LOAN AND SECURITY AGREEMENT among SUN HEALTHCARE GROUP, INC., et. al as Borrowers, HELLER HEALTHCARE FINANCE, INC., as Collateral Agent and Lender CITICORP USA, INC. as Administrative Agent and Lender, and The Financial Institution(s) Listed on the...
EXHIBIT 10.1
among
SUN HEALTHCARE GROUP, INC., et. al
as Borrowers,
XXXXXX HEALTHCARE FINANCE, INC.,
as Collateral Agent and Lender
CITICORP USA, INC.
as Administrative Agent and Lender,
and
The Financial Institution(s) Listed
on the Signature Pages Hereof,
as Lenders
Dated as of February 28, 2002
TABLE OF CONTENTS
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SECTION 1. | DEFINITIONS AND ACCOUNTING TERMS | 1 |
1.1 |
Certain Defined Terms | 1 |
1.2 |
Interpretation | 2 |
SECTION 2. | LOANS AND COLLATERAL | 2 |
2.1 |
Revolving Credit Facility | 2 |
(A) Revolving Loan | 2 |
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(B) Borrowing Base | 3 |
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(C) Eligible Collateral | 3 |
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(D) Borrowing Mechanics | 4 |
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(E) Payments with Respect to the Settlement Agreement | 5 |
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(F) Notes | 5 |
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(G) Letters of Credit | 5 |
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(1) Maximum Amount | 5 |
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(2) Reminbursement | 6 |
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(3) Request for Letters of Credit | 6 |
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(4) Renewal | 6 |
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(H) Other Letter of Credit Provisions | 6 |
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(1) Obligations Absolute | 6 |
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(2) Nature of Lender's Duties | 7 |
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(3) Liability | 8 |
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(I) Availability of a Lender's Pro Rata Share | 8 |
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(1) Lender's Amounts Available on a Funding Date | 8 |
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(2) Lender's Failure to Fund | 8 |
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(3) Payments to a Defaulting Lender | 8 |
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(4) Defaulting Lender's Right to Vote | 8 |
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(J) Pricing and Structural Changes Required for Syndication | 9 |
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2.2 |
Interest | 9 |
(A) Rate of Interest | 9 |
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(B) Computation and Payment of Interest | 10 |
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(C) Interest Laws | 10 |
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(D) Conversion or Continuation | 11 |
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2.3 |
Fees | 12 |
(A) Unused Line Fee | 12 |
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(B) Letter of Credit Fees | 12 |
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(C) Prepayment Fees | 12 |
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(D) Collateral Management and Administrative Agent Fees | 12 |
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(E) Audit Fees | 13 |
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(F) Other Fees and Expenses | 13 |
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(G) Fee Letter | 13 |
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2.4 |
Payments and Prepayments | 13 |
(A) Matters Relating to Cash Management | 13 |
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(B) Mandatory Prepayments | 16 |
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(1) Overadvance | 16 |
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(2) Prepayments from Proceeds of Asset Dispositions | 16 |
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(3) Prepayments for Issuance of Securities | 16 |
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(4) Prepayments from Tax Refunds | 16 |
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(5) Prepayments from Proceeds of Casualty or Condemnation | 16 |
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(6) Repayment from Sale of SunScript | 16 |
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(C) Collateralization of Lender
Letters of Credit; Termination of Commitments |
17 |
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(D) Payments on Business Days | 17 |
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(E) Application of Prepayment Proceeds | 17 |
|
2.5 |
Term of this Agreement | 17 |
2.6 |
Statements | 18 |
2.7 |
Grant of Security Interest | 18 |
(A) Grant of Liens in the Collateral | 18 |
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(B) Borrowers Remain Liable | 18 |
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(C) Security Agreement | 19 |
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2.8 |
Yield Protection | 19 |
(A) Capital Adequacy and other Adjustments | 19 |
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(B) Increased LIBOR Funding Costs | 19 |
|
2.9 |
Taxes | 20 |
(A) No Deductions | 20 |
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(B) Changes in Tax Laws | 20 |
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(C) Foreign Leaders | 21 |
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2.10 |
Required Termination and Prepayment | 21 |
2.11 |
Replacement of Lenders | 21 |
(A) Replacement of an Affected Lender | 22 |
|
(B) Prepayment of an Affected Lender | 22 |
|
2.12 |
Compensation | 22 |
2.13 |
Booking of LIBOR Loans | 22 |
2.14 |
Assumptions Concerning Funding of LIBOR Loans | 22 |
SECTION 3. | CONDITIONS TO LOANS | 23 |
SECTION 4. | REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS | 23 |
4.1 |
Organizations, Powers, Capitalization | 23 |
(A) Organization and Powers | 23 |
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(B) Capitalization | 23 |
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4.2 |
Authorization of Borrowing, No Conflict | 23 |
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4.3 |
Financial Condition | 24 |
4.4 |
Indebtedness and Liabilities | 24 |
4.5 |
Collateral Warranties and Covenants | 24 |
(A) Accounts | 24 |
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(B) Inventory Warranties and Covenants | 27 |
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(C) Equipment Warranties and Covenants | 27 |
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(D) Chattel Paper Warranties and Covenants | 27 |
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(E) Instruments Warranties and Covenants | 27 |
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(F) Investment Property Warranties and Covenants | 28 |
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(G) Letter-of-Credit Rights Warranties and Covenants | 28 |
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(H) General Intangibles Warranties and Covenants | 28 |
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(I) Intellectual Property Warranties and Covenants | 28 |
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(J) Commercial Tort Claims Warranties and Covenants | 29 |
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(K) Deposit Accounts; Bank Accounts Warranties and Covenants | 29 |
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(L) Bailees | 29 |
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(M) Collateral Description; Use of Collateral | 30 |
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(N) Collateral Filing Requirements; Collateral Records | 30 |
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(O) Federal Claims | 30 |
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4.6 |
Names and Locations | 30 |
4.7 |
Title to Properties; Liens | 31 |
4.8 |
Litigation; Adverse Facts | 31 |
4.9 |
Payment of Taxes | 31 |
4.10 |
Performance of Agreements | 31 |
4.11 |
Employee Benefit Plans | 32 |
4.12 |
Broker's Fees | 32 |
4.13 |
Environmental Compliance | 32 |
4.14 |
Solvency | 32 |
4.15 |
Disclosure | 32 |
4.16 |
Insurance | 32 |
4.17 |
Compliance with Laws; Government Authorizations; Consents | 34 |
4.18 |
Employee Matters | 34 |
4.19 |
Governmental Regulation | 34 |
4.20 |
Access to Accountants and Management | 34 |
4.21 |
Inspection | 35 |
4.22 |
Borrower's Receipt of Payments | 35 |
4.23 |
Recoupments; Overpayments | 35 |
4.24 |
Reports | 35 |
4.25 |
Compliance with Health Care Laws | 36 |
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4.26 |
Funds from Restricted Grants | 36 |
4.28 |
HIPAA Compliance | 36 |
4.29 |
Licenses | 37 |
4.30 |
Certificate of Need | 37 |
4.31 |
Inactive Entities | 37 |
4.32 |
Supplemental Schedules | 37 |
Section 5. | REPORTING AND OTHER AFFIRMATIVE COVENANTS | 37 |
5.1 |
Financial Statements and Other Reports | 37 |
5.2 |
Endorsement; Insurance Claims | 37 |
5.3 |
Maintenance of Properties | 38 |
5.4 |
Further Assurances | 38 |
5.5 |
Mortgages; Title Reports | 38 |
(A) Title | 38 |
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(B) Mortgages | 38 |
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(C) Other Real Property | 38 |
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5.6 |
Use of Proceeds and Margin Security | 38 |
5.7 |
Licensure; Medicaid/Medicare Cost Reports | 39 |
5.8 |
Termination/Default of Contracts | 39 |
5.9 |
Notice of Event of Default and Other Matters | 39 |
5.10 |
Inactive Entities | 39 |
5.11 |
Letters of Credit | 39 |
SECTION 6. | FINANCIAL COVENANTS | 40 |
SECTION 7. | NEGATIVE COVENANTS | 40 |
7.1 |
Indebtedness | 40 |
7.2 |
Guaranties | 40 |
7.3 |
Transfers, Liens and Related Matters | 41 |
(A) Transfers | 41 |
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(B) Liens | 41 |
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(C) No Negative Pledges | 41 |
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(D) No Restrictions on Borrower Distributions to Borrowers | 42 |
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7.4 |
Investments and Loans | 42 |
7.5 |
Restricted Junior Payments | 42 |
7.6 |
Restriction on Fundamental Changes | 42 |
7.7 |
Changes Relating to Term Loan Documents | 43 |
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7.8 |
Transactions with Affiliates | 43 |
7.9 |
Conduct of Business | 43 |
7.10 |
Tax Consolidations | 43 |
7.11 |
Subsidiaries | 43 |
7.12 |
Fiscal Year; Tax Designation | 43 |
7.13 |
Use of Lenders' Name | 43 |
7.14 |
Bank Accounts | 43 |
7.15 |
IRS Form 8821 | 43 |
7.16 |
Certificates of Need | 44 |
7.17 |
Sale Lease-back Transactions | 44 |
7.18 |
Plan and Confirmation Order | 44 |
SECTION 8. | DEFAULT, RIGHTS AND REMEDIES | 44 |
8.1 |
Event of Default | 44 |
(A) Payment | 44 |
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(B) Default in Other Agreements | 44 |
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(C) Breach of Certain Provisions | 44 |
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(D) Breach of Warranty | 44 |
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(E) Other Defaults Under Loan Documents | 45 |
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(F) Change in Control | 45 |
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(G) Involuntary Bankruptcy; Appointment of Receiver, etc. | 45 |
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(H) Voluntary Bankruptcy; Appointment of Receiver, etc. | 45 |
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(I) Liens | 45 |
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(J) Judgement and Attachments | 46 |
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(K) Dissolution | 46 |
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(L) Solvency | 46 |
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(M) Injunction | 46 |
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(N) Invalidity of Loan Documents | 46 |
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(O) Failure of Security | 46 |
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(P) Damage, Strike, Casualty | 46 |
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(Q) Licenses and Permits | 46 |
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(R) Forfeiture | 47 |
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(S) Default Under Plan and/or Confirmation Order | 47 |
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(T) Alteration or Revocation of Plan or Confirmation Order | 47 |
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(U) Term Loan Documents | 47 |
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(V) Material Contracts | 47 |
|
8.2 |
Suspension of Commitments | 47 |
8.3 |
Acceleration | 47 |
8.4 |
Remedies | 48 |
8.5 |
Appointment of Attorney-in-Fact | 48 |
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8.6 |
Limitation on Duty of Agents and Lenders with Respect to Collateral | 49 |
8.7 |
Application of Proceeds | 49 |
8.8 |
License of Intellectual Property | 50 |
8.9 |
Waivers; Non-Exclusive Remedies | 50 |
SECTION 9. | AGENT | 50 |
9.1 |
Agent | 50 |
(A) Appointment | 50 |
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(B) Nature of Duties | 51 |
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(C) Rights, Exculpation, Etc. | 51 |
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(D) Reliance | 52 |
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(E) Indemnification | 52 |
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(F) Lenders Includes Agents | 52 |
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(G) Successor Agent | 52 |
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(1) Resignation | 52 |
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(2) Appointment of Successor | 53 |
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(3) Successor Agent | 53 |
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(H) Collateral Matters | 53 |
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(1) Release of Collateral | 53 |
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(2) Confirmation of Authority; Execution of Releases | 53 |
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(3) Absence of Duty | 54 |
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(I) Agency for Perfection | 54 |
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(J) Exercise of Remedies | 54 |
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9.2 |
Notice of Default | 55 |
9.3 |
Action by Agent | 55 |
9.4 |
Amendments, Waivers and Consents | 55 |
(A) Percentage of Lenders Required | 55 |
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(B) Specific Purpose or Intent | 55 |
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(C) Failure to Give Consent;
Replacement of Non-Consenting Lender |
56 |
|
9.5 |
Assignments and Participations in Loans | 56 |
(A) Assignments | 56 |
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(B) Participations | 56 |
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(C) No Relief of Obligations;
Cooperation; Ability to Make LIBOR Loans |
57 |
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(D) Security Interests; Assignment to Affiliates | 57 |
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(E) Recording of Assignments | 57 |
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9.6 |
Set Off and Sharing of Payments | 58 |
9.7 |
Disbursement of Funds | 58 |
9.8 |
Settlements, Payments and Information | 58 |
(A) Revolving Advances and Payments; Fee Payments | 58 |
|
(1) Fluctuation of Revolving Loan Balance | 58 |
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(2) Settlement Dates | 59 |
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(3) Settlement Definitions | 59 |
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(4) Settlement Payments | 59 |
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(B) Return of Payments | 60 |
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(1) Recovery after Non-Receipt of Expected Payment | 60 |
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(2) Recovery of Returned Payment | 60 |
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9.9 |
Discretionary Advances | 60 |
SECTION 10. | MISCELLANEOUS | 60 |
10.1 |
Expenses and Attorneys' Fees | 60 |
10.2 |
Indemnity | 61 |
10.3 |
Notices | 62 |
10.4 |
Survival of Representations and Warranties and Certain Agreements | 63 |
10.5 |
Indulgence Not Waiver | 63 |
10.6 |
Marshaling; Payments Set Aside | 63 |
10.7 |
Entire Agreement | 63 |
10.8 |
Severability | 63 |
10.9 |
Lenders' Obligations Several; Independent Nature of Lenders' Rights | 64 |
10.10 |
Headings | 64 |
10.11 |
APPLICABLE LAW | 64 |
10.12 |
Successors and Assigns | 64 |
10.13 |
No Fiduciary Relationship; No Duty; Limitation of Liabilities | 64 |
(A) No Fiduciary Relationship | 64 |
|
(B) No Duty | 64 |
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(C) Limitation of Liabilities | 64 |
|
10.14 |
CONSENT TO JURISDICTION | 65 |
10.15 |
WAIVER OF JURY TRIAL | 65 |
10.16 |
Construction | 65 |
10.17 |
Counterparts; Effectiveness | 65 |
10.18 |
Confidentiality | 66 |
10.19 |
Publication | 66 |
10.20 |
Intercreditor Agreement | 66 |
SECTION 11. | DEFINITIONS AND ACCOUNTING TERMS | 66 |
11.1 |
Certain Defined Terms | 66 |
11.2 |
Accounting Terms | 83 |
11.3 |
Other Definitional Provisions | 84 |
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EXHIBITS
SCHEDULES
RIDERS
viii
This LOAN AND SECURITY AGREEMENT is dated as of February 28, 2002 and entered into among SUN HEALTHCARE GROUP, INC., a Delaware corporation (the "Company") and each direct or indirect Subsidiary of the Company identified on the signature pages of this Agreement as a borrower (individually "Borrower"; all Borrowers together with the Company, collectively, "Borrowers"), the financial institution(s) listed on the signature pages hereof, and their respective successors and Eligible Assignees (each a "Lender" and, collectively, "Lenders"), CITICORP USA, INC., a Delaware corporation (in its individual capacity as a Lender, "CITICORP", and in its capacity as an administrative agent, "Administrative Agent"), and XXXXXX HEALTHCARE FINANCE, INC., a Delaware corporation (in its individual capacity as a Lender, "Xxxxxx", and in its capacity as a collateral agent "Collateral Agent"; Administrative Agent and Collateral Agent, collectively, "Agents" or "Joint Bookrunners").
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS
1.1 Certain Defined Terms. Capitalized terms not otherwise defined in this Agreement and the accounting terms used in this Agreement shall have the meanings set forth in Section 11 of this Agreement.
1.2 Interpretation.
(A) The definitions in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require.
(B) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time.
SECTION 2. LOANS AND COLLATERAL
2.1 Revolving Credit Facility.
(A) Revolving Loan.
(1) Each Lender, severally, but not jointly, agrees to lend to Borrowers from time to time such Lender's Pro Rata Share of each advance under the Revolving Loan Commitment. The aggregate amount of the Revolving Loan Commitment shall not exceed at any time ONE HUNDRED FIFTY MILLION DOLLARS ($150,000,000). Subject to subsection 2.1(A)(2), amounts borrowed under this Agreement may be borrowed, repaid and reborrowed at any time prior to the Termination Date.
(2) The Borrowers may elect to permanently reduce or partially terminate the Revolving Loan Commitment by written notice to the Agents and payments of any amounts due in accordance with subsection 2.3(C). In addition, the Borrowers may at any time prepay amounts owing pursuant to this Agreement, with no corresponding reduction or termination of the Revolving Loan Commitment, in which case all such prepaid amounts may be reborrowed by the Borrowers in accordance with the terms of this Agreement.
(3) Each of the Borrowers, jointly and severally, will be obligated in respect of the aggregate principal amount of all Loans, and the aggregate amount of credit available hereunder to any of the Borrowers at any time shall be determined taking into account all Loans outstanding and all outstanding Lender Letters of Credit, regardless of which of the Borrowers may have received the proceeds of the Loans or the benefit of any of the Lender Letters of Credit. By executing this Agreement, each of the Borrowers confirms to the other parties to this Agreement that the Company shall (and has been duly appointed by each of the Borrowers to) act as agent for the Borrowers for all purposes of the Loan Documents, including, without limitation, (i) requesting Loans, (ii) requesting the issuance of Lender Letters of Credit, (iii) allocating (to the extent permitted herein) the proceeds of Loans, and (iv) taking any other action or receiving any communication on behalf of such Borrower in connection with the Loan Documents. Each of the Lenders and the Agents shall be entitled to deal with any Borrower through the Company and to rely on any instructions or other communications from the Company on behalf of any Borrower. None of the Lenders or Agents shall have any responsibility to any Borrower for dealing with the Borrowers as provided in this subsection 2.1(A)(3), and the Obligations of each of the Borrowers to the Lenders shall not be affected by any matter relating to acts or omissions of the Company relating to the Loans, requests for Lender Letters of Credit or otherwise as agent for the
2
Borrowers hereunder. Notwithstanding the appointment of the Company as agent for the Borrowers hereunder, the Agents and the Lenders shall in their sole discretion be entitled to deal directly with any Borrower for all purposes of the Loan Documents.
(B) Borrowing Base. Except as otherwise provided herein, no Lender shall have any obligation to make a Revolving Advance to the extent such Revolving Advance would cause the Revolving Loans (after giving effect to any immediate application of the proceeds of such Revolving Advance) to exceed the Maximum Revolving Loan Amount.
"Maximum Revolving Loan Amount" means, as of any date of determination, the lesser of (a) the Revolving Loan Commitments of all Lenders less the sum of the Letter of Credit Reserve and (b) the Borrowing Base less the sum of the Letter of Credit Reserve.
"Borrowing Base" shall mean on any day an amount that is equal to the sum of (a) eighty-five percent (85%) of the then outstanding Eligible Accounts plus (b) the lesser of (1) $10,000,000 and (2) fifty percent (50%) of the aggregate value of Eligible Inventory, less (c) such reserves as the Agents, in their reasonable business discretion, may deem appropriate from time to time, including, without limitation, reserves with respect to all recoupments and overpayments whether or not disclosed pursuant to subsection 4.23.
(C) Eligible Collateral.
"Eligible Accounts" shall mean the net aggregate amount of the Accounts of Borrowers that (1) are generated in the ordinary course of business of the Borrowers arising or resulting from the sale of goods or the rendition of Medical Services, (2) conform to the representations, warranties and covenants contained herein and (3) at all times continue to be acceptable to Collateral Agent, less, without duplication, the sum of the following: (i) any Account or any portion of an Account that is payable (A) by an individual beneficiary, recipient or subscriber and not directly to a Borrower by a Medicaid/Medicare Account Debtor, an insurer, a managed care organization or the Veterans Administration or (B) by an Insurer that is not acceptable to Collateral Agent in its sole discretion; (ii) any Account that remains unpaid more than the Exclusion Level Number of Days (as defined below) past the claim or invoice date; (iii) any Account that is subject to any defense, set-off, counterclaim, deduction, discount, credit, chargeback, freight claim, allowance, or adjustment of any kind (whether issued, owing, granted or outstanding); (iv) any Account arising from a sale of goods, if (A) any of such goods have been returned, rejected, lost, or damaged or have not been shipped to the Account Debtor or its designee or (B) the sale was not an absolute sale, or the sale was made on consignment or on approval or on a sale-or-return basis, or the sale was made subject to any other repurchase or return agreement; (v) any Account arising from the performance of services, if the services have not been actually performed or the services were undertaken in violation of any law; (vi) any Account that is subject to a Lien other than those certain Permitted Encumbrances described in clauses (a), (b), (c), (d), (g) and (i) of the definition of Permitted Encumbrances; (vii) except to the extent the Account Debtor is acceptable to Collateral Agent in its sole discretion, any Account due from an Account Debtor that is (A) the debtor in any bankruptcy, insolvency, arrangement, reorganization, receivership or similar proceedings under any federal or state law, (B) negotiating, or has called a meeting of its creditors for purposes of negotiating, a compromise of its debts or (C) financially unacceptable to Collateral Agent or has a credit rating unacceptable to Collateral Agent; (viii) any Account that is evidenced by chattel paper or an instrument of any kind, or that has been reduced to judgment; (ix) any Account due from an Account Debtor with a
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principal place of business or chief executive office outside the United States; (x) any Account due from an Account Debtor that is an Affiliate or Subsidiary of any Borrower; (xi) all Accounts due from any Account Debtor other than a Medicaid/Medicare Account Debtor if (A) fifty percent (50%) or more of the Accounts due from such Account Debtor are not Eligible Accounts at the relevant time or (B) twenty percent (20%) of the aggregate Dollar amount of all Accounts due from such Account Debtor are unpaid more than the Exclusion Level Number of Days from the invoice date; (xii) all of the Accounts due from any Account Debtor other than a Medicaid/Medicare Account Debtor, if such Accounts exceed twenty percent (20%) of the net amount of all Eligible Accounts at the time (including Medicaid/Medicare Account Debtors); (xiii) any Account or any portion of an Account arising from the performance of Medical Services performed by or for any Borrower prior to the transfer or other disposition of, or of the management of, any of its Facilities or lease or other interest therein, unless Collateral Agent, in its sole discretion is satisfied that the terms of such transfer or disposition are sufficiently protective of the interests of the Agents and the Lenders in such Account that such Accounts may continue to be considered for purposes of the Borrowing Base; (xiv) contras; and (xv) such reserves as the Agents (in their reasonable business discretion) may deem appropriate from time to time. For purposes of the foregoing, "Exclusion Level Number of Days" shall mean, in relation to Accounts for Medical Services, accounts aged less than or equal to the number of days specified below for the Facilities in the business segments of the Facilities identified below, and in relation to all other Accounts, ninety (90) days:
SunBridge
- 120 days
SunDance
- 120 days
SunScript
- 60 days
"Eligible Inventory" shall mean, at any time, the gross amount of the inventory of the Borrowers that conforms to the representations, warranties and covenants contained herein and continues to be acceptable to Collateral Agent in its reasonable discretion, less any (1) work-in-progress, (2) supplies other than raw material, (3) goods not present in one of the locations identified in Schedule 2.01, (4) goods that are not, or within six (6) months will cease to be, salable in accordance with generally accepted criteria applicable to such goods at the time, (5) goods returned or rejected by the customers of any Borrower other than goods that are undamaged and resalable in the ordinary course of business, (6) goods to be returned to the suppliers of any Borrower, (7) goods in transit to third parties (other than the agents or any such distribution center) and (8) reserves as the Collateral Agent, in its reasonable business discretion, may deem appropriate from time to time. Eligible Inventory shall be valued at the lower of cost or market on a first-in first-out basis or another basis acceptable to Collateral Agent in its sole discretion.
(D) Borrowing Mechanics. (1) LIBOR Loans made on any Funding Date shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in excess of such amount. (2) On any day when any Borrower desires a Revolving Advance under this subsection 2.1, such Borrower shall give Administrative Agent written or telephonic notice of the proposed borrowing by 12:00 p.m. (noon) New York time on the Funding Date of a Base Rate Loan less than $10,000,000, written or telephonic notice by 12:00 p.m. (noon) New York time one (1) Business Day prior to the Funding Date of a Base Rate Loan equal to or greater than $10,000,000, and three (3) Business Days in advance of the Funding Date of a LIBOR Loan, which notice shall specify the proposed Funding Date (which shall be a Business Day), whether such Loans shall consist of Base Rate Loans or LIBOR Loans, and, for LIBOR Loans, the Interest Period applicable thereto. Any such telephonic notice shall be confirmed with a Notice of Borrowing on the same day as such request. Neither Administrative Agent
4
nor Lender shall incur any liability to any Borrower for acting upon any telephonic notice or a Notice of Borrowing that Administrative Agent believes in good faith to have been given by a duly authorized officer or other person authorized to borrow on behalf of such Borrower or for otherwise acting in good faith under this subsection 2.1(D). Neither Administrative Agent nor Lender will be required to make any advance pursuant to any telephonic or written notice or a Notice of Borrowing, unless all of the terms and conditions set forth in Section 3 (including the Conditions Rider, attached hereto and made a part hereof, have been satisfied and Administrative Agent has also received the most recent Borrowing Base Certificate and other documents required under Section 5 and the Reporting Rider, attached hereto and made a part hereof, by 12:00 p.m. (noon) New York time on or prior to the date of such funding request. Each Advance shall be deposited by wire transfer in immediately available funds in such account as such Borrower may from time to time designate to Administrative Agent in writing. The becoming due of any amount required to be paid under this Agreement or any of the other Loan Documents as principal, Lender Letter of Credit reimbursement obligation, accrued interest, fees, compensation or any other amounts shall be deemed irrevocably to be an automatic request by Borrowers for a Revolving Advance, which shall be a Base Rate Loan on the due date of, and in the amount required to pay (as set forth on Agent's books and records), such principal, Lender Letter of Credit reimbursement obligation, accrued interest, fees, compensation or any other amounts unless such amount shall have been paid by Borrowers on or prior to the date thereof.
(E) Payments with Respect to the Settlement Agreement. If an Event of Default exists and during such time a default under the Settlement Agreement shall exist, thereafter Lenders shall have the right, but not the obligation, exercisable in their sole and absolute discretion, to make Revolving Advances at the time and in the amounts of the payments Borrowers are obligated to make under the Settlement Agreement, and to deliver the proceeds of any such Revolving Advance directly to the payees under the Settlement Agreement. Any Revolving Advances made by Lenders under this subsection 2.1 (E) shall be treated for all purposes as a Revolving Advance under this Agreement. Lender's rights under this subsection 2.1 (E) are in addition to, and do not affect or limit, any of the other rights of Lenders or the obligations of Borrowers under this Agreement.
(F) Notes. Borrowers shall execute and deliver to each Lender Notes with appropriate insertions to evidence such Lender's Commitments. In the event of an assignment under subsection 9.5, Borrowers shall, upon surrender and cancellation of the assigning Lender's Notes, issue new Notes to reflect the interest held by the assigning Lender and its Eligible Assignee.
(G) Letters of Credit. The Revolving Loan Commitments may, in addition to Revolving Advances, be utilized, upon the request of any Borrower, for (1) the issuance of Letters of Credit by Administrative Agent or its Affiliates, or (2) the issuance by Administrative Agent of risk participations to banks to induce such banks to issue Bank Letters of Credit for the account of such Borrower (each of (1) and (2) above a "Lender Letter of Credit"). Each Lender shall be deemed to have purchased a participation in each Lender Letter of Credit issued on behalf of any Borrower in an amount equal to its Pro Rata Share thereof. In no event shall any Lender Letter of Credit be issued to the extent that the issuance of such Lender Letter of Credit would cause the sum of the Letter of Credit Reserve (after giving effect to such issuance), plus the Revolving Loan to exceed the lesser of (1) the Borrowing Base and (2) the Revolving Loan Commitments.
(1) Maximum Amount. The aggregate amount of Letter of Credit Liability with respect to all Lender Letters of Credit outstanding at any time shall not exceed $50,000,000.
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(2) Reimbursement. Borrowers shall be irrevocably and unconditionally obligated forthwith without presentment, demand, protest or other formalities of any kind, to reimburse Administrative Agent or the issuer for any amounts paid with respect to a Lender Letter of Credit including all fees, costs and expenses paid to any bank that issues a Bank Letter of Credit. Each Borrower hereby authorizes and directs Administrative Agent, at Administrative Agent's option, to debit such Borrower's account (by increasing the Revolving Loan) in the amount of any payment made with respect to any Lender Letter of Credit. In the event that Administrative Agent elects not to debit such Borrower's account and such Borrower fails to reimburse Administrative Agent in full on the date of any payment under a Lender Letter of Credit, Administrative Agent shall promptly notify each Lender of the unreimbursed amount of such payment together with accrued interest thereon and each Lender, on the next Business Day, shall deliver to Administrative Agent an amount equal to its respective participation in same day funds. The obligation of each Lender to deliver to Administrative Agent an amount equal to its respective participation pursuant to the foregoing sentence shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3. In the event any Lender fails to make available to Administrative Agent the amount of such Lender's participation in such Lender Letter of Credit, Administrative Agent shall be entitled to recover such amount on demand from such Lender together with interest on such amount calculated at the Base Rate.
(3) Request for Letters of Credit. Any Borrower desiring the issuance of a Letter of Credit shall give Administrative Agent at least two (2) Business Days prior notice specifying the date a Lender Letter of Credit is to be issued, identifying the beneficiary and describing the nature of the transactions proposed to be supported thereby. The notice shall be accompanied by the form of the Letter of Credit being requested. Any Letter of Credit which such Borrower requests must be in such form, be for such amount, contain such terms and support such transactions as are reasonably satisfactory to Administrative Agent. The expiration date of each Lender Letter of Credit shall be on a date which is at least thirty (30) days prior to the Termination Date, unless otherwise agreed to by Administrative Agent.
(4) Renewal. Except for any letters of credit outstanding on the Closing Date, no Lender Letter of Credit or Bank Letter of Credit may be issued containing any provision allowing for automatic renewal unless the provisions of subsection 5.11 shall have been met.
(H) Other Letter of Credit Provisions.
(1) Obligations Absolute. The obligation of any Borrower to reimburse Administrative Agent or any Lender for payments made under, and other amounts payable in connection with, any Lender Letter of Credit shall be unconditional and irrevocable and shall be paid under all circumstances strictly in accordance with the terms of this Agreement including, without limitation, the following circumstances:
(a) any lack of validity or enforceability of any Lender Letter of Credit, or any other agreement;
(b) the existence of any claim, set-off, defense or other right which Borrower, any of its Subsidiaries or Affiliates or any other Person may at any time have against any beneficiary or
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transferee of any Lender Letter of Credit (or any Persons for whom any such transferee may be acting), Agents, any Lender, Issuing Lender, or any other Person, whether in connection with this Agreement, any other Loan Document, or any other related or unrelated agreements or transactions;
(c) any draft, demand, certificate or any other document presented under any Lender Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(d) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Borrowers or any of their Subsidiaries;
(e) any breach of this Agreement or any other Loan Document by any party thereto;
(f) the occurrence and continuance of an Event of Default (it being understood and agreed that any such payment by the Borrowers of their obligations hereunder in respect of any such Lender Letter of Credit shall be without prejudice to, and shall not constitute a waiver of, any rights any of the Borrowers may have or may acquire against the issuer or the beneficiary of such Lender Letter of Credit); or
(g) payment under any Lender Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Lender Letter of Credit; provided that, in the case of any such payment by Administrative Agent or a Lender under any Lender Letter of Credit, Administrative Agent or such Lender has not acted with gross negligence or willful misconduct in determining that the demand for payment under such Lender Letter of Credit complies on its face with any applicable requirements for a demand for payment under such Lender Letter of Credit.
(2) Nature of Lender's Duties. As between any Lender that issues a Lender Letter of Credit (an "Issuing Lender"), on the one hand, and all Lenders on the other hand, all Lenders assume all risks of the acts and omissions of, or misuse of any Lender Letter of Credit by the beneficiary thereof. In furtherance and not in limitation of the foregoing, neither Agents nor any Issuing Lender shall be responsible: (a) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document by any party in connection with the application for and issuance of any Lender Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (b) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Lender Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (c) for failure of the beneficiary of any Lender Letter of Credit to comply fully with conditions required in order to demand payment thereunder; provided that, in the case of any payment under any such Lender Letter of Credit, any Issuing Lender has not acted with gross negligence or willful misconduct in determining that the demand for payment under any such Lender Letter of Credit complies on its face with any applicable requirements for a demand for payment thereunder; (d) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (e) for errors in interpretation of technical terms; (f) for any loss or delay in the transmission or otherwise of any document required in order to make a payment under any such Lender Letter of Credit; (g) for the credit
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of the proceeds of any drawing under any such Lender Letter of Credit; and (h) for any consequences arising from causes beyond the control of Agents or any Lender as the case may be.
(3) Liability. In furtherance and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by either Administrative Agent or any Lender under or in connection with any Lender Letter of Credit, if taken or omitted in good faith (and not as a result of gross negligence or willful misconduct of the Administrative Agent or such Lender), shall not put Administrative Agent or any Lender under any resulting liability to Borrowers or any other Lender.
(I) Availability of a Lender's Pro Rata Share
(1) Lender's Amounts Available on a Funding Date. Unless Administrative Agent receives written notice from a Lender on or prior to any Funding Date that such Lender will not make available to Administrative Agent as and when required such Lender's Pro Rata Share of any requested Loan or Advance, Administrative Agent may assume that each Lender will make such amount available to Administrative Agent in immediately available funds on the Funding Date and Administrative Agent shall, in reliance upon such assumption, make available to the requesting Borrower(s) on such date a corresponding amount.
(2) Lender's Failure to Fund. A Defaulting Lender shall pay interest to Administrative Agent at the Federal Funds Effective Rate on the Defaulted Amount from the Business Day following the applicable Funding Date of such Defaulted Amount until the date such Defaulted Amount is paid to Administrative Agent. A notice of Administrative Agent submitted to any Lender with respect to amounts owing under this subsection shall be conclusive, absent manifest error. If such amount is not paid when due to Administrative Agent, Administrative Agent, at its option, may notify Borrowers of such failure to fund and, in the event that Administrative Agent shall have funded such Defaulted Amount on behalf of such defaulting Lender, upon demand by Administrative Agent, Borrowers shall pay such Lenders unpaid amount to Administrative Agent for Administrative Agent's account, together with interest thereon for each day elapsed since the date of such borrowing, at a rate per annum equal to the interest rate applicable at the time to the Loan made by the other Lenders on such Funding Date. The failure of any Lender to make available any portion of its Commitment on any Funding Date or to fund its participation in a Lender Letter of Credit shall not relieve any other Lender of any obligation hereunder to fund such Lender's Commitment on such Funding Date or to fund any such participation, but no Lender shall be responsible for the failure of any other Lender to honor its Commitment on any Funding Date or to fund any participation to be funded by any other Lender.
(3) Payments to a Defaulting Lender. Notwithstanding any provision to the contrary contained in this Agreement or the other Loan Documents, Administrative Agent shall not be obligated to transfer to a Defaulting Lender any payment made by Borrowers to Administrative Agent or any amount otherwise received by Administrative Agent for application to the Obligations nor shall a Defaulting Lender be entitled to the sharing of any interest, fees or payments hereunder.
(4) Defaulting Lender's Right to Vote. Notwithstanding any provision to the contrary contained in this Agreement or the other Loan Documents for purposes of voting or consenting to matters with respect to (a) the Loan Documents or (b) any other matter concerning the Loans, a Defaulting Lender shall be deemed not to be a "Lender" and such Lender's Commitments and outstanding Loans and Advances shall be deemed to be zero.
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(J) Pricing and Structural Changes Required for Syndication. Notwithstanding anything to the contrary set forth herein (but subject to compliance with Section 3.1 of the Intercreditor Agreement), Joint Bookrunners may change pricing, terms or make structural changes to the Loans and this Agreement (without affecting the total amount of Commitments hereunder) within one hundred twenty (120) days after the Closing Date if Joint Bookrunners determine that such changes are reasonably required in order to ensure successful syndication of the credit facility on terms that are acceptable to Joint Bookrunners, and each Borrower agrees to execute such amendments and other agreements as Joint Bookrunners may request to modify this Agreement for such purposes; provided, however, that (i) no such change shall reduce the maximum aggregate amount of the Revolving Loan Commitment as set forth in subsection 2.1(A) and (ii) no such change shall increase the Base Rate Margin or the LIBOR Margin by more than one-half of one percent (0.50%) per annum or require the payment of additional fees.
(A) Rate of Interest. From the date the Loans are made and the date the other Obligations become due the Loans and the other Obligations shall bear interest at the applicable rates set forth below (collectively, the "Interest Rate"):
(1) The Revolving Loan and all other Obligations for which no other interest rate is specified shall bear interest as follows:
(a) If a Base Rate Loan, then at the sum of the Base Rate plus the Base Rate Margin applicable to Revolving Loans.
(b) If a LIBOR Loan, then at the sum of the LIBOR plus the LIBOR Margin applicable to Revolving Loans.
All Loans made on the Closing Date shall be either Base Rate Loans or LIBOR Loans with an Interest Period of one (1) month, and shall remain so until the earlier of ninety (90) days after the Closing Date or the date Collateral Agent notifies Borrowers that it has completed the primary syndication of the Loans. Thereafter, subject to the provisions of subsection 2.1(D), Borrowers shall designate to Administrative Agent whether a Loan shall be a Base Rate or LIBOR Loan at the time a Notice of Borrowing is given pursuant to subsection 2.1(D). Such designation by Borrowers may be changed from time to time pursuant to subsection 2.2(D). If on any day a Loan or a portion of any Loan is outstanding with respect to which notice has not been delivered to Administrative Agent in accordance with the terms of this Agreement specifying the basis for determining the rate of interest or if LIBOR has been specified and no LIBOR quote is available, then for that day that Loan or portion thereof shall bear interest determined by reference to the Base Rate.
"Base Rate Margin" shall mean (1) as of the Closing Date, two and three-quarters percent (2.75%) per annum, and (2) thereafter, as of September 30, December 31, March 31, June 30 of each year (each, an "Adjustment Date"), commencing on September 30, 2002, the Base Rate Margin shall be adjusted, if necessary, to the applicable percent per annum set forth in the pricing table set forth on Schedule 2.2(A) hereto corresponding to the Total Indebtedness to EBITDA Ratio for the trailing twelve (12) month period ending on the last day of the most recently completed calendar quarter prior to the
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applicable Adjustment Date (each such period, a "Calculation Period") calculated in the manner described in the Financial Covenants Rider, hereto attached and made a part hereof.
"LIBOR Margin" shall mean (1) as of the Closing Date, three and three-quarters percent (3.75%) per annum, and (2) thereafter, as of each Adjustment Date, commencing on September 30, 2002, the LIBOR Margin shall be adjusted, if necessary, to the applicable percent per annum set forth in the pricing table set forth on Schedule 2.2(A) hereto corresponding to the Total Indebtedness to EBITDA Ratio for the applicable Calculation Period.
If Borrowers shall fail to deliver a Compliance and Pricing Certificate within ten (10) Business Days of the date required pursuant to the Reporting Rider, effective as of the tenth (10th) Business Day following the date on which such Compliance and Pricing Certificate was due pursuant to the Reporting Rider, each applicable Base Rate Margin and each applicable LIBOR Margin shall be conclusively presumed to equal the highest applicable Base Rate Margin and the highest applicable LIBOR Margin specified in the pricing table set forth on Schedule 2.2(A) hereto until the date of receipt by the Agents of the Compliance and Pricing Certificate.
After the occurrence and during the continuance of an Event of Default (1) the Loans and all other Obligations shall, at the election of Administrative Agent or Requisite Lenders, bear interest at a rate per annum equal to two percent (2%) plus the applicable Interest Rate (the "Default Rate"), (2) each LIBOR Loan shall automatically convert to a Base Rate Loan at the end of any applicable Interest Period and (3) no Loans may be converted to LIBOR Loans. If an Event of Default has occurred and is continuing on an Adjustment Date, no reduction in the Base Rate Margin or LIBOR Margin shall occur on such Adjustment Date.
(B) Computation and Payment of Interest. Interest on the Loans and all other Obligations shall be computed on the daily principal balance on the basis of a three hundred sixty (360) day year for the actual number of days elapsed. In computing interest on any Loan, the date of funding of the Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted from a LIBOR Loan, the date of conversion of such LIBOR Loan to such Base Rate Loan, shall be included; and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan, or with respect to a Base Rate Loan being converted to a LIBOR Loan, the date of conversion of such Base Rate Loan to such LIBOR Loan, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one (1) day's interest shall be paid on that Loan. Interest on Base Rate Loans and all other Obligations other than LIBOR Loans shall be payable to Administrative Agent for the benefit of Lenders monthly in arrears on the first day of each month, on the date of any prepayment of Loans, and at maturity, whether by acceleration or otherwise. Interest on LIBOR Loans shall be payable to Administrative Agent for the benefit of Lenders on the last day of the applicable Interest Period for such Loan, on the date of any prepayment of the Loans, and at maturity, whether by acceleration or otherwise.
(C) Interest Laws. Notwithstanding any provision to the contrary contained in this Agreement or any other Loan Document, Borrowers shall not be required to pay, and neither Agent nor any Lender shall be permitted to collect, any amount of interest in excess of the maximum amount of interest permitted by applicable law ("Excess Interest"). If any Excess Interest is provided for or determined by a court of competent jurisdiction to have been provided for in this Agreement or in any other Loan Document, then in such event: (1) the provisions of this subsection shall govern and control;
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(2) Borrowers shall not be obligated to pay any Excess Interest; (3) any Excess Interest that Administrative Agent or any Lender may have received hereunder shall be, at such Lender's option, (a) applied as a credit against the outstanding principal balance of the Obligations or accrued and unpaid interest (not to exceed the maximum amount permitted by law), (b) refunded to the payor thereof, or (c) any combination of the foregoing; (4 ) the interest rate(s) provided for herein shall be automatically reduced to the maximum lawful rate allowed from time to time under applicable law (the "Maximum Rate"), and this Agreement and the other Loan Documents shall be deemed to have been and shall be, reformed and modified to reflect such reduction; and (5) no Borrowers shall have any action against any Agent or any Lender for any damages arising out of the payment or collection of any Excess Interest. Notwithstanding the foregoing, if for any period of time interest on any Obligations is calculated at the Maximum Rate rather than the applicable rate under this Agreement, and thereafter such applicable rate becomes less than the Maximum Rate, the rate of interest payable on such Obligations shall remain at the Maximum Rate until each Lender shall have received the amount of interest which such Lender would have received during such period on such Obligations had the rate of interest not been limited to the Maximum Rate during such period.
(D) Conversion or Continuation. Subject to the other provisions of this Agreement, including, without limitation, satisfying the Conditions set forth in Section 3, Borrowers shall have the option to (1) convert at any time all or any part of outstanding Loans equal to $1,000,000 and integral multiples of $100,000 in excess of that amount from Base Rate Loans to LIBOR Loans or (2) upon the expiration of any Interest Period applicable to a LIBOR Loan, to (a) continue all or any portion of such LIBOR Loan equal to $1,000,000 and integral multiples of $100,000 in excess of that amount as a LIBOR Loan or (b) convert all or any portion of such LIBOR Loan to a Base Rate Loan. The succeeding Interest Period(s) of such continued or converted Loan shall commence on the last day of the Interest Period of the Loan to be continued or converted; provided that no outstanding Loan may be continued as, or be converted into, a LIBOR Loan, when any Event of Default or Default has occurred and is continuing.
Borrowers shall deliver a Notice of Borrowing with respect to any such conversion/continuation to Administrative Agent no later than 12 p.m. (noon) New York time at least three (3) Business Days in advance of the proposed conversion/continuation date. The Notice of Borrowing with respect to such conversion/continuation shall certify: (1) the proposed conversion/continuation date which shall be a Business Day; (2) the amount of the Loan to be converted/continued; (3) the nature of the proposed conversion/continuation; (4) in the case of conversion to, or a continuation of, a LIBOR Loan, the requested Interest Period; (5) that no Default or Event of Default has occurred and is continuing or would result from the proposed conversion/continuation; and (6) that all conditions to make Loans as set forth in Section 3 and in the Conditions Rider have been satisfied.
In lieu of delivering a Notice of Borrowing with respect to any such conversion/continuation, the Company may give Administrative Agent telephonic notice by the required time of any proposed conversion/continuation under this subsection 2.2(D) (in such telephonic notice such Borrower shall certify to the items set forth above with respect to the Notice of Borrowing); provided that such telephonic notice shall be promptly confirmed in writing by delivery of a Notice of Borrowing (in form and substance described herein) with respect to such conversion/continuation to Administrative Agent on or before the proposed conversion/continuation date. Once given, such Borrower shall be bound by such telephonic notice. Upon the expiration of an Interest Period for a LIBOR Loan, in the absence of a new
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Notice of Borrowing or a telephonic notice submitted to Administrative Agent not less than three (3) Business Days prior to the end of such Interest Period, the LIBOR Loan then maturing shall be automatically converted to a Base Rate Loan.
No Agent or any Lender shall incur any liability to any Borrower in acting upon any telephonic notice or a Notice of Borrowing referred to above that Administrative Agent believes in good faith to have been given by an officer or other person authorized to act on behalf of such Borrower or for otherwise acting in good faith under this subsection 2.2(D).
(A) Unused Line Fee. Borrowers shall pay to Agent, for the benefit of Lenders, an annual fee in an amount equal to the Unused Daily Balance multiplied by one-half of one percent (0.50%) per annum. Such fee shall be calculated on the basis of a three hundred sixty (360) day year for the actual number of days elapsed and shall be payable monthly in arrears on the first day of each month following the Closing Date.
(B) Letter of Credit Fees. Borrowers shall pay to Administrative Agent a fee with respect to the Lender Letters of Credit (1) for the benefit of all Lenders with a Revolving Loan Commitment (based on their respective Pro Rata Share) in the amount of the average daily amount of Letter of Credit Liability outstanding during such month multiplied by three and one-half percent (3.50%) per annum, until the first Adjustment Date and thereafter by the applicable percentage specified as the "Letter of Credit Fee Rate" in the pricing table on Schedule 2.2(A) hereto as in effect on the date on which the fee is payable and (2) for the account of Administrative Agent a fronting fee for each Lender Letter of Credit issued or obtained by Administrative Agent from the date of issuance to the date of termination equal to the average daily amount of Letter of Credit Liability with respect to such Lender Letters of Credit outstanding during such month multiplied by one-half of one percent (0.50%) per annum. Such fees will be calculated on the basis of a three hundred sixty (360) day year for the actual number of days elapsed and will be payable monthly in arrears on the first day of each month. Borrowers shall also reimburse Administrative Agent for any and all fees and expenses, if any, paid by Administrative Agent or any Lender to the issuer of any Bank Letter of Credit.
(C) Prepayment Fees. If Borrowers prepay the Obligations and permanently reduce or partially terminate the Revolving Loan Commitment pursuant to and in accordance with subsection 2.1(A)(2) prior to the end of the second Loan Year, then at the time of such prepayment and permanent reduction or partial termination, as the case may be, Borrowers shall pay to the Administrative Agent, for the benefit of all Lenders with an outstanding principal balance due or Commitment outstanding under the Loan being prepaid at the time of such prepayment, as compensation for the costs of being prepared to make funds available to Borrowers under this Agreement, and not as a penalty, an amount determined by multiplying the amount of the Revolving Loan Commitment that is then being permanently reduced or terminated on such date by two percent (2%) upon such termination or reduction during the first Loan Year; and one percent (1%) upon such termination or reduction during the second Loan Year.
(D) Collateral Management and Administrative Agent Fees.
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(1) Borrowers shall pay to Collateral Agent, for its own account, a fully earned, nonrefundable collateral management fee in an amount equal to FOUR HUNDRED THOUSAND DOLLARS ($400,000) per annum (the "Collateral Management Fee"). Such Collateral Management Fee shall be payable in twelve (12) equal monthly installments in advance beginning on the Closing Date, next on April 1, 2002 and thereafter on the first (1st) day of each calendar month until all of the Obligations shall have been paid in full and the Revolving Loan Commitment shall have been completely terminated in accordance with the provisions of this Agreement.
(2) Borrowers shall pay to Administrative Agent, for the account of Administrative Agent, an annual fee in an amount equal to ONE HUNDRED THOUSAND DOLLARS ($100,000) per annum (the "Administrative Agent Fee"). Such Administrative Agent Fee shall be paid annually in advance beginning on the Closing Date and thereafter on each anniversary of the Closing Date until all Obligations shall have been paid in full and the Revolving Loan Commitment shall have been completely terminated in accordance with the provisions of this Agreement.
(E) Audit Fees. Borrowers agree to pay all reasonable out-of-pocket expenses of Collateral Agent and any firm or individual(s) engaged by Collateral Agent in connection with any audit of Borrowers' operations or records undertaken pursuant to this Agreement.
(F) Other Fees and Expenses. Borrowers shall pay to Administrative Agent, for its own account, all charges for returned items and all other bank charges incurred by Administrative Agent, as well as Administrative Agent's standard wire transfer charges for each wire transfer made under this Agreement.
(G) Fee Letter. Borrowers shall pay to Xxxxxx and CITICORP, each individually, the fees specified in that certain letter agreement, dated on or about February 27, 2002, by and among the Company, the Collateral Agent and the Administrative Agent in the amounts and at the times specified therein.
(A) Matters Relating to Cash Management.
(1) Borrowers shall establish and maintain at their expense the following accounts, which Borrowers hereby represent are in existence as of the Closing Date:
(a) depository accounts into which collections of Accounts of any Facility are paid directly or deposited manually by any Borrower (collectively, the "Facility Deposit Accounts"), which Facility Deposit Accounts (including the bank at which such Facility Deposit Accounts are maintained) are identified on Schedule 2.4(A)(1);
(b) depository accounts into which certain collections of Accounts, including Accounts of Medicare Account Debtors, are paid directly by electronic funds transfer (collectively, the "Medicare Deposit Accounts"), which Medicare Deposit Accounts (including the bank at which such Medicare Deposit Accounts are maintained) are identified on Schedule 2.4(A)(1);
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(c) depository accounts into which certain collections of Accounts, including Accounts of Medicaid and TRICARE Account Debtors, are paid directly by electronic funds transfer (collectively, the "Medicaid Deposit Accounts" ), which Medicaid Deposit Accounts (including the bank at which such Medicaid Deposit Accounts are maintained) are identified on Schedule 2.4(A)(1);
(d) depository accounts into which certain collections of Accounts of or with respect to CareerStaff Unlimited, Inc. (and its Subsidiaries) (collectively, "CareerStaff") are paid directly by electronic funds transfer or deposited manually (collectively, the "CareerStaff Deposit Accounts"), which CareerStaff Deposit Accounts (including the bank at which such CareerStaff Deposit Accounts are maintained) are identified on Schedule 2.4(A)(1); and
(e) that certain collection account with First Union National Bank ("Collecting Bank") into which collections of Accounts paid or deposited into the depository accounts described in subparagraph (a) above are transferred on a daily basis on each business day of the Collecting Bank (such collection account, the "Primary Collection Account)."
In addition, Borrowers shall establish and maintain at their expense any other depository account that shall be required by Collateral Agent for the purpose of collecting payments or deposits relating to any other Accounts of Borrower, which additional Accounts, if any, shall also be subject to the provisions of this subsection 2.4(A) (any such Accounts, collectively with the Accounts described in subsection 2.4(A)(1)(a), (b), (c) and (d), the "Borrower Deposit Accounts" and the bank(s) at which any such Borrower Deposit Accounts are maintained, collectively, the "Depository Banks").
(2) Borrowers shall ensure that all collections of Accounts (a) that are paid by the applicable Account Debtor electronically (by electronic funds transfer, wire transfer or otherwise) are paid directly into one of the Borrower Deposit Accounts or a Collection Account (as defined below), (b) that are paid by check are (i) in the case of checks sent by any Medicaid or other Account Debtor which are required by law, rule or regulation to be sent directly to Borrower, sent to the applicable Borrower and immediately deposited by such Borrower in one of the Borrower Deposit Accounts or (ii) in the case of checks sent by any Account Debtor that are not required by law, rule or regulation to be sent directly to Borrower, sent directly to a Depository Bank for deposit in a Borrower Deposit Account. Borrowers will not accept nor direct any payment of any Account of Borrowers in any manner other than as described above.
(3) On each Business Day of the applicable Depository Banks, Borrowers shall ensure that all collections of Accounts on deposit in the Borrower Deposit Accounts described in subsection 2.4(A)(1)(a), are transferred into the Collection Account. Borrowers shall further ensure that, on each Business Day of the Collecting Bank, all collections of Accounts (x) then on deposit having then been transferred to the Primary Collection Account and (y) on deposit in the Borrower Deposit Accounts described in subsections 2.4(A)(1)(c) and 2.4(A)(1)(d) are, in each case, transferred into a collection account maintained by Borrower with the Collecting Bank (such account, the "Intermediate Collection Account" and, together with the Primary Collection Account, the "Collection Accounts"). Borrower shall further ensure that, on each Business Day of the Collecting Bank, all collections of Accounts then on deposit or having then been transferred to the Intermediate Collection Account are transferred to a depository account maintained by Collateral Agent at First Union National Bank or such other financial institution as may be determined by Agents from time to time in their reasonable discretion, by written notices to the Borrowers and the Collecting Bank (the "Concentration Account").
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(4) Borrowers shall execute, with each of the Depository Banks and the Collecting Bank, three party lockbox agreements substantially in the applicable form(s) attached to this Agreement as Exhibit A (collectively, the "Lockbox Agreements") and such other agreements, forms or documents as Agents or any Depository Bank or the Collecting Bank may require; provided, that Borrowers shall in any event execute Lockbox Agreements with (a) the Collecting Bank, and each of the Depository Banks identified on Part 2 of Schedule 2.4(A)(1) prior to and as a condition to the Closing, and (b) with all other Depository Banks by the date that is no later than thirty (30) days after the Closing. Such Lockbox Agreements, including but not limited to the instructions to the applicable Depository Bank or Collecting Bank set forth therein, may be modified only as expressly set forth in such Lockbox Agreements, and Borrowers shall not (a) close or modify the arrangements regarding the Collection Accounts; (b) close or modify the arrangements regarding any Borrower Deposit Account, except Borrowers may close a Borrower Deposit Account so long as (i) Borrowers shall have notified Agents and (ii) Borrowers shall have arranged that, if such Borrower Deposit Account was subject to a Lockbox Agreement, all Accounts previously paid to such Borrower Deposit Account shall be paid to a newly established or existing Borrower Deposit Account that is subject to a Lockbox Agreement, or to one of the Collection Accounts; or (c) establish or open any Deposit Account into which collections of Accounts are deposited or directed to be deposited, other than as permitted by subsection (b) immediately above or as directed, or consented to by Collateral Agent in writing.
(5) Administrative Agent shall apply, on a daily basis, all collections of Accounts transferred into the Concentration Account pursuant to this subsection 2.4(A) towards amounts owing by the Borrowers under this Agreement. Such transfers will (solely for purposes of computing interest) be credited against the relevant Obligations of the Borrowers on the (a) second Business Day after receipt of such collections of Accounts if received no later than 1:00 p.m. (New York City time) or (b) third Business Day after receipt of such collections of Accounts if received after 1:00 p.m. (New York City time).
(6) Except as otherwise expressly provided in this Agreement, Administrative Agent shall, for value at the time specified above in this provision, apply the funds credited to the Concentration Account, first, to any expenses, indemnification or Fees owing pursuant to Article 2 or Article 10, second, to interest on the Loans that has become due and remains unpaid, and, third, to reduce the outstanding balance of the Loans (to the Base Rate Loans first), pro rata among the Loans of all the Lenders; provided, however, that any interest which is paid by Borrowers on funds which have been transferred from the Collecting Account to the Concentration Account but not yet credited against the relevant Obligations pursuant to the provisions of this subsection shall be retained by Administrative Agent and Collateral Agent and shared equally between them as compensation for their services.
(7) If as the result of collections of Accounts pursuant to the terms and conditions of this subsection 2.4(A), a credit balance exists with respect to the Concentration Account, such credit balance shall accrue interest in favor of the Borrowers for each day following the first Business Day after its deposit thereto until the date of its application or release pursuant to this Agreement at a rate per annum equal to the Base Rate for such day minus a spread equal to three and one-half percent (3.5%) (but such interest shall accrue only if an Event of Default has not occurred and is continuing in each such day). Such interest shall be calculated on the basis of a three hundred sixty (360) day year for the actual number of days elapsed. All such interest, when credited to the Concentration Account from time to
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time, shall be held therein and applied pursuant to this Agreement as Collateral. If any interest in excess of the interest referred to in this provision is actually paid on the funds held in the Concentration Account
from time to time, it shall be retained by Collateral Agent for its own benefit as compensation for its services.
(B) Mandatory Prepayments.
(1) Overadvance. At any time that the Revolving Loan exceeds the Maximum Revolving Loan Amount, Borrowers shall immediately repay the Revolving Loan to the extent necessary to reduce the aggregate principal balance to an amount equal to or less than the Maximum Revolving Loan Amount.
(2) Prepayments from Proceeds of Asset Dispositions. Immediately upon receipt by any Borrower or any of its Subsidiaries of proceeds of any Asset Disposition (in one or a series of related transactions), which proceeds exceed $2,000,000 (it being understood that if the proceeds exceed $2,000,000, the entire amount and not just the portion above $2,000,000 shall be subject to this subsection 2.4(B)(2)), Borrowers shall prepay the Obligations in an amount equal to such proceeds. All such prepayments shall be applied to the Loans in accordance with subsection 2.4(E). Notwithstanding anything to the contrary in the foregoing, the Borrowers shall not be required to prepay the Obligations in the event that any Borrower receives proceeds in respect of the Campus Transaction or the THCI Turnover.
(3) Prepayments from Issuance of Securities. Immediately upon the receipt by any Borrower of the proceeds of the issuance of equity securities in excess of $1,000,000 individually or in the aggregate (other than the issuance of equity securities in connection with any conversion of indebtedness under and in accordance with the Plan or Confirmation Order), Borrowers shall prepay the Loans in an amount equal to such excess proceeds, net of underwriting discounts and commissions and other reasonable costs associated therewith. All such prepayments shall be applied to the Loans in accordance with subsection 2.4(E).
(4) Prepayments from Tax Refunds. Immediately upon the receipt by any Borrower or any of their Subsidiaries of the proceeds of any federal, state or local tax refund in excess of $1,000,000 individually or in the aggregate, Borrowers shall prepay the Loans in an amount equal to such excess proceeds. All such prepayments shall be applied to the Loans in accordance with subsection 2.4(E).
(5) Prepayments from Proceeds of Casualty or Condemnation. Immediately upon receipt by any Borrower of any insurance proceeds arising from damage or casualty, or any proceeds arising from any condemnation, which proceeds exceed $1,000,000 individually or in the aggregate, Borrowers shall prepay the Loans in an amount equal to such excess proceeds, net of any reasonable costs incurred in connection therewith. All such prepayments shall be applied to the Loans in accordance with subsection 2.4(E).
(6) Repayments from Sale of SunScript.
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a. Immediately upon receipt by Lenders of the proceeds of the Option Price such proceeds shall be applied to prepay the Loans, to permanently reduce the Commitment, and to pay the prepayment fee in accordance with subsection 2.3(C).
b. Immediately upon the sale of the SunScript Stock (and, following the proper completion of the Partial Purchase Option, to the extent Term Collateral Agent may elect to sell or otherwise transfer all or any portion of the SunScript Assets following the execution upon such Assets), then to the extent that the aggregate proceeds of any such sale(s) or transfer(s) are in excess of the amount necessary to repay the obligations owing under the Term Loan Agreement in full, such excess proceeds shall be paid immediately to the Collateral Agent and such proceeds shall be applied to prepay the Loans in accordance with subsection 2.4(E)
(C) Collateralization of Lender Letters of Credit; Termination of Commitments. In the event that the entire Revolving Loan Commitment is terminated at a time that any Lender Letters of Credit are outstanding, Borrowers shall immediately cause the Administrative Agent and each Lender to be released from all liability under any Lender Letters of Credit or, at Borrowers' option, Borrowers shall (1) deposit with Administrative Agent for the benefit of all Lenders with a Revolving Loan Commitment cash or a back-to-back letter of credit satisfactory to the Administrative Agent in an amount equal to one hundred and five percent (105%) of the aggregate outstanding Letter of Credit Reserve to be available to Administrative Agent to reimburse payments of drafts drawn under such Lender Letters of Credit and pay any fees and expenses related thereto and (2) prepay the fees payable under subsection 2.3(B) with respect to such Lender Letters of Credit for the full remaining terms of such Lender Letters of Credit. Upon termination of any such Lender Letter of Credit, the unearned portion of such prepaid fee attributable to such Lender Letter of Credit shall be refunded to Borrowers.
(D) Payments on Business Days. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, the payment may be made on the next succeeding Business Day and such extension of time shall be included in the computation of the amount of interest or fees due hereunder.
(E) Application of Prepayment Proceeds. With respect to the prepayments described in subsections 2.4(B)(2), 2.4(B)(3), 2.4(B)(4), 2.4(B)(5), and 2.4(B)(6)(b) such prepayments shall be applied, at the election of the Company on written notice to the Agents, (i) to reduce the outstanding principal balance of the Revolving Loans but not as a permanent reduction of the Revolving Loan Commitment or (ii) in accordance with subsection 2.1(A)(2), to permanently reduce the Revolving Commitment with respect to such mandatory prepayment in accordance with subsection 2.1. Considering each type of Loan being prepaid separately, any such prepayment shall be applied first to Base Rate Loans of the type required to be prepaid before application to LIBOR Loans of the type required to be prepaid.
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subsection 2.4(C). Even after payment of all Obligations hereunder, Borrowers' obligation to indemnify Collateral Agent and each Lender in accordance with the terms hereof shall continue.
2.7 Grant of Security Interest.
(A) Grant of Liens in the Collateral. To secure the payment and performance of the Obligations, including all renewals, extensions, restructurings and refinancings of any or all of the Obligations, Borrowers hereby grant to Collateral Agent, for the benefit of Agents and Lenders, a continuing first priority security interest in, lien and mortgage in and to, right of setoff against and collateral assignment of all of Borrowers' personal property and all rights to such personal property, and Mortgaged Property, in each case, whether now owned or existing or hereafter acquired or arising and regardless of where located (all being collectively referred to as the "Collateral") including all: (1) Accounts; (2) Chattel Paper; (3) Commercial Tort Claims, including those specified on Schedule 2.7(A); (4) Deposit Accounts and cash and other monies and property of Borrower in the possession or under the control of Agent, any Lender or any participant of any Lender in the Loans; (5) Documents; (6) Equipment; (7) Fixtures; (8) General Intangibles (including Intellectual Property); (9) Goods; (10) Instruments; (11) Inventory; (12) Investment Property; (13) Letter-of-Credit Rights and Supporting Obligations; (14) other personal property whether or not subject to the UCC; and (15) all other rights to payment for money or funds advanced or sold whether or not arising out of the use of a credit or charge card together with all books, records, ledger cards, files, correspondence, computer programs, tapes, disks and related data processing software that at any time evidence or contain information relating to or for use with any of the property described above or are otherwise necessary or helpful in the collection thereof or realization thereon; and Proceeds and products of all or any of the property described above; provided, however, that the Collateral Agent's lien on the SunScript Stock shall be a second priority lien, subject only to the prior lien of the Term Collateral Agent.
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in contract or tort for Borrowers' acts or omissions with respect to the agreements included in the Collateral, unless such acts or omissions occur under protest by the applicable Borrower pursuant to written direction of any Agent or Lender, which direction constitutes gross negligence or willful misconduct on the part of such Agent or Lender.
Borrowers hereby irrevocably authorize Lender to file, in applicable UCC jurisdictions initial financing statements or amendments or continuations thereto relating to the Collateral as described in this Agreement at any time and from time to time in accordance with this Agreement and subject to the Intercreditor Agreement. Borrowers agree to furnish promptly upon request all information required for the sufficiency or filing office acceptance of any such initial financing statement or amendment thereto by the UCC of such jurisdiction. The Borrowers hereby ratify all UCC filings relating to the Collateral as described in this Agreement made prior to the date hereof and authorizes such filings as if made as of the date of this Agreement.
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(A) No Deductions. Any and all payments or reimbursements made hereunder shall be made free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto (all such taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto referred to herein as "Tax Liabilities"; excluding, however, taxes imposed on the net income of any Lender or any Agent by the jurisdiction under the laws of which such Agent or such Lender is organized or doing business or any political subdivision thereof and taxes imposed on its net income by the jurisdiction of such Agent's or such Lender's applicable lending office or any political subdivision). If Borrowers shall be required by law to deduct any such Tax Liabilities from or in respect of any sum payable hereunder to any Agent or any Lender, then the sum payable hereunder shall be increased as may be necessary so that, after making all required deductions, such Agent or such Lender receives an amount equal to the sum it would have received had no such deductions been made.
(a) does or shall subject any Agent or Lender to any tax of any kind whatsoever with respect to this Agreement, the other Loan Documents or any Loans made or Lender Letters of Credit issued hereunder, or change the basis of taxation of payments to such Agent or Lender of principal, fees, interest or any other amount payable hereunder (except for net income taxes, or franchise taxes imposed in lieu of net income taxes, imposed generally by federal, state or local taxing authorities with respect to interest or commitment or other fees payable hereunder or changes in the rate of tax on the overall net income of such Agent or Lender); or
(b) does or shall impose on any Agent or Lender any other condition or increased cost in connection with the transactions contemplated hereby or participations herein; and the result of any of the foregoing is to increase the costs to such Agent or Lender of issuing any Lender Letter of Credit or making or continuing any Loan hereunder, as the case may be, or to reduce any amount receivable hereunder;
then, in any such case, Borrowers shall promptly pay to such Agent or Lender, upon its notice and demand, any additional amounts necessary to compensate such Agent or Lender, on an after-tax basis, for such additional cost or reduced amount receivable, as determined by such Agent or Lender with respect to this Agreement or the other Loan Documents; provided that if any such Lender or Agent has a lending office in a jurisdiction that does not impose such taxes, then, upon the Company's request, such Agent or Lender agrees to use commercially reasonable efforts to cause such payments or reimbursement to be made to such office. If any Agent or Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify Borrowers of the event by reason of which such Agent or Lender shall become so entitled (with any such Lender concurrently notifying such Agent). A certificate as to any additional amounts payable pursuant to the foregoing sentence, together with supporting documentation, submitted by any Agent or Lender to Borrowers shall, absent manifest error, be final, conclusive and binding for all purposes.
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If a Foreign Lender is entitled to an exemption with respect to payments to be made to such Foreign Lender under this Agreement (or to a reduced rate of withholding) and does not provide a Certificate of Exemption to Borrowers and Administrative Agent within the time periods set forth in the preceding paragraph, Borrowers shall withhold taxes from payments to such Foreign Lender at the applicable statutory rates, and Borrowers shall not be required to pay any additional amounts as a result of such withholding; provided, however, that all such withholding shall cease upon delivery by such Foreign Lender or a Certificate of Exemption to Borrowers and Administrative Agent.
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(A) Replacement of an Affected Lender. Borrowers may obtain, at Borrowers' expense, a replacement Lender ("Replacement Lender") for an Affected Lender, which Replacement Lender shall be reasonably satisfactory to Agents. In the event Borrowers obtain a Replacement Lender that will purchase all outstanding Obligations owed to such Affected Lender and assume its Commitments hereunder within ninety (90) days following notice of Borrowers' intention to do so, the Affected Lender shall sell and assign its Loans and Commitments to such Replacement Lender in accordance with the provisions of subsection 9.5; provided, however, Borrowers have in any case where such replacement occurs as the result of a demand for payment of certain costs pursuant to subsection 2.8 or subsection 2.9, paid all increased costs for which such Affected Lender is entitled to under subsection 2.8 or subsection 2.9 through the date of such sale and assignment; or
(B) Prepayment of an Affected Lender. Borrowers may prepay in full all outstanding Obligations owed to an Affected Lender and terminate such Affected Lender's Commitments. Borrowers shall, within ninety (90) days following notice of their intention to do so, prepay in full all outstanding Obligations owed to such Affected Lender, including such Affected Lender's increased costs for which it is entitled to reimbursement under this Agreement through the date of such prepayment, and terminate such Affected Lender's Commitments.
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SECTION 3. CONDITIONS TO LOANS
The obligations of Agents and each Lender to make Loans and the obligation of Administrative Agent or any Lender to issue Lender Letters of Credit on the Closing Date and on each Funding Date are subject to satisfaction of all of the terms and conditions set forth in this Agreement and in the Conditions Rider, attached hereto and incorporated herein by reference.
SECTION 4. REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS
To induce Agents and each Lender to enter into the Loan Documents, to make and to continue to make Loans and to issue and to continue to issue Lender Letters of Credit or risk participations to the banks that issue Bank Letters of Credit, the Company represents, warrants and covenants on behalf of itself and the other Borrowers (and each of the other Borrowers, jointly and severally, accepts responsibility for such representations and warranties) to each Agent and Lender that the following statements are and will be true, correct and complete and, unless specifically limited, shall remain so for so long as any of the Commitments hereunder shall be in effect and until indefeasible payment in full, in cash, of all Obligations and termination of all Lender Letters of Credit:
4.1 Organization, Powers, Capitalization.
(A) Organization and Powers. Each of the Borrowers is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and qualified to do business in each jurisdiction where such qualification is required except where failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Each Borrower has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and proposed to be conducted and to enter into each Loan Document to which it is a party.
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of the transactions contemplated thereby do not contravene any applicable law, the corporate charter or bylaws or other organizational documents of any Borrower or any material agreement or order by which any Borrower or any Borrower's property is bound. This Agreement and the other Loan Documents are the legal, valid and binding obligations of the applicable Borrowers respectively, each enforceable against the Borrowers, as applicable, in accordance with their respective terms.
4.5 Collateral Warranties and Covenants.
(1) the Account is genuine and in all respects what it purports to be, and is not evidenced by a judgment.
(2) the Account arises from an actual, completed and bona fide sale and delivery of goods or rendition of Medical Services and other services to patients or customers, made by a Borrower in the ordinary course of its business, in accordance with the terms and conditions of all purchase orders, contracts, certifications, participations, certificates of need, provider or supplier agreements, or other documents relating thereto and forming a part of the contract between the relevant Borrower and Account Debtor;
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(3) the Account is for a liquidated amount maturing as stated in a claim or invoice covering the sale or rendition of Medical Services or other services that give rise to the Account, a copy of which has been furnished or is available to the Collateral Agent;
(4) except as previously disclosed in writing by the Borrowers to the Agents, none of the Borrowers has knowledge of any information that would lead it to believe that any of the following statements is incorrect: (i) the Account Debtor under the Account had the capacity to contract at the time any contract or other document giving rise to the Account was executed and (ii) such Account Debtor under the Account is solvent;
(5) except as previously disclosed in writing by the Borrowers to the Agents, none of the Borrowers has knowledge of any information that would lead it to believe that any of the following statement is incorrect: there are no proceedings or actions which are threatened or pending against any Account Debtor under the Account which might result in any material adverse change in such Account Debtor's financial condition or the collectibility of any account owed by such Account Debtor;
(6) the Account has been billed and forwarded to the Account Debtor for payment in accordance with applicable laws and in compliance and conformity with any and all requisite procedures, requirements and regulations governing payment by such Account Debtor with respect to such Account, and such Account if due from a Medicaid/Medicare Account Debtor, TRICARE or the Veterans Administration is properly payable directly to a Borrower in the amount stated as the balance of such Account;
(7) the goods, services and inventory sold giving rise to the Account are the exclusive property of the Borrowers owed such Accounts and are not and will not be subject to any lien, consignment arrangement, encumbrance, security interest or financing statement whatsoever, other than Liens in Accounts in favor of any landlord that has entered into a subordination agreement or estoppel certificate in form and substance satisfactory to the Agents;
(8) the invoices evidencing the Account are in the name of the Borrower to which such Account is owed;
(9) the patients or customers of the Borrowers have accepted the goods or services the sale or rendition of which gave rise to the Account, owe and are obligated to pay the full amounts stated the related invoices according to their terms, without dispute, offset, defense, counterclaim or contra, except for disputes and other matters arising in the ordinary course of business of which the Borrowers have advised the Agents;
(10) to the Borrower's knowledge, there are no facts, events or occurrences which in any material way impair the validity or enforceability of any Accounts or reduce the amount payable thereunder from the face amount of the claim or invoice and statements delivered or made available to the Collateral Agent with respect thereto; and
(11) Borrowers have obtained and currently have all certificates of need, Medicaid, Medicare and TRICARE provider numbers, licenses, permits and authorizations that are necessary in the generation of such Accounts.
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(12) Such Account does not represent a sale to any Borrower, Subsidiary of any Borrower, or Affiliate of any Borrower, or a consignment, sale or return or a xxxx and hold transaction.
The Borrowers shall, at their own expense: (i) keep accurate and complete records of its Accounts and all payments and collections thereon; (ii) cause all invoices evidencing such Accounts and all copies thereof to bear a notice that such invoices are payable to the Borrower Deposit Accounts and to the extent requested by the Collateral Agent, (A) provide written notice to each private indemnity, managed care or other Insurer who is an Account Debtor on any Account of such Borrower, and, thereafter, promptly after any such Insurer becomes an Account Debtor on any such Account, provide written notice to such Insurer, that the Collateral Agent has been granted a first priority lien and security interest in, upon and to all Accounts applicable to such Insurer and directs such Account Debtor to make payments into the appropriate Blocked Account and (B) do anything further that may be reasonably requested by the Collateral Agent to preserve or protect the security interests in the Collateral contemplated in this Agreement and the Plan and effectuate the intentions and objects of this Agreement, including, but not limited to, the execution and delivery of agreements relating to the Blocked Accounts, continuation statements, amendments to financing statements, and any other documents required under this Agreement and (iii) use its reasonable best efforts to assure prompt payment of all amounts due or to become due under Accounts. Except in the ordinary course of business consistent with past practices, no discounts, credits or allowances will be issued, granted or allowed by any Borrower to customers and no returns will be accepted without Collateral Agent's prior written consent.
Borrowers will promptly notify Collateral Agent in the event that any (x) Account Debtor (or any other Person obligated on such Account) alleges dispute or claim with respect to such Account or of any other circumstances known to Borrowers, in each case to the extent not previously disclosed to the Collateral Agent, that may materially impair the validity or collectibility of any such Account, (y) Account becomes evidenced or secured by an instrument or chattel paper and upon request of the Collateral Agent, promptly deliver such instrument or chattel paper to the Collateral Agent, or (z) Account in an aggregate face amount in excess of $250,000 ceases, to such Borrowers' knowledge, to qualify as an Eligible Account and, in which case Borrowers shall promptly describe the circumstances of such event. Collateral Agent shall have the right, at any time or times hereafter, to verify the validity, amount or any other matter relating to any Account by mail, telephone or in person and Borrowers shall take such actions as are requested by Collateral Agent to enable Collateral Agent to perform such verification.
After the occurrence of an Event of Default: (i) no Borrower shall, without the prior consent of Collateral Agent, adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor (or any other Person obligated on such Account), or allow any credit or discount thereon, except in the ordinary course of business consistent with past practices, and (ii) Collateral Agent shall have the right at any time (A) to exercise the rights of any Borrower, with respect to the obligation of the Account Debtor (or any other Person obligated on such Account) to make payment or otherwise render performance to such Borrower, and with respect to any property that secures the obligations of the Account Debtor or of any such other Person obligated on such Account; and (B) to adjust, settle or compromise the amount or payment of any such Account or release wholly or partly any Account Debtor or obligor thereunder or allow any credit or discount thereon. Each Borrower shall issue credit memoranda promptly (with copies to Collateral Agent after the occurrence of an Event of Default)
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upon accepting returns or granting allowances, until Collateral Agent has notified such Borrower that an Event of Default has occurred and that all future credits or allowances are to be made only after prior written approval from Collateral Agent.
(D) Chattel Paper Warranties and Covenants. As of the Closing Date, no Borrower holds any Chattel Paper and does not anticipate holding any Chattel Paper in the ordinary course of its business. Schedule 4.5(D) sets forth a list of all Chattel Paper held by each Borrower immediately prior to the Closing Date, all of which has been delivered to (and, where appropriate, duly endorsed to) Collateral Agent. To the extent any Borrower shall hold or obtain any Chattel Paper, such Borrower will promptly (i) deliver to Collateral Agent all Tangible Chattel Paper duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Collateral Agent and (ii) provide Collateral Agent with Control of all Electronic Chattel Paper, by having Collateral Agent identified as the assignee of the Records(s) pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of Control set forth in the UCC. Borrowers will xxxx conspicuously all Chattel Paper with a legend, in form and substance satisfactory to Collateral Agent, indicating that such Chattel Paper is subject to the Lien of Collateral Agent. At the request of the Collateral Agent, Borrowers shall take all actions reasonably necessary to ensure Collateral Agent has a perfected security interest in such Chattel Paper.
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Collateral Agent, each Borrower will deliver to Collateral Agent all Instruments it holds or obtains duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Collateral Agent. At the request of Collateral Agent, Borrowers will also deliver to Collateral Agent copies of all security agreements securing any such Instruments.
(G) Letter-of-Credit Rights Warranties and Covenants. Each Borrower will deliver to Collateral Agent all Letters of Credit under which it is the beneficiary or is otherwise entitled to receive proceeds duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Collateral Agent. Each Borrower will also deliver to Collateral Agent all security agreements securing any such Letters of Credit and execute UCC financing statement amendments evidencing the collateral assignment of Borrowers' letter-of-credit rights to Collateral Agent in connection with such security agreements. Borrowers will take any and all actions necessary (or required or requested by Agent), from time to time, to cause Collateral Agent to obtain Control of such Borrower's Letter-of-Credit Rights.
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all Intellectual Property, the loss of which could reasonably be expected to have a Material Adverse Effect, each Borrower shall: (a) prosecute diligently any copyright, patent or trademark application at any time pending; (b) preserve and maintain all rights in such Intellectual Property; (c) use its best efforts to obtain any consents, waivers or agreements necessary to enable Collateral Agent to exercise its remedies with respect to such Intellectual Property; (d) not abandon any material right to file a copyright, patent or trademark application nor abandon any pending copyright, patent or trademark application, or Copyright, Patent or Trademark without the prior written consent of Collateral Agent. All government registered Intellectual Property, the loss of which could reasonably be expected to have a Material Adverse Effect, is owned by Borrowers, is valid, subsisting and enforceable and all filings necessary to maintain the effectiveness of such registrations have been made. With respect to all Intellectual Property, the loss of which could reasonably be expected to have a Material Adverse Effect, is the execution, delivery and performance of this Agreement by Borrowers will not violate or cause a default under any of such Intellectual Property or any agreement with respect thereto.
(K) Deposit Accounts; Bank Accounts Warranties and Covenants.
(1) Schedule 4.5(K) sets forth the account numbers and locations, and the name of the depository bank, of all Deposit Accounts of Borrowers (other than the Borrower Deposit Accounts and the Collection Account) that are subject to a lockbox, blocked account or similar agreement or arrangement, or the collections or deposits in which are pledged to any third party (not including the Agents or the Lenders) (any such accounts, collectively, the "Blocked Accounts"), as well as a brief description of the terms of any lockbox, blocked account or similar agreement or arrangement regarding any Blocked Account.
(2) Borrowers shall not (a) transfer or direct the transfer of any collections from any Borrower Deposit Account or any Collection Account into any Blocked Account or other bank account of Borrowers or any Subsidiary of Borrowers or (b) close any Blocked Account or modify the terms of any lockbox, blocked account or similar agreement or arrangement, in either case without the prior written consent of Collateral Agent, except as otherwise expressly permitted by subsection 2.4(A)(4).
(L) Bailees. Except as disclosed on Schedule 4.5(L), none of the Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor. No Collateral having an aggregate value in excess of $50,000 shall at any time be in the possession or control of any warehouse, bailee or any of Borrowers' agents or processors (other than (i) patient medical records required to be retained under applicable law and (ii) Equipment that is obsolete or that is being recalibrated or refurbished) without Collateral Agent's prior written consent and unless Collateral Agent, if Collateral Agent has so requested, has received warehouse receipts or bailee lien waivers satisfactory to Collateral Agent prior to the commencement of such possession or control. If any such Collateral is at any time in the possession or control of any warehouse, bailee or any of Borrowers' agents or processors, Borrowers
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shall, upon the request of Collateral Agent, notify such warehouse, bailee, agent or processor of the Liens in favor of Collateral Agent, for the benefit of Collateral Agent and Lenders, created hereby, shall instruct such Person to hold all such Collateral for Collateral Agent's account subject to Collateral Agent's instructions, and shall obtain such Person's acknowledgement that it is holding the Collateral for Collateral Agent's benefit.
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Contract, and no condition exists that, with the giving of notice or the lapse of time or both, would constitute such a default.
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Agent in its reasonable discretion. Each Borrower shall cause Collateral Agent at all times to be named as additional loss payee, as its interests may appear, on all property damage insurance policies and shall cause Collateral Agent at all times to be named as additional insured under all general and professional liability policies relating to the Collateral, in each case pursuant to appropriate endorsements in form and substance satisfactory to Collateral Agent. No notice of cancellation has been received with respect to such policies and each Borrower and each of its Subsidiaries is in compliance with all material conditions contained in such policies. Any proceeds received from any policies of insurance relating to any Collateral shall be applied to the Obligations as set forth in subsection 2.4(B)(2). Each Borrower shall provide Collateral Agent evidence of the insurance coverage and of the assignments and endorsements required by this Agreement promptly upon request by Collateral Agent and upon renewal of any existing policy. If any Borrower elects to change insurance carriers, policies or coverage amounts, such Borrower shall notify Collateral Agent and provide Collateral Agent with evidence of the updated insurance coverage and of the assignments and endorsements required by this Agreement, except that such notice shall not be required (a) if such change does not materially reduce the coverage amounts or materially and adversely affect the terms or provisions of the coverage in existence on the Closing Date or (b) if such change does materially reduce the coverage amounts or does materially and adversely affect the terms or provisions of such coverage in existence on the Closing Date, such Borrower shall have obtained the highest amount of coverage and the most favorable terms and provisions that are then commercially available. In the event such Borrower fails to provide Collateral Agent with evidence of the insurance coverage required by this Agreement, Collateral Agent may, but is not required to, purchase insurance at such Borrower's expense to protect Collateral Agent's and the Lender's interests in the Collateral. This insurance may, but need not, protect such Borrower's interests. The coverage purchased by Collateral Agent may not pay any claim made by such Borrower or any claim that is made against such Borrower in connection with the Collateral. Such Borrower may later cancel any insurance purchased by Collateral Agent, but only after providing Collateral Agent with evidence that such Borrower has obtained insurance as required by this Agreement. If Collateral Agent purchases insurance for the Collateral, such Borrower will be responsible for the costs of that insurance, including interest thereon and other charges imposed on Collateral Agent in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance, and such costs may be added to the Obligations. The costs of the insurance may be more than the cost of insurance such Borrower is able to obtain on its own.
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4.20 Access to Accountants and Management. Borrowers authorize Agents and Lenders to discuss the financial condition and financial statements of any Borrower and its Subsidiaries with the Company's Accountants upon reasonable notice to the Company and, if no Event of Default shall have
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occurred and be continuing, in the Company's presence, either in person or, if Agents elect, by telephone. Borrowers authorize the Company's Accountants to respond to all of Collateral Agent's inquiries. Collateral Agent and each Lender may, with the consent of Collateral Agent, which will not be unreasonably denied, confer with each Borrower's management directly regarding such Borrower's business, operations and financial condition.
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consummation of the transactions contemplated herein, or related to the Facilities or the Collateral, are being conducted by any commission, board or agency in connection with the Medicare or Medicaid programs, and to the knowledge of Borrowers, no such reviews are scheduled, pending or threatened against or affecting any of the providers, or any of the Facilities or the Collateral, or the consummation of the transactions contemplated hereby except those reviews that could not reasonably be expected to have a Material Adverse Effect.
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Compliance Plan"); and (iii) has implemented or will implement those provisions of such HIPAA Compliance Plan in all material respects necessary to ensure that such Borrower is or becomes HIPAA Compliant. For purposes hereof, "HIPAA Compliant" shall mean that such Borrower is or will be in compliance with each of the applicable requirements of the so-called "Administrative Simplification" provisions of HIPAA on and as of each date that any part thereof, or any final rule or regulation thereunder, becomes effective in accordance with its or their terms, as the case may be, except where failure to be in compliance could not reasonably be expected to result in a Material Adverse Effect or otherwise materially adversely affect the rights and remedies of the Agents and Lenders hereunder.
4.30 Certificates of Need. Borrowers are the lawful owner of any certificates of need or other required license for the operation of each of the Facilities.
SECTION 5. REPORTING AND OTHER AFFIRMATIVE COVENANTS
Each of the Borrowers covenants and agrees that, so long as any of the Commitments hereunder shall be in effect and until payment in full, in cash, of all Obligations and termination of all Lender Letters of Credit, Borrowers shall perform and shall cause each of its Subsidiaries to perform, all covenants in this Section 5.
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fact, with power in the place and stead of each Borrower and in the name of each Borrower (a) to endorse such Borrower's name to any of the items of payment or proceeds described in subsection 4.22 above and all proceeds of Collateral that come into Collateral Agent's possession or under Collateral Agent's control, including, without limitation, with respect to any drafts, Instruments, Documents and Chattel Paper, and (b) during the continuance of an Event of Default, to obtain, adjust and settle insurance claims, which are required to be paid to Collateral Agent. Borrowers hereby ratify and approve all acts of Collateral Agent made or taken in accordance with this subsection 5.2 Both the appointment of Collateral Agent as Borrowers' attorney and Collateral Agent's rights and powers hereunder are coupled with an interest and are irrevocable.
(B) Mortgages. Borrowers shall as promptly as possible (and in any event within sixty (60) days after the Closing Date) deliver to Collateral Agent fully executed Mortgages, in form and substance satisfactory to Collateral Agent.
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X or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Securities Act.
5.7 Licensure; Medicaid/Medicare Cost Reports. Borrowers will maintain all certificates of need, provider numbers, provider agreements and licenses necessary to conduct their business as currently conducted. Borrowers will take any steps required to comply with any new or additional requirements that may be imposed on providers of medical products and Medical Services except where failure to maintain or comply could not reasonably be expected to result in a Material Adverse Effect. All Medicaid, Medicare and TRICARE cost reports required by law and all claims for reimbursement will be properly filed.
(A) any Default or Event of Default;
(B) any change in the business, assets, liabilities, financial condition, results of operations or business prospects of the Borrowers taken as a whole which has had or could reasonably, individually or in the aggregate, be expected to have a Material Adverse Effect; and
(C) any material amendment of the articles of incorporation or by-laws of any Borrower or any of its Subsidiaries which could reasonably be expected to materially adversely affect the interests, rights and remedies of the Agents and Lenders under this Agreement.
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(A) Borrowers shall use commercially reasonable efforts to cause the beneficiary of any Lender Letters of Credit or Bank Letters of Credit to accept such letters of credit without provisions for automatical renewal.
(B) With respect to any Lender Letter of Credit or Bank Letter of Credit, issued at the request of, or on behalf of any Borrower, that contains an automatic renewal provision, if Borrowers desire to permit the renewal of such letter of credit, Borrowers shall notify Agents not later than fifteen (15) days prior to the earlier of (i) the expiration date of such letter of credit or (ii) the date by which notice must be given by the issuer of such letter of credit that it is not being renewed.
SECTION 6. FINANCIAL COVENANTS
Each of the Borrowers covenants and agrees that so long as any of the Commitments remain in effect and until indefeasible payment in full, in cash, of all Obligations and termination of all Lender Letters of Credit, Borrowers shall comply with and shall cause each of their Subsidiaries to comply with all covenants contained in the Financial Covenant Rider.
Each of the Borrowers covenants and agrees that so long as any of the Commitments remain in effect and until indefeasible payment in full, in cash, of all Obligations and termination of all Lender Letters of Credit, Borrowers shall not and will not permit any of their Subsidiaries to:
7.1 Indebtedness. Directly or indirectly create, incur, assume, guaranty, or otherwise become or remain directly or indirectly liable, on a fixed or contingent basis, with respect to any Indebtedness except: (a) the Obligations; (b) intercompany Indebtedness among the Borrowers, incurred in the ordinary course of business; (c) Indebtedness owing by SHS to the Company or another Borrower in an aggregate principal amount not to exceed the sum of (i) the principal balance of such Indebtedness as of the Closing Date and (ii) $1,500,000; (d) Indebtedness incurred after the Closing Date in connection with Capital Leases or purchases secured by purchase money Liens, in both cases together not to exceed $5,000,000 in outstanding principal amount in the aggregate; (e)Indebtedness under the Term Loan Documents but only to the extent permitted under the terms of the Intercreditor Agreement; (f) Indebtedness existing on the Closing Date and identified on Schedule 7.1; (g) Indebtedness incurred in connection with refinancing of those certain mortgages existing on the date hereof that encumber certain real property owned by the Borrowers on the date hereof, as set forth in Schedule 7.1, which Indebtedness shall not exceed the principal balance secured by such mortgages on the Closing Date; (h) Indebtedness incurred in connection with the Sumitomo Transaction and the SunTrust Transaction; and (i) unsecured Indebtedness not to exceed $2,000,000 in outstanding principal amount in the aggregate. No Borrower will, and will not permit any of its Subsidiaries to, incur any Liabilities except for Indebtedness permitted herein and trade payables and normal accruals in the ordinary course of business not yet due and payable or with respect to which any Borrower or any of its Subsidiaries is contesting in good faith the amount or validity thereof by appropriate proceedings and then only to the extent that such Borrower or any of its Subsidiaries has established adequate reserves therefor under GAAP.
7.2 Guaranties. Except for endorsements of instruments or items of payment for collection in the ordinary course of business, guaranty, endorse, or otherwise in any way become or be responsible for
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any obligations of any other Person (unless such obligation constitutes Indebtedness permitted by subsection 7.1), whether directly or indirectly by agreement to purchase the indebtedness of any other Person or through the purchase of goods, supplies or services, or maintenance of working capital or other balance sheet covenants or conditions, or by way of stock purchase, capital contribution, advance or loan for the purpose of paying or discharging any indebtedness or obligation of such other Person or otherwise; provided, however, that any Borrower may guarantee any obligation of any other Borrower so long as such obligation is otherwise not prohibited under this Agreement.
7.3 Transfers, Liens and Related Matters.
(A) Transfers. Sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to any of the Collateral, except that (1) Borrowers may permit the Inactive Entities to sell or transfer their respective assets in connection with any dissolution or liquidation permitted under subsection 5.10 of this Agreement; (2) Borrowers may (a) sell Inventory to a buyer in the ordinary course of business and license a General Intangible to a licensee in the ordinary course of business; (b) make Asset Dispositions, if all of the following conditions are met: (i) the market value of assets sold or otherwise disposed of in any single transaction or series of related transactions does not exceed $2,000,000 or, if such market value exceeds $2,000,000, (A) the Borrowers shall have complied with subsections 2.4(B)(2) and (B) at least ninety percent (90%) of the consideration received is in the form of (x) cash, (y) an assumption of then existing Indebtedness or (z) a combination of cash and assumption of then existing Indebtedness; (ii) the consideration received is at least equal to the fair market value of such assets; (iii) after giving effect to the sale or other disposition of the assets included within the Asset Disposition and the repayment of the Obligations with the proceeds thereof, Borrowers are in compliance on a pro forma basis with the covenants set forth in the Financial Covenant Rider recomputed for the most recently ended calendar quarter for which information is available as if such Asset Disposition occurred at the beginning of such calendar quarter and are in compliance with all other terms and conditions contained in this Agreement, as determined by Collateral Agent in its reasonable discretion upon receipt of information it deems adequate for such purposes; and (iv) no Default or Event of Default shall then exist or result from such sale or other disposition; and (3) if no Event of Default shall then exist or result from such sale or disposition, consummate the Permitted Divestitures, the Campus Transaction and/or the THCI Turnover.
(B) Liens. Except for Permitted Encumbrances and Liens incurred in connection with Indebtedness permitted under clauses (f), (g) and (h) of subsection 7.1 (provided that such Liens shall not encumber Accounts or Inventory unless the grantee in respect of such Liens have entered into a subordination agreement in form and substance satisfactory to the Agents), directly or indirectly create, incur, assume or permit to exist any Lien on or with respect to any of the Collateral or any proceeds, income or profits therefrom.
(C) No Negative Pledges. Except for the Term Loan Agreement and agreements in connection with Indebtedness permitted under clauses (f), (g) and (h) of subsection 7.1 (provided that such agreements shall not restrict encumbrances on Accounts or Inventory unless the parties benefitting from such agreements have entered into subordination agreements or other agreements in form and substance satisfactory to the Agents), enter into or assume any agreement (other than the Loan Documents and the Term Loan Documents) prohibiting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired except if such agreement is entered into or assumed in connection with Capital Leases, or purchases secured by purchase money Liens, in either
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case (i) permitted by subsection 7.1 and (ii) not restricting the creation or assumption of any Lien upon its Accounts or Inventory.
(D) No Restrictions on Borrower Distributions to Borrowers. Except as provided herein or in the Term Loan Documents, directly or indirectly create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Borrower to: (1) pay dividends or make any other distribution on any of such Borrower's capital stock owned by any Borrower; (2) pay any indebtedness owed to any Borrower; (3) make loans or advances to any Borrower; or (4) transfer any of its property or assets to any Borrower other than property, or assets subject to Capital Leases or purchase money Liens permitted by this Agreement.
7.4 Investments and Loans. Make or permit to exist investments in, loans to or distributions to any other Person, except: (a) Cash Equivalents held by a Borrower; (b) loans and advances to employees of Borrowers for moving, entertainment, travel and other similar expenses in the ordinary course of business in an aggregate outstanding amount not in excess of $250,000 at any time; (c) loans in respect of intercompany Indebtedness permitted in subsection 7.1 of this Agreement; (d) investments by any Borrower in the capital stock of any Subsidiary that is a Borrower on the Closing Date or in any Person that has become a Subsidiary and a Borrower after the Closing Date in accordance with the terms of subsection 7.11 of this Agreement or otherwise with the prior written consent of the Agents; (e) investments after Closing Date by the Company or any other Borrower in SHS in an aggregate amount not to exceed $1,500,000; and (f) the investments disclosed on Schedule 7.4 existing on the date hereof. Notwithstanding any contrary provision contained in this Agreement (including, without limitation, the provisions of subsection 7.1 of this Agreement), Borrowers shall not permit any Inactive Entity to acquire any assets, incur any Indebtedness or Liabilities of any kind, conduct any business, perform any operations (other than those specifically required for liquidation or dissolution), receive any distributions from any Borrower or from any Subsidiary of any Borrower, make any investments or issue any stock or other equity interests.
7.5 Restricted Junior Payments. Directly or indirectly declare, order, pay, make or set apart any sum for any Restricted Junior Payment, except payments in respect of the Indebtedness owing in connection with the Term Loan Documents, but only to the extent permitted under the terms of the Intercreditor Agreement.
7.6 Restriction on Fundamental Changes. (a) Enter into any transaction of merger or consolidation; (b) liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution); (c) convey, sell, lease, sublease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its business or assets, or the capital stock of any of its Subsidiaries, whether now owned or hereafter acquired; or (d) acquire by purchase or otherwise all or any substantial part of the business or assets of, or stock or other beneficial ownership of, any Person; provided, however, that notwithstanding anything in the foregoing to the contrary, so long as no Event of Default shall have occurred and be continuing (or otherwise with the prior written consent of the Collateral Agent (which consent shall not be unreasonably withheld)), the following shall be permitted under this Agreement upon notice to the Collateral Agent: (x) the merger, consolidation or dissolution of any Inactive Entity in accordance with subsection 5.10 and (y) the mergers and consolidations of Borrowers with other Borrowers.
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7.7 Changes Relating to Term Loan Documents. Without the prior written consent of the Collateral Agent, change or amend the terms of the Term Loan Documents other than to the extent permitted by the Intercreditor Agreement.
7.8 Transactions with Affiliates. Directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale or exchange of property or the rendering of any service) with any Affiliate or with any officer, director or employee of any Borrower, except for transactions among Borrowers or transactions in the ordinary course of business and upon fair and reasonable terms which are fully disclosed to Agents and Lenders and which are no less favorable to Borrowers than they would obtain in a comparable arm's length transaction with an unaffiliated Person.
7.9 Conduct of Business. From and after the Closing Date, engage in any business other than businesses of the type engaged in by Borrowers or any of their Subsidiaries on the Closing Date.
7.10 Tax Consolidations. File or consent to the filing of any consolidated income tax return with any Person other than any of its Subsidiaries.
7.11 Subsidiaries. Other than the Subsidiaries set forth on Schedule 7.11, establish, create or acquire, subject to subsection 7.4, any new Subsidiaries without the written consent of the Collateral Agent. Notwithstanding anything in this subsection 7.11 to the contrary, Borrowers may, without the consent of the Collateral Agent establish any new domestic Subsidiary that, immediately upon its establishment, becomes a Borrower hereunder and thus becomes obligated in the same manner and to the same extent of any other Borrower under this Agreement. Borrowers shall cause each new Subsidiary to execute and deliver any and all agreements or modifications, revisions or amendments to the Loan Documents, necessary to evidence the addition of such new Subsidiary as a Borrower.
7.15 IRS Form 8821. Revoke IRS Form 8821 designating Collateral Agent as Borrowers' appointee to receive directly from the IRS, on an on-going basis, certain tax information, notices and
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other written communication or fail to take actions necessary to renew such Form 8821 prior to its expiration for all time periods prior to the Termination Date.
7.17 Sale Lease-back Transactions. Directly or indirectly, enter into any arrangement whereby any Borrower sells or transfers all or any of its assets and, within one (1) year thereafter, rents or leases such assets so sold or transferred, without the prior consent of Collateral Agent; provided that the Borrowers may enter into any such arrangements so long as the aggregate fair market value of all property subject to such arrangements does not exceed $5,000,000 (based on the fair market value at the time of the transaction). Notwithstanding anything in the foregoing to the contrary, the Borrowers may enter into sale and lease back transactions (i) in connection with the THCI Turnover and (ii) in respect of the Campus Transaction.
SECTION 8. DEFAULT, RIGHTS AND REMEDIES
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Person in writing pursuant or in connection with any Loan Document is false in any material respect on the date made; or
(F) Change in Control (1) Any Person or group (as defined in the Securities Exchange Act of 1934, as amended), other than the holders of the voting stock of the Company as of the Closing Date, shall acquire for the first time direct or indirect ownership (constructive or otherwise), or the direct or indirect power to vote more than forty percent (40%) of the outstanding voting stock of the Company, or (2) individuals who, as of the Closing Date, were members of the board of directors of the Company (together with any new director whose election by the Company's board of directors or whose nomination for election by the Company's shareholders were approved by a vote of at least a majority of the directors then in office who themselves were either directors as of the Closing Date or whose election or nomination for election was previously so approved) cease for any reason to constitute at least a majority of the members of the board of directors of the Company then in office; or
(H) Voluntary Bankruptcy; Appointment of Receiver, etc. (1) the Company or any of its Subsidiaries commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case or to the conversion of an involuntary case to a voluntary case under any such law or consents to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; or (2) the Company or any of its Subsidiaries makes any assignment for the benefit of creditors; or (3) the board of directors of the Company or any of its Subsidiaries adopts any resolution or otherwise authorizes action to approve any of the actions referred to in this subsection 8.1(H); or
(I) Liens. Any lien, levy or assessment is filed or recorded with respect to or otherwise imposed upon all or any part of the Collateral or the assets of the Company or any of its Subsidiaries by the United States or any department or instrumentality thereof or by any state, county, municipality or other governmental agency (other than Permitted Encumbrances) and such lien, levy or assessment is not stayed, vacated, paid or discharged within ten (10) days; or
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(J) Judgment and Attachments. Any money judgment, writ or warrant of attachment, or similar process involving (1) an amount in any individual case in excess of $500,000 or (2) an amount in the aggregate at any time in excess of $1,000,000 (in either case not adequately covered by insurance as to which the insurance company has acknowledged coverage) is entered or filed against the Company or any of its Subsidiaries or any of their respective assets and remains undischarged, unvacated, unbonded or unstayed for a period of forty-five (45) consecutive days; or
(P) Damage, Strike, Casualty. Any damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than ten (10) consecutive days, the cessation or substantial curtailment of revenue producing activities at any Facility of any Borrower or any of its Subsidiaries, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect; or
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(R) Forfeiture. There is filed against any Borrower any civil or criminal action, suit or proceeding under any federal or state racketeering statute (including, without limitation, the Racketeer Influenced and Corrupt Organization Act of 1970), which action, suit or proceeding (1) is not dismissed within one hundred twenty (120) days; and (2) could reasonably be expected to result in the confiscation or forfeiture of any material portion of the Collateral; or
(S) Default Under Plan and/or Confirmation Order. The default by Borrowers (or any of them) under any of Borrowers' duties under the Plan or the Confirmation Order, including, but not limited to the failure of Borrowers (or any of them) to make any payment(s) to creditor(s) when due under the terms of the Plan or the Confirmation Order, including, but not limited to, any agreement(s) or document(s) approved or incorporated therein or executed pursuant thereto and subject to any applicable grace periods; or
(T) Alteration Or Revocation Of Plan Or Confirmation Order. Any change to the Plan or Confirmation Order requested by Borrowers without the prior written consent of the Agents and any change to, or the revocation or change of the terms of the Plan or the Confirmation Order approved by the Bankruptcy Court on any basis, including, but not limited to orders of the Bankruptcy Court entered under Bankruptcy Code Section 1127(b), Bankruptcy Code Section 1144, and Federal Rule of Civil Procedure 60, as incorporated by Bankruptcy Rule 9024 in each case which could reasonably be expected to have a Material Adverse Effect; or
Notwithstanding the foregoing, Borrowers' failure to comply with any same provision of this Agreement two (2) times in any twelve (12) month period shall effect an immediate Event of Default (without the expiration of any applicable cure period) with respect to all subsequent failures by Borrowers to comply with such provision of this Agreement, and Lenders thereupon may exercise any remedy set forth in this Section 8 without affording Borrowers any opportunity to cure such Event of Default.
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expressly waived by Borrower, and the Commitments shall thereupon terminate. Upon the occurrence and during the continuance of any other Event of Default, Administrative Agent may, and upon demand by Requisite Lenders shall, by written notice to Borrowers, (a) declare all or any portion of the Obligations to be, and the same shall forthwith become, immediately due and payable and the Commitments shall thereupon terminate and (b) demand that Borrowers immediately comply with the obligations set forth in subsection 2.4(C).
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collection of or to preserve the value of any of the Collateral or otherwise to enforce the rights of Agents and Lenders with respect to any of the Collateral; (d) to pay or discharge taxes or Liens levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by Collateral Agent in its sole discretion, and such payments made by Collateral Agent to become Obligations, due and payable promptly on demand; (e) to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, assignments, verifications and notices in connection with Accounts, Chattel Paper or General Intangibles and other Documents relating to the Collateral; and (f) generally to take any act required of any Borrower under this Agreement, and to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though Collateral Agent were the absolute owner thereof for all purposes, and to do, at Collateral Agent's option and Borrowers' expense, at any time or from time to time, all acts and things that Collateral Agent deems necessary to protect, preserve or realize upon the Collateral. Without limiting the foregoing, each Borrower hereby irrevocably authorizes the Collateral Agent to send to each Insurer that is an Account Debtor on any Account of such Borrower any notice that such Borrower is required to deliver hereunder if such Borrower has failed to deliver any such notice within five (5) Business Days after such Borrower was required to deliver such notice. In addition, if any Borrower breaches its obligation hereunder to direct payments of the proceeds of the Collateral to the appropriate Blocked Account, the Collateral Agent, as the true and lawful attorney for such Borrower pursuant to this subsection 8.5 and subject to any applicable law or regulation, may, by the signature or other act of any of the Collateral Agent's officers (without requiring any of them to do so), direct any federal, state or private payor or fiscal intermediary to pay proceeds of the Collateral to such Borrower by directing payment to the appropriate Blocked Account to the extent permitted by law.
Borrowers hereby ratify and approve all acts of Collateral Agent made or taken pursuant to and in accordance with this subsection 8.5. The appointment of Collateral Agent as Borrowers' attorney-in-fact and Collateral Agent's rights and powers are coupled with an interest and are irrevocable, so long as any of the Commitments hereunder shall be in effect and until indefeasible payment in full, in cash, of all Obligations and termination of all Lender Letters of Credit.
8.6 Limitation on Duty of Agents and Lenders with Respect to Collateral. Beyond the safe custody thereof, no Agent or Lender shall have any duty with respect to any Collateral in its possession (or in the possession of any agent or bailee) or with respect to any income thereon or the preservation of rights against prior parties or any other rights pertaining thereto. Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which Collateral Agent accords its own property. No Agent or Lender shall be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouse, carrier, forwarding agency, consignee, broker or other agent or bailee selected by Borrowers or selected by Collateral Agent in good faith.
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Agent in writing in such manner as Administrative Agent may deem advisable notwithstanding any previous application by Administrative Agent and (b) in the absence of a specific determination by Administrative Agent with respect thereto, the proceeds of any sale of, or other realization upon, all or any part of the Collateral shall be applied: first, to all fees, costs and expenses incurred by or owing to Agents and then any Lender with respect to this Agreement, the other Loan Documents or the Collateral; second, to accrued and unpaid interest on the Obligations (including any interest which but for the provisions of any bankruptcy or insolvency law would have accrued on such amounts); third, to the principal amounts of the Obligations outstanding; and fourth, to any other Obligations of Borrowers owing to any Agent or Lender under the Loan Documents. Any balance remaining shall be delivered to Borrowers or to whomever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct.
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(B) Nature of Duties. Agents shall have no duties, obligations or responsibilities except those expressly set forth in this Agreement or in the Loan Documents. The duties of Agents shall be mechanical and administrative in nature. No Agent shall have by reason of this Agreement a fiduciary, trust or agency relationship with or in respect of any Lender or Borrowers. Nothing in this Agreement or any of the Loan Documents, express or implied, is intended to or shall be construed to impose upon any Agent any obligations in respect of this Agreement or any of the Loan Documents except as expressly set forth herein or therein. Each Lender shall make its own appraisal of the credit worthiness of Borrowers, and shall have independently taken whatever steps it considers necessary to evaluate the financial condition and affairs of Borrowers, and Agents shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto (other than as expressly required herein), whether coming into its possession before the Closing Date or at any time or times thereafter. If any Agent seeks the consent or approval of any Lenders to the taking or refraining from taking any action hereunder, then such Agent shall send notice thereof to each Lender. Agents shall promptly notify each Lender any time that the Requisite Lenders have instructed Agents to act or refrain from acting pursuant hereto.
(C) Rights, Exculpation, Etc. No Agent or any of their officers, directors, employees or agents shall be liable to any Lender for any action taken or omitted by them hereunder or under any of the Loan Documents, or in connection herewith or therewith, except that Agents shall be liable to the extent of their own gross negligence or willful misconduct as determined by a court of competent jurisdiction. Agents shall not be liable for any apportionment or distribution of payments made by it in good faith and if any such apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Lender to whom payment was due but not made, shall be to recover from other Lenders any payment in excess of the amount to which they are determined to be entitled (and such other Lenders hereby agree to return to such Lender any such erroneous payments received by them). In performing its functions and duties hereunder, Agents shall exercise the same care which they would in dealing with loans for their own account, but no Agent or any of its agents or representatives shall be responsible to any Lender for any recitals, statements, representations or warranties herein or for the execution, effectiveness, genuineness, validity, enforceability, collectibility, or sufficiency of this Agreement or any of the Loan Documents or the transactions contemplated thereby, or for the financial condition of any Borrower. No Agent shall 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 of the Loan Documents or the financial condition of any Borrower, or the existence or possible existence of any Default or Event of Default. Any Agent may at any time request instructions from Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the Loan Documents such Agent is permitted or required to take or to grant, and if such instructions are promptly requested, such Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Person for refraining from any action or withholding any approval under any of the Loan Documents until it shall have received such instructions from Requisite Lenders or all or such other portion of the Lenders as shall be prescribed by this Agreement. Without limiting the foregoing, no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of Requisite Lenders in the absence of an express requirement for a greater percentage of Lender approval hereunder for such action.
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(2) Appointment of Successor. Upon any such notice of resignation pursuant to subsection 9.1(G)(1) above, Requisite Lenders shall appoint a successor Agent which, unless an Event of Default has occurred and is continuing, shall be reasonably acceptable to Borrowers. If a successor Agent shall not have been so appointed within said thirty (30) Business Day period, the retiring Agent, upon notice to Borrowers, shall then appoint a successor Agent who shall serve as Agent until such time, if any, as Requisite Lenders appoint a successor Agent as provided above.
(2) Confirmation of Authority; Execution of Releases. Without in any manner limiting Collateral Agent's authority to act without any specific or further authorization or consent by Lenders (as set forth in subsection 9.1(H)(1) above), each Lender agrees to confirm in writing, upon request by Collateral Agent or Borrowers, the authority to release any Collateral conferred upon Collateral Agent under clauses (a), (b) and (c) of subsection 9.1(H)(1). To the extent Collateral Agent agrees to release any Lien granted to or held by Collateral Agent as authorized under subsection 9.1(H)(1), (a) Collateral Agent is hereby irrevocably authorized by Lenders to execute and/or authorize the filing of such documents, including, without limitation, UCC-3 partial release statements as may be necessary to evidence the release of the Liens granted to Collateral Agent for the benefit of Agents and Lenders, upon such Collateral; provided, however, that Collateral Agent shall not be required to execute any such document on terms which, in Collateral Agent's opinion, would expose Collateral Agent to liability or create upon Collateral Agent any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (b) Borrowers shall provide at least five (5) Business
53
Days prior written notice of any request for any document evidencing such release of the Liens and Borrowers agree that any such release shall not in any manner discharge, affect or impair the Obligations or any Liens granted to Collateral Agent on behalf of the Agents and Lenders upon (or obligations of any Borrower, in respect of) all interests retained by any Borrower, including, without limitation, the proceeds of any sale, all of which shall continue to constitute part of the property covered by this Agreement or the Loan Documents.
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security for the Loans, unless instructed to do so by Collateral Agent, it being understood and agreed that such rights and remedies may be exercised only by Collateral Agent.
No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of Lenders, unless such Agent shall have received written notice from a Lender or a Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". Any Agent will notify each Lender of its receipt of any such notice.
Agents shall take such action with respect to any Default or Event of Default as may be requested by Requisite Lenders in accordance with Section 8. Unless and until an Agent has received any such request, such Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to any Default or Event of Default as it shall deem advisable or in the best interests of Lenders.
9.4 Amendments, Waivers and Consents.
(B) Specific Purpose or Intent. Each amendment, modification, termination, waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was
55
given. No amendment, modification, termination, waiver or consent shall be required for Agent to take additional Collateral.
Notwithstanding anything in this subsection 9.4, Collateral Agent and Borrowers, without the consent of either Requisite Lenders or all Lenders, may execute amendments to this Agreement and the Loan Documents, which consist solely of the making of typographical corrections.
9.5 Assignments and Participations in Loans.
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written consent of Joint Bookrunners, which consent shall not be unreasonably withheld. All amounts payable by Borrowers hereunder shall be determined as if that Lender had not sold such participation and the holder of any such participation shall not be entitled to require such Lender to take or omit to take any action hereunder except action directly effecting (1) any reduction in the principal amount or an interest rate on any Loan in which such holder participates; (2) any extension of the Termination Date or the date fixed for any payment of interest or principal payable with respect to any Loan in which such holder participates; and (3) any release of substantially all of the Collateral. Borrowers hereby acknowledge and agree that the participant under each participation shall for purposes of subsections 2.8, 2.9, 2.10, 9.6 and 10.2 be considered to be a "Lender".
(E) Recording of Assignments. Administrative Agent shall maintain at its office in New York, New York, a copy of each Assignment and Acceptance Agreement delivered to it, with a copy to Collateral Agent, and a register for the recordation of the names and addresses of Lenders, and the commitments of, and principal amount of the Loans owing to each Lender pursuant to the terms hereof
57
from time to time (the "Register"). The entries in the Register shall be presumptive evidence of the amounts due and owing to Lender in the absence of manifest error. Each Borrower, Agent and Lender may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by any Borrower and any Lender, at any reasonable time upon reasonable prior notice.
9.7 Disbursement of Funds. Administrative Agent may, on behalf of Lenders, disburse funds to Borrowers for Loans requested. Each Lender shall reimburse Administrative Agent on demand for all funds disbursed on its behalf by Administrative Agent, or if Administrative Agent so requests, each Lender will remit to Administrative Agent its Pro Rata Share of any Loan or Advance before Administrative Agent disburses same to Borrowers. If Administrative Agent elects to require that each Lender make funds available to Administrative Agent prior to a disbursement by Administrative Agent to Borrowers, Administrative Agent shall advise each Lender by telephone, telex, fax or telecopy of the amount of such Lender's Pro Rata Share of the Loan requested by Borrowers no later than 1:00 p.m. New York time on the Funding Date applicable thereto, and each such Lender shall pay Administrative Agent such Lender's Pro Rata Share of such requested Loan, in same day funds, by wire transfer to Administrative Agent's account on such Funding Date.
9.8 Settlements, Payments and Information.
(A) Revolving Advances and Payments; Fee Payments.
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made by Administrative Agent. Such payments will be made by each Lender without set-off, counterclaim or reduction of any kind.
(2) Settlement Dates. Once each week for the Revolving Loan or if an Event of Default shall have occurred and be continuing more frequently (including daily), if Administrative Agent so elects (each such day being a "Settlement Date"), Administrative Agent will advise each Lender by telephone, fax or telecopy of the amount of each such Lender's Pro Rata Share of the Revolving Loan. In the event payments are necessary to adjust the amount of such Lender's required Pro Rata Share of the Revolving Loan balance to such Lender's actual Pro Rata Share of the Revolving Loan balance as of any Settlement Date, the party from which such payment is due will pay the other, in same day funds, by wire transfer to the other's account not later than 3:00 p.m. New York time on the Business Day following the Settlement Date.
(a) "Daily Loan Balance" means an amount calculated as of the end of each calendar day by subtracting (i) the cumulative principal amount paid by Administrative Agent to a Lender on a Loan from the Closing Date through and including such calendar day, from (ii) the cumulative principal amount on a Loan advanced by such Lender to Administrative Agent on that Loan from the Closing Date through and including such calendar day.
(b) "Daily Interest Rate" means an amount calculated by dividing the interest rate payable to a Lender on a Loan (as set forth in subsection 2.2) as of each calendar day by three hundred sixty (360).
(c) "Daily Interest Amount" means an amount calculated by multiplying the Daily Loan Balance of a Loan by the associated Daily Interest Rate on that Loan.
(d) "Interest Ratio" means a number calculated by dividing the total amount of the interest on a Loan received by Administrative Agent with respect to the immediately preceding month by the total amount of interest on that Loan due from Borrowers during the immediately preceding month.
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multiplying the total thereof by the Interest Ratio for that Loan. Such Lender's share of the Unused Line Fee described in subsection 2.3(A) shall be an amount equal to (a)(i) such Lender's average Revolving Loan Commitment during such month, less (ii) the sum of (x) such Lender's average Daily Loan Balance of the Revolving Loans, plus (y) such Lender's Pro Rata Share of the average daily aggregate amount of Letter of Credit Reserve, in each case for the preceding month, multiplied by (b) the percentage required by subsection 2.3(A). Such Lender's share of all other fees paid to Administrative Agent for the benefit of Lenders hereunder shall be paid and calculated based on such Lender's Commitment with respect to the Loans on which such fees are associated. To the extent Administrative Agent does not receive the total amount of any fee owing by Borrowers under this Agreement, each amount payable by Administrative Agent to a Lender under this subsection 9.8(A)(4) with respect to such fee shall be reduced on a pro rata basis. The Administrative Agent and the Lenders hereby acknowledge and agree that in no event shall the aggregate fee payments received by such Lenders pursuant to this subsection 9.8(A)(4) exceed the total amount of fees pursuant to subsection 2.3.
(1) Recovery after Non-Receipt of Expected Payment. If any Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been or will be received by such Agent from Borrowers and such related payment is not received by such Agent, then such Agent will be entitled to recover such amount from such Lender without set-off, counterclaim or deduction of any kind together with interest thereon, for each day from and including the date such amount is made available by such Agent to such Lender to but excluding the date of repayment to such Agent, at the greater of the Federal Funds Effective Rate and a rate determined by such Agent in accordance with banking industry rules on interbank compensation.
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actual costs and expenses incurred by any Agent (including reasonable attorneys' fees and expenses, the allocated costs of such Agent's internal legal staff and fees of environmental consultants, accountants and other professionals retained by such Agent) incurred in connection with the examination, review, due diligence investigation, documentation and closing of the financing arrangements evidenced by the Loan Documents; (b) reasonable fees and actual costs and expenses incurred by any Agent (including attorneys' fees and expenses, the allocated costs of such Agent's internal legal staff and fees of environmental consultants, accountants and other professionals retained by such Agent) incurred in connection with the review, negotiation, preparation, documentation, execution, syndication and administration of the Loan Documents, the Loans, and any amendments, waivers, consents, forbearances and other modifications relating thereto or any subordination or intercreditor agreements, including reasonable documentation charges assessed by such Agent for amendments, waivers, consents and any other documentation prepared by such Agent's internal legal staff; (c) reasonable fees and actual costs and expenses (including reasonable attorneys' fees and allocated costs of internal legal staff) incurred by any Agent or Lender in creating, perfecting and maintaining perfection of Liens in favor of Agents, on behalf of Agents and Lenders; (d) reasonable fees and actual costs and expenses incurred by any Agent in connection with forwarding to any Borrower the proceeds of Loans including such Agent's or any Lenders' standard wire transfer fee; (e) reasonable fees and actual costs and expenses and bank charges, including bank charges for returned checks, incurred by any Agent or any Lender in establishing, maintaining and handling lock box accounts, blocked accounts or other accounts for collection of the Collateral; and (f) reasonable fees and actual costs and expenses (including reasonable attorneys' fees and allocated costs of internal legal staff) of any Agent or any Lender and costs of settlement incurred in collecting upon or enforcing rights against the Collateral or incurred in any action to enforce this Agreement or the other Loan Documents or to collect any payments due from any Borrower under this Agreement or any other Loan Document or incurred in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement, whether in the nature of a "workout" or in connection with any insolvency or bankruptcy proceedings or otherwise.
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62
With
a copy
to: Citicorp
USA, Inc.
0
Xxxx'x Xxx
Xxxxx
000
Xxx
Xxxxxx, Xxxxxxxx 00000
Attn:
Xxxxxx Xxxxxx
Fax/Telecopy
No.: (000) 000-0000
If
to any Lender: Its address indicated on the signature page hereto, in an Assignment and
Acceptance Agreement or in a notice to Agents and Borrowers or to such other address as
the party addressed shall have previously designated by written notice to the serving
party, given in accordance with this subsection 10.3.
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the validity, legality or enforceability of the remaining provisions or obligations under this Agreement, or the other Loan Documents.
10.13 No Fiduciary Relationship; No Duty; Limitation of Liabilities.
(A) No Fiduciary Relationship. No provision in this Agreement or in any of the other Loan Documents and no course of dealing between the parties shall be deemed to create any fiduciary duty by any Agent or Lender to Borrowers.
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connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents. Borrowers hereby waive, release, and agree not to xxx any Agent or Lender or any of Agents' or any Lenders' affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the transactions contemplated hereby. Notwithstanding anything in the foregoing in this subsection 10.13, the Agents and Lenders hereby acknowledge and agree that Borrowers shall not be deemed to waive or release, or agree not to xxx any Indemnitee upon, any claim against any Indemnitee for direct or actual damages that is the direct result of the gross negligence or willful misconduct of such Indemnitee.
10.15 WAIVER OF JURY TRIAL. EACH BORROWER, AGENT AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. EACH BORROWER, AGENT AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH BORROWER, AGENT AND LENDER WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
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instrument. This Agreement shall become effective upon the execution and delivery of an executed counterpart hereof by each of the parties hereto.
SECTION 11. DEFINITIONS AND ACCOUNTING TERMS
The following terms used in this Agreement shall have the following meanings:
"Account Debtor" means any Person obligated on any Account of any Borrower, including without limitation, any Insurer and any Medicaid/Medicare Account Debtor.
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"Administrative Agent" has the meaning assigned to that term in the Recitals section of this Agreement.
"Administrative Agent Fee" has the meaning assigned to that term in subsection 2.3(D)
"Advance" shall mean an advance under the Revolving Loan.
"Affected Lender" has the meaning assigned to that term in subsection 2.11.
"Affiliate" means, as to any Person (other than any Agent, Lender or Borrower): (a) directly or indirectly controlling, controlled by, or under common control with, such Person, provided, however, that no individual shall be an Affiliate of any Person solely by reason of his or her being a director, officer or employee of such Person; (b) directly or indirectly owning or holding five percent (5%) or more of any equity interest in Borrower; (c) five percent (5%) or more of whose stock or other equity interest having ordinary voting power for the election of directors or the power to direct or cause the direction of management, is directly or indirectly owned or held by Borrower; or (d) which has a senior officer who is also a senior officer of Borrower; provided, however, that for purposes of this Agreement a Borrower shall not be deemed an "Affiliate" of any other Borrower. For purposes of this definition, "control" (including with correlative meanings, the terms "controlling", "controlled by" and "under common control with") means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or other equity interest, or by contract or otherwise.
"Agents" mean, collectively, Xxxxxx in its capacity as Collateral Agent for the Lenders, together with CITICORP in its capacity as Administrative Agent under the Loan Documents and any successor in either such capacity appointed pursuant to subsection 9.1(G).
"Agreement" means this Loan and Security Agreement as it may be amended, restated, supplemented or otherwise modified from time to time.
"Asset Disposition" means the disposition, whether by sale, lease, transfer, loss, damage, destruction, condemnation or otherwise, of any or all of the assets of any Borrower or any of its Subsidiaries other than (i) sales of Inventory to a Buyer in Ordinary Course of Business, (ii) disposition of worn out or obsolete equipment, (iii) transfers or other dispositions of assets or property by a Borrower to another Borrower, (iv) Permitted Divestitures, (v) the Campus Transaction and (vi) the THCI Turnover.
"Assignment and Acceptance Agreement" shall mean an Assignment and Acceptance Agreement substantially in the form of Exhibit B.
"Bank Letter of Credit" means each Letter of Credit issued by a bank acceptable to and approved by Administrative Agent for the account of Borrower and supported by a risk participation agreement issued by Administrative Agent.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as amended, and codified as 11 U.S.C. Sections 101 et seq.
"Bankruptcy Court" has the meaning assigned to that term in the Recitals to this Agreement.
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"Base Rate" means a variable rate of interest per annum equal to the higher of (a) the rate of interest from time to time published by the Board of Governors of the Federal Reserve System as the "Bank Prime Loan" rate in Federal Reserve Statistical Release H.15(519) entitled "Selected Interest Rates" or any successor publication of the Federal Reserve System reporting the Bank Prime Loan rate or its equivalent, or (b) the Federal Funds Effective Rate plus fifty (50) basis points. The statistical release generally sets forth a Bank Prime Loan rate for each Business Day. The applicable Bank Prime Loan rate for any date not set forth shall be the rate set forth for the last preceding date. In the event the Board of Governors of the Federal Reserve System ceases to publish a Bank Prime Loan rate or its equivalent, the term "Base Rate" shall mean a variable rate of interest per annum equal to the highest of the "prime rate", "reference rate", "base rate", or other similar rate announced from time to time by any of the three largest banks (based on combined capital and surplus) headquartered in New York, New York (with the understanding that any such rate may merely be a reference rate and may not necessarily represent the lowest or best rate actually charged to any customer by any such bank).
"Base Rate Loans" means Loans bearing interest at rates determined by reference to the Base Rate.
"Base Rate Margin" has the meaning assigned to that term in subsection 2.2 (A).
"Blocked Accounts" has the meaning assigned to that term in subsection 4.5(K)(1).
"Borrower" has the meaning assigned to that term in the Recitals section of this agreement.
"Borrowing Base" has the meaning assigned to the term in subsection 2.1(B).
"Borrowing Base Certificate" means each certificate and schedules duly executed by the Financial Officer, appropriately completed and in substantially the form of Exhibit C.
"Borrowing Deposit Accounts" has the meaning assigned to that term in subsection 2.4(A)(1).
"Business Day" means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the City of New York, or is a day on which banking institutions located in such city are closed, or for the purposes of LIBOR Loans only, "Business Day" means a London Banking Day.
"Calculation Period" has the meaning assigned to that term in subsection 2.2(A).
"Campus Transaction" means the sale of the headquarters office complex of the Company, located in Albuquerque, NM pursuant to the Plan.
"Capital Expenditures" shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities during such period and excluding that portion of Capital Leases (except any cash down payment) which is capitalized on the consolidated balance sheet of the Company and its Subsidiaries) net of cash amounts received by the Borrowers from other Persons during such period in reimbursement of Capital Expenditures made by the Borrowers, excluding interest capitalized during construction by the Borrowers during such period, that, in conformity with GAAP, are required to be
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included in or reflected by the property, plant, equipment or intangibles or similar fixed asset accounts reflected in the consolidated balance sheet of the Company and its Subsidiaries (including equipment which is purchased simultaneously with the trade-in of existing equipment owned by any Borrower to the extent of the gross amount of such purchase price less the book value of the equipment being traded in at such time), but excluding expenditures made in connection with the replacement or restoration of assets, to the extent reimbursed or financed from insurance proceeds paid on account of the loss of or the damage to the assets being replaced or restored, or from awards of compensation arising from the taking by condemnation or eminent domain of such assets being replaced.
"Capital Lease" means any lease of any property (whether real, personal or mixed) that, in conformity with GAAP, should be accounted for as a capital lease.
"Case" has the meaning assigned to that term in the Recitals to this Agreement.
"CareerStaff" has the meaning assigned to that term in subsection 2.4(A)(1)(d)
"CareerStaff Deposit Accounts" has the meaning assigned to that term in subsection 2.4(A)(1)(d).
"Cash Equivalents" means: (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within six (6) months from the date of acquisition thereof; (b) commercial paper maturing no more than six (6) months from the date issued and, at the time of acquisition, having a rating of at least A-1 from Standard & Poor's Corporation or at least P-1 from Xxxxx'x Investors Service, Inc.; (c) certificates of deposit or bankers' acceptances maturing within six (6) months from the date of issuance thereof issued by, or overnight reverse repurchase agreements from any commercial bank organized under the laws of the United States of America, or any state thereof or the District of Columbia, having combined capital and surplus of not less than $250,000,000 and not subject to setoff rights in favor of such bank; and (d) any money market fund registered under the Investment Company Act of 1940, as amended, investing in the above described securities or commercial paper if such fund holds investments in excess of $100,000,000 and the Borrowers' aggregate investment in such funds is less than ten percent (10%) of the total amount invested in such fund.
"Certificate of Exemption" has the meaning assigned to that term in subsection 2.9(C).
"CITICORP" has the meaning assigned to that term in the Recitals section of this Agreement.
"Closing Balance Sheet" means that consolidated balance sheet of the Borrowers, and delivered by Borrowers to Collateral Agent in accordance with the Reporting Rider.
"Closing Date" means February 28, 2002.
"Collateral" has the meaning assigned to that term in subsection 2.7(A).
"Collateral Agent" has the meaning assigned to that term in the Recitals section of this Agreement.
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"Collateral Management Fee" has the meaning assigned to that term in subsection 2.3(D).
"Collecting Bank" has the meaning assigned to that term in subsection 2.4(A)(3).
"Collection Account" has the meaning assigned to that term in subsection 2.4(A)(3).
"Commitment" means the commitment or commitments of Lenders to make Loans and to provide Lender Letters of Credit as set forth in Section 2.
"Company" has the meaning assigned to such term in the Recitals to this Agreement.
"Company's Accountants" means the independent certified public accountants selected by the Company and its Subsidiaries and reasonably acceptable to Collateral Agent, which selection shall not be modified during the terms of this Agreement (except if the Company retains another of the so-called "Big Five" accounting firms) without the Collateral Agent's prior written consent, which consent shall not be unreasonably withheld.
"Compliance and Pricing Certificate" means a certificate duly executed by the chief executive officer or chief financial officer of the Company appropriately completed and in substantially the form of Exhibit D.
"Concentration Account" has the meaning assigned to that term in subsection 2.4(A).
"Confirmation Hearing" has the meaning assigned to that term in the Recitals to this Agreement.
"Confirmation Order" has the meaning assigned to that term in the Recitals to this Agreement.
"Copyright Security Agreement" means any Copyright Security Agreement executed and delivered by certain of the Borrowers to Agent, as the same may be amended and in effect from time to time.
"Copyrights"
means collectively all of the following (a) all U.S. copyrights, rights and interests in
copyrights, works protectable by copyright, copyright registrations and copyright
applications, including those listed in the schedules to any Copyright
Security Agreement; (b) all renewals of any of the foregoing; (c) all income, royalties,
damages and payments now or hereafter due and/or payable under any of the foregoing or
with respect to any of the foregoing, including damages or payments for past, present or
future infringements of any of the foregoing; (d) the right to xxx for past, present and
future infringements of any of the foregoing; and (e) all rights corresponding to any of
the foregoing throughout the world.
"Daily Interest Amount" has the meaning assigned to that term in subsection 9.8(A)(3).
"Daily Interest Rate" has the meaning assigned to that term in subsection 9.8(A)(3).
"Daily Loan Balance" has the meaning assigned to that term in subsection 9.8(A)(3).
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"Default" means a condition, act or event that, after notice or lapse of time or both, would constitute an Event of Default if that condition, act or event were not waived, cured or removed within any applicable grace or cure period.
"Default Rate" has the meaning assigned to that term in subsection 2.2(A).
"Defaulted Amount" means, with respect to any Lender at any time, any amount required to be paid hereunder or under any other Loan Document by such Lender to the Administrative Agent or any other Lender which has not been so paid.
"Defaulting Lender" means, at any time, any Lender that owes a Defaulted Amount.
"Depository Banks" has the meaning assigned to that term in subsection 2.4(A)(1).
"Dollars" and "$" shall mean lawful money of the United States of America.
"EBITDA" means, for any period, without duplication, the total of the following for the Borrowers on a consolidated basis, each calculated for such period: (a) net income determined in accordance with GAAP; plus, to the extent included in the calculation of net income, (b) the sum of (i) income and franchise taxes paid or accrued; (ii) interest expenses, net of interest income, paid or accrued; (iii) amortization and depreciation and (iv) other non-cash charges (excluding accruals for cash expenses made in the ordinary course of business); less, to the extent included in the calculation of net income, (c) the sum of (i) the income of any Person in which any Borrower has a direct or indirect ownership interest except to the extent such income is received by such Borrower in a cash distribution during such period; (ii) gains or losses from sales or other dispositions of assets (other than Inventory in the normal course of business); and (iii) extraordinary or non-recurring gains and non-recurring losses.
"Eligible Accounts" has the meaning assigned to that term in subsection 2.1(B).
"Eligible Assignee" shall mean (a) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least $100,000,000 (or $250,000,000 in the case of an assignment of a Revolving Loan Commitment); (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the "OECD"), or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000 (or $250,000,000 in the case of an assignment of a Revolving Loan Commitment), provided that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD; (c) any other entity which is an "accredited investor" (as defined in Regulation D under the Securities Act) which extends credit or buys loans as one of its businesses, including but not limited to, insurance companies, mutual funds and lease financing companies, (d) a Related Fund (as such term is defined in subsection 9.5(D)), and (e) a Person that is primarily engaged in the business of lending that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a Lender is a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary; provided, however, that no Affiliate of any Borrower shall be an Eligible Assignee.
"Employee Benefit Plan" means any employee benefit plan within the meaning of Section 3(3) of ERISA which (a) is maintained for employees of any Borrower or any ERISA Affiliate or (b) has at any
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time within the preceding 6 years been maintained for the employees of any Borrower or any current or former ERISA Affiliate.
"Environmental Claims" means claims, liabilities, investigations, litigation, administrative proceedings, judgments or orders relating to Hazardous Materials.
"Environmental Laws" means any present or future federal, state or local law, rule, regulation or order relating to pollution, waste, disposal or the protection of human health or safety, plant life or animal life, natural resources or the environment, including, without limitation (a) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act, the Solid Waste Disposal Act, the Oil Pollution Act of 1990, the Rivers and Harbors Act of 1899, the Federal Water Pollution Control Act, the Clean Water Act, the Occupational Safety and Health Act ("OSHA"), the Clean Air Act, the Coastal Zone Management Act of 1972, the Emergency Planning and Community Right to Know Act, and (b) those relating to or addressing (i) the introduction into commerce, use, handling, transportation, treatment, storage, disposal, release or threatened release, removal or remediation of, or response, abatement, or corrective action with respect to, any Hazardous Material, or (ii) personal injury, sickness, disease, death, public welfare or property damage relating to Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute and all rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Borrower, means any Person who is a member of a group which is under common control with any Borrower, who together with any Borrower is treated as a single employer within the meaning of Section 414(b) and (c) of the IRC.
"Event of Default" has the meaning assigned to that term in subsection 8.1.
"Excess Interest" has the meaning assigned to that term in subsection 2.2(C).
"Facilities" shall mean any hospital, outpatient clinic, long term care facility, nursing home or rehabilitation center and related medical office building or other facility owned or used by any Borrower in its business.
"Facility Deposit Accounts" has the meaning assigned to that term in subsection 2.4(A)(1)(a).
"Federal Funds Effective Rate" means, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the immediately following Business Day by the Board of Governors of the Federal Reserve System as the Federal Funds Rate or Federal Reserve Statistical Release H.15(519) entitled "Selected Interest Rates" or any successor publication of the Federal Reserve System reporting the Federal Funds Effective Rate or its equivalent or, if such rate is not published for any Business Day, the average of the quotations for the day of the requested Loan received by Agent from three Federal funds brokers of recognized standing selected by Agent.
"Financial Officer" shall mean the Chief Financial Officer or the Treasurer of the Company or such other person as designated in writing to the Agents and reasonably satisfactory to such Agents.
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"Fiscal Year" means each twelve (12) month period ending on the last day of December in each year.
"Fixed Charge Coverage" means, for any period, Operating Cash Flow divided by Fixed Charges.
"Fixed Charges" means, for any period, and each calculated for such period (without duplication), (a) Interest Expense of the Company and its Subsidiaries; plus (b) scheduled payments of principal with respect to all Indebtedness of the Company and its Subsidiaries payable during such period; plus (c) any provision for (to the extent it is greater than zero) income or franchise taxes included in the determination of net income, excluding any provision for deferred taxes; plus (d) payment of deferred taxes accrued in any prior period; plus (e) Restricted Junior Payments made in cash.
"Foreign Lender" has the meaning assigned to that term in subsection 2.9(C).
"Funding Date" means the date of each funding of a Loan or issuance of a Lender Letter of Credit.
"GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board that are applicable to the circumstances as of the date of determination.
"Hazardous Material" means all or any of the following: (a) substances that are defined or listed in, or otherwise classified pursuant to, any Environmental Laws or regulations as "hazardous substances", "hazardous materials", "hazardous wastes", "toxic substances" or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity; (b) oil, petroleum or petroleum derived substances, natural gas, natural gas liquids or synthetic gas and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (c) any flammable substances or explosives or any radioactive materials; (d) asbestos in any form or electrical equipment which contains any oil or dielectric fluid containing polychlorinated biphenyls, and (e) mold of any form or type arising from any moisture source.
"Healthcare Laws" has the meaning assigned to that term in subsection 4.25.
"Xxxxxx" has the meaning assigned to that term in the Recitals section of this agreement.
"HIPAA" means the Health Insurance Portability and Accountability Act of 1996 and the federal standard for privacy of individually identifiable health information promulgated thereunder, and any and all rules or regulations promulgated from time to time thereunder including the regulations set forth at 45 CFR parts 160 and 164 as such provisions are currently drafted and, if applicable, updated, amended, or revised.
"Inactive Entity" shall mean each entity listed on Schedule 4.31.
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"Indebtedness", as applied to any Person, means without duplication: (a) all indebtedness for borrowed money; (b) obligations under leases which in accordance with GAAP constitute Capital Leases; (c) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (d) any obligation owed for all or any part of the deferred purchase price of property or services if the purchase price is due more than six (6) months from the date the obligation is incurred or is evidenced by a note or similar written instrument; (e) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is non-recourse to the credit of that Person; (f) obligations in respect of Letters of Credit (g) any advances under any factoring arrangement; and (h) obligations under the Settlement Agreement.
"Indemnified Liabilities" has the meaning assigned to that term in subsection 10.2.
"Indemnitees" has the meaning assigned to that term in subsection 10.2.
"Insurer" shall mean a Person that insures a Patient against certain of the costs incurred in the receipt by such Patient of Medical Services, or that has an agreement with any Borrower to compensate such Borrower for providing services to a Patient.
"Intangible Assets" means all intangible assets (determined in conformity with GAAP) including, without limitation, goodwill, Intellectual Property, Software, licenses, organizational costs, deferred amounts, covenants not to compete, unearned income and restricted funds.
"Intellectual Property" means, collectively, all of the foregoing: Copyrights, Patents and Trademarks.
"Intercreditor Agreement" means that certain Intercreditor Agreement dated of even date herewith by and among the Borrowers, Term Administrative Agent and Agents.
"Interest Expense" means, without duplication, for any period, the following, for Borrowers and their Subsidiaries each calculated for such period: interest expenses deducted in the determination of net income (excluding (a) the amortization of fees and costs with respect to the transactions contemplated by this Agreement which have been capitalized as transaction costs in accordance with the provisions of subsection 11.2; and (b) interest paid in kind).
"Interest Period" means, in connection with each LIBOR Loan, an interest period which Borrowers shall elect to be applicable to such Loan, which Interest Period shall be either a one (1), two (2) or three (3) month period; provided that:
(1) the initial Interest Period for any LIBOR Loan shall commence on the Funding Date of such Loan;
(2) in the case of successive Interest Periods, each successive Interest Period shall commence on the day on which the immediately preceding Interest Period expires;
(3) if an Interest Period expiration date is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that if any Interest Period expiration date is not a
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Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;
(4) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to part (5) below, end on the last Business Day of a calendar month;
(5) no Interest Period shall extend beyond the Termination Date; and
(6) there shall be no more than four (4) Interest Periods relating to LIBOR Loans outstanding at any time.
"Interest Rate" has the meaning assigned to that term in subsection 2.2(A).
"Interest Ratio" has the meaning assigned to that term in subsection 9.8(A)(3).
"Interest Settlement Date" has the meaning assigned to that term in subsection 9.8(A)(4).
"IRC" means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute and all rules and regulations promulgated thereunder.
"IRS" has the meaning assigned to that term in subsection 4.9.
"Issuing Lender" has the meaning assigned to that term in subsection 2.1(H)(2)
"Joint Bookrunners" has the meaning assigned to that term in the Recitals section of this Agreement.
"Lender" or "Lenders" has the meaning assigned to that term in the Recitals section of this agreement.
"Lender Letter of Credit" has the meaning assigned to that term in subsection 2.1(F).
"Letter of Credit Liability" means, all reimbursement and other liabilities of any Borrower with respect to each Lender Letter of Credit, whether contingent or otherwise, including: (a) the amount available to be drawn or which may become available to be drawn; (b) all amounts which have been paid or made available by any Lender issuing a Lender Letter of Credit or any bank issuing a Bank Letter of Credit to the extent not reimbursed; and (c) all unpaid interest, fees and expenses related thereto.
"Letter of Credit Reserve" means, at any time, an amount equal to the sum of (a) the aggregate amount of Letter of Credit Liability with respect to all Lender Letters of Credit outstanding at such time plus, without duplication (b) the aggregate amount theretofore paid by Agent or any Lender under Lender Letters of Credit and not debited to the Revolving Loan pursuant to subsection 2.1(G)(2) or otherwise reimbursed by Borrower.
"Letter of Non-Exemption" has the meaning assigned to that term in subsection 2.9(C).
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"Liabilities" shall have the meaning given that term in accordance with GAAP and shall include Indebtedness.
"LIBOR" means, for each Interest Period, a rate per annum equal to:
(1) the offered rate for deposits in U.S. dollars in an amount comparable to the amount of the applicable Loan in the London interbank market for the relevant Interest Period which is published by the British Bankers' Association and currently appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the day which is two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, that if such a rate ceases to be available to Agent on that or any other source from the British Bankers' Association, LIBOR shall be equal to a rate per annum equal to the average rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which Agent determines that U.S. dollars in an amount comparable to the amount of the applicable Loans are being offered to prime banks at approximately 11:00 a.m. (London time) on the day which is two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period for settlement in immediately available funds by leading banks in the London interbank market selected by Agent; divided by
(2) a number equal to one (1.0) minus the maximum reserve percentages (expressed as a decimal fraction) (including, without limitation, basic, supplemental, marginal and emergency reserves under any regulations of the Board of Governors of the Federal Reserve System or other governmental authority having jurisdiction with respect thereto, as now and from time to time in effect) for Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of such Board) which are required to be maintained by any Lender by the Board of Governors of the Federal Reserve System; such rate to be rounded upward to the next whole multiple of one-sixteenth of one percent (.0625%). LIBOR shall be adjusted automatically on and as of the effective date of any change in any such reserve percentage.
"LIBOR Loans" means at any time that portion of the Loans bearing interest at rates determined by reference to LIBOR.
"LIBOR Margin" has the meaning assigned to that term in subsection 2.2(A).
"Lien" means any lien, mortgage, pledge, security interest, charge or encumbrance of any kind, whether voluntary or involuntary (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement pursuant to which a Borrower grants any security interest).
"Loan" or "Loans" means an advance or advances under the Revolving Loan Commitment.
"Loan Documents" means this Agreement, the Notes, the Borrowing Base Certificates and all other documents, instruments and agreements executed by or on behalf of any Borrower, any Borrower's Subsidiaries and delivered concurrently herewith or at any time hereafter to or for Agent or any Lender in connection with the Loans, any Lender Letter of Credit, and any other transaction contemplated by this Agreement, all as amended, restated, supplemented or modified from time to time.
"Loan Year" means each period of twelve (12) consecutive months commencing on the Closing Date and on each anniversary thereof.
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"Lockbox Agreements" has the meaning assigned to that term in subsection 2.4(A)(4).
"London Banking Day" means any day on which dealings in deposits in U.S. dollars are transacted in the London Interbank market.
"Material Adverse Change" means a change that results in or causes, or has a reasonable likelihood of resulting in or causing, a Material Adverse Effect.
"Material Adverse Effect" means a material adverse effect upon (a) the business, operations, prospects, properties, assets or condition (financial or otherwise) of the Borrowers taken as a whole, (b) the ability of any Borrower to perform its obligations under any Loan Document to which it is a party, (c) the validity or enforceability of this Agreement or any Loan Document or (d) the Collateral, the liens of Lenders in the Collateral or the priority of such liens.
"Material Contracts" means a contract or agreement (including, without limitation, a provider agreement) the default (or event of default) under, termination of, or expiration of which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
"Maximum Rate" has the meaning assigned to that term in subsection 2.1(C).
"Maximum Revolving Loan Amount" has the meaning assigned to that term in subsection 2.1(A)(3).
"Medicaid Deposit Account" has the meaning assigned to that term in subsection 2.4(A)(1)(c).
"Medicaid/Medicare Account Debtor" shall mean any Account Debtor which is (i) the United States of America acting under the Medicaid or Medicare program established pursuant to the Social Security Act, or under the TRICARE program, (ii) any state or the District of Columbia acting pursuant to a health plan adopted pursuant to Title XIX of the Social Security Act (or any successor legislation) or (iii) any agent, carrier, administrator or intermediary for any of the foregoing.
"Medical Services" shall mean medical and health care services provided to a Patient, including, but not limited to, medical, pharmacy and health care services provided to a Patient and performed by any Borrower which are covered by a policy of insurance issued by an Insurer, and includes physician services, nurse and therapist services, dental services, hospital services, skilled nursing facility services, comprehensive outpatient rehabilitation services, home health care services, residential and out-patient behavioral healthcare services, and medicine or health care equipment provided by any Borrower to a Patient for a necessary or specifically requested valid and proper medical or health purpose.
"Medicare Deposit Accounts" has the meaning assigned to that term in subsection 2.4(A)(1)(b).
"Mortgage" means each of the mortgages, deeds of trust, leasehold mortgages, leasehold deeds of trust, collateral assignments of leases or other real estate security documents delivered by any Borrower to Collateral Agent, on behalf of the Lenders, with respect to the Mortgaged Property, all in form and substance satisfactory to Collateral Agent.
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"Mortgaged Property" means that certain real property owned by certain Borrowers and described on Schedule 11.1(B).
"Net Income" means, as of any date, net income calculated in accordance with GAAP.
"Net Worth" means, as of any date, the sum of the capital stock and additional paid-in capital plus retained earnings (or less accumulated deficit) calculated in conformity with GAAP.
"Note" means, individually, Revolving Note, and "Notes" means collectively, all of the Revolving Notes.
"Notice of Borrowing" means a notice duly executed by an authorized representative of Borrowers appropriately completed and in the form of Exhibit E.
"Obligations" means all obligations, liabilities and indebtedness of every nature of each Borrower from time to time owed to Agents or to any Lender under the Loan Documents (whether incurred before or after the Termination Date) including the principal amount of all debts, claims and indebtedness, accrued and unpaid interest and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from time to time hereafter owing, due or payable including, without limitation, all interest, fees, cost and expenses accrued or incurred after the filing of any petition under any bankruptcy or insolvency law.
"Operating Cash Flow" means, for any period, (a) EBITDA; plus (b) the net change in the accrued general and professional insurance liability as set forth in the cash flow statement delivered from time to time by the Company; less (c) Capital Expenditures.
"Option Price" has the meaning assigned to that term in the Intercreditor Agreement.
"paid in full" shall mean payment in full in cash or, with respect to letters of credit, delivery to Administrative Agent of cash or a back-to-back letter of credit, from an issuer and in form and substance satisfactory to Agents, in their sole discretion, and in each case, in an amount equal to 105% of the aggregate outstanding amount of the Letter of Credit Reserve.
"Partial Purchase Option" has the meaning assigned to that term in the Intercreditor Agreement.
"Patents" means collectively all of the following (a) all U.S. patents and patent applications including those listed on any schedule to any Patent Security Agreement and the inventions and improvements described and claimed therein, and patentable inventions; (b) the reissues, divisions, continuations, renewals, extensions and continuations-in-part of any of the foregoing; (c) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringements of any of the foregoing; (d) the right to xxx for past, present and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.
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"Patient" shall mean any Person receiving Medical Services from any Borrower and all Persons legally liable to pay any Borrower for such Medical Services other than Insurers.
"Permitted Divestitures" means the disposition on commercially reasonable terms and conditions of (i) the mobile x-ray business formerly known as TLC Mobile Medical and operated by SunAlliance Healthcare Services, Inc. and (ii) the respiratory services supplies and equipment business operated by SunCare Respiratory Services, each of which shall have occurred on or before May 31, 2002.
"Permitted Encumbrances" means the following types of Liens: (a) Liens (other than Liens relating to Environmental Claims or ERISA) for taxes, assessments or other governmental charges not yet due and payable; (b) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen and other similar liens imposed by law, which are incurred in the ordinary course of business for sums not more than thirty (30) days delinquent; (c) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); (d) easements, rights-of-way, restrictions, and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of the business of any Borrower; (e) Liens for purchase money obligations, provided that (i) the purchase of the asset subject to any such Lien is permitted under subsection 7.1(d) and subparagraph D of the Financial Covenants Rider, (ii) the Indebtedness secured by any such Lien is permitted under subsection 7.1, and (iii) such Lien encumbers only the asset so purchased; (f) Liens in respect of Indebtedness permitted under subsection 7.1(d); provided that such Liens encumber only the asset which is subject to a Capital Lease; (g) Liens in favor of the Collateral Agent, on behalf of itself and Lenders; (h) Liens on or security interests in certain accounts granted by a Borrower to the lessor of certain nursing home facilities, all as set forth on Schedule 11.1(C) or otherwise consented to in writing by the Agents; (i) Liens granted to the Term Administrative Agent pursuant to the Term Loan Documents (including the first priority lien on the SunScript Stock), (j) Liens with respect to, or hereafter incurred in connection with, the Sumitomo Transaction and the SunTrust Transaction, in each case, as set forth on Schedule 11.1(D)., and (k) Liens existing on the date hereof to the extent set forth on Schedule 11.1(D).
"Person" means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof.
"Plan" has the meaning assigned to that term in the Recitals.
"Primary Collection Account" has the meaning assigned to that term in subsection 2.4(A)(1)(e).
"Pro Forma" means the unaudited consolidated balance sheet of the Company and its Subsidiaries as of the Closing Date after giving effect to the transactions contemplated by this Agreement.
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"Projections" means Borrowers' forecasted consolidated: (a) balance sheets; (b) capitalization statements; (c) cash flow statements; and (d) profit and loss statements, all prepared on a division by division and Subsidiary by Subsidiary basis consistent with the Company's historical financial statements and based upon good faith estimates and assumptions by Borrowers believed to be reasonable at the time made, together with appropriate supporting details and a statement of underlying assumptions.
"Pro Rata Share" means (a) with respect to matters relating to a particular Commitment of a Lender, the percentage obtained by dividing (i) such Commitment of that Lender by (ii) all such Commitments of all Lenders and (b) with respect to all other matters, the percentage obtained by dividing (i) the Revolving Loan Commitment of a Lender by (ii) the Revolving Loan Commitments of all Lenders, in either (a) or (b), as such percentage may be adjusted by assignments permitted pursuant to subsection 9.5; provided, however, if any Commitment is terminated pursuant to the terms hereof, then "Pro Rata Share" means the percentage obtained by dividing (x) the aggregate amount of such Lender's outstanding Loans related to such Commitment by (y) the aggregate amount of all outstanding Loans related to such Commitment.
"Register" has the meaning assigned to that term in subsection 9.5(E).
"Related Fund" has the meaning assigned to that term in subsection 9.5 (D).
"Replacement Lender" has the meaning assigned to that term in subsection 2.11(A).
"Requisite Lenders" means Lenders, (other than a Defaulting Lender), holding or being responsible for: 51% or more of the sum of the (a) outstanding Loans, (b) Letter of Credit Reserve and (c) unutilized Commitments of all Lenders which are not Defaulting Lenders.
"Restricted Junior Payment" means: (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of the Company, any other Borrower, or any of their Subsidiaries now or hereafter outstanding, except a dividend payable solely with shares of the class of stock on which such dividend is declared; (b) any payment or prepayment of principal of, premium, if any, or interest on, or any redemption, conversion, exchange, retirement, defeasance, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Indebtedness under the Term Loan Documents or any shares of any class of stock of the Company or any of its Subsidiaries, other than in each case for regularly scheduled payments permitted under the Intercreditor Agreement now or hereafter outstanding, or the issuance of a notice of an intention to do any of the foregoing; (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of any Borrower or any of its Subsidiaries now or hereafter outstanding; and (d) any payment by any Borrower or any of its Subsidiaries of any management, consulting or similar fees to any Affiliate, whether pursuant to a management agreement or otherwise.
"Revolving Advance" means each advance made by Lender(s) under the Revolving Loan Commitment pursuant to subsection 2.1 (B).
"Revolving Loan" means the outstanding balance of all Revolving Advances and any amounts added to the principal balance of the Revolving Loan pursuant to this Agreement.
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"Revolving Loan Commitment" means (a) as to any Lender, the commitment of such Lender to make Revolving Advances pursuant to subsection 2.1 (B), and to purchase participations in Lender Letters of Credit pursuant to subsection 2.1(G) in the aggregate amount set forth on the signature page of this Agreement opposite such Lender's signature or in the most recent Assignment and Acceptance Agreement, if any, executed by such Lender and (b) as to all Lenders, the aggregate commitment of all Lenders to make Revolving Advances and to purchase participations in Lender Letters of Credit.
"Revolving Note" means each promissory note of Borrower, issued to evidence the Revolving Loan Commitments substantially in the form attached hereto as Exhibit F.
"Securities Act" means the Securities Act of 1933, as the same may be amended, modified or supplemented from time to time, and any successor statute thereto, and any and all rules or regulations promulgated from time to time thereunder.
"Settlement Agreement" means the "Settlement Agreement Entered Into Among the United States Of America, acting through the United States Department of Justice and Centers for Medicare and Medicaid Services, the TRICARE Management Activity Support Office, Sun Healthcare Group, Inc. and its subsidiaries who filed bankruptcy in the District of Delaware on October 14, 1999 and Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxxx, Xxxxxx XxXxx, Xxxxx Xxxxx, K.G. Xxxxxxx, XxxxxxX. Xxxxx, Xxxx Xxxxxxx, Xxxx X. Xxxxxx and Xxxxx Xxxx", date on or about February 1, 2002, which is the subject of Sections 4.3 and 5.12 of the Plan and which was incorporated into the Plan and approved by the Bankruptcy Court as part of the Confirmation Order.
"Settlement Date" has the meaning assigned to that term in subsection 9.8(A)(2).
"SHS" means Shared Healthcare Systems, Inc., a Delaware corporation.
"Social Security Act" shall mean the Social Security Act as codified at 42 U.S.C. Section 1395 et seq., as amended.
"Subsidiary" means, with respect to any Person, any corporation, association or other business entity of which more than fifty percent (50%) of the total voting power of shares of stock (or equivalent ownership or controlling interest) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other subsidiaries of that Person or a combination thereof.
"Sumitomo Transaction" means the conversion of the Sumitomo synthetic leases to mortgages as described in Schedule 11.1(D).
"SunBridge" means SunBridge Healthcare Corporation and its Subsidiaries.
"SunDance" means SunDance Rehabilitation Corporation and its Subsidiaries.
"SunPlus" means SunPlus Home Health Services, Inc. and its Subsidiaries.
"SunScript" means SunScript Pharmacy Corporation, SunFactors, Inc., Pharmacy Factors of Florida, Inc., Pharmacy Factors of Texas, Inc., Pharmacy Factors of California, Inc., Advantage Health
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Services, Inc., Homed Convalescent Equipment, Inc., SunScript/HRA LLC, First Class Pharmacy, Inc., and Executive Pharmacy Services, Inc.
"SunScript Stock" means the stock or other equity interests of SunScript.
"SunTrust Transaction" means the conversion of the SunTrust synthetic leases to mortgages as described in Schedule 11.1(D).
"Tangible Net Worth" of any Person means as of any date, an amount equal to: (a) Net Worth of such Person; less (b) Intangible Assets of such Person; less (c) prepaid expenses of such Person; less (d) all obligations owed to such Person by any Affiliate of such Person or any of its Subsidiaries; (determined in each case in conformity with GAAP).
"Tax Liabilities" has the meaning assigned to that term in subsection 2.9(A).
"Term Administrative Agent" means U.S. Bank National Association, in its capacity as administrative agent under the Term Loan Agreement.
"Term Loan Agreement" means the Term Loan and Note Purchase Agreement, dated as of the date hereof, between the Borrowers, the lenders party thereto and Term Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the Intercreditor Agreement.
"Term Loan Documents" means the Term Loan Agreement, the notes (if any) and all other documents, instruments and agreements executed by or on behalf of any Borrower or Subsidiary of such Borrower and delivered concurrently therewith or at any time hereafter to or for the Term Administrative Agent or any lender in connection with the loans and any other transaction contemplated by the Term Loan Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the Intercreditor Agreement.
"Termination Date" means the date that is the earlier of (1) the third anniversary of Closing Date and (2) the termination of the Revolving Loan Commitments in accordance with this Agreement.
"THCI Transfer Facilities" means, collectively, the following nursing home facilities: (a) Mediplex Rehab. of Denver, located in Denver, CO, (b) Mediplex of Stamford, located in Stamford, CT, (c) SunBridge Care and Rehabilitation for Brookline, located in Brookline, MA and (d) SunBridge Care and Rehabilitation for East Boston, located in East Boston, MA.
"THCI Turnover" means the going concern transfer of the THCI Transfer Facilities by the Borrowers to THCI Mortgage Holdings Company LLC.
"Total Assets" means the "Total Assets" as reflected on the Consolidated Legal Entities report, dated February 11, 2002 (11:18 AM) prepared by the Company and previously provided to Collateral Agent.
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"Total Revenues" means the "4th Qtr Total Revenue" as reflected on the Consolidated Legal Entities report, dated February 11, 2002 (11:18 AM) prepared by the Company and previously provided to Collateral Agent.
"Trademark Security Agreement" means any Trademark Security Agreement executed and delivered by certain of the Borrowers to Collateral Agent, as the same may be amended and in effect from time to time.
"Trademarks" means collectively all of the following: (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, other business identifiers, prints and labels on which any of the foregoing have appeared or appear, all registrations and recordings thereof, and all applications in connection therewith including those listed on any schedule to any Trademark Security Agreement; (b) all renewals thereof; (c) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing including damages and payments for past, present and future infringements of any of the foregoing; (d) the right to xxx for past, present and future infringements of any of the foregoing; (e) all rights corresponding to any of the foregoing throughout the world; and (f) all goodwill associated with and symbolized by any of the foregoing.
"TRICARE" means, collectively, a program of medical benefits covering former and active members of the uniformed services and certain of their dependents, financed and administered by the United States Departments of Defense, Health and Human Services and Transportation, which program was formerly known as the "Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)".
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, to the extent the law of any other state or other jurisdiction applies to the attachment, perfection, priority or enforcement of any Lien granted to Agent in any of the Collateral, "UCC" means, as applicable, the Uniform Commercial Code as in effect in such other state or jurisdiction for purposes of the provisions hereof relating to such attachment, perfection, priority or enforcement of a Lien in such Collateral. To the extent this Agreement defines the term "Collateral" by reference to terms used in the UCC, each of such terms shall have the broadest meaning given to such terms under the UCC as in effect in any state or other jurisdiction.
"Unused Daily Balance" means the Revolving Loan Commitment less the sum of (1) the average daily balance of the Revolving Loan during the preceding month plus (2) the average daily face amount of the Letter of Credit Reserve during the preceding month.
"Veterans Administration" shall mean the Department of Veterans Affairs.
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Accounting Changes with the desired result that the criteria for evaluating the financial condition of Borrower shall be the same after such Accounting Changes as if such Accounting Changes had not been made, and until such time as such an amendment shall have been executed and delivered by Borrower and Requisite Lenders, (A) all financial covenants, standards and terms in this Agreement shall be calculated and/or construed as if such Accounting Changes had not been made, and (B) Borrower shall prepare footnotes to each Compliance and Pricing Certificate and the financial statements required to be delivered hereunder that show the differences between the financial statements delivered (which reflect such Accounting Changes) and the basis for calculating financial covenant compliance (without reflecting such Accounting Changes). "Accounting Changes" means: changes in accounting principles required by GAAP and implemented by Borrower. All such adjustments resulting from expenditures made subsequent to the Closing Date (including, but not limited to, capitalization of costs and expenses or payment of pre-Closing Date liabilities) shall be treated as expenses in the period the expenditures are made and deducted as part of the calculation of EBITDA in such period.
[SIGNATURES BEGIN ON FOLLOWING PAGES]
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Witness
the due execution hereof by the respective duly authorized officers of the undersigned as
of the date first written above.
Sun Healthcare Group, Inc.
By: /s/ Xxxxxx X.
Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
Advantage Health Services, Inc.
Americare Health Services Corp.
Americare of West Virginia, Inc.
Atlantic Medical Supply Holding
Company, Inc.
Xxxxxxx Health Care Corp.
Bergen Eldercare, Inc.
Xxxx Health & Rehabilitation, Inc.
BioPath Clinical Laboratories, Inc.
Xxxxxxxx Enterprises, Inc.
Xxxxx-Lox Hall Nursing Home, Inc.
Brittany Rehabilitation Center, Inc.
Cal-Med, Inc.
Care Enterprises West
Care Enterprises, Inc.
Care Home Health Services
CareerStaff Management, Inc.
CareerStaff Services Corporation
CareerStaff Unlimited, Inc.
Xxxxxxxxxx Rehabilitation Center
Charlton Healthcare, Inc.
Circleville Health Care Corp.
Clipper Home of North Xxxxxx, Inc.
Clipper Home of Portsmouth, Inc.
Clipper Home of Rochester, Inc.
Clipper Home of Wolfeboro, Inc.
Coalinga Rehabilitation Center
Contour Medical, Inc.
Correctional Care Corp.
Covina Rehabilitation Center
Xxxxxx Health Care Corp.
Xxxxx Healthcare Center, Inc.
[SIGNATURE APPEARS ON PAGE S-4]
S-1
Executive Pharmacy Services, Inc.
Facility Supply, Inc.
Fairfield Rehabilitation Center
First Class Pharmacy, Inc.
Fullerton Rehabilitation Center
Gainesville Healthcare Center, Inc.
Gardendale Health Care Center, Inc.
Glendora Rehabilitation Center
Glenville Health Care, Inc.
Xxxxxxx Nursing Home, Inc.
Grand Terrace Rehabilitation Center
Hallmark Health Services, Inc.
Harbor View Rehabilitation Center
HC, Inc.
Heritage Rehabilitation Center
HoMed Convalescent Equipment, Inc.
HTA of New York, Inc.
Huntington Beach Convalescent
Hospital
Xxxx Xxxxx Healthcare, Inc.
Lake Forest Healthcare Center, Inc.
Xxxxxx Rehabilitation Center, Inc.
Manatee Springs Nursing Center, Inc.
Maplewood Health Care Center of
Jackson, Tennessee, Inc.
Xxxxxx Health Care Corp.
Masthead Corporation
Meadowbrook Rehabilitation Center
Mediplex Management of Palm Beach
County, Inc.
Mediplex Management, Inc.
Mediplex of Concord, Inc.
Mediplex of Connecticut, Inc.
Mediplex of Kentucky, Inc.
Mediplex of Maryland, Inc.
Mediplex of Massachusetts, Inc.
Mediplex of New Hampshire, Inc.
Mediplex of New Jersey, Inc.
Mediplex Rehabilitation of
Massachusetts, Inc.
Mid-Florida, Inc.
Mountain Care Management, Inc.
New Bedford Nursing Center, Inc.
Newport Beach Rehabilitation Center
Nursing Home, Inc.
[SIGNATURE APPEARS ON PAGE S-4]
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Orange Rehabilitation Hospital, Inc.
P.M.N.F. Management, Inc.
Pacific Health Care, Inc.
Paradise Rehabilitation Center, Inc.
Pharmacy Factors of California, Inc.
Pharmacy Factors of Florida, Inc.
Pharmacy Factors of Texas, Inc.
PRI, Inc.
Xxxxxx Health Care Corp.
Quality Care Holding Corporation
Quality Nursing Care of
Massachusetts, Inc.
Regency Health Services, Inc.
Regency High School, Inc.
Regency Rehab Hospitals, Inc.
Regency-North Carolina, Inc.
Regency-Tennessee, Inc.
Retirement Care Associates, Inc.
Rose Rehabilitation Center
Salem Health Care Corp.
San Bernardino Rehabilitation
Hospital, Inc.
San Xxxxxxx G.P. Corporation
Shandin Hills Rehabilitation Center
Southside Health Care Center, Inc.
Xxxxxxxx Land, Inc.
SRT, Inc.
Statesboro Health Care Center, Inc.
Stockton Rehabilitation Center, Inc.
Xxxxxxx Landing, Inc.
Sun Lane Purchase Corporation
SunAlliance Healthcare Services, Inc.
(successor by merger with SunDelta
Corporation)
SunBridge G.P. Corporation
SunBridge Healthcare Corporation
SunBridge Healthcare of Colorado,
Inc.
SunBridge Rehab of Colorado, Inc.
SunBridge, Inc.
SunCare Respiratory Services, Inc.
SunCare Services Corporation
SunChoice Medical Supply, Inc.
SunDance Rehabilitation Corporation
SunDance Services Corporation
SunFactors, Inc.
SunHealth Specialty Services, Inc.
[SIGNATURE APPEARS ON PAGE S-4]
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SunMark Nevada, Inc.
SunMark of New Mexico, Inc.
SunPlus Home Health Services, Inc.
SunScript Pharmacy Corporation
SunSolution, Inc.
The Mediplex Group, Inc.
U.S. Laboratory Corp.
Vista Xxxxx Rehabilitation Center, Inc.
West Tennessee, Inc.
Willow Way, Inc.
Worcester Nursing Center, Inc.
By: /s/ Xxxxxx X.
Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
S-4
S-5
HSR Partners, L.P.
Therapists Unlimited - Baltimore/
Washington, D.C., L.P.
Therapists Unlimited - Chicago, L.P.
(II)
Therapists Unlimited - Detroit II, L.P.
Therapists Unlimited - Fresno, L.P.
Therapists Unlimited - Indianapolis,
L.P.
Therapists Unlimited - Seattle, L.P.
By: CareerStaff Management, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title:
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LENDERS
CITICORP USA, INC.
By: /s/ Xxxxx X.
XxXxxxxx
Title: Director
Revolving Loan Commitment:
$50,000,000
XXXXXX HEALTHCARE FINANCE,
INC.
By: /s/
Title:
Revolving Loan Commitment:
$50,000,000
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FOOTHILL INCOME TRUST, L.P.
By: FIT GP, LLC, Its General Partner
By: /s/ M. E.
Xxxxxxx
Name: M. E.
Xxxxxxx
Title: Managing Member
Revolving Loan Commitment
$25,000,000
S-8
A. Lockbox Agreements
B. Assignment and Acceptance
Agreement
C. Borrowing Base Certificate
D. Compliance and Pricing
Certificate
E. Notice of Borrowing
F. Revolving Note
G. Inventory Report
H. Reconciliation Report
2.01
Inventory Locations
2.2(A) Base Rate Margins,
LIBOR Margins and Letter of Credit Fees
2.4(A)(1) Banks with Blocked Accounts
2.7(A) Commercial Tort Claims
4.1(B) Capitalization of
Borrowers
4.4
Indebtedness and Liabilities
4.5(D) List of Chattel Paper
4.5(I) Intellectual
Property
4.5(K) Bank Accounts
4.5(L) Bailees
4.6
Names and Locations
4.9
Borrowers' Federal Tax Identification Numbers and Returns Under Audit
4.17
Compliance with Laws
4.18
Employee Matters
4.29
Licenses
4.31
Inactive Entities
7.1
Existing Indebtedness
7.4
Existing Investments and Loans
7.11
Subsidiaries
11.1(B) Mortgaged Property
11.1(C) Liens or Security Interests in
Certain Accounts
11.1(D) Other Liens
SCHEDULE 2.2(A)
Base Rate Margins, LIBOR Margins and Letter of Credit Fees
|
|
|
|
|
|
|
|
Greater than 1.75 to and including 2.00 |
|
|
|
|
|
|
|
A. Conditions Rider
B. Reporting Rider
C. Financial Covenants Rider
CONDITIONS RIDER
This Conditions Rider is attached to and made a part of that certain Loan and Security Agreement dated as of February 28, 2002 and entered into among Borrowers, the Collateral Agent, the Administrative Agent and Lenders.
(A) Closing Deliveries. Agents shall have received, in form and substance satisfactory to the Agents, all documents, instruments and information identified on the Sun Healthcare Loan Closing Checklist, dated as of February 28, 2002 as it may updated and amended from time to time and all other agreements, notes, certificates, orders, authorizations, financing statements, pledges, mortgages, security agreement and other documents which Agents may at any time reasonably request.
(B) Security Interests. Collateral Agent shall have received satisfactory evidence that all security interests and liens granted to Collateral Agent for the benefit of Agents and Lenders pursuant to this Agreement or the other Loan Documents have been duly perfected, and to the extent set forth in subsection 4.7, constitute first priority liens on the Collateral, subject only to Permitted Encumbrances.
(C) Closing Date Availability. After giving effect to the consummation of the transactions contemplated hereunder on the Closing Date and the payment by Borrowers of all costs, fees and expenses relating thereto, the Maximum Revolving Loan Amount on the Closing Date shall exceed the Revolving Loan by at least $25,000,000
(D) Representations and Warranties. The representations and warranties contained herein and in the Loan Documents shall be true, correct and complete in all material respects on and as of that Funding Date to the same extent as though made on and as of that date, except for any representation or warranty limited by its terms to a specific date and taking into account any amendments to the Schedules or Exhibits as a result of any disclosures made by Borrowers to Agents after the Closing Date and approved by Agents.
(E) Fees. With respect to Loans or Lender Letters of Credit to be made or issued on the Closing Date, Borrowers shall have paid all fees due to Agents or any Lender and payable on the Closing Date.
(F) No Default. No event shall have occurred and be continuing or would result from funding a Loan or issuing a Lender Letter of Credit requested by any Borrower that would constitute an Event of Default or a Default.
(G) Performance of Agreements. Each Borrower shall have performed in all material respects all agreements and satisfied all conditions which any Loan Document provides shall be performed by it on or before the Funding Date.
(H) No Prohibition. No order, judgment or decree of any court, arbitrator or governmental authority shall purport to enjoin or restrain Agents or any Lender from making any Loans or issuing any Lender Letters of Credit.
(I) No Litigation. There shall not be pending or to the knowledge of Borrowers, threatened, any action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration by,
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against or affecting any Borrowers or any property of any Borrower or any of its Subsidiaries that has not been disclosed to Collateral Agent by Borrower in writing, and there shall have occurred no development in any such action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration that could reasonably be expected to have a Material Adverse Effect.
(J) Business Condition. Since the December 31, 2001 financial statements, there shall not have been any Material Adverse Change.
(K) Lenders' Audit. Lenders shall have completed an audit to determine the liquidity of Borrowers' Accounts and the general financial and operational condition of Borrowers, the results of which are satisfactory to Lenders in their sole and absolute discretion.
(L) Reorganization Plan. The Plan (i) shall have been confirmed by a final order of the United States Bankruptcy Court for the District of Delaware without appeal or application for reconsideration, (ii) is acceptable to Lenders in their sole discretion, (iii) shall have become effective, and (iv) the Agents shall be satisfied, in their sole discretion, that documents implementing or related to the Plan, are in form and substance consistent with the Loan Documents.
(M) Updated Schedules. Borrower shall have revised, updated and delivered to the Collateral Agent all Schedules to the Loan Documents to (a) reflect updated and accurate information with respect to any new Borrower, and (b) to update all other information as necessary to make the Schedules previously delivered correct. Borrowers hereby represent and warrant that the information set forth on the attached Schedules is true and correct as of the date of this Agreement. The attached Schedules are hereby incorporated into this Agreement as if originally set forth therein.
(N) The Borrower Deposit Accounts and the Collection Accounts shall have been established to the satisfaction of the Agents in their sole discretion.
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This Reporting Rider is attached and made a part of that certain Loan and Security Agreement, dated as of February 28 , 2002 and entered into among Borrowers, Agents and Lenders.
(A) Monthly Financials. As soon as available and in any event within thirty (30) days after the end of each month, The Company will deliver to Agents and Lenders (1) the consolidated balance sheet of the Company and its Subsidiaries as at the end of such month and the related consolidated statements of income and stockholders' equity for such month and for the period from the beginning of the then current Fiscal Year to the end of such month, and (2) a schedule of the outstanding Indebtedness for borrowed money of the Company and its Subsidiaries describing in reasonable detail each such debt issue or loan outstanding and the principal amount and amount of accrued and unpaid interest with respect to each such debt issue or loan.
(B) Quarterly Financials. As soon as available and in any event within fifth-five (55) days of the end of each of the first three calendar quarters of each Fiscal Year, the Company will deliver to Agents and Lenders (1) the consolidated balance sheet and cash flow sttement of the Company and its Subsidiaries as at the end of each such calendar quarter and the related consolidated statements of income, stockholders' equity and cash flow for each such calendar quarter and for the period from the beginning of the then current Fiscal Year to the end of each such calendar quarter and (2) a reasonably detailed schedule of the Capital Expenditures incurred during such calendar quarter.
(C) Year-End Financials. As soon as available and in any event within one hundred five (105) days after the end of each Fiscal Year, the Company will deliver to Agents and Lenders: (1) the consolidated balance sheet and cash flow statement of the Company and its Subsidiaries as at the end of such year and the related consolidated statements of income, stockholders' equity and cash flow for such Fiscal Year; (2) a detailed schedule of the Capital Expenditures incurred during such fiscal year; and (3) report with respect to the financial statements from the Company's Accountants, which report shall be unqualified as to going concern and scope of audit of the Company and its Subsidiaries and shall provide in substance that (a) such consolidated financial statements present fairly the consolidated financial position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in conformity with GAAP and (b) that the examination by Company's' Accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards; and (5) copies of the consolidating financial statements of Borrowers and their Subsidiaries, including (a) consolidating balance sheets of the Company and its Subsidiaries as at the end of such Fiscal Year showing intercompany elimination's and (b) related consolidating statements of income of Borrowers and their Subsidiaries showing intercompany elimination's.
(D) Compliance and Pricing Certificate. Together with the delivery of each set of financial statements referenced in subparagraphs (A), (B) and (C) above, Borrowers will deliver to Agents and Lenders a Compliance and Pricing Certificate, together with copies of the calculations and work-up employed to determine Borrowers' compliance or noncompliance with the financial covenants set forth in the Financial Covenants Rider.
(E) Borrowing Base Certificates, Registers and Journals. On no less than a weekly basis, Borrowers shall deliver to Administrative Agent: (1) a Borrowing Base Certificate updated to reflect the most recent sales and collections of Borrowers and an assignment schedule of all of Accounts created by
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Borrowers; (2) an invoice register or sales journal describing all sales of Borrowers, in form and substance satisfactory to Administrative Agent, and, if Administrative Agent so requests, copies of invoices evidencing such sales and proofs of delivery relating thereto; (3) a cash receipts journal; (4) a credit memo journal; and (5) an adjustment journal, setting forth all adjustments to Accounts.
(F) Reconciliation Reports, Inventory Reports and Listings and Agings. On the Closing Date and within twenty (20) days after the end of each calendar month and, if an Event of Default shall have occurred and be continuing, from time to time upon the request of Collateral Agent, Borrowers will deliver to Collateral Agent: (1) an aged trial balance of all then existing Accounts; and (2) an Inventory Report duly executed by an officer of each Borrower and substantially in the form of Exhibit G as of the last day of such period. As soon as available and in any event within five (5) Business Days after both the fifteenth and the last day of each month, and from time to time upon the request of Collateral Agent, Borrowers will deliver to Collateral Agent: (1) a Reconciliation Report duly executed by the Financial Officer and substantially in the form of Exhibit H as at the last day of such period; (2) an aged trial balance of all then existing accounts payable; and (3) a detailed inventory listing and cover summary report. All such reports shall be in form and substance satisfactory to Collateral Agent.
(G) Management Report. Together with each delivery of financial statements of Borrowers and their Subsidiaries pursuant to subparagraph (A) above, Borrowers will deliver to Agents and Lenders a management report: (1) describing the operations and financial condition of the Borrowers (by business segment) for the month then ended and the portion of the current Fiscal Year then elapsed; (2) setting forth in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the most recent Projections for the current Fiscal Year delivered to Collateral Agent and Lenders pursuant to subparagraph (L) below; and (3) discussing the reasons for any significant variations. The information above shall be presented in reasonable detail and shall be certified by the chief financial officer of the Company to the effect that such information fairly presents the results of operations and financial condition of Borrowers and their Subsidiaries as at the dates and for the periods indicated.
(H) Appraisals. From time to time, upon the request of Collateral Agent, Borrowers will obtain and deliver to Collateral Agent, at Borrowers' expense, appraisal reports in form and substance and from appraisers satisfactory to Collateral Agent, stating the then current fair market and orderly liquidation values of all or any portion of the Collateral; provided, however, so long as no Default or Event of Default is continuing, Collateral Agent shall not request an appraisal as to any particular category of Collateral to be performed more than once every Loan Year at Borrowers' expense.
(I) Government Notices. Borrowers will deliver to Collateral Agent promptly following receipt copies of all notices, requests, subpoenas, inquiries or other writings received from any governmental agency concerning the violation or alleged violation of ERISA, the violation or alleged violation of any Environmental Laws or the violation or alleged violation of the Fair Labor Standards Act, Borrowers shall deliver to Collateral Agent an update to Schedule 4.9 no less frequently than on a quarterly basis.
(J) Notice of Default, etc. Promptly upon a Borrower obtaining knowledge of any of the following events or conditions, such Borrower shall deliver to Administrative Agent a certificate of such Borrower's chief executive officer or a Financial Officer specifying the nature and period of existence of such condition or event and what action such Borrower has taken, is taking and proposes to take with
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respect thereto: (1) any condition or event that constitutes an Event of Default or Default; (2) any notice of default that any Person has given to such Borrower or any of its Subsidiaries, which default if unremedied could reasonably be expected to result in a Material Adverse Effect; or (3) any Material Adverse Effect.
(K) Projections. As soon as available and in any event no later than sixty (60) days after the end of each Fiscal Year of the Company, Borrowers, will deliver to Collateral Agent and Lenders consolidated Projections of the Company and its Subsidiaries for the forthcoming three Fiscal Years, year by year, and for the forthcoming Fiscal Year, month by month.
(L) Other Information. With reasonable promptness, Borrowers will deliver such other information and data as any Agent or any Lender may reasonably request from time to time.
(M) Opening Balance Sheet. As soon as available and in any event within ninety (90) days after the Closing Date, Borrowers will deliver to Agents and Lenders a consolidated Closing Date balance sheet reviewed and reported on by the Company's Accountants.
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This Financial Covenants Rider is attached and made a part of that certain Loan and Security Agreement, dated as of February 28, 2002 and entered into among Borrowers, Agents and Lenders.
A. Tangible Net Worth. The Borrowers, on a consolidated basis, shall maintain Tangible Net Worth of at least the amounts set forth below at the end of each quarter of a Fiscal Year set forth below.
First Quarter |
Amount |
March 31, 2002 |
As set forth on Closing Balance Sheet |
June 30, 2002 |
Amount as of March 31, 2002, plus $500,000 |
September 30, 2002 |
Amount as of June 30, 2002, plus $3,300,000 |
December 31, 2002 |
Amount as of September 30, 2002, plus $5,000,000 |
Each Quarter Thereafter (e.g. March 31, 2003, June 30, 2003 and so on) |
Amount of as of the end of the immediately prior calendar quarter plus 50% of the Net Income earned for the calendar quarter at issue |
B. Minimum Operating Cash Flow. The Borroowers, on a consolidated basis, shall at all times maintain a minimum Operating Cash Flow of at least the amounts set forth below at the end of each quarter of a Fiscal Year set forth below.
Fiscal Quarter Ending |
Amount |
March 31, 2002 |
$48,000,000 |
June 30, 2002 |
$42,000,000 |
September 30, 2002 |
$36,800,000 |
December 31, 2002 |
$44,600,000 |
March 31, 2003 |
$45,200,000 |
June 30, 2003 |
$45,900,000 |
September 30, 2003 |
$46,600,000 |
December 31, 2003 |
$47,300,000 |
March 31, 2004 |
$48,500,000 |
June 30, 2004 |
$49,800,000 |
September 30, 2004 |
$51,000,000 |
December 31, 2004 |
$52,200,000 |
C. Capital Expenditure Limits. The aggregate amount of all Capital Expenditures, Capital Leases with respect to fixed assets of Borrowers and their Subsidiaries (which shall be considered to be expended in full on the date such Capital Lease is entered into) and other contracts with respect to fixed assets initially capitalized on the Borrowers' or any of their Subsidiaries' balance sheet prepared in accordance with GAAP (which shall be considered to be expended in full on the date such contract is entered into) (excluding, in each case, expenditures for trade-ins and replacement of assets to the extent
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funded with casualty insurance proceeds) will not exceed the amount set forth below for each period set forth below.
Fiscal Quarter Ending |
Amount |
March 31, 2002 |
$11,600,000 |
June 30, 2002 |
$11,600,000 |
September 30, 2002 |
$11,100,000 |
December 31, 2002 |
$10,900,000 |
March 31, 2003 |
$12,300,000 |
June 30, 2003 |
$12,300,000 |
September 30, 2003 |
$12,300,000 |
December 31, 2003 |
$12,300,000 |
March 31, 2004 |
$13,000,000 |
June 30, 2004 |
$13,000,000 |
September 30, 2004 |
$13,000,000 |
December 31, 2004 |
$13,000,000 |
D. Fixed Charge Coverage. Borrowers, on a consolidated basis, shall not permit its Fixed Charge Coverage for the rolling twelve (12) month period ending on the last day of each fiscal quarter set forth below to be less than the ratio set forth below for such periods.
|
Ratio for Rolling |
March 31, 2002 |
2.45 |
June 30, 2002 |
1.70 |
September 30, 2002 |
1.25 |
December 31, 2002 |
1.15 |
March 31, 2003 |
1.15 |
June 30, 2003 |
1.15 |
September 30, 2003 |
1.15 |
December 31, 2003 |
1.15 |
March 31, 2004 |
1.15 |
June 30, 2004 |
1.15 |
September 30, 2004 |
1.15 |
December 31, 2004 |
1.15 |
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|
|
Ratio for Rolling |
March 31, 2002 |
4.50 |
4.04 |
June 30, 2002 |
4.15 |
3.69 |
September 30, 2002 |
3.75 |
3.32 |
December 31, 2002 |
3.00 |
2.63 |
March 31, 2003 |
2.81 |
2.46 |
June 30, 2003 |
2.63 |
2.29 |
September 30, 2003 |
2.44 |
2.12 |
December 31, 2003 |
2.25 |
1.95 |
March 31, 2004 |
2.25 |
1.95 |
June 30, 2004 |
2.25 |
1.95 |
September 30, 2004 |
2.25 |
1.95 |
December 31, 2004 |
2.25 |
1.95 |
F. Census. Borrowers, on a consolidated basis, shall not allow the Patient census for any period of four (4) consecutive weeks for the skilled nursing and hospital Facilities, when taken as a whole, to fall below eighty-seven percent (87%) of the number of licensed available beds in such Facilities taken as a whole (computed in a manner consistent with reporting practices existing on the date of this Agreement); provided that during the period from December 1st to January 1st of each year, the Borrowers shall not allow such census to fall below eighty-six percent (86%).
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