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EXHIBIT 10(m)
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RESPONSE ONCOLOGY, INC.
Borrower
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FIRST AMENDED AND RESTATED
LOAN AGREEMENT
$45,000,000 REVOLVING CREDIT LOAN
Dated as of April 21, 1997
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NATIONSBANK OF TENNESSEE, N.A., AGENT
AMSOUTH BANK OF TENNESSEE
NATIONSBANK OF TENNESSEE, N.A.
UNION PLANTERS NATIONAL BANK
Revolving Credit Lenders
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TABLE OF CONTENTS
RECITALS..........................................................................................................1
I. DEFINITIONS..................................................................................................1
1.1 Terms Defined in This Agreement........................................................1
1.2 Terms Generally.......................................................................17
II. LOANS........................................................................................................17
2.1 Amount of Revolving Credit Loan.......................................................18
2.2 Use of Proceeds of Revolving Credit Loan..............................................18
2.3 Revolving Credit Loan Notes...........................................................18
2.4 Separate Commitments of Lender........................................................18
2.5 Advances of Loans.....................................................................18
2.6 Interest..............................................................................20
2.7 Alternate Rate of Interest if LIBOR Unavailable.......................................22
2.8 Change in Circumstances...............................................................22
2.9 Change in Legality of LIBOR Loans.....................................................24
2.10 Principal Repayment...................................................................24
2.11 Prepayment of LIBOR Loans.............................................................24
2.12 Prepayment of Prime Rate Loans........................................................25
2.13 Fixed Commitment Fees.................................................................25
2.14 Periodic Commitment Fee Based on Use of Facilities....................................26
2.15 Agent's Fee...........................................................................26
2.16 Letters of Credit.....................................................................26
2.17 Swingline Loans.......................................................................32
III. CONDITIONS PRECEDENT.......................................................................................36
3.1 Conditions to Initial Advance.........................................................36
3.2 Conditions to Subsequent Loans........................................................38
IV. REPRESENTATIONS AND WARRANTIES..............................................................................39
4.1 Capacity..............................................................................39
4.2 Authorization.........................................................................39
4.3 Binding Obligations...................................................................39
4.4 No Conflicting Law or Agreement.......................................................39
4.5 No Consent Required...................................................................40
4.6 Financial Statements..................................................................40
4.7 Fiscal Year...........................................................................40
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4.8 Litigation............................................................................40
4.9 Taxes; Governmental Charges...........................................................40
4.10 Title to Properties...................................................................40
4.11 No Default............................................................................41
4.12 Casualties; Taking of Properties......................................................41
4.13 Compliance with Laws..................................................................41
4.14 Compliance with Fraud and Abuse Laws..................................................41
4.15 ERISA.................................................................................41
4.16 Full Disclosure of Material Facts.....................................................41
4.17 Accuracy of Projections...............................................................41
4.18 Investment Company Act................................................................42
4.19 Personal Holding Company..............................................................42
4.20 Solvency..............................................................................42
4.21 Chief Executive Office................................................................42
4.22 Subsidiaries..........................................................................42
4.23 Ownership of Patents, Licenses, Etc...................................................42
4.24 Environmental Compliance..............................................................42
4.25 Labor Matters.........................................................................42
4.26 OSHA Compliance.......................................................................43
4.27 Regulation U..........................................................................43
4.28 Affiliate Transactions................................................................43
V. AFFIRMATIVE COVENANTS........................................................................................43
5.1 Payment of Obligations................................................................43
5.2 Maintenance of Existence and Business.................................................43
5.3 Financial Statements and Reports......................................................43
5.4 Additional Information................................................................45
5.5 Certain Additional Reporting Requirements.............................................45
5.6 Taxes and Other Encumbrances..........................................................46
5.7 Payment of Liabilities................................................................47
5.8 Compliance with Laws..................................................................47
5.9 Maintenance of Property...............................................................47
5.10 Compliance with Contractual Obligations...............................................47
5.11 Further Assurances....................................................................47
5.12 Security Interest; Setoff.............................................................48
5.13 Insurance.............................................................................48
5.14 Accounts and Records..................................................................48
5.15 Official Records......................................................................48
5.16 Banking Relationships.................................................................49
5.17 Right of Inspection...................................................................49
5.18 ERISA Information and Compliance......................................................49
5.19 Indemnity; Expenses...................................................................49
5.20 Assistance in Litigation..............................................................50
5.21 Name Changes..........................................................................50
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5.22 Estoppel Letters......................................................................51
5.23 Environmental Matters.................................................................51
5.24 Opinions of Counsel...................................................................52
5.25 Additional Collateral Upon Certain Event..............................................52
5.26 Existing Capital Structure of Borrower................................................52
VI. NEGATIVE COVENANTS..........................................................................................53
6.1 Debts, Guaranties, and Other Obligations..............................................53
6.2 Change of Management..................................................................54
6.3 Change of Ownership...................................................................54
6.4 Distributions.........................................................................54
6.5 Encumbrances..........................................................................54
6.6 Investments...........................................................................54
6.7 Sales and Leasebacks..................................................................55
6.8 Change of Control.....................................................................55
6.9 Nature of Business....................................................................55
6.10 Further Acquisitions, Mergers, Etc....................................................55
6.11 Advances..............................................................................55
6.12 Disposition of Assets.................................................................55
6.13 Inconsistent Agreements...............................................................55
6.14 Fictitious Names......................................................................55
6.15 Subsidiaries and Affiliates...........................................................56
6.16 Place of Business.....................................................................56
6.17 Adverse Action With Respect to Plans..................................................56
6.18 Transactions With Affiliates..........................................................56
6.19 Constituent Document Amendments.......................................................56
6.20 Adverse Transactions..................................................................56
6.21 Margin Securities.....................................................................56
6.22 Accounting Changes....................................................................56
6.23 Action Outside Ordinary Course........................................................56
VII. FINANCIAL COVENANTS........................................................................................57
7.1 Current Ratio.........................................................................57
7.2 Total Funded Debt to Capital..........................................................57
7.3 Total Funded Debt to Consolidated EBITDA..............................................57
7.4 Fixed Charge Coverage.................................................................57
7.5 Net Worth.............................................................................57
7.6 Capital Expenditures..................................................................57
VIII. EVENTS OF DEFAULT.........................................................................................57
8.1 Events of Default.....................................................................57
8.2 Remedies..............................................................................60
IX. AGENT.......................................................................................................60
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9.1 Appointment of Agent..................................................................60
9.2 Powers of Agent.......................................................................61
9.3 Duties of Agent.......................................................................61
9.4 Indemnification of Agent..............................................................63
9.5 No Representations by Agent...........................................................63
9.6 Independent Investigations by Lenders.................................................64
9.7 Notice of Default.....................................................................64
9.8 Funding of Loans Pursuant to Borrowing Notices........................................64
9.9 Agent in its Individual Capacity......................................................64
9.10 Holders...............................................................................65
9.11 Successor Agent.......................................................................65
9.12 Sharing of Payments, etc..............................................................65
9.13 Separate Liens on Collateral..........................................................66
9.14 Payments Between Agent and Lenders....................................................66
9.15 Assignments and Participations........................................................66
9.16 Bankruptcy Provisions.................................................................66
9.17 Foreclosure of Collateral.............................................................66
9.18 Procedures for Notices and Approvals..................................................67
9.19 Amendments to Article IX..............................................................67
X. GENERAL PROVISIONS...........................................................................................67
10.1 Notices...............................................................................67
10.2 Renewal, Extension, or Rearrangement..................................................68
10.3 Application of Payments...............................................................68
10.4 Counterparts..........................................................................69
10.5 Negotiated Document...................................................................69
10.6 Consent to Jurisdiction; Exclusive Venue..............................................69
10.7 Not Partners; No Third Party Beneficiaries............................................69
10.8 No Reliance on Lenders' Analysis......................................................69
10.9 No Marshaling of Assets...............................................................69
10.10 Impairment of Collateral..............................................................70
10.11 Business Days.........................................................................70
10.12 Participations........................................................................70
10.13 Standard of Care; Limitation of Damages...............................................70
10.14 Incorporation of Schedules............................................................70
10.15 Indulgence Not Waiver.................................................................70
10.16 Cumulative Remedies...................................................................70
10.17 Amendment and Waiver in Writing.......................................................70
10.18 Assignment............................................................................70
10.19 Entire Agreement......................................................................71
10.20 Severability..........................................................................71
10.21 Time of Essence.......................................................................71
10.22 Applicable Law........................................................................71
10.23 Captions Not Controlling..............................................................71
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10.24 Arbitration...........................................................................71
10.25 Facsimile Signatures..................................................................72
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LIST OF EXHIBITS
1.1 Financial Projections
1.2 Form of Acquisition Certificate
1.3 Form of Swingline Note
2.3 Form of Revolving Credit Notes
2.5.1(b) Form of Borrowing Notice
LIST OF SCHEDULES
4.1 Corporate Structure
4.8 Litigation
4.9 Tax Extensions
4.28 Affiliate Transactions
5.26 Capital and Ownership Structure
6.1.2 Existing Liabilities
6.2 Management Staffing
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FIRST AMENDED AND RESTATED LOAN AGREEMENT
This First Amended and Restated Loan Agreement is entered into as of
the 21st day of April, 1997, by and among RESPONSE ONCOLOGY, INC. ("Borrower"),
a Tennessee corporation; AMSOUTH BANK OF TENNESSEE ("AmSouth"), a Tennessee
banking corporation, NATIONSBANK OF TENNESSEE, N.A. ("NationsBank"), a national
banking association, and UNION PLANTERS NATIONAL BANK ("Union Planters"), a
national banking association (collectively "Lenders"); and NATIONSBANK OF
TENNESSEE, N.A., in its capacity as Agent for Lenders ("Agent").
RECITALS
WHEREAS, Lenders (except for AmSouth) have previously extended a
revolving acquisition loan facility and a revolving working capital facility to
Borrower, on certain terms and conditions, as set forth in that Loan Agreement
dated as of May 31, 1996 (the "Prior Loan Agreement"); and
WHEREAS, Borrower and the Lenders that were parties to the Prior Loan
Agreement wish to combine the two credit facilities provided for in the Prior
Loan Agreement into a single revolving credit facility, to add AmSouth as a
Lender, and to make certain other changes to the terms and conditions of the
credit extended pursuant to the Prior Loan Agreement;
NOW, THEREFORE, as an inducement to cause Lenders to extend credit to
Borrower, and for other valuable consideration, the receipt and sufficiency of
which are acknowledged, it is agreed that the Prior Loan Agreement is hereby
amended and restated to read in full as follows:
I. DEFINITIONS
1.1 Terms Defined in This Agreement. As used below in this Agreement,
the following capitalized terms shall have the following meanings, unless the
context expressly requires otherwise:
"ACQUISITION EBITDA" means, with respect to a Practice acquired by a
Consolidated Entity and covered by a Service Agreement, (i) the pro forma income
to the Consolidated Entities that would have arisen under the applicable Service
Agreement preceding the effective date of the acquisition, determined based upon
the actual financial performance of the acquired Practice over the period for
which a calculation of Consolidated EBITDA is made, without adjustment, (ii)
less the pro forma amount of expenses (other than interest, taxes, depreciation
and amortization) that the Consolidated Entities would have incurred over the
same period on account of the acquired Practice (including, but not limited to,
additional expense of administrative personnel), in each case calculated as if
the Practice had been acquired effective as of the beginning of the relevant
financial period.
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"AFFILIATE" means, with respect to any Person, another Person that,
directly or indirectly through one or more intermediaries, Controls, or is
Controlled by, or is under common Control with, such Person.
"AGENT" means NationsBank of Tennessee, N.A., in its capacity as
described in Article IX of this Agreement, its lawful corporate successors and
any successor agent appointed pursuant to Article IX hereof.
"AGREEMENT" means this Loan Agreement (including all schedules and
exhibits hereto), as the same may be amended from time to time.
"APPLICABLE COMMITMENT FEE," "APPLICABLE LIBO RATE MARGIN," and
"APPLICABLE PRIME RATE MARGIN" mean, with respect to Loans advanced under and
the commitment fee respecting the Revolving Credit Loan, during any Effective
Period, the percentage rates per annum set forth opposite the appropriate test
in the pricing grid below (ratio values shall be rounded to the nearest
one-hundredth, with any value of .005 rounded upward):
TOTAL FUNDED DEBT TO PRIME RATE MARGIN LIBOR COMMITMENT
CONSOLIDATED EBITDA MARGIN FEE IN BASIS
POINTS
Less than or equal to 1.00 .25% 1.50% 20bps
Greater than or equal to 1.01 .50% 1.75% 25bps
and less than or equal to 2.00
Greater than or equal to 2.01 .75% 2.125% 30bps
and less than or equal to 3.00
The Total Funded Debt to Consolidated EBITDA ratio shall be established by Agent
on the basis of the consolidated quarterly financial statements of and schedules
prepared by Borrower delivered to Agent pursuant to this Agreement and shall be
calculated as set forth in Section 7.3 hereof. Notwithstanding the foregoing, at
the end of any Effective Period, and during any period of time for which Pricing
Values may be set by Agent pursuant to Section 8.1.5 hereof, the Pricing Values
with respect to the Loans shall automatically become the highest values provided
for in the applicable pricing grid set forth above. Additionally, the Applicable
Prime Rate Margin for Prime Rate Loans and the Applicable LIBO Rate Margin for
LIBOR Loans shall each be reduced by one-fourth of one percent (1/4%) if
Borrower shall receive aggregate Net Equity Proceeds after the Closing Date of
at least Thirty-Five Million and No/100 Dollars ($35,000,000.00).
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"ASSUMED DEBT" means Purchase Money Debt assumed by a Consolidated
Entity, or Purchase Money Debt secured by a Purchase Money Security Interest in
Property acquired by a Consolidated Entity, whether or not the Purchase Money
Debt is contractually assumed, occurring in either case in the course of a
Permitted Acquisition.
"BANKING DAY" means a Business Day, subject to the following additional
convention. As to notices or payments received by Agent on a Business Day at or
before 12:00 p.m. (noon) Nashville time, the Banking Day shall correspond to the
Business Day of receipt. As to notices or payments received by Agent on a
Business Day after 12:00 p.m. (noon) Nashville time, the Banking Day of receipt
shall be deemed to be the next following Business Day.
"BANKRUPTCY CODE" means Title I of the Bankruptcy Reform Act of 1978,
as it may be amended from time to time.
"BEST OF BORROWER'S KNOWLEDGE" means the actual knowledge, information
and belief of the Chairman, Chief Executive Officer, Chief Financial Officer,
Controller and General Counsel of Borrower, with no duty of inquiry.
"BORROWER" means Response Oncology, Inc., a Tennessee corporation, its
successors and assigns. This definition does not abrogate the requirements set
forth below restricting Borrower's ability to assign any rights under this
Agreement.
"BORROWING NOTICE" has the meaning assigned in Section 2.5.1(b) hereof.
"BUSINESS DAY" means any day on which Agent is open for the conduct of
ordinary business; provided however, that when used in connection with
determining the LIBO Rate, the term "Business Day" shall exclude any day on
which banks are not open for dealings in U.S. Dollar deposits in the London
Interbank Market.
"CAPITAL EXPENDITURES" means expenditures, determined according to GAAP
on a consolidated basis, that would be capitalized and depreciated over more
than one annual accounting period.
"CAPITAL LEASE" means a lease that would be characterized as a financed
sale or purchase under GAAP.
"CHANGE OF CONTROL" means the occurrence, after the date of this
Agreement, of (i) any Person or two or more Persons acting in concert acquiring
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of Borrower (or other securities
convertible into such securities) representing 51% or more of the combined
voting power of all securities thereof entitled to vote in the election of
directors; or (ii) during any period of up to 12 consecutive months, commencing
after the date of this Agreement,
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individuals who at the beginning of such 12-month period were directors of
Borrower ceasing for any reason to constitute a majority of the Board of
Directors thereof unless the Persons replacing such individuals were nominated
by the Board of Directors of Borrower; or (iii) any Person or two or more
Persons acting in concert acquiring by contract or otherwise, or entering into a
contract or arrangement which upon consummation will result in its acquisition
of, or control over, securities of Borrower (or other securities convertible
into such securities) representing 51% or more of the combined voting power of
all securities of Borrower entitled to vote in the election of directors.
"CLOSING DATE" means April 21, 1997.
"CMLTD" means scheduled principal payments in respect of long-term
Liabilities payable during the 12 months following the date of determination.
"COLLATERAL" means all Property now or hereafter securing the
Obligations.
"COMMITMENT" means the amount of each Lender's commitment to fund the
Revolving Credit Loan. Each Lender's several Commitment for the Revolving Credit
Loan shall be as follows:
AmSouth Ten Million and No/100 Dollars ($10,000,000.00)
NationsBank Twenty-Five Million and No/100 Dollars ($25,000,000.00)
Union Planters Ten Million and No/100 Dollars ($10,000,000.00)
"CONSOLIDATED CAPITAL" means Consolidated Net Worth plus Total Funded
Debt.
"CONSOLIDATED CURRENT RATIO" means current assets, determined on a
consolidated basis according to GAAP, divided by current liabilities, determined
on a consolidated basis according to GAAP.
"CONSOLIDATED EBITDA" means the EBITDA of the Borrower, determined on a
consolidated basis, and adjusted as follows with respect to acquisitions. The
positive Acquisition EBITDA of acquired Practices shall be included in
Consolidated EBITDA only if Agent is satisfied, in its reasonable discretion, as
to the accuracy and reliability of the financial information related thereto. In
assessing the accuracy and reliability of such financial information, (i)
unqualified audited financial statements prepared by a regional or national
accounting firm shall be acceptable, and (ii) financial statements reviewed (but
not audited) by such a firm shall also be acceptable unless Agent in good faith
determines that reviewed statements for a particular enterprise are subject to
material doubt as to their accuracy. The negative Acquisition EBITDA for any
Practice shall be included in Consolidated EBITDA, based upon the best
information available. Notwithstanding any other provision hereof, the EBITDA
attributed to Non-Corporate Unperfected Subsidiaries shall not be included in
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Consolidated EBITDA if Non-Corporate Unperfected Subsidiaries would account for
more than twenty percent (20%) of total Consolidated EBITDA.
"CONSOLIDATED ENTITIES" means Borrower and all Subsidiaries of
Borrower, from time to time.
"CONSOLIDATED NET INCOME" means net income, determined on a
consolidated basis according to GAAP.
"CONSOLIDATED NET WORTH" means shareholders' equity, determined on a
consolidated basis according to GAAP.
"CONTROL" or "CONTROLLED" means that a Person has the direct or
indirect power to conduct or govern the policies of another Person, whether this
power exists as a matter of right or through economic compulsion.
"DEFAULT RATE" means the Maximum Lawful Amount of interest that can be
charged.
"EBITDA" means the sum of net income before extraordinary items plus
Interest Expense and expenses for taxes, depreciation and amortization,
determined according to GAAP.
"EFFECTIVE PERIOD" means a period of up to one calendar quarter,
determined as follows. Pursuant to other provisions of this Agreement,
Borrower's financial information for each quarter-end is to be submitted during
the succeeding quarter, except that year-end financial statements are not due
until April 30 of the following year. The performance pricing provisions of this
Agreement reevaluate pricing quarterly, based upon those quarterly financial
results. An Effective Period imposing pricing based upon a quarter other than
the quarter ending December 31 shall begin on the later of (i) the first day of
the third month of the following fiscal quarter, or (ii) if financial statements
are submitted later than required under this Agreement and Agent waives any
Event of Default arising therefrom, five (5) Business Days after the submission
of required financial statements. An Effective Period imposing pricing based
upon the quarter ending December 31 shall begin "as of" the first day of the
third month of the following fiscal quarter, with a retroactive adjustment of
interest to be made when the year-end financial statements are timely submitted,
if necessary to reflect an increase or decrease of the interest rates or fees
based upon performance for the period ending December 31. If year-end financial
statements are not timely submitted, but are nonetheless accepted by Agent and
Agent waives any Event of Default arising therefrom, the Effective Period
imposing pricing based upon the quarter ending December 31 shall begin "as of"
five (5) Business Days after the submission of the required annual financial
statements. The Effective Period shall end on the last day of the second month
of each fiscal quarter following the quarter in which the Effective Period was
scheduled to begin. Therefore, assuming the
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timely delivery of all required financial statements, the Effective Periods will
be determined as follows:
Financial Statements Due By Effective Period
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May 15 June 1 - August 31
August 15 September 1 - November 30
November 15 December 1 - February 28/29
April 30 March 1 (retroactive) - May 31
"ENCUMBRANCE" means any interest in Property in favor of one not the
owner thereof, whether voluntary or involuntary, including, but not limited to,
(i) the lien or security interest arising from a deed of trust, mortgage,
pledge, security agreement, conditional sale, Capital Lease, consignment, or
bailment for security purposes, and (ii) reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases, and other such title encumbrances.
"ENVIRONMENTAL LAWS" means the Environmental Protection Act, the
Resource Conservation and Recovery Act of 1976, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Hazardous Materials
Transportation Act and any other federal, state or municipal law, rule or
regulation relating to air emissions, water discharge, noise emissions, solid or
liquid waste disposal, hazardous or toxic waste or materials, or other
environmental or health matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"ERISA AFFILIATE" means any Person who for purposes of Title IV of
ERISA is a member of Borrower's controlled group, or under common control with
Borrower, within the meaning of Section 414 of the IRC, the regulations
promulgated pursuant thereto and the published revenue rulings issued
thereunder.
"ERISA EVENT" means (i) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, unless the 30-day notice requirement with
respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of
operations at a facility in the circumstances described in Section 4068(f) of
ERISA; (iv) the withdrawal by Borrower or an ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer, as
defined in 4001(a)(2) of ERISA; (v) the failure by Borrower or any ERISA
Affiliate to make a material payment to a Plan required under Section 302(f)(1)
of ERISA; (vi) the adoption of an amendment to a Plan requiring the provision of
initial or additional security to such Plan, pursuant to Section 307 of
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ERISA; or (vii) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, a Plan.
"EVENT OF DEFAULT" means the occurrence of any of the events specified
in Section 8.1 hereof, as to which any requirement for notice or lapse of time
has been satisfied.
"FINANCIAL PROJECTIONS" means the financial projections prepared by
Borrower, a copy of which is attached hereto as Exhibit 1.1.
"FINANCIAL STATEMENTS" means the audited consolidated balance sheet,
income statement, and statement of cash flows for Borrower dated December 31,
1995 and the unaudited consolidated financial statements dated December 31, 1996
delivered by Borrower to Lenders, and all notes thereto.
"FIXED CHARGE COVERAGE RATIO" means (i) Consolidated EBITDA, plus
expenses incurred under Operating Leases, and less a charge of Ten Thousand and
No/100 Dollars ($10,000.00) per year per wholly-owned IMPACT Center and Five
Thousand and No/100 Dollars ($5,000.00) per year for each IMPACT Center that is
not wholly-owned by a Consolidated Entity to allow for maintenance Capital
Expenditures, and less Provider Loans, divided by (ii) the sum of Interest
Expense plus CMLTD (including implied amortization calculated as one-seventh of
the outstanding principal amount of the Revolving Credit Loan as of the end of
the applicable period), plus expenses incurred under Operating Leases. The
values for the fixed charges used in the calculation of this ratio will be
determined on a pro forma basis as though the acquisitions occurring during the
period over which the Fixed Charge Coverage Ratio is being determined had
occurred as of the beginning of that period, with such calculations to take into
account, along with other adjustments that Agent may approve, in its reasonable
discretion, (i) the exclusion of Interest Expense, CMLTD, Capital Lease expense
and Operating Lease expense of the target related to debts, leases and
obligations that were extinguished in connection with the acquisition, (ii) the
inclusion of Interest Expense, CMLTD, Capital Lease expense and Operating Lease
expense obligations of the target that survived the acquisition, and (iii) the
inclusion of Interest Expense, CMLTD, Capital Lease expense and Operating Lease
Expense arising from obligations incurred in connection with the acquisition
(including, but not limited to, added Interest Expense arising from Seller Debt
or from Loans advanced under this Agreement incidental to the acquisition).
"FRAUD AND ABUSE LAWS" means Section 1128B(b) of the Social Security
Act, 42 U.S.C. Section 1320a-7b(b) and Section 1877 of the Social Security Act,
42 U.S.C. Section 1877, as from time to time amended; any successor statute(s)
thereto; all rules and regulations promulgated thereunder; and any other Law
relating to the ownership of medical facilities by providers of medical services
or the referral of patients to medical facilities owned by providers of medical
services.
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"GAAP" means generally accepted accounting principles pronounced by the
Financial Accounting Standards Board or any successor thereto, as in effect from
time to time.
"GOVERNMENTAL AUTHORITY" means any governmental or quasi-governmental
entity, court or tribunal including, without limitation, any department,
commission, board, bureau, agency, administration, service or other
instrumentality of any foreign or domestic governmental entity.
"HAZARDOUS SUBSTANCES" means those substances included from time to
time within the definition of hazardous substances, hazardous materials, toxic
substances, or solid waste under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended, 42 U.S.C. ss. 9601 et seq.;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss. 6901 et seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et seq.; the
Clean Water Act, 33 U.S.C. Section 1251 et. seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et. seq., and in the regulations promulgated
pursuant to such acts and laws; and such other substances that are or become
regulated under any applicable local, state, or federal law or regulation
addressing environmental hazards.
"IMPACT CENTER" means a high dose chemotherapy cancer treatment center
operated by a Consolidated Entity.
"HEDGE AGREEMENT" means any agreement between Borrower and any Lender
now existing or hereafter entered into, which provides for an interest rate or
commodity swap, cap, floor, collar, forward foreign exchange transaction,
currency swap, cross-currency rate swap, currency option, or any combination of,
or option with respect to, these or similar transactions, for the purpose of
hedging Borrower's exposure to fluctuations in interest rates, currency
valuations or commodity prices.
"INTEREST EXPENSE" means (i) expenses for interest (and including the
interest portion of current charges on Capital Leases), (ii) expenses for
Letters of Credit and (iii) expenses for any interest rate swaps or similar
derivative contracts used for the management of interest expense; provided,
however, interest expense on Subordinated Debt shall not be included in Interest
Expense.
"INTEREST PAYMENT DATE" means, (i) as to Prime Rate Loans and Swingline
Loans, the first day of each month, and (ii) as to any LIBOR Loan, the last day
of the Interest Period applicable to such Loan and, in addition, in the case of
a LIBOR Loan with an Interest Period of six (6) or twelve (12) months' duration,
the numerically corresponding day (or, if there is no numerically corresponding
day, on the last day) in the calendar month that is 3, 6, 9 and 12 months, as
applicable, after the commencement of the Interest Period.
"INTEREST PERIOD" means, as to any LIBOR Loan, the period commencing on
(and including) the date of such LIBOR Loan and ending on (but excluding) the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the
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calendar month that is 1, 2, 3, 6 or 12 months thereafter, as Borrower may
elect; provided, however, that (x) if any Interest Period would end on a day
that is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, with respect to LIBOR Loans, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (y) no
Interest Period with respect to any Loan shall end later than the Maturity Date.
Interest shall accrue from and including the first Banking Day of an Interest
Period to but excluding the last Banking Day of such Interest Period.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time.
"LAW" or "LAWS" means all applicable constitutional provisions,
statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions,
rules, regulations, and requirements of all Governmental Authorities.
"LENDERS" means AmSouth, NationsBank and Union Planters, their
respective successors and assigns.
"LETTERS OF CREDIT" has the meaning assigned in Section 2.16 of this
Agreement.
"LETTER OF CREDIT DOCUMENTS" has the meaning assigned in Section 2.16.3
of this Agreement.
"LETTER OF CREDIT LIABILITIES" has the meaning assigned in Section 2.16
of this Agreement.
"LIABILITY" means, with respect to any Person, an obligation,
contingent or otherwise, that would be recorded or accrued under GAAP as a
liability of that Person including, but not limited to, any nonrecourse
obligation secured by Property of that Person.
"LIBO RATE" means, for any given Interest Period with respect to a
given LIBOR Loan, the rate per annum appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term LIBO Rate shall mean, for any
given Interest Period with respect to a given LIBOR Loan, the rate per annum
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates.
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"LIBO RATE RESERVE PERCENTAGE" means the reserve percentage applicable
during any Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for Lenders with respect to liabilities or assets
consisting of or including LIBOR Liabilities having a term equal to such
Interest Period.
"LIBOR LIABILITIES" means deposit liabilities incurred through the
London Interbank Market.
"LIBOR LOAN" means a Loan for which Borrower has elected application of
an interest rate based on the LIBO Rate.
"LOAN" means a loan advanced under the Revolving Credit Loan or, when
the context so requires, advanced as a Swingline Loan.
"LOAN DOCUMENTS" means, collectively, each writing delivered at any
time by Borrower to Lenders or Agent relating to the Revolving Credit Loan, the
Swingline Loans, any Hedge Agreement or to any Letters of Credit.
"MATERIAL ADVERSE CHANGE" means any material and adverse change in the
business, Properties, or operations of the Consolidated Entities.
"MATERIAL ADVERSE EFFECT" means any event or condition which, singly or
in the aggregate with other events or conditions, materially and adversely
affects the business, Properties, or operations of the Consolidated Entities,
considered collectively.
"MATURITY DATE" means March 31, 1999.
"MAXIMUM LAWFUL AMOUNT" means the maximum lawful amount of interest,
loan charges, commitment fees or other charges that may be assessed under
Tennessee law or, if higher, under applicable federal law.
"NATIONSBANK" means NationsBank of Tennessee, N.A., its successors and
assigns.
"NET EQUITY PROCEEDS" means the Net Proceeds of public issuances of
equity securities by Borrower, less any amounts expended to redeem equity
securities or to retire Subordinated Debt.
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"NET PROCEEDS" means gross proceeds of a transaction less reasonable
and customary underwriter and brokerage fees and commissions, the fees and
expenses of trustees and attorneys, and other reasonable and customary closing
fees and expenses.
"NON-CORPORATE SUBSIDIARY" means a Permitted Subsidiary that is other
than a corporation.
"NON-CORPORATE UNPERFECTED SUBSIDIARY" means a Non-Corporate
Subsidiary, Borrower's interest in which is not subject to a perfected security
interest to secure the Obligations.
"NOTE" means any of the Revolving Credit Notes referred to in Section
2.3 hereof.
"OBLIGATIONS" means the obligations of Borrower to Lenders to repay the
Revolving Credit Loan, the obligation of Borrower to the Swingline Lender to
repay the Swingline Loans, and all other obligations of Borrower and the
Consolidated Entities to Lenders and to Agent under this Agreement and the other
Loan Documents.
"OPERATING LEASES" means leases that are not Capital Leases.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ACQUISITION" means the acquisition (by asset purchase, stock
purchase, merger or otherwise, subject to the other requirements of this
definition set forth below) by Borrower or another Consolidated Entity of the
assets of a Practice in the ordinary course of business (it being acknowledged
that medical records and certain other professional assets that are required by
Law to be owned by a physician Provider are not acquired in these transactions),
which purchase meets all of the following criteria:
(a) The form of the acquisition shall have been of the
assets of a Practice (by merger or otherwise) or, if
for stock or other equity interest, the target
acquired shall become a Permitted Subsidiary
concurrently with the closing of the acquisition.
(b) Borrower shall have delivered to Lender, prior to
closing the acquisition, unaudited pro forma
financial statements demonstrating continued
compliance with all covenants in this Agreement
following the acquisition.
(c) Agent shall have issued its written consent to the
acquisition prior to the closing thereof and
following receipt and review of an Acquisition
Certificate in the form attached hereto as Exhibit
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1.2. This consent shall be required of Agent in the
cases of those acquisitions (i) for which the total
consideration is greater than eight (8) times
Acquisition EBITDA over the previous twelve (12)
months (with Acquisition EBITDA determined for the
purpose of this Subsection (i) only based upon the
pro forma financial performance of the acquired
Practice over the twelve (12) -month period,
including adjustment for cost savings that Borrower
can establish will occur immediately following the
transaction), (ii) for which the portion of the
purchase price consisting of cash, Assumed Debt and
Seller Debt exceeds three percent (3%) of Borrower's
total assets as reported by Borrower pursuant to this
Agreement most recently prior to the date of
determination, (iii) in which the Acquisition EBITDA
of the target is negative for either of the previous
two (2) fiscal years, (iv) of more than three (3)
Practices in a single transaction, (v) which,
together with previous acquisitions within a single
calendar year, total seven (7) or more Practices, or
(vi) for which any cash consideration exceeds
sixty-five percent (65%) of the total consideration
paid.
(d) Borrower shall have delivered to Agent such UCC
searches and other lien searches as Agent may request
to evidence compliance with the provisions of this
Agreement.
"PERMITTED ENCUMBRANCES" means all of the following:
(a) Encumbrances securing the payment of any of the
Obligations.
(b) Encumbrances securing taxes, assessments, or other
governmental charges not yet due or which are being
contested in good faith by appropriate action
promptly initiated and diligently conducted, if
Borrower has made reserve therefor as required by
GAAP.
(c) Mechanics', repairmen's, materialmen's,
warehousemen's, landlords' and other like liens
arising by operation of law securing accounts that
are not delinquent.
(d) Encumbrances on real property used by Borrower not
securing monetary obligations, provided that the
Encumbrances are of a type customarily placed on real
property and do not materially impair the value of
the affected property.
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(e) Pledges or deposits in the ordinary course of
business to secure nondelinquent obligations under
xxxxxxx'x compensation or unemployment laws or
similar legislation or to secure the performance of
leases or contracts entered into in the ordinary
course of business.
(e) Purchase Money Security Interests, to the extent
permitted by Section 6.1.7 hereof.
"PERMITTED SUBSIDIARY" means a Subsidiary that (i) is now or hereafter
becomes a Borrower or a guarantor under this Agreement, (ii) is owned, in both
economic interest and voting rights, by Borrower in an amount exceeding 50%,
(iii) is owned by Borrower in a proportion sufficient to allow Borrower to
Control the Subsidiary, including the right to cause the Subsidiary to make
lawful distributions of income, and the financial interest of Borrower therein
is, in Agent's reasonable judgment, freely alienable by Borrower through a
security interest granted therein or otherwise, and (iv) as to which Borrower
has granted to Agent as additional security for the Loans, a first priority
perfected security interest in its stock or other equity interest in the
Subsidiary pursuant to documentation in form and substance acceptable to Agent
and its counsel, with the validity and perfection of the security interest and
other matters as Agent may reasonably require confirmed to Agent by an opinion
of Borrower's outside counsel satisfactory to Agent in all respects, and with
all expenses related to such documentation (including, but not limited to,
filing fees and taxes and the reasonable fees and expenses of Lenders' and
Agent's attorneys) to be paid by Borrower; provided, however, that Borrower need
not grant a perfected security interest in its equity interest in a
Non-Corporate Subsidiary in order for such Subsidiary to be a Permitted
Subsidiary.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization,
government, governmental agency or political subdivision thereof, or any other
form of entity.
"PLAN" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by Borrower or any
Subsidiary and covered by Title IV of ERISA or to which Section 412 of the IRC
applies.
"PRACTICE" means an oncology or hematology treatment center or an
oncology or hematology medical practice (including, but not limited to,
radiation oncology medical practices or treatment centers). Whenever in this
Agreement "Practice" is used in describing an acquisition by Borrower, and if
the reference relates to a medical practice, such reference is to the
acquisition of the assets used in the operation of the Practice that can
lawfully be acquired by Borrower or to the acquisition of an interest in an
entity that owns, as of the time of purchase, only those assets that can be
lawfully acquired by Borrower.
"PRICING VALUES" means the Applicable LIBO Rate Margin, the Applicable
Prime Rate Margin and the Applicable Commitment Fee.
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"PRIME RATE" shall be that rate announced by Agent from time to time as
its Prime Rate and is one of several interest rate bases used by Agent. Lenders
and Agent lend at rates both above and below Agent's Prime Rate and Borrower
acknowledges that the Prime Rate is not represented or intended to be the lowest
or most favorable rate of interest offered by any Lender or Agent.
"PRIME RATE LOAN" means a Loan for which Borrower has elected
application of an interest rate based on the Prime Rate.
"PRO RATA" OR "PRO RATA SHARE" refer to the apportionment among Lenders
according to their respective total Commitments at the time of determination;
provided, however, if at a time of determination there are principal amounts
outstanding under the Revolving Credit Loan, and if any Lender has failed to
fund any unrepaid Loan that was funded by any other Lender or Lenders, this
apportionment shall be determined according to the respective total principal
amounts of the Revolving Credit Loan held by the respective Lenders rather than
by their Commitments.
"PROPERTY" or "PROPERTIES" means any interest in any kind of property,
whether real, personal, or mixed, or tangible or intangible.
"PROVIDER" means an oncologist, hematologist, radiologist or other
medical doctor whose specialty is complementary to the practice of oncology or
hematology and who performs professional services respecting a Practice that is
either managed by Borrower or the assets of which are owned by Borrower.
"PROVIDER LOANS" means obligations of Providers for amounts owed to
Consolidated Entities, whether resulting from loans advanced to the Providers or
obligations otherwise accruing; provided, however, that Provider Loans shall not
include (i) amounts owed by Providers as accounts payable for management or
service fees that arise in the ordinary course of business and which are not
outstanding more than thirty (30) days, or (ii) amounts advanced to Providers in
the ordinary course of business pursuant to Service Agreements (including, but
not limited to, amounts advanced to Providers that are used by Providers to pay
their accounts payable to Borrower for management or service fees described in
(i) above), which advances (x) are not outstanding more than ninety (90) days
and (y) are secured by security interests in accounts receivable of the
Providers which equal or exceed the amount of the related Provider Loans, which
security interests need not be perfected as of the Closing Date or thereafter,
except that such security interests must be perfected within thirty (30) days
after Borrower receives written notice from Agent that the Majority Lenders have
elected to require that the security interests in Provider accounts receivable
be perfected.
"PURCHASE MONEY DEBT" means a Liability that is secured by a Purchase
Money Security Interest.
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"PURCHASE MONEY SECURITY INTEREST" means an Encumbrance on specific
equipment (including the Encumbrance arising under a Capital Lease), provided
that (i) the Liability secured by any such Encumbrance shall have arisen at the
time of the acquisition thereof and shall not exceed 100% of the cost of the
equipment to the entity acquiring the same, and (ii) each such Encumbrance shall
attach only to the equipment acquired with the proceeds of the Liability secured
thereby.
"REIMBURSEMENT OBLIGATIONS" has the meaning assigned in Section 2.16.2
of this Agreement.
"REQUIRED LENDERS" means at least three (3) Lenders holding at least
75% of the total Commitments for the Revolving Credit Loan; provided, however,
if at a time of determination there are principal amounts outstanding under the
Revolving Credit Loan, and if any Lender has failed to fund any unrepaid Loan
that was funded by any other Lender or Lenders, this determination shall be made
according to Lenders holding the required percentage of principal amounts of the
Revolving Credit Loan rather than by the outstanding Commitments.
"REVOLVING CREDIT LOAN" means the revolving credit loan described in
Article II hereof.
"SEAFIELD POSITION" means the equity interest of Seafield Capital
Corporation in Borrower.
"SELLER" means the former owner of a Practice that is acquired by a
Consolidated Entity.
"SELLER DEBT" means a Liability incurred in favor of one or more
Sellers representing part of the purchase price of a Practice.
"SERVICE AGREEMENT" means one of those service or management agreements
now in effect or hereafter entered into by Borrower and Providers in connection
with the management of oncology practices and/or IMPACT Centers.
"SIGNIFICANT CONSOLIDATED ENTITY" means (i) Borrower, or (ii) any
Consolidated Entity other than Borrower that accounts for more than five percent
(5%) of either Borrower's total assets determined on a consolidated basis as of
the end of the most recent fiscal quarter or of Borrower's Consolidated EBITDA
for the most recent fiscal quarter, from time to time; provided, however, that
for as long as any facts that would otherwise constitute Events of Default exist
with respect to more than one Consolidated Entity at any time, such that the
total contribution of all affected Consolidated Entities exceeds more than five
percent (5%) of either Borrower's total assets determined on a consolidated
basis as of the end of the most recent fiscal quarter or of Borrower's
Consolidated EBITDA for the most
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recent fiscal quarter, each Consolidated Entity shall be considered a
Significant Consolidated Entity.
"SOLVENT" shall mean, as to any Person, that as of any date of
determination, (i) the then fair value of the assets of such Person is (a)
greater than the then total amount of liabilities (including subordinated
liabilities) of such Person and (b) greater than the amount that will be
required to pay such Person's probable liability on such Person's then existing
debts as they become absolute and matured, (ii) such Person's capital is not
unreasonably small in relation to its business, and (iii) such Person has not
incurred and does not intend to incur, or believe or reasonably should believe
that it will incur, debts beyond its ability to pay such debts as they become
due.
"SUBORDINATED DEBT" means any unsecured Liability that is subordinated
as to payment, liquidation, collection and collection in bankruptcy to the
obligations of Borrower to Lenders pursuant to subordination documentation in
form and substance acceptable to Agent and which has a maturity of no earlier
than three (3) months following the latest applicable Maturity Date.
"SUBSIDIARY" means any present or future corporation, joint venture,
limited liability company, or partnership, at least a majority of whose
outstanding voting stock or other voting securities or interests shall at the
time be owned directly or indirectly by Borrower.
"SWINGLINE BORROWING NOTICE" has the meaning assigned in Section
2.17.3(b) hereof.
"SWINGLINE LENDER" shall mean NationsBank of Tennessee, N.A.
"SWINGLINE LOAN" means a loan advanced under Section 2.17 hereof.
"SWINGLINE NOTE" shall mean the promissory note of the Borrowers in
substantially the form of Exhibit 1.3 hereto executed and delivered to the
Swingline Lender, together with any amendments, modifications and supplements
thereto and restatements thereof.
"TAXES" means all taxes and assessments, whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, which at any time may be
assessed, levied, confirmed or imposed on the Consolidated Entities or on any of
their properties or assets or any part thereof or in respect of any of their
franchises, businesses, income or profits.
"TOTAL FUNDED DEBT" means all obligations for borrowed money,
including, but not limited to, advances under the Revolving Credit Loan, all
Seller Debt (except for Subordinated Debt) and all Capitalized Leases, whether
short-term or long-term, and including
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all stated and undrawn amounts under Letters of Credit. Subordinated Debt is not
included in Total Funded Debt.
"UCC" means the Uniform Commercial Code as adopted in Tennessee, as it
may be amended from time to time.
"UNION PLANTERS" means Union Planters National Bank, its successors and
assigns.
"UNMATURED DEFAULT" means any event or condition that, but for the
giving of any required notice by Agent and/or the passing of time, would be an
Event of Default hereunder.
1.2 Terms Generally.
1.2.1 Computations; Accounting Principles. Where the character or
amount of any asset or liability or item of income or expense is
required to be determined, or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement,
such determination or calculation, to the extent applicable and except
as otherwise specified in this Agreement, shall be made in accordance
with GAAP. If a change in GAAP after the date of this Agreement would
require a change affecting the calculation of any requirement under
this Agreement, then Agent and Borrower shall negotiate in good faith
for the amendment of the affected requirements; provided, however,
until and unless such an amendment is agreed upon, the requirements of
this Agreement shall remain as written and compliance therewith shall
be determined according to GAAP as in effect prior to the change.
1.2.2 Gender and Number. Words used herein indicating gender or
number shall be read as context may require.
1.2.3 References Include Successors. References herein to specific
Laws, regulatory bodies, parties or agreements also refer to any
successor Laws, regulatory bodies, and parties, and to all
modifications, extensions, renewals and restatements of agreements.
1.2.4 References to This Agreement. "Herein," "hereof" and words of
similar import refer to this Agreement as a whole and not to any
particular provision hereof, unless otherwise expressly stated.
1.2.5 Limitations of Knowledge. Certain representations and
warranties are made herein the Best of Borrower's Knowledge. These
limitations reflect only Borrower's special interest in disclosing that
no targeted diligence has been performed as to these matters in
connection with this
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Agreement. Should any matter so represented or warranted be discovered
to be false, then, irrespective of the knowledge qualification, the
representation or warranty shall be deemed breached and shall
constitute an Event of Default or Unmatured Default hereunder, as may
apply.
II. LOANS
Concurrently with the execution of this Agreement, Lenders agree on a
several basis, and not on a joint basis, in accordance with their respective
Commitments, to make the Revolving Credit Loan to Borrower, under the following
terms and conditions:
2.1 Amount of Revolving Credit Loan. The principal indebtedness of
Borrower to Lenders under the Revolving Credit Loan shall not exceed Forty-Five
Million and No/100 Dollars ($45,000,000.00) less the outstanding principal
balance of Swingline Loans outstanding from time to time.
2.2 Use of Proceeds of Revolving Credit Loan. The proceeds of the
Revolving Credit Loan shall be used by Borrower for (i) Permitted Acquisitions,
(ii) other Capital Expenditures, (iii) the development of IMPACT Centers and of
ancillary services to be offered by Providers, (iv) as to up to Ten Million and
No/100 Dollars ($10,000,000.00), for working capital purposes.
2.3 Revolving Credit Loan Notes. Borrower's obligations under the
Revolving Credit Loan shall be evidenced by Revolving Credit Loan Notes in favor
of the respective Lenders in the form included as Exhibit 2.3 hereto payable to
each Lender for its Commitment.
2.4 Separate Commitments of Lenders. Borrower acknowledges that each
Lender's commitment to fund its portion of the Revolving Credit Loan is made by
each Lender severally, and neither Agent nor any Lender shall be liable for the
failure of another Lender to timely perform under this Agreement.
2.5 Advances of Loans. Subject to the terms and conditions of this
Agreement, Borrower may borrow, repay and reborrow Loans under the Revolving
Credit Loan, provided that the outstanding principal balance of the Revolving
Credit Loan shall not at any time exceed the amounts permitted under Section 2.1
above, and further provided that no new borrowings may be obtained after January
1, 1997, if amortization of the Revolving Credit Loan is then required under
Section 2.10 hereof. Loans shall be disbursed as follows:
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2.5.1 Loans Advanced Pursuant to Borrowing Notices.
2.5.1(a) Applicability. Loans under the Revolving
Credit Loan may be LIBOR Loans, Prime Rate Loans, or a
combination thereof, and the funding thereof shall be subject
to this Section 2.5.1.
2.5.1(b) Borrowing Notices. As long as Borrower meets
the conditions for funding stated in this Agreement, Borrower
may submit requests for Loans ("Borrowing Notices") to Agent.
All requests shall be made in writing (or by telephone,
subject to such security procedures as Agent may require from
time to time, provided that all telephonic notices shall be
confirmed by written Borrowing Notices within one (1) Business
Day) and shall specify the proposed disbursement date for the
requested Loan; the amount of the Loan; the purpose of the
Loan (characterized in accordance with Section 2.2 above); the
type of Loan, i.e., LIBOR Loan or Prime Rate Loan; and if a
LIBOR Loan, the designated Interest Period. Each Borrowing
Notice shall irrevocably obligate Borrower to accept the Loan
requested thereby. Borrowing Notices shall be in the form of
Exhibit 2.5.1(b) hereto or such other form as Agent may from
time to time require.
2.5.1(c) Funding of Loans. Lenders shall fund their
respective portions of requested Loans on the next following
Banking Day after the Banking Day of Agent's receipt of the
Borrowing Notice, in the case of Prime Rate Loans, and on the
second (2nd) Banking Day following the Banking Day of Agent's
receipt of the Borrowing Notice, in the case of LIBOR Loans.
All funds shall be disbursed directly into an account
maintained by Borrower with Agent. Borrower agrees that if any
Lender elects to fund any requested Loan(s) sooner after
requested than is required hereunder, the Lender may
nevertheless use the entire response period allowed hereunder
upon receipt of any subsequent request, at the Lender's sole
option.
2.5.1(d) Prime Rate Loan Limitations. Individual
Prime Rate Loans shall be in the minimum amount of One Hundred
Thousand and No/100 Dollars ($100,000.00) each. Any number of
Prime Rate Loans may be outstanding at any one time.
2.5.1(e) LIBOR Loan Limitations. Individual LIBOR
Loans shall be in the minimum amount of Five Hundred Thousand
and No/100 Dollars ($500,000.00) each. No more than three (3)
LIBOR Loans may be outstanding under the Revolving Credit
Loan.
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2.5.1(f) Additional Limitation on LIBOR
Interest Periods. Notwithstanding anything to the
contrary in this Agreement, if an Unmatured Event of
Default or an Event of Default shall have occurred
and be continuing, no additional LIBOR Loans may be
created or continued and no Prime Rate Loan may be
converted into a LIBOR Loan.
2.5.2 Conversion of Loans. Borrower shall have the
right, on prior irrevocable written notice to Agent given two
(2) Banking Days prior to the date of any requested
conversion, to convert any Prime Rate Loan or LIBOR Loan into
a Loan of another type, or to continue any LIBOR Loan for
another Interest Period, subject in each case to the
following:
2.5.2(a) Application of Loans. Each
conversion shall be effected by applying the proceeds
of the new LIBOR Loan and/or Prime Rate Loan, as the
case may be, to the Loan (or portion thereof) being
converted.
2.5.2(b) Notices of Conversions. Each
notice pursuant to this 2.5.2(b) shall be irrevocable
and shall refer to this Agreement and specify the
identity and principal amount of the particular Loan
that Borrower requests be converted or continued; if
such notice requests conversion, the date of such
conversion (which shall be a Business Day); and if a
Loan is to be converted to a LIBOR Loan or a LIBOR
Loan is to be continued, the Interest Period with
respect thereto. No LIBOR Loan shall be converted at
any time other than at the end of the Interest Period
applicable thereto, except in accordance with Section
2.11 hereof. Conversion notices shall be in the form
attached as Exhibit 2.5.1(b) hereto.
2.5.3 Absence of Election. If Borrower fails to
give Agent notice to continue any LIBOR Loan for a subsequent
period, such LIBOR Loan (unless repaid) shall automatically be
converted into a Prime Rate Loan. If Borrower fails to specify
in any Borrowing Notice the type of borrowing or, in the case
of a LIBOR Loan, the applicable Interest Period, Borrower will
be deemed to have requested a Prime Rate Loan.
2.5.4 Implied Representations Upon Request for
Loan. Upon making any request for any Loan, Borrower shall be
deemed to have warranted to Agent and Lenders that all
conditions to funding set forth in Article III hereof are
satisfied.
2.5.5 Advance Not Waiver. Either Lender's making
of any Loan that it is not obligated to make under any
provision of Article III hereof or any other
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provision hereof shall not be construed as a waiver of the
Lenders' right to withhold future Loans, declare an Event of
Default, or otherwise demand strict compliance with this
Agreement, acting through Agent as permitted by the terms
hereof.
2.5.6 Draws by Debit Memorandum. Agent may cause
Lenders to draw amounts that may be available under the
Revolving Credit Loan to pay any Obligation that is not
otherwise timely paid.
2.6 Interest. Interest shall accrue on each Loan as
follows:
2.6.1 Prime Rate Loans. Interest shall accrue on each
Prime Rate Loan at an annual rate equal to the Prime Rate plus
the Applicable Prime Rate Margin, said rate to change
contemporaneously with any change in the Prime Rate.
2.6.2 LIBOR Loans. Interest shall accrue on each
LIBOR Loan at a rate equal to the LIBO Rate for the selected
Interest Period plus the Applicable LIBO Rate Margin.
2.6.3 Additional Interest on LIBOR Loans. In addition
to the interest described above, Borrower shall pay to
Lenders, if and so long as Lenders shall be required under
regulations of the Board of Governors of the Federal Reserve
System to maintain reserves with respect to liabilities or
assets consisting of or including LIBOR Liabilities,
additional interest on the unpaid principal amount of each
LIBOR Loan, from the date of such advance until said principal
amount is paid in full, at an interest rate per annum equal at
all times to the remainder obtained by subtracting (i) the
LIBO Rate for the Interest Period from (ii) the rate obtained
by dividing the LIBO Rate by a percentage equal to 100% minus
the LIBO Rate Reserve Percentage for such Interest Period.
This additional interest shall be payable on each date on
which interest is payable. The amount of additional interest
shall be determined by each Lender, who shall notify Borrower
and Agent thereof and whose determination shall be conclusive,
absent manifest error.
2.6.4 Calculation of Interest. Interest for both
Prime Rate Loans and LIBOR Loans shall be computed on the
basis of a 360-day year counting the actual number of days
elapsed. Interest shall accrue on the Business Day a Loan is
extended and shall accrue through the Banking Day prior to the
Banking Day on which it is repaid.
2.6.5 Default Rate. Notwithstanding the foregoing,
upon the occurrence of an Event of Default and during the
continuation of such Event of Default, interest shall be
charged at the Default Rate, regardless of whether
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Lenders have elected to exercise any other remedies available
to Lenders, including, without limitation, acceleration of the
maturity of the outstanding principal of the Revolving Credit
Loan. All such interest shall be paid without demand on the
Interest Payment Dates applicable to Prime Rate Loans.
2.6.6 Payment of Interest. Interest for Prime Rate
Loans and LIBOR Loans shall be due and payable in arrears,
without notice, on each Interest Payment Date.
2.6.7 Usury Savings Provision. It is the intention of
the parties that all charges under or in connection with this
Agreement and the Obligations, however denominated, and
including (without limitation) all interest, commitment fees,
late charges and loan charges, shall be limited to the Maximum
Lawful Amount. Such charges hereunder shall be characterized
and all provisions of the Loan Documents shall be construed as
to uphold the validity of charges provided for therein to the
fullest possible extent. Additionally, all charges hereunder
shall be spread over the full permitted term of the
Obligations for the purpose of determining the effective rate
thereof to the fullest possible extent, without regard to
prepayment of or the right to prepay the Obligations. If for
any reason whatsoever, however, any charges paid or contracted
to be paid in respect of the Obligations shall exceed the
Maximum Lawful Amount, then, without any specific action by
Lenders, Agent or Borrower, the obligation to pay such
interest and/or other charges shall be reduced to the Maximum
Lawful Amount in effect from time to time, and any amounts
collected by Lenders that exceed the Maximum Lawful Amount
shall be applied to the reduction of the principal balance of
the Obligations and/or refunded to Borrower so that at no time
shall the interest or loan charges paid or payable in respect
of the Obligations exceed the Maximum Lawful Amount. This
provision shall control every other provision herein and in
any and all other agreements and instruments now existing or
hereafter arising between Borrower and Lenders with respect to
the Obligations.
2.7 Alternate Rate of Interest if LIBOR Unavailable. In the
event, and on each occasion, that on the date of commencement of any Interest
Period for a LIBOR Loan, a Lender shall have determined (i) that dollar deposits
in the amount of the requested principal amount of such LIBOR Loan are not
generally available in the London Interbank Market; (ii) that the rate at which
such dollar deposits are being offered will not adequately and fairly reflect
the cost to the Lender of making or maintaining such LIBOR Loan during such
Interest Period; or (iii) that reasonable means do not exist for ascertaining
the LIBO Rate, the Lender shall, as soon as practicable thereafter, give written
or telephonic notice of such determination to Borrower. In the event of any such
determination, any request by Borrower for a LIBOR Loan under this Agreement
shall, until the circumstances giving rise to such notice no longer exist, be
deemed to be a request for a Prime Rate Loan. Each determination by the Lender
hereunder shall be conclusive absent manifest error.
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2.8 Change in Circumstances.
2.8.1 Imposition of Requirements. Notwithstanding any
other provision herein, if after the date of this Agreement
any change in applicable Laws or in the interpretation or
administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or
not having the force of Law) shall change the basis of
taxation of payments to a Lender under any LIBOR Loan made by
the Lender or any other fees or amounts payable hereunder
(other than taxes imposed on the overall net income, gross
receipts or added value of a Lender by the country in which
the Lender is located, or by the jurisdiction in which a
Lender has its principal office, or by any political
subdivision or taxing authority therein), or shall impose,
modify or deem applicable any reserve requirement, special
deposit, insurance charge (including FDIC insurance on LIBOR
Liabilities) or similar requirement against assets of,
deposits with or for the account of, or credit extended by, a
Lender or shall impose on a Lender or the London Interbank
Market any other condition affecting this Agreement or LIBOR
Loans made by a Lender, and the result of any of the foregoing
shall be to increase the cost to the Lender of making or
maintaining its LIBOR Loan or to reduce the amount of any sum
received or receivable by a Lender hereunder (whether of
principal, interest or otherwise) in respect thereof by an
amount deemed by the affected Lender to be material, then
Borrower will pay to such Lender such additional amount or
amounts as will compensate the Lender for such additional
costs of reduction.
2.8.2 Other Changes. If either (i) the introduction
of, or any change in, or in the interpretation of, any United
States or foreign Law; or (ii) compliance with any directive,
guidelines or request from any central bank or other United
States or foreign Governmental Authority (whether or not
having the force of law) promulgated or made after the date
hereof, affects or would affect the amount of capital required
or expected to be maintained by a Lender (or any lending
office of a Lender) or any corporation directly or indirectly
owning or controlling a Lender (or any lending office of a
Lender) based upon the existence of this Agreement, and the
Lender shall have determined that such introduction, change or
compliance has or would have the effect of reducing the rate
of return on the Lender's capital or on the capital of such
owning or controlling corporation as a consequence of its
obligations hereunder (including its commitment) to a level
below that which the Lender or such owning or controlling
corporation could have achieved but for such introduction,
change or compliance (after taking into account that Lender's
policies or the policies of such owning or controlling
corporation, as the case may be, regarding capital adequacy)
by an amount deemed by the Lender (in its sole discretion) to
be material, then, from time to time, Borrower shall pay to
the Lender such additional amount or amounts as will
compensate the Lender for such reduction
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attributable to making, funding and maintaining its commitment
and Loans hereunder.
2.8.3 Computation of Amounts. A certificate of a
Lender setting forth the basis and method of computation of
such amount or amounts specified in Sections 2.11.1 and 2.11.2
hereof as shall be necessary to compensate the Lender (or its
participating banks) as specified above, as the case may be,
shall be delivered to Borrower and shall be conclusive absent
manifest error; provided however, that Borrower shall be
responsible for compliance herewith and the payment of
increased costs only to the extent that (i) any change in Laws
giving rise to increased costs occurs after the date of this
Agreement; and (ii) the Lender gives notice of the change
giving rise to increased costs within one hundred eighty (180)
Business Days after the Lender has, or with reasonable
diligence should have had, knowledge of the change, or else
Lender can only collect costs from and after the date of the
notice. Subject to the foregoing, Borrower shall pay the
affected Lender the amount shown as due on any such
certificate within ten (10) Business Days after its receipt of
such certificate.
2.8.4 No Duty to Contest. The protection of this
Section 2.8 shall be available to a Lender regardless of any
possible contention of invalidity or inapplicability of the
Law or condition that shall have been imposed. Should a Lender
assess any charge to Borrower under this Section 2.8, and
provided that Borrower pays the assessment to the Lender,
Borrower may thereafter undertake, at Borrower's own expense,
any contest of the matters giving rise to the charge that may,
in the opinion of Borrower's independent counsel issued to the
affected Lender, and concurred in by counsel to the Lender,
have a reasonable chance of success, provided further that the
contest would not require the assertion of any position
contrary to a position taken by the Lender generally with
taxing authorities or any other involved parties and that
there does not exist any other circumstance that would
disadvantage the Lender in the event of such contest, as the
affected Lender may determine in its discretion. The affected
Lender shall offer reasonable participation to Borrower for
the purpose of enabling Borrower to pursue the contest of such
issue, with all expenses, including fees and expenses of the
affected Lender's counsel, to be paid by Borrower.
2.9 Change in Legality of LIBOR Loans. Notwithstanding
anything to the contrary herein contained, if any change in any Law or in
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for a Lender to
make or maintain any LIBOR Loan or to give effect to its obligations as
contemplated hereby, then, by written notice to Borrower, the Lender may (i)
declare that LIBOR Loans will not thereafter be made by the Lender hereunder,
whereupon Borrower shall be prohibited from requesting LIBOR Loans from the
Lender hereunder unless such declaration is subsequently withdrawn; and (ii)
require that all outstanding LIBOR Loans made
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by it be converted to Prime Rate Loans, in which event (a) all such LIBOR Loans
shall be automatically converted to Prime Rate Loans (but without imposition of
any additional charge that would normally become due under Section 2.8 hereof)
as of the effective date of such notice, and (b) all payments and prepayments of
principal that would otherwise have been applied to repay the converted LIBOR
Loans shall instead be applied to repay the Prime Rate Loans resulting from the
conversion of such LIBOR Loans. For purposes of this Section 2.9, a notice to
Borrower by the Lender pursuant to (a) above shall be effective, if lawful, on
the last day of the then current Interest Period; in all other cases, such
notice shall be effective on the date of receipt by Borrower.
2.10 Principal Repayment. All remaining principal outstanding
under the Revolving Credit Loan shall become due on the Maturity Date or the
earlier acceleration of the Revolving Credit Loan in accordance with the terms
of this Agreement.
2.11 Prepayment of LIBOR Loans.
2.11.1 Notice of LIBOR Loan Prepayment. Borrower may,
upon two (2) Banking Days' prior written notice to Agent, and
upon payment of all applicable premiums set forth in Section
2.11.3 hereof, prepay any outstanding LIBOR Loans prior to any
Interest Payment Date for such LIBOR Loans, in whole or in
part. Each notice of prepayment of any LIBOR Loan shall
specify the date and amount of such prepayment and shall be
irrevocable.
2.11.2 Amount of LIBOR Loan Prepayment. Each partial
prepayment of any LIBOR Loan shall be in an aggregate
principal amount which is the lesser of (i) the then
outstanding principal balance of the one or more LIBOR Loans
to be prepaid, or (ii) Five Hundred Thousand and No/100
Dollars ($500,000.00) or an integral multiple thereof.
Interest on the amount prepaid accrued to the prepayment date
shall be paid on such date.
2.11.3 LIBOR Loan Prepayment Premium. Upon prepayment
of any LIBOR Loan on a date other than the relevant Interest
Payment Date for such borrowing, Borrower shall pay to
Lenders, in addition to all other payments then due and owing
Lenders, premiums which shall be equal to an amount, if any,
reasonably determined by Agent to be the difference between
the rate of interest then applicable to the relevant LIBOR
Loan and the yield Lenders would receive upon reinvestment of
so much of the relevant LIBOR Loans as is prepaid for the
remainder of the term of the relevant LIBOR Loan or Loans.
Anything in this Section 2.11.3 to the contrary
notwithstanding, the premiums payable upon any such prepayment
shall not exceed the amount, if any, determined by Agent to be
the difference between the rate of interest then applicable to
the relevant LIBOR Loan and the yield that Lenders could
receive upon reinvestment in the "Floor Reinvestment" of so
much of the relevant LIBOR Loan as is prepaid for the
remainder of the term of the relevant LIBOR
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Loan. For purposes hereof, "Floor Reinvestment" shall mean an
investment for the time period from the date of such
prepayment to the end of the relevant Interest Period
applicable to such LIBOR Loan at an interest rate per annum
equal to the federal funds "offered" rate as published in the
Wall Street Journal on the date of such prepayment. All
determinations, estimates, assumptions, allocations and the
like required for the determination of such premiums shall be
made by Agent in good faith and shall be presumed correct
absent manifest error.
2.12 Prepayment of Prime Rate Loans. Borrower may at any time
prepay any outstanding Prime Rate Loans prior to the Maturity Date in whole or
in part without premium or penalty.
2.13 Fixed Commitment Fees. Upon the execution of this
Agreement, Borrower shall pay commitment fees (i) to AmSouth, in the amount of
Sixty-Five Thousand and No/100 Dollars ($65,000.00), (ii) to Union Planters, in
the amount of Sixteen Thousand Two Hundred Fifty and No/100 Dollars
($16,250.00), and (iii) to NationsBank, in the amount of Thirty-Two Thousand
Five Hundred and No/100 Dollars ($32,500.00). These commitment fees are not
refundable or proratable.
2.14 Periodic Commitment Fee Based on Use of Facilities.
Borrower shall pay to Agent for distribution to Lenders Pro Rata an additional
commitment fee for the unused portion of the Revolving Credit Loan. This fee
shall be determined by applying the Applicable Commitment Fee to the average
daily unused balance of the Revolving Credit Loan. The commitment fee shall be
paid in arrears on each Interest Payment Date applicable to Prime Rate Loans.
This commitment fee is not refundable or proratable.
2.15 Agent's Fee. On the Closing Date, and on each subsequent
anniversary thereof excepting only an anniversary corresponding to the Maturity
Date, Borrower shall pay to Agent a fee of Five Thousand and No/100 Dollars
($5,000.00) for each Lender (inclusive of Agent) then a party to this Agreement.
If any additional Lender becomes a party to this Agreement between anniversary
dates as to increase the total number of Lenders, a like fee shall be paid to
Agent with respect to that Lender upon its entry, prorated to reflect the
balance of the year remaining until the next anniversary of the Closing Date. On
the Closing Date, Borrower shall further pay to Agent an arrangement fee of
Sixty-Seven Thousand Five Hundred and No/100 Dollars ($67,500.00).
2.16 Letters of Credit. Subject to the terms and conditions of
this Agreement, Lenders' respective Commitments for the Revolving Credit Loan
may be utilized, upon the request of Borrower, for the issuance by NationsBank
of letters of credit (the "Letters of Credit") for the account of Borrower for
uses that would be permitted for the Revolving Credit Loan; provided that in no
event shall (i) the aggregate amount of all stated and undrawn amounts under
Letters of Credit (the "Letter of Credit Liabilities"), together with the
aggregate principal amount of the Loans advanced under the Revolving Credit
Loan, exceed
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the amount stated in Section 2.1 hereof, (ii) the outstanding aggregate amount
of all Letter of Credit Liabilities together with all advances for working
capital purposes exceed in the aggregate Ten Million Five and No/100 Dollars
($10,000,000.00), or (iii) the expiration date of any Letter of Credit extend
beyond the Maturity Date applicable to the Revolving Credit Loan. The following
additional provisions shall apply to Letters of Credit:
2.16.1 Procedure for Issuance. Borrower shall give
Agent at least three (3) Business Days' irrevocable prior
notice (effective upon receipt) specifying the Business Day
(which shall be no later than thirty (30) days preceding the
Maturity Date) each Letter of Credit is to be issued and
describing in reasonable detail the proposed terms of such
Letter of Credit (including its beneficiary) and the nature of
the transactions or obligations proposed to be supported.
Borrower shall be the account party for each Letter of Credit,
including Letters of Credit issuable to a beneficiary having a
claim or potential claim against a Subsidiary of Borrower.
2.16.2 Participation Among Lenders. On each day
during the period commencing with the issuance by NationsBank
of any Letter of Credit and until such Letter of Credit shall
have expired or been terminated or, if drawn upon, until the
resulting obligations of reimbursement (the "Reimbursement
Obligations") have been satisfied in full by Borrower (whether
by a borrowing under this Agreement or otherwise), the
Commitment of each Lender shall be deemed to be utilized for
all purposes of this Agreement (including, but not limited to,
the calculation of availability and of the nonuse fee) in an
amount equal to such Lender's Pro Rata Share of the Letter of
Credit Liabilities associated with such Letter of Credit. Each
Lender (other than NationsBank) agrees that, upon the issuance
of any Letter of Credit, it shall automatically be deemed to
have acquired a participation in NationsBank's liability under
such Letter of Credit in an amount equal to such Lender's Pro
Rata Share of such liability, and each Lender (other than
NationsBank) thereby shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and
shall be unconditionally obligated to NationsBank to pay and
discharge when due, its Pro Rata Share of NationsBank's
liability under such Letter of Credit.
2.16.3 Reimbursement Obligation. Upon receipt from
the beneficiary of any Letter of Credit of any demand for
payment under such Letter of Credit, NationsBank shall
promptly notify Borrower of the amount to be paid by
NationsBank as a result of such demand and the date on which
payment is to be made by NationsBank to such beneficiary in
respect of such demand. Borrower hereby unconditionally agrees
to pay and reimburse Agent for the account of NationsBank and
the other Lenders Pro Rata with respect to the amount of each
demand for payment under such Letter of Credit at or prior to
the date on which payment is to be made by NationsBank to the
beneficiary under such Letter of
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Credit, without presentment, demand, protest or other
formalities of any kind. Any amounts not so paid or borrowed
as set forth in Section 2.16.4 below shall bear interest at
the rate(s) specified in the documents relating to the
issuance of the Letter of Credit (the "Letter of Credit
Documents") or, if higher, at the rate(s) specified on the
Notes (including the Default Rate, if applicable).
2.16.4 Means of Reimbursement. Forthwith upon its
receipt of a notice referred to in Section 2.16.3 hereof,
Borrower shall advise Agent whether or not Borrower intends to
obtain a Loan to finance its obligation to reimburse
NationsBank for the amount of the related demand for payment
and, if it does, submit a notice of such borrowing as provided
in this Agreement. In the event that Borrower fails to so
advise Agent, and if Borrower fails to reimburse NationsBank
for a demand for payment under a Letter of Credit by the date
of such payment, Agent shall give each Lender prompt notice of
the amount of the demand for payment, specifying such Lender's
Pro Rata Share of the amount of the related demand for
payment, and Borrower shall be deemed in default hereunder for
breaching Section 2.16.3 above.
2.16.5 Payments by Lenders. Each Lender (other than
NationsBank) shall pay to Agent for the account of NationsBank
in Dollars and in immediately available funds, such Lender's
Pro Rata Share of any payment under a Letter of Credit upon
notice by Agent to such Lender requesting such payment and
specifying such amount as provided in Section 2.16.4. Each
such Lender's obligation to make such payments to Agent for
the account of NationsBank under this Section 2.16.5, and
NationsBank's right to receive the same, shall be absolute and
unconditional and shall not be affected by any circumstance
whatsoever, including the failure of any other Lender to make
its payment under this Section 2.16.5, the financial condition
of Borrower, the existence of any Unmatured Default or Event
of Default or the termination of the Commitments. Each such
payment to NationsBank shall be made without any offset,
abatement, withholding or reduction whatsoever; provided,
nothing contained in the foregoing shall limit NationsBank's
liability for its gross negligence or willful misconduct in
improperly honoring a draft drawn under a Letter of Credit.
2.16.6 Settlement Among Lenders. Upon the making of
each payment by a Lender to NationsBank pursuant to Section
2.16.5 above in respect of any Letter of Credit, such Lender
shall, automatically and without any further action on the
part of Agent, NationsBank or such Lender, acquire (i) a
participation in any amount equal to such payment in the
Reimbursement Obligation owing to NationsBank by Borrower
under this Agreement and under the Letter of Credit Documents
relating to such Letter of Credit and (ii) a participation in
a percentage equal to such Lender's Pro Rata Share in any
interest or other amounts payable by Borrower under such
Letter of Credit Documents and the other Loan Documents in
respect of such Reimbursement Obligation. Upon
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receipt by NationsBank from or for the account of Borrower of
any payment in respect of any Reimbursement Obligation or any
such interest or other amount (including by way of set-off or
application of proceeds of any collateral security)
NationsBank shall promptly pay to Agent for the account of
each Lender who shall have previously assumed a participation
in such payment under clause (ii) above, such Lender's Pro
Rata Share of such payment, each such payment by NationsBank
to be made in the same money and funds in which received by
NationsBank. In the event any payment received by NationsBank
and so paid to Lenders is rescinded or must otherwise be
returned by NationsBank, each Lender shall, upon the request
of NationsBank (through Agent), repay to NationsBank (through
Agent) the amount of such payment paid to such Lender, with
interest at the rate specified in Section 2.16.10.
2.16.7 Letter of Credit Fee. Borrower shall pay to
Agent for the account of each Lender a letter of credit fee in
respect of each Letter of Credit on the daily average undrawn
face amount of such Letter of Credit for the period from and
including the date of issuance of such Letter of Credit to and
including the date such Letter of Credit is drawn in full,
expires or is terminated (such fee to be non-refundable, to be
paid in arrears on the first day of each calendar quarter and
on the Maturity Date applicable to the Revolving Credit Loan
and to be calculated, for any day, after giving effect to any
payments made under such Letter of Credit on such day) in an
amount equal to the Applicable LIBO Rate Margin(s) in effect
during the relevant period. All calculations of Letter of
Credit fees shall be based on a 360 day year counting the
actual number of elapsed days.
2.16.8 Letter of Credit Information. Upon the request
of any Lender from time to time, NationsBank shall deliver any
information reasonably requested by such Lender with respect
to each Letter of Credit then outstanding.
2.16.9 Conditions Relating to Letters of Credit. The
issuance by NationsBank of each Letter of Credit shall be
subject, in addition to the conditions precedent set forth in
Article III hereof (as though the issuance of the Letter of
Credit were the making of a Loan), to the conditions precedent
that (i) such Letter of Credit shall be in such form, contain
such terms and support such transactions as shall be
satisfactory to NationsBank consistent with its then current
practices and procedures with respect to letters of credit of
the same type and (ii) Borrower shall have executed and
delivered such applications, agreements and other instruments
relating to such Letter of Credit as NationsBank shall have
reasonably requested consistent with its then current
practices and procedures with respect to letters of credit of
the same type; provided that in the event of any conflict
between any such application, agreement or other instrument
and the provisions of this Agreement, the provisions of this
Agreement shall control.
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2.16.10 Payments Among Lenders. In the event that any
Lender fails to pay any amount required to be paid pursuant to
this Section 2.16 when due, such Lender shall pay interest to
NationsBank (through Agent) on such amount from and including
such due date to but excluding the date such payment is made
(i) during the period from and including such due date to but
excluding the date three Business Days thereafter, at a rate
per annum equal to the federal funds rate (as in effect from
time to time as determined by Agent) and (ii) thereafter, at a
rate per annum equal to the Prime Rate plus 2.0%.
2.16.11 Modifications. The issuance by NationsBank of
any modification or supplement to any Letter of Credit shall
be subject to the same conditions applicable under this
Section 2.16 to the issuance of new Letters of Credit, and no
such modification or supplement shall be issued unless either
(x) the respective Letter of Credit as affected by such action
would have complied with such conditions had it originally
been issued in such modified or supplemented form or (y) each
Lender shall have consented to such modification or
supplement.
2.16.12 Absolute Obligations of Borrower. The
obligations of Borrower under this Section 2.16 shall be
unconditional and absolute and shall not be affected, modified
or impaired, upon the happening at any time or from time to
time of any event, including any of the following, whether or
not with notice to or the consent of Borrower:
2.16.12(a) the compromise, settlement,
release, modification, amendment (whether material or
otherwise) or termination of any or all of the
obligations, conditions covenants or agreements of
any Person in respect of any of the Loan Documents;
2.16.12(b) the occurrence, or the failure
by Agent, any Lender or any other Person to give
notice to Borrower of the occurrence, of any Event of
Default or any default under any of the other Loan
Documents;
2.16.12(c) the waiver of the payment,
performance or observance of any of the obligations,
conditions, covenants or agreements of any Person
contained in any of the Loan Documents;
2.16.12(d) the extension of the time for
performance of any other obligations, covenants or
agreements of any Person under or arising out of any
of the Loan Documents;
2.16.12(e) the taking or the omission of any
of the actions referred to in any of the Loan
Documents;
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2.16.12(f) any failure, omission or delay
on the part of Agent, any Lender, Borrower or the
beneficiary of any Letter of Credit to enforce,
assert or exercise any right, remedy, power or
privilege conferred by this Agreement or any of the
Loan Documents, or any other act or acts on the part
of Agent, any Lender, Borrower or the beneficiary of
any Letter of Credit;
2.16.12(g) the voluntary or involuntary
liquidation, dissolution, sale or other disposition
of all or substantially all the assets of, the
marshaling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition
with creditors or readjustment of, or other similar
proceedings which affect, Borrower or any other party
to any of the Loan Documents;
2.16.12(h) any lack of validity or
enforceability of this Agreement, any Letter of
Credit or any other Loan Document, or any allegation
of invalidity or unenforceability or any contest of
such validity or enforceability;
2.16.12(i) the existence of any claim,
set-off, defense or other right which Borrower may
have at any time against Agent, any Lender or any
beneficiary or any transferee of any Letter of Credit
(or any persons or entities for whom the Lender or
any such beneficiary or transferee may be acting), or
any other Person, whether in connection with this
Agreement or any of the other Loan Documents or any
of the transactions contemplated by any Loan Document
or any unrelated transaction;
2.16.12(j) any statement in any
certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any such
statement being untrue or inaccurate in any respect
whatsoever;
2.16.12(k) payment by NationsBank under
any Letter of Credit against presentation of a demand
or certificate which does not comply with the terms
of such Letter of Credit;
2.16.12(l) the release or discharge by
operation of law of Borrower form the performance or
observance of any obligation, covenant or agreement
contained in any of the Loan Documents; or
2.16.12(m) any other circumstance or
happening whatsoever, whether or not similar to any
of the foregoing.
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2.16.13 Without affecting Borrower's liability under
any other provision of this Agreement, Borrower agrees to
indemnify each of NationsBank, Agent and Lenders and their
respective affiliates, directors, officers, employees,
attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, damages or expenses
incurred by any of them in connection with or by reason of any
actual or threatened investigation, litigation or other
proceeding (including, in respect of NationsBank and Agent,
any such investigations, litigation or other proceeding
between NationsBank or Agent and any Lender) relating to (a)
the execution and delivery of any Letter of Credit; (b) the
use of the proceeds of any drawing under any Letter of Credit;
or (c) the transfer or substitution of, or payment or failure
to pay under, any Letter of Credit, including the reasonable
fees and disbursements of counsel incurred in connection with
any such investigation, litigation or other proceeding, but
excluding damages, losses, liabilities or expenses to the
extent, but only to the extent, incurred by reason of the
willful misconduct or gross negligence of NationsBank in
determining whether a document presented under any Letter of
Credit complies with the terms of such Letter of Credit. It
shall not be a condition to any such indemnification that
NationsBank, Agent or any Lender shall be a party to any such
investigations, litigation or other proceeding. Nothing in
this Paragraph 2.16 is intended to limit Borrower's payment
obligations under this Agreement.
2.16.14 Borrower assumes all risks of the acts or
omissions of any beneficiary of any Letter of Credit with
respect to the use of the Letter of Credit. None of Agent, any
Lender nor any of their respective affiliates, officers,
directors, employees, attorneys or agents shall be liable or
responsible for: (a) the use which may be made of the Letter
of Credit or for any acts or omissions of any beneficiary of
any Letter of Credit in connection with such Letter of Credit;
(b) the validity, sufficiency or genuineness of documents
presented to NationsBank, or of any endorsement on such
documents, even if such documents should in fact prove to be
in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by NationsBank against presentation of
documents which do not comply with the terms of any Letter of
Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit; or
(d) any other circumstances whatsoever in making or failure to
make payment under any Letter of Credit; provided that
Borrower shall have a claim against NationsBank to the extent,
but only to the extent, of any direct, as opposed to
consequential, damages suffered by Borrower which Borrower
proves were caused by NationsBank's willful misconduct or
gross negligence in determining whether a document presented
under any Letter of Credit complies with the terms of such
Letter of Credit. In furtherance and not in limitation of the
foregoing, NationsBank may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the
contrary.
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2.17 Swingline Loans. The Swingline Lender hereby agrees to
extend to Borrower Swingline Loans in the aggregate amount not to exceed One
Million and No/100 Dollars ($1,000,000.00), on the following terms and
conditions.
2.17.1 Use of Proceeds of Swingline Loans. Borrower
may use the proceeds of Swingline Loans for any purpose
permitted for the proceeds of the Revolving Credit Loan under
Section 2.2 of this Agreement. To the extent proceeds of
Swingline Loans are used for working capital purposes, they
shall be applied to reduce the amount of the Revolving Credit
Loan that may be used for working capital purposes under
Section 2.2 of this Agreement.
2.17.2 Swingline Note. The Swingline Loans shall be
evidenced by the Swingline Note.
2.17.3 Funding of Swingline Loans Advanced Pursuant
to Borrowing Notices.
2.17.3(a) Applicability. Except for
Swingline Loans made pursuant to Account Agreements
as provided in Section 2.17.4 hereof, the funding of
Swingline Loans shall be subject to this Section
2.17.3.
2.17.3(b) Borrowing Notices. As long as
Borrower meets the conditions for funding stated in
this Agreement, Borrower may submit requests for
Swingline Loans ("Swingline Borrowing Notices") to
the Swingline Lender. All requests shall be made in
writing (or by telephone, subject to such security
procedures as the Swingline Lender may require from
time to time, provided that all telephonic notices
shall be confirmed by written Swingline Borrowing
Notices within one (1) Business Day) and shall
specify the proposed date of the requested
disbursement and the aggregate amount of such
disbursement. Each Swingline Borrowing Notice shall
irrevocably obligate Borrower to accept the Swingline
Loan requested thereby. Swingline Borrowing Notices
shall be in such form as the Swingline Lender may
from time to time require.
2.17.3(c) Funding of Swingline Loans. The
Swingline Lender shall fund Swingline Loans on the
Banking Day following the Banking Day of the
Swingline Lender's receipt of the Swingline Borrowing
Notice. All funds shall be disbursed directly into an
account maintained by Borrower with the Swingline
Lender. Borrower agrees that if the Swingline Lender
elects to fund any requested Swingline Loan(s) sooner
after requested than is required hereunder, the
Swingline Lender may nevertheless use the entire
response period allowed hereunder upon receipt of any
subsequent request, at its sole option.
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2.17.4 Funding of Swingline Loans Advanced Pursuant
to Cash Management Accounts. Borrower may have in effect from
time to time separate agreements with the Swingline Lender or
its affiliates ("Account Agreements") establishing cash
management procedures that may involve the automatic
disbursement of Swingline Loans. The Account Agreements may be
established using standardized forms that do not address the
specific circumstances of the Swingline Loan. To resolve
potential inconsistencies between this Agreement and Account
Agreements, the terms of this Agreement and of Account
Agreements shall relate to one another as follows:
2.17.4(a) Funding and Payment Procedures
Controlled by Account Agreements. The Account
Agreements shall control this Agreement as to (i)
Section 2.17.3 hereof regarding funding procedures,
and (ii) Interest Payment Dates, to the extent that
an Account Agreement may provide for such payment
more frequently than otherwise required under this
Agreement.
2.17.4(b) Certain Provisions Controlled by
this Agreement. Notwithstanding any provision of an
Account Agreement to the contrary, except as provided
above in Section 2.17.4(a) hereof, the provisions of
this Agreement shall control any Account Agreement to
the extent that an Account Agreement may be
inconsistent with this Agreement.
2.17.4(c) Continuing Warranty Under
Account Agreements. Because Account Agreements may
provide for the making of Swingline Loans without
formal draw requests from Borrower, Borrower agrees
that Borrower's warranty under Section 2.17.5 hereof
as to the satisfaction of all conditions to the right
to receive Swingline Loans shall be a continuing one
during any period that such an Account Agreement may
be in effect. Therefore, any Swingline Loans funded
by the Swingline Lender pursuant to an Account
Agreement after the failure of a condition stated in
Article III hereof shall be deemed made upon the
affirmative misrepresentation of Borrower unless the
Swingline Lender has received written notice of and
waived the failed condition in writing.
2.17.5 Implied Representations Upon Request for
Swingline Loan. Upon making any request for a Swingline Loan,
Borrower shall be deemed to have warranted to the Swingline
Lender that all conditions to funding are satisfied as of the
submission of the request to the Swingline Lender.
2.17.6 Advance Not Waiver. The Swingline Lender's
making of any Swingline Loan that it is not obligated to make
under any provision of Article III hereof or any other
provision hereof shall not be construed as a waiver of the
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Swingline Lender's right to withhold future Swingline Loans,
notify Agent of an Event of Default, or otherwise demand
strict compliance with this Agreement.
2.17.7 Interest. Interest shall be charged and paid
on each Swingline Loan as follows:
2.17.7(a) Rate of Interest. Interest shall
accrue on Swingline Loans at an annual rate equal to
the Prime Rate, said rate to change contemporaneously
with any change in the Prime Rate.
2.17.7(b) Calculation of Interest.
Interest shall be computed on the basis of a 360-day
year counting the actual number of days elapsed.
2.17.7(c) Payment of Interest. Interest
shall be due and payable in arrears without notice on
each Interest Payment Date.
2.17.7(d) Default Rate. Notwithstanding
the foregoing, upon the occurrence of an Event of
Default and during the continuation of such Event of
Default until it is cured or waived, interest shall
be charged at the Default Rate, regardless of whether
the Swingline Lender has elected to exercise any
other remedies available to it, including, without
limitation, acceleration of the maturity of the
outstanding principal of the Swingline Loans. All
such interest shall be paid at the time of and as a
condition precedent to the curing of any such Event
of Default to the extent any right to cure is given
in this Agreement.
2.17.7(e) Usury Savings Provision. It is
the intention of the parties that all charges under
or in connection with this Agreement and the
Obligations, however denominated, and including
(without limitation) all interest, commitment fees,
late charges and loan charges, shall be limited to
the Maximum Lawful Amount. Such charges hereunder
shall be characterized and all provisions of the Loan
Documents shall be construed as to uphold the
validity of charges provided for therein. If for any
reason whatsoever, however, any charges paid or
contracted to be paid in respect of the Swingline
Loans shall exceed the Maximum Lawful Amount, then,
ipso facto, the obligation to pay such interest
and/or other charges shall be reduced to the Maximum
Lawful Amount in effect from time to time, and any
amounts collected by Lender that exceed the Maximum
Lawful Amount shall be applied to the reduction of
the principal balance of the Swingline Loans and/or
refunded to Borrower so that at no time shall the
interest or loan charges paid or payable in respect
of the Swingline Loans exceed the Maximum Lawful
Amount. This provision shall control every other
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provision herein and in any and all other agreements
and instruments now existing or hereafter arising
between Borrower and Lender with respect to the
Swingline Loans.
2.17.8 Repayment of Principal. All remaining
principal, interest and expenses outstanding under the
Swingline Loans shall become due in full on the Maturity Date
or the earlier acceleration of the Revolving Credit Loan in
accordance with the terms of this Agreement. Borrower may at
any time prepay any outstanding Swingline Loans in whole or in
part without premium or penalty.
2.17.9 Procedures Among Lenders Upon Event of
Default. Upon the occurrence of an Event of Default, Lenders
shall acquire participation interests in the outstanding
Swingline Loans as necessary to cause each Lender to own a Pro
Rata interest in the outstanding Swingline Loans, pursuant to
such documentation as Agent may deem necessary. The obligation
of each Lender to acquire such a participation interest shall
be unconditional and, without limiting the foregoing, shall
remain in effect irrespective of (i) the occurrence of any
Event of Default or Unmatured Default, (ii) the financial
condition of Borrower, the Agent, the Swingline Bank or any
other Lender or (iii) the termination or cancellation of the
Commitments (provided that such Swingline Loan was made prior
to the date of such termination or cancellation). The
Swingline Loans shall thereafter be administered by Lenders
and Agent as though the Swingline Loans were amounts
outstanding under the Revolving Credit Loan. Additionally, to
this end, upon the occurrence and continuation of an Event of
Default, Agent may, in its discretion, and without Borrower's
consent, cause an advance to be made under the Revolving
Credit Loan sufficient to repay the outstanding Swingline
Loans, even if an Event of Default is then outstanding.
III. CONDITIONS PRECEDENT
3.1 Conditions to Initial Advance. Lenders shall not be obligated to
make their initial Loan pursuant to this Agreement unless and until Borrower
satisfies the following conditions:
3.1.1 Loan Documents. Borrower shall have delivered
to Lenders and to Agent the following documents, fully
executed and in form and substance acceptable to Agent:
3.1.1(a) Loan Agreement. This Agreement.
3.1.1(b) Notes. The Revolving Credit Notes
made by Borrower payable to the order of the
respective Lenders in the maximum principal amounts
of the Lenders' respective Commitments and the
Swingline Note.
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3.1.1(c) Guaranties of Subsidiaries.
Unconditional Continuing Guaranties executed by all
Subsidiaries of Borrower other than Non-Corporate
Subsidiaries.
3.1.1(d) Pledge of Equity Interests in
Subsidiaries. Stock Pledge Agreement, Irrevocable
Proxies and Blank Stock Powers, and any required
amendments thereof, evidencing a first priority
perfected security interest in all of the stock of
Borrower's corporate Subsidiaries and all dividends,
distributions and other property related thereto,
together with the original certificates evidencing
the pledged stock, and a Security Agreement granting
Agent an unperfected first priority security interest
in the interests of the Consolidated Entities in
Non-Corporate Subsidiaries.
3.1.1(e) Charters. Certified Copies of the
Consolidated Entities' corporate charters and all
amendments thereto, issued by the Secretaries of
State for their states of domicile.
3.1.1(f) Bylaws. Certified Copies of Bylaws
for the Consolidated Entities.
3.1.1(g) Certificates of Good Standing.
Certificates of good standing or existence, as
applicable, issued as to the Consolidated Entities by
the Secretaries of State for the states of their
domicile.
3.1.1(h) Foreign Qualification. Certificates
of Qualification issued by the Secretaries of State
for each state in which a Consolidated Entity is
required to qualify as a foreign corporation.
3.1.1(i) Resolutions. Certified Copies of
Resolutions authorizing the execution of all
applicable Loan Documents on behalf of Consolidated
Entities.
3.1.1(j) Opinions of Borrower's Counsel.
Opinions of counsel to the Consolidated Entities
addressed to Agent and Lenders, addressing matters
reasonably required by Lenders, Agent and their
counsel.
3.1.1(k) UCC Searches. UCC search reports on
Borrower from such jurisdictions and filing offices
as Lenders and Agent may require.
3.1.1(l) Closing Statement and Funding of
Expenses. Loan Closing Statement describing expenses
and fees due in connection with
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the closing of the Revolving Credit Loan and payment
thereof in immediately available funds.
3.1.1(m) Interest Rate Protection. Documents
evidencing interest rate protection acceptable to
Lenders for at least 50% of the projected outstanding
principal balance of the Revolving Credit Loan.
3.1.1(n) Other Documents. Such other
documents as Lenders or Agent may reasonably require.
3.1.1(o) Completion of Exhibits and
Schedules. The completion of all exhibits and
schedules to this Agreement, which shall be
satisfactory to Agent, in its sole discretion.
3.1.2 Additional Conditions. Borrower shall have
satisfied the following additional conditions, to Lenders' and Agent's
satisfaction:
3.1.2(a) Warranties. All warranties made in
the Loan Documents must be true in all material
respects and shall be true in all material respects
taking into account the funding of the requested
Loan.
3.1.2(b) Covenants. All covenants made in
the Loan Documents must have been complied with and
shall have been complied with taking into account the
funding of the requested Loan.
3.1.2(c) Absence of Unmatured Default. No
Event of Default or Unmatured Default shall exist
under this Agreement.
3.1.2(d) No Adverse Change. There must be no
Material Adverse Change since the date of the
Financial Statements.
3.1.2(e) Regulatory Diligence. The
completion of healthcare regulatory diligence to the
satisfaction of Agent and its counsel.
3.1.2(f) Ownership Structure. Lenders'
satisfaction upon a review of Borrower's present
capital structure as set forth in Schedule 5.26
hereof.
3.1.2(g) Projections. Lenders' receipt of
financial projections prepared by Borrower covering
Borrower's anticipated operations for the next two
(2) years.
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3.2 Conditions to Subsequent Loans. Lenders shall not be
obligated to make any Loan unless all of the following conditions are satisfied
as of the time of the request and of funding:
3.2.1 Conditions to Initial Advance. All of the
conditions in Section 3.1 hereof must have been satisfied.
3.2.2 Warranties. All warranties made in the Loan
Documents must be true in all material respects and shall be
true in all material respects taking into account the funding
of the requested Loan.
3.2.3 Covenants. All covenants made in the Loan
Documents must have been complied and shall have been complied
with taking into account the funding of the requested Loan.
3.2.4 Absence of Unmatured Default. No Event of
Default or Unmatured Default shall exist under this Agreement.
3.2.5 Material Adverse Change. There shall not have
occurred a Material Adverse Change.
IV. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders and Agent that:
4.1 Capacity. Each Consolidated Entity is a corporation or
other entity as set forth in Schedule 4.1 hereof, and is duly organized, validly
existing and in good standing under the laws of the state of its domicile as set
forth in Schedule 4.1. Each Consolidated Entity is qualified or authorized to do
business in all jurisdictions in which its ownership of property or conduct of
business requires such qualification or authorization or where the failure to be
so qualified or authorized would not have a Material Adverse Effect. Each
Consolidated Entity has the power and authority to own its Properties and to
carry on its business as now being conducted and as proposed to be conducted
after the execution hereof, to execute and deliver this Agreement and the other
Loan Documents, and to perform its obligations hereunder and under the other
Loan Documents.
4.2 Authorization. The execution, delivery and performance of
this Agreement and the other Loan Documents by each Consolidated Entity
executing such documents has been duly authorized by all requisite action.
4.3 Binding Obligations. This Agreement is and the other Loan
Documents, when executed and delivered to Lender, will be, legal, valid and
binding upon each Consolidated Entity who is a party thereto, enforceable in
accordance with its respective terms,
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subject only to principles of equity and laws applicable to creditors generally,
including bankruptcy laws.
4.4 No Conflicting Law or Agreement. The execution, delivery
and performance of this Agreement and the other Loan Documents by each
Consolidated Entity does not constitute a breach of or default under, and will
not violate or conflict with, any provisions of the corporate charter or other
constituent documents of a Consolidated Entity; any contract, financing
agreement, lease, or other agreement to which a Consolidated Entity is a party
or by which its Properties may be affected, the violation of which could have a
Material Adverse Effect; or any Law to which a Consolidated Entity is subject or
by which its Properties may be affected, the violation of which could have a
Material Adverse Effect; nor will the same result in the creation or imposition
of any Encumbrance upon any Property of any Consolidated Entity, other than
those contemplated by the Loan Documents.
4.5 No Consent Required. The execution, delivery, and
performance of this Agreement and the other Loan Documents by the Consolidated
Entities do not require the consent or approval of or the giving of notice to
any Person except for those consents which have been duly obtained and are in
full force and effect on the date hereof and others, if any, which by their
omission could not result in a Material Adverse Effect.
4.6 Financial Statements. The Financial Statements are
complete and correct, have been prepared in accordance with GAAP, and present
fairly the financial condition and results of operations of the Consolidated
Entities as of the date and for the period stated therein, subject to year-end
adjustments. No Material Adverse Change has occurred since the date of the
Financial Statements. Borrower acknowledges that Lenders have advanced (or shall
advance) the Revolving Credit Loan in reliance upon the Financial Statements.
4.7 Fiscal Year. Each Consolidated Entity's fiscal year ends
on December 31 of each year.
4.8 Litigation. Except as disclosed on Schedule 4.8 hereto,
(i) there is no litigation, arbitration, legal or administrative proceeding, tax
audit, investigation, or other action or proceeding of any nature pending
against any Consolidated Entity or any of its Properties, and (ii) there is no
litigation, arbitration, legal or administrative proceeding, tax audit,
investigation, or other action or proceeding of any nature threatened in writing
against a Consolidated Entity which, if adversely determined, could have a
Material Adverse Effect. No Consolidated Entity is subject to any outstanding
court, arbitral or administrative order, writ or injunction. To the Best of
Borrower's Knowledge, no facts exist under which third parties have unasserted
claims against any Consolidated Entity which, if adversely determined, could
have a Material Adverse Effect.
4.9 Taxes; Governmental Charges. Each Consolidated Entity has
filed or caused to be filed or has lawfully extended the deadline for filing all
tax returns and reports
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required to be filed. Each Consolidated Entity has paid, or made adequate
provision for the payment of, all Taxes that have or may have become due
pursuant to such returns or otherwise, or pursuant to any assessment received by
it, except such Taxes, if any, as are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided. To
the Best of Borrower's knowledge, there is no proposed material tax assessment
against any Consolidated Entity. No extension of time for the assessment of
federal, state or local taxes of any Consolidated Entity is in effect or has
been requested, except as disclosed in Schedule 4.9 hereto. Each Consolidated
Entity has timely made all required remittances of withholding deposits and
other assessments against payroll expenditures.
4.10 Title to Properties. Each Consolidated Entity has good
and marketable title to its Properties, free and clear of all Encumbrances
except for Permitted Encumbrances.
4.11 No Default. No Consolidated Entity is in default in any
respect that affects its business, Properties, operations, or condition,
financial or otherwise, under any indenture, mortgage, deed of trust, obligation
to equity holders, credit agreement, note, agreement, lease, sale agreement or
other instrument to which any Consolidated Entity is a party or by which its
Properties are bound, which default could have a Material Adverse Effect. To the
Best of Borrower's Knowledge, no other party to any contract with any
Consolidated Entity under which a default could have a Material Adverse Effect
is in default or breach thereof and no circumstances exist which, with the
giving of notice and/or the passing of time would constitute such default or
breach. No Event of Default or Unmatured Default exists under this Agreement.
4.12 Casualties; Taking of Properties. Neither the business
nor the Property of any Consolidated Entity is presently impaired as a result of
any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of property,
cancellation of contracts, permits, concessions by any domestic or foreign
government or any agency thereof, riot, activities of armed forces or acts of
God or of any public enemy, in any case as could have a Material Adverse Effect.
4.13 Compliance with Laws. No Consolidated Entity is in
violation of any Law to which it, its business or any of its Properties are
subject, the violation of which would likely have a Material Adverse Effect,
and, to the Best of Borrower's Knowledge, there are no outstanding citations,
notices or orders of noncompliance issued to any Consolidated Entity under any
such Law, the violation of which would likely have a Material Adverse Effect.
Each Consolidated Entity has obtained all licenses, permits, franchises, or
other governmental authorizations necessary to the ownership of its Properties
or to the conduct of its business, except for those which, if not obtained,
could not have a Material Adverse Effect.
4.14 Compliance with Fraud and Abuse Laws. Without limiting
any other provision of this Agreement, no Consolidated Entity and no Provider is
in violation of any Fraud and Abuse Law, the violation of which could have a
Material Adverse Effect.
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4.15 ERISA. No ERISA Event has occurred with respect to any
Plan or is reasonably expected to occur with respect to any Plan.
4.16 Full Disclosure of Material Facts. Borrower has fully
advised Lenders of all matters involving the financial condition, business,
operations and Properties of the Consolidated Entities that would be reasonably
expected to have a Material Adverse Effect. No information, exhibit, or report
furnished or to be furnished by Borrower to Lenders in connection with this
Agreement contains, as of the date thereof, any misrepresentation of fact or
failed or will fail to state any material fact, the omission of which would
render the statements therein materially false or misleading.
4.17 Accuracy of Projections. With respect to all business
plans and other forecasts and projections furnished by or on behalf of Borrower
and made available to Lenders relating to the financial condition, business,
operations or Properties of the Consolidated Entities, all facts stated as such
therein were true and complete in all material respects as of the time made and
all estimates and assumptions were made in good faith and believed to be
reasonable at the time made. As of the Closing Date, nothing has come to the
attention of Borrower that has changed its assessment of any such matters,
except for changes that could not have a Material Adverse Effect.
4.18 Investment Company Act. No Consolidated Entity is an
"investment company" under the Investment Company Act of 1940, as amended.
4.19 Personal Holding Company. No Consolidated Entity is a
"personal holding company" as defined in Section 542 of the IRC.
4.20 Solvency. Each Consolidated Entity is Solvent as of the
date hereof and will remain Solvent upon the consummation of the transactions
contemplated hereby.
4.21 Chief Executive Office. The address designated herein to
which notices are to be sent under this Agreement is Borrower's chief executive
office within the meaning of Tennessee Code Annotated Section 47-9-103(3)(d).
4.22 Subsidiaries. Borrower has no Subsidiaries, except for
those listed on Schedule 4.1 hereto, which schedule further describes the
present ownership of each Subsidiary.
4.23 Ownership of Patents, Licenses, Etc. The Consolidated
Entities own all licenses, permits, franchises, registrations, patents,
copyrights, trademarks, trade names or service marks, or the rights to use the
foregoing, that are necessary for the continued operation of their business
except for such licenses, etc., which, if not held or owned, could not have a
Material Adverse Effect.
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4.24 Environmental Compliance. Each Consolidated Entity has
duly complied with, and their Properties are owned and operated in compliance
with, all Environmental Laws, the violation of which could have a Material
Adverse Effect. There have been no citations, notices or orders of
non-compliance issued to any Consolidated Entity or, to the Best of Borrower's
knowledge, relating to their business or Properties pursuant to any
Environmental Law. Each Consolidated Entity has obtained all required federal,
state and local licenses, certificates or permits relating to them and their
Properties as required by applicable Environmental Laws, except for those which,
if not obtained, could not have a Material Adverse Effect
4.25 Labor Matters. No Consolidated Entity is subject to any
collective bargaining agreements or any decrees or orders requiring them to
recognize, deal with or employ any Person. No demand for collective bargaining
has been asserted against any Consolidated Entity by any union or organization.
No Consolidated Entity has experienced any strike, labor dispute, slowdown or
work stoppage due to labor dispute and, to the best knowledge of Borrower, there
is no such strike, dispute, slowdown or work stoppage threatened against any
Consolidated Entity. All Consolidated Entities are in compliance in all material
respects with the Fair Labor Standards Act of 1938, as amended.
4.26 OSHA Compliance. All Consolidated Entities are in
compliance in all material respects with the Federal Occupational Safety and
Health Act, as amended, and all regulations under the foregoing.
4.27 Regulation U. No Consolidated Entity is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System). No proceeds of any Loan will be used to purchase or
carry any margin stock (within the meaning of Regulation U issued by the Board
of Governors of the Federal Reserve System) in violation of applicable law,
including, without limitation, Regulation U issued by the Board of Governors of
the Federal Reserve System.
4.28 Affiliate Transactions. No Consolidated Entity is a party
to any transaction, contract or agreement with any Affiliate, except for Service
Agreements, lease agreements and other agreements among Borrower and its
Subsidiaries and those other agreements described in Schedule 4.28 hereof.
V. AFFIRMATIVE COVENANTS
Borrower covenants that, during the term of this Agreement
(and thereafter where expressly stated herein):
5.1 Payment of Obligations. Borrower shall pay all amounts
owed under the Obligations when due.
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5.2 Maintenance of Existence and Business. Except for
transactions among Consolidated Entities permitted under this Agreement, each
Consolidated Entity shall maintain its fundamental existence, name, rights, and
franchises, and shall maintain its qualification and good standing in all states
in which such qualification is necessary, and shall continue to operate in the
same type of business as such Consolidated Entity engages in as of the date
hereof.
5.3 Financial Statements and Reports. Borrower shall furnish
to Agent the following, all of which must be in form and substance satisfactory
to Lender (the financial reports below and all other reports required of
Borrower under this Agreement shall be delivered in sufficient counterparts that
each Lender and Agent may have an original counterpart thereof):
5.3.1 Monthly Financial Reports. As soon as
available, and in any event by the thirtieth (30th) day
following the end of a month, Borrower shall deliver to Agent
a balance sheet, income statement and statement of cash flows
of Borrower for and as of the end of the preceding month, all
prepared by Borrower on a consolidated basis and certified by
Borrower's president or chief financial officer to be complete
and correct and to present fairly, in accordance with GAAP
(excluding year-end adjustments and required footnote
disclosures), the consolidated financial condition of Borrower
as of the date of such statements and the consolidated results
of its operations and its cash flow for such period.
Notwithstanding the foregoing, if as of May 31, 1997, Borrower
has met the Financial Projections since the date hereof, the
requirements of this Section 5.3.1 will terminate and monthly
financial statements shall no longer be required.
5.3.2 Quarterly Financial Reports. As soon as
available, and in any event by the forty-fifth (45th) day of
each fiscal quarter except the fourth fiscal quarter, Borrower
shall prepare and deliver to Agent a consolidated balance
sheet, income statement and statement of cash flows of
Borrower for and as of the end of the preceding fiscal
quarter, certified by Borrower's President or Chief Financial
Officer to be complete and correct and to present fairly, in
accordance with GAAP (excluding year-end adjustments and
required footnote disclosures), the consolidated financial
condition of Borrower as of the date of such statements and
the consolidated results of its operations and its cash flow
for such period. Supplemental to such basic financial
statements, Borrower shall deliver to Agent calculations of
all financial ratios; the certification of Borrower's
President or Chief Financial Officer as to the absence of any
Event of Default or Unmatured Default; and by-Practice
financial summaries addressing Practice revenues, expenses and
fees to Consolidated Entities in form and substance acceptable
to Agent.
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5.3.3 Annual Financial Reports. As soon as available,
and in any event within ninety (90) days after the end of each
fiscal year, Borrower shall deliver to Agent the audited
consolidated balance sheet of Borrower as of the end of such
year and the related audited consolidated statements of
income, retained earnings and cash flows for such year,
together with supporting schedules, all such statements
prepared in accordance with GAAP and accompanied by an
unqualified audit report prepared by an independent "big six"
certified public accountant acceptable to Agent showing the
consolidated financial condition of Borrower at the close of
such year and the consolidated results of its operations,
changes in its retained earnings and its cash flows for such
year. Supplemental to the audited year-end financial
statements, Borrower shall deliver to Agent calculations of
all financial ratios as determined based upon the audited
financial statements and the certification of Borrower's
President or Chief Financial Officer as to the absence of any
Event of Default or Unmatured Default.
5.3.4 Accountant Reports. Promptly upon the receipt
thereof, Borrower shall deliver to Agent a copy of each other
report (other than work papers) submitted to Borrower or any
Subsidiary by its accountants in connection with any annual,
interim or special audit made by them, but Borrower shall be
obligated to deliver such report only if (i) the report
advises Borrower of a material weakness in internal controls,
or (ii) Agent has requested the report in writing based upon
Agent's good faith belief that, based upon its review of
Borrower's financial statements or other information relating
to the operations and condition of the Consolidated Entities,
a copy of such report is needed in order for Agent and/or
Lenders to thoroughly assess the financial condition of the
Consolidated Entities and/or their continued compliance with
this Agreement.
5.3.5 Acquisition Certification. Borrower shall
submit to Agent an Acquisition Compliance Certificate in the
form attached hereto as Exhibit 1.2 within the time periods
set forth therein.
5.3.6 Other Information. Borrower shall provide Agent
with such additional information regarding the financial
condition, properties, operations and prospects of the
Consolidated Entities and their consolidated entities as Agent
may reasonably require.
5.4 Additional Information. Borrower shall provide such other
information respecting the condition or operations, financial or otherwise, of
the Consolidated Entities as Agent may from time to time reasonably request.
5.5 Certain Additional Reporting Requirements.
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5.5.1 Owner Mailings. Promptly upon the sending
thereof, Borrower shall deliver to Agent a copy of each
statement, report or notice sent to its shareholders.
5.5.2 SEC Filings. Promptly upon the filing thereof,
should such filings become applicable, Borrower shall deliver
to Agent copies of all regular, periodic and special reports
that any Consolidated Entity files with the United States
Securities and Exchange Commission or any successor thereto,
or any national securities exchanges or the National
Association of Securities Dealers.
5.5.3 Change in Accounting Policies. Borrower shall
promptly notify Agent in writing upon any material change in
accounting policies or financial reporting practices on the
part of any Consolidated Entity.
5.5.4 Notice to Agent Upon Perceived Breach. Borrower
agrees to give Lender prompt written notice of any action or
inaction by or on behalf of Lender in connection with this
Agreement or the Obligations that Borrower believes may be
actionable against Lenders or Agent or a defense to payment of
any or all Obligations for any reason, including, but not
limited to, commission of a tort or violation of any
contractual duty or duty implied by law provided, however,
that Borrower's failure to give such notice, if such failure
is unintentional and does not arise from Borrower's gross
negligence, shall not foreclosure any such action or defense
to be asserted by Borrower.
5.5.5 Changes in Constituent Documents. Borrower
shall promptly notify Agent in writing of any change in the
corporate charter or bylaws of Borrower or the fundamental
documents of any Subsidiary following the encumbrance of the
stock thereof in favor of Agent to secure Lenders as required
under this Agreement, and shall provide Agent with a copy of
such change (Consolidated Entities are restricted in the
adoption of such amendments as provided elsewhere in the Loan
Documents, and nothing contained in this Section shall be
deemed a waiver of such restrictions).
5.5.6 Notice of Litigation. Borrower shall give Agent
prompt written notice of any litigation, arbitration, tax
audit, administrative proceeding or investigation that may
hereafter be instituted or threatened in writing in which
Borrower would be a party or which otherwise may affect any
Consolidated Entity or any of their business, operations or
Properties, except for (i) actions seeking only monetary
damages in an amount of less than the amount equal to one-half
percent (1/2%) of Borrower's Consolidated EBITDA for the most
recent four (4) fiscal quarters for which Borrower has
submitted financial statements to Agent, as of the time of
determination, and (ii) actions seeking only monetary damages
for personal injury or wrongful death and which are fully
covered by insurance, subject only to any applicable
deductible.
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5.5.7 Other Notices. Borrower shall promptly notify
Agent in writing if Borrower learns of the occurrence of (i)
any event that constitutes an Event of Default or an Unmatured
Default, together with a detailed statement of the steps being
taken as a result thereof, or (ii) any Material Adverse
Change.
5.6 Taxes and Other Encumbrances. Each Consolidated Entity
shall make due and timely payment or deposit of all federal, state and local
taxes, assessments or contributions required of it by law, and execute and
deliver to Agent, on demand, appropriate certificates attesting to the payment
or deposit thereof; provided, however, that the Consolidated Entities shall not
be required to pay or discharge any such tax, assessment, charge or claim for as
long as it is being diligently contested in good faith by proper proceedings and
for which appropriate reserves are being maintained.
5.7 Payment of Liabilities. Each Consolidated Entity shall
pay all of its Liabilities as and when the same becomes due in accordance with
its terms.
5.8 Compliance with Laws. Each Consolidated Entity shall
observe and comply with all Laws (including, but not limited to, Fraud and Abuse
Laws), and shall maintain all certificates, franchises, permits, licenses, and
authorizations necessary to the conduct of its business or the operation of its
Properties, except for such Laws, certificates, etc., which, if violated or not
obtained and full penalties were imposed for such violation, could not cause a
Material Adverse Effect. Each Consolidated Entity shall further use its best
efforts to assure the compliance by all Providers with all applicable Laws,
including, but not limited to, medical licensure and Fraud and Abuse Laws,
relating to their providing of professional services, except for those which, if
violated and full penalties were imposed for such violation, could not cause a
Material Adverse Effect.
5.9 Maintenance of Property. All Consolidated Entities shall
maintain their Property (and any Property leased by or consigned or held under
title retention or conditional sales contracts) in good and workable condition
at all times, subject to ordinary wear and tear, normal discards and
replacements due to functional and useful-life obsolescence, and shall make all
repairs, replacements, additions, and improvements to their Property reasonably
necessary and proper to ensure that the business carried on in connection with
their Property may be conducted properly and efficiently at all times.
5.10 Compliance with Contractual Obligations. Each
Consolidated Entity will perform all of its obligations in respect of all
material contracts to which it is a party and will use its best efforts to keep,
and to take all action to keep, such contracts in full force and effect and not
allow any such contract to lapse or be terminated or any rights to renew such to
be forfeited or canceled, if such lapse, etc. could have a Material Adverse
Effect; provided, however, that any such contract may lapse or be terminated or
such renewal rights may be forfeited or canceled if in the reasonable business
judgment of the Consolidated Entities it is in their best interests to allow or
cause such lapse, termination, forfeiture or cancellation.
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5.11 Further Assurances. The Consolidated Entities shall
promptly cure any defects in the creation, issuance, or delivery of the Loan
Documents. The Consolidated Entities at their expense will execute (or cause to
be executed) and deliver to Agent upon request all such other and further
documents, agreements, and instruments in compliance with or accomplishment of
the covenants and agreements applicable to them in the Loan Documents, or to
evidence further and to describe more fully any Collateral intended as security
for the Obligations, or to correct any omissions in the Loan Documents, or to
state more fully the Obligations and agreements set out in any of the Loan
Documents, or to perfect, protect, or preserve any Encumbrances created pursuant
to any of the Loan Documents, or to make any recordings, to file any notices, or
to obtain any consents, all as may be reasonably necessary or appropriate in
connection therewith. Borrower appoints Agent as Borrower's attorney-in-fact to
execute any financing statements or other instruments of perfection with respect
to the Collateral.
5.12 Security Interest; Setoff. In order to further secure the
payment of the Obligations, Borrower hereby grants to Agent and to each Lender a
security interest and right of setoff against all of Borrower's presently owned
or hereafter acquired monies, items, credits, deposits and instruments
(including certificates of deposit) presently or hereafter in the possession of
any Lender or Agent. By maintaining any such accounts or other property with a
Lender or Agent, Borrower acknowledges that Borrower voluntarily subjects the
property to the security interest arising hereunder. Subject to the provisions
in Article IX hereof, a Lender may exercise its rights under this Section
without prior notice (but with prompt notice following the setoff) following an
Event of Default. Borrower agrees that neither Lenders nor Agent shall be liable
for the dishonor of any instrument after notice of setoff shall have been duly
given resulting from a Lender's exercise of its rights under this Section.
5.13 Insurance.
5.13.1 General Insurance Requirements. In addition to
the other specific requirements set forth in this Agreement
and in other Loan Documents, the Consolidated Entities shall
maintain insurance on all insurable Properties now or
hereafter owned by them against such risks and to the extent
customary in their industry, and shall maintain or cause to be
maintained public liability and worker's compensation
insurance to the extent customary in the industry.
5.13.2 Practice-Related Insurance Requirements. The
Consolidated Entities shall maintain insurance for claims,
however characterized, against them in connection with the
provision of medical services by Providers and/or ancillary
services provided by them at Practices covered by Service
Agreements, in an amount of at least Five Hundred Thousand and
No/100 Dollars ($500,000.00) per occurrence and One Million
and No/100 Dollars ($1,000,000.00) in the aggregate for
Providers who are physicians, which insurance shall name
Lenders (or Agent on behalf of Lenders) as additional
insureds. The Consolidated Entities shall further cause each
Provider to
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maintain medical malpractice insurance of at least Five
Hundred Thousand and No/100 Dollars ($500,000.00) per
occurrence and One Million and No/100 Dollars ($1,000,000.00)
in the aggregate.
5.14 Accounts and Records. The Consolidated Entities shall
maintain current books of record and account, in which full, true, and correct
entries will be made of all transactions.
5.15 Official Records. The Consolidated Entities shall
maintain current corporate and official records, minute books and stock ledgers
and other records appropriate to their form of organization.
5.16 Banking Relationships. The Consolidated Entities shall
maintain their deposit accounts with Lenders or with other FDIC-insured
depository institutions.
5.17 Right of Inspection. The Consolidated Entities shall
permit any officer, employee, or agent of a Lender or Agent to visit and inspect
during ordinary business hours any of the their Property, to examine their books
of record and accounts and corporate records, to take copies and extracts from
such books of record and accounts, and to discuss the affairs, finances, and
accounts of the Consolidated Entities with their respective officers,
accountants, and auditors, all at such reasonable times and as often as a Lender
may reasonably desire and upon reasonable advance notice absent an Event of
Default. Without limiting Agent's right to obtain equitable relief as to any
other appropriate right in this Agreement or in other Loan Documents, Borrower
agrees that the rights in this Section may be enforced by affirmative injunction
and, to the extent the right to review records may be denied, the right may be
enforced by a restraining order prohibiting the interference by Borrower with
the exercise of rights to review of the records pursuant to this Section. Absent
an Event of Default or Unmatured Default, all expenses of such inspections, etc.
shall be paid by Lenders, and in the presence thereof, all expenses shall be
paid by Borrower.
5.18 ERISA Information and Compliance. The Consolidated
Entities shall comply with ERISA and all other applicable laws governing any
pension or profit sharing plan or arrangement to which they are a party. The
Consolidated Entities shall (i) upon request, provide Agent with copies of any
annual report required to be filed pursuant to ERISA with respect to any Plan or
any other employee benefit plan; (ii) notify Agent upon the occurrence of any
ERISA Event or of any additional act or condition arising in connection with any
Plan which they believe might constitute grounds for termination thereof by the
PBGC or for the appointment of a trustee to administer the Plan; and (iii)
furnish to Agent, promptly upon request, such additional information concerning
any Plan or any other employee benefit plan as Agent may request.
5.19 Indemnity; Expenses. Borrower agrees to indemnify, defend
(with counsel reasonably satisfactory to the indemnified party or parties) and
hold harmless Lenders and Agent against any loss, liability, claim or expense,
including reasonable attorneys' fees,
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that they may incur in connection with the Loan Documents or the Obligations,
except those losses, etc. that may result from a Lender's or Agent's gross
negligence or willful misconduct. Without limiting the foregoing, upon demand by
Agent, Borrower will reimburse Lenders and/or Agent for the following reasonable
expenses if not paid by Borrower promptly after written demand by Agent:
5.19.1 Taxes. All taxes that Lenders or Agent may be
required to pay because of the Obligations or because of
Lenders' or Agent's interest in any property securing the
payment of the Obligations, excepting taxes based upon the net
income of Lender or Agent.
5.19.2 Administration. All costs of the preparation
of this Agreement and any other related documents and the
administration of the Obligations (except for Lenders' and
Agent's usual overhead incurred in the acceptance and
processing of payments, the routine review of financial
statements, certifications and reports, routine communications
with Borrower, and other ordinary activities that are not
occasioned by an Unmatured Default, Event of Default or by a
request of Borrower to waive or vary the terms of this
Agreement).
5.19.3 Protection of Collateral. All costs of
preserving, insuring, preparing for sale (whether by
improvement, repair or otherwise) or selling any Collateral.
5.19.4 Costs of Collection. All court costs and other
costs of collecting any debt, overdraft or other obligation
included in the Obligations.
5.19.5 Litigation. All reasonable costs arising from
any litigation, investigation, or administrative proceeding
(whether or not Agent or a Lender is a party thereto) that
Agent or a Lender may incur as a result of the Obligations or
as a result of their association with any of the Consolidated
Entities, including, but not limited to, expenses incurred by
Agent or a Lender in connection with a case or proceeding
involving any Consolidated Entity under any chapter of the
Bankruptcy Code or any successor statute thereto.
5.19.6 Attorneys' Fees. Reasonable attorneys' fees
incurred in connection with any of the foregoing.
If a Lender or Agent pays any of the foregoing expenses, they shall become a
part of the Obligations and shall bear interest at the Maximum Lawful Amount.
This Section shall remain in full effect regardless of the full payment of the
Obligations, the purported termination of this Agreement, the delivery of the
executed original of this Agreement to Borrower, or the content or accuracy of
any representation made by Borrower to Lenders or Agent; provided, however,
Agent may terminate this Section by executing and delivering to Borrower a
written instrument of termination specifically referring to this Section.
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5.20 Assistance in Litigation. Borrower covenants to, upon
request, cooperatively participate in any proceeding in which Borrower is not an
adverse party to Lenders or Agent and which concerns Lenders' or Agent's rights
regarding the Obligations or any Collateral.
5.21 Name Changes. Borrower shall give Agent at least thirty
(30) days prior written notice before any Consolidated Entity changes its name
or begins doing business under any trade name.
5.22 Estoppel Letters. Borrower covenants to provide Agent,
within ten (10) days after request, an estoppel letter stating (i) the balance
of the Obligations, (ii) whether Borrower has any defenses to payment of the
Obligations, and (iii) the nature of any defenses to payment of the Obligations.
Such balance as presented for confirmation and the non existence of defenses
shall be presumed if Borrower fails to respond to such a request within the
required period.
5.23 Environmental Matters.
5.23.1 Compliance With Environmental Laws. All
Consolidated Entities will (i) employ in connection with their
operations, appropriate technology and compliance procedures
to maintain compliance with any applicable Environmental Laws,
the violation of which would reasonably be expected to have a
Material Adverse Effect, (ii) obtain and maintain any and all
materials permits or other permits required by applicable
Environmental Laws in connection with its operations,
excepting only such permits, etc. which could not by their
absence cause a Material Adverse Effect, and (iii) dispose of
any and all Hazardous Substances only at facilities and with
carriers reasonably believed to possess valid permits under
any applicable state and local Environmental Laws. All
Consolidated Entities shall use their best efforts to obtain
all certificates required by law to be obtained by them from
all contractors employed by them in connection with the
transport or disposal of any Hazardous Substances.
5.23.2 Remedial Work. If any investigation, site
monitoring, containment, clean-up, removal, restoration or
other remedial work of any kind or nature with respect to any
Consolidated Entity's Properties is required to be performed
by them under any applicable local, state or federal law or
regulation, any judicial order, or by any governmental or
non-governmental entity or Person because of, or in connection
with, the current or future presence, suspected presence,
release or suspected release of a Hazardous Substance in or
into the air, soil, groundwater, surface water or soil vapor
at, on, about, under, or within any of a Consolidated Entity's
Property (or any portion thereof), Borrower shall within 30
days after written demand for performance thereof (or such
shorter period of time as may be required under
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applicable law, regulation, order or agreement), commence and
thereafter diligently prosecute to completion, all such
remedial work.
5.23.3 Indemnification of Lenders and Agent. Borrower
agrees to indemnify, defend (with counsel reasonably
satisfactory to the indemnified party or parties) and hold
harmless Lenders and Agent against any loss, liability claim
or expense, including attorneys' fees, that Lender or Agent
may incur as a result of the violation or alleged violation of
any Environmental Law by a Consolidated Entity or with respect
to any other violation of Environmental Laws with respect to
any Consolidated Entity's Properties. This covenant shall
survive the repayment of the Revolving Credit Loan.
5.24 Opinions of Counsel. Borrower agrees that Agent may from
time to time, but not more frequently than once per calendar year absent an
Unmatured Default or an Event of Default, request in writing the opinion of
in-house counsel and/or outside healthcare counsel to the Consolidated Entities
as to the absence, except as disclosed in the opinion, of such counsel's
knowledge of any actual, threatened or asserted violation of any Fraud and Abuse
Law on the part of any Consolidated Entity and/or the Providers, and the
sufficiency of documentation then in use for the acquisition of Practices as
complying with Fraud and Abuse Laws. Absent the existence of an Unmatured
Default or and Event of Default, such opinions shall require no special
diligence on the part of the opining attorney(s), but only requiring a report of
matters then known to such attorneys, unless Agent specifically inquires about
facts that Agent reasonably believes may raise a Fraud and Abuse Law issue. Such
opinions shall be in form and substance acceptable to Agent, shall be delivered
to Agent at Borrower's expense within fifteen (15) days of the date of request
and shall address specifically any facts inquired of in Agent's request.
5.25 Additional Collateral Upon Certain Event. If Borrower's
Total Funded Debt to Consolidated EBITDA Ratio (as calculated in Section 7.3
hereof) exceeds 2.75 for any two (2) consecutive fiscal quarters, the
Consolidated Entities and all Subsidiaries of Borrower shall, upon demand by
Agent, execute and deliver to Agent such additional documents as Agent may
require on behalf of Lenders to grant to Lenders, or to Agent for the benefit of
Lenders, as Agent may require, a perfected security interest, subject only to
Permitted Encumbrances, in all of the Consolidated Entities' then owned and
thereafter acquired real property, personal property and fixtures, including,
but not limited to, all such equipment, inventory, accounts, general
intangibles, instruments, documents, chattel paper and fixtures, and all
products and proceeds thereof (all as defined in the UCC), including insurance
proceeds. Additionally, Borrower shall use its best efforts to cause to be
executed and delivered to Borrower opinions of Borrower's outside counsel in
form and substance acceptable to Agent, Lenders and their counsel addressing the
sufficiency of the security documentation as to attachment, perfection and
priority of the security interest granted therein and such other documents as
Agent, Lenders or their counsel may require to evidence the continued compliance
of Borrower with all requirements of this Agreement. All of Agent's usual
diligence items relating to the applicable types of property shall be conducted
at
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Borrower's expenses, including, but not limited to, environmental surveys,
boundary surveys and other real estate diligence procedures. All expenses of
recordation of lien instruments, title insurance, document preparation and other
transaction costs, including, but not limited to, the reasonable fees and
expenses of Lenders' and Agent's attorneys, shall be paid by Borrower.
5.26 Existing Capital Structure of Borrower. Schedule 5.26
hereto includes a description of Borrower's current ownership structure,
including outstanding stock and any warrants, convertible debt or other like
instruments, and a list of all Subordinated Debt now outstanding.
VI. NEGATIVE COVENANTS
Borrower covenants and agrees that without the advance written
consent of Agent, until the Obligations are repaid in full:
6.1 Debts, Guaranties, and Other Obligations. No Consolidated
Entity shall incur, create, assume, or in any manner become or be liable with
respect to any Liability, except the following:
6.1.1 Obligations to Lenders. Any Obligations to
Lenders under this Agreement.
6.1.2 Existing Liabilities. Liabilities, direct or
contingent, of Consolidated Entities existing on the date of
this Agreement that are reflected in Schedule 6.1.2 hereof.
6.1.3 Endorsements. Endorsements of negotiable or
similar instruments for collection or deposit in the ordinary
course of business.
6.1.4 Trade Liabilities. Trade payables and accruals
from time to time incurred in the ordinary course of business.
6.1.5 Taxes. Taxes, assessments, or other
governmental charges that are not delinquent or are being
contested in good faith by appropriate action promptly
initiated and diligently conducted, if Borrower has made the
reserve therefor required by GAAP.
6.1.6 Seller Debt. Seller Debt, which must be
unsecured.
6.1.7 Purchase Money Debt. Purchase Money Debt,
including Assumed Debt, not to exceed (i) Six Million and
No/100 Dollars ($6,000,000.00) in the aggregate, including all
Purchase Money Debt of all
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Consolidated Entities, (ii) Three Million and No/100 Dollars
($3,000,000.00) in the aggregate, excluding for this Section
(ii) all Purchase Money Debt owed by individual Practices that
have total Purchase Money Debt of less than One Hundred
Thousand and No/100 Dollars ($100,000.00) per Practice, or
(iii) One Million and No/100 Dollars ($1,000,000.00) as to any
single Practice, absent the prior written approval of Agent as
to this Section (iii).
6.1.8 Accounting Accruals. Liabilities arising from
reserves and accruals required by GAAP that do not reflect
liquidated and mature obligations to third parties, including,
but not limited to, current deferred income taxes.
6.1.9 Liabilities Among Consolidated Entities.
Liabilities incurred to other Consolidated Entities incurred
in the ordinary course of business.
6.2 Change of Management. Borrower shall not allow or suffer
any change of management effecting a material change in the duties or change in
the personnel presently staffing the positions of Chief Executive Officer,
President or Chief Financial Officer, as set forth in Schedule 6.2 hereto.
Notwithstanding the foregoing, should any of the named managers cease such
active participation in Borrower's management due to their death or disability,
Agent shall allow Borrower a period of sixty (60) days thereafter in which a
management succession plan may be presented to Agent so that Agent may, in its
discretion, elect to accept new management in lieu of prior management, subject
to such revisions of this Agreement as Agent may require. Additionally, Lenders
have been advised that a change is pending regarding the office of Chief
Financial Officer. Borrower shall give Agent written notice of this change when
a proposal is available, and Agent shall allow Borrower a period of sixty (60)
days thereafter so that Agent may, in its discretion, elect to approve the
proposed change in management.
6.3 Change of Ownership. Borrower shall not cause or suffer to
exist a change of ownership or suffer the issuance of new stock or other event
that would result in the ownership of more than 25% of the stock of Borrower by
any Person not presently a shareholder thereof, except as may result from the
sale or disposition of the Seafield Position.
6.4 Distributions. No Consolidated Entity shall declare or pay
any dividend or other distribution or redeem any of its capital stock except for
dividend payments and other distributions from Subsidiaries to Borrower.
6.5 Encumbrances. No Consolidated Entity shall create, incur,
assume, or permit to exist any Encumbrance on any of its Property (now owned or
hereafter acquired) except for Permitted Encumbrances, and shall not undertake a
commitment of any kind in favor of any Person (other than Lenders) (i) requiring
that any or all of such Consolidated Entity's Property be or remain
unencumbered, or (ii) requiring that a Consolidated Entity grant an Encumbrance
(other than a Permitted Encumbrance) in favor of any Person (other than Lenders)
on a Consolidated Entity's Property under any circumstances whatsoever. No
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Consolidated Entity shall sign or file under the Uniform Commercial Code a
financing statement that names such Consolidated Entity as debtor or the
equivalent or sign any security agreement authorizing any secured party
thereunder to file any such financing statement, except to secure Permitted
Encumbrances.
6.6 Investments. No Consolidated Entity shall make
investments (including but not limited to acquisitions or purchases of the
obligations or stock of, or any other or additional interest) in any person,
firm, partnership, joint venture or corporation except: (a) those investments in
existence as of the Closing Date, (b) general obligations of, or obligations
unconditionally guaranteed as to principal and interest by, the United States of
America maturing within fifteen (15) months of the date of purchase, (c)
commercial paper having a rating of not less than "A2" or "P2" from Xxxxx'x or S
& P, respectively, (d) Permitted Acquisitions, (f) certificates of deposit and
bankers acceptances issued by a Lender or another banking institution with a
minimum net worth of Five Hundred Million and No/100 Dollars ($500,000,000.00)
and having a letter of credit rating of not less than "A" from Xxxxx'x or S & P,
respectively, and (g) such other investments as Agent may approve, in its
discretion.
6.7 Sales and Leasebacks. No Consolidated Entity shall enter
into any arrangement, directly or indirectly, with any Person other than another
Consolidated Entity by which such Consolidated Entity shall sell or transfer any
of its Property, whether now owned or hereafter acquired, and by which a
Consolidated Entity shall then or thereafter rent or lease as lessee such
Property or any part thereof or other Property that it intends to use for
substantially the same purpose or purposes as the Property sold or transferred.
6.8 Change of Control. Borrower shall not suffer or permit
the occurrence of a Change of Control.
6.9 Nature of Business. No Consolidated Entity shall suffer
or permit any material changes to be made in the character of its business as
carried on at the Closing Date, except for the accomplishment of Permitted
Acquisitions.
6.10 Further Acquisitions, Mergers, Etc. Except for Permitted
Acquisitions and transactions involving only Consolidated Entities, no
Consolidated Entity shall enter into any agreement to merge, consolidate, or
otherwise reorganize or recapitalize, or sell, assign, lease, or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of their Property (whether now owned or hereafter acquired).
6.11 Advances. No Consolidated Entity shall extend any loans
to any other Persons, except for (i) loans to other Consolidated Entities in the
ordinary course of business and (ii) Provider Loans not to exceed Five Hundred
Thousand and No/100 Dollars ($500,000.00) per Practice and Three Million and
No/100 Dollars ($3,000,000.00) in the aggregate at any one time.
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6.12 Disposition of Assets. No Consolidated Entity shall
dispose of any of its assets other than in the ordinary course of their present
business upon terms standard in its industry.
6.13 Inconsistent Agreements. No Consolidated Entity shall
enter into any agreement containing any provision which would be violated or
breached by the performance by Borrower of the Obligations.
6.14 Fictitious Names. Borrower shall not use any name other
than the name used in executing this Agreement or any assumed or fictitious
name.
6.15 Subsidiaries and Affiliates. No Consolidated Entity shall
create or acquire any direct or indirect Subsidiary or Affiliate or divest
itself of any material assets by transferring them to any existing Subsidiary or
Affiliate other than Permitted Subsidiaries; nor shall Borrower enter into any
partnership, joint venture, or similar arrangement, or otherwise make any
material change in its corporate structure, except that Borrower may acquire and
create Permitted Subsidiaries from time to time in the ordinary course of
business.
6.16 Place of Business. Borrower shall not transfer its
executive offices, or maintain records with respect to accounts at any locations
other than at the address for notices specified herein and at the locations of
Practices affiliated with Borrower, except as Agent may approve, in its
reasonable discretion.
6.17 Adverse Action With Respect to Plans. No Consolidated
Entity shall take any action to terminate any Plan which could reasonably result
in a material liability of a Consolidated Entity to any Person.
6.18 Transactions With Affiliates. No Consolidated Entity
shall enter into any transaction with any Affiliate except in the ordinary
course of business and on fair and reasonable terms no less favorable to the
Consolidated Entity than it would obtain in a comparable arms length transaction
with a Person not an Affiliate.
6.19 Constituent Document Amendments. No Consolidated Entity
shall amend its corporate charter or bylaws, except as necessary to accomplish
corporate transactions that do not require Lenders' or Agent's specific approval
or transactions for which such approval is necessary and has been granted.
6.20 Adverse Transactions. No Consolidated Entity shall enter
into any transaction that materially and adversely affects or, to the best of
its knowledge, is likely to materially and adversely affect the Collateral or
Borrower's ability to repay the Obligations.
6.21 Margin Securities. No Consolidated Entity shall own,
purchase or acquire (or enter into any contract to purchase or acquire) any
"margin security" as defined by
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any regulation of the Federal Reserve Board as now in effect or as the same may
hereafter be in effect.
6.22 Accounting Changes. Borrower shall not change its fiscal
year or make any other significant change in consolidated or consolidating
accounting treatment and reporting practices, except as required or permitted by
GAAP or the Securities and Exchange Commission. Any change in fiscal year shall
be subject to Agent's prior written approval.
6.23 Action Outside Ordinary Course. No Consolidated Entity
shall take any other action outside the ordinary course of their business.
VII. FINANCIAL COVENANTS
7.1 Current Ratio. Borrower shall maintain a Consolidated
Current Ratio of not less than 1.75:1.00, tested as of the end of each fiscal
quarter.
7.2 Total Funded Debt to Capital. Borrower shall maintain a
ratio of Total Funded Debt divided by Consolidated Capital of no greater than
.50:1.00, tested as of the end of each fiscal quarter.
7.3 Total Funded Debt to Consolidated EBITDA. Borrower shall
maintain a ratio of Total Funded Debt divided by Consolidated EBITDA, measured
as of the end of each fiscal quarter for the previous four consecutive fiscal
quarters, of no greater than 3.00:1.00.
7.4 Fixed Charge Coverage. Borrower shall maintain a Fixed
Charge Coverage Ratio of at least 1.25:1.00 for the previous four consecutive
fiscal quarters through the fiscal quarter ending December 31, 1997, and of at
least 1.50:1.00 thereafter.
7.5 Net Worth. Borrower shall maintain a Consolidated Net
Worth as of the end of each fiscal quarter in an amount at least equal to the
sum of Thirty-Eight Million One Hundred Sixty-Seven Thousand and No/100
($38,167,000.00), (i) plus any Net Proceeds of equity issuances arising after
the Closing Date, and (ii) plus eighty-five percent (85%) of the amount of net
income for the fiscal quarter ending March 31, 1997 and for each fiscal quarter
thereafter, without adjustment for net losses.
7.6 Capital Expenditures. Lender approval shall be required
for Borrower to expend Capital Expenditures in excess of 115% of an annual
budget to be approved by Lender. The proposed budget for each year shall be
delivered to Lender no later than sixty (60) days after the end of the previous
fiscal year.
VIII. EVENTS OF DEFAULT
8.1 Events of Default. Any of the following events shall be
considered an Event of Default under this Agreement:
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8.1.1 Payments. Borrower's failure to make payment of
any amount of the Obligations within five (5) days after the
date due.
8.1.2 Representations and Warranties. Any
representation or warranty made by Borrower or any other party
in any Loan Document having been incorrect in any material
respect as of the date thereof.
8.1.3 Negative Covenants. The failure of Borrower to
comply with any of the requirements of Article VI hereof;
provided, however, as to any such event that is both (i) the
result of an act by a third party absent the cooperation of
any Consolidated Entity, and (ii) reasonably susceptible to
being cured, the event shall not constitute an Event of
Default unless the event remains uncured for a period of
twenty (20) days following the earlier of (i) Borrower's
knowledge of the facts giving rise thereto or (ii) Agent's
written notice to Borrower given in accordance with the
provisions hereof.
8.1.4 Financial Covenants. The failure of Borrower to
comply with any of the requirements of Article VII hereof,
unless, on or before the date that is the earlier of (i)
twenty (20) days after the date on which the breach is timely
reported to Agent, or (ii) if the financial statements
disclosing the breach were submitted to Agent later than
required by this Agreement, twenty (20) days after the date on
which such financial statements were due, Borrower provides
Agent with additional financial statements demonstrating that
the breach has been cured, which statements may be as of any
other date after the reporting date for which the breach
occurred (provided that such interim statements prepared for
this purpose must be accompanied by the same certifications as
quarterly financial statements and shall not disclose any
additional breach of a financial covenant).
8.1.5 Reporting Requirements. The failure of Borrower
or any other party to timely perform any covenant in the Loan
Documents requiring the furnishing of notices, financial
reports or other information to Lender within twenty (20) days
of when due; and provided, however, that during any period of
time that a report is delinquent, Agent may at its option
increase the Pricing Values to their highest levels permitted
under this Agreement.
8.1.6 Other Covenants. The failure of Borrower to
observe or perform any covenant contained in any Loan
Document, which covenant is not subject to any specific
provision in this Article VIII; provided, however, as to any
such breach that is reasonably susceptible to being cured, the
occurrence of such breach shall not constitute an Event of
Default hereunder if such breach is fully cured within twenty
(20) days after the earlier of Borrower's knowledge of the
facts giving rise thereto or Agent's written notice thereof to
Borrower given in accordance with the provisions hereof.
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8.1.7 Involuntary Bankruptcy or Receivership
Proceedings. The appointment of a receiver, custodian,
liquidator, or trustee for any Significant Consolidated
Entity, or for any of its Property, by the order or decree of
any court or agency or supervisory authority having
jurisdiction; or a Significant Consolidated Entity's
adjudication as being bankrupt or insolvent; or the
sequestering of any of the Property of any Significant
Consolidated Entity by court order or the filing of a petition
against a Significant Consolidated Entity under any state or
federal bankruptcy, reorganization, debt arrangement,
insolvency, readjustment of debt, dissolution, liquidation, or
receivership law of any jurisdiction, whether now or hereafter
in effect, and in each case without the acquiescence of a
Significant Consolidated Entity, unless dismissed within sixty
(60) days.
8.1.8 Voluntary Petitions. Any Significant
Consolidated Entity's filing of a petition in voluntary
bankruptcy or to seek relief under any provision of any
bankruptcy, reorganization, debt arrangement, insolvency,
receivership, readjustment of debt, dissolution, or
liquidation law of any jurisdiction, whether now or hereafter
in effect, or its acquiescence in the filing of any petition
against it under any such law.
8.1.9 Discontinuance of Business. Any Significant
Consolidated Entity's discontinuance of its usual business or
its dissolution, except pursuant to transactions permitted
under this Agreement.
8.1.10 Default on Other Liabilities. Any Significant
Consolidated Entity's failure to make any payment when due on
any Liabilities in excess of One Hundred Thousand and No/100
Dollars ($100,000.00).
8.1.11 Undischarged Judgments. The existence of a
final judgment or judgments for the payment of money in excess
of One Hundred Thousand and No/100 Dollars ($100,000.00) by
any court or other Governmental Authority against a
Significant Consolidated Entity, which is not paid,
discharged, stayed, dismissed through appropriate appellate
proceedings or bonded within thirty (30) days after entry.
8.1.12 Insolvency. Any Significant Consolidated
Entity's no longer being Solvent.
8.1.13 Attachment. The issuance of an attachment or
other process against any Property of any Significant
Consolidated Entity, unless removed (by bond or otherwise)
within twenty (20) days.
8.1.14 Insurance. Any Consolidated Entity's failure
to maintain any insurance required herein or in any other Loan
Document.
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8.1.15 Contest. Any Consolidated Entity's challenge
or contest of the validity or enforceability of this Agreement
or any other Loan Document or the validity, priority or
perfection of any security interest created hereunder or under
any other Loan Document in any action, suit or proceeding.
8.1.16 Fraud and Abuse Laws. Receipt by one or more
Consolidated Entities of a notice from a Governmental
Authority that it (i) intends to disallow requested
reimbursements, demand adjustment or repayment of past
reimbursements in excess of one-half of one percent (1/2%) of
the gross revenues of Borrower for the previous four (4)
fiscal quarters in the aggregate respecting amounts submitted
for reimbursement or collected by Borrower or a Provider, or
(ii) intends to impose civil money penalties or to seek to
exclude Borrower or a Provider from participation in the
Medicare or Medicaid programs due to a failure to comply with
Fraud and Abuse Laws, if the gross revenues to Borrower
arising from Borrower or Provider exceed one-half of one
percent (1/2%) of the gross revenues of Borrower for the
previous four (4) fiscal quarters in the aggregate.
8.2 Remedies. Upon the happening of any Event of Default:
8.2.1 Default Rate. Agent may declare the
Obligations to thereafter bear interest at the Default Rate.
8.2.2 Termination of Commitments. As provided in
Article III hereof, Lenders shall not be obligated to advance
any additional Loans, and additionally, Agent may terminate
the obligation of Lenders to advance any additional Loans by
written notice to Borrower, which formal termination shall
remain in effect notwithstanding any subsequent cure of the
Event of Default and whether or not the Revolving Credit Loan
is accelerated.
8.2.3 Acceleration. Agent may declare the entire
principal amount of all Obligations then outstanding,
including interest accrued thereon, to be immediately due and
payable without presentment, demand, protest, notice of
protest, or dishonor or other notice of default of any kind,
all of which are hereby expressly waived.
8.2.4 Setoff. Any Lender may exercise its lien upon
and right of setoff against any monies, items, credits,
deposits or instruments that such Lender may have in its
possession and which belong to Borrower or to any other person
or entity liable for the payment of any or all of the
Obligations.
8.2.5 Other Remedies. Lenders and Agent may exercise
any right that they may have under any other document
evidencing or securing the Obligations or otherwise available
to Lenders or Agent at law or equity.
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8.2.6 Attorney-in-Fact. Borrower hereby irrevocably
appoints Agent as Borrower's attorney-in-fact to take any
action to facilitate Agent's exercise of remedies hereunder.
IX. AGENT
9.1 Appointment of Agent. Lenders hereby appoint Agent to act
as specified in this Article IX. Agent's duties hereunder are administrative and
ministerial in nature, and Agent's capacity is that of an independent contractor
for Lenders. Agent is not a trustee or other fiduciary for Lenders, and Agent
has no duties whatsoever to Lenders except as expressly set forth in this
Agreement.
9.2 Powers of Agent.
9.2.1 Administration of Revolving Credit Loan. Except
as otherwise provided in this Section 9.2, Agent shall have
the exclusive power and authority to (i) give all consents and
approvals, issue waivers and amendments, enforce the Loan
Documents (including, but not limited to, the power to enforce
the Loan Documents in any relevant case under the Bankruptcy
Code) and otherwise take all actions permitted of Agent under
this Agreement or any other Loan Document, (ii) give all
consents and approvals, issue waivers and amendments, enforce
the Loan Documents (including, but not limited to, the power
to enforce the Loan Documents in any relevant case under the
Bankruptcy Code) and otherwise take all actions permitted of
Lenders under this Agreement or any other Loan Document,
excepting only those matters that the Loan Documents
specifically reserve for the respective Lenders severally
(such as the computation of LIBOR charges unique to the
circumstances of a given Lender), (iii) receive all payments,
notices and other deliveries and communications to be given
Lenders or Agent under this Agreement or any other Loan
Document, and (iv) to perform such actions as are incidental
to any of the foregoing.
9.2.2 Matters Reserved to Required Lenders. Absent
the prior approval of the Required Lenders, Agent shall not
waive or amend any financial covenant set forth in Article VII
hereof or approve any acquisition for which approval is
necessary under the definition of Permitted Acquisitions set
forth in Article I hereof.
9.2.3 Matters Reserved to all Lenders. Absent the
prior approval of all Lenders, Agent shall not forgive any
principal included in the Obligations; waive or amend any
interest rate applicable to the Obligations; waive or amend
the Maturity Date; waive or amend the amount of any Lender's
Commitment; release or subordinate any security interest
securing the Obligations (other than releases thereof in
connection with transactions for which the approval of Lenders
and/or Agent is not required, such as the release of pledged
stock of a
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Subsidiary in connection with the merger of that Subsidiary
into another Subsidiary); waive an Event of Default arising
from non-payment of any principal or interest due on the
Obligations; accelerate the maturity of the Obligations; or
amend the definitions of Pro Rata Share or Required Lenders.
9.3 Duties of Agent.
9.3.1 Specific Duties of Agent; Standard of Care.
Agent shall (i) remit to each Lender, with reasonable
promptness, the appropriate Pro Rata Share of payments
received or other amounts collected on account of the
Obligations, (ii) forward to Lenders, with reasonable
promptness, counterparts or copies of Borrowing Notices,
financial reports and other information that may be delivered
to Agent by Borrower pursuant to the requirements of the Loan
Documents, (iii) notify Lenders of any Unmatured Default or
Event of Default known to Agent, in accordance with Section
9.7 below, and (iv) otherwise administer the Revolving Credit
Loan through the exercise of such of the powers granted herein
as Agent deems appropriate from time to time. Agent shall have
no liability to Lenders for any action or inaction relating to
this Agreement or the other Loan Documents, except for actual
losses caused by its gross negligence or reckless or willful
misconduct.
9.3.2 Limitations on Agent's Duties. Agent shall not
be obligated to take any action hereunder or under any other
Loan Document (i) if such action would, in the opinion of
Agent, be contrary to applicable law, this Agreement or the
other Loan Documents, (ii) if it shall not first be
specifically indemnified to its satisfaction against any and
all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action, (iii) if it
would likely subject Agent to a tax in any jurisdiction where
it is not then subject to a tax, (iv) if it would likely
require Agent to qualify to do business in any jurisdiction
where it is not then so qualified, unless Agent receives
security or indemnity satisfactory to it against any tax or
other liability in connection with such qualification or
resulting from the taking of such action in connection
therewith, or (v) if it would likely subject Agent to in
personam jurisdiction in any location where it is not then so
subject.
9.3.3 Agent's Right to Require Instructions in
Performance of Duties. If Agent, in its sole and absolute
discretion, requests instructions from the Required Lenders
with respect to any act or action (including the failure to
act) in connection with this Agreement or any other Loan
Document for which the approval of the Required Lenders or all
Lenders is not otherwise required, Agent shall be entitled, at
its option, to refrain from such action, or to continue such
inaction, unless and until Agent shall have received such
instructions, and Agent shall incur no liability by reason of
so acting or refraining from action. No Lender shall have any
right of action whatsoever against Agent as a result of
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Agent's acting or refraining from acting hereunder or under
any other Loan Document in accordance with the instructions of
the Required Lenders in such a case.
9.3.4 Agent's Reliance on Others in Performance of
Duties. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution,
notice, statement, consent, certificate, telex, teletype or
facsimile message, order or other documentary,
teletransmission or telephone message believed by it in good
faith to be genuine and correct and to have been signed, sent
or made by the proper Person. Agent may consult with legal
counsel (including counsel for Borrower), accountants and
other experts selected by it with respect to all matters
pertaining to this Agreement and the other Loan Documents and
its duties hereunder and thereunder and shall not be liable
for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel (including
counsel for Borrower), accountants or experts.
9.3.5 Sharing of Information. Except as otherwise
expressly provided in this Article IX, Agent shall have no
duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other
information concerning the business, prospects, operations,
properties, financial or other condition or creditworthiness
of the Consolidated Entities or any other Person that may come
into its possession, whether before the making of the initial
Loans or at any time or times thereafter. All notices to be
given to Borrower by a Lender hereunder shall be concurrently
given to Agent and all other Lenders.
9.4 Indemnification of Agent. To the extent Agent is not
reimbursed by or on behalf of Borrower, and without limiting the obligation of
Borrower to do so, Lenders will reimburse and indemnify Agent, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees and expenses) or
disbursements of any kind or nature whatsoever that may at any time (including
at any time following the indefeasible repayment in full of the Loans) be
imposed on, incurred by or asserted against Agent in any way relating to or
arising out of this Agreement or any other Loan Document or the transactions
contemplated thereby or any action taken or omitted by Agent under or in
connection with any of the foregoing, and in particular will reimburse Agent for
out-of-pocket expenses promptly upon demand by Agent therefor; provided,
however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements finally determined by a court of competent
jurisdiction and not subject to any appeal or pursuant to arbitration to have
resulted from Agent's gross negligence or reckless or willful misconduct. Agent
may offset any amounts due Agent by any Lender against obligations of Agent to
that Lender.
9.5 No Representations by Agent. Each Lender acknowledges
that neither Agent nor any of its officers, directors, employees, attorneys,
accountants or agents has made
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any representation or warranty to it regarding the Consolidated Entities, the
Revolving Credit Loan, the Collateral or otherwise relating to this Agreement.
Agent shall not be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any other Loan Document
or in any document, instrument, certificate or other writing delivered in
connection herewith or therewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, priority or sufficiency of
this Agreement or any other Loan Document or the financial condition of the
Consolidated Entities or any other Person, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Loan Document, or the financial
condition of the Consolidated Entities or any other Person or the existence or
possible existence of any Unmatured Default or Event of Default.
9.6 Independent Investigations by Lenders. Each Lender
acknowledges that, independently and without reliance upon Agent or any other
Lender and based on such documents and information as it has deemed and may deem
appropriate, (i) it has made its own appraisal of and investigation into the
business, prospects, operations, properties, financial and other condition and
creditworthiness of the Consolidated Entities in connection with its decision to
enter into this Agreement and extend credit to Borrower hereunder, and (ii) it
will continue to make its own credit analysis, appraisals and decisions in
taking or not taking action hereunder.
9.7 Notice of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Unmatured Default or Event of
Default, other than any Unmatured Default or Event of Default arising out of the
failure to pay any principal, interest, fees or other amounts payable to Agent
for the account of Lenders, unless Agent has received written notice from
Borrower or a Lender describing such Unmatured Default or Event of Default and
stating that such notice is a "notice of default." In the event that Agent
receives such a notice, Agent shall give notice thereof to Lenders as soon as
reasonably practicable; provided, however, that if any such notice has also been
furnished to Lenders, Agent shall have no obligation to notify Lenders with
respect thereto. Each Lender shall promptly give Agent such a notice upon its
actual knowledge of an Unmatured Default or an Event of Default; provided,
however, that the failure of any Lender to deliver such notice in the absence of
gross negligence or reckless or willful misconduct shall not affect its rights
hereunder or under the other Loan Documents.
9.8 Funding of Loans Pursuant to Borrowing Notices. Promptly
following receipt of notice from Agent that a Borrowing Notice has been
submitted, and provided that all conditions to funding are believed to have been
satisfied, each Lender shall transfer to a designated account with Agent that
Lender's Pro Rata Share of the requested funding. The transfer of funds shall
occur within the time required for funding under this Agreement; provided,
however, no Lender shall be obligated to fund a LIBOR Loan earlier than two (2)
Business Days after its receipt of notice of the borrowing from Agent. Should
any Lender fail to timely fund its Pro Rata Share of a requested Loan, Agent
may, but shall be under no obligation whatsoever to, advance to Borrower the
defaulted Lender's Pro Rata Share of the
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requested Loan. If such an advance is made, it shall be deemed an advance by
Agent for the account of the defaulting Lender and shall bear interest at the
rate applicable to the Loan funded by the advance, payable on demand.
9.9 Agent in its Individual Capacity. With respect to its
Commitments, and the Loans made by it, Agent shall have the same rights and
powers under the Loan Documents as any other Lender or holder of a Note and may
exercise the same as though it were not performing the duties specified herein;
and the terms "Lenders," "Required Lenders," and any similar terms shall, unless
the context clearly otherwise indicates, include Agent in its individual
capacity as a Lender. Agent may accept deposits from, lend money to and
generally engage in any kind of banking, trust, financial advisory or other
business with the Consolidated Entities or any of their respective Affiliates as
if it were not performing the servicing duties specified herein, and may accept
fees and other consideration from Borrower for services in connection with this
Agreement and otherwise without having to disclose or account for the same to
Lenders.
9.10 Holders. Agent may deem and treat the payee of any Note
as the holder thereof and Lender hereunder for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof
purportedly executed by the payee, as the case may be, shall have been filed
with Agent. Any request, authority or consent of any Person that, at the time of
making such request or giving such authority or consent, is the holder of any
Note according to Agent's information, shall be conclusive and binding on any
subsequent holder, transferee, assignee or endorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.
9.11 Successor Agent. Agent may resign at any time upon sixty
(60) days' prior written notice to Borrower and Lenders. Agent may be removed
upon Agent's insolvency, liquidation or the appointment of a receiver for Agent,
by action of the Required Lenders, at any time upon sixty (60) days' prior
written notice to Borrower and Agent. Such resignation or removal, as the case
may be, shall take effect upon the appointment of a successor Agent as provided
herein. The Required Lenders will appoint from among Lenders a successor Agent.
If no successor Agent shall have been appointed within such sixty (60) day
period, Agent may appoint, after consulting with Lenders and Borrower, a
successor agent from among Lenders, who shall serve as Agent until such time, if
any, as the Required Lenders shall have appointed a successor Agent as provided
hereinabove. Upon the written acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. After any retiring Agent's
resignation as Agent, the provisions of this Article shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent.
9.12 Sharing of Payments, etc. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, set-off, counterclaim
or otherwise, obtain payment with
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respect to the Obligations which results in its receiving more than its Pro Rata
Share of the aggregate payments with respect to all of the Obligations, then (a)
such Lender shall be deemed to have simultaneously purchased from the other
Lenders a share in the Obligations so that the amount of the Obligations held by
each of Lenders shall continue to equal their respective Pro Rata Shares, and
(b) such other adjustments shall be made from time to time as shall be equitable
to insure that Lenders share such payments ratably. No Lender shall exercise its
banker's lien, set-off or other right to accomplish such payment absent Agent's
prior consent.
9.13 Separate Liens on Collateral. Each Lender agrees with the
other Lenders that, with the exception of security interests in deposit accounts
and like property in the possession of a Lender as expressly provided for in
this Agreement, it will not take or permit to exist any Encumbrance in its favor
on any of the Collateral or other property of any of the Consolidated Entities
other than Encumbrances securing the Obligations due to all Lenders pursuant to
the Loan Documents.
9.14 Payments Between Agent and Lenders. All payments by Agent
to any Lender, and all payments by any Lender to Agent, under the terms of this
Agreement shall be made by wire transfer in immediately available funds to the
receiving party's address specified for notices in this Agreement. If any of
Lenders fail to pay when due any sum payable to Agent, then, except as otherwise
provided in Section 9.8 hereof, such sum shall bear interest until paid at the
interest rate per annum for overnight borrowing by the payee from the Federal
Reserve Bank for the period commencing on the date such payment was due and
ending on, but excluding, the date such payment is made.
9.15 Assignments and Participations. Absent the approval of
the other Lenders, no Lender shall assign its interest in the Revolving Credit
Loan without first offering to sell such Lender's interest to the other Lenders
to be closed Pro Rata to the Lender(s) who may elect to purchase such interest.
Such offers to sell shall be made in writing, shall provide the other Lenders
ten (10) days to accept or reject, and shall allow an additional ten (10) days
to close. Lenders may sell participation interests in their interests in the
Revolving Credit Loan as long as the terms of such participations establish that
no participant will be regarded as a Lender under this Agreement.
9.16 Bankruptcy Provisions. Should any of the Consolidated
Entities become a party to a case under the Bankruptcy Code, each Lender shall
be entitled to file its own claim, to the extent such a filing may be necessary.
Agent shall review each claim before being filed by a Lender to assure that the
claim is filed on a basis consistent with Agent's records and Agent's legal
positions taken pursuant to this Agreement. Should any of the Consolidated
Entities become a party to a reorganization proceeding under the Bankruptcy
Code, each Lender shall be recognized as the holder of a separate claim for the
purpose of the approval or rejection of a Plan under 11 U.S.C. ss. 1126, may
freely vote such claim, and the provisions of that Section shall control the
other provisions of this Agreement that otherwise require the consent of the
Required Lenders or all Lenders in certain circumstances. Agent
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shall continue to administer the Revolving Credit Loan on behalf of Lenders, as
they may be amended by any adopted Plan of Reorganization.
9.17 Foreclosure of Collateral. In the event of a foreclosure
of any Collateral, Agent may issue a credit bid for the account of all Lenders,
up to the amount of the then outstanding Obligations. Any Property acquired at
such a foreclosure (or acquired by Agent through a conveyance in lieu of
foreclosure) shall be held and administered by Agent for the benefit of all
Lenders pursuant to the terms of this Article IX.
9.18 Procedures for Notices and Approvals. All notices given
among Lenders and Agent with respect to this Agreement or the other Loan
Documents shall be given in the manner provided in this Agreement. Additionally,
should Agent request Lenders' approval of any matter, each Lender shall respond
in writing within five (5) Business Days after the Business Day on which the
request was received. If a Lender fails to so respond, it shall be deemed to
have approved the action proposed by Agent.
9.19 Amendments to Article IX. No provision of this Article IX
may be amended or waived absent the prior written consent of all Lenders and
Agent. Borrower's approval shall not be required for the amendment or waiver of
any provision of this Article IX; provided, however, Borrower's written consent
shall be required for any amendment of this Article IX that would eliminate the
position of Agent.
X. GENERAL PROVISIONS
10.1 Notices. All communications relating to this Agreement or
any of the other Loan Documents shall be in writing and shall effective when be
delivered by mail, overnight courier, special courier, telecopier or otherwise
to the following addresses:
if to Borrower:
Response Oncology, Inc.
Attn: Xxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxx Xxxx.
Xxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
With a Copy To:
Baker, Donelson, Bearman & Xxxxxxxx
Attn: Xxxx X. Good, Esq.
000 Xxxxxxx Xxx.
00xx Xxxxx
00
00
Xxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
If to NationsBank or Agent:
NationsBank of Tennessee, N.A.
Attn: Xxxxx X. Xxxxx
0 XxxxxxxXxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
With a Copy To:
Boult, Cummings, Xxxxxxx & Xxxxx, PLC
Attn: Xxxx X. Xxxxxxx III, Esq.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
If to Union Planters:
Union Planters National Bank
Attn: Xxxxxxx XxXxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
If to AmSouth:
AmSouth Bank of Tennessee
Attn: Xxxxx X. Wind
000 Xxxxx Xxxxxx Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Any party may change its address for receipt of notice by
written direction to the other parties hereto.
10.2 Renewal, Extension, or Rearrangement. All provisions of
this Agreement relating to Obligations shall apply with equal force and effect
to each and all promissory notes executed hereafter which in whole or in part
represent a renewal, extension for any period, increase, or rearrangement of any
part of the Obligations originally represented by any part of such other
Obligations.
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10.3 Application of Payments. Amounts received with respect to
the Obligations shall be applied (i) first, to any expenses due Lenders or
Agent, (ii) second, to accrued and unpaid interest under any of the Obligations,
(iii) third, to reduce the unpaid principal portion of the Obligations (other
than those arising from Hedge Agreements) in such manner as determined by Agent,
and (iv) fourth, to any Obligations arising under Hedge Agreements (apportioned
pro rata among them if more than one).
10.4 Counterparts. This Agreement may be executed in
counterparts with all signatures or by counterpart signature pages, and it shall
not be necessary that the signatures of all parties be contained on any one
counterpart. Each counterpart shall be deemed an original, but all of them
together shall constitute one and the same instrument.
10.5 Negotiated Document. This Agreement and the other Loan
Documents have been negotiated by the parties with full benefit of counsel and
should not be construed against any party as author.
10.6 Consent to Jurisdiction; Exclusive Venue. Borrower hereby
irrevocably consents to the jurisdiction of the United States District Court for
the Middle District of Tennessee and of all Tennessee state courts sitting in
Davidson County, Tennessee, for the purpose of any litigation to which Lenders
or Agent may be a party and which concerns this Agreement or the Obligations. It
is further agreed that venue for any such action shall lie exclusively with
courts sitting in Davidson County, Tennessee, unless Lenders and Agent agree to
the contrary in writing. This election applies only for the limited judicial
proceedings that may apply as set forth in the provision of this Agreement
electing binding arbitration for the resolution of disputes and does not impair
the effect of that provision in any way.
10.7 Not Partners; No Third Party Beneficiaries. The
relationship of Lenders and Borrower is that of lenders and borrower only, and
neither is a fiduciary, partner or joint venturer of the other for any purpose.
This Agreement has been executed for the sole benefit of Lenders, and no third
party is authorized to rely upon Lenders' rights or duties hereunder.
10.8 No Reliance on Lenders' Analysis. Borrower acknowledges
and represents that, in connection with the Obligations, Borrower has not relied
upon any financial projection, budget, assessment or other analysis by Lenders
or Agent upon any representation by Lenders as to the risks, benefits or
prospects of Borrower's business activities or present or future capital needs
incidental thereto, all such considerations having been examined fully and
independently by Borrower.
10.9 No Marshaling of Assets. Lenders and Agent may proceed
against collateral securing the Obligations and against parties liable therefor
in such order as they may elect, and neither Borrower nor any surety or
guarantor for Borrower nor any creditor of Borrower shall be entitled to require
Lenders or Agent to marshal assets. The benefit of any rule of law or equity to
the contrary is hereby expressly waived.
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10.10 Impairment of Collateral. Lenders or Agent may, in their
sole discretion, release any Collateral securing the Obligations or release any
party liable therefor. The defenses of impairment of collateral and impairment
of recourse and any requirement of diligence in collecting the Obligations are
hereby waived.
10.11 Business Days. If any payment date under the Obligations
falls on a day that is not a Business Day, or if the last day of any notice
period falls on such a day, the payment shall be due and the notice period shall
end on the next following Business Day.
10.12 Participations. Lenders may, from time to time, in their
sole discretion, and with concurrent notice to Borrower, sell participations in
any credit subject hereto to such other investors or financial institutions as
it may elect. Lenders and Agent may from time to time disclose to any
participant or prospective participant such information as they may have
regarding the financial condition, operations, and prospects of Borrower.
10.13 Standard of Care; Limitation of Damages. Lenders and
Agent shall be liable to Borrower only for matters arising from this Agreement
or otherwise related to the Obligations resulting from such Lender's or Agent's
gross negligence or reckless or willful misconduct, and liability for all other
matters is hereby waived. Lenders and Agent shall not in any event be liable to
Borrower for special or consequential damages arising from this Agreement or
otherwise related to the Obligations.
10.14 Incorporation of Schedules. All Schedules and Exhibits
referred to in this Agreement are incorporated herein by this reference.
10.15 Indulgence Not Waiver. Lenders' or Agent's indulgence in
the existence of a default hereunder or any other departure from the terms of
this Agreement shall not prejudice Lenders' or Agent's rights to declare a
default or otherwise demand strict compliance with this Agreement.
10.16 Cumulative Remedies. The remedies provided Lenders and
Agent in this Agreement are not exclusive of any other remedies that may be
available to Lenders and Agent under any other document or at law or equity.
10.17 Amendment and Waiver in Writing. No provision of this
Agreement can be amended or waived, except by a statement in writing signed by
the party or parties against whom enforcement of the amendment or waiver is
sought. Waivers and amendments may be executed by Agent on behalf of Lenders,
subject to the requirements of Article IX hereof requiring the consent of some
or all of Lenders under certain circumstances.
10.18 Assignment. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of Borrower and
Lenders, except that Borrower shall not assign any rights or delegate any
obligations arising hereunder without the
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prior written consent of Lenders. Any attempted assignment or delegation by
Borrower without the required prior consent shall be void.
10.19 Entire Agreement. This Agreement and the other written
agreements among Borrower, Lenders and Agent represent the entire agreement
between the parties concerning the subject matter hereof, and all oral
discussions and prior agreements are merged herein. Provided, if there is a
conflict between this Agreement and any other document executed
contemporaneously herewith with respect to the Obligations, the provision in
this Agreement shall control.
10.20 Severability. Should any provision of this Agreement be
declared invalid or unenforceable for any reason, the remaining provisions
hereof shall remain in full effect.
10.21 Time of Essence. Time is of the essence of this
Agreement, and all dates and time periods specified herein shall be strictly
observed.
10.22 Applicable Law. The validity, construction and
enforcement of this Agreement and all other documents executed with respect to
the Obligations shall be determined according to the laws of Tennessee
applicable to contracts executed and performed entirely within that state.
10.23 Captions Not Controlling. Captions and headings have
been included in this Agreement for the convenience of the parties, and shall
not be construed as affecting the content of the respective Sections.
10.24 Arbitration. Any controversy or claim between or among
the parties hereto including but not limited to those arising out of or relating
to this instrument, agreement or document or any related instruments, agreements
or documents, including any claim based on or arising from an alleged tort,
shall be determined by binding arbitration in accordance with the Federal
Arbitration Act (or if not applicable, the applicable state law), the Rules of
Practice and Procedure for the Arbitration of Commercial Disputes of
J.A.M.S./Endispute or any successor thereof ("J.A.M.S."), and the "Special
Rules" set forth below. In the event of any inconsistency, the Special Rules
shall control. Judgment upon any arbitration award may be entered in any court
having jurisdiction. Any party to this Agreement may bring an action, including
a summary or expedited proceeding, to compel arbitration of any controversy or
claim to which this Agreement applies in any court having jurisdiction over such
action.
10.24.1 Special Rules. The arbitration shall be
conducted in Nashville, Tennessee and administered by J.A.M.S
who will appoint an arbitrator; if J.A.M.S. is unable or
legally precluded from administering the arbitration, then the
American Arbitration Association will serve. All arbitration
hearings will be commenced within 90 days of the demand for
arbitration; further, the
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arbitrator shall only, upon a showing of cause, be permitted
to extend the commencement of such hearing for up to an
additional 60 days.
10.24.2 Reservation of Rights. Nothing in this
arbitration provision shall be deemed to (i) limit the
applicability of any otherwise applicable statutes of
limitation or repose and any waivers contained in this
arbitration provision; or (ii) be a waiver by any Lender of
the protection afforded to it by 12 U.S.C. Sec. 91 or any
substantially equivalent state law; or (iii) limit the right
of any Lender (a) to exercise self help remedies such as (but
not limited to) setoff, or (b) to foreclose against any real
or personal property collateral, or (c) to obtain from a court
provisional or ancillary remedies such as (but not limited to)
injunctive relief, writ of possession or the appointment of a
receiver. Lenders and Agent may exercise such self help
rights, foreclose upon such property, or obtain such
provisional or ancillary remedies before, during or after the
pendency of any arbitration proceeding brought pursuant to
this instrument, agreement or document. Neither this exercise
of self help remedies nor the institution or maintenance of an
action for foreclosure or provisional or ancillary remedies
shall constitute a waiver of the right of any party, including
the claimant in such action, to arbitrate the merits of the
controversy or claim occasioning resort to such remedies.
10.25 Facsimile Signatures. This Agreement may be executed by
facsimile signatures, and shall be effective when Agent has received telecopy
transmissions of the signature pages executed by all parties hereto; provided,
however, that all parties shall deliver original executed documents to Agent
promptly following the execution hereof.
Executed as of the date first written above.
RESPONSE ONCOLOGY, INC., Borrower
By:
------------------------------------------
Title:
---------------------------------------
NATIONSBANK OF TENNESSEE, N.A., as
Agent
By:
------------------------------------------
Title:
---------------------------------------
NATIONSBANK OF TENNESSEE, N.A., as a
Lender, Issuing Bank and Swingline Lender
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By:
---------------------------------------
Title:
------------------------------------
UNION PLANTERS NATIONAL BANK,
as a Lender
By:
---------------------------------------
Title:
------------------------------------
AMSOUTH BANK OF TENNESSEE,
as a Lender
By:
---------------------------------------
Title:
------------------------------------
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EXHIBIT 2.5.1(B)
BORROWING/CONVERSION NOTICE
TO: NationsBank of Tennessee, N.A., Agent
LENDERS: NationsBank of Tennessee, N.A. Date: , 199
Union Planters National Bank --------- -
AmSouth Bank of Tennessee
BORROWER: Response Oncology, Inc.
This notice is delivered under the First Amended and Restated
Loan Agreement (as renewed, extended and amended, the "Loan Agreement") dated as
of April 21, 1997, between Borrower and Lenders. Terms defined in the Loan
Agreement have the same meanings when used -- unless otherwise defined -- in
this request.
Borrower requests a Loan under the Loan Agreement as follows:
The requested draw is from the Revolving Credit Loan.
Borrowing Date(1) , 199
---------- -
Amount of Borrowing
----------------
Type of Borrowing(2)
----------------
For LIBOR Loans, the Interest Period(3) months
----------
Select one:
The proceeds of the requested Loan shall be disbursed
---- to Borrower as provided in the Loan Agreement. The
purpose of the requested Loan is (select one for this
Loan):
New advance for a Permitted Acquisition
-----
New advance for capital expenditures other than
----- Permitted Acquisitions
New advance for IMPACT Center or ancillary
----- service development
New advance for working capital
-----
The proceeds of the requested LIBOR Loan shall be
---- applied to the payment of Borrower's existing Prime
Rate Loan, this new Loan being a conversion of a
Prime Rate Loan to a LIBOR Loan
---------------------------
(1)Same Banking Day for Prime Rate Loans, second following Banking Day for
LIBOR Loans
(2)LIBOR or Prime Rate Loan.
(3)1, 2, 3, 6 or 12 months.
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The proceeds of the requested LIBOR Loan shall be
---- applied to the payment of the following LIBOR Loan,
subject to all requirements of the Loan Agreement,
this new Loan being a conversion of a LIBOR Loan to a
different LIBOR Loan:
Date:
-----------------------------
Amount:
---------------------------
Interest Period:
------------------
The proceeds of the requested Prime Rate Loan shall
---- be applied to the payment of the following LIBOR
Loan, subject to all requirements of the Loan
Agreement, this new Loan being a conversion of a
LIBOR Loan to a Prime Rate Loan:
Date:
-----------------------------
Amount:
---------------------------
Interest Period:
------------------
Date:
-----------------------------
Amount:
---------------------------
Interest Period:
------------------
If this draw request relates to an acquisition, attached
hereto as Exhibit A are calculations of financial covenants as they will exist
both before and after the closing of the acquisition. These calculations
demonstrate continued compliance with all financial covenants before and after
the acquisition.
Borrower certifies that on the date hereof and on the date of
the above Borrowing Date -- after giving effect to the requested Loan -- (a) all
of the representations and warranties in the Loan Documents will be true and
correct in all material respects -- unless they speak to a specific date or the
facts on which they are based have been changed by transactions contemplated or
permitted by the Loan Agreement, (b) no Event of Default or Unmatured Default
will exist, and (c) all conditions to Borrower's right to receive the requested
Loan under the Loan Agreement have been satisfied.
RESPONSE ONCOLOGY, INC., Borrower
By:
--------------------------------
(Name)
-----------------------------
(Title)
----------------------------
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EXHIBIT 1.2
ACQUISITION CERTIFICATE
SUBMITTED BY RESPONSE ONCOLOGY, INC. TO
NATIONSBANK OF TENNESSEE, N.A., AS AGENT
This Acquisition Certificate ("Certificate") is delivered
under the First Amended and Restated Loan Agreement (as renewed, extended and
amended, the "Loan Agreement") dated as of April 21, 1997, among RESPONSE
ONCOLOGY, INC. ("Borrower"), a Tennessee corporation; AMSOUTH BANK OF TENNESSEE,
a Tennessee banking corporation, NATIONSBANK OF TENNESSEE, N.A., a national
banking association, and UNION PLANTERS NATIONAL BANK, a national banking
association (collectively "Lenders"); and NATIONSBANK OF TENNESSEE, N.A., in its
capacity as Agent for Lenders ("Agent"). Capitalized terms defined in the Loan
Agreement have the same meanings when used in this Certificate.
This Certificate is submitted with respect to (CHECK ONE):
A. _____ An acquisition (i) for which Agent's approval is not
required under the Loan Agreement as a Permitted Acquisition and (ii) that will
not result in Borrower's inclusion of any additional Acquisition EBITDA.
Therefore, this submission is for Lender's information only. THIS CERTIFICATE IS
SUBMITTED AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO THE ANTICIPATED CLOSING OF
THE ACQUISITION.
B.______ An acquisition (i) for which Agent's approval is not
required under the Loan Agreement as a Permitted Acquisition and (ii) that
Borrower intends to result in Borrower's inclusion of additional Acquisition
EBITDA. Therefore, this submission constitutes Borrower's request that the
target's financial statements submitted herewith be approved as sufficient under
the definition of Acquisition EBITDA under the Loan Agreement.
THIS CERTIFICATE IS SUBMITTED AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO THE
ANTICIPATED CLOSING OF THE ACQUISITION.
C._______ An acquisition (i) for which Agent's approval is
required under the Loan Agreement as a Permitted Acquisition and (ii) that
Borrower intends to result in Borrower's inclusion of additional Acquisition
EBITDA. Therefore, this submission constitutes Borrower's request that the
proposed acquisition be approved as a Permitted Acquisition and that the
target's financial statements submitted herewith be approved as sufficient under
the definition of Acquisition EBITDA under the Loan Agreement. THIS CERTIFICATE
IS SUBMITTED PRIOR TO BORROWER'S ENTERING INTO A BINDING OBLIGATION TO CLOSE THE
ACQUISITION. AGENT SHALL RESPOND WITHIN FIVE (5) BUSINESS DAYS BUT MAY REQUIRE
LONGER BEFORE FINAL APPROVAL OR DENIAL IF ADDITIONAL INFORMATION IS NEEDED.
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Borrower certifies and submits the following:
The acquisition ____ does ___ does not involve the acquisition
of, or the creation of, a corporate entity or other entity that will be a
Consolidated Entity and which is therefore required to be pledged to Lender.
No Unmatured Default or Event of Default now exists, and none
will be caused by the consummation of the proposed acquisition. Without limiting
the foregoing, no financial covenant under the Loan Agreement will be breached
by the consummation of the proposed transaction. Pro forma financial statements
showing the effect of this acquisition on all financial covenants are attached
to this Certificate.
Following is a brief description of the acquisition target by
location, size, number of physicians, type of practice and other key elements:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
IF SELECTION B ABOVE APPLIES:
Accompanying this Certificate are the financial statements of
the acquisition target that Borrower requests be approved as the basis for
inclusion of Acquisition EBITDA arising from the proposed acquisition.
IF SELECTION C ABOVE APPLIES:
Accompanying this Certificate are the financial statements of
the acquisition target and such other information as Borrower believes necessary
to enable Lenders to assess the proposed transaction. Borrower shall submit such
additional information in this regard as Agent may request.
This is not a draw request; all draw requests shall be
submitted separately.
Dated the day of , 199 .
--- ----- -
RESPONSE ONCOLOGY, INC.
By:
-------------------------------------
Title:
----------------------------------
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APPROVAL
Agent hereby confirms its approval of the following matters:
____ If A above applies, Agent acknowledges receipt of this
Certificate and confirms that the acquisition may proceed.
____ The inclusion of Acquisition EBITDA arising from the
acquisition described above is approved.
____ The transaction described above is approved as a
Permitted Acquisition.
Dated the day of , 199 .
-- ------ --
NATIONSBANK OF TENNESSEE, N.A.,
as Agent
By:
-----------------------------
Title:
--------------------------
