with respect to any stock
appreciation rights, plans, equity incentive or achievement plans or any
similar plans (other than payments under normal cash bonus plans for employees
that are approved by the board of directors of the Borrower) or setting aside
of any funds for the foregoing purposes.
"Documents" shall mean, collectively, the Credit Documents and the
Senior Subordinated Note Documents.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation
D of the Securities Act); provided, however, that individual persons shall not
be included in this definition of Eligible Transferee.
"Employee Benefit Plans" shall have the meaning provided in Section
5A.05.
"End Date" shall mean, for any Margin Reduction Period, the last day
of such Margin Reduction Period.
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"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, formal demands, demand letters, claims,
liens, notices of non-compliance or violation, investigations or proceedings
relating in any way to any Environmental Law or any permit issued, or any
approval given, under any such law (hereafter "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities
for enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law, and (b) any and all
Claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief in connection with alleged injury
or threat of injury to health, safety or the environment due to the presence of
Hazardous Materials.
"Environmental Law" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, written guideline,
written policy and rule of common law now or hereafter in effect and in each
case as amended, and any binding judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or
judgment binding on the Borrower or any Subsidiary, as applicable, and relating
to the environment, occupational safety and health or Hazardous Materials,
including, without limitation, CERCLA; RCRA; the Federal Water Pollution
Control Act, 33 U.S.C.A.ss.2601 et seq.; the Toxic Substances Control Act, 15
X.X.X.xx. 2601 et seq.; the Clean Air Act, 42 X.X.X.X.xx. 7401 et seq.; the
Safe Drinking Water Act, 42 X.X.X.X.xx. 3803 et seq.; the Oil Pollution Act of
1990, 33 X.X.X.X.xx. 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 X.X.X.X.xx. 11001 et seq.; the Hazardous Material
Transportation Act, 49 X.X.X.X.xx. 1801 et seq.; the Occupational Safety and
Health Act, 29 X.X.X.X.xx. 651 et seq.; and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.
"Equity Interests" of any Person shall mean any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest.
"Equity Investment" shall mean any Investment evidenced solely by
Equity Interests.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower
would be deemed to be a "single employer" within the meaning of Section 414(b),
(c), (m) or (o) of the Code.
"Eurodollar Loan" shall mean each Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
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"Eurodollar Rate" shall mean for any Interest Determination Date with
respect to an Interest Period for a Eurodollar Loan, the rate per annum
obtained by dividing (i)(a) the per annum rate for deposits in Dollars for a
period corresponding to the duration of the relevant Interest Period which
appears on Telerate Page 3750 at approximately 11:00 A.M. (London time) on such
Interest Determination Date or (b) if such rate does not appear on Telerate
Page 3750 on such Interest Determination Date, the rate per annum (rounded
upward to the nearest 1/16 of one percent) at which deposits in Dollars are
offered by Administrative Agent to first-class banks in the London interbank
market, in the approximate amount of Administrative Agent's relevant Eurodollar
Loan and having a maturity approximately equal to such Interest Period, at
approximately 11:00 A.M. (London time) on such Interest Determination Date by
(ii) a percentage equal to 100% minus the then stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) applicable
to any member bank of the Federal Reserve System in respect of Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D). The Eurodollar Rate shall be rounded to the
next higher multiple of 1/100 of 1% if the rate is not such a multiple. The
reference to Telerate Page 3750 in this definition shall be construed to be a
reference to the relevant page or any other page that may replace such page on
the Telerate service or any other service that may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying
British Bankers' Association Interest Settlement Rates for deposits in Dollars.
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any period, the remainder of (i)
the sum of (a) Adjusted Consolidated Net Income for such period and (b) the
decrease, if any, in Adjusted Consolidated Working Capital from the first day
to the last day of such period, minus (ii) the sum of (a) the amount of all
Capital Expenditures and Acquisition CapEx made by the Borrower and its
Subsidiaries pursuant to Section 9.07(b) and (c) and (d) during such period, in
each case except to the extent financed with Indebtedness (including without
limitation proceeds of Revolving Loans or Swingline Loans hereunder), (b) the
aggregate principal amount of permanent principal payments of Indebtedness for
borrowed money of the Borrower and its Subsidiaries (other than repayments (x)
made with proceeds of Indebtedness, equity issuances, asset sales or Recovery
Events and (y) of Loans, provided that repayments of Loans shall be included in
the deduction set forth in clause (ii)(b) above in determining Excess Cash Flow
if such repayments were (x) required as a result of a Scheduled Incremental
Term Loan Repayment under Section 4.02(b) or (y) made as a voluntary prepayment
with internally generated funds (but in the case of a voluntary prepayment of
Revolving Loans or Swingline Loans, only to the extent accompanied by a
voluntary reduction to the Total Revolving Loan Commitment in an equal amount))
during such period and (c) the increase, if any, in Adjusted Consolidated
Working Capital from the first day to the last day of such period.
"Excess Cash Payment Date" shall mean the date occurring 95 days
after the last day of each fiscal year of the Borrower (beginning with its
fiscal year ending June 30, 2002).
"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of the Borrower.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Senior Subordinated Notes" shall mean Senior Subordinated
Notes which are substantially identical securities to the Senior Subordinated
Notes issued on or prior to the Effective Date, which Exchange Senior
Subordinated Notes shall be issued pursuant to a registered exchange offer or
private exchange offer for the Senior Subordinated Notes and pursuant to the
Senior Subordinated Notes Indenture. In no event will the issuance of any
Exchange Senior Subordinated Notes increase the aggregate principal amount of
Senior Subordinated Notes then outstanding or otherwise result in an increase
in the interest rate applicable to the Senior Subordinated Notes.
"Existing Credit Agreement" shall mean the Credit Agreement, dated as
of February 1, 2000, among Vanguard Health Systems, Inc., as Borrower, Xxxxxx
Xxxxxxx Senior Funding, Inc., as Administrative Agent, and various banks party
thereto from time to time.
"Existing Indebtedness" shall have the meaning provided in Section
7.22.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5A.05.
"Existing Investments" shall mean those Investments held by the
Borrower and its Subsidiaries on the Effective Date and listed on Schedule XI
hereto.
"Existing Letters of Credit" shall have the meaning provided in
Section 2.01(a).
"Facing Fee" shall have the meaning provided in Section 3.01(d).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Final Maturity Date" shall mean, at any time, the latest Maturity
Date in respect of any Tranche of Loans.
"First Union" shall mean First Union National Bank, in its individual
capacity.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit
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of esmployees of the Borrower or such Subsidiaries residing outside the United
States of America, which plan, fund or other similar program provides, or
results in, retirement income, a deferral of income in contemplation of
retirement or payments to be made upon termination of employment, and which
plan is not subject to ERISA or the Code.
"GAAP" shall have the meaning provided in Section 13.07(a).
"GECC" shall mean General Electric Capital Corporation, in its
individual capacity.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, dielectric fluid containing levels of
polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "restricted hazardous materials,"
"extremely hazardous wastes," "restrictive hazardous wastes," "toxic
substances," "toxic pollutants," "contaminants" or "pollutants," or words of
similar meaning and regulatory effect under any applicable Environmental Law;
and (c) any other chemical, material or substance, the Release of which is
prohibited, limited or regulated by any governmental authority.
"Health Care Asset" shall mean (a) a medical surgical facility, acute
care facility or hospital, psychiatric hospital, surgical center, health
maintenance organization, preferred provider organization, retirement center or
physician practice, (b) any asset held or used in the conduct of the businesses
of owning or operating any of the foregoing or any ancillary business related
to any of the foregoing, including, without limitation, any medical office
building, diagnostic center, physical therapy center, home health care services
center, skilled nursing facility or other health care service provider and (c)
the stock or other Equity Interests of any Person all or substantially all of
whose assets consist of any of the foregoing.
"Health Care Joint Venture" shall mean a Person engaged primarily in
the operation of businesses utilizing Health Care Assets in which the Borrower
and its Wholly-Owned Subsidiaries collectively own less than 100% of the Equity
Interests.
"Hospital Property" shall mean each psychiatric hospital or acute
care hospital, and the campus and Real Property on which such hospital is
located, owned, leased or operated by the Borrower or any of its Subsidiaries
(including the furniture, fixture and equipment thereon).
"Incremental Term Loan" shall have the meaning provided in Section
1.01(d).
"Incremental Term Loan Borrowing Date" shall mean each date on which
Incremental Term Loans are incurred pursuant to Section 1.01(d).
"Incremental Term Loan Commitment" shall mean, for each Incremental
Term Loan Lender, the commitment of such Incremental Term Loan Lender to make
Incremental Term Loans pursuant to Section 1.01(b) on a given Incremental Term
Loan Borrowing Date, as such commitment (x) is set forth in the respective
Incremental Term Loan Commitment Agreement
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delivered pursuant to Section 1.13(b) and (y) may be reduced pursuant to
Section 4.02 or terminated pursuant to Sections 3.03 and/or 10.
"Incremental Term Loan Commitment Agreement" shall mean an
Incremental Term Loan Commitment Agreement substantially in the form of Exhibit
C (appropriately completed and with such modifications as may be acceptable to
the Administrative Agent).
"Incremental Term Loan Lender" shall have the meaning provided in
Section 1.13(b).
"Incremental Term Loan Maturity Date" shall mean for any Tranche of
Incremental Term Loans, the maturity date for such Tranche of Incremental Term
Loans set forth in the Incremental Term Loan Commitment Agreement relating
thereto, provided that the Maturity Date for all Incremental Term Loans of a
given Tranche shall be the same date.
"Incremental Term Loan Tranches Percentage" shall mean, with respect
to any mandatory repayment of Incremental Term Loans and mandatory reductions
to the Total Revolving Loan Commitment pursuant to Section 4.02(d), (e) and (g)
at any time, a fraction (expressed as a percentage) the numerator of which is
equal to the aggregate principal amount of Incremental Term Loans outstanding
at such time and the denominator of which is equal to the sum of (i) the
aggregate principal amount of all Incremental Term Loans outstanding at such
time plus (ii) the Total Revolving Loan Commitment at such time or, if the
Total Revolving Loan Commitment has terminated at such time, the aggregate
principal amount of Revolving Loans and Swingline Loans and Letter of Credit
Outstandings at such time.
"Incremental Term Note" shall have the meaning provided in Section
1.05(a).
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (provided that, if the Person has not assumed or
otherwise become liable in respect of such Indebtedness, such Indebtedness
shall be deemed to be in an amount equal to the fair market value of the
property to which such Lien relates as determined in good faith by such
Person), (iv) the aggregate amount of Capitalized Lease Obligations of such
Person, (v) all obligations of such Person to pay a specified purchase price
for goods or services, whether or not delivered or accepted, i.e., take-or-pay
and similar obligations, (vi) all Contingent Obligations of such Person to the
extent known and quantifiable, and (vii) all obligations under any Interest
Rate Protection Agreement or Other Hedging Agreement or under any similar type
of agreement or arrangement; provided that this definition of Indebtedness
shall not include Current Liabilities of such Person incurred in the ordinary
course of business.
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"Intercompany Note" shall mean a promissory note evidencing the
intercompany Indebtedness of the Borrower and its Subsidiaries substantially in
the form of Exhibit M.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement, interest rate floor agreement or other similar
agreement or arrangement.
"Investment" shall have the meaning provided in Section 9.05.
"Issuing Lenders" shall mean the Administrative Agent and any other
Lender which at the request of the Borrower and with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld) agrees,
in such Lender's sole discretion, to become an Issuing Lender for the purpose
of issuing Letters of Credit pursuant to Section 2. The only Issuing Lenders on
the Effective Date are the Administrative Agent and, with respect to the
Existing Letter Credit only, LaSalle Bank National Association.
"Joinder Agreement" shall mean a Joinder in Subsidiaries Guaranty,
Security Agreement and Pledge Agreement substantially in the form of Exhibit O.
"Joint Lead Arrangers" shall have the meaning provided in the first
paragraph hereof.
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower or any of its Subsidiaries incurred in the ordinary course of business
with respect to workers compensation, surety bonds and other similar statutory
obligations and (ii) such other obligations of the Borrower or any of its
Subsidiaries (other than in respect of the Senior Subordinated Notes or any
Permitted Subordinated Notes) as are otherwise permitted to exist pursuant to
(or otherwise not prohibited by) the terms of this Agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under any lease or
license of land, improvements and/or fixtures.
"Lender" shall mean each financial institution listed on Schedule I,
as well as any Person which becomes a "Lender" hereunder pursuant to Section
1.13, 1.14 or 13.04(b).
"Lender Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Lender to make available its portion of any
Borrowing (including any Mandatory Borrowing) in violation of the requirements
of this Agreement or to fund its portion of any unreimbursed payment under
Section 2.04(c) or (ii) a Lender having notified in writing the
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Borrower and/or the Administrative Agent that it does not intend to comply with
its obligations under Section 1.01 or 2.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit at such
time and (ii) the amount of all Unpaid Drawings at such time.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other) or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any lien evidenced by a financing or similar statement or notice
filed under the UCC or any other similar recording or notice statute, and any
lease having substantially the same effect as any of the foregoing).
"Loan" shall mean each Revolving Loan, Swingline Loan and each
Incremental Term Loan (if any).
"Majority Lenders" of any Tranche shall mean those Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement (without giving effect to the proviso contained in such
definition) if all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Managed Physician Practices" shall mean Physician practices owned or
managed by a Subsidiary of the Borrower.
"Management Agreements" shall have the meaning provided in Section
5A.05.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(c).
"Margin Reduction Period" shall mean each period which shall commence
on the date occurring after the Effective Date upon which respective officer's
certificate is delivered pursuant to Section 8.01(d) (together with the related
financial statements pursuant to Section 8.01(a) or (b), as the case may be)
and which shall end on the date of actual delivery of the next officer's
certificates pursuant to Section 8.01(d) (and related financial statements) or
the latest date on which such next officer's certificate (and related financial
statements) is required to be so delivered.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Leases" shall have the meaning provided in Section 5A.05.
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"Maturity Date" shall mean, with respect to any Tranche of Loans, the
Revolving Loan Maturity Date, the Incremental Term Loan Maturity Date for such
Tranche of Loans or the Swingline Expiry Date, as the case may be.
"Maximum Eurodollar Borrowing Number" shall mean (x) in the case of
Revolving Loans, 10 and (y) in the case of any Tranche of Incremental Term
Loans, 10 or such other number as may be specified as the Maximum Eurodollar
Borrowing Number for such Tranche in the respective Incremental Term Loan
Commitment Agreement (although any Incremental Term Loan Commitment Agreement
providing for Incremental Term Loans which will be added to an existing Tranche
shall not specify a Maximum Eurodollar Borrowing Number for such Tranche which
differs from the Maximum Eurodollar Borrowing Number already applicable to such
Tranche).
"Maximum Swingline Amount" shall mean $20,000,000.
"MSCP Group" shall mean Xxxxxx Xxxxxxx Capital Partners III, L.P.,
MSCP III 892 Investors, L.P., Xxxxxx Xxxxxxx Capital Investors, L.P., Xxxxxx
Xxxxxxx Xxxx Xxxxxx Capital Partners IV, L.P., MSDW IV 892 Investors, L.P. and
Xxxxxx Xxxxxxx Xxxx Xxxxxx Capital Investors IV, L.P.
"Minimum Borrowing Amount" shall mean (i) for Swingline Loans,
$100,000, (ii) for Revolving Loans, $1,000,000 and (iii) for Incremental Term
Loans, $1,000,000 or such other amount as may be specified in the respective
Incremental Term Loan Commitment Agreement (although an Incremental Term Loan
Commitment Agreement providing for the addition of Incremental Term Loans to an
existing Tranche may not specify a different Minimum Borrowing Amount from that
which already applies to the respective Tranche).
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Xxxxxx Xxxxxxx Holders" shall mean (a) the MSCP Group, (b) Xxxxxx
Xxxxxxx & Company Incorporated and its Subsidiaries and any other Person of
which any member of the MSCP Group is a direct or indirect Subsidiary, (c) any
Subsidiary of a Person described in preceding clause (a) or (b), or (d) any
investment fund or vehicle managed by any of the Persons described in preceding
clauses (a) through (c) or the general partner of any Person referred to in
preceding clauses (a) through (c).
"Mortgage" shall mean each mortgage, deed to secure debt or deed of
trust pursuant to which any Credit Party shall have granted to the Collateral
Agent a mortgage lien on such Credit Party's Mortgaged Property.
"Mortgage Policy" shall have the meaning provided in Section 5A.11.
"Mortgaged Property" shall mean each parcel of Real Property owned or
leased by any Credit Party, as applicable, which is encumbered by a Mortgage.
"MSSF" shall mean Xxxxxx Xxxxxxx Senior Funding, Inc., in its
individual capacity.
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"NAIC" shall mean the National Association of Insurance
Commissioners.
"Net Debt Proceeds" shall mean, with respect to each incurrence of
Indebtedness for borrowed money by any Person, the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs associated
therewith) received by such Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Equity Proceeds" shall mean, with respect to each issuance or
sale of any Equity Interests by any Person or any capital contribution to such
Person, the cash proceeds (net of underwriting discounts and commissions and
other reasonable costs associated therewith) received by such Person from the
respective sale or issuance of its Equity Interests or from the respective
capital contribution.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with such Recovery Event.
"Net Sale Proceeds" shall mean, with respect to any asset sale, the
gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received) received from such sale of assets, net of (i) the reasonable costs of
such sale (including fees and commissions, payments of unassumed liabilities
relating to the assets sold and required payments of any Indebtedness (other
than Indebtedness under the Credit Documents or any Indebtedness owed to the
Borrower or a Subsidiary thereof) which is secured by the respective assets
which were sold), (ii) the marginal increased amount of all taxes to the extent
actually payable in cash during (or within 120 days after) the fiscal year in
which the respective asset sale occurred as a direct consequence of such asset
sale and (iii) in the event of any such sale of assets owned by a
non-Wholly-Owned Subsidiary that is a Non-Guarantor Subsidiary, net of amounts
received by third Persons which own Equity Interests in such Subsidiary so long
as such amounts do not exceed such Persons' proportionate share thereof (based
upon such Persons' relative holdings of Equity Interests in such Subsidiary).
"Non-Defaulting Lender" shall mean and include each Lender other than
a Defaulting Lender.
"Non-Guarantor Subsidiary" shall mean any Subsidiary of the Borrower
not party to the Subsidiaries Guaranty.
"Note" shall mean each Revolving Note, each Incremental Term Note and
the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, Attention: Xxxxx
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Young, or such other office as the Administrative Agent may hereafter designate
in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative
Agent, the Collateral Agent or any Lender pursuant to the terms of this
Agreement or any other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative Agent
located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 or such
other office as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Lender at such time and the denominator of which is the
Total Revolving Loan Commitment at such time, provided that if the Percentage
of any Lender is to be determined after the Total Revolving Loan Commitment has
been terminated, then the Percentages of the Lenders shall be determined
immediately prior (and without giving effect) to such termination.
"Permitted Acquisition" shall have the meaning provided in Section
9.02(viii).
"Permitted Acquisition Compliance Certificate" shall mean a
certificate, signed by an Authorized Officer of the Borrower, delivered to the
Administrative Agent in connection with a Permitted Acquisition, which
certificate shall represent and warrant that (i) the purchase agreement and all
related agreements evidencing such acquisition shall, on the date such
acquisition is consummated, have been duly executed and delivered by the
parties thereto and shall be in full force and effect, (ii) the acquisition
shall be consummated in accordance with the purchase agreement, the related
agreements evidencing such acquisition and all applicable law (excluding such
violations of law which could not reasonably have, individually, or in the
aggregate for all such violations, a material adverse effect on the business,
property, assets, liabilities (actual or contingent), operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a
whole), (iii) true and correct copies of the purchase agreement and related
agreements evidencing such acquisition have been delivered to the Lenders, (iv)
both before and after giving effect to the proposed acquisition, no Default or
Event of Default is or shall be in existence, (v) no material environmental
liabilities are being assumed by the Borrower or its Subsidiaries pursuant to
such acquisition, and (vi) the Borrower is and will be in compliance with
Sections 9.08 and 9.09 on a Post-Test Period Pro Forma Basis after giving
effect to the respective Permitted Acquisition and all Acquisition CapEx to be
made in connection therewith. Such
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Compliance Certificate shall also (x) include a statement of all Acquisition
CapEx required to be made in connection with such acquisition, (y) set forth
the amount, if any, of the Retained Excess Cash Flow Amount to be used in
connection with the respective Permitted Acquisition and (z) set forth the
calculations required to establish whether the Borrower is in compliance with
the provisions of Sections 9.01 through 9.05, inclusive and 9.07 through 9.09,
inclusive, and Section 9.17, both before and after giving effect to such
Permitted Acquisition. Notwithstanding anything to the contrary above in this
definition, in the event that a Permitted Acquisition Compliance Certificate is
required to be delivered pursuant to Section 9.02(viii) and the Borrower has
not delivered a Permitted Acquisition Compliance Certificate covering any
theretofore consummated Permitted Acquisitions, such required Permitted
Acquisition Compliance Certificate shall include all of the representations and
warranties (except clause (iii) above) set forth in the second preceding
sentence (and include the information and calculations described in the
immediately preceding sentence) with respect to all such theretofore
consummated Permitted Acquisitions.
"Permitted Encumbrances" shall mean, with respect to any Real
Property, such exceptions to title which (i) individually or in the aggregate,
do not materially detract from the value of such Real Property, (ii) in the
case of Mortgaged Property described in Section 5A.11, are set forth on
Schedule B to the Mortgage Policy relating to such Mortgaged Property or (iii)
are otherwise acceptable to the Administrative Agent in its reasonable
discretion.
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Permitted Subordinated Note Documents" shall mean all documentation
(including, without limitation, any indenture or purchase agreement) entered
into in connection with any issuance of Permitted Subordinated Notes.
"Permitted Subordinated Notes" shall mean unsecured subordinated debt
securities of the Borrower (which may be guaranteed on a subordinated basis by
Subsidiary Guarantors), the terms of which (and conditions surrounding the
issuance of which) satisfy the relevant requirements of Section 9.04(xv).
"Person" shall mean any individual, partnership, limited liability
company, joint venture, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Physician" means, collectively, with respect to any hospital owned
or leased and operated by the Borrower or any of its Subsidiaries, physicians
employed by or affiliated with such hospital, Persons in the immediate family
of such physicians and any Person directly or indirectly controlled by or
acting for the benefit of one or more such physicians or families. As used in
this definition of "Physicians," the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Physician Support Obligation" means a loan to or on behalf of, or a
guarantee of income to or Indebtedness of, a physician or healthcare
professional providing service to patients
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in the service area of a hospital or other health care facility operated by the
Borrower or any of its Subsidiaries made or given by the Borrower or any of its
Subsidiaries (i) in the ordinary course of its business, and (ii) pursuant to a
written agreement having a period not to exceed five years.
"PIK Preferred Stock" shall mean the 21,600 shares of preferred stock
of the Borrower, $.01 par value per share, held on the Effective Date by
XxxXxxx Memorial Hospital Association and any additional shares thereof issued
as pay-in-kind Dividends.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, or a Subsidiary of the
Borrower or an ERISA Affiliate maintained, contributed to or had an obligation
to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5A.08.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
"Post-Test Period Pro Forma Basis" shall mean the making of
calculations on a pro forma basis in accordance with, and to the extent
required by, the provisions of Section 11.02, giving effect to the adjustments
required to be made therein for determinations on a Post-Test Period Pro Forma
Basis.
"Prime Lending Rate" shall mean the rate announced by the
Administrative Agent from time to time as its prime lending rate, the Prime
Lending Rate to change when and as such prime lending rate changes. The Prime
Lending Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. The Administrative Agent may
make commercial loans or other loans at rates of interest at, above or below
the Prime Lending Rate.
"Pro Forma Basis" shall mean the making of any calculation on a pro
forma basis in accordance with, and to the extent required by, the provisions
of Section 11.02 hereof, but without making the adjustments described therein
for determinations to be made on a Post-Test Period Pro Forma Basis.
"Projections" shall mean the financial assumptions and projections
prepared by the Borrower, dated July 17, 2001 in connection with the
Transaction and delivered to the Administrative Agent and the Lenders prior to
the Effective Date.
"Quarterly Payment Date" shall mean the last Business day of each
September, December, March and June occurring after the Effective Date.
"Qualified Public Offering" shall mean an underwritten public
offering of common stock of the Borrower which generates cash proceeds to the
Borrower of at least $50,000,000.
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"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable (i)
by reason of theft, loss, physical destruction or damage or any other similar
event with respect to any property or assets of the Borrower or any of its
Subsidiaries and (ii) under any policy of insurance required to be maintained
under Section 8.03.
"Refinancing" shall mean the repayment of all outstanding loans and
all other obligations (and the termination of all commitments) under the
Existing Credit Agreement, as described in Section 5A.07.
"Register" shall have the meaning provided in Section 13.16.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation O" shall mean Regulation O of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Release" shall have the meaning provided such term in CERCLA.
"Relevant Incremental Term Loan Commitment Percentage" shall mean,
with respect to any mandatory reduction of any Incremental Term Loan Commitment
of any Tranche at any time, a fraction (expressed as a percentage), the
numerator of which is equal to the aggregate amount of Incremental Term Loan
Commitments of such Tranche at such time and the denominator of which is equal
to the aggregate amount of all Incremental Term Loan Commitments of all
Tranches at such time.
"Relevant Incremental Term Loan Percentage" shall mean, with respect
to any voluntary prepayment or mandatory repayment of a particular Tranche of
Incremental Term Loans at any time, a fraction (expressed as a percentage), the
numerator of which is equal to the aggregate outstanding principal amount of
Incremental Term Loans of such Tranche at such time
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and the denominator of which is equal to the aggregate principal amount of all
Incremental Term Loans at such time, provided that to the extent any such
voluntary prepayment or mandatory prepayment is being applied to a particular
Tranche of Incremental Term Loans, as provided in Section 4.01(a)(vi)(A)(1) or
4.02(h)(iv)(1), as the case may be, the Relevant Incremental Term Loan
Percentage of such Tranche shall mean a fraction (expressed as a percentage)
the numerator of which is equal to the aggregate outstanding principal amount
of Scheduled Incremental Term Loan Repayments of such Tranche occurring within
twelve months following any such prepayment or repayment, as the case may be,
and the denominator of which is equal to the aggregate principal amount of all
Scheduled Incremental Term Loan Repayments of all Tranches of Incremental Term
Loans occurring within twelve months following any such prepayment or
repayment, as the case may be.
"Replaced Lender" shall have the meaning provided in Section 1.14.
"Replacement Lender" shall have the meaning provided in Section 1.14.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required AHCCS Amount" shall mean, on any date for which
Consolidated Debt is being determined, (x) if the date for which Consolidated
Debt is being determined is within seven days prior to or seven days after the
last day of any fiscal quarter of the Borrower, the aggregate amount of cash
and Cash Equivalents which are required to be deposited with, or held by,
Subsidiaries of the Borrower that have contracts with the Arizona Health Care
Cost Containment System to arrange health care services for Medicare patients,
to the extent such cash or Cash Equivalents, as the case may be, are required
by the Arizona Health Care Cost Containment System (or the relevant
governmental authorities having jurisdiction over same) to remain with such
Subsidiaries on the date for which Consolidated Debt is being determined or (y)
if Consolidated Debt is being determined for a date which does not occur within
seven days prior to, or seven days after, the last day of any fiscal quarter of
the Borrower, the amount determined pursuant to preceding clause (x) for the
last day of the fiscal quarter of the Borrower most recently ended prior to the
date for which Consolidated Debt is being determined.
"Required Lenders" shall mean Non-Defaulting Lenders, the sum of
whose outstanding principal of Term Loans and Revolving Loan Commitments (or
after the termination of the Revolving Loan Commitments, outstanding Revolving
Loans and Percentage of outstanding principal of Swingline Loans and Letter of
Credit Outstandings) represent an amount greater than 50% of the sum of the
outstanding principal amount of all Term Loans of Non-Defaulting Lenders and
the Total Revolving Loan Commitment (or after the termination of the Total
Revolving Loan Commitment, the sum of the then total outstanding Revolving
Loans of Non-Defaulting Lenders and the aggregate Percentages of all
Non-Defaulting Lenders of the total outstanding principal of Swingline Loans
and Letter of Credit Outstandings at such time), provided that from and after
such time as when the Borrower has obtained at least $125,000,000 of
Incremental Term Loan Commitments, Required Lenders shall mean (other than for
purposes
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of taking action pursuant to the last paragraph of Section 10 or
causing enforcement actions to be taken pursuant to the Subsidiaries Guaranty
or Security Documents) those Non-Defaulting Lenders which would constitute the
Required Lenders as otherwise provided above if the percentage "50%" above were
changed to "66-2/3%".
"Retained Excess Cash Flow Amount" shall initially mean $0, provided
that (w) on each Excess Cash Payment Date where Excess Cash Flow for the
relevant Excess Cash Payment Period is less than $0, the Retained Excess Cash
Flow Amount shall be decreased by such amount (expressed as a positive amount
for purposes of such deduction), (x) on each Excess Cash Payment Date where
Excess Cash Flow for the relevant Excess Cash Payment Period is in excess of
$1,000,000, the Retained Excess Cash Flow Amount shall be increased (so long as
any required repayments of Loans and/or reductions of Commitments are made as
required by Section 4.02(f)) by an amount equal to that portion of Excess Cash
Flow for the relevant Excess Cash Payment Period in excess of $1,000,000 which
is permitted to be retained by the Borrower pursuant to the provisions of
Section 4.02(f), (y) on the date any Permitted Acquisition is effected which
involves a utilization of the Retained Excess Cash Flow Amount as then in
effect in accordance with the provisions of clause (z) of the first proviso to
Section 9.02(viii), the Retained Excess Cash Flow Amount shall be reduced by
the aggregate amount of consideration so justified and (z) the Retained Excess
Cash Flow Amount shall be reduced on the date of the making of any Capital
Expenditure pursuant to Section 9.07(e)(iii) by the amount thereof.
"Revolving Loan" shall have the meaning provided in Section 1.01(a).
"Revolving Loan Commitment" shall mean, for each Lender, the amount
set forth opposite such Lender's name in Schedule I directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to
time as a result of assignments to or from such Lender pursuant to Section 1.14
or 13.04(b).
"Revolving Loan Maturity Date" shall mean July 31, 2006.
"Revolving Loan Tranche Percentage" shall mean, with respect to any
mandatory repayment of Loans and mandatory reductions to the Total Revolving
Loan Commitment pursuant to Section 4.02(d), (e) and (g) at any time, a
fraction (expressed as a percentage), the numerator of which is equal to the
Total Revolving Loan Commitment at such time or, if the Total Revolving Loan
Commitment has terminated at such time, the aggregate principal amount of
Revolving Loans and Swingline Loans and the Letter of Credit Outstandings at
such time and the denominator of which is equal to the sum of (i) the aggregate
principal amount of all Term Loans outstanding at such time plus (ii) the Total
Revolving Loan Commitment at such time or, if the Total Revolving Loan
Commitment has terminated at such time, the aggregate principal amount of
Revolving Loans and Swingline Loans and the Letter of Credit Outstandings at
such time.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"S&P" shall mean Standard & Poor's Ratings Services.
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"Scheduled Incremental Term Loan Repayment" shall have the meaning
provided in Section 4.02(b).
"Scheduled Incremental Term Loan Repayment Date" shall have the
meaning provided in Section 4.02(b).
"SEC" shall have the meaning provided in Section 8.01(g).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
"Secured Creditors" shall have the meaning provided in the respective
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section
5A.10.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Documents" shall mean and include each of the Security
Agreement, the Pledge Agreement, each Mortgage and, after the execution and
delivery thereof, each Additional Security Document.
"Senior Subordinated Note Documents" shall mean the Senior
Subordinated Note Indenture, the Senior Subordinated Notes and each other
document or agreement relating to the issuance of the Senior Subordinated
Notes.
"Senior Subordinated Note Indenture" shall mean the Indenture, dated
as of July 30, 2001, between the Borrower, the Subsidiary Guarantors and Bank
One Trust Company, N.A., as Trustee thereunder, as in effect on the Effective
Date and as the same may be amended, modified or supplemented from time to time
in accordance with the terms hereof and thereof.
"Senior Subordinated Notes" shall mean the Borrower's 9-3/4% Senior
Subordinated Notes due 2011 issued pursuant to the Senior Subordinated Note
Indenture, as in effect on the Effective Date and as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof. As used herein, the term "Senior Subordinated Notes" shall include
any Exchange Senior Subordinated Notes issues pursuant to the Senior
Subordinated Note Indenture in exchange for theretofore outstanding Senior
Subordinated Notes, as contemplated by the Offering Memorandum dated July 20,
2001, and the definition of Exchange Senior Subordinated Notes.
"Shareholders" shall mean each Person which owns any shares of any
class of capital stock of the Borrower on the Effective Date.
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"Shareholders' Agreements" shall have the meaning provided in Section
5A.05.
"Specified Construction Project" shall mean a construction project
undertaken by the Borrower or a Subsidiary Guarantor for the construction of a
Hospital Property or other Health Care Assets that are to be owned by the
Borrower or such Subsidiary Guarantor provided that (i) a project shall
constitute a Specified Construction Project only if the respective Health Care
Assets are to be owned by the Borrower or such Subsidiary Guarantor and have
been designated as a "Specified Construction Project" in writing by the
Borrower to the Administrative Agent, which writing shall certify compliance
with the requirements of this definition and shall set forth the calculations
(in reasonable detail) required to establish compliance with the requirements
of succeeding clause (v)), (ii) no Default or Event of Default shall exist on
the date of any designation of a project as a Specified Construction Project,
(iii) each project designated as a Specified Construction Project shall remain
a Specified Construction Project until the first to occur of (x) the date which
is two years after such project was designated by the Borrower as a Specified
Construction Project (which designation shall not occur any later than the
first date on which actual construction has commenced on the Specific
Construction Project) and (y) the first day on which respective Health Care
Asset provides treatment or other health services to its first patient, (iv) on
the earlier of the dates specified in preceding clause (iii), the respective
construction project shall cease to constitute a Specified Construction Project
and (v) the Consolidated Senior Leverage Ratio (calculated on a Post-Test
Period Pro Forma Basis) shall be less than 2.5:1.00 at the time of any
designation of a project as a Specified Construction Project. In addition, to
the extent the Borrower or any Subsidiary Guarantor purchases any Real Property
as contemplated in the last sentence of Section 9.07(d), the requirements set
forth in clauses (ii) and (v) of the immediately preceding sentence are
satisfied at the time of such purchase and the Borrower notifies the
Administrative Agent in writing that it wishes to treat such Real Property as a
Specified Construction Project, such Real Property shall be deemed to be a
Specified Construction Project for the purposes hereof for a period not to
exceed 15 months, at which time such Real Property shall cease to be a
Specified Construction Project unless the Borrower designates such Real
Property as a "Specified Construction Project" in writing as provided in clause
(i) of the immediately preceding sentence and each of the other requirements
set forth above in this definition are satisfied at such time.
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Start Date" shall mean, with respect to any Margin Reduction Period,
the first day of such Margin Reduction Period.
"Stated Amount" of each Letter of Credit shall mean, at any time, the
maximum amount available to be drawn thereunder (in each case determined
without regard to whether any conditions to drawing could then be met).
"Subsidiaries Guaranty" shall have the meaning provided in Section
5A.09.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of
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any 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 owned by such
Person and/or one or more Subsidiaries of such Person and (ii) any partnership,
limited liability company, association, joint venture or other entity in which
such Person and/or one or more Subsidiaries of such Person has more than a 50%
equity interest at the time. Except as otherwise specified herein or unless the
context otherwise requires, references in this Agreement to one or more
"Subsidiaries" are to Subsidiaries of the Borrower.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
designated as a "Subsidiary Guarantor" on Schedule VI hereto or which executes
the Subsidiaries Guaranty after the Effective Date pursuant to Section 9.14,
provided that any such Person shall cease to constitute a Subsidiary Guarantor
upon its release from the Subsidiaries Guaranty in accordance with this
Agreement and the Subsidiaries Guaranty.
"Supermajority Lenders" of any Tranche shall mean those
Non-Defaulting Lenders which would constitute the Required Lenders under, and
as defined in, this Agreement if (x) all outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments with
respect thereto were terminated and (y) the percentage "50%" contained therein
were changed to "66-2/3%".
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Revolving Loan Maturity Date.
"Swingline Lender" shall mean Bank of America and its successors and
assigns.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Syndication Date" shall mean the earlier of (x) September 15, 2001
and (y) that date (if any) upon which the Joint Lead Arrangers determine (and
notify the Borrower) that the primary syndication (and resultant addition of
Persons as Lenders pursuant to Section 13.04(b)) has been successfully
completed (to the satisfaction of the Joint Lead Arrangers).
"Tax Benefit" shall have the meaning provided in Section 4.04(c).
"Tax Sharing Agreements" shall have the meaning provided in Section
5A.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Date" shall mean, with respect to any Start Date, the last day
of the most recent fiscal quarter of the Borrower ended immediately prior to
such Start Date for which the financial statements required by Section 8.01(a)
or (b), as the case may be, have been delivered as contemplated by the
definition of Margin Reduction Period.
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"Test Period" shall mean each period of four consecutive fiscal
quarters of the Borrower (taken as one accounting period).
"Total Assets" means, with respect to any Person, the consolidated
total assets of such Person and its consolidated Subsidiaries, determined in
accordance with GAAP; provided that in determining Total Assets of any group of
Non-Guarantor Subsidiaries, such Total Assets shall be determined for all such
Non-Guarantor Subsidiaries on a combined basis without duplication.
"Total Capitalization" of the Borrower at any time shall mean the sum
of (x) Consolidated Debt of the Borrower at such time and (y) the Consolidated
Net Worth of the Borrower at such time.
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Lenders.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Lenders.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the Total Revolving Loan Commitment
then in effect less (y) the sum of the aggregate principal amount of Revolving
Loans and Swingline Loans then outstanding plus the then aggregate amount of
Letter of Credit Outstandings.
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being a single Tranche on the Effective
Date (consisting of the Total Revolving Loan Commitment and the extensions of
credit (i.e., Revolving Loans, Swingline Loans and Letters of Credit) pursuant
thereto. In addition, any Incremental Term Loans extended after the Effective
Date shall be made pursuant to one or more additional Tranches which shall be
designated pursuant to the respective Incremental Term Loan Commitment
Agreements in accordance with the relevant requirements specified in Section
1.13.
"Transaction" shall mean the occurrence of the Refinancing, the
entering into of the Credit Documents and the extensions of credit under this
Agreement on the Effective Date, and the issuance of the Senior Subordinated
Notes.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the accumulated benefit obligation under the Plan as of the close
of its most recent plan year,
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determined in accordance with actuarial assumptions at such time consistent
with Statement of Financial Accounting Standards No. 87, exceeds the market
value of the assets allocable thereto.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unused Capital Expenditures Amount" shall have the meaning provided
in Section 9.07(c).
"Unutilized Revolving Loan Commitment" with respect to any Lender at
any time shall mean such Lender's Revolving Loan Commitment at such time, if
any, less the sum of (i) the aggregate outstanding principal amount of
Revolving Loans made by such Lender and (ii) such Lender's Percentage of the
outstanding principal of Swingline Loans and the Letter of Credit Outstandings
at such time.
"Weighted Average Life to Maturity" shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the then
outstanding principal amount of such Indebtedness into (ii) the product
obtained by multiplying (x) the amount of each then remaining installment or
other required scheduled payments of principal, including payment at final
maturity, in respect thereof, by (y) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of such
payment.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than directors' qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Wholly-Owned Subsidiaries of such Person owns 100% of the Equity
Interests at such time. Except as otherwise specified herein or unless the
context otherwise requires, references in this Agreement to one or more
"Wholly-Owned Subsidiaries" are to Wholly-Owned Subsidiaries of the Borrower.
11.02 Certain Pro Forma Calculations. (a) For purposes of calculating
Consolidated EBITDA for any Test Period for purposes of this Agreement, the
following rules shall apply:
(i) if at any time during the respective Test Period (and, in the
case of determinations being made on a Post-Test Period Pro Forma Basis
only, thereafter and on or prior to the date of determination) the
Borrower or any of its Subsidiaries shall have made any Disposition,
Consolidated EBITDA for such Test Period shall be reduced by an amount
equal to the Consolidated EBITDA (if positive) attributable to the assets
or Equity Interests which are the subject of such Disposition for such
Test Period or increased by an amount equal to the Consolidated EBITDA (if
negative) applicable thereto for such Test Period; provided that if any
Disposition is of Equity Interests in a Subsidiary of the Borrower which
remains a Subsidiary after giving effect to such Disposition, Consolidated
EBITDA shall be adjusted to give pro forma effect thereto (as if such
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disposition occurred on the first day of the respective Test Period) in
accordance with the rules set forth in the definition of Consolidated Net
Income contained herein;
(ii) if during such Test Period (and, in the case of determinations
being made on a Post-Test Period Pro Forma Basis only, thereafter and on
or prior to the date of determination) the Borrower or any Subsidiaries
shall have made any Acquisition, Consolidated EBITDA for such Test Period
shall be calculated after giving pro forma effect thereto as if such
Acquisition had occurred on the first day of such Test Period;
(iii) if during such Test Period (and, in the case of determinations
being made on a Post-Test Period Pro Forma Basis only, thereafter and on
or prior to the date of determination) any Person that became a Subsidiary
or was merged with or into the Borrower or any of its Subsidiaries since
the beginning of such Test Period shall have entered into any disposition
or acquisition transaction that would have required an adjustment pursuant
to clause (i) or (ii) above if made by the Borrower or a Subsidiary of the
Borrower during such Test Period, Consolidated EBITDA for such Test Period
shall be calculated after giving pro forma effect thereto as if such
transaction occurred on the first day of such Test Period; and
(iv) pro forma calculations of Consolidated EBITDA, whether pursuant
to this Section 11.02 or otherwise, shall not give effect to anticipated
cost savings and/or increases to Consolidated EBITDA for the relevant
period, except in cases of Acquisitions for factually supportable and
identifiable pro forma cost savings and/or increases to Consolidated
EBITDA for the relevant period (in each case reasonably expected to occur
within one year of the respective date of acquisition) that are
attributable to such Acquisition, in which case such adjustments shall be
permitted so long as same are demonstrated in writing by the Borrower
(with supporting calculations) to the Administrative Agent at the time of
the relevant Acquisition; provided further, that the add backs for cost
savings and/or increases to Consolidated EBITDA for any Test Period for
all Acquisitions (whether being determined on a Pro Forma Basis or a
Post-Test Period Pro Forma Basis) shall not, without the written consent
of the Required Lenders, exceed the greater of (x) 15% of Consolidated
EBITDA for the relevant Test Period, as calculated on a Pro Forma Basis or
Post-Test Period Pro Forma Basis, as the case may be, after giving effect
to such additions and (y) $20 million.
(b) For purposes of calculating Consolidated Debt and Consolidated
Senior Debt for purposes of this Agreement, the following rules shall apply:
(i) all determinations of Consolidated Debt and Consolidated Senior
Debt shall be made based on the actual amount of Consolidated Debt or
Consolidated Senior Debt, as the case be, outstanding on the last day of
the respective Test Period or, in the case of determinations being on a
Post-Test Period Pro Forma Basis, on the date of the respective
determination, except that for all purposes, other than calculations of
the Consolidated Leverage Ratio (and component defined terms, as used
therein) for purposes of determining Applicable Margins, (i) Consolidated
Debt and Consolidated Senior Debt, as the case may be, shall be calculated
to exclude all Indebtedness which would otherwise
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have been included therein to the extent the Borrower certifies in
reasonable detail that the respective Indebtedness being excluded has been
incurred to finance one or more Specified Construction Projects which, on
the last date of the respective Test Period or, in the case of
determinations being made on a Post-Test Period Pro Forma Basis, on the
date of the respective determination, remain at such time Specified
Construction Projects and (ii) during the first year immediately following
the date when a Specified Construction Project ceases to constitute same,
Consolidated Debt and Consolidated Senior Debt shall be calculated to
exclude (1) during the first four months beginning after the date the
respective Specified Construction Project ceased to constitute same, all
Indebtedness which would otherwise have been included therein to the
extent the Borrower certifies in reasonable detail that the respective
Indebtedness has been incurred to finance the respective Specified
Construction Project, (2) during the second four months beginning after
the date the respective Specified Construction Project ceased to
constitute same, two-thirds of the amount of all Indebtedness which would
otherwise have been included therein to the extent the Borrower certifies
in reasonable detail that the respective Indebtedness has been incurred to
finance the respective Specified Construction Project and (3) during the
third four months beginning after the date the respective Specified
Construction Project ceased to constitute same, one-third of the amount of
all Indebtedness which would otherwise have been included therein to the
extent Borrower certifies in reasonable detail that the respective
Indebtedness has been incurred to finance the respective Specified
Construction Project; provided that (x) no more than an aggregate amount
of Indebtedness equal to 0.5 multiplied by the Borrower's Consolidated
EBITDA for the relevant Test Period (determined on a Pro Forma Basis or
Post-Test Period Pro Forma Basis, as the case may be) shall be permitted
to be so excluded pursuant to the provisions of preceding clauses (i) and
(ii) and (y) no such Indebtedness shall be excluded at any time when the
Borrower's Consolidated Debt/Total Capitalization Ratio (calculated on the
last day of the respective Test Period in the case of determinations on a
Pro Forma Basis, and on the date of determination in the case of any
calculations being made on a Post-Test Period Pro Forma Basis, but in any
event including all Indebtedness relating to Specified Construction
Projects which may otherwise be excluded as provided above) is greater
than 50%; and
(ii) all determinations for purposes of Section 1.01 and 1.13 shall
determine Consolidated Senior Debt as if all unfunded Incremental Term
Loan Commitments then in effect had in fact been fully funded (thereby
adding same as a component to Consolidated Senior Debt).
(c) For purposes of calculating Consolidated Cash Interest Expense
for any Test Period for purposes of this Agreement, the following rules shall
apply:
(i) Consolidated Cash Interest Expense shall be determined for the
respective Test Period based on actual Consolidated Cash Interest Expense;
provided that such amount shall be adjusted to give pro forma effect (as
if the events described below occurred on the first day of the respective
Test Period, based on the historical rates which would have been
applicable thereto in the case of pro forma determinations of Indebtedness
which would have been outstanding for periods when same was not actually
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outstanding) to (x) all incurrences of Indebtedness incurred to finance
any Acquisition during the respective Test Period (or, for determinations
being made on a Post-Test Period Pro Forma Basis, on the date of
determination) to the extent the respective Indebtedness remains
outstanding on the last day of the respective Test Period (or, for
determinations being made on a Post-Test Period Pro Forma Basis, on the
date of determination) and (y) all to permanent repayments of Indebtedness
described in immediately preceding clause (x) actually made during such
Test Period (or, for determinations being made on a Post-Test Period Pro
Forma Basis, through the date of determination) made with net cash
proceeds of events of the type described in Sections 4.02(c), (e) and/or
(g), whether or not such net cash proceeds were required to be used
permanently to repay Loans hereunder; and
(ii) notwithstanding anything to the contrary contained above, (x)
with respect to each Specified Construction Project which remains a
Specified Construction Project on the last day of the respective Test
Period (or, for determinations being made on a Post-Test Period Pro Forma
Basis, on the date of determination), Consolidated Cash Interest Expense
shall be calculated by excluding any cash interest expense attributable to
Indebtedness incurred to finance the respective Specified Construction
Project, so long as the Borrower certifies in reasonable detail the
respective Indebtedness and related Consolidated Cash Interest Expense
being excluded as provided above in this clause (ii) and (y) for
determinations of Consolidated Cash Interest Expense where the last day of
the respective Test Period (or, for determinations being made on a
Post-Test Period Pro Forma Basis, the date of determination) occurs within
the first year immediately following the date when the Specified
Construction Project ceased to constitute same, Consolidated Cash Interest
Expense shall be calculated to exclude (1) if the last day of the
respective Test Period (or, for determinations being made on a Post-Test
Period Pro Forma Basis, the date of determination) occurs before the end
of the first four months beginning after the date the respective Specified
Construction Project ceased to constitute same, all Consolidated Cash
Interest Expense which would otherwise have been included therein to the
extent the Borrower certifies in reasonable detail that the respective
Indebtedness has been incurred to finance the respective Specified
Construction Project and the Consolidated Cash Interest Expense relating
thereto being excluded as provided above in this subclause (1), (2) if the
last day of the respective Test Period (or, for determinations being made
on a Post-Test Period Pro Forma Basis, the date of determination) occurs
during the four months following the end of the period described in clause
(1) above, two-thirds of the Consolidated Cash Interest Expense which
would otherwise have been included therein to the extent the Borrower
certifies in reasonable detail that the respective Indebtedness has been
incurred to finance the respective Specified Construction Project and the
Consolidated Cash Interest Expense relating thereto being excluded as
provided above in this subclause (2), and (3) if the last day of the
respective Test Period (or, for determinations being made on a Post-Test
Period Pro Forma Basis, the date of determination) occurs during the four
months following the end of the period described in clause (2) above,
one-third of the Consolidated Cash Interest Expense which would otherwise
have been included therein to the extent the Borrower certifies in
reasonable detail that the respective Indebtedness has been incurred to
finance
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the respective Specified Construction Project and the Consolidated Cash
Interest Expense relating thereto being excluded as provided above in this
subclause (3); provided if any Indebtedness (where the related
Consolidated Cash Interest Expense would otherwise be excluded in whole or
in part pursuant to the foregoing provisions of this clause (ii)) related
to a Specified Construction Project is included in Consolidated Debt or
Consolidated Senior Debt by virtue of the proviso to Section 11.02(b)(i)
above, the related Cash Interest Expense shall likewise be included in
Consolidated Cash Interest Expense (and shall not be excluded pursuant to
the preceding provisions of this clause (ii)).
SECTION 12. The Agents and the Joint Lead Arrangers.
12.01 Appointment. The Lenders hereby designate Bank of America as
Administrative Agent (for purposes of this Section 12 and Section 13.01, the
term "Administrative Agent" shall include Bank of America in its capacity as
Collateral Agent pursuant to the Security Documents) to act as specified herein
and in the other Credit Documents. The Lenders hereby designate MSSF as
Syndication Agent to act as specified herein and in the other Credit Documents.
The Lenders hereby designate First Union and GECC as Co-Documentation Agents to
act as specified herein and in the other Credit Documents. The Lenders hereby
designate BAS and MSSF as Joint Lead Arrangers to act as specified herein and
in the other Credit Documents. Each Lender hereby irrevocably authorizes, and
each holder of any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, each Agent and each Joint Lead Arranger to take such
action on its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of each Agent or each
Joint Lead Arranger by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. Each Agent and each Joint Lead Arranger may
perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates.
12.02 Nature of Duties. Neither any Agent nor any Joint Lead Arranger
shall have any duties or responsibilities except those expressly set forth in
this Agreement and in the other Credit Documents. Neither Agent, any Joint Lead
Arranger nor any of their respective officers, directors, agents, employees or
affiliates shall be liable for any action taken or omitted by it or them
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful
misconduct. The duties of the Agents and the Joint Lead Arrangers shall be
mechanical and administrative in nature; no Agent nor any Joint Lead Arranger
shall have by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Lender or the holder of any Note; and nothing in
this Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon any Agent or any Joint Lead
Arranger any obligations in respect of this Agreement or any other Credit
Document except as expressly set forth herein or therein.
12.03 Lack of Reliance on the Agents and the Joint Lead Arrangers.
Independently and without reliance upon any Agent or any Joint Lead Arranger,
each Lender and the
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holder of each Note, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of the Borrower and each of its Subsidiaries in
connection with the making and the continuance of the Loans and the taking or
not taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of the Borrower and each of its Subsidiaries and, except
as expressly provided in this Agreement, no Agent nor any Joint Lead Arranger
shall have any duty or responsibility, either initially or on a continuing
basis, to provide any Lender or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter. No Agent nor any Joint
Lead Arranger shall be responsible to any Lender or the holder of any Note for
any recitals, statements, information, representations or warranties herein or
in any document, certificate or other writing delivered in connection herewith
or for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectability, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of the Borrower or any of its
Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of the
Borrower or any of its Subsidiaries or the existence or possible existence of
any Default or Event of Default.
12.04 Certain Rights of the Agents and the Joint Lead Arrangers. If
any Agent or Joint Lead Arranger shall request instructions from the Required
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Credit Document, such Agent or such
Joint Lead Arranger, as the case may be, shall be entitled to refrain from such
act or taking such action unless and until Agent or such Joint Lead Arranger,
as the case may be, shall have received instructions from the Required Lenders;
and neither shall such Agent or such Joint Lead Arranger incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender or
the holder of any Note shall have any right of action whatsoever against any
Agent, any Joint Lead Arranger as a result of the Administrative Agent acting
or refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Lenders.
12.05 Reliance. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that such Agent or such Joint Lead Arranger, as the case may be,
believed to be the proper Person, and, with respect to all legal matters
pertaining to this Agreement and any other Credit Document and its duties
hereunder and thereunder, upon advice of counsel selected by such Agent.
12.06 Indemnification. To the extent any Agent or Joint Lead Arranger
is not reimbursed and indemnified by the Borrower, the Lenders will reimburse
and indemnify such Agent or Joint Lead Arranger, in proportion to their
respective "percentages" as used in determining the Required Lenders
(determined as if there were no Defaulting Lenders), for and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by such Agent or Joint Lead
Arranger in performing its respective
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duties hereunder or under any other Credit Document, or in any way relating to
or arising out of this Agreement or any other Credit Document; provided that to
the extent that the respective Agent or Joint Lead Arranger is reimbursed by
the Borrower for amounts paid by the Lenders pursuant to this Section 12.06,
such Agent or Joint Lead Arranger shall reimburse the Lenders for such amounts;
provided further, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the respective Agent's
or Joint Lead Arranger's gross negligence or willful misconduct.
12.07 The Agents and the Joint Lead Arrangers in their Individual
Capacities. With respect to its obligation to make Loans, or issue or
participate in Letters of Credit, under this Agreement, each Agent and each
Joint Lead Arranger shall have the rights and powers specified herein for a
"Lender" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Lenders," "Required
Lenders," "Majority Lenders," "Supermajority Lenders," "holders of Notes" or
any similar terms shall, unless the context clearly otherwise indicates,
include each Agent and each Joint Lead Arranger in its individual capacity.
Each Agent and each Joint Lead Arranger may accept deposits from, lend money
to, and generally engage in any kind of banking, investment banking, trust or
other business with, or provide debt financing, equity capital or other
services (including financial advisory services) to, any Credit Party or any
Affiliate of any Credit Party (or any Person engaged in a similar business with
any Credit Party or any Affiliate thereof) as if they were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower or any other Credit Party or any Affiliate of any Credit Party for
services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
12.08 Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or endorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Agents and the Joint Lead Arrangers. (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days' prior written notice to the Lenders and the Borrower
(provided that no such notice shall be required to be given to the Borrower if
a Default or an Event of Default of the type described in Section 10.05 exists
with respect to the Borrower). Such resignation shall take effect upon the
appointment of a successor Administrative Agent pursuant to clauses (b) and (c)
below or as otherwise provided below.
(b) Upon any such notice of resignation by the Administrative Agent,
the Required Lenders shall appoint a successor Administrative Agent hereunder
or thereunder who shall be a commercial bank or trust company reasonably
acceptable to the Borrower (it being understood and agreed that (i) so long as
no Default or Event of Default exists at such time such
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successor Administrative Agent shall be required to be reasonably satisfactory
to the Borrower and (ii) any Non-Defaulting Lender is deemed to be acceptable
to the Borrower).
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed but shall not be required at any time when a Default or an Event of
Default), shall then appoint a successor Administrative Agent who shall serve
as Administrative Agent hereunder or thereunder until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.
(d) The Syndication Agent and any Joint Lead Arranger may resign from
the performance of all its respective functions and duties hereunder by giving
five Business Days' notice to the Administrative Agent. Any resignation
pursuant to the immediately preceding sentence shall become effective on the
5th Business Day after the respective notice is given to the Administrative
Agent.
(e) Upon a resignation of any Agent or any Joint Lead Arranger
pursuant to this Section 12.09, such Agent or such Joint Lead Arranger, as the
case may be, shall remain indemnified to the extent provided in this Agreement
and the other Credit Documents and the provisions of this Section 12 shall
continue in effect for the benefit of such Agent or Joint Lead Arranger, as the
case may be, for all of its actions and inactions while serving as an Agent or
a Joint Lead Arranger, as the case may be.
(f) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 30th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative
Agent's resignation shall become effective and the Required Lenders shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required
Lenders appoint a successor Administrative Agent as provided above.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower agrees that it shall:
(i) whether or not the transactions contemplated herein are consummated, pay
all reasonable out-of-pocket costs and expenses of each Agent and each Joint
Lead Arranger (including, without limitation, the reasonable fees and
disbursements of counsel, which shall be limited to the fees and expenses of
White & Case LLP and such other relevant local counsel as may be retained in
connection with security matters), in connection with the preparation,
execution, delivery and performance of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein, any
amendment, waiver or consent relating hereto or thereto, of each Agent and each
Joint Lead Arranger in connection with its syndication efforts with respect to
this Agreement and, upon the occurrence and during the continuance of an Event
of Default, the reasonable costs and expenses of each Agent and each of the
Lenders in connection with the enforcement of this Agreement and the other
Credit Documents and the documents and instruments referred to herein and
therein or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
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pursuant to any insolvency or bankruptcy proceedings (including, in each case
without limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent and, following an Event of Default, for each of the
Lenders); (ii) pay and hold each of the Lenders harmless from and against any
and all present and future stamp, excise and other similar documentary taxes
with respect to the foregoing matters and save each of the Lenders harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Lender) to pay
such taxes; and (iii) indemnify each Agent, each Joint Lead Arranger and each
Lender, and each of their respective officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a)
any investigation, litigation or other proceeding (whether or not any Agent,
any Joint Lead Arranger or any Lender is a party thereto) related to the
entering into and/or performance of this Agreement or any other Credit Document
or the use of any Letter of Credit or the proceeds of any Loans hereunder or
the consummation of any transactions contemplated herein or in any other Credit
Document or the exercise of any of their rights or remedies provided herein or
in the other Credit Documents, or (b) the actual or alleged presence of
Hazardous Materials in the air, surface water or groundwater or on the surface
or subsurface of any Real Property owned, leased or at any time operated by the
Borrower or any of its Subsidiaries, the Release, generation, storage,
transportation, handling or disposal of Hazardous Materials at any location,
whether or not owned, leased or operated by the Borrower or any of its
Subsidiaries, the non-compliance of any Real Property owned, leased or operated
by the Borrower or any of its Subsidiaries with foreign, federal, state and
local laws, regulations, and ordinances (including applicable permits
thereunder) applicable to such Real Property, or any Environmental Claim
asserted against the Borrower, any of its Subsidiaries or any Real Property
owned, leased or at any time operated by the Borrower or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified (as determined by a court of competent jurisdiction in a final and
non-appealable decision) or to the extent incurred as a result of actions taken
by a party other than the Borrower or its Subsidiaries after the Real Property
is no longer owned, leased or operated by the Borrower or its Subsidiaries). To
the extent that the undertaking to indemnify, pay or hold harmless the
Administrative Agent or any Lender set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Borrower
shall make the maximum contribution to the payment and satisfaction of each of
the indemnified liabilities which is permissible under applicable law.
13.02 Right of Setoff. (a) In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to
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set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Lender (including,
without limitation, by branches and agencies of such Lender wherever located)
to or for the credit or the account of any Credit Party against and on account
of the Obligations and liabilities of such Credit Party to such Lender under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Lender pursuant to
Section 13.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME THAT
THE LOANS OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED IN
CALIFORNIA, NO LENDER (OTHER THAN THE ADMINISTRATIVE AGENT OR THE COLLATERAL
AGENT) SHALL EXERCISE A RIGHT OF SETOFF, LIEN OR COUNTERCLAIM OR TAKE ANY COURT
OR ADMINISTRATIVE ACTION OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION
OF THIS AGREEMENT OR ANY NOTE UNLESS IT IS TAKEN WITH THE CONSENT OF THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR THE REQUIRED LENDERS (OR, TO THE
EXTENT REQUIRED BY SECTION 13.12 OF THIS AGREEMENT, ALL OF THE LENDERS), IF
SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO CALIFORNIA CODE
OF CIVIL PROCEDURE SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF
CIVIL PROCEDURE OR SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF APPLICABLE, OR
OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY, OR ENFORCEABILITY OF THE
LIENS GRANTED TO THE COLLATERAL AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE
ENFORCEABILITY OF THE NOTES AND OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED
EXERCISE BY ANY SUCH LENDER WITHOUT OBTAINING SUCH CONSENT OF THE REQUIRED
LENDERS OR THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT, AS THE CASE MAY
BE, SHALL BE NULL AND VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR THE BENEFIT
OF EACH OF THE LENDERS, THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT.
13.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to any Lender, at its address specified on Schedule II;
and if to the Administrative Agent, at the Notice Office; or, as to any Credit
Party or the Administrative Agent, at such other address as shall be designated
by such party in a written notice to the other parties hereto and, as to each
Lender, at such other address as shall be designated by such Lender in a
written notice to the Borrower and the Administrative Agent. All such notices
and communications shall, when mailed, telegraphed, telexed, telecopied, or
cabled or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier, except that
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notices and communications to the Administrative Agent or any Credit Party
shall not be effective until received by the Administrative Agent or such
Credit Party.
13.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, the Borrower may not assign
or transfer any of its rights, obligations or interest hereunder or under any
other Credit Document without the prior written consent of the Lenders and,
provided further, that, although any Lender may transfer, assign or grant
participations in its rights hereunder, such Lender shall remain a "Lender" for
all purposes hereunder (and may not transfer or assign all or any portion of
its Commitments hereunder except as provided in Section 13.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Lender" hereunder and, provided further, that no Lender shall transfer or
grant any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Revolving Loan Maturity Date) in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates, and it being
understood and agreed that any amendment or modification to the financial
definitions in this Agreement or to Section 13.07(a) shall not constitute a
reduction in the rate of interest or any Fees for purposes of this clause (i))
or reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitments shall not constitute a change in the terms
of such participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the
Collateral under all of the Security Documents (except as expressly provided in
the Credit Documents) supporting the Loans hereunder in which such participant
is participating. In the case of any such participation, the participant shall
not have any rights under this Agreement or any of the other Credit Documents
(the participant's rights against such Lender in respect of such participation
to be those set forth in the agreement executed by such Lender in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Lender had not sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender together
with one or more other Lenders) may (x) assign all or a portion of its
Revolving Loan Commitment (and related outstanding Obligations hereunder)
and/or its outstanding Incremental Term Loans to one or more Lenders or (y)
assign all, or if less than all, a portion equal to at least $1,000,000 in the
aggregate for the assigning Lender or assigning Lenders, of such Revolving Loan
Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Incremental Term Loans to one or more Eligible Transferees, each of
which assignees shall become a party to this Agreement as a Lender by execution
of an Assignment and Assumption Agreement, provided that (i) at such time
Schedule I shall be deemed modified to reflect the Commitments (and/or
outstanding Loans, as the case may be) of such new Lender and of the existing
Lenders,
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(ii) upon surrender of the old Notes (if any) (or, upon such assigning Lender's
indemnifying the Borrower for any lost Note pursuant to a customary
indemnification agreement), new Notes will be issued, at the Borrower's
expense, to such new Lender and to the assigning Lender upon the request of
such new Lender or assigning Lender, such new Notes to be in conformity with
the requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Commitments (and/or outstanding Loans, as the
case may be), (iii) the consent of the Administrative Agent and, so long as no
Default or Event of Default then exists, the Borrower (each of which consents
shall not be unreasonably withheld or delayed) shall be required in connection
with any such assignment pursuant to clause (y) above, (iv) the Swingline
Lender and each Issuing Lender (which consents shall not be unreasonably
withheld or delayed) shall be required in connection with any assignment
(whether pursuant to preceding clause (x) or (y)) of any Revolving Loan
Commitment and (v) the Administrative Agent shall receive at the time of such
assignment, from the assigning and assignee Lenders, the payment of a
processing and recording fee of $3,500, provided further, that no transfer or
assignment pursuant to this Section 13.04(b) will be effective until recorded
by the Administrative Agent on the Register pursuant to Section 13.16. To the
extent of any assignment pursuant to this Section 13.04(b), the assigning
Lender shall be relieved of its obligations hereunder with respect to its
assigned Commitments. At the time (x) any Person becomes a Lender hereunder
pursuant to Section 1.1 and (y) of each assignment pursuant to this Section
13.04(b), in either such case if the respective new Lender (whether pursuant to
Section 1.13 or as a result of an assignment pursuant to this Section 13.04(b))
is not already a Lender hereunder and is not a United States Person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective new Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable a Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To
the extent that an assignment of all or any portion of a Lender's Commitments
and related outstanding Obligations pursuant to Section 1.14 or this Section
13.04(b) would, at the time of such assignment, result in increased costs under
Section 1.10, 1.11, 2.06 or 4.04 from those being charged by the respective
assigning Lender prior to such assignment, then the Borrower shall not be
obligated to pay or reimburse such increased costs (although the Borrower shall
be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank and,
with the consent of the Administrative Agent, any Lender which is a fund may
pledge all or any portion of its Loans and Notes to its trustee in support of
its obligations to its trustee. No pledge pursuant to this clause (c) shall
release the transferor Lender from any of its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the part
of the Administrative Agent or any Lender or any holder of any Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit
Party and the Administrative Agent or any Lender or the holder of any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder.
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The rights, powers and remedies herein or in any other Credit Document
expressly provided are cumulative and not exclusive of any rights, powers or
remedies which the Administrative Agent or any Lender or the holder of any Note
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or any Lender or the holder of any Note to any other or
further action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Lenders (other than any
Lender that has consented in writing to waive its pro rata share of any such
payment) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other
Lenders is in a greater proportion than the total of such Obligation then owed
and due to such Lender bears to the total of such Obligation then owed and due
to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the
respective Credit Party to such Lenders in such amount as shall result in a
proportional participation by all the Lenders in such amount; provided that if
all or any portion of such excess amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
13.07 Calculations; Computations. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in
the notes thereto or as otherwise disclosed in writing by the Borrower to the
Lenders) ("GAAP"); provided that, except as otherwise specifically provided
herein, all computations of Excess Cash Flow, Consolidated Cash Interest
Expense, Consolidated Debt, Consolidated Debt/Total Capitalization Ratio,
Consolidated EBIT, Consolidated EBITDA, Consolidated Interest Coverage Ratio,
Consolidated Leverage Ratio, Consolidated Net Income, Consolidated Net Worth,
Consolidated Senior Debt and Consolidated Senior Leverage Ratio (in each case
including component defined terms) and all computations determining compliance
with Sections 9.08 and 9.09, inclusive, shall utilize accounting principles and
policies in conformity with those used to prepare the historical financial
statements of the Borrower referred to in Section 7.05(a).
(b) All computations of interest, Commitment Commission, and other
Fees hereunder shall be made (i) in the case of Base Rate Loans based on the
Prime Lending Rate, on
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the actual number of days elapsed over a year of 365 or 366 days, as the case
may be, and (ii) in all other cases, on the actual number of days over a year
of 360 days (in each case including the first day but excluding the last day).
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS
OTHERWISE PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK IN EACH CASE WHICH ARE LOCATED IN THE CITY OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE
BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
JURISDICTION OVER THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURT LACKS
JURISDICTION OVER THE BORROWER. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE
HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY
OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
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(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which (i) the Borrower, each Lender, each Agent
and each Joint Lead Arranger shall have signed a counterpart hereof (whether
the same or different counterparts) and shall have delivered (including by way
of facsimile device) the same to the Administrative Agent at the Notice Office
or, in the case of the Lenders, shall have given the Administrative Agent
telephonic (confirmed in writing), written or telex notice (actually received)
at such office that same has been signed and mailed to it and (ii) the
conditions contained in Section 5A are met to the satisfaction of the Agents
and the Required Lenders. Unless the Administrative Agent has received actual
notice from any Lender that the conditions contained in Section 5A have not
been met, upon the satisfaction of the condition described in clause (i) of the
immediately preceding sentence and upon the Administrative Agent's good faith
determination that the conditions described in clause (ii) of the immediately
preceding sentence have been met, then the Effective Date shall have been
deemed to have occurred, regardless of any subsequent determination that one or
more of the conditions thereto had not been met (although the occurrence of the
Effective Date shall not release the Borrower from any liability for failure to
satisfy one or more of the applicable conditions contained in Section 5A). The
Administrative Agent will give the Borrower and each Lender prompt written
notice of the occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the respective Credit Parties party thereto and the
Required Lenders, provided that no such change, waiver, discharge or
termination shall, without the consent of each Lender (other than a Defaulting
Lender) (with Obligations being directly modified in the case of following
clause (i)), (i) extend the final scheduled maturity of any Loan or Note, or
extend the stated expiration date of any Letter of Credit beyond the Revolving
Loan Maturity Date, or reduce the rate or extend the time of payment of
interest or Fees thereon (except in connection with a waiver of applicability
of any post-default increase in interest rates), or reduce the principal amount
thereof (except to the extent repaid in cash) (it being understood that any
amendment or modification to the financial definitions in this Agreement or to
Section 13.07(a) shall not constitute a reduction in the rate of
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interest or any Fees for purposes of this clause (i)), (ii) release all or
substantially all of the Collateral (except as expressly provided in the Credit
Documents) under all the Security Documents, (iii) amend, modify or waive any
provision of this Section 13.12, (iv) reduce the percentage specified in the
definition of Required Lenders (it being understood that, with the consent of
the Required Lenders, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Lenders on
substantially the same basis as the extensions of Loans and Commitments are
included on the Effective Date) or (v) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement;
provided further, that no such change, waiver, discharge or termination shall
(1) increase the Commitment of any Lender over the amount thereof then in
effect without the consent of such Lender (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitments shall not constitute an
increase of the Commitment of any Lender, and that an increase in the available
portion of any Commitment of any Lender shall not constitute an increase in the
Commitment of such Lender), (2) without the consent of each Issuing Lender,
amend, modify or waive any provision of Section 2 or alter its rights or
obligations with respect to Letters of Credit, (3) without the consent of the
Administrative Agent, amend, modify or waive any provision of Section 12 as
same applies to the Administrative Agent or any other provision as same relates
to the rights or obligations of the Administrative Agent, (4) without the
consent of the Collateral Agent, amend, modify or waive any provision relating
to the rights or obligations of the Collateral Agent, (5) without the consent
of the Swingline Lender, alter the Swingline Lender's rights or obligations
with respect to Swingline Loans, (6) without the consent of the Majority
Lenders of each Tranche which is being allocated a lesser prepayment, repayment
or commitment reduction as a result of the actions described below (or without
the consent of the Majority Lenders of each Tranche in the case of an amendment
to the definition of Majority Lenders), amend the definition of Majority
Lenders or alter the required application of any prepayments or repayments (or
commitment reduction), as between the various Tranches, pursuant to Section
4.01(a) or 4.02 (excluding Section 4.02(b)) (although the Required Lenders may
waive, in whole or in part, any such prepayment, repayment or commitment
reduction, so long as the application, as amongst the various Tranches, of any
such prepayment, repayment or commitment reduction which is still required to
be made is not altered), (7) without the consent of the Supermajority Lenders
of the respective Tranche, reduce the amount of, or extend the date of, any
Scheduled Incremental Term Loan Repayment, or amend the definition of
Supermajority Lenders (it being understood that, with the consent of the
Required Lenders, additional extensions of credit pursuant to this Agreement
may be included in the determination of the Supermajority Lenders on
substantially the same basis as the extensions of Revolving Loans are included
on the Effective Date), (8) in cases where any Tranche of Incremental Term
Loans is being added to pursuant to Section 1.13, without the consent of the
Supermajority Lenders of the respective Tranche (determined before giving
effect to the additions to such Tranche), alter any of the requirements
contained in Section 1.13(c), and (9) without the consent of the Majority
Lenders of each Tranche of Term Loans and the Supermajority Lenders of the
Tranche consisting of the Total Revolving Loan Commitment (and the extensions
of credit pursuant thereto), amend or modify the provisions of Section
1.13(a)(ix) or (x).
-130-
(b) If, in connection with any proposed change, waiver, discharge or
termination with respect to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 13.12(a), the consent of the Required Lenders is obtained but the
consent of one or more of such other Lenders whose consent is required is not
obtained, then the Borrower shall have the right, so long as all non-consenting
Lenders whose individual consent is required are treated as described in either
clause (A) or (B) below, to either (A) replace each such non-consenting Lender
or Lenders (or, at the option of the Borrower, if the respective Lender's
individual consent is required with respect to less than all Tranches of Loans
(or related Commitments), to replace only the Commitments and/or Loans under
the respective Tranche of the respective non-consenting Lender which gave rise
to the need to obtain such a Lender's individual consent) with one or more
Replacement Lenders pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Lender consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting Lender's
Revolving Loan Commitment (if such a Lender's individual consent is required as
a result of its Revolving Loan Commitment) and/or repay the outstanding Loans
of such Lender under each Tranche which gave rise to the need to obtain such a
Lender's individual consent and/or cash collateralize its applicable Percentage
of the Letter of Credit Outstandings in accordance with Sections 3.02(b) and/or
4.01(b), provided that, unless the Commitments are terminated, and Loans
repaid, pursuant to preceding clause (B) are immediately replaced in full at
such time through the addition of new Lenders or the increase of the
Commitments and/or outstanding Loans of existing Lenders (who in each case must
specifically consent thereto), then in the case of any action pursuant to
preceding clause (B) the Required Lenders (determined before giving effect to
the proposed action) shall specifically consent thereto, provided further, that
in any event the Borrower shall not have the right to replace a Lender,
terminate any of its Commitments or repay its Loans solely as a result of the
exercise of such Lender's rights (and the withholding of any required consent
by such Lender) pursuant to the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
13.14 Domicile of Loans. Each Lender may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such
Lender. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 13.14 would, at the
time of such transfer, result in increased costs under Section 1.10, 1.11, 2.06
or 4.04 from those being charged by the respective Lender prior to such
transfer, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the
respective transfer).
13.15 Confidentiality. (a) Subject to the provisions of clause (b) of
this Section 13.15, each Lender agrees that it will use its reasonable efforts
in accordance with its customary practices not to disclose without the prior
written consent of the Borrower (other than to its directors, employees,
auditors, advisors or counsel or to another Lender if the Lender or such
Lender's holding or parent company in its sole discretion determines that any
such party should
-131-
have access to such information, provided such Persons shall be subject to the
provisions of this Section 13.15 to the same extent as such Lender) any
information with respect to any Credit Party or any of its Subsidiaries which
is now or in the future furnished pursuant to this Agreement or any other
Credit Document, provided that any Lender may disclose any such information (a)
as has become generally available to the public other than by virtue of a
breach of this Section 13.15(a), (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Lender or to
the Federal Reserve Board, the Federal Deposit Insurance Corporation or the
NAIC or similar organizations (whether in the United States or elsewhere) or
their successors, (c) as may be required or appropriate in respect to any
summons or subpoena or in connection with any litigation, (d) in order to
comply with any law, order, regulation or ruling applicable to such Lender, (e)
to the Administrative Agent or the Collateral Agent and (f) to any prospective
or actual transferee or participant in connection with any contemplated
transfer or participation of any of the Notes or Commitments or any interest
therein by such Lender, provided that such prospective transferee agrees with
such Lender for the benefit of the Borrower to be subject to the provisions of
this Section 13.15(a).
(b) The Borrower hereby acknowledges and agrees that each Lender may
share with any of its affiliates any information related to Credit Parties or
any of their respective Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of the Credit
Parties and their respective Subsidiaries, provided such Persons shall be
subject to the provisions of this Section 13.15 to the same extent as such
Lender), it being understood that for purposes of this Section 13.15(b) the
term "affiliate" shall mean any direct or indirect holding company of a Lender
as well as any direct or indirect Subsidiary of such holding company.
13.16 Register. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
13.16, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Lenders, the Loans made by each of
the Lenders and each repayment in respect of the principal amount of the Loans
of each Lender. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or
transfer of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 13.04(b). Coincident with the delivery
of such an Assignment and Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a Loan,
or as soon thereafter as practicable, the assigning or transferor Lender shall
surrender the Note evidencing such Loan, and thereupon one or more new Notes in
the same aggregate principal amount shall be issued to the assigning or
transferor Lender and/or the new Lender. The Borrower agrees to indemnify the
Administrative Agent
-132-
from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 13.16.
13.17 Limitation on Increased Costs. Notwithstanding anything to the
contrary contained in Section 1.10, 1.11, 2.06 or 4.04, unless a Lender gives
notice to the Borrower that it is obligated to pay an amount under any such
Section within 180 days after the later of (x) the date such Lender incurs the
respective increased costs, Taxes, loss, expense or liability, or reduction in
amounts received or receivable or reduction in return on capital or (y) the
date such Lender has actual knowledge of its incurrence of the respective
increased costs, Taxes, loss, expense or liability, or reductions in amounts
received or receivable or reduction in return on capital, then such Lender
shall only be entitled to be compensated for such amount by the Borrower
pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the case may be, to the
extent the costs, Taxes, loss, expense or liability, or reduction in amounts
received or receivable or reduction in return on capital are incurred or
suffered on or after the date which occurs 180 days prior to such Lender giving
notice to the Borrower that it is obligated to pay the respective amounts
pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the case may be. This
Section 13.17 shall have no applicability to any Section of this Agreement or
any other Credit Document other than said Sections 1.10, 1.11, 2.06 and 4.04.
* * *
-133-
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address: VANGUARD HEALTH SYSTEMS, INC.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000 By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Telephone No.: (000) 000-0000 Title: Chief Financial Officer
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
BANK OF AMERICA, N.A.,
Individually and as Administrative
Agent
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Title: Principal
BANC OF AMERICA SECURITIES LLC,
as a Joint Lead Arranger
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------------
Title: Vice President
XXXXXX XXXXXXX SENIOR FUNDING,
INC., Individually, as Syndication
Agent and as a Joint Lead Arranger
By: /s/ Xxxx Xxxxxxxx
--------------------------------------
Title: Principal
FIRST UNION NATIONAL BANK,
Individually and as a
Co-Documentation Agent
By: /s/ Xxxxx X. Law
--------------------------------------
Title: Director
GENERAL ELECTRIC CAPITAL CORPORATION,
Individually and as a
Co-Documentation Agent
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Title: Duly Authorized Signatory
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Title: Vice President
CREDIT SUISSE FIRST BOSTON
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Title: Vice President
By: /s/ Xxxx X'Xxxx
--------------------------------------
Title: Vice President
UBS AG, STAMFORD BRANCH
By: /s/ Xxxxxx X. Xxxx III
--------------------------------------
Title: Executive Director
By: /s/ Xxxxxxx X. Saint
--------------------------------------
Title: Associate Director
Schedule I
----------
COMMITMENTS
-----------
Revolving
Loan
Lender Commitment
------ ----------
Bank of America, N.A. $20,000,000
Xxxxxx Xxxxxxx Senior Funding, Inc. $20,000,000
First Union National Bank $20,000,000
General Electric Capital Corporation $20,000,000
LaSalle Bank National Association $20,000,000
Credit Suisse First Boston $12,500,000
UBS AG, Stamford Branch $12,500,000
-----------
TOTAL: $ 125,000,000
Schedule II
-----------
LENDER ADDRESSES
----------------
Bank of America, N.A.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Banc of America Securities LLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Xxxxxx Xxxxxxx Senior Funding, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
First Union National Bank
000 Xxxxx Xxxxxxx Xxxxxx
XX 0760
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx Xxx
Telephone No.: (704) 715) 1788
Telecopier No.: (000) 000-0000
General Electric Capital Corporation
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Schedul e II
Page 2
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Credit Suisse First Boston
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
UBS AG, Stamford Branch
000 Xxxxxxxxxx Xxxxxxxxx
0xx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Schedule III
------------
EXISTING LETTERS OF CREDIT
--------------------------
EXISTING LETTERS OF CREDIT
------------------------------------------------------------------------------------------------------------------------------------
LOC
Number Bank Amount Issue Date Maturity Date Beneficiary Purpose
------------ ------------------- --------------- ------------- ---------------- ------------------------------ ---------------
S525856 LaSalle Bank N.A. 1,565,000 8/1/2000 8/1/2001 The Travelers Indemnity Co. Workers Comp
------------ ------------------- --------------- ------------- ---------------- ------------------------------ ---------------
Total: $ 1,565,000
------------ ------------------- --------------- ------------- ---------------- ------------------------------ ---------------
---------------
Note: LaSalle Bank letter of credit to increase on 8/1/01 by $846,100 for workers comp for a total projected
Letters of Credit outstanding as of 8/1/01 of $3,200,000.
Schedule IV
-----------
REAL PROPERTY
-------------
Fee or leasehold mortgages (as the case may be) will be granted on the
properties marked with an asterisk (*), such property hereby designated as
Mortgaged Property.
Owned Real Property
--------------------------------------------------------------------------------
Maryvale Hospital Medical Center:
---------------------------------
1. Maryvale Hospital Medical Center, 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxx, XX
00000*
2. Maryvale Medical Arts Plaza, 0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxxxx, XX
00000
Huntington Beach Hospital:
--------------------------
1. Huntington Beach Hospital, 00000 Xxxxx Xxxxxxxxx, Xxxxxxxxxx Xxxxx, XX
00000-0000*
2. Westminster Building, 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000*
West Anaheim Medical Center:
----------------------------
1. West Anaheim Medical Center, 0000 X. Xxxxxx Xxxxxx, Xxxxxxx, XX 00000*
XxxXxxx Hospital:
1. Main Hospital, 0000 X. Xxx Xxxx Xxx. Xxxxxx, XX 00000*
2. Land (only), 0000 X. Xxx Xxxx, Xxx, Xxxxxx, XX 00000*
3. Xxxxxxx Xxxxxx, Xxxxxx & Xxxxxxx, Xxxxxx, XX 00000*
4. Professional Services Building, 0000 X. Xxxxxx, Xxxxxx, XX 00000*
5. Service Building, 0000 X. Xxx Xxxx Xxx. Xxxxxx, XX 00000*
6. Parking, Xxxx Xxxx xx Xxxxxx, Xxxxxx, XX 00000*
7. House, 0000 X. 00xx Xxxxxx, Xxxxxx, XX 00000*
8. Library, 0000 X. Xxx Xxxx Xxx., Xxxxxx, XX 00000*
9. Xxxxx Building, 0000 X. Xxxxxxx Xxx., Xxxxxx, XX 00000*
10. Remote Employee Xxxxxxx Xxx, Xxxxxx, XX 00000*
11. XxxXxxx Health Care Center, 0000 X. Xxxxxx, Xxxxxx, XX 00000*
12. XxxXxxx Health Care Center, 0000 X. Xxxxxx, Xxxxxx, XX 00000*
13. Xxxxx Professional Building, 0000 X. Xxxxxx Xxx., Xxxxxxxxx, XX 00000*
14. XxxXxxx Health Care Center, 000 X. XxXxxxxx, XxXxxxxx, XX 00000*
15. XxxXxxx Health Care Center, 0000 X. 00xx Xxxxxx, Xxxxxxxxxx, XX 00000*
16. XxxXxxx Health Care Center, 0000 X. Xxxxxxx, Xxxxxxx, XX 00000*
17. XxxXxxx Health Care Center & Parking Lot, 0000 X. Xxxxxxx, Xxxxxxx,
XX 00000*
18. XxxXxxx Xxxxxx Xxxx Xxxxxx - Xxxxxx, 0000 Xxxxxx, Xxxxxxx, XX 00000*
19. House, 0000 X. 00xx Xxxxxx, Xxxxxx, XX 00000*
20. House, 0000 X. Xxxxxx, Xxxxxx, XX 00000*
21. House, 0000 X. Xxxxxx, Xxxxxx, XX 00000*
1
SCHEDULE IV
22. House, 0000 X. Xxxxxx, Xxxxxx, XX 00000*
23. House, 0000 X. Xxxxxx, Xxxxxx, XX 00000*
La Palma Intercommnunity Hospital:
----------------------------------
1. La Palma Intercommunity Hospital, 0000 Xxxxxx Xxxxxx, Xx Xxxxx, XX 00000*
Phoenix Baptist Hospital and Medical Center:
--------------------------------------------
1. Phoenix Baptist Hospital & Medical Center, 0000 X. Xxxxxxx Xxxx Xxxx,
Xxxxxxx, XX 00000*
2. Xxxxxxx Medical Center, 0000 X. Xxxxxxx Xxxx Xxxx, Xxxxxxx, XX 00000*
Arrowhead Community Hospital and Medical Center:
------------------------------------------------
1. Arrowhead Community Hospital & Medical Center, 00000 X. 00xx Xxxxxx,
Xxxxxxxx, XX 00000*
2. Xxxxxx Xxxxx & Xxx. Xxxx Xxx, X. 00xx Xxx. & X. Xxxxx Xxxxx, Xxxxxxxx,
XX 00000*
3. Parking Lot & Vacant Land, 0000 X. Xxxxx Xxxxx Xxxx., Xxxxxxxx, XX 00000*
4. AMPII (land only), 00000 X. 00xx Xxxxx, Xxxxxxxx, XX 00000
Phoenix Memorial Hospital:
--------------------------
1. Phoenix Memorial Hospital & Parking lots, 0000 Xxxxx 0xx Xxxxxx, Xxxxxxx,
XX 00000*
2. Xxxxx Xxxxx Medical Center, 000 X. Xxxxxxxx Xxxx, Xxxxxxx, XX 00000*
3. Xxxxx Xxxxx Care Center, 000 X. Xxxxxxxx Xxxx, Xxxxxxx, XX 00000*
4. Palm Valley Medical Center, 00000 X. XxXxxxxx Xxxx, Xxxxxxxx, XX 00000*
5. Buckeye Medical Center, 0000 X. Xxxxxx Xxxx, Xxxxxxx, XX 00000*
6. Palm Valley unimproved land (future estate only), Xxxxxxxx, XX 00000*
7. Palm Valley Reversionary Interest parcel, Xxxxxxxx, XX 00000*
CERTAIN LEASED REAL PROPERTY
--------------------------------------------------------------------------------
Maryvale Hospital Medical Center:
---------------------------------
1. West Valley Health Center, 000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxxxxx, XX 00000
Huntington Beach Hospital:
--------------------------
1. Huntington Beach Hospital, 00000 Xxxxx Xxxxxxxxx, Xxxxxxxxxx Xxxxx,
XX 00000-0000*
2. North Anaheim Surgicenter, 0000 Xxxxx Xxxxxx, Xxxxxxx, XX 00000
3. Magnolia Surgery Center, 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx,
XX 00000
2
SCHEDULE IV
West Anaheim Medical Center:
----------------------------
1. West Anaheim Medical Center, 0000 X. Xxxxxx Xxxxxx, Xxxxxxx, XX 00000*
2. Xxxxxxxx Property, 000 Xxxxx Xxxxx Xxxx., Xxxxxxx, XX 00000*
XxxXxxx Hospital:
-----------------
1. Xxxx Xxxxxxxx, 0000 X. Xxxxxxx, Xxxxxx, XX 00000*
2. 0000 X. Xxx Xxxx Xxxxx, Xxxxxx, XX 00000*
3. Berwyn Medical Center, 0000 X. Xxx Xxxx Xxxxx, Xxxxxx, XX 00000*
4. Xxxxxxx Xxx, 00xx & Xxxxx, Xxxxxx, XX 00000*
5. House, 0000 X. Xxxxx, Xxxxxx, XX 00000*
La Palma Intercommnunity Hospital:
----------------------------------
None.
Phoenix Baptist Hospital and Medical Center:
--------------------------------------------
1. Texaco Property (portion of Hospital parking lot)*
Arrowhead Community Hospital and Medical Center:
------------------------------------------------
None.
Phoenix Memorial Hospital:
--------------------------
1. Phoenix Health Plan, 0000 Xxxxx 0xx Xxxxxx, Xxxxxxx, XX 00000
TMC Advanced Imaging:
---------------------
1. Xxxxxx Place Medical Offices, Suites 5-11, 0000 X. Xxxxxxxx Xxxxxx,
Xxxxx, XX
2. 0000 X. 00xx Xxxxxx, Xxxxxx 103 and 112, Xxxxxxxxxx, XX 00000
3. Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxx, Xxxxxx X-000 & C-105, 00000 X. 00xx Xxxxxx,
Xxxxxxxx, XX 00000
4. 0000 X. Xxxx Xxxxxx Xxxx, Xxxxxx 000, 115, 125, 000 & 000, Xxxxxxxx,
XX 00000
5. 000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxx, XX 00000
6. Palm Valley Office Park Phase I, 0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, XX 00000
Other:
------
1. Corporate Offices, 00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxx 00000
2. Regional Office, 0000 X. 00xx Xxx., Xxxxx 000, Xxxxxxx, XX 00000
3
Schedule V
----------
ERISA MATTERS
-------------
1. Vanguard Health Management, Inc. Premium Payment Plan dated July 1, 1997
2. Vanguard 401(k) Retirement Savings Plan dated January 1, 2000 plus Summary
Plan description related thereto.
SCHEDULE VI
SUBSIDIARIES
State of Direct Is Subsidiary
Name (*) Incorporation/Organization Ownership a Subsidiary Guarantor?
-------------------------------------------------- -------------------------- ------------------------ -----------------------
Vanguard Health Management, Inc. ("VHMI") Delaware 100% by Borrower Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
Vanguard Health Financial Company, Inc. ("VHFCI") Tennessee 100% by Borrower Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Corporation Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
V-II Acquisition Co., Inc. ("VAC") Pennsylvania 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
Healthcare Compliance, L.L.C. District of Columbia 100% by VHMI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS of Orange County, Inc. ("VHOC") Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Holding Company, Inc. ("VHS-HC") Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS of Illinois, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
XxxXxxx Medical Records, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Genesis Labs, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
XxxXxxx Management Services, Inc. ("MMS") Illinois 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS of Phoenix, Inc. ("VHS-P") Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
Trinity MedCare, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
The VHS Arizona Imaging Centers Delaware 88% by VHS-HC Yes
Limited Partnership 10% by VHFCI
2% by VHS-I
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Imaging Centers, Inc. ("VHS-I") Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Subsidiary Number 1, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Subsidiary Number 2, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Subsidiary Number 3, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Subsidiary Number 4, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Subsidiary Number 5, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Subsidiary Number 6, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Subsidiary Number 7, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Subsidiary Number 8, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Subsidiary Number 9, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Acquisition Subsidiary Number 10, Inc. Delaware 100% by VHFCI Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS of Rancocas, Inc. New Jersey 100% by VAC Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS of Huntington Beach, Inc. ("VHS-HB") Delaware 100% by VHOC Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS of Anaheim, Inc. ("VHS-A") Delaware 100% by VHOC Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
The Anaheim VHS Limited Partnership Delaware 98% by VHS-HC Yes
2% by VHS-A
-------------------------------------------------- -------------------------- ------------------------- -----------------------
The Huntington Beach VHS Limited Partnership Delaware 98% by VHS-HC Yes
2% of VHS-HB
-------------------------------------------------- -------------------------- ------------------------- -----------------------
1
Schedule VI
SUBSIDIARIES
State of Direct Is Subsidiary
Name (*) Incorporation/Organization Ownership a Subsidiary Guarantor?
-------------------------------------------------- -------------------------- ------------------------ -----------------------
Magnolia Surgery Center Limited Partnership Delaware 97% by VHS-HC No
2% by VHS-HB
1% by Physicians
-------------------------------------------------- -------------------------- ------------------------- -----------------------
North Anaheim Surgicenter, Ltd. California 75% VHS-A1 No
25% by Physicians
-------------------------------------------------- -------------------------- ------------------------- -----------------------
Primary Care Physicians Center, LLC Illinois 94% by MMS2 No
-------------------------------------------------- -------------------------- ------------------------- -----------------------
Midwest Claims Processing, Inc. Illinois 100% by MMS Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
XxxXxxx Health Providers, Inc. Illinois 100% by MMS Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
Watermark Physician Services, Inc.3 Illinois 100% by MMS Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
Pros Temporary Staffing, Inc. Illinois 100% by MMS Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
The 0000 Xxxx Xxxxxxxxx Xxxxxxx Xxxxxxxxxxx Xxxxxxxx 50.33% by MMS4 No
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS of Arrowhead, Inc. ("VA") Delaware 100% by VHS-P Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Outpatient Clinics, Inc. Delaware 100% by VHS-P Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS of South Phoenix, Inc. ("VHS-SP") Delaware 100% by VHS-P Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
Pleasant Properties, Inc. Arizona 100% by VA Yes
-------------------------------------------------- -------------------------- ------------------------- -----------------------
VHS Phoenix Health Plan, Inc. Delaware 100% by VHS-SP No
-------------------------------------------------- -------------------------- ------------------------- -----------------------
--------
1 VHS-A aggregate ownership is 75% of the partnership interests (150 units out of 200 units). Physicians own 50
LP units for 25% partnership interest ownership.
2 A third party (or parties) owns 6% of the Membership Interests.
3 Formerly, Watermark Ventures, Inc.
4 A third party (or parties) owns 49.67% of the partnership interests.
2
Schedule VII
------------
INTELLECTUAL PROPERTY
---------------------
Borrower incorporated in the State of Delaware on July 1, 1997, under the
corporate name "Vanguard Health Systems, Inc." and filed a "Service Xxxx"
Application in the United States Patent and Trademark Office ("Trademark
Office") on September 18, 1997. From July 1, 1997 through September 18, 1997,
Borrower openly used the Xxxx in interstate commerce.
On November 7, 1997, Borrower received a letter from Vanguard Healthcare, LLC
("Different Vanguard"), with an address of 0 Xxxxxxxxxxxxx Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, claiming it had filed a prior federal Service Xxxx
Application on the Xxxx and stating "...we suggest you consider a different
name, as we believe your usage may infringe upon our trademark".
Upon investigation Borrower determined that (1) Different Vanguard was
organized on June 14, 1996, as a Tennessee limited liability company under the
name "Total HealthCare, LLC" and changed its name on November 4, 1997, to
Vanguard Healthcare, LLC, and (2) Different Vanguard filed on September 11,
1997 a "Service Xxxx" Application on the Xxxx (on an "intent to use" basis)
(i.e. this date was 7 days prior to Borrower's Application ).
The Trademark Office has examined Borrower's Application and approved it for
form and registrability, subject to the issuance or abandonment of the
Application of Different Vanguard. Different Vanguard's Application was
examined by the Trademark Office in the summer of 1999 and was published for
opposition purposes on August 24, 1999. Borrower had 30 days from the date of
publication to file an objection (i.e. an "Opposition") to its registration by
Different Vanguard and the Borrower filed its Opposition on August 30, 1999.
Outside Trademark counsel has informed the Borrower that Different Vanguard's
earlier filing of its Application confers no superior ownership rights of any
kind in the Xxxx because of Borrower's first and prior public use of the Xxxx.
Discovery in this matter has begun. Different Vanguard claims no written use of
the Xxxx by it prior to November 1997, but claims its selection and its oral
use of the Xxxx starting on July 10, 1997. Different Vanguard is in the nursing
home business, owning and managing nursing homes for itself and for other
owners.
On January 21, 2000 Borrower filed a summary judgment motion in this matter
claiming its prior use of the Xxxx commencing on or about July 1, 1997, 9 days
before the earliest date claimed by Different Vanguard. The Trademark Office
denied the Borrower's motion for summary judgment on February 28, 2001 finding
that "...there are genuine issues of material fact regarding the priority of
use of the marks".
Thus, this matter currently continues in the discovery process (the depositions
of the Borrower's Chief Executive Officer and General Counsel having been taken
by Different Vanguard in May 2001) with trial of the matter expected during the
last six months of calendar 2001.
Based on the foregoing, Outside Trademark counsel has informed Borrower that
Borrower is more likely than not to prevail in the trial of the facts as to its
objection to the registration of Different Vanguard's Application for the Xxxx.
This Trademark Office proceeding only involves the issue of registrability. The
Trademark Office cannot enjoin the use of a xxxx by either party, or award
damages, profits, costs, or attorney fees. The decision by the Trademark Office
is not binding or res judicata on any future proceedings involving the parties'
rights to use their respective marks.
To date, Different Vanguard has not pursued any formal action to preclude
Borrower's use of the Xxxx VANGUARD HEALTH despite more than two years use by
Borrower. The longer no such action is pursued, the greater likelihood such an
action would be unsuccessful, based on the equitable defenses of laches,
estoppel, and acquiescence.
Schedule VIII
-------------
EXISTING INDEBTEDNESS
---------------------
LESSOR/DEBTOR DESCRIPTION LOAN/LEASE NUMBER BALANCE
-----------------------------------------------------------------------------------------------------------------------------------
1. ARROWHEAD MOB JOINT VENTURE
FARM BUREAU LIFE INSURANCE CO SECURED INSTALLMENT LOAN $2,249,834.00
2. VHS OF PHOENIX, INC.
BANC ONE LEASING CAPITAL LEASE 1000065630 279,086.71
BANC ONE LEASING CAPITAL LEASE 0000000000 219,691.52
3. VHS OF ARROWHEAD, INC.
BANC ONE LEASING CAPITAL LEASE 1000054137 132,124.24
BANC ONE LEASING CAPITAL LEASE 1000067412 196,185.21
4. VHS OF SOUTH PHOENIX, INC.
DATA GENERAL CAPITAL LEASE 13311-001 3,454,664.97
SIEMENS CAPITAL LEASE 000-0000000-000 348,619.40
CHIRON DIAGNOSTICS CAPITAL LEASE 1633 12,128.22
5. THE VHS ARIZONA IMAGING CENTERS LIMITED
PARTNERSHIP
DVI FINANCIAL SERVICES CAPITAL LEASE 181-0 451,159.38
DVI FINANCIAL SERVICES CAPITAL LEASE 887-006 33,347.47
DVI FINANCIAL SERVICES CAPITAL LEASE 887-007 36,750.72
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,232.56
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,176.91
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,434.62
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,229.63
DVI FINANCIAL SERVICES CAPITAL LEASE 1375-005 29,346.39
DVI FINANCIAL SERVICES CAPITAL LEASE 1375-006 97,773.79
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,839.90
DVI FINANCIAL SERVICES CAPITAL LEASE 1375-008 40,598.50
DVI FINANCIAL SERVICES CAPITAL LEASE 1375-009 20,419.56
DVI FINANCIAL SERVICES CAPITAL LEASE 1375-010 28,389.49
DVI FINANCIAL SERVICES CAPITAL LEASE 1797-001 14,092.37
DVI FINANCIAL SERVICES CAPITAL LEASE 1830-001 43,786.78
DVI FINANCIAL SERVICES CAPITAL LEASE 1830-002 1,774,052.10
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,554.89
DVI FINANCIAL SERVICES CAPITAL LEASE 1830-004 15,315.26
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,032.52
DVI FINANCIAL SERVICES CAPITAL LEASE 1830-006 15,125.86
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,534.98
DVI FINANCIAL SERVICES CAPITAL LEASE 1830-008 1,192,945.59
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,491.56
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,124.02
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,645.13
DVI FINANCIAL SERVICES CAPITAL LEASE 1830-012 42,930.97
DVI FINANCIAL SERVICES CAPITAL LEASE 0000-000 000,966.24
DVI FINANCIAL SERVICES CAPITAL LEASE 1830-014 48,478.44
GENERAL ELECTRIC CAPITAL LEASE 8553456-002/003 30,477.99
GENERAL ELECTRIC CAPITAL LEASE 8512356-001 923,962.02
GENERAL ELECTRIC CAPITAL LEASE 8512568-001 295,743.95
GENERAL ELECTRIC CAPITAL LEASE 8513846-002 257,002.56
GENERAL ELECTRIC CAPITAL LEASE 8513633-001 245,359.75
6. VANGUARD HEALTH SYSTEMS, INC.
XXXXXX XXXXXXX SENIOR FUNDING INC./ROYAL BANK LETTER OF CREDIT 0699/S19488 788,900.00
OF CANADA
--------------------
$17,124,556.17
====================
Schedule IX
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INSURANCE
---------
1. Policy: Excess Healthcare Professional & General Liability
Effective: June 1, 2001
Expiration: June 1, 2002
Carrier: Truck Insurance Exchange
Named Insured and address: Vanguard Health Management, Inc.
00 Xxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Limits of Liability
Occurrence Limit: $49,000,000
Annual Aggregate: $49,000,000
Excess of: $ 1,000,000/Occ.
$ 13.2MM.2/Agg.
2. POLICY: Business Automobile
EFFECTIVE: June 1, 2001
EXPIRATION: June 1, 2002
CARRIER: Travelers
NAMED INSURED AND ADDRESS: Vanguard Health Management, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
COVERAGE AND LIMITS
Limits of Liability: $1,000,000 CSL BI/PD Per Accident
1) Any auto
Uninsured/Underinsured Motorist: $1,000,000
Covered Autos: 2) All owned Autos
PHYSICAL DAMAGE COVERAGE AND LIMITS
o Recovery is Based on Actual Cash Value
o Comprehensive and Collision is Included as Follows:
Deductible: $500
Covered Autos: 2) All Owned Autos
8) Hired Autos
o Hired Car Physical Damage:
Maximum Value of a Hired Auto: $50,000
Comprehensive and Collision Deductible: $ 500
Schedule IX
-----------
3. POLICY: Worker's Compensation & Employer's Liability
EFFECTIVE: June 1, 2001
EXPIRATION: June 1, 2002
CARRIER: Travelers
NAMED INSURED AND ADDRESS: Vanguard Health Management, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
COVERAGE AND LIMITS
Worker's Compensation Applies in the Listed States: AZ, CA, IL, TN
Employers' Liability Limits (To Include Pre and Post Judgment Interest)
Each Accident: $1,000,000
Disease (Policy Limit): $1,000,000
Disease (Each Employee): $1,000,000
Deductible: $ 250,000
Schedule IX
-----------
4. POLICY: Excess Automobile & Employers Liability
EFFECTIVE: June 13, 2001
EXPIRATION: June 1, 2002
CARRIER: National Surety Corporation
NAMED INSURED AND ADDRESS: Vanguard Health Management, Inc.
00 Xxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
LIMITS OF LIABILITY
Occurrence Limit: $49,000,000
Annual Aggregate: $49,000,000
Excess of: $ 1,000,000
Schedule IX
-----------
5. POLICY: Excess Liability
EFFECTIVE: June 1, 2001
EXPIRATION: June 1, 2002
CARRIER: Steadfast Insurance Co.
NAMED INSURED AND ADDRESS: Vanguard Health Management, Inc.
00 Xxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
LIMITS OF LIABILITY
Occurrence Limit: $25,000,000
Annual Aggregate: $25,000,000
Excess of: $50,000,000 Occ/Agg
Schedule IX
-----------
6. POLICY: Excess Liability
EFFECTIVE: June 1, 2001
EXPIRATION: June 1, 2002
CARRIER: XL Insurance Ltd.
NAMED INSURED AND ADDRESS: Vanguard Health Management, Inc.
00 Xxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
LIMITS OF LIABILITY
Occurrence Limit: $25,000,000
Annual Aggregate: $25,000,000
Excess of: $75,000,000
Schedule IX
-----------
7. POLICY: Property
EFFECTIVE: June 1, 2001
EXPIRATION: June 1, 2002
CARRIER: Zurich
NAMED INSURED AND ADDRESS: Vanguard Health Management, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
COVERAGE AND LIMITS
Policy Limit - Blanket $1,137,337,239
Business Interruption: Policy Limit
Extra Expense: $ 25,000,000
Contingent BVEE: $ 25,000,000
Boiler and Machinery: Policy Limit
Service Interruption: $ 25,000,000
Deductible: $ 10,000
Schedule IX
-----------
8. POLICY: Non-Owned Aircraft Liability Insurance
EFFECTIVE: June 1, 2001
EXPIRATION: June 1, 2002
CARRIER: AIG Aviation (National Union Fire Insurance Company of
Pittsburg, PA)
NAMED INSURED AND ADDRESS: Vanguard Health Management, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
AIRCRAFT: Any non-owned fixed wing aircraft having no more than
45 total seats and any non-owned rotor wing aircraft
having no more than 7 total seats.
NON-OWNED AIRCRAFT
COVERAGE: $10,000,000 Combined Single Limit Bodily
Injury Liability and Property Damage
Liability, including Passengers
PASSENGER PERSONAL
EFFECTS COVERAGE: $250 Each passenger
DEDUCTIBLE: None
Schedule IX
-----------
9. POLICY: Heliport Liability Insurance
EFFECTIVE: June 1, 2001
EXPIRATION: June 1, 2002
CARRIER: AIG Aviation (National Union Fire Insurance Company of
Pittsburg, PA)
NAMED INSURED AND ADDRESS: Vanguard Health Management, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
AIRPORT PREMISES
LIABILITY COVERAGE: $10,000,000 Combined Single Limit Bodily
Injury and Property Damage Liability
LOCATION OF
AIRPORT PREMISES: o Maryvale Hospital Medical Center
Phoenix, AZ
o West Valley Emergency Center
Goodyear, AZ
o West Anaheim Medical Center
Anaheim, CA
o Xxxxxxxxxx Xxxxx Xxxxxxxx
Xxxxxxxxxx Xxxxx, XX
o Arrowhead Community Hospital
Glendale, AZ
o Phoenix Baptist Hospital
Phoenix, AZ
o Phoenix Memorial Hospital
Phoenix, AZ
DEDUCTIBLE: None
Schedule X
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EXISTING LIENS
--------------
1. Liens on Subsidiary assets securing the Existing Indebtedness set forth on
Schedule VIII.
Schedule XI
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EXISTING INVESTMENTS
--------------------
EXISTING INVESTMENTS
1. 50% Membership Interest in West Anaheim MSO, LLC (current capital
contribution - $250,000; no additional capital required without the
consent of a Subsidiary Guarantor). A Subsidiary Guarantor is the Managing
Member of this LLC.
2. $300,000 line of credit to West Anaheim MSO, LLC. (current balance, $0)
3. 25% joint venture (general partner) interest in BHS Digestive Disease
Associates (a/k/a Gastro & Liver Specialists Joint Venture), an Illinois
joint venture.
4. 40% joint venture (general partner) interest in XxxXxxx/CCP Joint Venture.
5. 25% of the Percentage Interests in Berwyn Magnetic Resonance Center, LLC,
an Illinois limited liability company.
6. 18% limited partnership interest in Palm Valley Nursing Facility Limited
Partnership LLLP, an Arizona limited partnership.
7. 49% limited partnership interest in PBG Partners, Ltd., a Florida limited
partnership.
8. 44.45% joint venture (general partner) interest in XxxXxxx/Xxxx/Xxxx Joint
Venture, an Illinois joint venture.
9. Physician Support Obligations in aggregate amount at 6/30/01 of
approximately $5,700,000.
LEGAL NAMES, ORGANIZATION IDENTIFICATION NUMBERS
JURISDICTION OF ORGANIZATION, TYPE OF ORGANIZATION
SCHEDULE XII
ENTITY NAME JURISDICTION TYPE OF ORGANIZATION FEDERAL ID# STATE ID#
----------- ------------ -------------------- ----------- ---------
Vanguard Health Systems, Inc. Delaware Corporation 00-0000000 2765298
VHS Acquisition Corporation Delaware Corporation 00-0000000 2863490
VHS of Phoenix, Inc. Delaware Corporation 00-0000000 3177186
VHS Outpatient Clinics, Inc. Delaware Corporation 00-0000000 3212542
VHS of Arrowhead, Inc. Delaware Corporation 00-0000000 318980
Pleasant Properties, Inc. Arizona Corporation 00-0000000 0236400-8
VHS of South Phoenix, Inc. Delaware Corporation 00-0000000 3348177
The VHS Arizona Imaging Centers
Limited Partnership Delaware Limited Partnership 00-0000000 3391889
VHS Imaging Centers, Inc. Delaware Corporation 00-0000000 3381167
VHS of Anaheim, Inc. Delaware Corporation 00-0000000 3046767
VHS of Orange County, Inc. Delaware Corporation 00-0000000 2991266
VHS Holding Company, Inc. Delaware Corporation 00-0000000 3053546
VHS of Huntington Beach, Inc. Delaware Corporation 00-0000000 3053551
The Anaheim VHS Limited Partnership Delaware Limited Partnership 00-0000000 3054158
The Huntington Beach VHS Limited
Partnership Delaware Limited Partnership 00-0000000 3052
VHS of Illinois, Inc. Delaware Corporation 00-0000000 3100647
XxxXxxx Health Providers, Inc. Illinois Corporation 00-0000000 D5365-515-7
XxxXxxx Management Services, Inc. Illinois Corporation 00-0000000 D5347-087-4
Midwest Claims Processing, Inc. Illinois Corporation 00-0000000 D6050-154-8
Pros Temporary Staffing, Inc. Illinois Corporation 00-0000000 D6086-116-1
Watermark Physician Services, Inc. Illinois Corporation 00-0000000 D6080-956-9
VHS Genesis Labs, Inc. Delaware Corporation 00-0000000 3143714
XxxXxxx Medical Records, Inc. Delaware Corporation 00-0000000 3160763
Vanguard Health Management, Inc. Delaware Corporation 00-0000000 2712798
Trinity Medcare, Inc. Delaware Corporation 00-0000000 2720439
V-II Acquisition Co., Inc. Pennsylvania Corporation 00-0000000 3795-539
Vanguard Health Financial Company, Inc. Tennessee Corporation 00-0000000 0345736
Healthcare Compliance, L.L.C. District of Columbia Limited Liability Corporation 00-0000000 0236505
VHS of Rancocas, Inc. New Jersey Corporation 00-0000000 0100-7423-73
VHS Acquisition Subsidiary Number 1, Inc. Delaware Corporation 00-0000000 3414395
VHS Acquisition Subsidiary Number 2, Inc. Delaware Corporation 00-0000000 3414394
VHS Acquisition Subsidiary Number 3, Inc. Delaware Corporation 00-0000000 3414388
VHS Acquisition Subsidiary Number 4, Inc. Delaware Corporation 00-0000000 3414383
VHS Acquisition Subsidiary Number 5, Inc. Delaware Corporation 00-0000000 3414379
VHS Acquisition Subsidiary Number 6, Inc. Delaware Corporation 00-0000000 3414377
VHS Acquisition Subsidiary Number 7, Inc. Delaware Corporation 00-0000000 3414374
VHS Acquisition Subsidiary Number 8, Inc. Delaware Corporation 00-0000000 3414371
VHS Acquisition Subsidiary Number 9, Inc. Delaware Corporation 00-0000000 3414366
VHS Acquisition Subsidiary Number 10, Inc. Delaware Corporation 00-0000000 3414364
