CREDIT AGREEMENT
DATED AS OF JUNE 21, 1996
AMONG
GOOD SAMARITAN SUPPLY SERVICES, INC.,
AS BORROWER,
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
AND
LASALLE NATIONAL BANK,
AS THE AGENT
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Certain Defined Terms . . . . . . . . . . . . . . . . . . . 1
1.2. Subsidiary References . . . . . . . . . . . . . . . . . . . 35
1.3. Schedule References; Supplemental Disclosure. . . . . . . . 35
ARTICLE II. THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . 36
2.1. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.2. Revolving Loans . . . . . . . . . . . . . . . . . . . . . . 38
2.3. Ratable Loans . . . . . . . . . . . . . . . . . . . . . . . 38
2.4. Rate Options for All Advances . . . . . . . . . . . . . . . 38
2.5. Optional Payments - Mandatory Prepayments . . . . . . . . . 39
(A) Optional Payments . . . . . . . . . . . . . . . . 39
(B) Mandatory Prepayments . . . . . . . . . . . . . . 39
2.6. Reduction of Commitments. . . . . . . . . . . . . . . . . . 42
2.7. Method of Borrowing . . . . . . . . . . . . . . . . . . . . 42
2.8. Borrowing Notice; Determination of Applicable Margins . . . 42
2.9. Minimum Amount of Each Advance. . . . . . . . . . . . . . . 44
2.10. Method of Selecting Types and Interest Periods for
Conversion and Continuation of Advances . . . . . . . . . 44
(A) Right to Convert. . . . . . . . . . . . . . . . . 44
(B) Automatic Conversion and Continuation . . . . . . 44
(C) No Conversion Post-Default or Post-Unmatured
Default . . . . . . . . . . . . . . . . . . . . 44
(D) Conversion/Continuation Notice. . . . . . . . . . 45
2.11. Default Rate. . . . . . . . . . . . . . . . . . . . . . . . 45
2.12. Collections, and Concentration Account Arrangements . . . . 45
2.13. Method of Payment . . . . . . . . . . . . . . . . . . . . . 47
2.14. Notes, Telephonic Notices . . . . . . . . . . . . . . . . . 47
2.15. Promise to Pay; Interest and Fees; Interest Payment Dates;
Interest and Fee Basis; Taxes; Loan and Control
Accounts. . . . . . . . . . . . . . . . . . . . . . . . . 47
(A) Promise to Pay. . . . . . . . . . . . . . . . . . 47
(B) Interest Payment Dates. . . . . . . . . . . . . . 47
(C) Fees. . . . . . . . . . . . . . . . . . . . . . . 48
(D) Interest and Fee Basis. . . . . . . . . . . . . . 48
(E) Taxes . . . . . . . . . . . . . . . . . . . . . . 49
(F) Loan Account. . . . . . . . . . . . . . . . . . . 51
(G) Control Account . . . . . . . . . . . . . . . . . 52
(H) Entries Binding . . . . . . . . . . . . . . . . . 52
2.16. Notification of Advances, Interest Rates, Prepayments and
Aggregate Revolving Loan Commitment Reductions. . . . . . 52
2.17. Lending Installations . . . . . . . . . . . . . . . . . . . 52
2.18. Non-Receipt of Funds by the Agent . . . . . . . . . . . . . 52
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2.19. Termination Date. . . . . . . . . . . . . . . . . . . . . . 53
2.20. Replacement of Certain Lenders. . . . . . . . . . . . . . . 53
2.21. Letter of Credit Facility . . . . . . . . . . . . . . . . . 54
2.22. Letter of Credit Participation. . . . . . . . . . . . . . . 55
2.23. Reimbursement Obligation. . . . . . . . . . . . . . . . . . 55
2.24. Cash Collateral . . . . . . . . . . . . . . . . . . . . . . 56
2.25. Letter of Credit Fees . . . . . . . . . . . . . . . . . . . 56
2.26. Indemnification; Exoneration. . . . . . . . . . . . . . . . 57
ARTICLE III. CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . 58
3.1. Yield Protection. . . . . . . . . . . . . . . . . . . . . . 58
3.2. Changes in Capital Adequacy Regulations . . . . . . . . . . 59
3.3. Availability of Types of Advances . . . . . . . . . . . . . 59
3.4. Funding Indemnification . . . . . . . . . . . . . . . . . . 59
3.5 Lender Statements; Survival of Indemnity. . . . . . . . . . 60
ARTICLE IV. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . 60
4.1. Initial Advances and Letters of Credit. . . . . . . . . . . 60
4.2. Each Advance and Letter of Credit . . . . . . . . . . . . . 61
4.3. Conditions for Acquisition Loans and Addition of
Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE V. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . 62
5.1. Organization; Corporate Powers. . . . . . . . . . . . . . . 62
5.2. Authority . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.3. No Conflict; Governmental Consents. . . . . . . . . . . . . 63
5.4. Financial Statements. . . . . . . . . . . . . . . . . . . . 64
5.5. No Material Adverse Change. . . . . . . . . . . . . . . . . 64
5.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
(A) Tax Examinations. . . . . . . . . . . . . . . . . 64
(B) Payment of Taxes and Claims . . . . . . . . . . . 64
5.7. Litigation; Loss Contingencies and Violations . . . . . . . 64
5.8. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . 65
5.9. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.10. Accuracy of Information . . . . . . . . . . . . . . . . . . 66
5.11. Securities Activities . . . . . . . . . . . . . . . . . . . 66
5.12. Material Agreements; Licenses . . . . . . . . . . . . . . . 66
5.13. Compliance with Laws. . . . . . . . . . . . . . . . . . . . 66
5.14. Assets and Properties; Government Approvals; Validity of
Receivables on Borrowing Base Certificate . . . . . . . . 67
5.15. Statutory Indebtedness Restrictions . . . . . . . . . . . . 68
5.16. Post-Retirement Benefits. . . . . . . . . . . . . . . . . . 68
5.17. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.18. Contingent Obligations. . . . . . . . . . . . . . . . . . . 68
5.19. Restricted Junior Payments. . . . . . . . . . . . . . . . . 68
5.20. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . 69
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5.21. The Acquisitions. . . . . . . . . . . . . . . . . . . . . . 69
5.22. Environmental Matters . . . . . . . . . . . . . . . . . . . 70
5.23. Healthcare Regulatory Matters . . . . . . . . . . . . . . . 70
ARTICLE VI. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.1. Reporting . . . . . . . . . . . . . . . . . . . . . . . . . 71
(A) Financial Reporting . . . . . . . . . . . . . . . 71
(B) Notice of Default . . . . . . . . . . . . . . . . 73
(C) Lawsuits. . . . . . . . . . . . . . . . . . . . . 73
(D) Insurance . . . . . . . . . . . . . . . . . . . . 73
(E) ERISA Notices . . . . . . . . . . . . . . . . . . 73
(F) Labor Matters . . . . . . . . . . . . . . . . . . 74
(G) Other Indebtedness. . . . . . . . . . . . . . . . 74
(H) Other Reports; SEC Filings, Notices and Other
Public Information. . . . . . . . . . . . . . . . 75
(I) Environmental Notices . . . . . . . . . . . . . . 75
(J) Borrowing Base Certificate. . . . . . . . . . . . 75
(K) Other Information . . . . . . . . . . . . . . . . 76
(L) Healthcare Notices. . . . . . . . . . . . . . . . 76
(M) Reports in Connection with Acquisition
Agreements. . . . . . . . . . . . . . . . . . . . 77
(N) Financial Information regarding the Society . . . 77
6.2. Affirmative Covenants . . . . . . . . . . . . . . . . . . . 77
(A) Corporate Existence, Etc. . . . . . . . . . . . . 77
(B) Corporate Powers; Conduct of Business . . . . . . 77
(C) Compliance with Laws, Etc . . . . . . . . . . . . 77
(D) Payment of Taxes and Claims; Tax Consolidation. . 77
(E) Insurance . . . . . . . . . . . . . . . . . . . . 78
(F) Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . . . 78
(G) Insurance and Condemnation Proceeds . . . . . . . 78
(H) ERISA Compliance. . . . . . . . . . . . . . . . . 79
(I) Maintenance of Property . . . . . . . . . . . . . 79
(J) Environmental Compliance. . . . . . . . . . . . . 80
(K) Use of Proceeds . . . . . . . . . . . . . . . . . 80
(L) Healthcare Regulatory Matters . . . . . . . . . . 80
(M) Deposit Accounts. . . . . . . . . . . . . . . . . 81
(N) Future Liens on Real Property . . . . . . . . . . 81
(O) Subsidiary Guarantee; Subsidiary Security
Agreement . . . . . . . . . . . . . . . . . . . . 81
(P) Separate Corporate Existence. . . . . . . . . . . 81
(Q) Waiver under Shareholders Agreement . . . . . . . 83
6.3. Negative Covenants. . . . . . . . . . . . . . . . . . . . . 83
(A) Indebtedness. . . . . . . . . . . . . . . . . . . 83
(B) Sales of Assets . . . . . . . . . . . . . . . . . 85
(C) Liens . . . . . . . . . . . . . . . . . . . . . . 85
(D) Investments . . . . . . . . . . . . . . . . . . . 86
(E) Contingent Obligations. . . . . . . . . . . . . . 88
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(F) Restricted Junior Payments. . . . . . . . . . . . 88
(G) Conduct of Business; Subsidiaries . . . . . . . . 89
(H) Acquisitions. . . . . . . . . . . . . . . . . . . 89
(I) Transactions with Shareholders and Affiliates . . 94
(J) Restriction on Fundamental Changes. . . . . . . . 94
(K) Sales and Leasebacks. . . . . . . . . . . . . . . 94
(L) Margin Regulations. . . . . . . . . . . . . . . . 95
(M) ERISA . . . . . . . . . . . . . . . . . . . . . . 95
(N) Issuance of Capital Stock . . . . . . . . . . . . 95
(O) Corporate Documents . . . . . . . . . . . . . . . 95
(P) Other Indebtedness. . . . . . . . . . . . . . . . 95
(Q) Fiscal Year . . . . . . . . . . . . . . . . . . . 95
(R) Subsidiary Covenants. . . . . . . . . . . . . . . 95
(S) Rate Hedging Obligations. . . . . . . . . . . . . 96
(T) Change of Deposit Accounts. . . . . . . . . . . . 96
6.4. Financial Covenants . . . . . . . . . . . . . . . . . . . . 96
(A) Defined Terms for Financial Covenants . . . . . . 96
(B) Interest Expense Coverage Ratio . . . . . . . . . 97
(C) Fixed Charge Coverage Ratio . . . . . . . . . . . 98
(D) Minimum EBITDA. . . . . . . . . . . . . . . . . . 98
(E) Maximum Leverage Ratio. . . . . . . . . . . . . . 99
(F) Calculations for Acquisition. . . . . . . . . . . 99
ARTICLE VII. DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . 99
7.1. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . 99
ARTICLE VIII. ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . .104
8.1. Termination of Commitments; Acceleration. . . . . . . . . .104
8.2. Defaulting Lender . . . . . . . . . . . . . . . . . . . . .104
8.3. Amendments. . . . . . . . . . . . . . . . . . . . . . . . .105
8.4. Preservation of Rights. . . . . . . . . . . . . . . . . . .106
ARTICLE IX. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . .107
9.1. Survival of Representations . . . . . . . . . . . . . . . .107
9.2. Governmental Regulation . . . . . . . . . . . . . . . . . .107
9.3. Performance of Obligations. . . . . . . . . . . . . . . . .107
9.4. Headings . . . . . . . . . . . . . . . . . . . . . . . . .108
9.5. Entire Agreement. . . . . . . . . . . . . . . . . . . . . .108
9.6. Several Obligations; Benefits of this Agreement . . . . . .108
9.7. Expenses; Indemnification . . . . . . . . . . . . . . . . .108
(A) Expenses. . . . . . . . . . . . . . . . . . . . .108
(B) Indemnity . . . . . . . . . . . . . . . . . . . .109
(C) Waiver of Certain Claims. . . . . . . . . . . . .110
(D) Survival of Agreements. . . . . . . . . . . . . .110
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9.8. Numbers of Documents. . . . . . . . . . . . . . . . . . . .110
9.9. Accounting; Changes in Agreement Accounting Principles. . .111
9.10. Severability of Provisions. . . . . . . . . . . . . . . . .111
9.11. Nonliability of Lenders . . . . . . . . . . . . . . . . . .111
9.12. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . .111
9.13. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY
TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . .112
(A) CONSENT TO JURISDICTION . . . . . . . . . . . . .112
(B) SERVICE OF PROCESS. . . . . . . . . . . . . . . .112
(C) WAIVER OF JURY TRIAL. . . . . . . . . . . . . . .112
(D) WAIVER OF BOND. . . . . . . . . . . . . . . . . .113
(E) ADVICE OF COUNSEL . . . . . . . . . . . . . . . .113
9.14. No Strict Construction. . . . . . . . . . . . . . . . . . .113
9.15. Subordination of Intercompany Indebtedness. . . . . . . . .113
ARTICLE X. THE AGENT AS THE LENDERS' CONTRACTUAL
REPRESENTATIVE 114
10.1. Appointment; Nature of Relationship . . . . . . . . . . . .114
10.2. Powers. . . . . . . . . . . . . . . . . . . . . . . . . . .115
10.3. General Immunity. . . . . . . . . . . . . . . . . . . . . .115
10.4. No Responsibility for Loans, Creditworthiness,
Collateral, Recitals, Etc . . . . . . . . . . . . . . . .115
10.5. Action on Instructions of Lenders . . . . . . . . . . . . .116
10.6. Employment of Agents and Counsel. . . . . . . . . . . . . .116
10.7. Reliance on Documents; Counsel. . . . . . . . . . . . . . .116
10.8. The Agent's Reimbursement and Indemnification . . . . . . .116
10.9. Rights as a Lender. . . . . . . . . . . . . . . . . . . . .116
10.10. Lender Credit Decision. . . . . . . . . . . . . . . . . . .117
10.11. Successor Agent . . . . . . . . . . . . . . . . . . . . . .117
10.12. Collateral Documents. . . . . . . . . . . . . . . . . . . .117
10.13. Delivery of Documents . . . . . . . . . . . . . . . . . . .117
ARTICLE XI. SETOFF; RATABLE PAYMENTS. . . . . . . . . . . . . . . . . .118
11.1. Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . .118
11.2. Ratable Payments. . . . . . . . . . . . . . . . . . . . . .118
11.3. Application of Payments . . . . . . . . . . . . . . . . . .118
11.4. Relations Among Lenders . . . . . . . . . . . . . . . . . .119
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . .120
12.1. Successors and Assigns. . . . . . . . . . . . . . . . . . .120
12.2. Participations. . . . . . . . . . . . . . . . . . . . . . .120
(A) Permitted Participants; Effect. . . . . . . . . .120
(B) Voting Rights . . . . . . . . . . . . . . . . . .120
(C) Benefit of Setoff . . . . . . . . . . . . . . . .121
12.3. Assignments . . . . . . . . . . . . . . . . . . . . . . . .121
(A) Permitted Assignments . . . . . . . . . . . . . .121
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(B) Effect; Effective Date. . . . . . . . . . . . . .122
(C) The Register. . . . . . . . . . . . . . . . . . .122
12.4. Confidentiality . . . . . . . . . . . . . . . . . . . . . .122
12.5. Dissemination of Information. . . . . . . . . . . . . . . .123
ARTICLE XIII. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . .123
13.1. Giving Notice . . . . . . . . . . . . . . . . . . . . . . .123
13.2. Change of Address . . . . . . . . . . . . . . . . . . . . .123
ARTICLE XIV. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . .123
EXHIBITS
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EXHIBIT A - Form of Borrowing Base Certificate
EXHIBIT B - Revolving Loan Commitments, Term Loan Commitments and
Acquisition Loan Commitments
EXHIBIT C1 - Form of Revolving Note
EXHIBIT C2 - Form of Term Note
EXHIBIT C3 - Form of Acquisition Loan Note
EXHIBIT D - Form of Subsidiary Security Agreement
EXHIBIT E - Form of Subsidiary Pledge Agreement
EXHIBIT F - Form of Assignment Agreement
EXHIBIT G - Form of Subsidiary Guarantee
EXHIBIT H - Money Transfer Instructions
EXHIBIT I - List of Closing Documents
EXHIBIT J - Form of Officer's Certificate
EXHIBIT K - Form of Compliance Certificate
EXHIBIT L - Form of Contribution Agreement
EXHIBIT M - Form of Assignment of Representations
EXHIBIT N - Form of Acquisition Consent Certificate
EXHIBIT O - Sample List of Acquisition Closing Documents
EXHIBIT P - Form of Subsidiary Depositary Agreement
EXHIBIT Q - Form of Subsidiary Lock Box Agreement
EXHIBIT R - Form of Borrower Pledge Agreement
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SCHEDULES
---------
SCHEDULE 1.1.1 - Permitted Existing Contingent Obligations
SCHEDULE 1.1.2 - Permitted Existing Indebtedness
SCHEDULE 1.1.3 - Permitted Existing Investments
SCHEDULE 1.1.4 - Permitted Existing Liens
SCHEDULE 5.3 - Conflicts; Governmental Consents
SCHEDULE 5.7 - Litigation; Loss Contingencies
SCHEDULE 5.8 - Corporate Structure; Subsidiaries
SCHEDULE 5.9 - Erisa Matters
SCHEDULE 5.14 - Accreditations, Permits, Cons, Health Facility Licenses
SCHEDULE 5.17 - Insurance
SCHEDULE 5.18 - Contingent Obligations
SCHEDULE 5.20 - Labor Matters; Compensation Agreements
SCHEDULE 5.22 - Environmental Matters
SCHEDULE 5.23 - Healthcare Regulatory Matters
SCHEDULE 6.3(I) - Transactions with Affiliates
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CREDIT AGREEMENT
This Credit Agreement dated as of June 21, 1996 is entered into among
Good Samaritan Supply Services, Inc., a South Dakota corporation, the
institutions from time to time a party hereto as Lenders, whether by execution
of this Agreement or an Assignment pursuant to SECTION 12.3 (an "ASSIGNMENT"),
and LaSalle National Bank, in its capacity as the contractual representative for
itself and the other Lenders. The parties hereto agree as follows:
ARTICLE I. DEFINITIONS
1.1 Certain Defined Terms. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined:
As used in this Agreement:
"ACCOUNT DEBTOR" means and includes the account debtor or obligor with
respect to any of the Receivables and/or the prospective purchaser with respect
to any contract right, and/or any party which enters into or proposes to enter
into any contract or other arrangement with a Loan Party.
"ACCREDITATION" means certification by a generally recognized independent
agency or other organization such as the JCAHO or other similar agency or
organization that a facility fully complies with the standards set by such
agency or organization for operation of such a facility.
"ACQUISITION" means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which any Loan Party (i) acquires
any going business or all or substantially all of the assets of any Person or
division thereof, whether through purchase of assets, merger or otherwise or
(ii) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of vote)
of the securities of a corporation which have ordinary voting power for the
election of directors (other than securities having such power only by reason of
the happening of a contingency), a majority (by percentage of voting power) of
the membership, ownership or other equity interests in a limited liability
company or a majority (by percentage of voting power) of the outstanding
partnership interests of a partnership (any such target business, assets,
corporation, partnership or the like being herein referred to as a "TARGET").
"ACQUISITION APPROVAL LENDERS" means Lenders whose Pro Rata Shares, in the
aggregate, are equal to or greater than eighty percent (80%); PROVIDED, HOWEVER,
that, in the event any of the Lenders shall have failed to fund its Pro Rata
Share of any Revolving Loan, Term Loan or Acquisition Loan requested by the
Borrower which such Lenders are obligated to fund under the terms of this
Agreement and any such failure has not been cured, then for so long as such
failure continues, "ACQUISITION APPROVAL LENDERS" means Lenders (excluding all
Lenders whose failure to fund their respective Pro Rata Shares of such Revolving
Loan, Term Loan or
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Acquisition Loan has not been so cured) whose Pro Rata Shares represent eighty
percent (80%) or more of the aggregate Pro Rata Shares of the remaining Lenders.
"ACQUISITION APPROVAL PACKAGE" means, with respect to any proposed
Acquisition, those documents and financial statements prepared or supplied by
the Borrower in connection with the Acquisition, including without limitation,
an information package regarding the operations and prospects of the Target, the
financial background of the Target, the required documents itemized in SECTION
6.3(H), and such other information as is relevant for the specifics of the
particular Target to inform the Lenders about its business, financial condition,
projections, operations, performance and properties of the Target, and
anticipated integration of the Target into the Borrower Corporate Group.
"ACQUISITION CLOSING DATE" means the date of the consummation of any
Permitted Acquisition of any Target under the terms of this Agreement.
"ACQUISITION CONSENT CERTIFICATE" is defined in SECTION 6.3(H) below.
"ACQUISITION DOCUMENTS" means all documents, instruments and agreements
entered into by any Loan Party in connection with Permitted Acquisitions.
"ACQUISITION LOAN" is defined in SECTION 2.1(b) below.
"ACQUISITION LOAN AVAILABILITY" means at any particular time prior to the
Conversion Date, the amount by which the Aggregate Acquisition Loan Commitment
at such time exceeds the aggregate outstanding principal amount of all
Acquisition Loans.
"ACQUISITION LOAN COMMITMENT" means, with respect to any Lender, the
obligation of such Lender to make one or more Acquisition Loans on an
Acquisition Closing Date pursuant to the terms and conditions of this Agreement,
and which shall not exceed its Acquisition Loan Commitment as set forth on
EXHIBIT B opposite such Lender's name under the heading, "Acquisition Loan
Commitment" or as indicated in the Assignment by which it became a Lender, in
each case as modified from time to time pursuant to the terms of this Agreement.
"ACQUISITION LOAN NOTE" means a promissory note, in substantially the form
of EXHIBIT C3 hereto, duly executed by the Borrower and payable to the order of
a Lender in the amount of its Acquisition Loan Commitment, including any
amendment, restatement, modification, renewal or replacement of such Acquisition
Loan Note.
"ACQUISITION LOAN TARGET DATE" means the date on which the Borrower shall
have had a positive Net Income (as defined in SECTION 6.4(A)) for each of the
preceding three consecutive calendar months (provided that each calendar month
shall end on or after April 30, 1996) for which financial statements have been
delivered to the Lenders.
2
"ACQUISITION SUBORDINATED DEBT" is defined in SECTION 6.3(H)(iii) below and
shall in any event include the Note dated June 1, 1996 in the original principal
amount of $1,022,700 issued by the Borrower to Amber Enterprises, Inc.
"ADDITIONAL EQUITY INVESTMENT" means each purchase by AMC from the Borrower
after the date hereof of additional common shares of the Borrower pursuant to
the terms of the Share Purchase Agreement, PROVIDED that the aggregate amount of
the Additional Equity Investments shall not exceed $2,000,000.
"ADJUSTED AMOUNT OF ELIGIBLE INVENTORY" means the Eligible Inventory of the
Borrower Corporate Group valued at the lower of cost determined on a first-in-
first-out basis (determined in accordance with Agreement Accounting Principles,
consistently applied) or market value less (i) the value of reserves which have
been recorded by the Borrower Corporate Group with respect to obsolete, dated,
slow-moving or excess Inventory and (ii) such other reserves as the Agent elects
to establish in accordance with its reasonable credit judgment (which credit
judgment shall be exercised in a manner that is not arbitrary or capricious).
"ADJUSTED AMOUNT OF ELIGIBLE RECEIVABLES" means the face amount outstanding
under the Borrower Corporate Group's Eligible Receivables, determined in
accordance with Agreement Accounting Principles consistently applied, adjusted
to reflect the amount that the Borrower reasonably calculates it expects to
receive with respect to the services performed or Inventory sold, including
adjustments or reductions that the Borrower reasonably believes may be required
by any Applicable Carrier or other Payor with respect to the reimbursable amount
for such services or Inventory, such adjustments being reasonably based upon the
Borrower Corporate Group's past claims history, agreements with such Applicable
Carrier or other Payor, communications with such Applicable Carrier or other
Payor regarding the reimbursable amount and/or coverage and eligibility for
reimbursement (such adjustments being referred to herein as the "CONTRACTUAL
ALLOWANCES"), less (i) all finance charges, service charges, late fees and other
fees, (ii) the value of any accrual which has been recorded by the Borrower with
respect to downward price adjustments, and (iii) such other reserves as the
Agent elects to establish in accordance with its reasonable credit judgment
(which credit judgment shall be exercised in a manner that is not arbitrary or
capricious).
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount of
the several Loans made by the Lenders to the Borrower of the same Type and, in
the case of Eurodollar Advances, for the same Interest Period.
"AFFECTED LENDER" is defined in SECTION 2.20 hereof.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act)
of greater than twenty percent (20%) of any class of voting securities (or other
voting interests) of the controlled Person or possesses, directly or indirectly,
3
the power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract or otherwise.
"AGENT" means LaSalle National Bank in its capacity as contractual
representative for itself and the Lenders pursuant to ARTICLE X hereof and any
successor Agent appointed pursuant to ARTICLE X hereof.
"AGGREGATE ACQUISITION LOAN COMMITMENT" means the aggregate of the
Acquisition Loan Commitments of all the Lenders, as modified from time to time
pursuant to the terms hereof or to give effect to any applicable Assignment.
The initial Aggregate Acquisition Loan Commitment is Five Million and 00/100
Dollars ($5,000,000).
"AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the Revolving
Loan Commitments of all the Lenders, as modified from time to time pursuant to
the terms hereof or to give effect to any applicable Assignment. The initial
Aggregate Revolving Loan Commitment is Five Million and 00/100 Dollars
($5,000,000).
"AGGREGATE TERM LOAN COMMITMENT" means the aggregate of the Term Loan
Commitments of all the Lenders, as modified from time to time pursuant to the
terms hereof or to give effect to any applicable Assignment. The initial
Aggregate Term Loan Commitment is Five Million and 00/100 Dollars ($5,000,000).
"AGREEMENT" means this Credit Agreement, as it may be amended, restated or
otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect as of the Closing Date, applied in a manner consistent
with that used in preparing the audited financial statements of the Borrower, or
with respect to a Target, in preparing the financial statements of such Target
for the fiscal year immediately preceding the Acquisition of it by the Borrower
delivered to the Agent and the Lenders pursuant to the provisions of
SECTION 6.3(H).
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Prime Rate for such day and (ii) the
sum of (a) the Federal Funds Effective Rate for such day and (b) one-half of one
percent (1/2%) per annum.
"AMC" means American Medserve Corporation, a Delaware corporation, and its
successors and assigns, including a debtor-in-possession on behalf of AMC.
"APPLICABLE CARRIER" means, with respect to any Person: (a) a private
insurance company, health maintenance organization, preferred provider
organization or other health plan acceptable to the Agent and the Required
Lenders, which in each case provides reimbursement to the applicable patient for
the services performed by or Inventory sold by the applicable Person; (b) a
Payor for whom Interplan is a paying agent; or (c) Interplan.
4
"APPLICABLE EURODOLLAR MARGIN" as at any date of determination, shall be
the rate per annum then applicable to Eurodollar Loans determined in accordance
with the provisions of SECTION 2.8(b).
"APPLICABLE FLOATING RATE MARGIN" as at any date of determination, shall be
the rate per annum then applicable to Base Rate Loans determined in accordance
with the provisions of SECTION 2.8(b).
"APPLICABLE LETTER OF CREDIT FEE" as at any date of determination, shall be
the rate per annum then applicable in the determination of the amount payable
under SECTION 2.25 with respect to Letters of Credit, determined in accordance
with the provisions of SECTION 2.8(b).
"APPLICABLE MARGIN(S)" shall have the meaning ascribed to that term in
SECTION 2.8(b).
"ASSET SALE" means, with respect to any Person, (i) the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction and including the sale or
other transfer of any of the Capital Stock of any Subsidiary of such Person) or
(ii) the issuance, sale, conveyance, disposition or other transfer by such
Person of any Capital Stock of such Person or ownership, membership or other
equity interests in such Person; PROVIDED, HOWEVER, that notwithstanding the
foregoing, the term "ASSET SALE" shall not include the sale, lease, conveyance,
disposition or other transfer of any assets in the ordinary course of business.
"ASSIGNMENT" is defined in the preamble to this Agreement.
"AUTHORIZED OFFICER" means, with respect to any Person, any of such
Person's chief executive officer, chief financial officer, treasurer or
controller, acting singly.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan) in respect of which the Borrower or any
other member of the Controlled Group is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.
"BORROWER" means Good Samaritan Supply Services, Inc., a South Dakota
corporation, and its successors and assigns, including a debtor-in-possession on
behalf of the Borrower.
"BORROWING BASE" means, as of any date of calculation, an amount, as set
forth on the most current Borrowing Base Certificate delivered to the Agent by
the Borrower, equal to: (i) seventy percent (70%) of the Adjusted Amount of
Eligible Receivables of the Borrower Corporate Group, plus (ii) fifty percent
(50%) of the Adjusted Amount of Eligible Inventory of the Borrower Corporate
Group. The Agent shall give the Borrower commercially reasonable notice, taking
into account all facts and circumstances known by the Agent at such time, of any
change in the criteria (or the application thereof) to determine the eligibility
of any Receivables or Inventory or to the establishment by the Agent of any
reserves which, in any such case, might reasonably be expected to materially
decrease the amount of the Borrowing Base.
5
"BORROWING BASE CERTIFICATE" means a certificate of the Borrower, in
substantially the form of EXHIBIT A attached hereto and made a part hereof,
setting forth the Borrowing Base of the Borrower Corporate Group and the
component calculations thereof.
"BORROWER CORPORATE GROUP" means, as of any given time, the Borrower and
all of the Borrower's direct and indirect Subsidiaries.
"BORROWING DATE" means a date on which an Advance is made hereunder.
"BORROWING NOTICE" is defined in SECTION 2.8 hereof.
"BUSINESS ACTIVITY REPORT" means (A) a Notice of Business Activities Report
from the State of Minnesota, Department of Revenue, or (B) any similar report
required by any other State relating to the ability of any Loan Party to enforce
its accounts receivable claims against account debtors located in any such
state.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Chicago and on which
dealings in United States dollars are carried on in the London interbank market
and (ii) for all other purposes a day (other than a Saturday or Sunday) on which
banks are open for business in Chicago, Illinois.
"CAPITAL EXPENDITURES" is defined in SECTION 6.4(A) hereof.
"CAPITALIZED LEASE " of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CAPITAL STOCK", with respect to any Person, means any capital stock of
such Person, regardless of class or designation, and all warrants, options,
purchase rights, conversion or exchange rights, voting rights, calls or claims
of any character with respect thereto.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, or its branches or agencies and having capital and surplus in an
aggregate amount not less than $500,000,000 (fully protected against currency
fluctuations for any such deposits with a term of more than ten (10) days);
(iii) shares of money market, mutual or similar funds having net assets
6
in excess of $500,000,000 and the investments of which are limited to investment
grade securities (i.e., securities rated at least Baa by Xxxxx'x Investors
Service, Inc. or at least BBB by Standard & Poor's Corporation or carrying an
equivalent rating, by a nationally recognized rating agency if both of the
aforementioned rating agencies cease publishing investment ratings) and
(iv) commercial paper of United States and foreign banks and bank holding
companies and their subsidiaries and United States and foreign finance,
commercial industrial or utility companies (other than any member of the
Borrower Corporate Group or any Affiliate thereof) which, at the time of
acquisition, are rated A-1 (or better) by Standard & Poor's Corporation or P-1
(or better) by Xxxxx'x Investors Services, Inc. or carrying an equivalent rating
by a nationally recognized rating agency if both of the aforementioned rating
agencies cease publishing investment ratings; PROVIDED, that the maturities of
such Cash Equivalents shall not exceed 365 days.
"CASH FLOW PERIOD" means the four consecutive fiscal quarters ending
December 31, 1996 and thereafter, as separate periods, each period of four
consecutive fiscal quarters ending on December 31 of each calendar year.
"CHAMPUS" means the Civilian Health and Medical Program of the Uniformed
Services established pursuant to 10 U.S.C. Sections 1071 ET SEQ. and any
Governmental Authority succeeding to the functions thereof.
"CHAMPUS CERTIFICATION" means certification by CHAMPUS or an agency or
entity under contract with CHAMPUS that the applicable facility fully complies
with all conditions of participation set forth in CHAMPUS Regulations.
"CHAMPUS RECEIVABLES" means a Receivable with respect to which the Account
Debtor is a Governmental Authority or agent thereof obligated thereunder
pursuant to CHAMPUS Regulations.
"CHAMPUS REGULATIONS" means, collectively, all federal statutes affecting
the medical benefits program for specified categories of individuals qualified
for CHAMPUS benefits by virtue of their relationship to the U.S. Army, Navy, Air
Force, Marine Corps, Coast Guard, Commissioned Corps of the U.S. Public Health
Service and Commissioned Corps of the National Oceanic and Atmospheric
Administration established by 5 U.S.C. Section 301 and 10 U.S.C. Sections 1079
and 1086, together with all applicable provisions of all rules, regulations,
manuals, orders and administrative reimbursement and other guidelines of all
Governmental Authorities promulgated pursuant to or in connection with any of
the foregoing (whether or not having the force of law), as each may be amended,
supplemented, or otherwise modified from time to time.
"CHANGE" is defined in SECTION 3.2 hereof.
"CHANGE OF CONTROL" means an event or series of events by which:
(a) except in respect of a transaction permitted pursuant to the terms of
SECTION 6.3(J) (other than SECTION 6.3(B)(v)), (i) the Borrower ceases to be
the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange
Act) of more than fifty percent (50%) of the
7
combined voting power of each of its Subsidiaries' outstanding Capital Stock
ordinarily having the right to vote at an election of directors or (ii) the
Borrower ceases to have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the board of
directors of each of its Subsidiaries;
(b) AMC ceases to be the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act), directly or indirectly, of at least thirty-
five percent (35%) of the combined voting power of the Borrower's outstanding
Capital Stock ordinarily having the right to vote at an election of directors;
(c) AMC ceases to have the right or ability by voting power, contract or
otherwise to elect or designate for election not less than forty percent (40%)
of the board of directors of the Borrower; or
(d) AMC and the Foundation cease to be the "beneficial owner" (as defined
in Rule 13d-3 under the Securities Exchange Act), directly or indirectly, of at
least eighty percent (80%) of the combined voting power of the Borrower's
outstanding Capital Stock ordinarily having the right to vote at an election of
directors.
"CLOSING DATE" means June 21, 1996, or such other date as shall be mutually
agreeable to the Borrower, the Agent and the Lenders.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, including any rules or regulations promulgated thereunder.
"COLLATERAL" means all property and interests in property now owned or
hereafter acquired by any Loan Party in or upon which a security interest, lien
or mortgage is granted to the Agent, for the benefit of the Holders of Secured
Obligations, or to the Agent, for the benefit of the Lenders, whether under any
Security Agreement, under any of the other Collateral Documents or under any of
the other Loan Documents.
"COLLATERAL DOCUMENTS" means all agreements, instruments and documents
executed in connection with this Agreement, including, without limitation, the
Pledge Agreements, the Subsidiary Guarantees, the Security Agreements, the Lock
Box Agreements, the Depositary Agreements, the Concentration Account Agreement,
the Restricted Account Agreements and all other security agreements, loan
agreements, notes, guarantees, subordination agreements, pledges, powers of
attorney, consents, assignments, contracts, fee letters, notices, leases and
financing statements, whether heretofore, now or hereafter executed by or on
behalf of any Loan Party and delivered to the Agent or any of the Lenders,
together with all agreements and documents referred to therein or contemplated
thereby.
"COLLECTION ACCOUNT" means each lock box account maintained by the Borrower
or any other Loan Party, subject to the Lock Box Agreement, for the collection
of Receivables and other proceeds of Collateral.
8
"COLORADO ACQUISITION" means the acquisition by the Borrower of
substantially all of the assets of Professional Pharmacy Services, Inc. pursuant
to and in accordance with that certain Asset Purchase Agreement dated November
15, 1995 between Professional Pharmacy Services, Inc. and the Borrower, as
amended by Side Letter dated January 29, 1996.
"COMMITMENTS" means the Revolving Loan Commitments, the Term Loan
Commitments and/or the Acquisition Loan Commitments, as applicable in the
context used.
"COMMISSION" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"CON" means a Certificate of Need or other license or Permit issued by a
health facilities planning board or similar agency or body required for the
construction or expansion of, investment in, or transfer of ownership relating
to a health facility.
"CONCENTRATION ACCOUNT" means each account maintained at LaSalle into which
collections of Receivables and other cash proceeds of Collateral are transferred
pursuant to the terms of a Lock Box Agreement or otherwise and as described in
SECTION 2.12.
"CONCENTRATION ACCOUNT AGREEMENT" means an agreement executed and delivered
by the Borrower and/or any other member of Borrower Corporate Group, LaSalle and
the Agent with respect to the Concentration Accounts in form and substance
acceptable to the Agent, as it may be amended, restated or otherwise modified
from time to time.
"CONCENTRATION ACCOUNT BLOCKAGE DATE" means the date, following the
occurrence of a Default on which the Agent or the Required Lenders, in the
Agent's or the Required Lenders' sole discretion, instruct(s) LaSalle as
described in the Concentration Account Agreement to remit, during the
continuance of such Default, all amounts deposited in the Concentration Accounts
to the Agent or as the Agent shall direct.
"CONTINGENT OBLIGATION", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other monetary obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability of
another directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable, including Contractual Obligations
(contingent or otherwise) arising through any agreement to purchase, repurchase,
or otherwise acquire such Indebtedness, obligation or liability or any security
therefor, or to provide the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received.
"CONTINGENT PURCHASE PRICE PAYMENTS" means any deferred purchase price
payments, earnouts, or performance based payments made in connection with any
Permitted Acquisition.
9
"CONTRACTUAL ALLOWANCES" is defined in the definition of Adjusted Amount of
Eligible Receivables above.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of
any equity or debt securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument, in any case in writing, to which that
Person is a party or by which it or any of its properties is bound, or to which
it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower; (ii) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the Code) with the Borrower; and (iii) a member
of the same affiliated service group (within the meaning of Section 414(m) of
the Code) as the Borrower, any corporation described in CLAUSE (i) above or any
partnership or trade or business described in CLAUSE (ii) above.
"CONTROLLED SUBSTANCES LICENSES" means any state licenses, permits,
approvals, registrations or other authorizations required to distribute
controlled substances.
"CONVERSION/CONTINUATION NOTICE" is defined in SECTION 2.10(D) hereof.
"CONVERSION DATE" means the earlier of (i) June 21, 1998, (ii) the date on
which (x) the Borrower has obtained Term Loans in an aggregate principal amount
equal to $5,000,000 (whether or not any portion of the Term Loans have been
repaid) and (y) the aggregate principal amount outstanding of Acquisition Loans
is $5,000,000 and (iii) the date on which the Commitments are terminated
pursuant to Section 2.6 or Section 8.1.
"CURE LOANS" is defined in SECTION 8.2(iii) hereof.
"CURRENT ASSETS" is defined in SECTION 6.4(A) hereof.
"CUSTOMARY PERMITTED LIENS" means:
(i) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other similar
Liens imposed by law created in the ordinary course of business for amounts
not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with Agreement
Accounting Principles;
(ii) Liens (other than Environmental Liens and Liens in favor of
the PBGC) incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance or other
types of social security benefits or to
10
secure the performance of bids, tenders, sales, contracts (other than for
the repayment of borrowed money), surety, appeal and performance bonds;
PROVIDED that (A) all such Liens do not in the aggregate materially detract
from the value of the applicable Person's or its Subsidiary's assets or
property taken as a whole or materially impair the use thereof in the
operation of the businesses taken as a whole, and (B) all Liens securing
bonds to stay judgments or in connection with appeals do not secure at any
time an aggregate amount for all Loan Parties exceeding $100,000;
(iii) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the use
of real property which do not interfere with the ordinary conduct of the
business of any Loan Party;
(iv) Liens of attachment or judgment with respect to judgments,
writs or warrants of attachment, or similar process against any Loan Party
which do not constitute a Default under SECTION 7.1(h);
(v) Liens arising from leases or subleases granted to others which
do not interfere in any material respect with the respective business of
any Loan Party;
(vi) Liens (other than Environmental Liens and Liens in favor of
the PBGC) arising in the ordinary course of business securing the payment
of taxes, assessments, or governmental charges or other claims, either not
yet due or the validity of which is being contested in good faith by
appropriate proceedings, and as to which Borrower shall, if appropriate
under Agreement Accounting Principles, have set aside on its books and
records adequate reserves to the extent that (a) the amounts secured are
not prohibited by the terms of SECTION 6.2(C) and (b) the aggregate amount
of such claims or taxes together with all amounts secured by Liens pursuant
to CLAUSE (vii) below does not exceed $100,000 in the aggregate for all
Loan Parties;
(vii) Liens arising in the ordinary course of business for amounts
not yet due or payable to the extent that (a) such Liens do not involve any
deposits or advances for borrowed money or the deferred purchase price of
property or services and (b) the aggregate amount secured by such Liens
together with all amounts secured by Liens pursuant to CLAUSE (vi) above
does not exceed $100,000 in the aggregate for all Loan Parties; and
(viii) any interest or title of the lessor in the property subject to
any operating lease entered into by any Loan Party in the ordinary course
of business.
"DEA LICENSE" means an authorization or license to distribute
pharmaceuticals issued by the Federal Drug Enforcement Agency.
"DECISION PERIOD" is defined in SECTION 6.2(G) hereof.
11
"DECISION RESERVE" is defined in SECTION 6.2(G) hereof.
"DEFAULT" means an event described in ARTICLE VII hereof.
"DEFAULT RATE" is defined in SECTION 2.11 hereof.
"DEPOSITARY ACCOUNT" means each depositary account maintained by the
Borrower or any other Loan Party pursuant to a Depositary Agreement for the
collection of Medicare Receivables and Medicaid Receivables.
"DEPOSITARY AGREEMENT(S)" means, individually or collectively, as
applicable, the Depositary Agreement executed by and among the Borrower, First
Bank National Association and the Agent relating to the establishment and
maintenance of a lock box and lock box account for the collection of Medicare
Receivables and Medicaid Receivables and any written agreement between any other
Loan Party, the Agent and a bank at which such Loan Party maintains a Depositary
Account, which Subsidiary Depositary Agreement shall be in substantially the
form of Exhibit P attached hereto, in each case as amended, restated or
otherwise modified from time to time.
"DOL" means the United States Department of Labor and any Person succeeding
to the functions thereof.
"EBITDA" is defined in SECTION 6.4(A) hereof.
"ELIGIBLE INVENTORY" means Inventory which is held for sale or lease or
furnished under any contract of service which is at all times and shall continue
to be acceptable to the Agent in all respects. Standards of eligibility may be
fixed and revised from time to time by the Agent in the Agent's reasonable
business judgment (which credit judgment shall be exercised in a manner that is
not arbitrary or capricious). In general, without limiting the foregoing, the
following Inventory is not Eligible Inventory:
(i) (to the extent not provided for by reserves described in the
definition of the Adjusted Amount of Eligible Inventory) Inventory which is
obsolete, not in good condition, not either currently usable or currently
saleable in the ordinary course of business or does not meet all material
standards imposed by any Governmental Authority having regulatory authority
over such item of Inventory, its use or its sale;
(ii) Inventory which the Agent determines, in the exercise of its
reasonable discretion (which discretion shall not be exercised in a manner
that is arbitrary or capricious), to be unacceptable because it is beyond
the manufacturer's dating or because a recall notice has been issued with
respect thereto;
(iii) Inventory consisting of packaging material, supplies, raw
materials and work in process;
12
(iv) except to the extent provided in CLAUSE (viii) below,
Inventory (a) which is consigned to a third party for sale or (b) which is
on consignment from a third party to a Loan Party for sale;
(v) Inventory which consists of goods in transit;
(vi) Inventory which is subject to a Lien in favor of any Person
other than the Agent;
(vii) Inventory with respect to which the Agent does not have a
first and valid fully perfected security interest;
(viii) unless subject to a consignment agreement as set forth in
Exhibit D to the Security Agreement and a financing statement as set forth
therein, Inventory maintained by the Loan Parties at any health care
facility (a) for such facility's emergency use (including in such health
care facility's "stat boxes" or emergency kits) or (b) for dispensing to a
patient at such health care facility or for any other purpose (whether or
not consigned to such health care facility for sale) to the extent that the
aggregate value (valued at the lower of cost determined on a first-in-
first-out basis) of such Inventory maintained by all of the Loan Parties at
all such health care facilities exceeds $10,000;
(ix) unless covered by clause (viii) above, Inventory which is not
located either (a) on a Loan Party's owned premises in the United States
listed on Schedule 2 to its Security Agreement or (b) (1) on a Loan Party's
leased premises in the United States listed on Schedule 2-A to its Security
Agreement, (2) in warehouses or with other bailees in the United States, in
each case as listed on Schedule 2-A to its Security Agreement or (3) in
other leased premises, warehouses or with other bailees in the United
States not listed on Schedule 2-A to its Security Agreement permitted to be
established under its Security Agreement or established in connection with
a Permitted Acquisition, in each case under the immediately preceding
clauses (1) through (3) in connection with which the Agent shall have
received landlord, mortgagee, bailee and/or warehousemen's access and lien
waiver agreements, as applicable, in each case in form and substance
acceptable to the Agent.
(x) Inventory which is evidenced by a Receivable;
(xi) Inventory which is a retail pharmacy or other retail facility
consisting of general sundries or floor stock (including school supplies,
stationery, sun glasses and small gift items but excluding greeting cards,
wrapping paper, paperback books, magazines, weekly newspapers), edible
Inventory (including candy, gum and beverages), toiletries (including
shaving creams, razor blades, deodorants, hygiene products), cosmetics,
perfumes, colognes, and Inventory consisting of photo processing items;
(xii) Inventory consisting of medical equipment for rental and/or
sale to customers; provided that notwithstanding the provisions of this
clause (xii), there shall be
13
included as "Eligible Inventory" the medical equipment held for sale by the
Loan Parties with respect to their respective "home health care" units
which otherwise constitutes Eligible Inventory including, without
limitation, supports, chairs, portable commodes, wheelchairs and hospital
beds; and
(xiii) Inventory which is not in conformity in all material respects
with the representations and warranties made to the Agent with respect
thereto whether contained in this Agreement or a Security Agreement.
Without limiting the foregoing, (1) Inventory of any Loan Party which is
acquired pursuant to a Permitted Acquisition shall not be deemed Eligible
Inventory unless and until the Agent and the Required Lenders, after concluding
any due diligence they reasonably deem necessary, shall be satisfied as to the
condition thereof and that such Inventory would otherwise meet the standards of
eligibility set forth herein (including, without limitation, perfection of the
Agent's security interests in such Inventory) but for the fact that it was
acquired by the applicable Loan Party outside of the ordinary course of
business, (2) Inventory acquired pursuant to such Permitted Acquisition may be
deemed Eligible Inventory from and after such Permitted Acquisition if the
foregoing determinations have been made to the Agent's and the Required Lenders'
satisfaction and (3) Inventory acquired by the Borrower from Amber Enterprises,
Inc. pursuant to the Omaha Asset Purchase Agreement shall be deemed Eligible
Inventory if and to the extent that such Inventory would otherwise meet the
standards of eligibility set forth herein (including, without limitation,
perfection of the Agent's security interest in such Inventory) but for the fact
that it was acquired by the Borrower outside of the ordinary course of business.
"ELIGIBLE RECEIVABLES" means Receivables created in the ordinary course of
business arising out of the sale of goods or rendition of services, which
Receivables are and at all times shall continue to be acceptable to the Agent in
all respects. Standards of eligibility may be fixed and revised from time to
time by the Agent in the Agent's reasonable credit judgment (which credit
judgment shall be exercised in a manner that is not arbitrary or capricious).
In general, without limiting the foregoing, the following Receivables are not
Eligible Receivables:
(i) Receivables (other than Perfected Government Receivables) with
respect to which the Account Debtor is not an Applicable Carrier;
(ii) Receivables (other than Perfected Government Receivables)
which remain unpaid one hundred twenty (120) days after the date of the
original applicable invoice;
(iii) Perfected Government Receivables which remain unpaid one
hundred eighty (180) days after the date of the original applicable
invoice;
(iv) all Receivables (other than Perfected Government Receivables)
owing by a single Account Debtor (including a Receivable which remains
unpaid fewer than the number of days set forth in clause (ii) above) if
twenty-five percent (25%) of the balance owing by such Account Debtor to
all members of the Borrower Corporate Group, calculated without taking into
account any credit balances of such Account Debtor, (y)
14
remains unpaid one hundred twenty (120) days after the date of the original
applicable invoice or (z) has otherwise become, or has been determined by
the Agent to be, ineligible;
(v) Perfected Government Receivables owing by a single Account
Debtor (including a Receivable which remains unpaid fewer than the
applicable number of days set forth in clause (iii) above) if seventy
percent (70%) of the balance owing by such Account Debtor to all members of
the Borrower Corporate Group, calculated without taking into account any
credit balances of such Account Debtor, (y) remains unpaid one hundred
eighty (180) days after the date of the original applicable invoice or (z)
has otherwise become, or has been determined by the Agent to be,
ineligible;
(vi) (x) Receivables, other than Perfected Government Receivables
and Receivables from the Society, from any single Account Debtor and its
Affiliates which otherwise constitute Eligible Receivables comprising more
than fifteen percent (15%) of all Eligible Receivables of all members of
the Borrower Corporate Group but only to the extent that such Receivables
exceed such fifteen percent amount and (y) Receivables from the Society
which otherwise constitute Eligible Receivables comprising more than fifty
percent (50%) of all Eligible Receivables of the Borrower Corporate Group
but only to the extent such Receivables exceed such fifty percent amount;
(vii) Receivables (other than Receivables from the Society) with
respect to which the Account Debtor is a director, officer, employee,
Subsidiary or Affiliate of any member of the Borrower Corporate Group;
(viii) Receivables, other than Perfected Government Receivables
consisting of Medicare Receivables or Medicaid Receivables, with respect to
which the Account Debtor is any federal Governmental Authority, the United
States of America or any state thereof, or, in each case, any department,
agency, instrumentality or municipality thereof, unless with respect to any
such Receivable, the applicable Loan Party has complied to the Agent's
satisfaction with the provisions of the Federal Assignment of Claims Act or
other applicable statutes, including, without limitation, executing and
delivering to the Agent all statements of assignment and/or notifications
which are in form and substance acceptable to the Agent and which are
deemed necessary by the Agent to effectuate the assignment to the Agent on
behalf of the Lenders of such Receivables;
(ix) Receivables not denominated in U.S. dollars or with respect to
which the Account Debtor is not a resident of the United States unless the
Account Debtor has supplied the applicable Loan Party with an irrevocable
letter of credit, issued by a financial institution satisfactory to the
Agent, sufficient to cover such Receivable in form and substance
satisfactory to the Agent;
(x) Receivables with respect to which the Account Debtor (a) has
asserted or is reasonably likely to assert a counterclaim, including,
without limitation, any periodic reconciliation of such Receivable by such
patient or Payor with respect thereto (other
15
than in respect of Contractual Allowances), (b) has a right of setoff or
(c) has a receivable owing from the applicable Loan Party but only to the
extent of such counterclaim, setoff or receivable;
(xi) Receivables for which the prospect of payment or performance
by the Account Debtor is or will be impaired (including, without
limitation, as a result of the deterioration of the funding sources or
funding status of any Governmental Authority in connection with any
Government Receivables) as determined by the Agent in the exercise of its
reasonable credit judgment (which credit judgment shall not be exercised in
a manner that is arbitrary or capricious);
(xii) Receivables with respect to which the Agent does not have a
first and valid fully perfected and enforceable security interest
(including, without limitation, such Receivables arising from the
assignment to the applicable Loan Party of any Insurance Claims);
(xiii) Receivables with respect to which the applicable Account
Debtor is the subject of bankruptcy or a similar insolvency proceeding, has
been dissolved or has made an assignment for the benefit of creditors or
whose assets have been conveyed to a receiver or trustee;
(xiv) Receivables with respect to which the Account Debtor's
obligation to pay the Receivable is conditional upon the Account Debtor's
approval or is otherwise subject to any repurchase obligation or return
right, as with sales made on a xxxx-and-hold, guaranteed sale, sale-and-
return, sale on approval (except with respect to (a) Receivables in
connection with which Account Debtors are entitled to return Inventory on
the basis of the quality of such Inventory or (b) Perfected Government
Receivables in connection with which the patient or applicable health care
facility is entitled to return the unused portion or non-dispensed portion
of such Inventory in the ordinary course and pursuant to requirements of
the applicable Government Authority) or consignment basis;
(xv) Receivables with respect to which the Account Debtor is
located in Minnesota or any other jurisdiction which adopts a statute or
other requirement with respect to which any Person that obtains business
from within such jurisdiction or is otherwise subject to such
jurisdiction's tax law requiring such Person to file a Business Activity
Report or make any other required filings in a timely manner in order to
enforce its claims in such jurisdiction's courts or arising under such
jurisdiction's laws; provided, however, such Receivables shall nonetheless
be eligible if the applicable Loan Party has filed a Business Activity
Report (or other applicable report) with the applicable state office or is
qualified to do business in such jurisdiction and, at the time the
Receivable was created, was qualified to do business in such jurisdiction
or had on file with the applicable state office a current Business Activity
Report (or other applicable report);
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(xvi) Receivables with respect to which the Account Debtor's
obligation does not constitute its legal, valid and binding obligation,
enforceable against it in accordance with its terms;
(xvii) Receivables with respect to which the applicable Loan Party
has not yet dispensed or shipped the applicable goods or performed the
applicable service;
(xviii) Receivables which the Agent, exercising reasonable discretion
(which discretion shall not be exercised in a manner that is arbitrary or
capricious), has determined to be unacceptable to it;
(xix) any Receivable which is not in conformity in all material
respects with the representations and warranties made in the Loan Documents
with respect thereto whether contained in this Agreement or a Security
Agreement;
(xx) Receivables in connection with which the applicable Loan Party
has not complied with all material requirements contained in the charter
and by-laws or other organizational or governing documents of the
applicable Loan Party, and any law, rule or regulation, or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon the applicable Loan Party or any of its
property or to which the applicable Loan Party or any of its property is
subject, including, without limitation, all laws, rules, regulations and
orders of any Governmental Authority or judicial authority relating to
truth in lending, billing practices, fair credit reporting, equal credit
opportunity, debt collection practices and consumer debtor protection,
applicable to such Receivable (or any related contracts) or affecting the
collectability of such Receivables to the extent that (x) such
noncompliance may result in such Receivable being deemed invalid or
uncollectible, (y) such noncompliance impairs the Agent's ability to
realize on its security interest therein or (z) such noncompliance impairs
the value of such Receivable;
(xxi) Receivables in connection with which the applicable Loan
Party or any other party to such Receivable is in default in the
performance or observance of any of the terms thereof in any material
respect; and
(xxii) Receivables with respect to which (a) the applicable Loan
Party has not received an enforceable assignment of the applicable
patient's claim or (b) the applicable Loan Party's right to receive payment
from the Applicable Carrier or other Payor is not mature.
Without limiting the foregoing, (i) Receivables of any Loan Party which are
acquired pursuant to a Permitted Acquisition shall not be deemed Eligible
Receivables unless and until the Agent and the Required Lenders, after
concluding any due diligence they reasonably deem necessary, shall be satisfied
as to the quality and creditworthiness thereof and that such Receivables would
otherwise meet the standards of eligibility set forth herein (including, without
limitation, perfection and priority of the Agent's security interests in such
Receivables) but for the fact that
17
they were acquired by the Loan Party outside of the ordinary course of business
and (ii) Receivables acquired pursuant to such Permitted Acquisition may be
deemed Eligible Receivables from and after such Permitted Acquisition if the
foregoing determinations have been made to the Agent's and the Required Lenders'
satisfaction.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law that are federal, state and local laws, ordinances, rules,
regulations, Permits, licenses or other binding determination of any
Governmental Authority relating to, imposing liability or standards concerning,
or otherwise addressing the environment (including, without limitation, those
applicable to the disposal of medical waste), health and/or protection of worker
health or safety, including but not limited to the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq., the
Occupational Safety and Health Act of 1970, 29 U.S.C. Sections 651 et seq, the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 ET SEQ.,
and the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Sections
136 et seq, public health codes and Health License requirements, in each case
including any amendments thereto, any successor statutes, and any regulations
promulgated thereunder, and any state or local equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any governmental entity for
(a) any liability under Environmental, Health or Safety Requirements of Law, or
(b) damages arising from, or costs incurred by such governmental entity in
response to, a release or threatened release of a contaminant (including,
without limitation, any medical waste) into the environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of
law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EURODOLLAR ADVANCE" means an Advance which bears interest at the
Eurodollar Rate.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Loan for the
relevant Interest Period, the rate determined by the Agent to be the rate at
which deposits in U.S. dollars are offered by LaSalle to first-class banks in
the London interbank market at approximately 11 a.m. (London time) two Business
Days prior to the first day of such Interest Period, in the approximate amount
of LaSalle's relevant Eurodollar Loan and having a maturity approximately equal
to such Interest Period, as adjusted for Reserves.
"EURODOLLAR LOAN" means a Loan, or portion thereof, which bears interest at
the Eurodollar Rate.
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"EURODOLLAR RATE" means, with respect to a Eurodollar Loan for the relevant
Interest Period, the Eurodollar Base Rate applicable to such Interest Period
PLUS the Applicable Eurodollar Margin as in effect on the first day of such
Interest Period. The Eurodollar Rate shall be rounded to the next higher
multiple of 1/16 of 1% if the rate is not such a multiple.
"EXCESS CASH FLOW" means, for any Cash Flow Period, an amount equal to the
Borrower Corporate Group's consolidated (i) earnings before interest expense,
tax expense, depreciation and amortization for such period, PLUS (ii) the net
reduction, if any, in Working Capital during such period, MINUS, (iii) the net
increase, if any, in Working Capital during such period, MINUS (iv) current (not
deferred) income taxes, whether paid in cash or accrued, MINUS (v) Capital
Expenditures, whether paid in cash or accrued during such period, MINUS (vi)
Interest Expense for such period, MINUS (vii) scheduled amortization of the
principal portion of the Term Loans and the Acquisition Loans and scheduled
amortization of the principal portion of all other Indebtedness of Borrower
Corporate Group during such period, MINUS (viii) the aggregate amount (without
duplication) of (x) cash dividends and/or cash redemptions paid during such
period with respect to all of the Loan Parties' Capital Stock and permitted
pursuant to SECTION 6.3(F), (y) Restricted Junior Payments (other than
Contingent Purchase Price Payments) paid during such period pursuant to SECTION
6.3(F) and (z) Contingent Purchase Price Payments required to be paid with
respect to such period (but only to the extent thereafter actually paid) and
permitted pursuant to SECTION 6.3(F), MINUS (ix) all prepayments of Loans made
(other than ordinary course repayments of the Revolving Loans), PLUS or MINUS
(x) reductions or increases in long-term assets, as calculated in accordance
with Agreement Accounting Principles and not otherwise accounted for herein
(excluding therefrom reductions resulting in Net Cash Proceeds for which the
Lenders have received a mandatory prepayment pursuant to SECTION 2.5(B)(i)(a)),
PLUS or MINUS (xi) increases or decreases in long-term liabilities, as
calculated in accordance with Agreement Accounting Principles and not otherwise
accounted for herein. All such amounts shall be calculated assuming that each
Loan Party has conducted their respective businesses in the ordinary course and
in accordance with past practices.
"EXCLUDED INSURANCE PROCEEDS" is defined in SECTION 6.2(G) hereof.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum, equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"FEES" is defined in SECTION 6.4(A) hereof.
"FIXED CHARGE COVERAGE RATIO" is defined in SECTION 6.4(A) hereof.
19
"FLOATING RATE" means, for any day, a rate per annum, equal to (i) the
Alternate Base Rate for such day PLUS (ii) the Applicable Floating Rate Margin,
changing when and as the Alternate Base Rate and/or the Applicable Floating Rate
Margin changes.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
"FLOATING RATE LOAN " means a Loan, or portion thereof, which bears
interest at the Floating Rate.
"FOUNDATION" means The Evangelical Lutheran Good Samaritan Foundation, a
not-for-profit corporation organized under the laws of the State of Minnesota,
and its successors and assigns.
"GOVERNMENT RECEIVABLES" means, collectively, Medicaid Receivables,
Medicare Receivables, and CHAMPUS Receivables, and other Receivables from a
Governmental Authority payable to the Borrower or a Subsidiary under government
health care reimbursement and/or payment programs.
"GOVERNMENTAL ACTS" is defined in SECTION 2.26(A) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including, without limitation, HCFA, HHS, the Office
of CHAMPUS and any other entity responsible for administering payment of any
Government Receivables, including, without limitation in connection with the
black lung program, the railroad retirement assistance program or veterans
programs.
"GROSS NEGLIGENCE" means recklessness, the absence of the slightest care or
the complete disregard of consequences. Gross Negligence does not mean the
absence of ordinary care or diligence, or an inadvertent act or inadvertent
failure to act. To the extent the term "gross negligence" is used with respect
to any Person in any of the other Loan Documents, it shall have the meaning set
forth herein.
"HCFA" means the Healthcare Financing Administration of HHS and any Person
succeeding to the functions thereof.
"HEALTH LICENSE" means a license or other similar authorization issued by a
federal or state health agency or similar agency or body, including, without
limitation, a Controlled Substances License, a DEA License and a Pharmacy
License.
"HHS" means the Department of Health and Human Services and any Person
succeeding to the functions thereof.
"HOLDERS OF SECURED OBLIGATIONS" is defined as set forth in the Security
Agreements.
20
"INCOME TAX" OR "INCOME TAXES" means all federal, state, local, and foreign
taxes (i) based upon, measured by, or calculated with respect to, gross or net
income (including, but not limited to, any capital gains taxes, franchise taxes,
branch profits taxes, minimum taxes and any taxes on items of tax preference)
and (ii) any tax based on, measured by, or calculated with respect to multiple
bases (including, but not limited to, franchise or occupation taxes) if one or
more of the bases on which such tax may be based, measured by, or computed with
respect to, is described in (i) above. With respect to the Agent or a Lender,
"Income Tax" or "Income Taxes" shall include United States federal withholding
taxes under Code Sections 881 and 1442 (or any successor provisions thereto)
imposed on the Lender or the Agent unless the Lender or the Agent, as the case
may be, was not subject to such withholding taxes (either under an applicable
tax treaty concluded by the United States or under the provisions of Code
Sections 881 and 1442) on the later of (i) the Closing Date or (ii) the date on
which the Lender became a Lender or such Agent became the Agent.
"INDEBTEDNESS" of any Person means (i) any indebtedness of such Person,
contingent or otherwise, in respect of borrowed money including all principal,
interest, fees and expenses with respect thereto (whether or not the recourse of
the lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, acceptances, debentures or other
instruments or letters of credit (or reimbursement obligations with respect
thereto, including Reimbursement Obligations under the Letters of Credit) or
representing the balance deferred and unpaid of the purchase price of any
property (including pursuant to Capitalized Leases) or services, if and to the
extent any of the foregoing indebtedness would appear as a liability upon a
balance sheet of such Person prepared in accordance with Agreement Accounting
Principles (except that any such balance that constitutes a trade payable and/or
an accrued liability arising in the ordinary course of business payable in
accordance with customary and usual terms and as to which no interest or other
charge is payable shall not be considered Indebtedness); (ii) to the extent not
otherwise included, (a) interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceedings and other interest
that would have accrued but for the commencement of such proceedings, (b) any
Capitalized Lease Obligations, (c) the maximum fixed repurchase price of any
Redeemable Stock, (d) obligations, whether or not assumed, secured by Liens or
payable out of the proceeds or production from property now or hereafter owned
or acquired by such Person, (e) Contingent Obligations (exclusive of whether
such items would appear upon such balance sheet) and (f) Rate Hedging
Obligations. For purposes of the preceding sentence, the maximum fixed
repurchase price of any Redeemable Stock which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Redeemable Stock
as if such Redeemable Stock were repurchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement, PROVIDED that if
such Redeemable Stock is not then permitted to be repurchased, the repurchase
price shall be the book value of such Redeemable Stock. The amount of
Indebtedness of any Person at any date shall be without duplication (i) the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability of any such Contingent Obligations at such date
and (ii) in the case of Indebtedness of others secured by a Lien to which the
property or assets owned or held by such Person is subject, the lesser of the
21
fair market value at such date of any asset subject to a Lien securing the
Indebtedness of others and the amount of the Indebtedness secured.
"INDEMNITY MATTERS" is defined in SECTION 9.7(B) hereof.
"INDEMNITEES" is defined in SECTION 9.7(B) hereof.
"INSURANCE CLAIMS" shall mean all now owned or hereafter acquired claims,
rights and interests of any Loan Party arising from a patient's assignment of
his or her claim against an insurance company, proponent of a health plan or
other Person, for services performed for, or Inventory sold to, such patient by
such Loan Party; PROVIDED Insurance Claims shall not be construed to include any
claims governed by CHAMPUS, CHAMPUS Regulations, Medicare Regulations or
Medicaid Regulations.
"INTEREST EXPENSE" is defined in SECTION 6.4(A) hereof.
"INTEREST EXPENSE COVERAGE RATIO" is defined in SECTION 6.4(B) hereof.
"INTEREST PERIOD" means, with respect to a Eurodollar Loan, a period of one
(1), two (2), three (3) or six (6) months commencing on a Business Day selected
by the Borrower pursuant to this Agreement. Such Interest Period shall end on
(but exclude) the day which corresponds numerically to such date one, two, three
or six months thereafter; provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"INTEREST RATE AGREEMENTS" is defined in SECTION 6.3(S) hereof.
"INTERPLAN" shall mean a paying agent for certain out-of-state Blue Cross
and/or Blue Shield claims.
"INVENTORY" shall mean any and all goods, including, without limitation,
goods in transit, wheresoever located, whether now owned or hereafter acquired
by any of the Loan Parties, which are held for sale or lease, furnished under
any contract of service or held as raw materials, work in process or supplies,
and all materials used or consumed in any of the businesses of the applicable
Loan Party, and shall include such property the sale or other disposition of
which has given rise to Receivables and which has been returned to or
repossessed or stopped in transit by any Loan Party.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of stock, partnership interest, membership, ownership
or other equity interests, notes, debentures or other securities, or of a
beneficial interest in stock, partnership interest,
22
membership, ownership or other equity interests, notes, debentures or other
securities, issued by any other Person, (ii) any purchase by that Person of all
or substantially all of the assets of a business conducted by another Person,
and (iii) any loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, accounts receivable,
advances to employees and similar items made or incurred in the ordinary course
of business) or capital contribution by that Person to any other Person,
including all Indebtedness to such Person arising from a sale of property by
such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"JCAHO" means the Joint Commission for Accreditation of Healthcare
Organizations or any Person succeeding to the functions thereof.
"KNOWLEDGE" means as applied to any Person generally, the actual knowledge,
after due inquiry, of any fact or circumstance or any fact or circumstance which
such Person should have known, with respect to any of the (A) chairman of the
board of directors, chief executive officer, chief financial officer, treasurer
and/or controller of such Person (or persons performing the functions typically
performed by persons with such titles) and (B) the senior corporate executive
officers and chairman of the board of each Subsidiary of such Person; provided,
however, with respect to Requirements of Law and other matters regulated by any
Governmental Authority the list of Persons in clauses (A) and (B) shall include
the persons primarily responsible for monitoring and ensuring compliance with
such Requirements of Law and other regulatory matters or Persons succeeding to
their respective duties as employees of the such Person as of the Closing Date.
"ISSUING LENDER" is defined in SECTION 2.21 hereof.
"L/C DRAFT" means a draft drawn on any Issuing Lender pursuant to a Letter
of Credit.
"L/C INTEREST" shall have the meaning ascribed to such term in SECTION
2.22.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum of
(i) the aggregate of the amount then available for drawing under the Letters of
Credit, (ii) the face amounts of all outstanding L/C Drafts, which L/C Drafts
have been accepted by the applicable Issuing Lender, (iii) the aggregate
outstanding amount of all Reimbursement Obligations and (iv) the aggregate face
amount of all Letters of Credit requested but not yet issued (unless the request
for an unissued Letter of Credit has been denied).
"LASALLE" means LaSalle National Bank, in its individual capacity, and its
successors.
"LENDERS" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns. Unless the context
otherwise requires, references in this Agreement to a Lender or to the Lenders
shall be to such lending institutions in their capacity as a Lender or an
Issuing Lender hereunder.
23
"LENDING INSTALLATION" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
"LETTER OF CREDIT" means the letters of credit to be issued by one or more
of the Issuing Lenders pursuant to SECTION 2.21 hereof.
"LEVERAGE RATIO" shall have the meaning ascribed to that term in SECTION
6.4(E) hereof.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN(S)" means (i) with respect to a Lender, such Lender's portion of any
Advance made pursuant to SECTION 2.1 or SECTION 2.2, as applicable, (ii) with
respect to the Borrower, Advances made to the Borrower pursuant to SECTION 2.1
or SECTION 2.2, as applicable, and (iii) collectively, all Term Loans,
Acquisition Loans and Revolving Loans, whether made or continued as or converted
to Floating Rate Loans or Eurodollar Loans.
"LOAN ACCOUNT" is defined in SECTION 2.15(F) hereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Subsidiary
Guarantees, the Security Agreements, the Pledge Agreements, the other Collateral
Documents and all other documents, instruments and agreements executed by or on
behalf of any member of the Borrower Corporate Group in connection herewith or
therewith or contemplated hereby or thereby, as the same may be amended,
restated or otherwise modified and in effect from time to time.
"LOAN PARTIES" shall mean and include the Borrower and each other member of
the Borrower Corporate Group and "LOAN PARTY" shall mean any of the foregoing.
"LOCK BOX" means each lock box and lock box account maintained by the
Borrower or any other Loan Party, subject to a Lock Box Agreement, for the
collection of Receivables (other than Medicare Receivables and Medicaid
Receivables) and other proceeds of Collateral.
"LOCK BOX AGREEMENT(S)" means, individually or collectively, as applicable,
the Lock Box Agreement executed between the Borrower and LaSalle relating to the
establishment and maintenance of a lock box and lock box account at LaSalle for
the collection of Receivables (other than Medicare Receivables and Medicaid
Receivables) and other proceeds of Collateral, and any written agreement between
any other Loan Party and LaSalle, as the bank at which such Loan Party maintains
a Lock Box, which Subsidiary Lock Box Agreement shall be in substantially the
form attached hereto as Exhibit Q, in each case as amended, restated or
otherwise modified from time to time.
24
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, financial condition, operations, performance or properties of the
Borrower and its Subsidiaries, taken as a whole, (b) the ability of any Loan
Party to perform any of its respective obligations in any material respect under
the Loan Documents, or (c) the ability of the Lenders or the Agent to enforce in
any material respect the Obligations or their rights with respect to the
Collateral.
"MAXIMUM REVOLVING CREDIT AMOUNT" means, at any particular time, (i) the
lesser of (A) the Revolving Credit Commitments at such time and (B) the
Borrowing Base at such time, LESS (ii) the amount of any Decision Reserve in
effect at such time.
"MEDICAID CERTIFICATION" means, with respect to any Person or health care
facility, certification by HCFA or a state agency or entity under contract with
HCFA that such Person or facility, as applicable, fully complies with all the
conditions of participation set forth in Medicaid Regulations.
"MEDICAID RECEIVABLE" means a Receivable with respect to which the Account
Debtor is a Governmental Authority or agent thereof obligated thereunder
pursuant to Medicaid Regulations.
"MEDICAID REGULATIONS" means, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act (42 U.S.C. Sections
1396 ET SEQ.) or elsewhere) affecting the medical assistance program established
by Title XIX of the Social Security Act; (ii) all applicable provisions of all
federal rules, regulations, manuals, orders and administrative, reimbursement
and other guidelines of all Governmental Authorities (whether or not having the
force of law) promulgated pursuant to or in connection with the statutes
described in CLAUSE (i) above; (iii) all state statutes enacted and all state
plans for medical assistance and state plan amendments filed by the state with
HCFA in connection with the statutes and provisions described in CLAUSES (i) and
(ii) above; and (iv) all applicable provisions of all rules, regulations,
manuals, orders and administrative, reimbursement, and other guidelines of all
Governmental Authorities (whether or not having the force of law) promulgated
pursuant to or in connection with any of the foregoing, in each case as may be
amended, supplemented or otherwise modified from time to time.
"MEDICARE CERTIFICATION" means, with respect to any Person or health care
facility, certification by HCFA or a state agency or entity under contract with
HCFA that such Person or facility, as applicable, fully complies with all the
conditions of participation set forth in Medicare Regulations.
"MEDICARE RECEIVABLE" means a Receivable with respect to which the Account
Debtor is a Governmental Authority or agent thereof obligated thereunder
pursuant to Medicare Regulations.
"MEDICARE REGULATIONS" means, collectively, all federal statutes (whether
set forth in Title XVIII of the Social Security Act (42 U.S.C. Sections 1395 ET
SEQ.) or elsewhere) affecting the health insurance program for the aged and
disabled established by Title XVIII of the Social
25
Security Act, together with all applicable provisions of all rules, regulations,
manuals, orders and administrative, reimbursement and other guidelines of all
Governmental Authorities (including, without limitation, HHS, HCFA, the Office
of the Inspector General for HHS, or any Person succeeding to the functions of
any of the foregoing) promulgated pursuant to or in connection with any of the
foregoing (whether or not having the force of law), as each may be amended,
supplemented or otherwise modified from time to time.
"MULTIEMPLOYER PLAN" means a Plan as defined in Section 4001(a)(3) of ERISA
to which the Borrower or any member of the Controlled Group is, or ever has,
contributed or to which the Borrower or any member of the Controlled Group has,
or ever has had, an obligation to contribute.
"NET CASH PROCEEDS" means, with respect to any Asset Sale of any Person,
(a) cash (freely convertible into U.S. dollars) received by such Person or any
Subsidiary of such Person from such Asset Sale (including cash received as
consideration for the assumption or incurrence of liabilities incurred in
connection with or in anticipation of such Asset Sale), after (i) provision for
all income or other taxes measured by or resulting from such Asset Sale, (ii)
payment of all brokerage commissions and other fees and expenses related to such
Asset Sale, (iii) all amounts used to repay Indebtedness secured by a Lien on
any asset disposed of in such Asset Sale or which is or may be required (by the
express terms of the instrument governing such Indebtedness) to be repaid in
connection with such Asset Sale (including payments made to obtain or avoid the
need for the consent of any holder of such Indebtedness), and (iv) deduction of
appropriate amounts to be provided by such Person or a Subsidiary of such Person
as a reserve, in accordance with Agreement Accounting Principles, against any
liabilities associated with the assets sold or disposed of in such Asset Sale
and retained by such Person or a Subsidiary of such Person after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with the assets sold or disposed of in
such Asset Sale; and (b) cash payments in respect of any Indebtedness, Capital
Stock or other consideration received by such Person or any Subsidiary of such
Person from such Asset Sale upon receipt of such cash payments by such Person or
such Subsidiary.
"NET INCOME" is defined in SECTION 6.4(A) hereof.
"NON-CONTROLLED AFFILIATE" means each Affiliate of the Borrower and each
Affiliate of any such Affiliate which is not a member of the Borrower Corporate
Group.
"NON PRO RATA LOAN" is defined in SECTION 8.2 hereof.
"NOTES" means the Revolving Notes, the Acquisition Loan Notes and the Term
Notes.
"NOTICE OF ASSIGNMENT" is defined in SECTION 12.3(B) hereof.
"OBLIGATIONS" means all Loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower or any other Loan Party to the Agent,
any Issuing Lender, any
26
Lender, or any Indemnitee, of any kind or nature, present or future, arising
under this Agreement, the Notes or any other Loan Document, whether or not
evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of credit, loan,
guaranty, indemnification, or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
includes, without limitation, all interest, charges, expenses, fees, attorneys'
fees and disbursements, paralegals' fees (in each case whether or not allowed),
and any other sum chargeable to the Borrower or any Loan Party under this
Agreement or any other Loan Document.
"OMAHA ACQUISITION" means the acquisition by the Borrower of substantially
all of the assets of Amber Enterprises, Inc. pursuant to and in accordance with
the Omaha Asset Purchase Agreement.
"OMAHA ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement dated
as of May 14, 1996 by and between the Borrower and Amber Enterprises, Inc.
(d/b/a Unidose LTC Pharmacy), as said Asset Purchase Agreement may be amended,
supplemented or modified from time to time with the prior written consent of the
Agent and the Required Lenders.
"OTHER TAXES" is defined in SECTION 2.15(E)(ii) hereof.
"OVER-ADVANCE" is defined in SECTION 2.18 hereof.
"PARENT PLEDGE AGREEMENT" means each of (i) the Parent Pledge Agreement
executed by AMC to the Agent for the benefit of itself and the Holders of
Secured Obligations and (ii) the Parent Pledge Agreement executed by the
Foundation to the Agent for the benefit of itself and the Holders of Secured
Obligations, in each case as the same may from time to time be amended,
modified, supplemented or restated.
"PARTICIPANTS" is defined in SECTION 12.2(A) hereof.
"PAYMENT DATE" means the first Business Day of each calendar month.
"PAYOR" shall mean an insurance company, a proponent of a healthcare plan
and other Persons reasonably acceptable to the Agent and the Required Lenders.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERFECTED GOVERNMENT RECEIVABLES" means Receivables with respect to which
the Account Debtor is any federal, state or municipal Governmental Authority or
any agency or instrumentality thereof in connection with which the Agent has
received an opinion of counsel, from a firm and in form and substance
satisfactory to the Agent, with respect to perfection of the Agent's security
interest with respect thereto.
27
"PERMITS" means any permit, approval, authorization, license, variance, or
permission required from a Governmental Authority or other Person under an
applicable Requirement of Law, and shall include, without limitation,
Accreditations, CONs, Health Licenses, CHAMPUS Certifications, Medicaid
Certifications, and Medicare Certifications.
"PERMITTED ACQUISITION" is defined in SECTION 6.3(H) hereof and, in any
event, shall include the Omaha Acquisition.
"PERMITTED EXISTING CONTINGENT OBLIGATIONS" means those Contingent
Obligations of any Loan Party identified as such on SCHEDULE 1.1.1 to this
Agreement.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of each Loan Party
identified as such on SCHEDULE 1.1.2 to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of each Loan Party
identified as such on SCHEDULE 1.1.3 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of any Loan Party
identified as such on SCHEDULE 1.1.4 to this Agreement.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" means the Indebtedness permitted
pursuant to SECTION 6.3(A)(viii).
"PERMITTED SUBORDINATED INDEBTEDNESS" means Subordinated Indebtedness, if
any, permitted pursuant to SECTION 6.3(A)(iii) and shall include Acquisition
Subordinated Debt, if any, permitted pursuant to SECTION 6.3(A)(iv).
"PERSON" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"PHARMACY LICENSES" means any state licenses, permits, approvals,
registrations or other authorizations required to operate a pharmacy.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA in
respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENT(S)" means individually or collectively, as applicable,
(a) each of the Parent Pledge Agreements executed by AMC and the Foundation in
favor of the Agent, for the benefit of itself and the Holders of Secured
Obligations, pursuant to which AMC and the Foundation, respectively, pledge all
of the Capital Stock of the Borrower held by it; (b) a Pledge Agreement executed
by the Borrower in favor of the Agent, for the benefit of itself and the Holders
of Secured Obligations, pursuant to which the Borrower pledges all of the
Capital Stock owned by the Borrower in each of its Subsidiaries, as now owned or
hereafter owned or acquired,
28
which Pledge Agreement shall be in substantially the form of Exhibit R attached
hereto; and (c) any Pledge Agreement executed from time to time by a Subsidiary
of the Borrower in favor of the Agent, for the benefit of itself and the Holders
of Secured Obligations, pursuant to which such Subsidiary pledges all of the
Capital Stock owned by such Subsidiary in each of its Subsidiaries, in each case
as now owned or hereafter owned or acquired by the respective pledgor to the
Agent as collateral security for the Secured Obligations, which Subsidiary
Pledge Agreement shall be in substantially the form of Exhibit E attached
hereto, in each case as the same may from time to time be amended, modified,
supplemented or restated.
"PRIME RATE" means the prime rate of interest announced by LaSalle from
time to time (which is not necessarily LaSalle's lowest or most favorable rate
of interest at any particular time), changing when and as said prime rate
changes.
"PRO RATA SHARE" means, with respect to any Lender, the percentage obtained
by dividing (A) the sum of such Lender's Term Loan Commitment, Acquisition Loan
Commitment and/or Revolving Credit Commitment, as the context requires, at such
time (in each case, as adjusted from time to time in accordance with the
provisions of this Agreement or to give effect to any applicable Assignment) by
(B) the sum of the Aggregate Term Loan Commitment, the Aggregate Acquisition
Loan Commitment and/or the Aggregate Revolving Loan Commitment at such time;
PROVIDED, HOWEVER, if the Term Loan Commitments, Revolving Loan Commitments
and/or Acquisition Loan Commitments are terminated pursuant to the terms of this
Agreement, then "Pro Rata Share" shall be determined by reference to the
outstanding principal amounts of the Term Loans, Revolving Loans and/or
Acquisition Loans, as applicable.
"PROVIDER AGREEMENT" means, with respect to any health care facility to
which any Loan Party provides services or sells Inventory, the agreement between
such health care facility and CHAMPUS, the state agency administering the
Medicaid program and/or HCFA under which such health care facility agrees to
provide services for CHAMPUS patients, Medicaid patients and/or Medicare
patients, as applicable, in accordance with the terms of such agreement and the
applicable CHAMPUS Regulations, Medicaid Regulations and/or Medicare
Regulations.
"PURCHASERS" is defined in SECTION 12.3(A) hereof.
"RATE HEDGING OBLIGATIONS" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"RATE OPTION" means the Eurodollar Rate or the Floating Rate.
29
"RECEIVABLE(S)" means and includes, with respect to any Person, all of such
Person's presently existing and hereafter arising or acquired accounts, accounts
receivable, including, without limitation, Government Receivables, and all
present and future rights of such Person to payment for goods sold or leased or
for services rendered (except those evidenced by instruments or chattel paper),
whether or not they have been earned by performance, and all rights in any
merchandise or goods which any of the same may represent, and all rights, title,
security and guaranties with respect to each of the foregoing, including,
without limitation, any right of stoppage in transit.
"REDEEMABLE STOCK" means any Capital Stock which by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, in whole or in part, prior to December 31, 2003 or is, by its terms
or upon the happening of any event, redeemable at the option of the holder
thereof, in whole or in part, prior to December 31, 2003.
"REGISTER" is defined in SECTION 12.3(C) hereof.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"REIMBURSEMENT OBLIGATION" is defined in SECTION 2.23 hereof.
"RENTALS" is defined in SECTION 6.4(A) hereof.
"REPLACEMENT LENDER" is defined in SECTION 2.20 hereof.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, PROVIDED, HOWEVER, that a failure to meet the
minimum funding standards of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
are equal to or greater than sixty-six and two-thirds percent (66-2/3%);
PROVIDED, HOWEVER, that, in the
30
event any of the Lenders shall have failed to fund its Pro Rata Share of any
Revolving Loan, Term Loan or Acquisition Loan requested by the Borrower which
such Lenders are obligated to fund under the terms of this Agreement and any
such failure has not been cured, then for so long as such failure continues,
"REQUIRED LENDERS" means Lenders (excluding all Lenders whose failure to fund
their respective Pro Rata Shares of such Revolving Loan, Term Loan or
Acquisition Loan have not been so cured) whose Pro Rata Shares represent sixty-
six and two-thirds percent (66-2/3%) or more of the aggregate Pro Rata Shares of
the remaining Lenders.
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act, the Securities Exchange Act, Regulations
G, U and X, ERISA, the Fair Labor Standards Act, the Worker Adjustment and
Retraining Notification Act, Americans with Disabilities Act of 1990, the Social
Security Act, CHAMPUS Regulations, Medicaid Regulations, Medicare Regulations,
any CON, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or Permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law (including, without
limitation, those applicable to the disposal of medical waste).
"RESERVES" shall mean the maximum reserve requirement, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) with respect
to "Eurocurrency liabilities" or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Eurodollar
Loans is determined or category of extensions of credit or other assets which
includes loans by a non-United States office of any Lender to United States
residents.
"RESTRICTED ACCOUNT" is defined in SECTION 2.12(e) hereof.
"RESTRICTED ACCOUNT AGREEMENT" is defined in SECTION 2.12(e) hereof.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
any Loan Party now or hereafter outstanding, except (A) a dividend payable to
the Borrower or (B) a dividend payable solely in shares of stock of the
Borrower, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of Capital Stock of any Loan Party now or hereafter outstanding, (iii)
any payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to any Permitted Subordinated Indebtedness, (iv) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of any Loan Party now or hereafter outstanding, (v) any payment of
a claim for the rescission of the purchase or sale of, or for material damages
arising from the purchase or sale of any Permitted Subordinated
31
Indebtedness or any shares of the capital stock of any Loan Party or of a claim
for reimbursement, indemnification or contribution arising out of or related to
any such claim for damages or rescission, (vi) any payment of management fees,
investment fees, professional services fees, expense reimbursements or any other
amounts by any Loan Party to any Non-Controlled Affiliate of any Loan Party and
(vii) any Contingent Purchase Price Payments.
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
by which the Maximum Revolving Credit Amount at such time exceeds the Revolving
Credit Obligations at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time (i) the
aggregate outstanding principal amount of all of the Revolving Loans at such
time, PLUS (ii) the aggregate L/C Obligations at such time.
"REVOLVING LOAN(S)" is defined in Section 2.2 hereof.
"REVOLVING LOAN COMMITMENT" means, with respect to any Lender, the
obligation of such Lender to make Revolving Loans and to purchase participations
in Letters of Credit on the terms and conditions of this Agreement, and which
shall not exceed the aggregate principal amount set forth on EXHIBIT B opposite
such Lender's name under the heading "Revolving Loan Commitment" or as indicated
in the Assignment by which it became a Lender, in each case as modified from
time to time pursuant to the terms of this Agreement or to give effect to any
applicable Assignment.
"REVOLVING NOTE" means a promissory note, in substantially the form of
EXHIBIT C1 hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Revolving Loan Commitment, including any amendment,
restatement, modification, renewal or replacement of such Revolving Note.
"RISK BASED CAPITAL GUIDELINES" is defined in SECTION 3.2 hereof.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii) all
Rate Hedging Obligations owing to one or more Lenders under one or more Interest
Rate Agreements.
"SECURITY AGREEMENT(S)" means (i) that certain Security Agreement dated as
of the date hereof executed by the Borrower as of the date of this Agreement in
favor of the Agent for the benefit of the Agent and the Holders of Secured
Obligations, and (ii) each Security Agreement executed from time to time by any
other Loan Party in favor of the Agent for the benefit of the Agent and the
Holders of Secured Obligations in connection with this Agreement, which
Subsidiary Security Agreement shall be in substantially the form of EXHIBIT D
attached hereto, in each case as amended, restated or otherwise modified from
time to time.
"SHAREHOLDERS AGREEMENT" means the Shareholders Agreement dated as of
April 30, 1996 by and among the Borrower, AMC and the Foundation, as in effect
on the date hereof and
32
as it may hereafter be amended, supplemented or modified from time to time with
the prior written consent of the Agent and the Required Lenders.
"SHARE PURCHASE AGREEMENT" means the Share Purchase Agreement dated as of
April 30, 1996 by and between the Company and AMC, as it may hereafter be
amended, supplemented or modified from time to time with the prior written
consent of the Agent and the Required Lenders.
"SINGLE EMPLOYMENT PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SOCIAL SECURITY ACT" means the Social Security Act, 42 U.S.C. Sections 301
ET SEQ., any amendments thereto, any successor statutes, and any regulations or
guidance promulgated thereunder.
"SOCIETY" means the Evangelical Lutheran Good Samaritan Society, a non-
profit corporation organized under the laws of the State of North Dakota, and
its successors and assigns.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of any Loan Party, the
payment of which is subordinated to payment of the Secured Obligations to the
written satisfaction of the Required Lenders.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "SUBSIDIARY"
shall mean a Subsidiary of the Borrower.
"SUBSIDIARY GUARANTEES" means each of the Guarantees executed from time to
time by any Loan Party in favor of the Agent for the benefit of the Agent and
the Holders of Secured Obligations in connection with this Agreement, which
Guarantees shall be in substantially the form of EXHIBIT G attached hereto, in
each case as amended, restated or otherwise modified from time to time.
"TARGET" is defined in the definition of Acquisition above.
"TAXES" is defined in SECTION 2.15(E)(i) hereof.
"TERM LOAN(S)" is defined in SECTION 2.1(a) hereof.
33
"TERM LOAN AVAILABILITY" means at any particular time prior to the
Conversion Date, the amount by which the Aggregate Term Loan Commitments exceeds
the aggregate principal amount of all of the Term Loans made from time to time
pursuant to SECTION 2.1(a).
"TERM LOAN COMMITMENT" means, with respect to any Lender, the obligation of
such Lender to make one or more Term Loans on the Closing Date and/or on an
Acquisition Closing Date pursuant to the terms and conditions of this Agreement,
and which shall not exceed its Term Loan Commitment as set forth on EXHIBIT B
opposite such Lender's name under the heading, "Term Loan Commitment" or as
indicated in the Assignment by which it became a Lender, in each case as
modified from time to time pursuant to the terms of this Agreement.
"TERM LOAN TERMINATION DATE" means June 21, 2001.
"TERM NOTE" means a promissory note, in substantially the form of
EXHIBIT C2 hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Term Loan Commitment, including any amendment,
restatement, modification, renewal or replacement of such Term Note.
"TERMINATION DATE" means the earlier of (a) June 21, 2001 and (b) the date
of termination of the Commitments pursuant to SECTION 2.6 or SECTION 8.1.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"TRANSACTION COSTS" means the fees, costs and expenses payable by the
Borrower and/or any other Loan Party in connection with the execution, delivery
and performance of the Transaction Documents and the consummation of the
Permitted Acquisitions.
"TRANSACTION DOCUMENTS" means the Loan Documents and the Acquisition
Documents.
"TRANSFEREE" is defined in SECTION 12.4 hereof.
"TYPE" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurodollar Loan.
34
"UNFUNDED LIABILITIES" means the amount (if any) by which the present value
of all vested nonforfeitable benefits under all Single Employer Plans exceeds
the fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plans, and (ii) in
the case of Multiemployer Plans, the withdrawal liability that would be incurred
by the Controlled Group if all members of the Controlled Group completely
withdrew from all Multiemployer Plans.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary in which all voting shares, or
other ownership interests having voting powers, are owned by the Borrower and/or
one or more Wholly-Owned Subsidiaries of the Borrower.
"WORKING CAPITAL" means, as at any date of determination, the excess, if
any, consolidated in each case for the Borrower Corporate Group of (i)
consolidated current assets, except cash and Cash Equivalents, over (ii) the
consolidated current liabilities, except current maturities of long-term debt
and Revolving Credit Obligations as of such date and all accrued interest as of
such date.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Any accounting terms used in this
Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with the Agreement Account Principles.
1.2. SUBSIDIARY REFERENCES. The existence throughout this Agreement of
references to the Borrower's Subsidiaries is for a matter of convenience only
and shall not in any way be construed as consent by the Agent or any Lender to
the establishment, maintenance or Acquisition of any Subsidiary.
1.3. SCHEDULE REFERENCES; SUPPLEMENTAL DISCLOSURE. The parties to this
Agreement acknowledge and agree that the Schedules hereto have been prepared
without reference to factual changes which may result from consummation of any
Permitted Acquisition. The Borrower shall be permitted to revise the Schedules
in connection with Permitted Acquisitions after the Closing Date provided such
changes are reasonably acceptable to the Agent and the Required Lenders. At any
time at the request of the Agent and at such additional times as the Borrower
determines, the Borrower shall supplement each schedule or representation herein
or in the other Loan Documents with respect to any matter hereafter arising
which, if existing or occurring at the date of this Agreement, would have been
required to be set forth or described in such schedule or as an exception to
such representation or which is necessary to correct any information in such
schedule or representation which has been rendered inaccurate thereby. If any
such supplement to such schedule or representation discloses the existence or
occurrence of events, facts or circumstances which are restricted or prohibited
by the terms of this Agreement or any other Loan Document or otherwise
constitute or result in a Material Adverse Effect, such
35
supplement to such schedule or representation shall not be deemed an
amendment thereof unless expressly consented to in writing by the Agent and
the Required Lenders, and no such amendments, except as the same may be
consented to in a writing which expressly includes a waiver, shall be or be
deemed a waiver by the Agent or any Lender of any Default disclosed therein.
Any items disclosed in any such supplemental disclosures shall be included in
the calculation of any baskets, limits or similar restrictions contained in
this Agreement or any other Loan Document.
ARTICLE II. THE CREDITS
2.1. LOANS. (a) TERM LOANS. Subject to the terms and conditions set
forth in this Agreement (including the conditions precedent set forth in
SECTION 4.3), each Lender hereby severally and not jointly agrees to make
from time to time on the Closing Date and on an Acquisition Closing Date, a
term loan, in Dollars, to the Borrower (individually, a "TERM LOAN" and
collectively, the "TERM LOANS") from time to time in an amount not to exceed
such Lender's Pro Rata Share of Term Loan Availability at such time;
PROVIDED, HOWEVER, at no time shall the aggregate principal amount of Term
Loans made pursuant to this SECTION 2.1(a) exceed the Aggregate Term Loan
Commitment. On and after the Conversion Date, the Term Loans shall be repaid
in accordance with SECTION 2.1(e). All Term Loans shall be made by the
Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any
failure by any other Lender to perform its obligation to make any Term Loan
hereunder nor shall the Term Loan Commitment of any Lender be increased or
decreased as a result of any such failure. Any Term Loans repaid hereunder
may not be reborrowed.
(b) ACQUISITION LOANS. Subject to the terms and conditions set forth
in this Agreement (including the conditions precedent set forth in SECTION
4.3), each Lender hereby severally and not jointly agrees to make, from time
to time on and after the Acquisition Loan Target Date and on or prior to the
Conversion Date, on an Acquisition Closing Date, revolving loans, in Dollars,
to the Borrower which shall convert into term loans (individually, an
"ACQUISITION LOAN" and collectively, the "ACQUISITION LOANS") from time to
time in an amount not to exceed such Lender's Pro Rata Share of Acquisition
Loan Availability at such time; PROVIDED, HOWEVER, (i) no Acquisition Loan
shall be made hereunder unless and until the Borrower has obtained Term Loans
in an aggregate principal amount equal to $5,000,000, (ii) no Acquisition
Loan shall be made hereunder unless, as of the applicable Acquisition Closing
Date, the sum of (x) EBITDA (as defined in SECTION 6.4 (A)) for the twelve
calendar months most recently completed for which financial statements have
been delivered pursuant to SECTION 6.1(A)(i) (or, if the number of calendar
months from April 1, 1996 through the last month for which such financial
statements are available is less than twelve months, then the EBITDA for such
period from April 1, 1996 through such month for which financial statements
are available, times a fraction the numerator of which is twelve and the
denominator of which is the number of calendar months from April 1, 1996
through such month for which financial statements are available) on a
consolidated basis for the Borrower and its consolidated Subsidiaries (other
than any Target proposed to be acquired with the proceeds of such Acquisition
Loan), including any Subsidiary acquired by the Borrower or another
Subsidiary during the applicable period on a pro
36
forma basis as if such Subsidiary had been acquired on the first day of such
period, PLUS (y) EBITDA (determined in a manner consistent with the
calculation of EBITDA of the Borrower and its Subsidiaries, as defined in
Section 6.4(A)) of the Target proposed to be acquired with the proceeds of
such Acquisition Loan for the most recent twelve month period for which
financial statements meeting the requirements of Section 6.3(H)(ii) have been
delivered to the Agent and the Lenders, shall not be less than $1,750,000 and
(iii) at no time shall the aggregate outstanding Acquisition Loans exceed the
Aggregate Acquisition Loan Commitment. Subject to the terms and conditions
set forth in this Agreement (including the conditions precedent set forth in
SECTION 4.3), the Borrower may borrow, repay and reborrow Acquisition Loans
at any time on or prior to the Conversion Date in connection with any
Acquisition approved by the Acquisition Approval Lenders under SECTION
6.3(H). On the Conversion Date, the Acquisition Loans shall automatically
convert to term loans and be repaid in accordance with SECTION 2.1(e). All
Acquisition Loans shall be made by the Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being understood that
no Lender shall be responsible for any failure by any other Lender to perform
its obligation to make any Acquisition Loan hereunder nor shall the
Acquisition Loan Commitment of any Lender be increased or decreased as a
result of any such failure.
(c) TERM LOAN ON CLOSING DATE. The Borrower hereby requests a Term
Loan in the principal amount of $2,500,000 to be made to it on the Closing
Date, such funds to be disbursed in accordance with the written instructions
of the Borrower delivered to the Agent on or prior to the Closing Date.
(d) [Reserved].
(e) REPAYMENT OF THE TERM LOANS AND ACQUISITION LOANS. The
outstanding principal balance of the Term Loans and the Acquisition Loans on
the Conversion Date shall be repayable in consecutive monthly installments
payable on the first Business Day of each calendar month commencing on the
first such date to occur after the Conversion Date and continuing thereafter
until the Term Loan Termination Date, and the Term Loans and the Acquisition
Loans shall be permanently reduced by the ratable portion (based upon the
outstanding principal balance of the Term Loans and the outstanding principal
balance of the Acquisition Loans) of each installment on the date payment
thereof is required to be made hereunder. The installments shall be in the
aggregate amount equal to the applicable percentage of the aggregate
principal balance of the Term Loans and the Acquisition Loans outstanding on
the Conversion Date set forth below:
INSTALLMENT DATE APPLICABLE PERCENTAGE
The first Business Day of each calendar
month occurring after the Conversion Date
but on or prior to the two-year anniversary
of the Conversion Date 1.25%
37
The first Business Day of each calendar month
occurring after the two-year anniversary of the
Conversation Date but on or prior to the four-
year anniversary of the Conversion Date 1.67%
The first Business Day of each calendar month
occurring after the four-year anniversary of the
Conversion Date but before the Term Loan
Termination Date 2.50%
In addition, and notwithstanding the foregoing, the then outstanding principal
balance of the Term Loans and Acquisition Loans shall be due and payable on the
Term Loan Termination Date. After the Conversion Date, amounts repaid with
respect to the Acquisition Loans may not be reborrowed.
In addition to the scheduled payments on the Term Loans and Acquisition
Loans, the Borrower may make the voluntary prepayments described in SECTION
2.5(A) and shall make the mandatory prepayments prescribed in SECTION 2.5(B),
for credit against such scheduled payments on the Term Loans or the Acquisition
Loans, respectively, pursuant to SECTION 2.5(B).
2.2. REVOLVING LOANS. Upon the satisfaction of the conditions
precedent set forth in SECTIONS 4.1 and 4.2 hereof, from and including the
date of this Agreement and prior to the Termination Date, each Lender
severally agrees, on the terms and conditions set forth in this Agreement, to
make revolving loans (individually, a "REVOLVING LOAN" and collectively
"REVOLVING LOANS") to the Borrower from time to time in an amount not to
exceed such Lender's Pro Rata Share of Revolving Credit Availability at such
time; PROVIDED, HOWEVER, at no time shall the Revolving Credit Obligations
exceed the Maximum Revolving Credit Amount. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow at any time prior to
the Termination Date. The initial Revolving Loans to the Borrower shall be
Floating Rate Loans and thereafter may be continued as Floating Rate Loans or
converted into Eurodollar Loans in the manner provided in SECTION 2.10 and
subject to the other conditions and limitations therein set forth and set
forth in ARTICLE II. On the Termination Date, the Borrower shall repay in
full the outstanding principal balance of its Revolving Loans.
2.3 RATABLE LOANS. (i) Each Advance under SECTION 2.1(a) shall consist
of Term Loans made by each Lender ratably in proportions to such Lender's
respective Pro Rata Share of the Aggregate Term Loan Commitment. (ii) Each
Advance under SECTION 2.1(b) shall consist of Acquisition Loans made by each
Lender ratably in proportion to such Lender's respective Pro Rata Share of the
Aggregate Acquisition Loan Commitment. (iii) Each Advance under SECTION 2.2
shall consist of Revolving Loans made by each Lender ratably in proportion to
such Lender's respective Pro Rata Share of the Aggregate Revolving Loan
Commitment.
2.4. RATE OPTIONS FOR ALL ADVANCES. The Advances may be Floating Rate
Advances or Eurodollar Advances, or a combination thereof, selected by the
Borrower in accordance with SECTION 2.10; provided, however, notwithstanding
anything herein to the contrary, the Borrower
38
may not elect to make a Revolving Loan as a Eurodollar Advance or convert a
Revolving Loan to a Eurodollar Advance prior to the date on which the
Borrower has made a Term Loan or an Acquisition Loan hereunder. The Borrower
may select, in accordance with SECTION 2.10, Rate Options and Interest
Periods applicable to portions of the Revolving Loans, Acquisition Loans and
the Term Loans; PROVIDED that there shall be no more than five (5) Interest
Periods in effect with respect to all of the outstanding Eurodollar Loans of
the Borrower at any time.
2.5. OPTIONAL PAYMENTS - MANDATORY PREPAYMENTS.
(A) OPTIONAL PAYMENTS. The Borrower may from time to time repay or
prepay, without penalty or premium, all or any part of outstanding
Floating Rate Advances. Subject to payment of all amounts payable
pursuant to SECTION 3.4, a Eurodollar Advance may be voluntarily repaid
or prepaid prior to the last day of the applicable Interest Period.
Unless the aggregate outstanding principal balance of the Borrower's
Term Loans and, after the Conversion Date, the Acquisition Loans are to
be prepaid in full, voluntary prepayments of the Term Loans and the
Acquisition Loans shall be in an aggregate minimum amount of $250,000
and integral multiples of $100,000 in excess of that amount. Each
voluntary prepayment of the Term Loans and/or the Acquisition Loans
shall be applied (i) prior to the Conversion Date, first, to the
Acquisition Loans outstanding and then to the Term Loans in the inverse
order of maturity; and (ii) after the Conversion Date, to the unpaid
installments of the Term Loans and Acquisition Loans in the inverse
order of maturity.
(B) MANDATORY PREPAYMENTS.
(i) MANDATORY PREPAYMENTS OF TERM LOANS AND ACQUISITION LOANS.
(a) Except as expressly provided in CLAUSES (1) through (3) below,
upon the consummation of any Asset Sale by any Loan Party, the Net Cash
Proceeds of which (when aggregated with all other Asset Sales in the
immediately 12-month period) are greater than $200,000 in any 12-month
period, within three (3) Business Days after the applicable Loan Party's
(i) receipt of any Net Cash Proceeds from any such Asset Sale, or
(ii) conversion to cash or Cash Equivalents of non-cash proceeds (whether
principal or interest and including securities, release of escrow
arrangements or lease payments) received from any such Asset Sale, the
Borrower shall make or cause to be made a mandatory prepayment of the
Obligations in an amount equal to (x) fifty percent (50%) of such Net Cash
Proceeds in the case of an Asset Sale in connection with the Borrower's
issuance of Capital Stock or public offering of Capital Stock and (y) one
hundred percent (100%) of such Net Cash Proceeds or such proceeds converted
from non-cash to cash or Cash Equivalents of all other Asset Sales;
PROVIDED, HOWEVER, that no mandatory prepayment shall be required:
(1) in the case of Asset Sales conducted pursuant to the terms
of SECTION 6.3(B)(i);
39
(2) in connection with an Asset Sale comprised of a sale,
conveyance, disposition or other transfer of any Capital Stock of the
Borrower pursuant to the terms of SECTION 6.3(B)(v), provided the Net
Cash Proceeds therefrom are received when no Default has occurred and
is continuing;
(3) if, within sixty (60) days after the consummation of any
Asset Sale (other than with respect to Receivables or Inventory) by a
Loan Party that is made in connection with the anticipated purchase by
such Loan Party of replacement assets of a like kind, the Net Cash
Proceeds thereof have been used by such Loan Party for the replacement
of the assets sold by assets of a like kind and such Loan Party shall
have delivered to the Agent written evidence of the use of the Net
Cash Proceeds for such purchase; PROVIDED, FURTHER if such Loan Party
shall not have provided evidence of such use or if less than all of
the Net Cash Proceeds are used for such replacement, then a mandatory
prepayment will be required to be made on the sixtieth (60th) day
after the consummation of such Asset Sale in the amount of such Net
Cash Proceeds (or unutilized portion thereof).
(b) Simultaneously with the delivery of the annual audited financial
statements for the Borrower Corporate Group required to be delivered
pursuant to SECTION 6.1(a)(iii) for each Cash Flow Period, the Borrower
shall calculate Excess Cash Flow for such Cash Flow Period and shall make a
mandatory prepayment, payable no later than ten (10) days after such
financial statements are required to be delivered pursuant to
SECTION 6.1(a)(iii) hereof, in an amount equal to (i) one hundred percent
(100%) of such Excess Cash Flow if the Leverage Ratio reflected in such
audited financial statements was greater than or equal to 3.5 to 1.0 and
(ii) seventy-five percent (75%) of such Excess Cash Flow if the Leverage
Ratio reflected in such audited financial statements was less than 3.5 to
1.0.
(c) Within two (2) Business Days after receipt by any Loan Party of
any Net Cash Proceeds of Indebtedness permitted by SECTION 6.3(A)(iii)
(other than Subordinated Indebtedness issued to an Affiliate, if such cash
proceeds are received at a time when no Default has occurred and is
continuing), at the request of the Agent or the Required Lenders, the
Borrower shall make or cause to be made a mandatory prepayment in an amount
equal to one-hundred percent (100%) of such proceeds of Indebtedness.
(d) Nothing in this SECTION 2.5(B)(i) shall be construed to
constitute the Lenders' consent to any transaction referred to in
CLAUSES (a) and (c) above which is not expressly permitted by or is
prohibited by the terms of this Agreement.
(e) Each mandatory prepayment required by CLAUSES (a), (b) and (c) of
this SECTION 2.5(B) shall be referred to herein as a "DESIGNATED
PREPAYMENT". Designated Prepayments (other than Designated Prepayments
resulting from Asset Sales which are public offerings of the stock of the
Borrower) shall be allocated and applied to the Obligations as follows:
40
(i) (x) prior to the Conversion Date, to the unpaid
installments of the Term Loans in the inverse order of maturity, until
the Term Loans are paid in full,
(y) after the Conversion Date, ratably to the unpaid
installments of the Term Loans and Acquisition Loans in the inverse
order of maturity, until the Term Loans and Acquisition Loans are
repaid in full;
and thereafter
(ii) first, to repay Revolving Loans (but shall reduce Revolving
Loan Commitments only at the option of the Borrower); second,
following the payment in full of the Revolving Loans, if such
prepayment is made prior to the Conversion Date, to repay the
Acquisition Loans (but shall reduce the Acquisition Loan Commitments
only at the option of the Borrower); and third, following the payment
in full of the Revolving Loans and Acquisition Loans, the amount of
each Designated Prepayment shall be applied first to interest on the
Reimbursement Obligations, then to principal on the Reimbursement
Obligations, then to fees on account of Letters of Credit and then, to
the extent any L/C Obligations are contingent, deposited with the
Agent as cash collateral in respect of such L/C Obligations.
Designated Prepayments resulting from Asset Sales which are public
offerings of the stock of the Borrower shall be allocated and applied to
the Obligations as follows: the amount of each Designated Prepayment shall
be applied first to repay Revolving Loans (but shall reduce Revolving Loan
Commitments only at the option of the Borrower); second, following the
payment in full of the Revolving Loans if such prepayment is made prior to
the Conversion Date, to repay the Acquisition Loans (but shall reduce the
Acquisition Loan Commitments only at the option of the Borrower); or if
such prepayment is made after the Conversion Date to the unpaid
installments of the Term Loans and the Acquisition Loans in the inverse
order of maturity.
(f) On the date any Designated Prepayment is received by the Agent,
such prepayment shall be applied first to Floating Rate Loans and to any
Eurodollar Loans maturing on such date. The Agent shall hold the remaining
portion of such Designated Prepayment as cash collateral in an interest
bearing deposit account and shall apply funds from such account to
subsequently maturing Eurodollar Loans in order of maturity; PROVIDED,
HOWEVER, that if a Default has occurred and is continuing such funds shall
be applied as provided herein.
(ii) MANDATORY PREPAYMENTS OF REVOLVING LOANS. In addition to repayments
under SECTION 2.5(B)(i), if the Revolving Credit Obligations are greater than
the Maximum Revolving Credit Amount, the Borrower shall immediately make a
mandatory prepayment of the Revolving Credit Obligations, to be applied to repay
the Revolving Loans, in an amount equal to such excess. In addition, to the
extent the Maximum Revolving Credit Amount is at any time less
41
than the amount of L/C Obligations outstanding at any time, the Borrower
shall deposit cash collateral with the Agent in an amount equal to the amount
by which the L/C Obligations exceed such Maximum Revolving Credit Amount.
2.6. REDUCTION OF COMMITMENTS. The Borrower may permanently reduce the
Aggregate Revolving Loan Commitment, the Aggregate Term Loan Commitment or the
Aggregate Acquisition Loan Commitment in whole or in part ratably among the
Lenders, in an aggregate minimum amount of $250,000 and integral multiples of
$100,000 in excess of that amount, upon at least three Business Days' written
notice to the Agent, which notice shall specify the amount of any such reduction
and whether such reduction relates to the Aggregate Revolving Loan Commitment,
the Aggregate Term Loan Commitment or the Aggregate Acquisition Loan Commitment
(each such notice, a "REDUCTION NOTICE"); PROVIDED, HOWEVER, that the amount of
the Aggregate Revolving Loan Commitment may not be reduced below the aggregate
principal amount of the outstanding Revolving Credit Obligations. All accrued
commitment fees with respect to the portion of the Aggregate Revolving Loan
Commitment, the Aggregate Term Loan Commitment or Aggregate Acquisition Loan
Commitment being terminated shall be payable on the effective date of any
termination of the obligations of the Lenders to make Revolving Loans, Term
Loans or Acquisition Loans, as applicable, hereunder.
2.7. METHOD OF BORROWING. Not later than 2:00 p.m. (Chicago time) on
each Borrowing Date, each Lender shall make available its Revolving Loan(s),
Term Loan(s) or Acquisition Loan(s), as applicable, in funds immediately
available in Chicago to the Agent at its address specified pursuant to
ARTICLE XIII hereof. Subject to the fulfillment of the conditions precedent
set forth in SECTIONS 4.1, 4.2 and 4.3, the Agent will promptly make the
funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address. The failure of any Lender to deposit the amount described
above with the Agent on the applicable Borrowing Date shall not relieve any
other Lender of its obligations hereunder to make its Loan on such date.
2.8. BORROWING NOTICE; DETERMINATION OF APPLICABLE MARGINS; MAKING OF
LOANS.
(a) BORROWING NOTICE. The Borrower shall select the Type of Advance
and, in the case of each Eurodollar Advance, the Interest Period applicable
to each of its Advances from time to time. The Borrower shall give the Agent
irrevocable notice (a "BORROWING NOTICE") not later than 11:00 a.m. (Chicago
time) on the Borrowing Date of each Floating Rate Advance and three Business
Days before the Borrowing Date for each Eurodollar Advance, specifying: (i)
the Borrowing Date (which shall be a Business Day and, in the case of a Term
Loan or an Acquisition Loan, an Acquisition Closing Date) of such Advance;
(ii) the aggregate amount of such Advance; (iii) the Type of Advance
selected; (iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto; (v) the amount of such Advance which is a Revolving
Credit Loan, Term Loan and/or Acquisition Loan; and (vi) instructions for
disbursement of such Advance. The Borrower shall select Interest Periods so
that, to the best of the Borrower's knowledge, it will not be necessary to
prepay all or any portion of any Eurodollar Advance prior to the last day of
the applicable Interest Period in order to make mandatory prepayments as
required pursuant to the terms hereof. Each Floating Rate Advance and all
Obligations other
42
than Loans shall bear interest from and including the date of the making of
such Advance to (but not including) the date of repayment thereof at the
Floating Rate, changing when and as such Floating Rate changes. Changes in
the rate of interest on that portion of any Advance maintained as a Floating
Rate Loan will take effect simultaneously with each change in the Alternate
Base Rate and/or Applicable Floating Rate Margin. Each Eurodollar Advance
shall bear interest from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such Eurodollar
Advance. Each request for an Advance shall be deemed a representation and
warranty by the Borrower that all conditions precedent to such Advance under
Article IV are satisfied as of the date of such request and as of the date of
such Advance.
(b) DETERMINATION OF APPLICABLE MARGINS AND APPLICABLE LETTER OF CREDIT
FEE.
(i) DEFINITIONS. As used in this Section 2.8(b) and in this Agreement,
the following terms shall have the following meanings:
"APPLICABLE LETTER OF CREDIT FEE" and "APPLICABLE MARGINS" shall mean
the Applicable Letter of Credit Fee, the Applicable Floating Rate Margin
and/or Applicable Eurodollar Margin, as the case may be. The Applicable
Letter of Credit Fee and Applicable Margins shall be determined, in
accordance with the provisions of this SECTION 2.8(b), by reference to the
following:
Applicable Applicable Applicable
Leverage Ratio Eurodollar Floating Rate Letter of
Margin Margin Credit Fee
-------------------------------------------------------------------------------
Greater than or equal to 2.75% 1.50% 2.75%
4.00 to 1.00
Less than 4.00 to 1.00 and 2.50% 1.25% 2.50%
greater than or equal to
3.00 to 1.00
Less than 3.00 to 1.00 2.25% 1.00% 2.25%
-------------------------------------------------------------------------------
PROVIDED, HOWEVER, that notwithstanding the foregoing, prior to the time that
any Term Loan or Acquisition Loan is made, the Applicable Floating Rate Margin
shall be 0.50%.
(ii) DETERMINATION OF APPLICABLE MARGINS AND APPLICABLE LETTER OF CREDIT
FEE.
(A) The Applicable Margin in respect of any Loan and the Applicable
Letter of Credit Fee payable under SECTION 2.25 shall be determined by
reference to the tables set forth in CLAUSE (i) above, as applicable, on the
basis of the Leverage Ratio (calculated on a rolling four quarter basis)
determined by reference to (1) the most recent financial statements delivered
pursuant to SECTION 6.1(A)(iI) or 6.1(A)(iii) or (2) the PRO FORMA financial
statements delivered in connection with an Acquisition pursuant to SECTION
6.3(H).
43
(B) Upon receipt of the financial statements with respect to the Borrower
Corporate Group delivered pursuant to SECTION 6.1(A)(ii) or SECTION 6.1(A)(iii),
as applicable, the Applicable Margins for all outstanding Loans and the
Applicable Letter of Credit Fee shall be adjusted, such adjustment being
effective on the tenth (10th) Business Day after receipt of such financial
statements and the Compliance Certificate to be delivered in connection
therewith; PROVIDED, HOWEVER, if the Borrower shall not have timely delivered
such financial statements in accordance with SECTION 6.1(A)(ii) or SECTION
6.1(A)(iii), as applicable, beginning with the date upon which such financial
statements should have been delivered and continuing until such financial
statements are delivered, it shall be assumed for purposes of determining the
Applicable Margins and the Applicable Letter of Credit Fee that the Leverage
Ratio was greater than 4.00 to 1.0. Notwithstanding the provisions set forth
above, upon receipt of the PRO FORMA financial statements with respect to the
Borrower Corporate Group delivered pursuant to SECTION 6.3(H) in connection with
an Acquisition, the Applicable Margins for all outstanding Loans and the
Applicable Letter of Credit Fee shall be adjusted, such adjustment being
effective on the Acquisition Closing Date with respect to such Acquisition, by
reference to such PRO FORMA financial statements.
2.9. MINIMUM AMOUNT OF EACH ADVANCE. Each Eurodollar Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $500,000 in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$100,000 (and in multiples of $100,000 in excess thereof); PROVIDED, HOWEVER,
that any Floating Rate Advance may be in the amount of the unused Aggregate
Revolving Loan Commitment, the unused Aggregate Acquisition Loan Commitment
and/or the unused Aggregate Term Loan Commitment.
2.10. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR CONVERSION AND
CONTINUATION OF ADVANCES.
(A) RIGHT TO CONVERT. The Borrower may elect from time to time,
subject to the provisions of SECTION 2.4, this SECTION 2.10 and SECTION 3.3
to convert all or any part of its Loan of any Type into any other Type or
Types of Loans; PROVIDED that any conversion of any Eurodollar Advance shall
be made on, and only on, the last day of the Interest Period applicable
thereto.
(B) AUTOMATIC CONVERSION AND CONTINUATION. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Loans. Each Eurodollar Loan shall continue as a
Eurodollar Loan until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Loan shall be automatically converted
into a Floating Rate Loan unless the Borrower shall have given the Agent
notice in accordance with SECTION 2.10(D) requesting that, at the end of such
Interest Period, such Eurodollar Loan continue as a Eurodollar Loan.
(C) NO CONVERSION POST-DEFAULT OR POST-UNMATURED DEFAULT.
Notwithstanding anything to the contrary contained in SECTION 2.10(A) or
SECTION 2.10(B), no Loan may be converted into or continued as a Eurodollar
Loan (except with the consent of the Required Lenders) when any Default or
Unmatured Default has occurred and is continuing.
44
(D) CONVERSION/CONTINUATION NOTICE. The Borrower shall give the Agent
irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of a
Floating Rate Loan into a Eurodollar Loan or continuation of a Eurodollar Loan
not later than 11:00 a.m. (Chicago time) three Business Days prior to the date
of the requested conversion or continuation, specifying: (1) the requested date
(which shall be a Business Day) of such conversion or continuation; (2) the
amount and Type of the Loan to be converted or continued; and (3) the amount of
Eurodollar Loan(s) into which such Loan is to be converted or continued and the
duration of the Interest Period(s) applicable thereto.
2.11. DEFAULT RATE. After the occurrence and during the continuance of a
Default, at the option of the Agent or at the direction of the Required Lenders,
the interest rate(s) applicable to the Obligations shall be increased by two
percent (2.0%) per annum above the Floating Rate or Eurodollar Rate, as
applicable (the "Default Rate").
2.12. COLLECTIONS, AND CONCENTRATION ACCOUNT ARRANGEMENTS. (a) The
Borrower agrees that it shall not maintain any lock box arrangement with any
Person, other than pursuant to the Lock Box Agreement and the Depositary
Agreement.
(b) The Borrower shall establish on or before the Closing Date a separate
irrevocable lock box arrangement with LaSalle pursuant to the Lock Box Agreement
to collect proceeds of Receivables (other than Medicare Receivables and Medicaid
Receivables). On or before August 15, 1996, the Borrower shall notify each
account debtor in respect of the Receivables (other than Medicare Receivables
and Medicaid Receivables) to make all payments in respect of such Receivables
directly to the Lock Box. From and after August 15, 1996, the Borrower shall
use its best efforts to cause all proceeds of such Receivables to be collected
through the Lock Box and deposited in the Collection Account or deposited
directly into the Collection Account, and if Collateral is sold, the Borrower
shall cause the purchaser to deposit the proceeds therefor directly into the
Collection Account for the benefit of the Agent and the Holders of Secured
Obligations. The Borrower acknowledges that it shall have no control whatsoever
over any proceeds so held. Any collections received by the Borrower and not so
deposited, shall be deemed to have been received by the Borrower as the Agent's
trustee and, upon the Borrower's receipt thereof, the Borrower shall immediately
transfer all such amounts into the Collection Account in their original form.
(c) On or before August 15, 1996, the Borrower shall establish a separate
irrevocable lock box arrangement pursuant to a Depositary Agreement with a bank
other than the Agent or a Lender (the "DEPOSITARY BANK") to collect proceeds of
Medicare Receivables and Medicaid Receivables. The Borrower shall notify each
account debtor in respect of Medicare Receivables and Medicaid Receivables to
make all payments in respect of such Receivables to the Depositary Account.
From and after August 15, 1996, the Borrower shall use its best efforts to cause
all proceeds of Medicare Receivables and Medicaid Receivables to be collected
through the Depositary Account and deposited into an account with the Depositary
Bank. The Borrower shall instruct the Depositary Bank that on each Business
Day, the Depositary Bank shall transfer
45
all collected funds in the Depositary Account to the Collection Account held by
LaSalle. The Agent shall have no control whatsoever over the Depositary
Account.
(d) The Collection Account shall constitute collateral for the
Obligations, which shall not be invested and from which the Borrower may not
withdraw funds. The Agent may, and the Borrower hereby authorizes the Agent to,
apply, on the date of the receipt of any immediately available funds and on the
second Business Day following the deposit of any check into the Collection
Account, such proceeds to the repayment of Revolving Credit Loans. At any time
that no Revolving Loans shall be outstanding and no Default shall have occurred
and be continuing, the Agent shall deposit any amounts on deposit in the
Collection Account in one or more Concentration Accounts, as the Borrower shall
direct.
(e) The Borrower shall maintain one or more accounts with LaSalle as
operating accounts (the "CONCENTRATION ACCOUNTS"). The Concentration Accounts
shall constitute collateral for the Obligations, which shall not be invested and
from which the Borrower may withdraw funds. The terms and conditions of each
Concentration Account shall be in accordance with LaSalle's usual and customary
deposit account arrangements. From and after August 15, 1996, the Borrower will
not, nor permit any Loan Party to, establish or maintain, or permit any of its
funds to be held in, any bank or deposit account (general or special) other than
the Depositary Accounts, the Concentration Accounts and the Collection Accounts;
PROVIDED that the Borrower and the other Loan Parties may have an aggregate
amount of not greater than $50,000 on deposit in accounts (each, a "RESTRICTED
ACCOUNT") maintained with banks which have entered into an agreement with the
Agent, in form and substance acceptable to the Agent (a "RESTRICTED ACCOUNT
AGREEMENT"), providing for each such bank, upon notice from the Agent of the
occurrence of a Default, to transfer all funds maintained in such account to the
Agent for deposit to a Concentration Account; and PROVIDED FURTHER that the
Borrower and the other Loan Parties may have an aggregate amount of not greater
than $10,000 on deposit in accounts other than Depositary Accounts,
Concentration Accounts and Restricted Accounts. The Borrower shall maintain
from time to time balances in the Concentration Accounts such that the average
daily demand deposit balances shall be sufficient to cover all service costs of
LaSalle (which shall be LaSalle's reasonable and customary service costs),
PROVIDED, HOWEVER, that if at any time the balances maintained by the Borrower
shall be deficient, LaSalle shall, and the Borrower hereby authorizes LaSalle
to, charge on a monthly basis any Concentration Account for such deficiency.
Following the occurrence and during the continuance of a Default, all amounts in
the Concentration Accounts may be applied by the Agent, whenever the Agent so
directs, to pay Obligations.
(f) Following the Concentration Account Blockage Date and during the
continuance of a Default giving rise thereto, all deposits in or to the
Concentration Accounts, all payments received by the Agent, all collections of
Receivables included in the Collateral received by the Agent, and all proceeds
of other Collateral received by the Agent, whether through payment or otherwise,
will be the sole property of the Agent for the benefit of the Holders of Secured
Obligations and will be deemed held or received by the Agent for application to
the Obligations pursuant to the terms of this Agreement.
46
2.13. METHOD OF PAYMENT. All payments of principal, interest and fees
hereunder, including without limitation payments with respect to Reimbursement
Obligations and fees with respect to Letters of Credit, shall be made, without
setoff, deduction or counterclaim, in immediately available funds to the Agent
at the Agent's address specified pursuant to ARTICLE XIII, or at any other
Lending Installation of the Agent specified in writing by the Agent to the
Borrower, by 2:00 p.m. (Chicago time) on the date when due and shall be made
ratably among the Lenders (unless such amount is not to be shared ratably in
accordance with the terms hereof). Each payment delivered to the Agent for the
account of any Lender shall be delivered promptly by the Agent to such Lender in
the same type of funds which the Agent received at its address specified
pursuant to ARTICLE XIII or at any Lending Installation specified in a notice
received by the Agent from such Lender. The Agent is hereby authorized to
charge any account of the Borrower maintained with LaSalle for each payment of
principal, interest and fees as it becomes due hereunder.
2.14 NOTES, TELEPHONIC NOTICES. Each Lender is hereby authorized to
record the principal amount of each of its Loans to the Borrower and each
repayment with respect to its Loans on the schedule attached to its respective
Note; PROVIDED, HOWEVER, that the failure to so record shall not affect the
Borrower's obligations under any such Note. The Borrower hereby authorizes the
Lenders and the Agent to extend Advances, effect selections of Types of Advances
and to transfer funds based on telephonic notices made by any person or persons
the Agent or any Lender in good faith believes to be acting on behalf of the
Borrower. The Borrower agrees to deliver promptly to the Agent a written
confirmation signed by an Authorized Officer, if such confirmation is requested
by the Agent or any Lender, of each telephonic notice. If the written
confirmation differs in any material respect from the action taken by the Agent
and the Lenders, (i) the telephonic notice shall govern absent manifest error
and (ii) the Agent or the Lender, as applicable, shall promptly notify the
Authorizing Officer who provided such confirmation of such difference.
2.15. PROMISE TO PAY; INTEREST AND FEES; INTEREST PAYMENT DATES; INTEREST
AND FEE BASIS; TAXES; LOAN AND CONTROL ACCOUNTS.
(A) PROMISE TO PAY. The Borrower hereby unconditionally promises to pay
when due the principal amount of each Loan which is made to it, and to pay all
unpaid interest accrued thereon, in accordance with the terms of this Agreement
and Notes.
(B) INTEREST PAYMENT DATES. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof and at maturity (whether by acceleration or
otherwise). Interest accrued on each Eurodollar Loan shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Loan is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Loan having an Interest Period longer than
three months shall also be payable on the last day of each three-month interval
during such Interest Period. Interest accrued on the principal balance of all
other Obligations shall be payable in arrears (i) on each Payment Date,
commencing on the first such day following the incurrence of such
47
Obligation, (ii) upon repayment thereof in full or in part, and (iii) if not
theretofore paid in full, at the time such Obligation becomes due and payable
(whether by acceleration or otherwise).
(C) FEES.
(i) The Borrower shall pay to the Agent, for the account of the
Lenders, in accordance with their Pro Rata Shares of the Aggregate
Revolving Loan Commitment, a commitment fee accruing at the rate of one-
half of one percent (0.50%) per annum from and after the date of this
Agreement until the Termination Date on the amount by which (A) the
Aggregate Revolving Loan Commitment in effect from time to time exceeds (B)
the Revolving Credit Obligations in effect from time to time. All such
commitment fees payable under this CLAUSE (C)(I) shall be payable quarterly
in arrears on the first Business Day of each March, June, September and
December occurring after the Closing Date and, in addition, on the
Termination Date.
(ii) In addition, the Borrower shall pay to the Agent, for the
account of the Lenders, in accordance with their Pro Rata Shares of the
Aggregate Term Loan Commitment, a commitment fee accruing at the rate of
one-half of one percent (0.50%) per annum from and after the date of this
Agreement until the Conversion Date on the unborrowed amount of the
Aggregate Term Loan Commitment in effect from time to time. All such
commitment fees payable under this CLAUSE (C)(II) shall be payable
quarterly in arrears on the first Business Day of each March, June,
September and December occurring after the date of this Agreement and, in
addition, on the Conversion Date.
(iii) In addition, the Borrower shall pay to the Agent, for the
account of the Lenders, in accordance with their Pro Rata Shares of the
Aggregate Acquisition Loan Commitment, a commitment fee accruing at the
rate of one-half of one percent (0.50%) per annum from and after the date
of this Agreement until the Conversion Date on the amount by which (A) the
Aggregate Acquisition Loan Commitment in effect from time to time exceeds
(B) the aggregate principal amount of Acquisition Loans outstanding from
time to time. All such commitment fees payable under this CLAUSE (C)(III)
shall be payable quarterly in arrears on the first Business Day of each
March, June, September and December occurring after the date of this
Agreement and, in addition, on the Conversion Date.
(iv) The Borrower shall pay to LaSalle, for its own account, an
origination fee, as set forth in that certain letter agreement dated June
21, 1996 between the Borrower and LaSalle.
(D) INTEREST AND FEE BASIS. Interest and fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Obligation is incurred but not for the day of any payment on the
amount paid if payment is received prior to 2:00 p.m. (Chicago time) at the
place of payment. If any payment of principal of or interest on a Loan or any
payment of any other Obligations shall become due on a day which is not a
Business
48
Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
(E) TAXES.
(i) Any and all payments by the Borrower hereunder shall be made
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto including those arising after the date
hereof as a result of the adoption of or any change in any law, treaty,
rule, regulation, guideline or determination of a Governmental Authority
or any change in the interpretation or application thereof by a
Governmental Authority but excluding, in the case of each Lender and the
Agent, any Income Taxes imposed on the Lender or the Agent by the United
States of America or any Governmental Authority of the jurisdiction under
the laws of which such Lender or the Agent, as the case may be, is
organized or maintains a Lending Installation (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings, and liabilities which
the Agent or a Lender determines to be applicable to this Agreement, the
other Loan Documents, the Commitments, the Loans or the Letters of Credit
being hereinafter referred to as "TAXES"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the other Loan Documents to any Lender or the Agent,
(i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this SECTION 2.15(E)) such Lender or the
Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall
make such deductions, and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law. If a withholding tax of the United States
of America or any other Governmental Authority shall be or become
applicable (y) after the date of this Agreement, to such payments by the
Borrower made to the Lending Installation or any other office that a Lender
may claim as its Lending Installation, or (z) after such Lender's selection
and designation of any other Lending Installation, to such payments made to
such other Lending Installation, such Lender shall use reasonable efforts
to make, fund and maintain its Loans through another Lending Installation
of such Lender in another jurisdiction so as to reduce the Borrower's
liability hereunder, if the making, funding or maintenance of such Loans
through such other Lending Installation of such Lender does not, in the
judgment of such Lender, otherwise adversely affect such Loans, the
obligations under the Commitments or such Lender.
(ii) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges,
or similar levies which arise from any payment made hereunder, from the
issuance of Letters of Credit hereunder, or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the other
Loan Documents, the Commitments, the Loans or the Letters of Credit
(hereinafter referred to as "OTHER TAXES").
49
(iii) The Borrower will indemnify each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed by any Governmental Authority on amounts
payable under this SECTION 2.15(E)) paid by such Lender or the Agent (as
the case may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within thirty (30) days after the date such
Lender or the Agent (as the case may be) makes written demand therefor. A
certificate as to any additional amount payable to any Lender or the Agent
under this SECTION 2.15(E) submitted to the Borrower and the Agent (if a
Lender is so submitting) by such Lender or the Agent shall show in
reasonable detail the amount payable and the calculations used to determine
such amount and shall, absent manifest error, be final, conclusive and
binding upon all parties hereto. With respect to such deduction or
withholding for or on account of any Taxes and to confirm that all such
Taxes have been paid to the appropriate Governmental Authorities, the
Borrower shall promptly (and in any event not later than thirty (30) days
after receipt) furnish to each Lender and the Agent such receipts or other
appropriate documentation evidencing payment thereof.
(iv) Within thirty (30) days after the date of any payment of Taxes
or Other Taxes by the Borrower, the Borrower will furnish to the Agent the
original or a certified copy of a receipt or other appropriate
documentation evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this SECTION 2.15(E) shall survive the payment in full of
principal and interest hereunder, the termination of the Letters of Credit
and the termination of this Agreement.
(vi) Without limiting the obligations of the Borrower under this
SECTION 2.15(E), each Lender that is not created or organized under the
laws of the United States of America or a political subdivision thereof
shall deliver to the Borrower and the Agent on or before the Closing Date,
or, if later, the date on which such Lender becomes a Lender pursuant to
SECTION 12.3 hereof, a true and accurate certificate executed in duplicate
by a duly authorized officer of such Lender, in a form satisfactory to the
Borrower and the Agent, to the effect that such Lender is capable under the
provisions of an applicable tax treaty concluded by the United States of
America (in which case the certificate shall be accompanied by two executed
copies of Form 1001 of the IRS) or under Section 1442 of the Code (in which
case the certificate shall be accompanied by two copies of Form 4224 of the
IRS) of receiving payments of interest hereunder without deduction or
withholding of United States federal income tax. Each such Lender further
agrees to deliver to the Borrower and the Agent from time to time a true
and accurate certificate executed in duplicate by a duly authorized officer
of such Lender substantially in a form satisfactory to the Borrower and the
Agent, before or promptly upon the occurrence of any event requiring a
change in the most recent certificate previously delivered by it to the
Borrower and the Agent pursuant to this SECTION 2.15(E)(vi).
50
Further, each Lender which delivers a certificate accompanied by Form 1001
of the IRS covenants and agrees to deliver to the Borrower and the Agent
within fifteen (15) days prior to January 1, 1997, and every third (3rd)
anniversary of such date thereafter (or such earlier date as provided for
by the Code or the applicable regulations promulgated thereunder) on which
this Agreement is still in effect, another such certificate and two
accurate and complete original signed copies of Form 1001 (or any successor
form or forms required under the Code or the applicable regulations
promulgated thereunder), and each Lender that delivers a certificate
accompanied by Form 4224 of the IRS covenants and agrees to deliver to the
Borrower and the Agent within fifteen (15) days prior to the beginning of
each subsequent taxable year (or such earlier date as provided for by the
Code or the applicable regulations promulgated thereunder) of such Lender
during which this Agreement is still in effect, another such certificate
and two accurate and complete original signed copies of IRS Form 4224 (or
any successor form or forms required under the Code or the applicable
regulations promulgated thereunder). Each such certificate shall certify
as to one of the following:
(a) that such Lender is capable of receiving payments of
interest hereunder without deduction or withholding of United States
of America federal income tax;
(b) that such Lender is not capable of receiving payments of
interest hereunder without deduction or withholding of United States
of America federal income tax as specified therein but is capable of
recovering the full amount of any such deduction or withholding from a
source other than the Borrower and will not seek any such recovery
from the Borrower; or
(c) that, as a result of the adoption of or any change in any
law, treaty, rule, regulation, guideline or determination of a
Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority after the date such
Lender became a party hereto, such Lender is not capable of receiving
payments of interest hereunder without deduction or withholding of
United States of America federal income tax as specified therein and
that it is not capable of recovering the full amount of the same from
a source other than the Borrower.
Each Lender shall promptly furnish to the Borrower and the Agent such
additional documents as may be reasonably required by the Borrower or the
Agent to establish any exemption from or reduction of any Taxes or Other
Taxes required to be deducted or withheld and which may be obtained without
undue expense to such Lender.
(F) LOAN ACCOUNT. Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "LOAN ACCOUNT") evidencing the
Obligations of the Borrower to such Lender resulting from each Loan owing to
such Lender from time to time, including the amount of principal and interest
payable and paid to such Lender from time to time hereunder and under the Notes.
51
(G) CONTROL ACCOUNT. The Register maintained by the Agent pursuant to
SECTION 12.3 shall include a control account, and a subsidiary account for the
Borrower and each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Advance made hereunder, the Type of Loan
comprising such Advance and any Interest Period applicable thereto, (ii) the
effective date and amount of each assignment and acceptance delivered to and
accepted by it and the parties thereto pursuant to SECTION 12.3, (iii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder or under the Notes, (iv) the amount
of any sum received by the Agent from the Borrower hereunder and each Lender's
share thereof, and (v) all other appropriate debits and credits as provided in
this Agreement, including, without limitation, all fees, charges, expenses and
interest.
(H) ENTRIES BINDING. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error,
unless the Borrower objects to information contained in the Register and each
Loan Account within thirty (30) days of the Borrower's receipt of such
information.
2.16. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND AGGREGATE
REVOLVING LOAN COMMITMENT REDUCTIONS. Promptly after receipt thereof, the
Agent will notify each Lender of the contents of each Reduction Notice,
Borrowing Notice, Continuation/Conversion Notice, and repayment or prepayment
notice received by it hereunder. The Agent will notify each Lender of the
interest rate applicable to each Eurodollar Loan promptly upon determination of
such interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.17. LENDING INSTALLATIONS. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Notes shall be deemed held by each Lender for the benefit
of such Lending Installation. Each Lender may, by written or facsimile notice
to the Agent and the Borrower, designate a Lending Installation through which
Loans will be made by it and for whose account Loan payments are to be made.
Any Lender claiming any additional amounts payable pursuant to SECTION 2.15(E)
OR ARTICLE III agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Lending Installation if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that may thereafter accrue and
would not, in the sole judgment of such Lender, be otherwise disadvantageous to
such Lender.
2.18. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that the Borrower
or Lender does not intend to make such payment, the Agent may assume that such
payment has been made. The Agent may, but shall not be obligated to, make the
amount of such
52
payment available to the intended recipient in reliance upon such assumption.
If such Lender or the Borrower, as the case may be, has not in fact made
such payment to the Agent, the recipient of such payment shall, on demand by
the Agent, repay to the Agent the amount so made available together with
interest thereon in respect of each day during the period commencing on the
date such amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to (i) in the case of payment
which was assumed to have been made by a Lender, the Federal Funds Effective
Rate for such day or (ii) in the case of payment which was assumed to have
been made by the Borrower, the interest rate applicable to the relevant Loan.
If and to the extent any Lender shall not have made available the proceeds
of its Loan to the Agent on the date of any Advance, LaSalle may in its sole
discretion make a Loan (the "OVER-ADVANCE") to repay the Agent forthwith on
demand a corresponding amount and the Lender which failed to make available
the proceeds of its Loan agrees to repay LaSalle forthwith on demand a
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount
is repaid to LaSalle at the interest rate applicable during such period to
the Advance and the principal amount repaid by such Lender shall constitute
such Lender's Loan for purposes of this Agreement. In the event any Lender
fails to make available the proceeds of its Loan to the Agent on the date of
any Advance and LaSalle elects to make an Over-Advance, LaSalle's and such
other Lender's relevant Commitments shall be temporarily increased and
decreased, respectively, by the amount of the Over-Advance and any payments
allocable to such other Lender shall be paid to LaSalle until the principal
of and interest on the Over-Advance shall be paid in full. The failure of any
Lender to make any Advance to be made by it shall not relieve any other
Lender of its obligation, if any, hereunder to make its Loan on the date of
such Advance. No Lender shall be responsible for the failure of any other
Lender to make a Loan to be made by such Lender on the date of any such
Advance. The Agent shall promptly give the Borrower notice of any Lender's
failure to make its Loan.
2.19. TERMINATION DATE. Notwithstanding the occurrence of the Termination
Date or the Term Loan Termination Date, this Agreement shall remain effective
and all of the rights and remedies under this Agreement and the other Loan
Documents shall survive and the Agent shall be entitled to retain its security
interest in and to all existing and future Collateral for the benefit of itself
and the Holders of Secured Obligations until all of the Obligations (other than
contingent indemnity obligations) shall have been fully and indefeasibly paid
and satisfied, all financing arrangements among the Borrower, the Agent and the
Lenders shall have been terminated (other than under Interest Rate Agreements)
and all of the Letters of Credit shall have expired, been canceled or
terminated.
2.20. REPLACEMENT OF CERTAIN LENDERS. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its Pro Rata Share of any Advance
requested by the Borrower which such Lender is obligated to fund under the terms
of this Agreement and which failure has not been cured, (ii) requested
compensation from the Borrower under SECTIONS 2.15(E), 3.1 or 3.2 to recover
Taxes, Other Taxes or other additional costs incurred by such Lender which are
not being incurred generally by the other Lenders, (iii) delivered a notice
pursuant to SECTION 3.3 claiming that such Lender is unable to extend Eurodollar
Loans to the Borrower for reasons not generally applicable to the other Lenders
or (iv) invoked SECTION 9.2, then, in any such case, the
53
Borrower or the Agent may make written demand on such Affected Lender (with a
copy to the Agent in the case of a demand by the Borrower and a copy to the
Borrower in the case of a demand by the Agent) for the Affected Lender to
assign, and such Affected Lender shall use its best efforts to assign
pursuant to one or more duly executed Assignments in substantially the form
of EXHIBIT F five (5) Business Days after the date of such demand, to one or
more financial institutions which complies with the provisions of SECTION
12.3(A) (and, if selected by the Borrower is reasonably acceptable to the
Agent) which the Borrower or the Agent, as the case may be, shall have
engaged for such purpose ("REPLACEMENT LENDER"), all of such Affected
Lender's rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, its Revolving Loan Commitment, its
Term Loan Commitment, its Acquisition Loan Commitment, all Loans owing to it,
all of its participation interests in existing Letters of Credit, and its
obligation to participate in additional Letters of Credit hereunder) in
accordance with SECTION 12.3. If the Affected Lender is also an Issuing
Lender, then prior to or simultaneously with the assignment to the
Replacement Lender, all Letters of Credit issued by the Affected Lender shall
be replaced by Letters of Credit issued by the Agent, the Replacement Lender
or another Issuing Lender. The Agent hereby agrees, upon the occurrence of
such events with respect to an Affected Lender and upon the written request
of the Borrower, to use its reasonable efforts to obtain the commitments from
one or more financial institutions to act as a Replacement Lender. The Agent
is hereby authorized to execute one or more of such assignment agreements as
attorney-in-fact for any Affected Lender failing to execute and deliver the
same within five (5) Business Days after the date of such demand. Further,
with respect to such assignment the Affected Lender shall have concurrently
received, in cash, all amounts due and owing to the Affected Lender hereunder
or under any other Loan Document, including, without limitation, the
aggregate outstanding principal amount of the Loans owed to such Lender,
together with accrued interest thereon through the date of such assignment,
amounts payable under SECTION 2.15(E), 3.1, and 3.2 with respect to such
Affected Lender and compensation payable under SECTION 2.15(C) through the
date of such assignment in the event of any replacement of any Affected
Lender under CLAUSE (ii) or CLAUSE (iii) of this SECTION 2.20; PROVIDED, upon
such Affected Lender's replacement, such Affected Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of SECTIONS
2.15(E), 2.26, 3.1, 3.2, 3.4, and 9.7, as well as to any fees accrued for its
account hereunder and not yet paid, and shall continue to be obligated under
SECTION 10.8 with respect to matters arising out of events which occurred
prior to the date of replacement of such Affected Lender. Upon the
replacement of any Affected Lender pursuant to this SECTION 2.20, the
provisions of SECTION 8.2 shall continue to apply with respect to Loans which
are then outstanding with respect to which the Affected Lender failed to fund
its Pro Rata Share and which failure has not been cured.
2.21. LETTER OF CREDIT FACILITY. Upon receipt of duly executed
applications therefor, and such other documents, instructions and agreements as
such Issuing Lender may require, and subject to the provisions of ARTICLE IV,
the Agent shall or any other Lender, in its sole discretion, may, issue letters
of credit for the account of the Borrower, and for which a Subsidiary may be a
co-applicant (the Agent and each such other Lender in such capacity being
referred to as an ("ISSUING LENDER"), on terms as are satisfactory to such
Issuing Lender; PROVIDED, HOWEVER, that no Letter of Credit will be issued for
the account of the Borrower by an Issuing Lender if (i) on the date of issuance,
before or after taking such Letter of Credit into account the aggregate of all
54
Revolving Credit Obligations exceeds the Maximum Revolving Credit Amount at
such time; or (ii) the aggregate outstanding amount of the L/C Obligations
exceeds $500,000; and PROVIDED, FURTHER, that no Letter of Credit shall be
issued which has an expiration date later than the date which is five (5)
Business Days immediately preceding the Termination Date. If the Borrower
applies for a Letter of Credit from any Lender other than the Agent, the
Borrower shall simultaneously notify the Agent of the proposed amount and
expiration date of such Letter of Credit. The Agent shall promptly notify
the Borrower and the Lender to which such application has been made whether
issuance of such Letter of Credit would comply with the terms of this SECTION
2.21.
2.22. LETTER OF CREDIT PARTICIPATION. Immediately upon the
issuance of each additional Letter of Credit hereunder, each Lender shall be
deemed to have automatically, irrevocably and unconditionally purchased and
received from the applicable Issuing Lender an undivided interest and
participation in and to such Letter of Credit, the obligations of the
Borrower (and the applicable Subsidiary, if any, which is the co-applicant)
in respect thereof, and the liability of the applicable Issuing Lender
thereunder (collectively, an "L/C INTEREST") in an amount equal to the amount
available for drawing under such Letter of Credit multiplied by such Lender's
Pro Rata Share. The Agent will notify each Lender (or in the case of an
Issuing Lender other than the Agent, such Issuing Lender shall notify the
Agent who in turn will notify each Lender) promptly (a) upon the issuance of
any Letter of Credit and (b) upon presentation to it of an L/C Draft or upon
any other draw under a Letter of Credit. On or before the Business Day on
which the applicable Issuing Lender makes payment of each such L/C Draft or,
in the case of any other draw on a Letter of Credit, on demand of the
applicable Issuing Lender (which demand shall not require payment prior to
the Business Day such payment is required to be made by the Issuing Lender
under the Letter of Credit), each Lender shall make payment to the Agent for
the account of the applicable Issuing Lender in immediately available funds
in an amount equal to such Lender's Pro Rata Share of the Aggregate Revolving
Loan Commitment of the amount of such payment or draw. The obligation of
each Lender to reimburse the Agent for the account of the applicable Issuing
Lender under this SECTION 2.22 shall be unconditional, continuing,
irrevocable and absolute. In the event that any Lender fails to make payment
to the Agent for the account of the applicable Issuing Lender of any amount
due under this SECTION 2.22, the Agent shall be entitled to receive, retain
and apply against such obligation the principal and interest otherwise
payable to such Lender hereunder until the Agent receives such payment from
such Lender on behalf of the applicable Issuing Lender or such obligation is
otherwise fully satisfied; PROVIDED, HOWEVER, that nothing contained in this
sentence shall relieve such Lender of its obligation to reimburse the Agent
on behalf of the applicable Issuing Lender for such amount in accordance with
this SECTION 2.22.
2.23. REIMBURSEMENT OBLIGATION. The Borrower agrees
unconditionally, irrevocably and absolutely to pay immediately to the Agent,
for the account of the applicable Issuing Lender or the account of the
Lenders, as the case may be, the amount of each advance which may be drawn
under or pursuant to a Letter of Credit issued for its account or an L/C
Draft related thereto (such obligation of the Borrower to reimburse the
Issuing Lender or the Agent for an advance made under a Letter of Credit or
L/C Draft being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with
respect to such Letter of Credit or L/C Draft). If the
55
Borrower at any time fails to repay a Reimbursement Obligation pursuant to
this SECTION 2.23, the Borrower shall be deemed to have elected to borrow a
Revolving Loan from the Lenders (any such Loan to be evidenced by the
Revolving Credit Notes and for all purposes under and on and subject to the
terms of this Agreement and the Loan Documents, although without regard to
the conditions precedent to making an Advance and any requirement of this
Agreement that an Advance be in a minimum amount), as of the date of the
advance giving rise to the Reimbursement Obligation, consisting of a Floating
Rate Advance equal in amount to the amount of the unpaid Reimbursement
Obligation, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises,
then such Reimbursement Obligation shall bear interest from and after such
day, until paid in full, at the interest rate applicable to Revolving Loans
consisting of Floating Rate Loans.
2.24. CASH COLLATERAL. Notwithstanding anything to the contrary
herein or in any application for a Letter of Credit, after the occurrence and
during the continuance of Default, the Borrower shall, upon the Agent's
demand, deliver to the Agent for the benefit of the Lenders, cash, or other
collateral of a type satisfactory to the Required Lenders, having a value, as
determined by such Lenders, equal to the aggregate outstanding L/C
Obligations. In addition, to the extent the Maximum Revolving Credit Amount
is at any time less than the amount of L/C Obligations outstanding at any
time, the Borrower shall deposit cash collateral with the Agent in an amount
equal to the amount by which the L/C Obligations exceed such Maximum
Revolving Credit Amount. Any such collateral shall be held by the Agent in a
separate account appropriately designated as a cash collateral account in
relation to this Agreement and the Letters of Credit and retained by the
Agent for the benefit of the Lenders as collateral security for the
Borrower's obligations in respect of this Agreement and each of the Letters
of Credit and L/C Drafts. Such amounts shall be applied to reimburse the
Agent or each Issuing Lender, as applicable, for drawings or payments under
or pursuant to Letters of Credit or L/C Drafts, or if no such reimbursement
is required, to payment of such of the other Obligations as the Agent shall
determine. If no Default or Unmatured Default shall be continuing, amounts
remaining in any cash collateral account established pursuant to this SECTION
2.24 which are not to be applied to reimburse the Agent for amounts actually
paid or to be paid by the Agent in respect of a Letter of Credit or L/C
Draft, shall be returned to the Borrower (after deduction of the Agent's
expenses incurred in connection with such cash collateral account).
2.25. LETTER OF CREDIT FEES. The Borrower agrees to pay (i)
monthly, in arrears, to the Agent for the ratable benefit of the Lenders,
except as set forth in SECTION 8.2, a letter of credit fee in the amount of
the Applicable Letter of Credit Fee rate per annum on the aggregate amount
available for drawing under all of the Letters of Credit issued for the
Borrower's account and (ii) to the Issuing Lender directly for its benefit as
issuing bank, all customary fees (including fronting fees) and other
issuance, amendment, document examination, negotiation and presentment
expenses and related charges in connection with the issuance, amendment,
presentation of L/C Drafts, and the like customarily charged by such Issuing
Lender with respect to standby and commercial Letters of Credit issued by it
for the Borrower's account, including, without limitation standard
commissions with respect to commercial Letters of Credit, payable at the time
of invoice of such amounts.
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2.26. INDEMNIFICATION; EXONERATION. (a) In addition to amounts
payable as elsewhere provided in this Agreement, the Borrower hereby agrees
to protect, indemnify, pay and save harmless the Agent, each Lender and each
Issuing Lender from and against any and all liabilities and costs which the
Agent, any Lender or any Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit
other than, in the case of the Issuing Lender thereof, as a result of its
Gross Negligence or willful misconduct as determined by the final judgment of
a court of competent jurisdiction, or (ii) the failure of the Issuing Lender
of such Letter of Credit to honor a drawing under such Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present
or future de jure or de facto Governmental Authority (all such acts or
omissions herein called "GOVERNMENTAL ACTS").
(b) As among the Borrower, the Lenders, the Issuing Lenders and the
Agent, the Borrower assumes all risks of the acts and omissions of, or misuse
of such Letter of Credit by, the beneficiary of any Letter of Credit. In
furtherance and not in limitation of the foregoing, subject to the provisions
of the Letter of Credit applications and Letter of Credit reimbursement
agreements executed by the Borrower at the time of request for any Letter of
Credit, the Issuing Lender of a Letter of Credit, the Agent and the Lenders
shall not be responsible (in the absence of Gross Negligence or willful
misconduct in connection therewith as determined by the final judgment of a
court of competent jurisdiction): (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party
in connection with the application for and issuance of the Letters of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a 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; (iii) for failure of the beneficiary of a Letter
of Credit to comply duly with conditions required in order to draw upon such
Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex,
or other similar form of teletransmission or otherwise; (v) for errors in
interpretation of technical trade terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Letter of Credit or the proceeds of
any drawing under such Letter of Credit; and (viii) for any consequences
arising from causes beyond the control of the Agent, the Issuing Lender of
the Letter of Credit and the Lenders including, without limitation, any
Governmental Acts. None of the above shall affect, impair, or prevent the
vesting of any Issuing Lender's rights or powers under this SECTION 2.26.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Lender under or in connection with Letters of Credit issued on behalf
of the Borrower or any related certificates shall not, in the absence of
Gross Negligence or willful misconduct as determined by the final judgment of
a court of competent jurisdiction, put the Issuing Lender, the Agent or any
Lender under any resulting liability to the Borrower or relieve the Borrower
of any of its obligations hereunder to any such Person.
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(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained
in this SECTION 2.26 shall survive the payment in full of principal and
interest hereunder, the termination of the Letters of Credit and the
termination of this Agreement.
ARTICLE III. CHANGE IN CIRCUMSTANCES
3.1. YIELD PROTECTION. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether
or not having the force of law) adopted after the date of this Agreement and
having general applicability to all banks within the jurisdiction in which
such Lender operates (excluding, for the avoidance of doubt, the effect of
and phasing in of capital requirements or other regulations or guidelines
passed prior to the date of this Agreement), or any interpretation or
application thereof by any governmental authority charged with the
interpretation or application thereof, or the compliance of any Lender
therewith,
(i) subjects any Lender (each reference in this SECTION 3.1 to a
Lender being in its capacity either as a Lender or an Issuing Lender, or
both) or any applicable Lending Installation to any tax, duty, charge or
withholding on or from payments due from the Borrower, or changes the basis
of taxation of payments to any Lender in respect of its Commitments, its
Loans, its L/C Interests, the Letters of Credit or other amounts due it
hereunder (excluding for purposes of this Section 3.1(i), any Income Taxes
imposed on any Lender or applicable Lending Installation by the United States
of America or any Governmental Authority of the jurisdiction under the laws
of which such Lender is organized or maintains a Lending Installation), or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Lender or any applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest rate applicable to
Eurodollar Loans) with respect to its Commitments, its Loans, L/C Interests
or the Letters of Credit, or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining the Commitments, the Loans, the L/C Interests
or the Letters of Credit or reduces any amount received by any Lender or any
applicable Lending Installation in connection with Commitments, Loans, L/C
Interests or Letters of Credit, or requires any Lender or any applicable
Lending Installation to make any payment calculated by reference to the
amount of Commitments, Loans, L/C Interests or Letters of Credit held or
interest received by it or by reference to the Letters of Credit, by an
amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender
of making, renewing or maintaining its Commitments, Loans, L/C Interests or
Letters of Credit or to reduce any amount received under this Agreement,
then, within 15 days after receipt by the Borrower of written demand by such
Lender pursuant to SECTION 3.5, the Borrower shall pay such Lender that
portion of such increased expense incurred or reduction in an amount received
which such
58
Lender determines is attributable to making, funding and maintaining its
Commitments, Loans, L/C Interests or Letters of Credit.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender (each
reference in this SECTION 3.2 to a Lender being in its capacity either as a
Lender or an Issuing Lender, or both) determines (i) the amount of capital
required or expected to be maintained by such Lender, any Lending
Installation of such Lender or any corporation controlling such Lender is
increased as a result of a "Change" (as defined below), and (ii) such
increase in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation
to make Loans hereunder, then, within 15 days after receipt by the Borrower
of written demand by such Lender pursuant to SECTION 3.5, the Borrower shall
pay such Lender the amount necessary to compensate for any shortfall in the
rate of return on the portion of such increased capital which such Lender
determines is attributable to this Agreement, its Loans, its L/C Interests,
the Letters of Credit or its obligation to make Loans hereunder (after taking
into account such Lender's policies as to capital adequacy). "CHANGE" means
(i) any change after the date of this Agreement in the "Risk-Based Capital
Guidelines" (as defined below) excluding, for the avoidance of doubt, the
effect of any phasing in of such Risk Based Capital Guidelines or any other
capital requirements passed prior to the date hereof, or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement and having general
applicability to all banks and financial institutions within the jurisdiction
in which such Lender operates which affects the amount of capital required or
expected to be maintained by any Lender or any Lending Installation or any
corporation controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means
(i) the risk-based capital guidelines in effect in the United States on the
date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted
prior to the date of this Agreement.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If (i) any Lender determines
that maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or
not having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type and maturity appropriate to match fund Eurodollar Advances
are not available or (y) the interest rate applicable to a Type of Advance
does not accurately reflect the cost of making or maintaining such an
Advance, then the Agent shall suspend the availability of the affected Type
of Advance until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and, in the case of
any occurrence set forth in clause (i), require any Advances of the affected
Type to be repaid or converted into Advances of another Type.
3.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment, or otherwise, or a Eurodollar
Advance is not made on the date specified by the
59
Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain the Eurodollar Advance.
3.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of
the Borrower to such Lender under SECTIONS 3.1 and 3.2 or to avoid the
unavailability of a Type of Advance under SECTION 3.3, so long as such
designation is not disadvantageous to such Lender. Each Lender requiring
compensation pursuant to SECTION 2.15(E) or this ARTICLE III shall use its
best efforts to notify the Borrower and the Agent in writing of any Change,
law, policy, rule, guideline or directive giving rise to such demand for
compensation as soon as practicable but not later than ninety (90) days
following the date upon which the responsible account officer of such Lender
knows or should have known of such Change, law, policy, rule, guideline or
directive. Any demand for compensation pursuant to this ARTICLE III shall be
in writing and shall state the amount due, if any, under SECTION 3.1, 3.2 or
3.4 and shall set forth in reasonable detail the calculations upon which such
Lender determined such amount. Such written demand shall be rebuttably
presumed correct for all purposes. Notwithstanding anything in this
Agreement to the contrary, the Borrower shall not be obligated to pay any
amount or amounts under SECTION 2.15(E) or this Article III to the extent
such amount or amounts result from a Change, law, policy, rule, guideline or
directive which took effect more than ninety (90) days prior to the date of
delivery of the notice described above, provided that the foregoing shall not
limit the right of any Lender to demand or receive such compensation to the
extent such compensation relates to the retroactive application of any
Change, law, policy, rule, guideline or directive if such notice is given
within 90 days after the implementation of such Change, law, policy, rule,
guideline or directive. Determination of amounts payable under such Sections
in connection with a Eurodollar Loan shall be calculated as though each
Lender funded its Eurodollar Loan through the purchase of a deposit of the
type and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate applicable to such Loan, whether in fact that
is the case or not. The obligations of the Borrower under SECTIONS 3.1, 3.2
and 3.4 shall survive payment of the Obligations and termination of this
Agreement. The obligations of the Borrower under SECTIONS 3.1, 3.2 and 3.4
shall survive the replacement of a Lender pursuant to SECTION 2.20 or the
assignment by a Lender of all of its rights and obligations under the
Agreement pursuant to SECTION 12.3.
ARTICLE IV. CONDITIONS PRECEDENT
4.1. INITIAL ADVANCES AND LETTERS OF CREDIT. The Lenders shall not
be required to make the initial Loans under this Agreement or issue any
Letters of Credit or purchase any participations therein unless the Agent has
received (with sufficient copies for each of the Lenders) the following:
(1) A certificate, signed by a financial officer
acceptable to the Agent, stating that on the Closing Date no
Default or Unmatured Default has occurred and is continuing;
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(2) Copies of the Certificate of Incorporation of the
Borrower, together with all amendments, and a certificate of good
standing, in each case certified by the appropriate governmental
officer in its jurisdiction of incorporation and good standing
certificates from each otherjurisdiction where the ownership of its
assets or conduct of its business dictates that it should be qualified;
(3) Copies, certified by the Secretary or
Assistant Secretary of the Borrower, of its By-Laws and of its
Board of Directors' resolutions (and resolutions of other bodies,
if any are deemed necessary by counsel for any Lender) authorizing
the execution of the Loan Documents;
(4) An incumbency certificate, executed by the
Secretary or Assistant Secretary of the Borrower, which shall
identify by name and title and bear the signature of the officers
of the Borrower authorized to sign the Loan Documents and to make
borrowings hereunder, upon which certificate the Lenders shall be
entitled to rely until informed of any change in writing by the
Borrower;
(5) A written opinion of the Borrower's
counsel, addressed to the Agent and the Lenders in form and
substance acceptable to the Agent;
(6) Notes payable to the order of each of the Lenders;
(7) Such other documents as the Agent or any
Lender or its counsel may have reasonably requested, including,
without limitation, all of the documents reflected on the List of
Closing Documents attached as EXHIBIT I to this Agreement (unless
designated thereon to be received after the Closing Date).
4.2. EACH ADVANCE AND LETTER OF CREDIT. The Lenders shall not be
required to make any Advance, issue any Letter of Credit or purchase any
participation therein, unless on the applicable Borrowing Date, or in the
case of a Letter of Credit, the date on which the Letter of Credit is to be
issued:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in ARTICLE V are
true and correct as of such Borrowing Date except for changes in the
Schedules to this Agreement reflecting transactions permitted by this
Agreement as such Schedules have been amended pursuant to the terms of
SECTION 1.3 hereof.
Each Borrowing Notice with respect to each such Advance and the letter of
credit application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower that the conditions contained in
SECTIONS 4.2(i) and (ii) have been satisfied. The Agent may require a duly
completed officer's certificate in substantially the form of EXHIBIT J hereto
and/or a duly completed compliance certificate in substantially the form of
EXHIBIT K hereto as a condition to making an Advance.
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4.3. CONDITIONS FOR ACQUISITION LOANS AND ADDITION OF SUBSIDIARIES.
In addition to satisfying the conditions precedent set forth in SECTIONS
4.1 and 4.2, the Lenders shall not be required to make any Advance in
connection with an Acquisition Loan or a Term Loan (other than the Term Loan
to be made on the Closing Date pursuant to SECTION 2.1(c)), unless (i) the
Agent and the Acquisition Approval Lenders shall have consented to the
proposed Acquisition of such Target pursuant to SECTION 6.3(H), (ii) the
Acquisition constitutes a Permitted Acquisition pursuant to SECTION 6.3(H),
and (iii) the Agent shall have been provided with the certificates, opinions,
agreements and other documents required to be delivered pursuant to SECTION
6.3(H)(xii) for distribution to the Lenders.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this
Agreement and to make the Loans and the other financial accommodations to the
Borrower and to issue the Letters of Credit described herein, the Borrower
hereby represents and warrants as follows to each Lender and the Agent as of
the Closing Date and thereafter on each date as required by SECTION 4.2:
5.1 ORGANIZATION; CORPORATE POWERS. Each Loan Party (i) is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (ii) is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction in which failure to be so qualified and in good standing
will have or is reasonably likely to have a Material Adverse Effect, (iii)
has filed and maintained in effect (unless exempt from the requirements for
filing) a current Business Activity Report with the appropriate governmental
authority in the States in which failure to file and maintain such a report
(y) has or is reasonably likely to have a Material Adverse Effect or (z)
impair the enforceability of Receivables in excess of $100,000 in the
aggregate for the Borrower and all of its Subsidiaries and (iv) has all
requisite corporate power and authority to own, operate and encumber its
property and to conduct its business as presently conducted and as proposed
to be conducted in connection with and following the consummation of the
transactions contemplated by this Agreement (including, without limitation,
any Acquisitions, if any, permitted under the terms of this Agreement).
5.2. AUTHORITY.
(A) Each of the Transaction Documents to which any Loan Party is a
party has been duly executed, delivered or filed, as the case may be, by it
and constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms (except as enforceability may be limited by
bankruptcy, insolvency, or similar laws affecting the enforcement of
creditor's rights generally and by general principles of equity), is in full
force and effect, and no material term or condition thereof has been amended,
modified or waived from the terms and conditions contained in the Transaction
Documents delivered to the Agent pursuant to SECTIONS 4.1 OR 6.3(H) without
the prior written consent of the Required Lenders. Each Loan Party has
performed and complied with all the terms, provisions, agreements and
conditions set forth in each of the Loan Documents and required to be
performed or complied with by such parties
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thereunder, and no unmatured default, default or breach of any covenant by
any Loan Party exists thereunder. Each Loan Party has, and, to such Person's
Knowledge, all other parties to each of the Acquisition Documents have,
performed and complied in all material respects with all the terms,
provisions, agreements and conditions set forth in the Acquisition Documents
and required to be performed or complied with by such parties thereunder, and
no unmatured default, default or material breach of any covenant by any Loan
Party and, to the Knowledge of the Borrower, no unmatured default, default or
material breach of any covenant by any other party to the Acquisition
Documents exists thereunder.
(B) Each Loan Party has the requisite corporate power and authority (i)
to execute, deliver and perform each of the Transaction Documents executed by
it in connection with Permitted Acquisitions or which have been executed by
it as required by this Agreement and (ii) to file the Transaction Documents
which must be filed by it in connection with Permitted Acquisitions or which
have been filed by it as required by this Agreement with any Governmental
Authority.
(C) The execution, delivery, performance and filing, as the case may
be, of each of the Transaction Documents which must be executed or filed by
any Loan Party in connection with the Permitted Acquisitions or which have
been executed or filed as required by this Agreement and to which any Loan
Party is a party, and the consummation of the transactions contemplated
thereby, including, without limitation consummation of the Permitted
Acquisitions, have been duly approved by the respective boards of directors
and, if necessary, the shareholders of such Loan Party, and such approvals
have not been rescinded. No other corporate action or proceedings on the
part of any Loan Party is necessary to consummate such transactions,
including, without limitation, the Permitted Acquisitions.
5.3. NO CONFLICT; GOVERNMENTAL CONSENTS. Except as set forth on
SCHEDULE 5.3 to this Agreement, the execution, delivery and performance of
each of the Loan Documents and other Transaction Documents to which any Loan
Party is a party do not and will not (i) conflict with the certificate or
articles of incorporation or by-laws of any Loan Party, (ii) to the
Borrower's Knowledge constitute a violation of or breach under any
Contractual Obligation of any Loan Party or conflict with, result in a breach
of or constitute (with or without notice or lapse of time or both) a default
under any Requirement of Law (including, without limitation, any
Environmental Property Transfer Act) or Contractual Obligation of any Loan
Party, or require termination of any Contractual Obligation, except such
interference, breach, default or termination which individually or in the
aggregate would not reasonably be likely to have a Material Adverse Effect,
(iii) with respect to the Loan Documents and, to the Borrower's Knowledge,
with respect to the other Transaction Documents, result in or require the
creation or imposition of any Lien whatsoever upon any of the property or
assets of any Loan Party, other than Liens permitted by the Loan Documents,
or (iv) require any approval of any Loan Party's shareholders except such as
have been obtained. Except as set forth on SCHEDULE 5.3 to this Agreement,
the execution, delivery and performance of each of the Transaction Documents
to which any Loan Party is a party do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by any Governmental Authority, including under any Environmental
Property Transfer Act, except (i) filings, consents or notices which
63
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate would not reasonably be likely to have a
Material Adverse Effect, and (ii) filings necessary to create or perfect
security interests in the Collateral.
5.4. FINANCIAL STATEMENTS. Complete and accurate copies of the
following financial statements and the following related information have
been delivered to the Agent:
(1) the unaudited financial statements of the Borrower as
of December 31, 1995; and
(2) the unaudited financial statements of the Borrower for
the three-month period ending March 31, 1996.
5.5. NO MATERIAL ADVERSE CHANGE. Since December 31, 1995, there
has occurred no change in the business, properties, prospects, condition
(financial or otherwise) or results of operations of Borrower and its
Subsidiaries which has had or is reasonably likely to have a Material Adverse
Effect.
5.6. TAXES.
(A) TAX EXAMINATIONS. All deficiencies which have been asserted
against any Loan Party as a result of any federal, state, local or foreign
tax examination for each taxable year in respect of which an examination has
been conducted have been fully paid or finally settled or are being contested
in good faith, and as of the Closing Date no issue has been raised by any
taxing authority in any such examination which, by application of similar
principles, reasonably can be expected to result in assertion by such taxing
authority of a material deficiency for any other year not so examined which
has not been reserved for in the applicable consolidated financial statements
to the extent, if any, required by Agreement Accounting Principles. Except
as permitted pursuant to SECTION 6.2(D), no Loan Party anticipates any
material tax liability with respect to the years which have not been closed
pursuant to applicable law.
(B) PAYMENT OF TAXES AND CLAIMS. All tax returns and reports of
each Loan Party required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid, except those items
which are being contested in good faith and have been reserved for in
accordance with Agreement Accounting Principles. No Loan Party has any
Knowledge of any proposed tax assessment against any Loan Party that will
have or is reasonably likely to have a Material Adverse Effect.
5.7. LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS. Except as set
forth in Schedules 5.7 and 5.18 to this Agreement, there is no action, suit,
proceeding, investigation of which the Borrower has Knowledge or arbitration
before or by any Governmental Authority or private arbitrator pending or, to
the Knowledge of the Borrower, threatened against any Loan Party or any
property of any of them (i) challenging the validity or the enforceability of
any material
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provision of the Transaction Documents or (ii) which will have or is
reasonably likely to have a Material Adverse Effect. There is no material
loss contingency within the meaning of Agreement Accounting Principles which
has not been reflected in the consolidated financial statements of the
Borrower and its Subsidiaries prepared and delivered pursuant to Section
6.1(A) for the fiscal period during which such material loss contingency was
incurred. No Loan Party is (A) in violation of any applicable Requirements
of Law which violation will have or is reasonably likely to have a Material
Adverse Effect, or (B) subject to or in default with respect to any final
judgment, writ, injunction, restraining order or order of any nature, decree,
rule or regulation of any court or Governmental Authority which will have or
is reasonably likely to have a Material Adverse Effect.
5.8. SUBSIDIARIES. SCHEDULE 5.8 to this Agreement (i) contains a
description of the corporate structure and capitalization of the Borrower,
and its Subsidiaries and any other Person in which the Borrower or any of its
Subsidiaries holds an equity interest (both narratively and in chart form);
and (ii) accurately sets forth (A) the correct legal name, the jurisdiction
of incorporation and the jurisdictions in which each such Person is qualified
to transact business as a foreign corporation, (B) the authorized, issued and
outstanding shares of each class of Capital Stock of the Borrower and each of
its Subsidiaries and the owners of such shares (and on a fully-diluted basis
after the exercise of all options, warrants, or other equity interests), and
(C) a summary of the direct and indirect partnership, joint venture, or other
equity interests, if any, of the Borrower and each of their respective
Subsidiaries in any Person that is not a corporation. Except as set forth in
the Share Purchase Agreement and the Shareholders Agreement, none of the
issued and outstanding Capital Stock of the Borrower or any of its
Subsidiaries is subject to any vesting, redemption, or repurchase agreement
(other than obligations pursuant to Subsidiaries' shareholder agreements to
purchase shares of certain minority shareholders upon termination of their
employment) and there are no warrants or options outstanding with respect to
such Capital Stock. The outstanding Capital Stock of the Borrower and each
of its Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and is not margin stock (as defined in Regulation U). Except
as set forth on SCHEDULE 5.8, the Borrower does not have any Subsidiaries.
5.9. ERISA. Except as set forth on SCHEDULE 5.9, no Loan Party is now
maintaining or contributing to or has ever maintained or contributed to any
Benefit Plan. No Loan Party is now contributing to or has ever contributed
to or been obligated to contribute to any Multiemployer Plan. No Loan Party
maintains or contributes to any employee welfare benefit plan within the
meaning of Section 3(l) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of ERISA.
Each Plan maintained or contributed to by any Loan Party which is intended to
be qualified under Section 401(a) of the Code as currently in effect is so
qualified, and each trust related to any such Plan is exempt from federal
income tax under Section 501(a) of the Code as currently in effect. Each
Loan Party is in compliance in all material respects with the
responsibilities, obligations and duties imposed on it by ERISA and the Code
with respect to all Plans maintained or contributed to by any Loan Party. No
Loan Party nor, to the Knowledge of the Borrower, any fiduciary of any Plan
has engaged in a nonexempt prohibited transaction described in Sections 406
of ERISA or 4975 of the Code which could reasonably be expected to subject
the Loan Parties to liability in excess of $100,000,
65
individually or in the aggregate. Neither the Borrower nor any member of the
Controlled Group has taken or failed to take any action which would
constitute or result in a Termination Event, which action or inaction could
reasonably be expected to subject Borrower and the other members of the
Controlled Group to liability in excess of $100,000, individually or in the
aggregate. No Loan Party is subject to any liability under Sections 4063,
4064, 4069, 4204 or 4212(c) of ERISA and no other member of the Controlled
Group is subject to any liability under Sections 4063, 4064, 4069, 4204 or
4212(c) of ERISA which could reasonably be expected to subject Borrower and
the other members of the Controlled Group to liability in excess of $100,000,
individually or in the aggregate. No Loan Party has, by reason of the
transactions contemplated hereby, any obligation to make any payment to any
employee pursuant to any Plan or existing contract or arrangement.
5.10. ACCURACY OF INFORMATION. The written information, exhibits and
reports (other than projections from time to time delivered to the Agent)
furnished by the Borrower and any other Loan Party to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents, the representations and warranties of the Borrower and each other
Loan Party contained in the Loan Documents, and all certificates and
documents delivered to the Agent and the Lenders pursuant to the terms
thereof do not contain as of the date furnished any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
5.11. SECURITIES ACTIVITIES. No Loan Party is engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(as defined in Regulation U).
5.12 MATERIAL AGREEMENTS; LICENSES. No Loan Party is a party to any
agreement or instrument or subject to any charter or other corporate
restriction which will have or is reasonably likely to have a Material
Adverse Effect. No Loan Party has received notice or has Knowledge that (i)
it is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, or (ii) any condition exists which, with the giving of
notice or the lapse of time or both, would constitute a default with respect
to any such Contractual Obligation, in each case, except where such default
or defaults, if any, will not have or are not reasonably likely to have a
Material Adverse Effect. Since December 31, 1995, no Permit, agreement or
other license or authorization which, in the judgment of the Required
Lenders, is material to the business, operations or employee relations of any
Loan Party has been suspended, terminated, modified, revoked, breached or
declared to be in default.
5.13 COMPLIANCE WITH LAWS. Each of the Loan Parties is in compliance
with all Requirements of Law applicable to it and its respective businesses,
in each case where the failure to so comply individually or in the aggregate
(a) will have or is reasonably likely to have a Material Adverse Effect or
(b) has resulted in or is reasonably likely to result in any restriction or
revocation of any Loan Party's Health License or the loss by any Loan Party
which as of the Closing Date or at any time thereafter becomes eligible to
participate in CHAMPUS, Medicare or Medicaid of such Loan Party's eligibility
to participate in CHAMPUS, Medicare or Medicaid
66
or to accept assignments or rights to reimbursement under CHAMPUS
Regulations, Medicaid Regulations or Medicare Regulations.
5.14 ASSETS AND PROPERTIES; GOVERNMENT APPROVALS; VALIDITY OF RECEIVABLES
ON BORROWING BASE CERTIFICATE.
(a) Each Loan Party has good and marketable title to substantially
all of its assets and properties (tangible and intangible, real or personal)
owned by it or a valid leasehold interest in all of its leased assets and all
such assets and property are free and clear of all Liens, except Liens
securing the Obligations and Liens permitted under SECTION 6.3(C).
Substantially all of the assets and properties owned by, leased to or used by
each Loan Party are in adequate operating condition and repair, ordinary wear
and tear excepted. Except for Liens granted to the Agent for the benefit of
the Agent and the Holders of Secured Obligations, neither this Agreement nor
any other Transaction Document, nor any transaction contemplated under any
such agreement, will affect any right, title or interest of any Loan Party in
and to any of such assets in a manner that would have or is reasonably likely
to have a Material Adverse Effect.
(b) Each of the Loan Parties: (i) maintains eligibility for
reimbursement from CHAMPUS, Medicare, Medicaid and other federal health care
programs, required with respect to such Loan Party's Eligible Receivables;
(ii) maintains eligibility for reimbursement from Applicable Carriers; and
(iii) except as disclosed on Schedule 5.14, owns, is licensed or otherwise
has the lawful right to use, or has all Permits and other governmental
approvals, patents, trademarks, trade names, copyrights, technology, know-how
and processes used in or necessary for the conduct of their businesses as
currently conducted which are material to their business, financial
condition, operations, performance or properties. SCHEDULE 5.14 describes
(A) all Accreditations, Permits, CONs, Health Licenses, CHAMPUS
Certifications, Medicare Certifications, and Medicaid Certifications in
effect as of the Closing Date with respect to any Loan Party, (B) those
patents, trademarks, trade names, and copyrights which are deemed, by the
applicable Person, to be material to the continued operations of any Loan
Party, and (C) all pending patent and trademark applications and Permits of
each Loan Party. Except as set forth on SCHEDULE 5.14, (1) no Loan Party,
and no facilities operated by any Loan Party, is subject to any ongoing or,
to such Loan Party's Knowledge, threatened review by any Governmental
Authority or other Person, the outcome of which might result in the loss of
any Permit and (2) no claims are pending or, to the Knowledge of any Loan
Party, threatened, that any such Person is infringing or otherwise adversely
affecting the rights of any Person with respect to such Permits and other
governmental approvals, patents, trademarks, trade names, licenses,
copyrights, technology, know-how and processes, except for such claims and
infringements as do not give rise to any liability on the part of any Loan
Party which has or is reasonably likely to have a Material Adverse Effect.
(c) The consummation of the transactions contemplated by the
Acquisition Documents and/or the Loan Documents will not impair the ownership
of or rights under (or the license or other right to use, as the case may be)
any Permits and governmental approvals, patents, trademarks, trade names,
licenses, copyrights, technology, know-how or processes of
67
any Loan Party in any manner which has or is reasonably likely to have a
Material Adverse Effect.
(d) The Eligible Receivables listed or referred to in any Borrowing
Base Certificate delivered by the Borrower hereunder, to the Borrower's
Knowledge, (i) are genuine, are in all respects what they purport to be, and
are not evidenced by a judgment, (ii) have arisen in the ordinary course of
the applicable Loan Party's business and reflect BONA FIDE obligations for
the payment of goods and services provided by such Loan Party, and (iii) will
not be subject to any deduction, offset, counterclaim, return privilege or
other condition (except as has already been reflected in the adjustments made
in determining the Adjusted Amount of Eligible Receivables reflected
therein), other than in accordance with the provisions of the applicable
Payor agreement, if any, with respect to the Account Debtor obligated on such
Receivable and reflected in the Borrowing Base Certificate.
5.15. STATUTORY INDEBTEDNESS RESTRICTIONS. No Loan Party is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, or the Investment Company Act of
1940, or any other federal or state statute or regulation which limits its
ability to incur indebtedness or its ability to consummate the transactions
contemplated hereby or in connection with Permitted Acquisitions.
5.16. POST-RETIREMENT BENEFITS. No Loan Party has any expected cost of
post-retirement medical and insurance benefits payable by it to its employees
and former employees, as estimated in accordance with Financial Accounting
Standards Board Statement No. 106, except such as are reflected on the
financial statements delivered pursuant to this Agreement.
5.17. INSURANCE. SCHEDULE 5.17 to this Agreement accurately sets forth
as of the Closing Date all insurance policies and programs currently in
effect with respect to the respective properties, assets and businesses of
each Loan Party, specifying for each such policy and program, (i) the amount
thereof, (ii) the risks insured against thereby, (iii) the name of the
insurer and each insured party thereunder, (iv) the policy or other
identification number thereof, (v) the expiration date thereof, (vi) the
annual premium with respect thereto and (vii) describes any reserves,
relating to any self-insurance program that is in effect. Such insurance
policies and programs reflect coverage that is reasonably consistent with
prudent industry practice.
5.18. CONTINGENT OBLIGATIONS. Except as set forth on SCHEDULE 5.18 to
this Agreement, no Loan Party has any Contingent Obligation, contingent
liability, long-term lease or commitment, not reflected in its audited
financial statements delivered to the Agent on or prior to the Closing Date
or otherwise disclosed to the Agent in the other Schedules to this Agreement,
which will have or is reasonably likely to have a Material Adverse Effect.
5.19. RESTRICTED JUNIOR PAYMENTS. No Loan Party has directly or
indirectly declared, ordered, paid or made or set apart any sum or properties
for any Restricted Junior Payment or agreed to do so, except as permitted
pursuant to SECTION 6.3(F) of this Agreement.
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5.20. LABOR MATTERS.
(A) There are on the Closing Date no collective bargaining
agreements, other labor agreements or Multiemployer Plans covering any of the
employees of any Loan Party. As of the Closing Date, no attempt to organize
the employees of any Loan Party, no labor disputes, strikes or walkouts
affecting the operations of any Loan Party, is pending, or, to such Loan
Party's Knowledge, threatened, planned or contemplated.
(B) Set forth in SCHEDULE 5.20 to this Agreement is a list, as of the
Closing Date, of all material consulting agreements, executive compensation
plans, deferred compensation agreements, employee pension plans or retirement
plans, employee profit sharing plans, employee stock purchase and stock
option plans, severance plans, group life insurance, hospitalization
insurance or other plans or arrangements of the Borrower providing for
benefits for employees of the Borrower.
5.21. THE ACQUISITIONS. As of the Closing Date with respect to the
Omaha Acquisition and as of the Acquisition Closing Date with respect to any
other Acquisition:
(a) the Acquisition Documents with respect to such Acquisition are in
full force and effect, no material breach or default of any term or provision
of any of such Acquisition Documents by the Borrower or any Loan Party or, to
the Knowledge of the Borrower, the other parties thereto has occurred (except
for such defaults, if any, consented to in writing by the Agent and the
Acquisition Approval Lenders);
(b) the representations and warranties of each Loan Party, and, to
their Knowledge, each other Person a party thereto, contained in the
Acquisition Documents, are true and correct in all material respects;
(c) except as otherwise provided in the Acquisition Documents, all
conditions precedent to and all consents necessary to permit, the applicable
Acquisition pursuant to the Acquisition Documents related thereto have been
satisfied, unless (i) the failure to satisfy such conditions could not
materially adversely affect the Agent or the Lenders or materially impair the
rights of the Loan Parties, the Agent or the Lenders thereunder or (ii) are
waived with the prior written consent of the Agent and the Acquisition
Approval Lenders;
(d) the Acquisition has been consummated, and whether by merger,
stock acquisition or asset acquisition, the assets of the Target are owned by
the Borrower or a Subsidiary of the Borrower, free and clear of any Liens,
other than Liens permitted pursuant to the terms of this Agreement;
(e) no Loan Party has assumed any liabilities in connection with such
Acquisition other than disclosed liabilities set forth in the Acquisition
Documents presented to the Agent and the Lenders pursuant to SECTION 6.3(H)
or SECTION 4.1; and
69
(f) no action has been taken by any competent authority which
restrains, prevents or imposes any material adverse condition upon, or seeks
to restrain, prevent or impose any material adverse condition upon, any
Acquisition.
5.22 ENVIRONMENTAL MATTERS. Except as disclosed on SCHEDULE 5.22 to
this Agreement or except as would not reasonably be likely to subject the
Loan Parties to liability in excess of $100,000, individually or in the
aggregate, the operations of each Loan Party comply in all material respects
with Environmental, Health or Safety Requirements of Law (including, without
limitation, those applicable to the disposal of medical waste) and neither
any Loan Party nor any of their respective present property or operations,
or, to their Knowledge, any of their respective past property or operations,
are subject to or the subject of any investigation of which any Loan Party
has Knowledge, judicial or administrative proceeding, order, judgment,
decree, settlement or other agreement respecting (a) any violation of
Environmental, Health or Safety Requirements of Law (including, without
limitation, those applicable to the disposal of medical waste), (b) any
remedial action or (c) any claims or liabilities arising from the release or
threatened release of a contaminant (including, without limitation, any
medical waste) into the environment. Except as disclosed on SCHEDULE 5.22 to
this Agreement or except as would not reasonably be likely to subject the
Loan Parties to liability in excess of $100,000, individually or in the
aggregate, there is not now nor, to the best of any of such Persons'
Knowledge, has there ever been on or in the property of any Loan Party any
landfill, waste pile, underground storage tanks, aboveground storage tanks,
surface impoundment or hazardous waste storage facility of any kind, any
polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
transformers or other equipment, or any asbestos containing material. No
Loan Party has any material Contingent Obligation in connection with any
release or threatened release of a contaminant (including, without
limitation, any medical waste) into the environment which could reasonably be
likely to subject the Loan Parties to liability in excess of $100,000,
individually or in the aggregate.
5.23. HEALTHCARE REGULATORY MATTERS. (i) Except as disclosed on
SCHEDULE 5.23, to the Knowledge of the Borrower, each facility to which any
Loan Party sells Inventory or provides services has obtained and maintains in
good standing all required Health Licenses.
(ii) The Adjusted Amount of Eligible Receivables listed on each
Borrowing Base Certificate have been and will continue to be appropriately
adjusted to reflect current reimbursement policies of third party payors and
Applicable Carriers, including, without limitation, CHAMPUS, Medicare,
Medicaid, Blue Cross/Blue Shield, private insurers, health maintenance
organizations, preferred provider organizations, alternative delivery
systems, and/or managed care systems. The Adjusted Amount of Eligible
Receivables, adjusted as set forth above, relating to such third party payors
do not and shall not exceed amounts the Borrower reasonably believes the
applicable Loan Parties are entitled to receive under any capitation
arrangement, fee schedule, discount formula, cost-based reimbursement, or
other adjustment or limitation to the usual charges of such Loan Party.
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ARTICLE VI. COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations), unless the Required Lenders
shall otherwise give prior written consent:
6.1. REPORTING. The Borrower shall:
(A) FINANCIAL REPORTING. Furnish to the Agent and each Lender or
cause to be furnished to the Agent and each Lender:
(i) MONTHLY REPORTS. As soon as practicable, and in any event within
forty-five (45) days after the end of each calendar month, the consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such
period and the related consolidated statements of income and statement of
cash flow of the Borrower and its Subsidiaries for such calendar month and
for the period from the beginning of the then current fiscal year to the end
of such calendar month, certified by the chief financial officer of the
Borrower as fairly presenting the consolidated financial position of the
Borrower and its Subsidiaries at the dates indicated and the results of their
operations and cash flow for the periods indicated in accordance with
Agreement Accounting Principles, subject to normal year-end adjustments.
(ii) QUARTERLY REPORTS. (a) As soon as practicable, and in any event
within forty-five (45) days after the end of each fiscal quarter in each
fiscal year, the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such period and the related consolidated
statements of income and cash flow of the Borrower and its Subsidiaries for
such fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter and a comparison of the
statement of earnings and cash flow to the budget and to the prior year,
certified by the chief financial officer of the Borrower as fairly presenting
the consolidated financial position of the Borrower and its Subsidiaries as
at the dates indicated and the results of their operations and cash flow for
the periods indicated in accordance with Agreement Accounting Principles,
subject to normal year-end adjustments.
(b) As soon as practicable, and in any event within forty-five (45)
days after the end of the last fiscal quarter in each fiscal year, the
preliminary annual unaudited consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income, stockholders' equity and cash flow of the
Borrower and its Subsidiaries for such fiscal year, setting forth in each
case in comparative form the corresponding actual and forecasted figures for
the previous fiscal year, subject to revisions based on the annual reports
delivered pursuant to CLAUSE (iii) below, along with consolidating schedules
in form and substance sufficient to calculate the financial covenants set
forth in SECTION 6.4.
(iii) ANNUAL REPORTS. As soon as practicable, and in any event within
one hundred twenty (120) days after the end of each fiscal year (or, in the
case of the fiscal year ended December 31, 1995, on or before August 31,
1996), (a) the consolidated balance sheet of the
71
Borrower and its Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income, stockholders' equity and cash flow
for such fiscal year, and in comparative form the corresponding figures for
the previous fiscal year, and (b) an audit report on the items listed in
CLAUSE(a) hereof of independent certified public accountants of recognized
national standing, which audit report shall be unqualified and shall state
that such financial statements fairly present the consolidated financial
position of the Borrower and its Subsidiaries as at the dates indicated and
the results of their operations and cash flow for the periods indicated in
conformity with Agreement Accounting Principles and that the examination by
such accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing standards. The
deliveries made pursuant to this CLAUSE (iii) shall be, accompanied by (y)
any management letter prepared by the above-referenced accountants and (z) a
certificate of such accountants that, in the course of their examination
necessary for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured Default shall exist, stating the nature
and status thereof.
(iv) MANAGEMENT DISCUSSION AND ANALYSIS. Together with each delivery
of the financial statements delivered pursuant to clauses (ii) or (iii), the
Borrower shall deliver management's discussion and analysis of the financial
condition, changes in financial condition and results of operations of the
Borrower and its Subsidiaries, providing (i) a discussion of material changes
in results from operations and in financial condition from period to period
and the causes for such changes, (ii) a description of any unusual or
infrequent events or transactions or any significant economic changes that
materially affected the operations or financial results of the Borrower and
its Subsidiaries for such period, and (iii) a description of any trends or
uncertainties which have had or could reasonably be expected to have a
materially favorable or unfavorable impact on the revenues and net income, or
otherwise on the operations or financial results of the Borrower and its
Subsidiaries.
(v) OFFICER'S CERTIFICATE. Together with each delivery of any
financial statement (a) pursuant to CLAUSES (i), (ii) and (iii) of this
SECTION 6.1(A), an Officer's Certificate of the president or treasurer of the
Borrower, substantially in the form of EXHIBIT J attached hereto and made a
part hereof, stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status thereof
and (b) pursuant to CLAUSES (ii) and (iii) of this SECTION 6.1(A), a
Compliance Certificate, substantially in the form of EXHIBIT K attached
hereto and made a part hereof, signed by the Borrower's chief financial
officer or treasurer, setting forth calculations for the period then ended
for SECTION 2.5(B), if applicable, and which demonstrate compliance, when
applicable, with the provisions of SECTION 6.4 (and, in the case of SECTION
6.4(C), setting forth the calculation of the Fixed Charge Coverage Ratio
including Acquisition Subordinated Indebtedness in the calculation of clause
(ii)(f) of the definition of Fixed Charge Coverage Ratio and, if applicable,
the calculation of Fixed Charge Coverage Ratio excluding Acquisition
Subordinated Indebtedness in the calculation of clause (ii)(f) of such
definition).
(vi) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. As soon as
practicable and in any event not later than the forty-fifth (45th) day prior
to the beginning of each fiscal year, a copy of the plan and forecast
(including a projected balance sheet, income statement and funds flow
72
statement) of the Borrower and its Subsidiaries for the upcoming fiscal year
prepared in such detail as shall be reasonably satisfactory to the Agent.
(B) NOTICE OF DEFAULT. Promptly upon the Borrower having Knowledge
(i) of any condition or event which constitutes a Default or Unmatured
Default, or becoming aware that any Lender or the Agent has given any written
notice with respect to a claimed Default or Unmatured Default under this
Agreement, or (ii) that any Person has given any written notice to Borrower
or any other Loan Party or taken any other action with respect to a claimed
default or event or condition of the type referred to in SECTION 7.1(e),
deliver to the Agent and each of the Lenders an Officer's Certificate
specifying (A) the nature and period of existence of any such claimed
default, Default, Unmatured Default, condition or event, (B) the notice given
or action taken by such Person in connection therewith, and (C) what action
the applicable Person has taken, is taking and proposes to take with respect
thereto.
(C) LAWSUITS. (i) Promptly upon any Loan Party obtaining Knowledge
of the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting any Loan Party
or any property of any Loan Party not previously disclosed pursuant to
SECTION 5.7, which action, suit, proceeding, governmental investigation or
arbitration exposes, or in the case of multiple actions, suits, proceedings,
governmental investigations or arbitrations arising out of the same general
allegations or circumstances which expose, the Borrower or any other Loan
Party to liability in an amount aggregating $100,000 or more (exclusive of
claims covered by applicable insurance policies unless the insurers of such
claims have disclaimed coverage or reserved the right to disclaim coverage on
such claims and exclusive of claims covered by the indemnity of a financially
responsible indemnitor in favor of the applicable Person unless the
indemnitor has disclaimed or reserved the right to disclaim indemnity
thereof), give written notice thereof to the Agent and each of the Lenders
and provide such other information as may be reasonably available to enable
each Lender and the Agent and its counsel to evaluate such matters; and (ii)
in addition to the requirements set forth in CLAUSE (i) of this SECTION
6.1(C) upon request of the Agent or the Required Lenders, promptly give
written notice of the status of any action, suit, proceeding, governmental
investigation or arbitration covered by a report delivered pursuant to CLAUSE
(i) above and provide such other information as may be reasonably available
to it that would not violate any attorney-client privilege by disclosure to
the Lenders to enable each Lender and the Agent and its counsel to evaluate
such matters.
(D) INSURANCE. As soon as practicable and in any event within ninety
(90) days of the end of each fiscal year commencing with fiscal year ending
December 31, 1996, deliver to the Agent and each of the Lenders (i) a report
in form and substance reasonably satisfactory to the Agent and the Lenders
outlining all material insurance coverage maintained as of the date of such
report by the Borrower Corporate Group and the duration of such coverage and
(ii) an insurance broker's statement that all premiums with respect to such
coverage have been paid when due.
(E) ERISA NOTICES. Deliver or cause to be delivered to the Agent and
each of the Lenders, at the Borrower's expense, the following information and
notices as soon as reasonably possible, and in any event:
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(i) within ten (10) Business Days after the Borrower has Knowledge
that a Termination Event has occurred which could reasonably be expected to
subject the Borrower and the other members of the Controlled Group to
liability in excess of $100,000, individually or in the aggregate , a
written statement of the chief financial officer of the applicable Person
describing such Termination Event and the action, if any, which the member
of the Controlled Group has taken, is taking or proposes to take with
respect thereto, and when known, any action taken or threatened by the IRS,
DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after the Borrower has Knowledge
that an assessment of a prohibited transaction excise tax under Section
4975 of the Code against any member of the Controlled Group has occurred, a
statement of the chief financial officer or treasurer of the Borrower
describing such transaction and the action which the applicable Loan Party
has taken, is taking or proposes to take with respect thereto;
(iii) within ten (10) Business Days after the establishment by any Loan
Party of any Benefit Plan or the commencement of, or obligation to
commence, contributions by any Loan Party to any Benefit Plan or
Multiemployer Plan to which any Loan Party was not previously contributing,
notification of such establishment, commencement or obligation to commence
and the amount of such contributions;
(iv) within ten (10) Business Days after any Loan Party receives
notice of any unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code, copies of each
such letter; and
(v) within ten (10) Business Days after the establishment by any Loan
Party of any foreign employee benefit plan or the commencement of, or
obligation to commence, contributions by any Loan Party to any foreign
employee benefit plan to which any Loan Party was not previously
contributing, notification of such establishment, commencement or
obligation to commence and the amount of such contributions.
(F) LABOR MATTERS. Notify the Agent and each of the Lenders in
writing, promptly upon learning thereof, of (i) any material labor dispute to
which any Loan Party may become a party, including, without limitation, any
strikes, lockouts or other disputes relating to such Person's plants and
other facilities and (ii) any Worker Adjustment and Retraining Notification
Act liability incurred with respect to the closing of any plant or other
facility of any Loan Party.
(G) OTHER INDEBTEDNESS. Deliver to the Agent and each of the Lenders
(i) a copy of each regular report, notice or communication regarding
potential or actual defaults (including any accompanying officers'
certificate) delivered by or on behalf of any Loan Party of funded
Indebtedness pursuant to the terms of the agreements governing such
Indebtedness, such delivery to be made at the same time and by the same means
as such notice or other communication is delivered to such holders, and (ii)
a copy of each notice or other communication received by any Loan Party from
the holders of funded Indebtedness pursuant to the terms of such
Indebtedness,
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such delivery to be made promptly after such notice or other communication is
received by such Loan Party.
(H) OTHER REPORTS; SEC FILINGS, NOTICES AND OTHER PUBLIC INFORMATION.
As soon as practicable after such items are available, deliver or cause to
be delivered to the Agent and each of the Lenders copies of all financial
statements, reports and notices, if any, sent or made available generally by
any Loan Party to its securities holders or filed with the Commission by any
Loan Party, all press releases made available generally by any Loan Party to
the public concerning material developments in the business of any such Loan
Party and all notifications received from the Commission by any Loan Party
pursuant to the Securities Exchange Act and the rules promulgated thereunder.
Promptly upon the filing thereof or receipt thereof, deliver copies to the
Agent of all registration statements and annual, quarterly, monthly or other
reports (including 8-Ks), if any, which any Loan Party files with the
Securities and Exchange Commission (other than routine reports which are
required to be filed concerning the management of employee benefit plans,
including, without limitation, stock purchases or the exercise of stock
options made under any such employee benefit plan) and all notifications
received from the Securities and Exchange Commission by any Loan Party, if
any, pursuant to the Securities Exchange Act and the rules promulgated
thereunder.
(I) ENVIRONMENTAL NOTICES. As soon as possible and in any event
within ten (10) days after receipt by any Loan Party, a copy of (i) any
notice or claim to the effect that any Loan Party is or may be liable to any
Person as a result of the release by any such Person or any other Person of
any contaminant (including, without limitation, any medical waste) into the
environment, and (ii) any notice alleging any violation of any Environmental,
Health or Safety Requirements of Law by any Loan Party if, in either case,
such notice or claim relates to an event which could reasonably be expected
to subject the Loan Parties to liability in excess of $100,000, individually
or in the aggregate.
(J) BORROWING BASE CERTIFICATE. As soon as practicable, and in any
event (i) within thirty (30) days after the end of each calendar month (and
more often if requested by the Agent or the Required Lenders) and (ii) on
each Acquisition Closing Date on which a Term Loan or Acquisition Loan is
made, the Borrower shall provide to the Agent and each of the Lenders (with
respect to the Borrower Corporate Group and each Subsidiary which has any
amount outstanding under an Intercompany Note) with a Borrowing Base
Certificate, together with such supporting documents as the Agent deems
desirable, all certified as being true and correct by the president or
treasurer of the Borrower. Without limiting the foregoing, together with
each Borrowing Base Certificate, the Borrower shall provide to the Agent and
each of the Lenders (i) detailed information regarding unpaid taxes,
assessments or other similar amounts which are payable to any federal, state,
county or municipal Governmental Authority or any agency or instrumentality
thereof if the aggregate amount payable to any municipal, county, state or
federal Governmental Authority equals or exceeds $10,000 and (ii) information
regarding the percentage of the total Eligible Receivables reflected on such
Borrowing Base Certificate which consists of Receivables from the Society.
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(K) OTHER INFORMATION. Promptly upon receiving a request therefor,
prepare and deliver to the Agent and each of the Lenders such other information
with respect to any Loan Party or the Collateral, including, without limitation,
schedules identifying and describing the Collateral and any dispositions thereof
or any Asset Sale (and the use of the Net Cash Proceeds thereof), as from time
to time may be reasonably requested by the Agent or any Lender.
(L) HEALTHCARE NOTICES. Deliver or cause to be delivered to the Agent
and each of the Lenders, at the Borrower's expense, the following information
and notices as soon as reasonably possible, and in any event:
(i) within ten (10) Business Days after receipt by any Loan Party,
copies of all notices received by any Loan Party which contain any
recommendation from any Governmental Authority or other regulatory body
that any such Loan Party should have its licensure or Accreditation
revoked, or its Health Licenses restricted or revoked, or have its
eligibility to participate in CHAMPUS, Medicare or Medicaid or to accept
assignments or rights to reimbursement under CHAMPUS Regulations, Medicaid
Regulations or Medicare Regulations revoked unless certain corrections are
made;
(ii) within ten (10) Business Days after receipt by any Loan Party,
notice of any investigation or pending or threatened proceedings relating
to any possible violation by any Loan Party of CHAMPUS, CHAMPUS
Regulations, Medicare Regulations, Medicaid Regulations, including, without
limitation, any investigation or proceeding involving possible violation of
any of the Medicare and/or Medicaid fraud and abuse provisions;
(iii) within three (3) Business Days after any Loan Party obtains
knowledge thereof, notice of any claims to recover any alleged overpayments
with respect to any of the Loan Parties' Receivables, whether such payments
were received from CHAMPUS, Medicare, Medicaid or from any Applicable
Carrier;
(iv) within three (3) Business Days after any Loan Party obtains
knowledge thereof, notice of termination of eligibility of any Loan Party
to participate in any reimbursement program of any Applicable Carrier or
other Payor applicable to it;
(v) within three (3) Business Days after the occurrence thereof,
notice of any reduction in the level of reimbursement expected to be
received with respect to any Receivables of any Loan Party unless such
reduction has already been reflected in the Adjusted Amount of Eligible
Receivables delivered on the most recently delivered Borrowing Base
Certificate; and
(vi) within ten (10) Business Days after receipt thereof, copies of
any report or communication from any Governmental Authority in connection
with any inspection of any facility of any Loan Party or any health care
facility to which any Loan Party provides services or sells Inventory.
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(M) REPORTS IN CONNECTION WITH ACQUISITION AGREEMENTS. Deliver or cause
to be delivered to the Agent and each of the Lenders as soon as reasonably
possible, and in any event within five (5) Business Days of when such item was
sent or received, as applicable, copies of all financial statements, reports and
notices, if any, sent, made or received by any Loan Party to or from any other
Person in connection with a Permitted Acquisition.
(N) FINANCIAL INFORMATION REGARDING THE SOCIETY. Upon request of the
Agent or the Required Lenders, financial information, including without
limitation the most recent financial statements of the Society, which the Agent
or such Required Lenders may reasonably request in order to, among other things,
evaluate the creditworthiness of the Society.
6.2. AFFIRMATIVE COVENANTS.
(A) CORPORATE EXISTENCE, ETC. The Borrower shall, and shall cause each
Loan Party to, at all times maintain its corporate existence and preserve and
keep, or cause to be preserved and kept, in full force and effect its rights and
franchises material to its businesses.
(B) CORPORATE POWERS; CONDUCT OF BUSINESS. The Borrower shall, and shall
cause each Loan Party to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its business requires it to be so qualified
and where the failure to be so qualified will have or is reasonably likely to
have a Material Adverse Effect. The Borrower shall, and shall cause each Loan
Party to, carry on and conduct its business in substantially the same manner and
in substantially the same fields of enterprise as it is presently conducted,
including any business related or incidental thereto.
(C) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause each
Loan Party to, (a) comply with all Requirements of Law and Permits and all
restrictive covenants affecting such Person or the business, properties, assets
or operations of such Person unless failure to comply could not reasonably be
anticipated to have a Material Adverse Effect, (b) obtain as needed all Permits
and other government approvals and authorizations necessary for its operations
and maintain such Permits, approvals and authorizations in good standing unless
failure to obtain or maintain such Permits, approvals or authorizations has not
had, and is not reasonably likely to have, a Material Adverse Effect and (c)
maintain adequate assets, licenses, patents, copyrights, trademarks, service
marks, trade names, privileges, franchises and concessions as are reasonably
necessary to conduct its respective business.
(D) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Borrower shall,
and shall cause each other Loan Party to, pay (i) all material taxes,
assessments and other governmental charges imposed upon it or on any of its
properties or assets or in respect of any of its franchises, business, income or
property before any penalty or interest accrues thereon, and (ii) all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by SECTION 6.3(C)) upon any of
the Collateral, prior to the time when any penalty or fine shall be incurred
with respect thereto; PROVIDED, HOWEVER, that no such taxes, assessments and
governmental charges referred to in CLAUSE (i) above or claims referred to in
CLAUSE (ii) above
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(and interest, penalties or fines relating thereto) need be paid if being
contested in good faith by appropriate proceedings diligently instituted and
conducted and if such reserve or other appropriate provision, if any, as
shall be required in conformity with Agreement Accounting Principles shall
have been made therefor. The Borrower shall not, and shall not permit any
Loan Party to, file or consent to the filing of any consolidated income tax
return with any Person other than the Borrower and its consolidated
Subsidiaries.
(E) INSURANCE. The Borrower shall maintain for itself and each other
Loan Party, or shall cause each Loan Party to maintain, in full force and effect
the insurance policies and programs listed on SCHEDULE 5.17 to this Agreement or
substantially similar policies and programs or other policies and programs as
reflect coverage that is reasonably consistent with prudent industry practice.
Each certificate and policy relating to coverages shall contain an endorsement
(i) naming the Agent and the Lenders as additional insureds under such policy
with respect to liability coverage and (ii) naming the Agent as lender's loss
payee with respect to property damage, boiler and machinery and business
interruption insurance coverage. In the event any Loan Party, at any time or
times hereafter shall fail to obtain or maintain any of the policies or
insurance required herein or to pay any premium in whole or in part relating
thereto, then the Agent, without waiving or releasing any obligations or
resulting Default hereunder, may at any time or times thereafter (but shall be
under no obligation to do so) obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which the Agent
deems advisable. All sums so disbursed by the Agent shall constitute part of
the Obligations, payable as provided in this Agreement.
(F) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The Borrower
shall permit, and shall cause each other Loan Party to permit, any authorized
representative(s) designated by either the Agent or any Lender to visit and
inspect any of the properties of any Loan Party, to examine, audit, check and
make copies, at the Borrower's expense, of their respective financial and
accounting records, books, journals, orders, receipts and any correspondence and
other data relating to their respective businesses or the transactions
contemplated hereby and by the Permitted Acquisitions (including, without
limitation, in connection with environmental compliance, hazard or liability),
and to discuss their affairs, finances and accounts with their officers and
independent certified public accountants, all upon reasonable notice and at such
reasonable times during normal business hours, as often as may be reasonably
requested. The Borrower shall keep and maintain, and cause each other Loan
Party to keep and maintain, in all material respects, proper books of record and
account in which entries in conformity with Agreement Accounting Principles
shall be made of all dealings and transactions in relation to their respective
businesses and activities, including, without limitation, transactions and other
dealings with respect to the Collateral. If a Default has occurred and is
continuing, the Borrower, upon the Agent's request, shall and shall cause each
other Loan Party to turn over copies of any such records to the Agent or its
representatives.
(G) INSURANCE AND CONDEMNATION PROCEEDS. The Borrower hereby directs,
and shall cause each other Loan Party to direct, all insurers under policies of
property damage, boiler and machinery and business interruption insurance and
payors of any condemnation claim or award relating to the property to pay all
proceeds payable under such policies or with respect to such
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claim or award for any loss with respect to the Collateral directly to the
Agent, for the benefit of the Agent and the Holders of the Secured
Obligations; PROVIDED, HOWEVER, in the event that such proceeds or award are
less than $200,000 in the aggregate for all events during the prior 12-month
period ("EXCLUDED INSURANCE PROCEEDS"), unless a Default shall have occurred
and be continuing, the Agent shall remit such Excluded Insurance Proceeds to
the Borrower or the applicable Loan Party. Each such policy shall contain a
lender's loss-payable endorsement naming the Agent as lender's loss payee,
which endorsement shall be in form and substance acceptable to the Agent.
The Agent shall, upon receipt of such proceeds (other than Excluded Insurance
Proceeds) and at Borrower's direction, either apply the same to the principal
amount of the Revolving Credit Loans outstanding at the time of such receipt
and create a corresponding reserve against Revolving Credit Availability in
an amount equal to such application (the "DECISION RESERVE") or hold them as
cash collateral for the Obligations. For up to 60 days from the date of any
loss (the "DECISION PERIOD"), the Borrower may notify the Agent that the
applicable Loan Party intends to restore, rebuild or replace the property
subject to any insurance payment or condemnation award and shall, as soon as
practicable thereafter, provide the Agent detailed information, including a
construction schedule and cost estimates. If (i) a Default occurs at any
time during the Decision Period, (ii) the Borrower notifies the Agent that
the applicable Loan Party has decided not to rebuild or replace such property
during the Decision Period, or (iii) the Borrower fails to notify the Agent
of the Borrower's or the applicable Loan Party's decision during the Decision
Period, then the amounts held as cash collateral pursuant to this SECTION
6.2(G) or as the Decision Reserve shall upon the Required Lenders' direction
be deemed to be Net Cash Proceeds of an Asset Sale and applied as a mandatory
prepayment pursuant to SECTION 2.5(B)(i)(a). Proceeds held as cash
collateral pursuant to this SECTION 6.2(G) or constituting the Decision
Reserve shall be disbursed as payments for restoration, rebuilding or
replacement of such property become due; PROVIDED, HOWEVER, should a Default
occur after the Borrower has notified the Agent that a Loan Party intends to
rebuild or replace the property, the Decision Reserve or amounts held as cash
collateral may, or shall, upon the Required Lenders' direction, be applied as
a mandatory prepayment of the Term Loans or Acquisition Loans as set forth
above. Upon completion of the restoration, rebuilding or replacement of such
property, the unused proceeds shall be deemed to constitute Net Cash Proceeds
of an Asset Sale and shall be applied as a mandatory prepayment of the Term
Loans and/or Acquisition Loans pursuant to SECTION 2.5(B)(i)(a).
(H) ERISA COMPLIANCE. The Borrower shall, and shall cause each other
Loan Party to, establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA, the Code, all other applicable
laws, and the regulations and interpretations thereunder and the respective
requirements of the governing documents for such Plans.
(I) MAINTENANCE OF PROPERTY . The Borrower shall, and shall cause each
other Loan Party to, cause substantially all property used or useful in the
conduct of its business or the business of any of its respective Subsidiaries to
be maintained and kept in good condition, repair and working order (ordinary
wear and tear excepted) and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as may be necessary so that the business carried on in
connection therewith may be effectively and lawfully conducted at all times;
PROVIDED, HOWEVER, that
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nothing in this Section shall prevent any Loan Party from discontinuing the
operation or maintenance of any of such property if such discontinuance, in
the judgment of the applicable Loan Party, is desirable in the conduct of its
business or the business of any of its Subsidiaries and not disadvantageous
in any material respect to the Agent or the Lenders.
(J) ENVIRONMENTAL COMPLIANCE. The Borrower shall, and shall cause each
other Loan Party to, comply with all Environmental, Health or Safety
Requirements of Law (including, without limitation, those applicable to the
disposal of medical waste), except where noncompliance would not reasonably be
likely to subject the Loan Parties to liability in excess of $100,000,
individually or in the aggregate.
(K) USE OF PROCEEDS. The Borrower will use the proceeds of the Revolving
Loans solely to provide funds for the working capital needs of the Borrower and
its Subsidiaries and other general corporate purposes. The Borrower will use
the proceeds of the Term Loans and the Acquisition Loans solely for the purpose
of effecting the Permitted Acquisitions and paying Transaction Costs related
thereto and, with respect to proceeds of the Term Loan made on the Closing Date,
to refinance existing indebtedness of the Borrower. The Borrower will not use
any of the proceeds of the Loans, nor will it permit any Loan Party to use any
of the proceeds of the Loans, to (1) purchase or carry any "margin stock" (as
defined in Regulation U), (2) to make any other Acquisition or (3) to make loans
to, Investments in or otherwise enter into any transaction with any of the
Borrower's Non-Controlled Affiliates.
(L) HEALTHCARE REGULATORY MATTERS. The Borrower shall at all times, and
shall cause each Loan Party at all times to:
(i) comply in all material respects with all applicable CON
requirements in jurisdictions where such Person operates,
(ii) maintain in good standing all required Health Licenses required
for the operation of such Loan Party's business;
(iii) maintain the requisite Accreditation, if any, for the
operation of such Loan Party's business;
(iv) maintain eligibility to participate in CHAMPUS, Medicaid and
Medicare as required for the operation of such Loan Party's business or to
accept assignments or rights to reimbursement under CHAMPUS Regulations,
Medicaid Regulations or Medicare Regulations, as applicable, and from any
Applicable Carrier;
(v) maintain CHAMPUS, Medicare and Medicaid provider numbers as
required for the operation of such Loan Party's business which initially
were issued to the current provider and which have not been used by any
predecessor in interest;
(vi) comply with all applicable provisions of CHAMPUS, CHAMPUS
Regulations, Medicaid Regulations and Medicare Regulations; and
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(vii) operate the businesses acquired prior to the Closing Date
pursuant to operative Health Licenses issued to such Loan Party and operate
the businesses acquired in connection with any Permitted Acquisition
pursuant to Health Licenses pursuant to which such Loan Party may legally
operate, whether pursuant a valid and enforceable power of attorney or
otherwise, for the period from the Acquisition Closing Date with respect
thereto through not later than the earlier to occur of the expiration date
of such Health License or the date that is sixty (60) days after such
Acquisition Closing Date and on or before such date obtain and thereafter
maintain Health Licenses issued to such Loan Party with respect to the
operations so acquired.
(M) DEPOSIT ACCOUNTS. The Borrower shall, and shall cause each other
Loan Party to, maintain a cash management system for the Borrower Corporate
Group acceptable to the Agent, including, without limitation, compliance with
the provisions of SECTION 2.12.
(N) FUTURE LIENS ON REAL PROPERTY. The Borrower shall, and shall cause
each other Loan Party to, execute and deliver to the Agent immediately upon the
acquisition of any real property after the Closing Date, a mortgage, deed of
trust or other appropriate instrument (each, a "MORTGAGE") evidencing a lien
upon any such acquired property, in form and substance reasonably satisfactory
to the Agent, to be subject only to such Liens as otherwise shall be permitted
by this Agreement. Upon recording of each Mortgage, the Borrower agrees to
obtain and deliver to the Agent, at Borrower's expense, an ALTA lender's title
policy insuring the lien of each Mortgage, subject only to Liens permitted by
SECTION 6.3(C) hereof, together with such endorsements as may be reasonably
requested by the Agent, and such other certificates, opinions and documents as
the Agent shall reasonably request. The Borrower shall, and shall cause each
other Loan Party to, use its best efforts to obtain a landlord, mortgagee,
bailee and/or warehouseman's access and lien waiver agreement, as applicable, in
each case in form and substance acceptable to the Agent, with respect to each of
the properties leased by the Borrower or any other Loan Party at which the
Borrower or such Loan Party maintains any collateral securing the Obligations.
(O) SUBSIDIARY GUARANTEE; SUBSIDIARY SECURITY AGREEMENT. The Borrower
hereby agrees to cause each Person which is or may hereafter become a Subsidiary
to execute, deliver and perform a Subsidiary Guarantee, such Collateral
Documents as the Agent may reasonably require, in form and substance acceptable
to the Agent, in order to grant to the Agent, for the benefit of itself and the
Holders of Secured Obligations, a lien on and security interest in all of such
Subsidiary's assets, subject only to Liens permitted hereunder, and such
documents, certificates and opinions as the Agent may reasonably request in
connection therewith.
(P) SEPARATE CORPORATE EXISTENCE. The Borrower shall take all reasonable
steps (including, without limitation, all steps which the Agent may from time to
time reasonably request) to maintain its and the other Loan Parties' identity as
separate legal entities and to make it apparent to third parties that Borrower
and such Loan Parties are each an entity with assets and liabilities distinct
from those of the Borrower's Non-Controlled Affiliates. Without limiting the
generality of the foregoing, the Borrower shall:
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(i) require that all full-time employees of the Borrower and each
other Loan Party identify themselves as such and not as employees of a Non-
Controlled Affiliate (including, without limitation, by means of providing
appropriate employees with business or identification cards identifying
such employees solely as Borrower's or such Loan Party's employees, as
applicable);
(ii) compensate all employees, consultants, investment bankers,
accountants, lawyers and agents directly, from Borrower's or such Loan
Party's applicable bank accounts, for services provided to Borrower or such
Loan Party by such employees, consultants, investment bankers and agents
and, to the extent any employee, consultant, investment banker or agent of
Borrower or any Loan Party is also an employee, consultant, investment
banker or agent of a Non-Controlled Affiliate, allocate the compensation of
such employee, consultant, investment banker or agent between Borrower or
the Loan Party, as applicable, and the Non-Controlled Affiliate on the
basis of actual use of the services so rendered to the extent practicable
and, to the extent such allocation is not practical, on a basis reasonably
related to actual use of such services;
(iii) allocate all overhead expenses (including, without
limitation, telephone and other utility charges and lease and office
expenses) for items shared between Borrower or any Loan Party and a Non-
Controlled Affiliate on the basis of actual use to the extent practicable
and, to the extent such allocation is not practicable, on a basis
reasonably related to actual use;
(iv) cause the Borrower and each other Loan Party to be named as an
insured on the insurance policy covering its property, or enter into an
agreement with the holder of such policy whereby in the event of a loss in
connection with such property, proceeds are paid to the Borrower or
applicable Loan Party;
(v) maintain the Borrower's and the other Loan Parties' books and
records complete and separate from those of any Non-Controlled Affiliate;
(vi) ensure that any consolidated financial statements or other public
information for the Borrower and its Affiliates (including any Non-
Controlled Affiliates) on a consolidated basis contain appropriate
disclosures concerning the Borrower's separate existence;
(vii) not maintain bank accounts or other depository accounts to
which a Non-Controlled Affiliate is an account party, into which a Non-
Controlled Affiliate makes deposits or from which a Non-Controlled
Affiliate has the power to make withdrawals;
(viii) not permit a Non-Controlled Affiliate to pay any of the
Borrower's or any other Loan Party's operating expenses (except when paid
and charged pursuant to an allocation based upon actual use, to the extent
practicable and to the extent such allocation is not practicable, on a
basis reasonably related to actual use);
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(ix) not pay dividends or make distributions, loans or other advances
to a Non-Controlled Affiliate, except in each case, as duly authorized by
its board of directors and in accordance with applicable corporation law
and the provisions of this Agreement; and
(x) ensure that all advances and loans between or among the Loan
Parties shall be properly accounted for as indebtedness, shall be
documented as intercompany indebtedness and shall be evidenced by an
intercompany note.
(Q) WAIVER UNDER SHAREHOLDERS AGREEMENT. The Borrower hereby consents to
the execution and delivery by each of AMC and the Foundation of the Parent
Pledge Agreement to which it is a party and to the pledge of the Pledged
Collateral (as defined therein) to the Agent for the benefit of itself and the
Holders of Secured Obligations. The Borrower hereby further consents and agrees
that neither the Agent nor any Holder of Secured Obligations, nor any successor,
assign or transferee thereof shall be obligated by or subject to any of the
provisions of the Shareholders Agreement, including without limitation any
restrictions on Transfers (as defined in the Shareholders Agreement), rights of
first refusal or voting rights. The Borrower hereby waives the provisions of
the Shareholders Agreement to the extent that they are contrary to or
inconsistent with the terms of this Agreement or the Parent Pledge Agreements.
6.3. NEGATIVE COVENANTS.
(A) INDEBTEDNESS. The Borrower shall not, and shall not permit any other
Loan Party to, directly or indirectly create, incur, assume or otherwise become
or remain directly or indirectly liable with respect to any Indebtedness,
except:
(i) the Obligations;
(ii) Permitted Existing Indebtedness of any Loan Party, and any
extension, renewal, refunding or refinancing thereof, PROVIDED THAT any
such extension, renewal, refunding or refinancing is in an aggregate
principal amount not greater than the principal amount of and interest,
fees and expenses accrued on, such Permitted Existing Indebtedness
outstanding at the time thereof and is on terms (including, without
limitation, maturity, amortization, interest rate, premiums, fees,
covenants, events of default, and remedies) not materially less favorable
to the applicable Loan Party or materially adverse to the Lenders than the
terms of such Permitted Existing Indebtedness;
(iii) unsecured Subordinated Indebtedness (other than Acquisition
Subordinated Debt) the terms (including, without limitation, subordination,
default, standstill, sinking fund, maturity, amortization, interest rate,
premiums, fees, covenants, the entity (or entities) which issue the
Subordinated Indebtedness, events of default, and remedies) of which are
acceptable to the Lenders when issued, but not any increase in the
principal amount thereof and not any refinancing, modification, refunding
or extension of maturity thereof, in whole or in part, unless such
refinancing, modification, refunding or extension is not materially less
favorable to the applicable Loan Party, including, without
83
limitation, with respect to amount, maturity, amortization, interest rate,
premiums, fees, covenants, subordination terms, events of default and
remedies or materially adverse to the Lenders than the terms of the
original approved Subordinated Indebtedness. Without limiting the
foregoing with respect to Subordinated Indebtedness that is not Acquisition
Subordinated Debt, (i) the scope and nature of covenants and defaults which
the Agent and the Lenders may deem acceptable will be determined taking
into account the Person(s) to which such Indebtedness is issued and the
relative size of the Subordinated Indebtedness compared to the size of the
Loans; (h) financial covenants, if any, contained in the agreement
governing such Subordinated Indebtedness shall be less restrictive than
those contained in this Agreement, (iv) such Subordinated Indebtedness
shall be unsecured; (v) there shall be no mandatory prepayments or
redemptions of such Subordinated Indebtedness of any type; PROVIDED,
HOWEVER, those interest payments permissible as Restricted Junior Payments
pursuant to SECTION 6.3(F)(ii) may be paid in accordance therewith; (vi)
none of the Subordinated Indebtedness shall mature prior to December 31,
2003; (vii) the agreement governing such Subordinated Indebtedness shall
not contain a cross-default to this Agreement or other Indebtedness (but
may contain a cross-acceleration clause to Indebtedness in excess of a
threshold amount to be determined based upon the size of the Subordinated
Indebtedness); and (viii) the agreement governing such Subordinated
Indebtedness shall contain no limitation on the sale of assets of any Loan
Party provided that any such sale does not involve a transfer of all or
substantially all of the assets of the Borrower or the applicable Loan
Party, any such sale is made in good faith on an arm's length basis and the
net proceeds of such sale are applied to repay or retire Obligations under
this Agreement.
(iv) Acquisition Subordinated Debt meeting the requirements of Section
6.3(H)(iii);
(v) Indebtedness constituting Contingent Obligations permitted by
SECTION 6.3(E);
(vi) Indebtedness constituting Contingent Purchase Price Payments,
which Indebtedness is issued pursuant to and in accordance with the terms
of the applicable Acquisition Documents;
(vii) Indebtedness arising from intercompany loans borrowed by any
Loan Party from the Borrower, evidenced by an intercompany note;
(viii) Indebtedness in respect of Interest Rate Agreements
permitted under SECTION 6.3(S); and
(ix) purchase money Indebtedness (including Capitalized Leases)
incurred by the Borrower or any other Loan Party after the Closing Date to
finance the acquisition of fixed assets, if (a) at the time of such
incurrence, no Default or Unmatured Default has occurred and is continuing
or would result from such incurrence, (b) such Indebtedness has a scheduled
maturity and is not due on demand, (c) such Indebtedness does not
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exceed $1,000,000 in the aggregate outstanding at any time for all Loan
Parties, and (d) any Lien securing such Indebtedness is permitted under
SECTION 6.3(C).
(B) SALES OF ASSETS. The Borrower shall not, and shall not permit any
other Loan Party to, sell, assign, transfer, lease, convey or otherwise dispose
of any property, whether now owned or hereafter acquired, or any income or
profits therefrom, or enter into any agreement to do so, unless:
(i) such sale is in connection with sales of Inventory in the
ordinary course of business;
(ii) (w) such sale, assignment, transfer, lease, conveyance or
disposition does not involve Inventory or Receivables, (x) the aggregate
net book value of assets sold in connection with all such sales by the
Borrower and each other Loan Party in the prior 12-month period does not
exceed $200,000, (y) such sale, assignment, transfer, lease, conveyance or
disposition is made in connection with the anticipated purchase by the
Borrower or the applicable Loan Party of replacement assets, and (z) all
mandatory prepayments required in connection therewith shall have been made
as and when provided in SECTION 2.5(B)(i)(a);
(iii) the aggregate net book value of such assets, together with
the net book value of all other assets sold, assigned, transferred, leased,
conveyed or otherwise disposed of and not replaced in accordance with the
provisions of CLAUSE (ii) above (other than sales and leases of Inventory
in the ordinary course of business) since the Closing Date does not exceed
$500,000 and all mandatory prepayments required in connection therewith
shall have been made as and when provided in Section 2.5(B)(i)(a);
(iv) such sale, assignment, transfer, lease, conveyance or other
disposition occurs pursuant to a merger (if such merger is not otherwise
prohibited by this Agreement) of one Loan Party into the Borrower or
another Loan Party (provided, in connection therewith the applicable
parties shall be in full compliance with the terms of the Collateral
Agreements); or
(v) such sale is in connection with the issuance by the Borrower of
any Capital Stock of the Borrower (x) to AMC pursuant to the terms of the
Share Purchase Agreement, (y) to employees, directors or Affiliates or (z)
in connection with a Permitted Acquisition; PROVIDED in connection
therewith no Change in Control shall occur and PROVIDED, FURTHER all
mandatory prepayments required in connection therewith shall have been made
as and when provided in SECTION 2.5(B)(i)(a).
(C) LIENS . The Borrower shall not, and shall not permit any other Loan
Party to, directly or indirectly create, incur, assume or permit to exist any
Lien on or with respect to any of their respective property or assets,
including, without limitation with respect to its Capital Stock, except:
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(i) Liens created by the Loan Documents;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens; and
(iv) purchase money Liens (including the interest of a lessor under
a Capitalized Lease and Liens to which any property is subject at the time of
the Loan Party's acquisition thereof) securing Indebtedness permitted under
SECTION 6.3(A)(IX); PROVIDED that such Liens shall not apply to any property
of any of the Loan Parties other than that purchased with the proceeds of
such Indebtedness or subject to such Capitalized Lease.
In addition, neither Borrower nor any other Loan Party nor any of its
stockholders shall become a party to any agreement, note, indenture or other
instrument, or take any other action, which would prohibit the creation of a
Lien on any of its properties or other assets or its Capital Stock in favor
of the Agent for the benefit of itself and the Holders of Secured
Obligations, as additional collateral for the Obligations; PROVIDED that any
agreement, note, indenture or other instrument in connection with secured
purchase money Indebtedness (including Capitalized Leases) permitted pursuant
to the terms of this Agreement may prohibit the creation of a Lien in favor
of the Agent for the benefit of itself and the Holders of the Secured
Obligations on the items of property obtained with the proceeds of such
purchase money Indebtedness or subject to such Capitalized Lease.
(D) INVESTMENTS. Except to the extent permitted pursuant to
PARAGRAPH (H) below, the Borrower shall not, and shall not permit any other
Loan Party to, directly or indirectly make or own any Investment, except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater
than the amount thereof on the Closing Date;
(iii) Investments received in connection
with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of,
and other disputes with, customers and suppliers arising
in the ordinary course of business;
(iv) Investments consisting of (a) bank and money market accounts
(other than those subject to a Restricted Account Agreement)
maintained by the Borrower or any Loan Party with financial
institutions provided not more than $50,000 shall be
maintained in all such accounts at any one time; and (b)
deposit accounts maintained by the Borrower or any Loan
Party with LaSalle provided funds deposited in such deposit
accounts are subject to the terms of the Concentration
Account Agreement;
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(v) Investments by the Borrower in connection with any
Permitted Acquisition, provided that if as a result of or
in connection with such Permitted Acquisition a Subsidiary
is created or acquired, such Subsidiary complies with the
requirements set forth in SECTION 6.3(H);
(vi) Investments by the Borrower or a
Wholly-Owned Subsidiary of the Borrower into a
Wholly-Owned Subsidiary, PROVIDED that upon the creation
or acquisition of a Wholly-Owned Subsidiary the following
requirements will have been satisfied:
(1) Such Wholly-Owned Subsidiary shall have executed a
Subsidiary Guarantee in substantially the form attached
hereto as EXHIBIT G.
(2) Such Wholly-Owned Subsidiary, if any, shall have
executed a Security Agreement in substantially the
form attached hereto as EXHIBIT D.
(3) Such Wholly-Owned Subsidiary shall have obtained all
of the third party agreements from the applicable
parties as set forth herein and in the Security
Agreement with respect to its assets.
(4) Each other Person party to any of the Loan Documents
shall have executed a consent and reaffirmation of
such Person's obligations under the Loan Documents.
(5) The Borrower and/or the Subsidiary of which such
Wholly-Owned Subsidiary will be a direct Subsidiary,
as applicable, shall have delivered to the Agent as
Collateral stock certificates representing all of
the Capital Stock of such Wholly-Owned Subsidiary
and such Capital Stock shall be subject to the
Pledge Agreements.
(6) The Agent shall have received in form suitable for
filing UCC-1 financing statements naming such
Wholly-Owned Subsidiary as debtor and the Agent as
secured party in all jurisdictions requested by the
Agent and shall have confirmed that no Liens exist
with respect to the assets or property of such
Wholly-Owned Subsidiary except Liens permitted under
the terms of this Agreement and the relevant
Security Agreement.
(7) The Agent shall have been provided with endorsements
with respect to the insurance to be maintained with
respect to such Wholly-Owned Subsidiary as required
pursuant to SECTION 6.2(E).
(8) Each of the Borrower and the other Loan Parties,
including such Wholly-Owned Subsidiary, shall have
executed and delivered the
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Contribution Agreement and/or an addendum thereto,
as applicable, together with a completed or revised
SCHEDULE I to the Contribution Agreement, in
substantially the form attached hereto as EXHIBIT L.
(9) The Loan Parties (including such Wholly-Owned
Subsidiary) shall have executed such other Loan
Documents and/or Collateral Documents and delivered
such documents, instruments, agreements and opinions
as shall be reasonably requested by the Agent, in
each case, in form and substance reasonably
satisfactory to the Agent. Such additional
documents shall disclose any revisions necessary to
the Schedules to this Agreement or any of the other
Loan Documents, all of which revisions shall be
reasonably acceptable to the Agent and the Required
Lenders.
(vii) Investments consisting of loans to management of the
Borrower and the other Loan Parties at any time not to
exceed $200,000 in the aggregate for all Loan Parties.
(E) CONTINGENT OBLIGATIONS. The Borrower shall not, and shall not
permit any other Loan Party to, directly or indirectly create or become or be
liable with respect to any Contingent Obligation, except (i) recourse
obligations resulting from endorsement of negotiable instruments for
collection in the ordinary course of business, (ii) Permitted Existing
Contingent Obligations and any extensions, renewals or replacements thereof,
provided that any such extension, renewal or replacement is not greater than
the Indebtedness under, and shall be on terms no less favorable to the
Borrower or such Loan Party, as applicable, than the terms of, the Permitted
Existing Contingent Obligation being extended, renewed or replaced and (iii)
Contingent Obligations arising under the Loan Documents.
(F) RESTRICTED JUNIOR PAYMENTS. The Borrower shall not, and shall not
permit any other Loan Party to, declare or make any Restricted Junior Payment,
except:
(i) payment of management fees, investment fees, professional
services fees, expense reimbursements or other amounts to
a Non-Controlled Affiliate required to be paid pursuant
to a services agreement in an amount not to exceed
$25,000 for any fiscal quarter, PROVIDED that no such
management fees, investment fees, professional services
fees, expense reimbursements or other amounts shall be
paid to a Non-Controlled Affiliate on or before December 31,
1996;
(ii) annual mandatory payments of interest, if any, due on the
Permitted Subordinated Indebtedness (as permitted under
SECTION 6.3(A)(III)) (other than Acquisition Subordinated
Debt) unless such payments are prohibited by the terms of
such Indebtedness or the subordination agreement or
intercreditor agreement related thereto;
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(iii) annual mandatory Contingent Purchase Price Payments in an
amount not to exceed the amount which would be payable
under the applicable Acquisition Documents entered into
at the time of the applicable Acquisition, without taking
into account any amendment, modification, supplement or
restatement of any such agreement or the adjustment of
any such amount pursuant to the terms of any such
Acquisition Document resulting from a change of facts and
circumstances after the Closing Date (as it relates to
the Omaha Acquisition) or Acquisition Closing Date with
respect thereto (unless the Agent and the Lenders shall
have consented to the terms thereof) the effect of which
is to increase the amount or accelerate the time of
payment of any such Contingent Purchase Price Payment;
(iv) Restricted Junior Payments from any Loan Party to the
Borrower; and
(v) annual mandatory payments of interest and principal, if any,
due on Acquisition Subordinated Debt unless such payments
are prohibited by the terms of such Indebtedness or the
subordination agreement or intercreditor agreement
related thereto;
PROVIDED, HOWEVER, that (a) the Restricted Junior Payments described in
CLAUSES (I), (II), (III), and (V) above shall not be permitted if either a
Default or an Unmatured Default shall have occurred and be continuing at the
date of payment thereof or would result therefrom.
(G) CONDUCT OF BUSINESS; SUBSIDIARIES. The Borrower shall not, and
shall not permit any other Loan Party to, engage in any business other than
the businesses engaged in by the Borrower on the date hereof and any business
or activities which are substantially similar, related or incidental thereto.
The Borrower shall not, and shall not permit any other Loan Party to, sell
to or provide services to any Person that has not obtained or maintained in
good standing all required Health Licenses. Except in connection with a
Permitted Acquisition or as otherwise permitted by SECTION 6.3(D)(VI), the
Borrower shall not, and shall not permit any other Loan Party to, create,
capitalize or acquire any Subsidiary after the date hereof.
(H) ACQUISITIONS. The Borrower shall not, and shall not permit any
other Loan Party to, make any Acquisition and no Target shall be added as a
Subsidiary, unless (i) the purchase price (including without limitation all
cash and non-cash consideration and any assumption of liabilities) of a
Target is less than $500,000 and in the aggregate the total purchase price of
Acquisitions which have not been approved by the Acquisition Approval Lenders
does not exceed $500,000 in any twelve month period or (ii) the Agent and the
Acquisition Approval Lenders shall have consented to the proposed Acquisition
of such Target, which consent shall not be unreasonably withheld. In
connection with each proposed Acquisition requiring the consent of the
Acquisition Approval Lenders, the Borrower shall deliver an Acquisition
Approval Package to each of the Lenders containing such information and in
such detail as shall be satisfactory to the Agent. Each Lender, in its
discretion, shall deliver to the Agent a certificate in the form of EXHIBIT N
hereto ("ACQUISITION CONSENT CERTIFICATE") indicating whether or not
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such Lender consents to the proposed Acquisition. If a Lender fails to
deliver the Acquisition Consent Certificate within the time frame requested
by the Borrower (but in any event no later than forty-five (45) days after
receipt of the completed Acquisition Approval Package), then the Lender shall
be deemed to have disapproved of the Acquisition. If the Agent has received
within such period, executed Acquisition Consent Certificates from the
Acquisition Approval Lenders indicating their consent to the proposed
Acquisition, then, subject to the Agent's satisfaction with all documentation
in connection therewith and that the Borrower is in compliance with the
criteria set forth below, the approved Acquisition may be consummated not
later than sixty (60) days after the consent of the Acquisition Approval
Lenders has been received by the Agent on the terms and conditions of the
Acquisition Approval Package (each such approved Acquisition constituting a
"PERMITTED ACQUISITION") :
(i) No Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of any
Indebtedness in connection therewith.
(ii) Each of the Lenders shall have been provided with two years of
audited financial statements with respect to the Target for distribution to
the Lenders. In the event that audited financial statements for such period
are not available as a result of divisional accounting or similar accounting
issues or past business practices, then the Lenders shall have received for
distribution to the Lenders, financial statements of the Target in such form
as shall be acceptable to the Agent and the Acquisition Approval Lenders.
(iii) Any Indebtedness (other than the applicable Acquisition Loan)
("ACQUISITION SUBORDINATED DEBT") incurred for the purpose of financing all
or any part of the Acquisition shall be subordinated to the Obligations on
terms and conditions acceptable to the Agent and the Acquisition Approval
Lenders. The terms and conditions of any such Acquisition Subordinated Debt,
including without limitation, those pertaining to subordination, default,
standstill, sinking fund, amortization, interest rate, covenants and
defaults, the entity or entities which issue or are otherwise liable for the
Acquisition Subordinated Debt, shall be in form and substance reasonably
acceptable to the Agent and the Acquisition Approval Lenders. Without
limiting the foregoing: (i) the scope and nature of covenants and defaults
which the Agent and the Acquisition Approval Lenders may deem acceptable will
be determined taking into account the Person(s) to which such Indebtedness is
issued (it being expected that the scope and nature of covenants and defaults
in Indebtedness issued to the seller of a Target would be significantly more
limited than terms from third-party financing sources) and the relative size
of the Acquisition Subordinated Indebtedness; (ii) financial covenants, if
any, contained in the agreement governing such Acquisition Subordinated Debt
shall be materially less restrictive than the financial covenants included in
this Agreement; (iii) other covenants or defaults, if any, contained in the
agreement governing such Acquisition Subordinated Debt which covenants or
defaults contain monetary baskets or restrictions shall be materially less
restrictive than those contained in this Agreement; (iv) such Acquisition
Subordinated Debt shall be unsecured; (v) the maturity of such Acquisition
Subordinated Debt and any mandatory prepayments or redemptions of such
Acquisition Subordinated Debt shall be acceptable to the Agent and the
Acquisition Approval Lenders; (vi) the agreement governing such Acquisition
Subordinated Debt shall not contain a cross-default to this Agreement or
other Indebtedness (but may contain a cross-
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acceleration clause to this Agreement and other Indebtedness in excess of a
threshold amount to be determined based upon the size of the Target); and
(vii) the agreement governing such Acquisition Subordinated Debt shall
contain no limitation on the sale of assets of any Target provided that any
such sale does not involve a transfer of all or substantially all of the
assets of the Target, any such sale is made in good faith on an arm's length
basis and the net proceeds of such sale are applied to repay or retire
Obligations under this Agreement.
(iv) The Acquisition is either a purchase of assets by the Borrower or a
Subsidiary or the resulting entity becomes a Subsidiary, is consummated
pursuant to a negotiated acquisition agreement on a non-hostile basis on
terms and conditions reasonably acceptable to the Agent and the Acquisition
Approval Lenders and involves the purchase of a business line similar,
related or incidental to that of the Borrower as of the Closing Date. In the
event that the acquisition agreement contains any Contingent Purchase Price
Payments, the terms thereof shall be reasonably acceptable to the Agent and
the Acquisition Approval Lenders.
(v) After giving effect to such Acquisition, the representations and
warranties set forth in ARTICLE V hereof shall be true and correct in all
material respects on and as of the date of such Acquisition with the same
effect as though made on and as of such date except for those made only as of
the Closing Date.
(vi) Prior to such Acquisition, the Borrower shall deliver to the
Lenders (i) PRO FORMA historical financial statements for the twelve-month
period ending on the last day of the Borrower's most recently completed
fiscal quarter taking into account the proposed Acquisition and the
incurrence of Indebtedness in connection therewith; (ii) PRO FORMA opening
date balance sheets as of the date of such proposed Acquisition taking into
account the consummation thereof and the incurrence of any Indebtedness
proposed to be incurred in connection therewith; and (iii) PRO FORMA
projections for the period remaining until the Termination Date. The
financial information delivered pursuant to this clause (vi) shall also
contain a revised plan and forecast (including a projected balance sheet,
income statement and funds flow statement) of the Borrower and the Borrower
Corporate Group for the balance of the fiscal year prepared in such detail as
shall be reasonably satisfactory to the Agent.
(vii) As of the applicable Acquisition Closing Date, the Borrower shall
deliver to the Agent and the Lenders a certificate from the Borrower's chief
financial officer demonstrating to the satisfaction of the Agent and the
Acquisition Approval Lenders that after giving effect to such Acquisition and
the incurrence of any Indebtedness permitted in connection therewith on a PRO
FORMA basis as if such Acquisition and such incurrence of Indebtedness had
occurred on the first day of the twelve-month period ending on the last day
of the Borrower's most recently completed fiscal quarter, the Borrower would
have been in compliance with all provisions of SECTION 6.4 at all times
during such twelve-month period and will be in compliance with all provisions
of SECTION 6.4 at all times during the period from such Acquisition Closing
Date until the Termination Date.
(viii) All material regulatory and legal approvals for the Acquisition
shall have been obtained.
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(ix) There shall be an absence of injunction or temporary restraining
order which, in the judgment of the Agent would prohibit the making of the
Term Loans or Acquisition Loans, if any, on the Acquisition Closing Date or
the consummation of the Acquisition.
(x) The Agent (directly or through its traveling auditors and/or
outside consultants) shall have completed its review of the Target and, if
applicable, its subsidiaries and their respective business operations, assets
and liabilities, including, without limitation, review of financial
statements and review of pending and threatened litigation and insurance
coverage relating thereto, environmental risks and liabilities, material
agreements, retiree medical benefits, ERISA obligations and compliance with
applicable laws and regulations deemed necessary or prudent by the Agent and
the Acquisition Approval Lenders, and such review shall have provided the
Agent and the Lenders with results and information which, in the Agent's and
the Acquisition Approval Lenders' reasonable determination, are satisfactory
to permit the Lenders to enter into the secured financing transaction in
connection with the Acquisition and to make the Term Loans or Acquisition
Loans, if any, in connection therewith. The Agent and the Acquisition
Approval Lenders shall have determined that all financial, accounting and tax
aspects of the Acquisition are reasonably acceptable.
(xi) The Agent and the Lenders shall have received legal opinions from
the Borrower's and the Target's counsel (or other counsel reasonably
satisfactory to the Agent) in form and substance reasonably satisfactory to
the Agent addressing such matters as the Agent shall reasonably designate and
such other opinions as are customary for transactions of a similar nature.
(xii) Simultaneously with any such Acquisition, the Borrower and the
Target shall have taken all action required under applicable law, or
reasonably requested by the Agent, to grant to the Agent, for the benefit of
the Holders of Secured Obligations, a valid and perfected first-priority
security interest in all of the stock of the Target owned by the Borrower or
any one or more of its Subsidiaries and, subject to Customary Permitted Liens
and Liens securing Indebtedness or leases of the Target which the Agent and
the Acquisition Approval Lenders agree to permit to remain outstanding, all
of the assets of the Target. In connection therewith:
(1) Each Subsidiary acquired or created in connection with such Permitted
Acquisition (a "New Subsidiary"), if any, shall have executed a
Subsidiary Guarantee in substantially the form attached hereto as
EXHIBIT G.
(2) Each New Subsidiary, if any, shall have executed a Security Agreement
in substantially the form attached hereto as EXHIBIT D.
(3) Each Loan Party (including any New Subsidiary) shall have obtained all
of the third party agreements from the applicable parties as set forth
herein and in the Security Agreements with respect to the Target's
assets.
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(4) Each other Person party to any of the Loan Documents shall have
executed a consent and reaffirmation of such Person's obligations
under the Loan Documents.
(5) The Borrower or the Subsidiary of which any New Subsidiary will be a
direct Subsidiary, as applicable, shall have delivered to the Agent as
Collateral stock certificates representing all of the Capital Stock of
the Target owned by the Borrower or such Subsidiary and (a) such
Capital Stock together with the Capital Stock of other Persons which
have executed a Pledge Agreement shall be for not less than 80% of the
combined voting power of the Target's outstanding Capital Stock
ordinarily having the right to vote at an election of directors and
(b) such Capital Stock shall be subject to the Pledge Agreements.
(6) The Agent shall have received in form suitable for filing UCC-1
financing statements naming the applicable Loan Party or New
Subsidiary as debtor and the Agent as secured party in all
jurisdictions requested by the Agent and shall have confirmed that no
Liens exist with respect to the assets or property of the Target
except Liens permitted under the terms of this Agreement and the
relevant Security Agreement (PROVIDED, HOWEVER, the Agent and the
Lenders agree that prefiling and post-filing Lien searches need not be
conducted in jurisdictions where the aggregate book value of assets of
the Target do not exceed $100,000, PROVIDED the aggregate book value
of assets of all Loan Parties for which such Lien searches have not
been conducted shall not exceed five percent (5.0%) of the
consolidated book value of all assets of all members of the Borrower
Corporate Group).
(7) The Agent shall have been provided with endorsements with respect to
the insurance to be maintained with respect to the Target as required
pursuant to SECTION 6.2(E).
(8) Upon the creation or acquisition of a New Subsidiary, each of the
Borrower and the other Loan Parties shall have executed and delivered
the Contribution Agreement and/or an addendum thereto, as applicable,
together with a completed or revised SCHEDULE I to the Contribution
Agreement, in substantially the form attached hereto as EXHIBIT L.
(9) The applicable Loan Parties shall have entered into a Collateral
Assignment of Representations, Warranties and Covenants in
substantially the form attached hereto as EXHIBIT M with respect to
the acquisition agreement in connection with the proposed Acquisition.
(10) The Borrower shall have delivered to the Agent certificates of value,
solvency and other appropriate factual information from Borrower's
chief financial officer in form and substance acceptable to the Agent,
supporting the conclusions that after giving effect to the Acquisition
of the Target, the Borrower is solvent and will be solvent subsequent
to incurring the Indebtedness in connection with the
93
Acquisition, will be able to pay its debts and liabilities as they
become due and will not be left with unreasonably small capital
with which to engage in its businesses.
(11) The Loan Parties (including any New Subsidiaries) shall have executed
such other Loan Documents and/or Collateral Documents and delivered
such documents, instruments and agreements as shall be reasonably
requested by the Agent, in each case, in form and substance reasonably
satisfactory to the Agent. Such additional documents shall disclose
any revisions necessary to the Schedules to this Agreement or any of
the other Loan Documents, all of which revisions shall be reasonably
acceptable to the Agent and the Acquisition Approval Lenders and which
shall not disclose any information which is inconsistent with the
other criteria for permitting an Acquisition under this SECTION
6.3(H). Set forth as EXHIBIT O is a sample list of closing documents
which would be delivered in connection with the closing of an
Acquisition.
(I) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. The Borrower shall
not, and shall not permit any other Loan Party to, directly or indirectly (i)
except as permitted in SECTION 6.3(F), pay any management fees or other
similar fees or compensation to any Non-Controlled Affiliate or any holder or
holders of any Loan Party's Capital Stock or any Affiliate thereof, other
than wages, salaries, bonuses and advances for expenses incurred in the
ordinary course and consistent with past practices of employees who are also
stockholders of any Loan Party in the ordinary course and consistent with
past practices of the Borrower or (ii) except as disclosed in SCHEDULE
6.3(I), enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Non-Controlled Affiliate or any holder or
holders of any of the Capital Stock of any Loan Party or any Affiliate
thereof which is not a Subsidiary of the Borrower, on terms that are less
favorable to the applicable Loan Party than those that might be obtained in
an arm's length transaction at the time from Persons who are not such a
holder or Affiliate.
(J) RESTRICTION ON FUNDAMENTAL CHANGES. The Borrower shall not, and
shall not permit any other Loan Party to, enter into any merger or
consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation
or dissolution), or convey, lease, sell, transfer or otherwise dispose of, in
one transaction or series of transactions, all or substantially all of any
such Person's business or property, whether now or hereafter acquired, except
(i) transactions permitted under SECTIONS 6.3(B) or 6.3(H) and (ii) merger of
any Loan Party with and into the Borrower, with the Borrower as the surviving
corporation in the merger.
(K) SALES AND LEASEBACKS. The Borrower shall not, and shall not permit
any other Loan Party to, become liable, directly, by assumption or by
Contingent Obligation, with respect to any lease, whether an Operating Lease
or a Capitalized Lease, of any property (whether real or personal or mixed)
(i) which the Borrower or one of the Loan Parties sold or transferred or is
to sell or transfer to any other Person, or (ii) which the Borrower or one of
the Loan Parties intends to use for substantially the same purposes as any
other property which has been or is to be sold or transferred by the Borrower
or one of the Loan Parties to any other Person in connection with
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such lease, unless in either case the sale involved is not prohibited under
SECTION 6.3(B) and the lease involved is not prohibited under SECTION 6.3(A).
(L) MARGIN REGULATIONS. No Loan Party shall use all or any portion of
the proceeds of any credit extended under this Agreement to purchase or carry
Margin Stock.
(M) ERISA. No Loan Party shall participate in any prohibited
transaction described in Sections 406 of ERISA or 4975 of the Code for which
a statutory or class exemption is not available or a private exemption has
not been previously obtained from the DOL, if (i) as a result thereof the
Loan Parties could be subject to liability in excess of $100,000,
individually or in the aggregate, or (ii) if it could result in a Material
Adverse Effect.
(N) ISSUANCE OF CAPITAL STOCK. Except as permitted in SECTION 6.3(B),
no Loan Party shall issue any Capital Stock.
(O) CORPORATE DOCUMENTS. No Loan Party shall amend, modify or
otherwise change any of the terms or provisions in any of their respective
corporate documents as in effect on the date hereof or on the Acquisition
Closing Date or the date of the creation thereof, as applicable, with respect
to any Subsidiary acquired or created after the date hereof, in any manner
adverse to the interests of the Lenders without the prior written consent of
the Required Lenders (which consent shall not be unreasonably withheld).
(P) OTHER INDEBTEDNESS. The Borrower shall not, and shall not permit
any other Loan Party to, amend, supplement or otherwise modify the terms of
(i) any Indebtedness permitted under SECTION 6.3(A)(II) or (IV) or any
Permitted Existing Contingent Obligations in any way that would be materially
less advantageous to such Loan Party or materially adverse to the Lenders,
including, without limitation, with respect to amount, maturity,
amortization, interest rate, premiums, fees, covenants, events of default and
remedies or (ii) any Indebtedness incurred under Sections 6.3(A)(iii), (vii)
or (viii) in any manner such that such Indebtedness as so amended,
supplemented or modified could not be incurred as of the date of such
amendment, supplement or modification pursuant to such applicable subsection
of Section 6.3. Except for mandatory payments of principal and interest on
Indebtedness (other than Permitted Subordinated Indebtedness), mandatory
payments of principal and interest on Acquisition Subordinated Debt permitted
pursuant to Section 6.3(F)(iii) and mandatory payments of interest on
Permitted Subordinated Indebtedness (other than Acquisition Subordinated
Debt) permitted pursuant to Section 6.3(F)(ii), no Loan Party shall purchase,
redeem, prepay or repay any principal of, premium, if any, interest or other
amount payable in respect of any Indebtedness (other than the Obligations).
(Q) FISCAL YEAR. The Borrower shall not, and shall not permit any
other Loan Party to, change its fiscal year for accounting or tax purposes
from a period consisting of the 12-month period ending on December 31 of each
calendar year.
(R) SUBSIDIARY COVENANTS. The Borrower will not permit any of its
Subsidiaries to create or otherwise become effective any consensual
encumbrance or restriction of any kind on
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the ability of any such Subsidiary to pay dividends or make any other
distribution on its stock, or make any other Restricted Junior Payment, pay
any Indebtedness or other Obligation owed to the Borrower or any other such
Subsidiary, make loans or advances or other Investments in the Borrower or
any other such Subsidiary, or sell, transfer or otherwise convey any of its
property to the Borrower or any other such Subsidiary.
(S) RATE HEDGING OBLIGATIONS. No Loan Party shall enter into any
interest rate, commodity or foreign currency exchange, swap, collar, cap or
similar agreements other than those entered into pursuant to which any Loan
Party has hedged its actual interest rate, foreign currency or commodity
exposure (such hedging agreements are sometimes referred to herein as
"INTEREST RATE AGREEMENTS").
(T) CHANGE OF DEPOSIT ACCOUNTS. The Borrower shall not, and shall not
permit any other Loan Party to, establish any deposit account with any bank
or other financial institution, except in accordance with and in compliance
with the provisions of SECTION 2.12.
6.4 FINANCIAL COVENANTS. The Borrower shall and shall cause each
of the Loan Parties to be operated in a manner so as to comply with the
following:
(A) DEFINED TERMS FOR FINANCIAL COVENANTS.
The following terms used in this Agreement shall have the following meanings
(such meanings to be applicable, except to the extent otherwise indicated in
a definition of a particular term, both to the singular and the plural forms
of the terms defined):
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases and Permitted Purchase Money Indebtedness and including
all related Transaction Costs) by the Borrower and its consolidated
Subsidiaries during such period that, in conformity with Agreement Accounting
Principles, are required to be included in or reflected by the property,
plant, equipment or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrower and its consolidated Subsidiaries
other than with respect to the acquisition of inventory and equipment in the
ordinary course of business or with respect to the Permitted Acquisitions.
"EBITDA" means, for any period, on a consolidated basis for Borrower and
its consolidated Subsidiaries, the sum, without duplication, of the amounts
for such period of (i) Net Income, PLUS (ii) charges against income for
foreign, federal, state and local taxes, PLUS (iii) Interest Expense, plus
(iv) Fees, PLUS (v) amortization expense, including, without limitation,
amortization of goodwill and other intangible assets, PLUS (vi) other
non-cash charges classified as long-term deferrals in accordance with
Agreement Accounting Principles, PLUS (vii) depreciation expense, MINUS
(viii) interest income, MINUS (ix) extraordinary gains (and any unusual gains
arising in or outside of the ordinary course of business not included in
extraordinary gains determined in accordance with Agreement Accounting
Principles which have been included in the determination of Net Income).
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"FEES" means fees (including agency and unused commitment fees) and
discounts with respect to (i) Letters of Credit and (ii) Indebtedness
evidenced by this Agreement.
"FIXED CHARGE COVERAGE RATIO" means a ratio of: (i) the sum, without
duplication, of the amounts of (a) EBITDA, PLUS (b) Rentals, MINUS (c)
Capital Expenditures, MINUS (d) Contingent Purchase Price Payments to (ii)
the sum, without duplication, of the amounts of (a) Interest Expense, PLUS
(b) Fees, PLUS (c) Rentals, PLUS (d) Restricted Junior Payments consisting of
management fees paid pursuant to SECTION 6.3(F)(I), PLUS (e) any amounts paid
by the Borrower or any of its Subsidiaries to any Governmental Authority with
respect to the Borrower Corporate Group's tax liability, PLUS (f) scheduled
amortization of the principal portion of the Term Loans and Acquisition Loans
and scheduled amortization of the principal portion of all other Indebtedness
of Borrower and its consolidated Subsidiaries during such period; provided
that at any time that (i) the Borrower is otherwise in compliance with the
requirements of the provisions of Section 6.4 and (ii) the Borrower has a
contractual commitment (which is not subject to any conditions (other than
notice as provided in the Shareholders Agreement), which are not satisfied)
from AMC to advance funds to the Borrower in the amount of the outstanding
Acquisition Subordinated Indebtedness, the scheduled amortization of the
principal portion of the Acquisition Subordinated Indebtedness shall be
excluded from the calculation pursuant to clause (ii)(f) above.
In each case the Fixed Charge Coverage Ratio shall be determined as of the
last day of each fiscal quarter for the four-quarter period ending on such
day.
"INTEREST EXPENSE" means, for any period, total interest expense of
Borrower and its consolidated Subsidiaries, other than in respect of Fees,
whether paid, deferred or accrued (including the interest component of
Capitalized Leases), but excluding interest expense not payable in cash
(including amortization of discount), all as determined in conformity with
Agreement Accounting Principles.
"NET INCOME" means, for any period, the net earnings (or loss) after
taxes of Borrower and its consolidated Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in conformity
with Agreement Accounting Principles.
"RENTALS" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property having an original term
(including any required renewals or any renewals at the option of the lessor
or lessee) of one year or more but does not include any amounts payable under
Capitalized Leases of such Person.
(B) INTEREST EXPENSE COVERAGE RATIO . Maintain a ratio (the "INTEREST
EXPENSE COVERAGE RATIO") of (i) EBITDA, MINUS Capital Expenditures to (ii)
Interest Expense for the applicable period of at least:
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Applicable Period Applicable Interest
Coverage Ratio
From the Closing Date and each 2.00 to 1.0
fiscal quarter thereafter
In each case the Interest Expense Coverage Ratio shall be determined as of
the last day of each fiscal quarter for the four-quarter period ending on
such day.
(C) FIXED CHARGE COVERAGE RATIO. Maintain a Fixed Charge Coverage
Ratio of at least 1.15 to 1.00 as of the last day of each fiscal quarter of
the Borrower.
(D) MINIMUM EBITDA. Not permit EBITDA for the applicable period to be
less than:
Applicable Period Minimum EBITDA
From January 1, 1996 through June 30, 1996 $200,000, PLUS 75% of the
Projected EBITDA of Targets
From January 1, 1996 through September 30, 1996 $450,000, PLUS
75% of the Projected
EBITDA of Targets
From January 1, 1996 through December 31, 1996 $825,000, PLUS 75% of the
Projected EBITDA of Targets
For purposes hereof, the "PROJECTED EBITDA OF TARGETS" shall mean with
respect to each Target, for each applicable period occurring after the
Acquisition Closing Date in respect of such Target, the sum of the projected
EBITDA (determined in a manner consistent with calculation of EBITDA of the
Borrower and its Subsidiaries as defined in SECTION 6.4(A)) for such period
for each Target acquired by a Loan Party from and after the Closing Date
based upon the projected financial information contained in the Acquisition
Approval Package delivered to the Lenders regarding such Target.
The parties hereto acknowledge and agree, that the minimum levels of EBITDA
for each period of each fiscal year after the fiscal year ending after
December 31, 1996 shall be established prior to the beginning of each fiscal
year and further agree to enter into negotiations, in good faith, in
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order to establish such levels in a manner so as to reflect equitably the
desired result that the criteria for evaluating the Borrower's and the
Borrower Corporate Group's financial condition shall be consistent with the
criteria used in establishing the levels for the fiscal year ending December
31, 1996.
(E) MAXIMUM LEVERAGE RATIO. Shall not permit at any time on or after
the earlier of December 31, 1996 or the Conversion Date the ratio ("LEVERAGE
RATIO") of (i) Indebtedness of Borrower and its consolidated Subsidiaries for
borrowed money (excluding from the calculation thereof any Contingent
Obligations or Rate Hedging Obligations) to (ii) EBITDA MINUS Capital
Expenditures for the applicable period, to be greater than:
Applicable
Applicable Period Leverage Ratio
From December 31, 1996 through the Conversion Date 4.50 to 1.0
For the first three fiscal quarters after the 4.25 to 1.0
Conversion Date
For the fourth, fifth, sixth and seventh 4.00 to 1.0
fiscal quarters after the Conversion Date
For the eighth fiscal quarter after the 3.50 to 1.0
Conversion Date
For the ninth fiscal quarter after the 3.25 to 1.00
Conversion Date
For the tenth and eleventh fiscal quarters 3.00 to 1.00
after the Conversion Date
Each fiscal quarter thereafter 2.75 to 1.00
The Leverage Ratio shall be calculated, in each case, as of the last day of
each fiscal quarter based upon (A) for Indebtedness, Indebtedness as of the
last day of each such fiscal quarter; and (B) for EBITDA and Capital
Expenditures, the actual amount for the four-quarter period ending on such
day.
(F) CALCULATIONS FOR ACQUISITION. For purposes of calculating the
Leverage Ratio, EBITDA and Capital Expenditures for any period shall be
calculated on a pro forma basis as if each Permitted Acquisition and the
Colorado Acquisition, if applicable, consummated during such period had
occurred on the first day of such four (4) quarter period.
ARTICLE VII. DEFAULTS
7.1 DEFAULTS . Each of the following occurrences shall constitute a
Default under this Agreement:
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(a) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower shall (i) fail to
pay when due any of the Obligations consisting of principal with respect to
the Loans or (ii) shall fail to pay within three (3) Business Days of the
date when due any of the other Obligations under this Agreement or the other
Loan Documents.
(b) BREACH OF CERTAIN COVENANTS. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation
binding on it under:
(i) Sections 6.1(C), 6.1(D), 6.1(E), 6.1(F), 6.1(G), 6.1(H), 6.1(I),
6.1(K), 6.1(N), 6.2(B) or 6.2(F) and such failure shall continue unremedied
for fifteen (15) days;
(ii) Section 6.1(A), 6.1(B), 6.1(J) or 6.2(E) and such failure shall
continue unremedied for five (5) Business Days;
(iii) Section 6.3 and such failure shall continue unremedied for five (5)
Business Days but only if such failure was unintentional and inadvertent and
is capable of being and is reasonably likely to be cured or remedied within
such five (5) Business Day period; or
(iv) Section 6.3 (to the extent such failure is not subject to CLAUSE (III)
above), 6.4(B), 6.4(C), 6.4(D) or 6.4(E).
(c) BREACH OF REPRESENTATION OR WARRANTY. Any representation or warranty
made or deemed made by Borrower, any other Loan Party, AMC or the Foundation
to the Agent or any Lender herein or in any of the other Loan Documents or in
any statement or certificate at any time given by any such Person pursuant to
any of the Loan Documents shall be false or misleading in any material
respect on the date as of which made (or deemed made).
(d) OTHER DEFAULTS. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered
by PARAGRAPHS (a), (b) or (c) of this SECTION 7.1), or the Borrower or any
other Loan Party shall default in the performance of or compliance with any
term contained in any of the other Loan Documents, and such default shall
continue for thirty (30) days after the occurrence thereof.
(e) DEFAULT AS TO OTHER INDEBTEDNESS. The Borrower or any other Loan
Party shall fail to make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) with respect to any
Indebtedness (other than the Obligations), which Indebtedness has an
outstanding principal balance in excess of $200,000; or any breach, default
or event of default shall occur, or any other condition shall exist under any
instrument, agreement or indenture pertaining to any such Indebtedness, if
the effect thereof is to cause an acceleration, mandatory redemption, a
requirement that Borrower or such Loan Party offer to purchase such
Indebtedness or other required repurchase of such Indebtedness, or permit the
holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to be due
and payable (by acceleration or otherwise) or required to be prepaid,
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redeemed or otherwise repurchased by Borrower or any Loan Party (other than
by a regularly scheduled required prepayment) prior to the stated maturity
thereof.
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case shall be commenced against the Borrower or any
other Loan Party and the petition shall not be dismissed, stayed, bonded or
discharged within sixty (60) days after commencement of the case; or a court
having jurisdiction in the premises shall enter a decree or order for relief
in respect of the Borrower or any other Loan Party in an involuntary case,
under any applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted under any
applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Borrower or any
other Loan Party or over all or a substantial part of the property of the
Borrower or any other Loan Party shall be entered; or an interim receiver,
trustee or other custodian of the Borrower or any other Loan Party or of all
or a substantial part of the property of the Borrower or any other Loan Party
shall be appointed or a warrant of attachment, execution or similar process
against any substantial part of the property of the Borrower or any other
Loan Party shall be issued and any such event shall not be stayed, dismissed,
bonded or discharged within sixty (60) days after entry, appointment or
issuance.
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Borrower
or any other Loan Party shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent 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, (iii) consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property, (iv) make any assignment for the benefit of creditors or (v) take
any corporate action to authorize any of the foregoing.
(h) JUDGMENTS AND ATTACHMENTS. Any money judgment(s) (other than a money
judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against Borrower or any other Loan Party or any
of their respective assets involving in excess of $200,000 in the aggregate with
respect to the Borrower and all other Loan Parties is (are) entered and shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60)
days or in any event later than fifteen (15) days prior to the date of any
proposed sale thereunder.
(i) DISSOLUTION. Any order, judgment or decree shall be entered against
Borrower or any other Loan Party decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a period
in excess of sixty (60) days; or the Borrower or any other Loan Party shall
otherwise dissolve or cease to exist except as specifically permitted by this
Agreement.
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(j) LOAN DOCUMENTS; FAILURE OF SECURITY. At any time, for any reason,
(i) any Loan Document as a whole that materially affects the ability of the
Agent, or any of the Lenders, to enforce the Obligations or enforce their
rights against any guarantor or the Collateral or any other collateral
pledged thereunder ceases to be in full force and effect or the Borrower, any
other Loan Party, AMC or the Foundation seeks to repudiate its obligations
under any of the Loan Documents and the Liens intended to be created thereby
are, or the Borrower, any such Loan Party, AMC or the Foundation seeks to
render such Liens, invalid and unperfected, or (ii) Liens on Collateral with
a fair market value in excess of $100,000 in the aggregate for all Loan
Parties in favor of the Agent contemplated by the Loan Documents shall, at
any time, for any reason, be invalidated or otherwise cease to be in full
force and effect, or such Liens shall not have the priority contemplated by
this Agreement or the Loan Documents.
(k) TERMINATION EVENT. Any Termination Event occurs which the Required
Lenders believe is reasonably likely to subject the Borrower and the other
members of the Controlled Group to liability in excess of $100,000,
individually or in the aggregate.
(l) WAIVER APPLICATION. The plan administrator of any Benefit Plan
applies under Section 412(d) of the Code for a waiver of the minimum funding
standards of Section 412(a) of the Code and the Agent believes that the
substantial business hardship upon which the application for the waiver is
based is reasonably likely to subject the Loan Parties to liability in excess
of $100,000, individually or in the aggregate.
(m) CHANGE OF CONTROL. A Change of Control shall occur.
(n) INTEREST RATE AGREEMENTS. Nonpayment by the Borrower of any
obligation under any Interest Rate Agreements entered into with any Lender or
the breach by the Borrower of any term, provision or condition contained in
any such Interest Rate Agreements, in each case following the expiration of
any cure periods with respect to such nonpayment or breach.
(o) ENVIRONMENTAL MATTERS. The Borrower or any other Loan Party shall be
the subject of any proceeding or investigation pertaining to (i) the release
by any Loan Party of any contaminant (including, without limitation, any
medical waste) into the environment, (ii) the liability of any Loan Party
arising from the release by any other Person of any contaminant (including,
without limitation, any medical waste) into the environment, or (iii) any
violation of any Environmental, Health or Safety Requirements of Law
(including, without limitation, those applicable to the disposal of medical
waste) by any Loan Party, which, in any case, is reasonably likely to subject
the Loan Parties to liability in excess of $100,000, individually or in the
aggregate.
(p) GUARANTOR REVOCATION. Any guarantor of the Obligations shall
terminate or revoke any of its obligations under the applicable guarantee
agreement or breach any of the terms of such guarantee agreement.
(q) FAILURE OF SUBORDINATION. (1) The subordination provisions of the
documents and instruments evidencing any Permitted Subordinated Indebtedness
shall, at any time, be
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invalidated or otherwise cease to be in full force and effect; or (2) any
violation or breach of the terms of any subordination or intercreditor
agreement relating to any Permitted Subordinated Indebtedness shall occur by
any Loan Party; or (3) any violation or breach of the terms of any
subordination or intercreditor agreement relating to any Permitted
Subordinated Indebtedness shall occur by any Person other than a Loan Party
and (a) such violation or breach continues unremedied for fifteen (15)
Business Days or (b) the Agent or the Required Lenders have determined that
such violation or breach is reasonably likely to impair or otherwise be
materially disadvantageous to the position of the Lenders.
(r) ACCREDITATION; LICENSING. Any Loan Party shall fail to maintain its
Accreditation or any Health License, as applicable.
(s) CHAMPUS/MEDICARE/MEDICAID ELIGIBILITY. Any Loan Party eligible as of
the Closing Date, or which thereafter becomes eligible, to participate in
CHAMPUS, Medicare and/or Medicaid programs shall receive notice of
termination of its eligibility to, or shall otherwise become ineligible
thereunder for any reason to, participate in the CHAMPUS, Medicare or
Medicaid programs or to accept assignments or rights to reimbursement under
CHAMPUS Regulations, Medicare Regulations or Medicaid Regulations.
(t) PARTICIPATION IN MANAGED CARE PROGRAMS. Any Loan Party eligible as
of the Closing Date, or which thereafter becomes eligible, to participate in
any managed care program or other program from which any Loan Party derives
more than fifteen percent (15%) of its Receivables, shall become ineligible
thereunder for any reason and such Loan Party's eligibility shall not have
been reinstated within five (5) Business Days.
(u) CONTRACTUAL ALLOWANCE UNDERSTATEMENT. Any Loan Party shall
understate by any material amount the Contractual Allowances or shall
overstate by any material amount the Adjusted Amount of Eligible Receivables.
(v) PLEDGE OF CAPITAL STOCK. At any time the Agent shall fail to have a
first perfected possessory pledge with respect to (i) all of the Borrower's
Capital Stock owned by AMC and the Foundation; (ii) at least 80% of the
combined voting power of the Borrower's outstanding Capital Stock ordinarily
having the right to vote at an election of directors; (iii) all of the other
Loan Parties' Capital Stock owned by the Borrower or another Loan Party; or
(iv) at least 80% of the combined voting power of each of the Loan Parties'
(other than the Borrower) outstanding Capital Stock ordinarily having the
right to vote at an election of directors.
(w) MATERIAL ADVERSE CHANGE. (i) Since December 31, 1995, there shall
have occurred any event which could have a Material Adverse Effect or (ii)
the unaudited financial statements of the Borrower as of and for the fiscal
year ended December 31, 1995 do not accurately reflect in all material
respects the financial condition as of such date or the results of operations
for the fiscal year ended on such date, as reflected in the audited financial
statements of the Borrower and its Subsidiaries as of December 31, 1995
delivered to the Lenders pursuant to SECTION 6.1(A)(III).
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A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with SECTION 8.3(a).
ARTICLE VIII. ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES
8.1. TERMINATION OF COMMITMENTS; ACCELERATION. If any Default described
in SECTION 7.1 (f) or 7.1(g) occurs with respect to the Borrower or any Loan
Party, the obligations of the Lenders to make Loans hereunder and the
obligation of the Agent or any other Issuing Lender to issue Letters of
Credit hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part
of the Agent, any Lender or any Issuing Lender. If any other Default occurs,
the Required Lenders may terminate or suspend the obligations of the Lenders
to make Loans hereunder and the obligation of the Agent and the Issuing
Lenders to issue Letters of Credit hereunder, or declare the Obligations to
be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice
of any kind, all of which the Borrower hereby expressly waive.
8.2. DEFAULTING LENDER. In the event that any Lender fails to fund its
Pro Rata Share of any Advance requested or deemed requested by the Borrower
which such Lender is obligated to fund under the terms of this Agreement (the
funded portion of such Advance by the non-defaulting Lender(s) being
hereinafter referred to as a "NON PRO RATA LOAN") and LaSalle elects not to
make an Over-Advance, until the earlier of such Lender's cure of such failure
and the termination of the Commitments, the proceeds of all amounts
thereafter repaid to the Agent by the Borrower and otherwise required to be
applied to such Lender's share of all other Obligations pursuant to the terms
of this Agreement shall be advanced to the Borrower by the Agent on behalf of
such Lender to cure, in full or in part, such failure by such Lender, but
shall nevertheless be deemed to have been paid to such Lender in satisfaction
of such other Obligations. Notwithstanding anything in this Agreement to the
contrary:
(i) the foregoing provisions of this SECTION 8.2 shall apply only with
respect to the proceeds of payments of Obligations and shall not affect the
conversion or continuation of Loans pursuant to SECTION 2.10;
(ii) any such Lender shall be deemed to have cured its failure to fund
its Pro Rata Share of any Advance at such time as an amount equal to such
Lender's original Pro Rata Share of the requested principal portion of such
Advance is fully funded to the Borrower, whether made by such Lender itself
or by operation of the terms of this SECTION 8.2, and whether or not the Non
Pro Rata Loan with respect thereto has been repaid, converted or continued;
(iii) amounts advanced to the Borrower to cure, in full or in part, any
such Lender's failure to fund its Pro Rata Share of any Advance ("CURE
LOANS") shall bear interest at the rate applicable to Floating Rate Loans in
effect from time to time, and for all other purposes of this Agreement shall
be treated as if they were Floating Rate Loans;
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(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to its
desired application, all repayments of principal which, in accordance with
the other terms of this Agreement, would be applied to the outstanding
Floating Rate Loans shall be applied FIRST, ratably to all Floating Rate
Loans constituting Non Pro Rata Loans, SECOND, ratably to Floating Rate Loans
other than those constituting Non Pro Rata Loans or Cure Loans and, THIRD,
ratably to Floating Rate Loans constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's cure of
the failure to fund its Pro Rata Share of any Advance and the termination of
the Revolving Loan Commitments, the term "Required Lenders" for purposes of
this Agreement shall mean Lenders (excluding all Lenders whose failure to
fund their respective Pro Rata Shares of such Advance have not been so cured)
whose Pro Rata Shares represent equal to or greater than sixty-six and two
thirds percent (66-2/3 %) of the aggregate Pro Rata Shares of such Lenders;
and
(fi) for so long as and until any such Lender's failure to fund its Pro
Rata Share of any Advance is cured in accordance with SECTION 8.2(II), (A)
such Lender shall not be entitled to any commitment fees with respect to its
Revolving Loan Commitment, Term Loan Commitment or Acquisition Loan
Commitment and (B) such Lender shall not be entitled to any letter of credit
fees, which commitment fees and letter of credit fees shall accrue in favor
of the Lenders which have funded their respective Pro Rata Share of such
requested Advance, shall be allocated among such performing Lenders ratably
based upon their relative Revolving Loan Commitments, and shall be calculated
based upon the average amount by which the aggregate Revolving Loan
Commitments of such performing Lenders exceeds the sum of (I) the outstanding
principal amount of the Loans owing to such performing Lenders, PLUS (II) the
outstanding Reimbursement Obligations owing to such performing Lenders, PLUS
(III) the aggregate participation interests of such performing Lenders
arising pursuant to SECTION 2.21 with respect to undrawn and outstanding
Letters of Credit.
8.3. AMENDMENTS.
(a) GENERAL PROVISIONS. Subject to the provisions of this ARTICLE
VIII, the Required Lenders (or the Agent with the consent in writing of the
Required Lenders) and the Borrower may enter into agreements supplemental
hereto for the purpose of adding or modifying any provisions to the Loan
Documents or changing in any manner the rights of the Lenders, or the
Borrower hereunder or waiving any Default hereunder; PROVIDED, HOWEVER, that
no such supplemental agreement shall, without the consent of each Lender
affected thereby:
(b) Postpone or extend the Termination Date, the Term Loan Termination
Date, the Conversion Date or any other date fixed for any payment of
principal of, or interest on, the Loans, the Reimbursement Obligations or any
fees or other amounts payable to such Lender;
(c) Reduce the principal amount of any Loans or L/C Obligations,
reduce the amount of any required payment on the Loans or reduce the rate or
extend the time of payment of interest or fees thereon;
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(iii) Reduce the percentage specified in the definition of Required Lenders
or the definition of Acquisition Approval Lenders or any other percentage of
Lenders specified to be the applicable percentage in this Agreement to act on
specified matters;
(iv) Increase the amount of the Revolving Loan Commitment, the Term Loan
Commitment or Acquisition Loan Commitment of any Lender hereunder (except with
respect to an increase in the amount, or other modification to the terms or
components, of the Borrowing Base);
(v) Permit Borrower to assign its rights under this Agreement;
(vi) Amend this SECTION 8.3;
(vii) Release all or substantially all of the Collateral; or
(viii) Release any Subsidiary Guaranty.
No amendment of or waiver of any condition precedent to an Acquisition Loan
under SECTION 4.3 shall be effective without the written consent of the
Acquisition Approval Lenders. No amendment of any provision of this Agreement
relating to the Agent shall be effective without the written consent of the
Agent. No amendment of any provision of this Agreement relating to any Issuing
Lender shall be effective without the written consent of such Issuing Lender.
The Agent may waive payment of the fee required under SECTION 12.3(B) without
obtaining the consent of any of the Lenders.
(b) ITEMS NOT REQUIRING CONSENT. Nothing in this Agreement shall require
the consent of any Lender to the execution by the Agent of documentation
acceptable to the Agent evidencing the release of the Agent's liens on any
Collateral sold in a transaction permitted by SECTION 6.3(B)(II) or SECTION
6.3(B)(III) or otherwise consented to by the requisite group of Lenders so long
as all mandatory prepayments in connection therewith shall have been made
pursuant to SECTION 2.5(B)(I).
8.4. PRESERVATION OF RIGHTS. No delay or omission of the Lenders, the
Issuing Lenders or the Agent to exercise any right under the Loan Documents
shall impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan or the issuance of a Letter of
Credit notwithstanding the existence of a Default or the inability of the
Borrower to satisfy the conditions precedent to such Loan or issuance of such
Letter of Credit shall not constitute any waiver or acquiescence. Any single or
partial exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to SECTION 8.3, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be
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available to the Agent, the Lenders and the Issuing Lenders until the
Obligations have been paid in full.
ARTICLE IX. GENERAL PROVISIONS
9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower and neither the Agent nor any Issuing Lender shall be obligated to
issue any Letter of Credit for the account of the Borrower or any other Person
in violation of any limitation or prohibition provided by any applicable statute
or regulation.
9.3. PERFORMANCE OF OBLIGATIONS. The Borrower agrees that the Agent may,
but shall have no obligation, after the occurrence and during the continuance of
a Default to: pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against any Collateral and make
any other payment or perform any act required of Borrower or any other Loan
Party under any Loan Document or take any other action which the Agent in its
discretion deems necessary or desirable to protect or preserve the Collateral,
including, without limitation, any action to (y) effect any repairs or obtain
any insurance called for by the terms of any of the Loan Documents and to pay
all or any part of the premiums therefor and the costs thereof and (z) pay any
rents payable by any Loan Party which are more than 30 days past due, or as to
which the landlord has given notice of termination, under any lease. The Agent
shall use its best efforts to give the Borrower notice of any action taken under
this SECTION 9.3 prior to the taking of such action or promptly thereafter
provided the failure to give such notice shall not affect the Borrower's
obligations in respect thereof. The Borrower agrees to pay the Agent, upon
demand, the principal amount of all funds advanced by the Agent under this
SECTION 9.3, together with interest thereon at the rate from time to time
applicable to Floating Rate Loans from the date of such advance until the
outstanding principal balance thereof is paid in full. If the Borrower fails to
make payment in respect of any such advance under this SECTION 9.3 within one
(1) Business Day after the date the Borrower receives written demand therefor
from the Agent, the Agent shall promptly notify each Lender and each Lender
agrees that it shall thereupon make available to the Agent, in Dollars in
immediately available funds, the amount equal to such Lender's Pro Rata Share of
such advance. If such funds are not made available to the Agent by such Lender
within one (1) Business Day after the Agent's demand therefor, the Agent will be
entitled to recover any such amount from such Lender together with interest
thereon at the Effective Federal Funds Rate for each day during the period
commencing on the date of such demand and ending on the date such amount is
received. The failure of any Lender to make available to the Agent its Pro Rata
Share of any such unreimbursed advance under this SECTION 9.3 shall neither
relieve any other Lender of its obligation hereunder to make available to the
Agent such other Lender's Pro Rata Share of such advance on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Agent. All
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outstanding principal of, and interest on,
advances made under this SECTION 9.3 shall constitute Obligations secured by the
Collateral until paid in full by the Borrower.
9.4. HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.5. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
9.6. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other. The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as
to confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
9.7. EXPENSES; INDEMNIFICATION.
(A) EXPENSES. The Borrower shall reimburse the Agent for any reasonable
costs, internal charges and out-of-pocket expenses (including attorneys' and
paralegals' fees and time charges of attorneys and paralegals for the Agent,
which attorneys and paralegals may be employees of the Agent, provided such
reimbursements shall be subject to the terms of any written agreements, if any,
entered into with such attorneys regarding their fees) paid or incurred by the
Agent in connection with the preparation, negotiation, execution, delivery,
syndication (but only in connection with any amendment to the credit facilities
provided for herein), review, amendment, modification and administration of the
Loan Documents and any proposal letters or commitment letters issued in
connection therewith, including without limitation, the commitment letter and
accompanying letter agreement dated April 19, 1996 executed in contemplation of
entering into this Agreement. The Borrower also agrees to reimburse the Agent,
the Lenders and the Issuing Lenders for any reasonable costs, internal charges
and out-of-pocket expenses (including attorneys' and paralegals' fees and time
charges of attorneys and paralegals for the Agent and the Lenders, which
attorneys and paralegals may be employees of the Agent, the Lenders or the
Issuing Lenders) paid or incurred by the Agent, any Lender or any Issuing Lender
in connection with any restructuring or "workout" relating to this Agreement and
the Obligations, the collection of the Obligations and enforcement of the Loan
Documents. In addition to expenses set forth above, the Borrower agrees to
reimburse the Agent, promptly after the Agent's request therefor, for each
audit, collateral analysis or other business analysis performed by or for the
benefit of the Lenders in connection with this Agreement or the other Loan
Documents in an amount equal to the Agent's then customary charges for each
person employed to perform such audit or analysis, plus all costs and expenses
(including without limitation, travel expenses) incurred by the Agent in the
performance of such audit or analysis; PROVIDED, HOWEVER the Borrower shall be
obligated to reimburse the Agent for not more than two (2) such audits in any
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twelve-month period if such audits were conducted other than in connection with
a proposed Acquisition and at a time when no Default has occurred and is
continuing; PROVIDED, FURTHER, it is expressly understood that the Borrower
shall reimburse the Agent for all such audits (i) conducted in connection with a
proposed Acquisition or (ii) conducted at a time when a Default has occurred and
is continuing. The Agent shall provide Borrower with a detailed statement of
all reimbursements requested under this Section.
(B) INDEMNITY. The Borrower further agrees, jointly and severally, to
defend, protect, indemnify, and hold harmless the Agent, each and all of the
Lenders, each and all of the Issuing Lenders and each of their respective
Affiliates, and each of the Agent's, Lender's, Issuing Lender's or Affiliate's
respective officers, directors, employees, attorneys and agents (including,
without limitation, those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in ARTICLE IV)
(collectively, the "INDEMNITEES") from and against any and all liabilities,
obligations, losses damages, penalties, actions, judgments, suits, claims,
costs, expenses of any kind or nature whatsoever (including, without limitation,
the fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents (including without
limitation, the commitment letter and accompanying letter agreement dated April
19, 1996 executed in contemplation of entering into this Agreement) or any of
the Transaction Documents, or any act, event or transaction related or attendant
thereto or to any Permitted Acquisition, the making of the Loans, and the
issuance of and participation in Letters of Credit hereunder, the management of
such Loans or Letters of Credit, the use or intended use of the proceeds of the
Loans or Letters of Credit hereunder, or any of the other transactions
contemplated by the Transaction Documents; or
(ii) any liabilities, obligations, responsibilities, losses, damages,
personal injury, death, punitive damages, economic damages, consequential
damages, special damages, incidental damages, treble damages, intentional,
willful or wanton injury, damage or threat to the environment, natural resources
or public health or welfare, costs and expenses (including, without limitation,
attorney, expert and consulting fees and costs of investigation, feasibility or
remedial action studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future relating to violation of any Environmental, Health or Safety Requirements
of Law (including, without limitation, those applicable to the disposal of
medical waste) arising from or in connection with the past, present or future
operations of the Borrower, any of the other Loan Parties or any of their
respective predecessors in interest, or, the past, present or future
environmental, health or safety condition of any respective property of the
Borrower or any of the other Loan Parties, the presence of asbestos-containing
materials at any respective property of the Borrower or the other Loan Parties
or the release or threatened release of any contaminant (including, without
limitation, any medical waste) into the environment (collectively, the
"INDEMNIFIED MATTERS"); PROVIDED, however, the indemnity set forth in this
CLAUSE (II) shall not apply to any losses or costs incurred
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by any Indemnitee to the extent such losses or costs arise solely from the
actions of the Agent, any Lender or any Issuing Lender; PROVIDED, further,
however, the indemnity set forth in this clause (ii) shall otherwise remain
in full force and effect, including, without limitation, with respect to
hazardous substances and hazardous wastes which are discovered or released at
any premises after the Agent acquires possession to the premises, but which
were not actually introduced at the premises by the Agent, with respect to
the continuing migration or release of hazardous substances or hazardous
wastes previously introduced at or near the premises and with respect to all
substances which may be hazardous wastes or hazardous substances and which
are situated at the premises prior to the Agent taking possession but are
removed by the Agent subsequent to such date; PROVIDED, HOWEVER, Borrower
shall not have any obligation to an Indemnitee under CLAUSE (I) or (II)
hereof with respect to Indemnified Matters to the extent caused by or
resulting from (y) a dispute among the Lenders or a dispute between any
Lender and the Agent, or (z) the willful misconduct or Gross Negligence of
such Indemnitee or breach of contract by such Indemnitee with respect to the
Loan Documents, in each case, as determined by the final non-appealed
judgment of a court of competent jurisdiction. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees. In
addition, no settlement shall be entered into by the Borrower or any other
Loan Party with respect to any claim, litigation, arbitration or other
proceeding relating to or arising out of the transaction evidenced by this
Agreement, the other Loan Documents or in connection with Permitted
Acquisitions (whether or not the Agent, any Lender or any Issuing Lender is a
party thereto) unless such settlement releases all Indemnitees from any and
all liability with respect thereto.
(C) WAIVER OF CERTAIN CLAIMS. The Borrower agrees to assert no claim
against any of the Indemnitees on any theory of liability for special or
punitive damages. In any action in which a jury is participating to resolve the
dispute, the Borrower agrees to assert no claim against any of the Indemnitees
on any theory of liability for consequential or indirect damages. In any court
trial, except as expressly provided below, the Borrower agrees to assert no
claim against any of the Indemnitees on any theory of liability for
consequential or incidental damages; PROVIDED, HOWEVER, in the event that the
Borrower, in any such matter is able to establish, as determined by the court in
its written opinion or findings, that any Indemnitee acted with Gross
Negligence, in bad faith or engaged in willful misconduct, then the agreement of
the Borrower not to assert any claim on any theory of liability for
consequential or incidental damages shall be of no further force and effect with
result to damages incurred as a result of such Gross Negligence, bad faith or
willful misconduct.
(D) SURVIVAL OF AGREEMENTS. The obligations and agreements of the
Borrower under this SECTION 9.7 shall survive the termination of this Agreement.
9.8. NUMBERS OF DOCUMENTS. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
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9.9. ACCOUNTING; CHANGES IN AGREEMENT ACCOUNTING PRINCIPLES. Except as
provided to the contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with Agreement Accounting Principles. If any changes in generally
accepted accounting principles are hereafter required or permitted and are
adopted by the Borrower or any Loan Party with the agreement of its
independent certified public accountants and such changes result in a change
in the method of calculation of any of the financial covenants, restrictions
or standards herein or in the related definitions or terms used therein
("ACCOUNTING CHANGES"), the parties hereto agree, at the Borrower's request,
to enter into negotiations, in good faith, in order to amend such provisions
in a credit neutral manner so as to reflect equitably such changes with the
desired result that the criteria for evaluating the Borrower's and the
Borrower Corporate Group's financial condition shall be the same after such
changes as if such changes had not been made; PROVIDED, HOWEVER, until such
provisions are amended in a manner reasonably satisfactory to the Agent and
the Required Lenders, no Accounting Change shall be given effect in such
calculations and all financial statements and reports required to be
delivered hereunder shall be prepared in accordance with Agreement Accounting
Principles without taking into account such Accounting Changes. In the event
such amendment is entered into, all references in this Agreement to Agreement
Accounting Principles shall mean generally accepted accounting principles as
of the date of such amendment.
9.10. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.11. NONLIABILITY OF LENDERS. The relationship between the Borrower, on
the one hand, and the Lenders, the Issuing Lenders and the Agent, on the other,
shall be solely that of borrower and lender. Neither the Agent nor any Lender
nor any Issuing Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent nor any Lender nor any Issuing Lender undertakes
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of any of Borrower's or any other Loan
Party's business or operations.
9.12. GOVERNING LAW. THE AGENT HEREBY ACCEPTS THIS AGREEMENT, ON BEHALF OF
ITSELF, THE LENDERS AND THE ISSUING LENDERS, AT CHICAGO, ILLINOIS BY
ACKNOWLEDGING AND AGREEING TO IT THERE. ANY DISPUTE BETWEEN BORROWER AND THE
AGENT, ANY LENDER, ANY ISSUING LENDER OR ANY OTHER HOLDER OF SECURED OBLIGATIONS
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, EXCEPT
TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION GOVERN THE PERFECTION (AND EFFECT
OF THE PERFECTION OR NONPERFECTION OF THE AGENT'S LIENS ON THE COLLATERAL).
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9.13. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY ILLINOIS STATE OR FEDERAL COURT SITTING IN CHICAGO,
ILLINOIS, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN SUCH ILLINOIS STATE OR FEDERAL COURT. THE BORROWER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING. THE BORROWER AGREES THAT A JUDGMENT, FINAL BY APPEAL OR EXPIRATION
OF TIME TO APPEAL WITHOUT AN APPEAL BEING TAKEN, IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
SECTION 9.13 SHALL AFFECT THE RIGHT OF THE AGENT OR ANY LENDER TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE AGENT OR
ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.
(B) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE OF ANY
PROCESS UPON IT AND HEREBY APPOINTS AND AGREES TO MAINTAIN AT ALL TIMES DURING
THE TERM OF THIS AGREEMENT THE CORPORATION SERVICE COMPANY AT C/O CORPORATION
ASSOCIATES OF ILLINOIS, 000 X. XXXXXX XXXXXX, XXXXXXXXXXX, XXXXXXXX 00000, AS
ITS REGISTERED AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS ISSUED BY
ANY COURT IN CONNECTION WITH ANY DISPUTE ARISING OUT OF, OR RELATED TO THE
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. THE BORROWER IRREVOCABLY WAIVES
ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(C) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT,
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DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF
THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(D) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO REALIZE ON THE COLLATERAL (INCLUDING, WITHOUT LIMITATION, THE
REAL PROPERTY COLLATERAL, IF ANY) OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR
TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY, OR
TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER, PRELIMINARY OR
PERMANENT INJUNCTION, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF THIS SECTION 9.13, WITH ITS COUNSEL.
9.14. NO STRICT CONSTRUCTION. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
9.15. SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees that
any and all claims of the Borrower against any Loan Party, any endorser or any
other guarantor of all or any part of the Secured Obligations, or against any of
their respective properties, including without limitation pursuant to any
intercompany note or intercompany security agreement executed pursuant to
SECTION 6.3(A)(VI), shall be subordinate and subject in right of payment to the
prior payment, in full and in cash, of all Secured Obligations. Notwithstanding
any right of the Borrower to ask, demand, xxx for, take or receive any payment
from any Loan Party, all rights, liens and security interests of the Borrower,
whether now or hereafter arising and howsoever existing, in any assets of any
Loan Party (whether constituting part of Collateral given to any Holder of
Secured Obligations or the Agent to secure payment of all or any part of the
Secured Obligations or otherwise) shall be and are subordinated to the rights of
the Holders of Secured Obligations and the Agent in those assets. The Borrower
shall have no right to possession of any such asset or to foreclose upon any
such asset, whether by judicial action or otherwise, unless and until all of the
Secured Obligations shall have been fully paid and satisfied and all financing
arrangements between the Borrower and each Loan Party and the Holders of Secured
Obligations have been terminated. If all or any part of the assets of any Loan
Party, or the proceeds thereof, are subject to any distribution, division or
application to the creditors of
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such Loan Party, whether partial or complete, voluntary or involuntary, and
whether by reason of liquidation, bankruptcy, arrangement, receivership,
assignment for the benefit of creditors or any other action or proceeding, or
if the business of any Loan Party is dissolved or if substantially all of the
assets of any Loan Party are sold, then, and in any such event, any payment
or distribution of any kind or character, either in cash, securities or other
property, which shall be payable or deliverable upon or with respect to any
indebtedness of any such Loan Party to the Borrower ("INTERCOMPANY
INDEBTEDNESS") shall be paid or delivered directly to the Agent for
application on any of the Secured Obligations, due or to become due, until
such Secured Obligations shall have first been fully paid and satisfied. The
Borrower irrevocably authorizes and empowers the Agent to demand, xxx for,
collect and receive every such payment or distribution and give acquittance
therefor and to make and present for and on behalf of the Borrower such
proofs of claim and take such other action, in the Agent's own name or in the
name of the Borrower or otherwise, as the Agent may deem necessary or
advisable for the enforcement of this SECTION 9.15. The Agent may vote such
proofs of claim in any such proceeding, receive and collect any and all
dividends or other payments or disbursements made thereon in whatever form
the same may be paid or issued and apply the same on account of any of the
Secured Obligations. Should any payment, distribution, security or
instrument or proceeds thereof be received by the Borrower upon or with
respect to the Intercompany Indebtedness prior to the satisfaction of all of
the Secured Obligations (other than contingent indemnity obligations) and the
termination of all financing arrangements between the Borrower and each Loan
Party and the Holders of Secured Obligations, the Borrower shall receive and
hold the same in trust, as trustee, for the benefit of the Holders of Secured
Obligations and shall forthwith deliver the same to the Agent, for the
benefit of the Holders of Secured Obligations, in precisely the form received
(except for the endorsement or assignment of the Borrower where necessary),
for application to any of the Secured Obligations, due or not due, and, until
so delivered, the same shall be held in trust by the Borrower as the property
of the Holders of Secured Obligations. If the Borrower fails to make any
such endorsement or assignment to the Agent, the Agent or any of its officers
or employees are irrevocably authorized to make the same. The Borrower
agrees that until the Secured Obligations (other than the contingent
indemnity obligations) have been paid in full (in cash) and satisfied and all
financing arrangements between the Borrower, the Loan Parties and the Holders
of Secured Obligations have been terminated, the Borrower will not assign or
transfer to any Person any claim the Borrower has or may have against any
Loan Party.
ARTICLE X. THE AGENT AS THE LENDERS' CONTRACTUAL
REPRESENTATIVE
10.1. APPOINTMENT; NATURE OF RELATIONSHIP. LaSalle National Bank is hereby
appointed by the Lenders (each reference in this Article X to a Lender being in
its capacity either as a Lender or an Issuing Lender, or both) as the Agent
hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Agent to act as the contractual representative of
such Lender with the rights and duties expressly set forth herein and in the
other Loan Documents. The Agent agrees to act as such contractual
representative upon the express conditions contained in this ARTICLE X.
Notwithstanding the use of the defined term "Agent," it is expressly understood
and agreed that the Agent shall not have any fiduciary responsibilities to any
Lender by reason of this Agreement and that the Agent is merely acting as the
representative
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of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any
fiduciary duties to any of the Lenders, (ii) is a "representative" of the
Lenders within the meaning of Section 9-105 of the Uniform Commercial Code
and (iii) is acting as an independent contractor, the rights and duties of
which are limited to those expressly set forth in this Agreement and the
other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. POWERS. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto;
PROVIDED, HOWEVER, the Agent shall not be entitled to commence any judicial or
non-judicial foreclosure with respect to any of the Collateral without the
consent of the Required Lenders and, subject to the provisions of SECTION 10.5,
if directions are received by the Agent from the Required Lenders in connection
therewith, the Agent will proceed with such foreclosure in accordance with the
directions of the Required Lenders. The Agent shall have no implied duties to
or fiduciary duties to the Lenders, or any obligation to the Lenders to take any
action hereunder or under any of the other Loan Documents except any action
specifically provided by the Loan Documents to be required to be taken by the
Agent.
10.3. GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen solely from (i) the Gross Negligence or
willful misconduct of such Person or (ii) breach of contract by such Person with
respect to the Loan Documents.
10.4. NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, COLLATERAL, RECITALS,
ETC. Neither the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in Article IV, except receipt of items
required to be delivered solely to the Agent; (iv) the existence or possible
existence of any Default or (v) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein, for the perfection or priority
of any of the Liens on any of the Collateral, or for the execution,
effectiveness, genuineness, validity, legality, enforceability, collectability,
or sufficiency of this Agreement or any of the other Loan Documents or the
transactions contemplated thereby, or for the financial condition of any
guarantor of any or all of the Obligations, the Borrower or any other Loan
Parties.
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10.5 ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
10.6 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8 THE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective Pro
Rata Shares (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have arisen
solely from the Gross Negligence or willful misconduct of the Agent.
10.9 RIGHTS AS A LENDER. With respect to its Revolving Loan
Commitment, its Acquisition Loan Commitment, its Term Loan Commitment, Loans
made by it, the Notes issued to it and Letters of Credit issued by it as an
Issuing Lender, the Agent shall have the same rights and powers hereunder and
under any other Loan Document as any Lender and may exercise the same as
though it were not the Agent, and the term "Lender" or "Lenders" or "Issuing
Lender" or "Issuing Lenders", as applicable, shall, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent
may accept deposits from, lend money to, and generally
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engage in any kind of trust, debt, equity or other transaction, in addition
to those contemplated by this Agreement or any other Loan Document, with the
Borrower or any other Loan Party in which such Person is not prohibited
hereby from engaging with any other Person.
10.10 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
10.11 SUCCESSOR AGENT. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, and the Agent may be removed at
any time with or without cause by written notice received by the Agent from the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty days
after the retiring Agent's giving notice of resignation, then the retiring Agent
may appoint, on behalf of the Borrower and the Lenders, a successor Agent.
Notwithstanding anything herein to the contrary, so long as no Default has
occurred and is continuing, each such successor Agent shall be subject to
approval by the Borrower, which approval shall not be unreasonably withheld or
delayed. Such successor Agent shall be a commercial bank having capital and
retained earnings of at least $50,000,000. Upon the acceptance of any
appointment as the Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents. After any retiring Agent's resignation hereunder as Agent, the
provisions of SECTION 9.7 and this ARTICLE X shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent hereunder and under the other Loan Documents.
10.12 COLLATERAL DOCUMENTS. Each Lender hereby authorizes the Agent to
enter into each of the Collateral Documents to which it is a party and to take
all action contemplated by such documents. Each Lender agrees that no Lender
shall have the right individually to seek to realize upon the security granted
by any Collateral Document, it being understood and agreed that such rights and
remedies may be exercised solely by the Agent for the benefit of the Holders of
Secured Obligations upon the terms of the Collateral Documents.
10.13 DELIVERY OF DOCUMENTS. The Agent agrees to deliver to each Lender,
promptly upon the Agent's receipt from the Borrower or any other Loan Party,
copies of all notices, certificates and reports, including without limitation
reports delivered pursuant to SECTION 6.1, delivered pursuant to the
requirements contained in this Agreement or any other Loan Document.
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ARTICLE XI. SETOFF; RATABLE PAYMENTS
11.1 SETOFF. In addition to, and without limitation of, any rights of
the Lenders or Issuing Lenders under applicable law, if any Default occurs
and is continuing, any indebtedness from any Lender or Issuing Lender to the
Borrower (including all account balances, whether provisional or final and
whether or not collected or available) may be offset and applied toward the
payment of the Obligations owing to such Lender, such Issuing Lender and the
other Obligations, whether or not the Obligations, or any part hereof, shall
then be due.
11.2 RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant
to SECTIONS 3.1, 3.2 or 3.4) in a greater proportion than that received by
any other Lender, such Lender agrees, promptly upon demand, to purchase a
portion of the Loans held by the other Lenders so that after such purchase
each Lender will hold its ratable proportion of Loans. If any Lender,
whether in connection with setoff or amounts which might be subject to setoff
or otherwise, receives collateral or other protection for its Obligation or
such amounts which may be subject to setoff, such Lender agrees, promptly
upon demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to the obligations owing to
them. In case any such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
11.3 APPLICATION OF PAYMENTS. Except as set forth in SECTION 2.5, and
subject to the provisions of SECTION 8.2, the Agent shall, unless otherwise
specified at the direction of the Required Lenders which direction shall be
consistent with the last sentence of this SECTION 11.3, apply all payments
and prepayments in respect of any Obligations and all proceeds of Collateral
in the following order:
(A) first, to pay interest on and then principal of any portion of
the Loans which the Agent may have advanced on behalf of any Lender for
which the Agent has not then been reimbursed by such Lender or the
Borrower;
(B) second, to pay interest on and then principal of any advance made
under SECTION 9.3 for which the Agent has not then been paid by the
Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
(D) fourth, to the ratable payment of Obligations in respect of any
fees, expenses, reimbursements or indemnities then due to the Lenders and
Issuing Lenders;
(E) fifth, to the ratable payment of interest due in respect of Loans
and L/C Obligations;
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(F) sixth, to the ratable payment or prepayment of principal
outstanding on Loans and Reimbursement Obligations in such order as the
Agent may determine in its sole discretion;
(G) seventh, to provide required cash collateral if any pursuant to
Section 2.24; and
(H) eighth, to the ratable payment of all other Secured Obligations,
including, without limitation, the Rate Hedging Obligations which are
Secured Obligations.
Unless otherwise designated (which designation shall only be applicable prior
to the occurrence of a Default) by the Borrower, all principal payments in
respect of Loans shall be applied FIRST, to the outstanding Revolving Loans
and, SECOND, prior to the Conversion Date, to the outstanding Acquisition
Loans until the Acquisition Loans are repaid in full and then to the
outstanding Term Loans and on and after the Conversion Date, ratably to the
outstanding Term Loans and Acquisition Loans, in each case, FIRST, to repay
outstanding Floating Rate Loans, and THEN to repay outstanding Eurodollar
Loans with those Eurodollar Loans which have earlier expiring Eurodollar
Interest Periods being repaid prior to those which have later expiring
Eurodollar Interest Periods. The order of priority set forth in this SECTION
11.3 and the related provisions of this Agreement are set forth solely to
determine the rights and priorities of the Agent, the Lenders, the Issuing
Lenders and other Holders of Secured Obligations as among themselves. The
order of priority set forth in CLAUSES (D) through (H) of this SECTION 11.3
may at any time and from time to time be changed by the Required Lenders
without necessity of notice to or consent of or approval by the Borrower or
any other Person. The order of priority set forth in CLAUSES (A) through (C)
of this SECTION 11.3 may be changed only with the prior written consent of
the Agent.
11.4 RELATIONS AMONG LENDERS.
(a) Except with respect to the exercise of set-off rights of any
Lender in accordance with SECTION 11.1, the proceeds of which are applied in
accordance with this Agreement, and except as set forth in the following
paragraph, each Lender agrees that it will not take any action, nor institute
any actions or proceedings, against Borrower or any other obligor hereunder
or with respect to any Collateral or Loan Document, without the prior written
consent of the Required Lenders or, as may be provided in this Agreement or
the other Loan Documents, at the direction of the Agent.
(b) The Lenders are not partners or co-venturers, and no Lender shall
be liable for the acts or omissions of, or (except as otherwise set forth
herein in case of the Agent) authorized to act for, any other Lender.
Notwithstanding the foregoing, and subject to SECTION 11.2, any Lender shall
have the right to enforce on an unsecured basis the payment of the principal
of and interest on any Loan made by it after the date such principal or
interest has become due and payable pursuant to the terms of this Agreement.
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ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Agent and the Lenders and their respective successors and assigns, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents and (ii) any assignment by any Lender
must be made in compliance with SECTION 12.3 hereof. Notwithstanding clause
(ii) of this Section, any Lender may at any time, without the consent of
Borrower or the Agent, assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank; PROVIDED, HOWEVER, that no
such assignment shall release the transferor Lender from its obligations
hereunder. The Agent may treat the payee of any Note as the owner thereof
for all purposes hereof unless and until such payee complies with SECTION
12.3 hereof in the case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of a Note agrees by acceptance thereof to be bound by
all the terms and provisions of the Loan Documents. Any request, authority
or consent of any Person, who at the time of making such request or giving
such authority or consent is the holder of any Note, shall be conclusive and
binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
12.2 PARTICIPATIONS.
(A) PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("PARTICIPANTS") participating
interests in any Loan owing to such Lender, any Note held by such Lender, any
Revolving Loan Commitment of such Lender, any Term Loan Commitment of such
Lender, any Acquisition Loan Commitment of such Lender, any L/C Interest of
such Lender or any other interest of such Lender under the Loan Documents on
a pro-rata or non pro-rata basis; provided that the amount of such
participation shall not be for less than $5,000,000. In the event of any
such sale by a Lender of participating interests to a Participant, such
Lender's obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder of any
such Note for all purposes under the Loan Documents, all amounts payable by
the Borrower under this Agreement shall be determined as if such Lender had
not sold such participating interests, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents except that, for
purposes of ARTICLE III hereof, the Participants shall be entitled to the
same rights as if they were Lenders (provided that any Participant shall not
be entitled to receive any more than the Lender selling such participation
would have received had such sale not taken place).
(B) VOTING RIGHTS. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification
or waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or Commitment in which such
Participant has an interest which:
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(i) Postpones or extends the Termination Date, the Term Loan Termination
Date, the Conversion Date or any other date fixed for any payment of principal
of, or interest on, the Loans, the Reimbursement Obligations or any fees or
other amounts payable in which such Participant has an interest;
(ii) Reduces the principal amount of any Loans or L/C Obligations, or
reduces the rate or extends the time of payment of interest or fees thereon;
(iii) Permits the Borrower to assign its rights under this Agreement;
(iv) Releases all or substantially all of the Collateral; or
(v) Releases any Subsidiary Guarantee.
(C) BENEFIT OF SETOFF. The Borrower agrees that each Participant shall
be deemed to have the right of setoff provided in SECTION 11.1 hereof in respect
to its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, provided that each Lender shall
retain the right of setoff provided in SECTION 11.1 hereof with respect to the
amount of participating interests sold to each Participant except to the extent
such Participant exercises its right of set off. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in SECTION 11.1 hereof, agrees to share with each Lender, any amount
received pursuant to the exercise of its right of setoff, such amounts to be
shared in accordance with SECTION 11.2 as if each Participant were a Lender.
12.3 ASSIGNMENTS.
(A) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("PURCHASERS") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its
Commitments, all Loans owing to it, all of its interest as an Issuing Lender
with respect to Letters of Credit, all of its participation interests in
existing Letters of Credit, and its obligation to participate in additional
Letters of Credit hereunder) in accordance with the provisions of this SECTION
12.3. Each assignment shall be of a constant, and not a varying, ratable
percentage of all of the assigning Lender's rights and obligations under this
Agreement. Such assignment shall be substantially in the form of EXHIBIT F
hereto and shall not be permitted hereunder unless such assignment is either for
all of such Lender's rights and obligations under the Loan Documents or involves
loans and commitments in an aggregate amount of at least $5,000,000. The
consent of the Agent shall be required prior to an assignment becoming effective
with respect to a Purchaser which is not a Lender or an Affiliate thereof. Such
consent shall be set forth on the
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Notice of Assignment and shall not be unreasonably withheld. In addition,
the consent of the Borrower shall be required (which consent shall not be
unreasonably withheld) prior to an assignment becoming effective if such
assignment is at a time when no Default has occurred and is continuing, which
consent, if required, shall be set forth on the Notice of Assignment;
PROVIDED, no consent of the Borrower shall be required in connection with any
assignment to another Lender or to an Affiliate of any Lender.
(B) EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of a notice
of assignment, substantially in the form attached as APPENDIX I to EXHIBIT F
hereto (a "NOTICE OF ASSIGNMENT"), together with any consents required by
SECTION 12.3(A) hereof, and (ii) payment of a $3,000 fee to the Agent for
processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. On and after the
effective date of such assignment, such Purchaser, if not already a Lender,
shall for all purposes be a Lender party to this Agreement and any other Loan
Documents executed by the Lenders and shall have all the rights and obligations
of a Lender under the Loan Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the Borrower, the
Lenders or the Agent shall be required to release the transferor Lender with
respect to the percentage of the Aggregate Revolving Loan Commitment, Aggregate
Term Loan Commitment, Aggregate Acquisition Loan Commitment, Loans and Letter of
Credit participations assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this SECTION 12.3(B), the transferor
Lender, the Agent and the Borrower shall make appropriate arrangements so that
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their Revolving Loan Commitment, Term Loan
Commitment, Acquisition Loan Commitment, or, if after the Conversion Date, their
Term Loans and Acquisition Loans, as adjusted pursuant to such assignment.
(C) THE REGISTER. The Agent shall maintain at its address referred to in
SECTION 13.1 a copy of each assignment delivered to and accepted by it pursuant
to this SECTION 12.3 and a register (the "REGISTER") for the recordation of the
names and addresses of the Lenders and the Revolving Loan Commitment, Term Loan
Commitment and Acquisition Loan Commitment of and principal amount of the Loans
owing to, each Lender from time to time and whether such Lender is an original
Lender or the assignee of another Lender pursuant to an assignment under this
SECTION 12.3. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower and each other Loan Party,
the Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
12.4 CONFIDENTIALITY. Subject to SECTION 12.5, the Agent and the Lenders
shall hold all nonpublic information obtained pursuant to the requirements of
this Agreement in accordance with such Person's customary procedures for
handling confidential information of this nature and in accordance with safe and
sound banking practices and in any event may make disclosure reasonably required
by a prospective "Transferee" (as defined in SECTION 12.5) in connection with
the contemplated participation or assignment or as required or requested by any
Governmental Authority or representative thereof or pursuant to legal process
and shall require any such Transferee to agree (and require any of its
Transferees to agree) to comply with this SECTION 12.4. In no event shall the
Agent or any Lender be obligated or required to return any materials furnished
by or on behalf of the Borrower or any other Loan Party; PROVIDED, HOWEVER, each
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prospective Transferee shall be required to agree that if it does not become a
participant or assignee it shall return all materials furnished to it by or on
behalf of any Loan Party in connection with this Agreement.
12.5 DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the Loan Parties and the Collateral; PROVIDED that, prior to any such
disclosure, such prospective Transferee shall agree to preserve in accordance
with SECTION 12.4 the confidentiality of any confidential information described
therein.
ARTICLE XIII. NOTICES
13.1 GIVING NOTICE. Except as otherwise permitted by SECTION 2.14 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
13.2 CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XIV. COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders.
* * * * * * * *
Remainder of this Page Intentionally Blank
* * * * * * * *
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
GOOD SAMARITAN SUPPLY SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxx
Title: Vice President and Chief Financial
Officer
Address:
Good Samaritan Supply Services, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xx. Xxxx, Xxxxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
LASALLE NATIONAL BANK,
Individually and as Agent
By: /s/ Xxxx Xxxxxxxx
Title: Vice President
Address:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
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