EXHIBIT 10.1
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EXECUTION COPY
CREDIT AGREEMENT
Dated as of August 19, 2003
among
ARDENT HEALTH SERVICES, INC.,
as the Borrower,
ARDENT HEALTH SERVICES LLC
and
CERTAIN OF ITS SUBSIDIARIES,
as the Guarantors,
BANK ONE, NA,
as Administrative Agent, Swing Line Lender and L/C Issuer,
BANK OF AMERICA, N.A. and
UBS SECURITIES LLC,
as Co-Syndication Agents,
GENERAL ELECTRIC CAPITAL CORPORATION and
XXXXXXX XXXXX CAPITAL,
as Co-Documentation Agents,
and
The Other Lenders Party Hereto
Arranged By:
BANC OF AMERICA SECURITIES LLC
and
BANC ONE CAPITAL MARKETS, INC.,
as Joint Lead Arrangers and Joint Book Managers
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.......................................1
1.01 Defined Terms.......................................................1
1.02 Other Interpretive Provisions.......................................31
1.03 Accounting Terms....................................................32
1.04 Rounding............................................................32
1.05 References to Agreements and Laws...................................33
1.06 Times of Day........................................................33
1.07 Letter of Credit Amounts............................................33
ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS.................................33
2.01 Revolving Loans and Incremental Term Loans..........................33
2.02 Borrowings; Conversions and Continuations of Loans..................35
2.03 Letters of Credit...................................................36
2.04 Swing Line Loans....................................................43
2.05 Prepayments.........................................................45
2.06 Termination or Reduction of Commitments.............................47
2.07 Repayment of Loans..................................................47
2.08 Interest............................................................47
2.09 Fees................................................................48
2.10 Computation of Interest and Fees....................................48
2.11 Evidence of Debt....................................................48
2.12 Payments Generally..................................................49
2.13 Sharing of Payments.................................................50
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY...............................51
3.01 Taxes...............................................................51
3.02 Illegality..........................................................52
3.03 Inability to Determine Rates........................................52
3.04 Increased Cost and Reduced Return; Capital Adequacy.................53
3.05 Funding Losses......................................................53
3.06 Matters Applicable to all Requests for Compensation.................54
3.07 Survival............................................................54
ARTICLE IV GUARANTY..............................................................54
4.01 The Guaranty........................................................54
4.02 Obligations Unconditional...........................................54
4.03 Reinstatement.......................................................55
4.04 Certain Additional Waivers..........................................56
4.05 Remedies............................................................56
4.06 Rights of Contribution..............................................56
4.07 Guarantee of Payment; Continuing Guarantee..........................57
ARTICLE V CONDITIONS PRECEDENT...................................................57
5.01 Conditions to Closing...............................................57
5.02 Further Conditions..................................................61
5.03 Further Conditions to the Borrowing of Incremental Term Loans.......62
ARTICLE VI REPRESENTATIONS AND WARRANTIES........................................63
6.01 Existence, Qualification and Power..................................63
6.02 Authorization; No Contravention.....................................63
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6.03 Governmental Authorization; Other Consents..........................64
6.04 Binding Effect......................................................64
6.05 Financial Statements; No Material Adverse Effect....................64
6.06 Litigation..........................................................65
6.07 Contractual Obligations.............................................65
6.08 Ownership of Property; Liens........................................65
6.09 Environmental Compliance............................................65
6.10 Insurance...........................................................66
6.11 Taxes...............................................................66
6.12 ERISA Compliance....................................................66
6.13 Subsidiaries........................................................67
6.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act.................................................67
6.15 Disclosure..........................................................67
6.16 Compliance with Laws................................................68
6.17 Intellectual Property; Licenses, Etc................................68
6.18 Solvency............................................................69
6.19 Perfection of Security Interests in the Collateral..................69
6.20 Business Locations..................................................69
6.21 Brokers' Fees.......................................................69
6.22 Labor Matters.......................................................69
6.23 Fraud and Abuse.....................................................69
6.24 Licensing and Accreditation.........................................69
6.25 Tax Shelter Regulations.............................................70
6.26 Subordination.......................................................70
ARTICLE VII AFFIRMATIVE COVENANTS................................................70
7.01 Financial Statements................................................71
7.02 Certificates; Other Information.....................................72
7.03 Notices.............................................................74
7.04 Payment of Obligations..............................................76
7.05 Preservation of Existence, Etc......................................76
7.06 Maintenance of Properties...........................................76
7.07 Maintenance of Insurance............................................76
7.08 Compliance with Laws................................................77
7.09 Books and Records...................................................77
7.10 Inspection Rights...................................................78
7.11 Use of Proceeds.....................................................78
7.12 Additional Subsidiaries.............................................78
7.13 ERISA Compliance....................................................79
7.14 Pledged Assets......................................................79
ARTICLE VIII NEGATIVE COVENANTS..................................................80
8.01 Liens...............................................................80
8.02 Investments.........................................................82
8.03 Indebtedness........................................................83
8.04 Fundamental Changes.................................................85
8.05 Dispositions........................................................85
8.06 Restricted Payments.................................................86
8.07 Change in Nature of Business........................................86
8.08 Transactions with Affiliates and Insiders...........................86
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8.09 Burdensome Agreements...............................................87
8.10 Use of Proceeds.....................................................87
8.11 Financial Covenants.................................................88
8.12 Prepayment of Other Indebtedness, Etc...............................90
8.13 Organization Documents; Fiscal Year; Legal Name,
State of Formation and Form of Entity...............................90
8.14 Ownership of Subsidiaries...........................................91
8.15 Sale Leasebacks.....................................................91
8.16 Limitations on Parent...............................................91
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES........................................92
9.01 Events of Default...................................................92
9.02 Remedies Upon Event of Default......................................94
9.03 Application of Funds................................................95
ARTICLE X ADMINISTRATIVE AGENT...................................................96
10.01 Appointment and Authorization of Administrative Agent...............96
10.02 Delegation of Duties................................................96
10.03 Liability of Administrative Agent...................................96
10.04 Reliance by Administrative Agent....................................97
10.05 Notice of Default...................................................97
10.06 Credit Decision; Disclosure of Information by Administrative Agent..97
10.07 Indemnification of Administrative Agent.............................98
10.08 Administrative Agent in its Individual Capacity.....................98
10.09 Successor Administrative Agent......................................99
10.10 Administrative Agent May File Proofs of Claim.......................99
10.11 Collateral and Guaranty Matters.....................................100
10.12 Other Agents; Arrangers and Managers................................101
ARTICLE XI MISCELLANEOUS.........................................................101
11.01 Amendments, Etc.....................................................101
11.02 Notices and Other Communications; Facsimile Copies..................102
11.03 No Waiver; Cumulative Remedies......................................103
11.04 Attorney Costs, Expenses and Taxes..................................104
11.05 Indemnification by the Borrower.....................................104
11.06 Payments Set Aside..................................................105
11.07 Successors and Assigns..............................................105
11.08 Confidentiality.....................................................108
11.09 Set-off.............................................................108
11.10 Interest Rate Limitation............................................109
11.11 Counterparts........................................................109
11.12 Integration.........................................................109
11.13 Survival of Representations and Warranties..........................109
11.14 Severability........................................................110
11.15 Tax Forms...........................................................110
11.16 Replacement of Lenders..............................................111
11.17 Governing Law.......................................................112
11.18 Waiver of Right to Trial by Jury....................................112
11.19 Publicity...........................................................112
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SCHEDULES
1.01 Existing Letters of Credit
2.01 Commitments and Pro Rata Shares
5.01(g) Survey Locations
6.10 Insurance
6.13 Subsidiaries
6.17 IP Rights
6.20(a) Locations of Real Property
6.20(b) Locations of Tangible Personal Property
6.20(c) Location of Chief Executive Office
8.01 Liens Existing on the Closing Date
8.02 Investments Existing on the Closing Date
8.03 Indebtedness Existing on the Closing Date
8.15 Sale and Leaseback Transactions
11.02 Certain Addresses for Notices
EXHIBITS
A Form of Intercreditor and Subordination Agreement
B Form of Pledge Agreement
C Form of Security Agreement
D Form of Incremental Term Loan Commitment Agreement
E Form of Loan Notice
F Form of Swing Line Loan Notice
G Form of Revolving Note
H Form of Swing Line Note
I Form of Incremental Term Note
J Form of Compliance Certificate
K Form of Borrowing Base Certificate
L Form of Joinder Agreement
M Form of Intercompany Note
N Form of Intercompany Security Documents
O Form of Assignment and Assumption
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CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of August 19, 2003 among
ARDENT HEALTH SERVICES, INC., a Delaware corporation (the "Borrower"), the
Guarantors (defined herein), the Lenders (defined herein) and BANK ONE, NA, as
Administrative Agent, Swing Line Lender and L/C Issuer.
The Borrower has requested that the Lenders provide $125,000,000 in
credit facilities for the purposes set forth herein, and the Lenders are willing
to do so on the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS.
As used in this Agreement, the following terms shall have the meanings
set forth below:
"Account" means any right to payment for goods sold or leased or
services rendered, whether or not evidenced by an instrument or chattel paper,
and whether or not earned by performance, including, without limitation, the
right to payment of management fees.
"Account Debtor" means any Person obligated on any Account of a Loan
Party, including without limitation, any Insurer and any Medicaid/Medicare
Account Debtor.
"Acquisition", by any Person, means the acquisition by such Person, in
a single transaction or in a series of related transactions, of all or any
substantial portion of the Property of another Person or any Voting Stock of
another Person, in each case whether or not involving a merger or consolidation
with such other Person and whether for cash, property, services, assumption of
Indebtedness, securities or otherwise.
"Additional Subordinated Indebtedness" means any Indebtedness of the
Borrower which by its terms is expressly subordinated in right of payment to the
prior payment of the Obligations under this Agreement and the other Loan
Documents on terms and conditions (including without limitation the
subordination provisions) at least as favorable to the Lenders as those set
forth in the Senior Subordinated Notes Documents or on such other terms and
conditions as evidenced by documentation satisfactory to the Administrative
Agent and the Syndication Agents.
"Administrative Agent" means Bank One, NA in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent Fee Letter" means the letter agreement dated July
22, 2003 among the Borrower, Bank One and Banc One Capital Markets, Inc.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 11.02 or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 5% or more of
the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
"Agent-Related Persons" means the Administrative Agent and the
Arrangers, together with their respective Affiliates and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Aggregate Revolving Commitments" means the Revolving Commitments of
all the Lenders. The amount of the Aggregate Revolving Commitments in effect on
the Closing Date is ONE HUNDRED TWENTY-FIVE MILLION DOLLARS ($125,000,000).
"Agreement" means this Credit Agreement, as amended, modified,
supplemented and extended from time to time.
"Applicable Rate" means (a) in the case of the Incremental Term Loans,
the percentage per annum determined on or prior to the applicable Incremental
Term Loan Borrowing Date as set forth in the applicable Incremental Term Loan
Commitment Agreement and (b) in the case of the Revolving Loans and the Letters
of Credit, the following percentages per annum, based upon the Consolidated
Leverage Ratio as set forth in the most recent Compliance Certificate received
by the Administrative Agent pursuant to Section 7.02(b):
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Pricing Consolidated Letters of Credit and
Tier Leverage Ratio Eurodollar Loans Base Rate Loans
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1 < 2.75:1.0 2.75% 1.75%
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2 > 2.75:1.0 but < 3.5:1.0 3.25% 2.25%
-
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3 > 3.5:1.0 but < 4.0:1.0 3.75% 2.75%
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4 > 4.0 to 1.0 4.00% 3.00%
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Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is required to be
delivered pursuant to Section 7.02(b); provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then
Pricing Tier 4 shall apply as of the first Business Day after the date on which
such Compliance Certificate was required to have been delivered until the first
Business Day immediately following the date a Compliance Certificate is
delivered in accordance with Section 7.02(b), whereupon the Applicable Rate
shall be adjusted based upon the calculation of the Consolidated Leverage Ratio
contained in such Compliance Certificate. The Applicable Rate in effect from the
Closing Date through the first Business Day immediately following the date a
Compliance Certificate is required to be delivered pursuant to Section 7.02(b)
for the fiscal quarter ending December 31, 2003 shall be determined based upon
Pricing Tier 3. Notwithstanding anything to the contrary contained herein, if on
the date that any Incremental Term Loan is incurred the Applicable Rate
initially in effect for such Incremental Term Loan exceeds by
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more than 0.50% the Applicable Rate then in effect for the Revolving Loans, the
Applicable Rate with respect to each Pricing Tier for the Revolving Loans shall
be automatically increased by such excess over 0.50%.
"Approved Hospital Swap" means any exchange of one or more healthcare
facilities and related Property owned by any Loan Party for one or more
healthcare facilities and related Property owned by one or more Persons other
than a Loan Party; provided, that (a) the Borrower shall have delivered to the
Administrative Agent a certificate of a Responsible Officer, in detail
reasonably satisfactory to the Administrative Agent, demonstrating that, upon
giving effect to any such exchange on a Pro Forma Basis, Consolidated EBITDA
will be not less than 90% of Consolidated EBITDA prior to such exchange and (b)
the aggregate book value of all assets disposed of by the Loan Parties pursuant
to these exchanges subsequent to the Closing Date (determined as of the date of
any such exchange, net of any liabilities of the Loan Parties assumed by the
Person to which the relevant assets were transferred) shall not exceed 10% of
the total assets of the Parent and its Subsidiaries on a consolidated basis.
Furthermore, (a) if any transaction involves both an exchange and payment of
consideration, such transaction shall be deemed to be an Approved Hospital Swap
only to the extent that it involves such an exchange and (b) a Loan Party shall
not be permitted to exchange assets that are not in the HMO Business for assets
in the HMO Business pursuant to an Approved Hospital Swap.
"Arrangers" means Banc of America Securities LLC and Banc One Capital
Markets, Inc. in their capacities as joint lead arrangers and joint book
managers.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit O.
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
(b) in respect of any Synthetic Lease, the capitalized amount of the remaining
lease payments under the relevant lease that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease were
accounted for as a capital lease and (c) in respect of any Securitization
Transaction of any Person, the outstanding principal amount of such financing,
after taking into account reserve accounts and making appropriate adjustments,
determined by the Administrative Agent in its reasonable judgment.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Parent and its Subsidiaries for the fiscal year ended December 31,
2002, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Parent and its
Subsidiaries, including the notes thereto.
"Availability Period" means, with respect to the Revolving Commitments,
the period from and including the Closing Date to the earliest of (a) the
Maturity Date, (b) the date of termination of the Aggregate Revolving
Commitments pursuant to Section 2.06, and (c) the date of termination of the
commitment of each Lender to make Loans and of the obligation of the L/C Issuer
to make L/C Credit Extensions pursuant to Section 9.02.
"Bank of America" means Bank of America, N.A. and its successors.
"Bank One" means Bank One, NA and its successors.
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"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% per annum and (b) the rate
of interest in effect for such day as publicly announced from time to time by
Bank One as its "prime rate." The "prime rate" is a rate set by Bank One based
upon various factors including Bank One's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
Any change in the "prime rate" announced by Bank One shall take effect at the
opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Base Rate Revolving Loan" means a Revolving Loan that bears interest
based on the Base Rate.
"Baton Rouge Property" means that certain property known as the
Stanacola Clinic located at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxx.
"Behavioral Business" has the meaning set forth in Section 7.01(a).
"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrowing" means a borrowing consisting of simultaneous Loans of the
same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period made by each of the Lenders pursuant to Section 2.01.
"Borrowing Base" means, as of any day, an amount equal to the sum of
(a) sixty-five percent (65%) of the book value of the Qualified Accounts due and
owing from any Medicaid/Medicare Account Debtor, Insurer or other Account
Debtor, plus (b) eighty-five percent (85%) of the book value of Fixed Assets, in
each case as set forth in the most recent Borrowing Base Certificate delivered
to the Administrative Agent and the Lenders in accordance with Section 7.02(c).
"Borrowing Base Certificate" has the meaning specified in Section
7.02(c).
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located and
if such day relates to any Eurodollar Rate Loan, also means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Businesses" means, at any time, a collective reference to the
businesses operated by the Parent and its Subsidiaries at such time.
"Capital Lease" means, as applied to any Person, any lease of any
Property by that Person as lessee which, in accordance with GAAP, is required to
be accounted for as a capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
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"Captive Insurance Subsidiary" means the Subsidiary established by the
Borrower or any of its Subsidiaries for the sole purpose of providing
self-insurance coverage to the Parent and its Subsidiaries.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
"Cash Equivalents" means, as at any date, (a) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition, (b) Dollar denominated time deposits and
certificates of deposit of (i) any Lender, (ii) First Bank, (iii) any domestic
commercial bank of recognized standing having capital and surplus in excess of
$500,000,000 or (iv) any bank whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Xxxxx'x is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved Bank
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six months of the date of acquisition, (d) repurchase agreements
entered into by any Person with a bank or trust company (including any of the
Lenders) or recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States in which such Person shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the repurchase
obligations, (e) Investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable financial
institutions having capital of at least $500,000,000 and the portfolios of which
are limited to Investments of the character described in the foregoing
subdivisions (a) through (d) and (f) with respect to (i) the Parent and its
Subsidiaries (other than HMO Subsidiaries), marketable debt securities regularly
traded on a national securities exchange or in the over-the-counter market, if
and to the extent such debt security constitutes a permitted investment under
the HMO Regulations applicable to any of the HMO Subsidiaries or (ii) any HMO
Subsidiary, marketable debt securities regularly traded on a national securities
exchange or in the over-the-counter market, if and to the extent such debt
security constitutes a permitted investment under the HMO Regulations applicable
to such HMO Subsidiary.
"CHAMPUS" means the United States Department of Defense Civilian Health
and Medical Program of the Uniformed Services or any successor thereto
including, without limitation, TRICARE.
"Change of Control" means an event or series of events by which:
(a) prior to the consummation of an initial Public Equity
Offering:
(i) the Sponsor Group shall fail to own beneficially,
directly or indirectly, at least 50.1% of the outstanding
Voting Stock of the Parent, after giving effect to the
conversion and exercise of all outstanding warrants, options
and other securities of the Parent, convertible into or
exercisable for Voting Stock of the Parent (whether or not
such securities are then currently convertible or
exercisable); or
(ii) the Parent shall fail to own directly 100% of
the outstanding Capital Stock of the Borrower, determined on a
fully diluted basis after giving effect to the conversion and
exercise of all outstanding warrants, options and other
securities of the Borrower, convertible into or exercisable
for Capital Stock of the Borrower (whether or not such
securities are then currently convertible or exercisable); or
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(b) after the consummation of an initial Public Equity
Offering of the common stock of the Parent:
(i) (A) any "person" or "group" (within the meaning
of the Securities Exchange Act of 1934 and the rules of the
SEC thereunder as in effect on the date hereof) other than the
Sponsor Group becomes the beneficial owner, directly or
indirectly, of more than 25% of the outstanding Voting Stock
of the Parent, after giving effect to the conversion and
exercise of all outstanding warrants, options and other
securities of the Parent, convertible into or exercisable for
Voting Stock of the Parent (whether or not such securities are
then currently convertible or exercisable) and (B) the Sponsor
Group fails to own beneficially, directly or indirectly, at
least 10% more outstanding Voting Stock of the Parent than any
"person" or "group" owning more than 25% of the outstanding
Voting Stock of the Parent, after giving effect to the
conversion and exercise of all outstanding warrants, options
and other securities of the Parent, convertible into or
exercisable for Voting Stock of the Parent (whether or not
such securities are then currently convertible or
exercisable). For the avoidance of doubt, it would constitute
a "Change of Control" hereunder if any "person" or "group"
other than the Sponsor Group acquired 25.1% of the outstanding
Voting Stock of the Parent and the Sponsor Group failed to own
at least 35.1% of the outstanding Voting Stock of the Parent;
or
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted
the Parent's board of directors (or similar governing body)
(together with any new directors whose election was approved
by a majority of the directors then in office who were either
directors at the beginning of such period or whose election
was previously so approved) cease for any reason to have a
majority of the total voting power of the board of directors
(or similar body) of the Parent; or
(iii) the Parent shall fail to own directly 100% of
the outstanding Capital Stock of the Borrower, determined on a
fully diluted basis after giving effect to the conversion and
exercise of all outstanding warrants, options and other
securities of the Borrower, convertible into or exercisable
for Capital Stock of the Borrower (whether or not such
securities are then currently convertible or exercisable); or
(c) after the consummation of an initial Public Equity
Offering of the common stock of the Borrower:
(i) (A) any "person" or "group" (within the meaning
of the Securities Exchange Act of 1934 and the rules of the
SEC thereunder as in effect on the date hereof) other than the
Sponsor Group becomes the beneficial owner, directly or
indirectly, of more than 25% of the outstanding Voting Stock
of the Borrower, after giving effect to the conversion and
exercise of all outstanding warrants, options and other
securities of the Borrower, convertible into or exercisable
for Voting Stock of the Borrower (whether or not such
securities are then currently convertible or exercisable) and
(B) the Sponsor Group fails to own beneficially, directly or
indirectly, at least 10% more outstanding Voting Stock of the
Borrower than any "person" or "group" owning more than 25% of
the outstanding Voting Stock of the Borrower, after giving
effect to the conversion and exercise of all outstanding
warrants, options and other securities of the Borrower,
convertible into or exercisable for Voting Stock of the
Borrower (whether or not such securities are then currently
convertible or exercisable). For the avoidance of doubt, it
would constitute a "Change of Control" hereunder if any
"person" or "group" other than
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the Sponsor Group acquired 25.1% of the outstanding Voting
Stock of the Borrower and the Sponsor Group failed to own at
least 35.1% of the outstanding Voting Stock of the Borrower;
or
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted
the Borrower's board of directors (or similar governing body)
(together with any new directors whose election was approved
by a majority of the directors then in office who were either
directors at the beginning of such period or whose election
was previously so approved) cease for any reason to have a
majority of the total voting power of the board of directors
(or similar body) of the Borrower; or
(d) the occurrence of a "Change of Control" (or any comparable
term) under, and as defined in, the Subordinated Indebtedness
Documents; or
(e) the occurrence of a "Change of Control" (or any comparable
term) under, and as defined in, the Senior Subordinated Notes
Documents.
"Closing Date" means the date hereof.
"CMS" means the Centers for Medicare and Medicaid Services and any
successor thereof.
"Collateral" means a collective reference to all real and personal
Property with respect to which Liens in favor of the Administrative Agent are
purported to be granted pursuant to and in accordance with the terms of the
Collateral Documents.
"Collateral Agent" means Bank One, NA, in its capacity as collateral
agent under any of the Collateral Assignment Documents, or any successor
collateral agent.
"Collateral Assignment Documents" means the collateral assignments of
notes and liens executed by the Loan Parties executed in favor of the Collateral
Agent, as amended, modified, restated or supplemented from time to time.
"Collateral Documents" means a collective reference to the Security
Agreement, the Pledge Agreement, the Mortgage Instruments, the Collateral
Assignment Documents and such other security documents as may be executed and
delivered by the Loan Parties pursuant to the terms of Section 7.14.
"Commitment" means, as to each Lender, the Revolving Commitment of such
Lender and/or the Incremental Term Loan Commitment of such Lender.
"Company Action Level" means the Company Action Level risk-based
capital threshold, as defined by NAIC.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit J.
"Consolidated Capital Expenditures" means, for any period, for the
Parent and its Subsidiaries on a consolidated basis, all capital expenditures,
as determined in accordance with GAAP; provided, however, that Consolidated
Capital Expenditures shall not include (i) expenditures made with proceeds of
any Disposition to the extent such proceeds are reinvested within the period
required by the definition of "Net Cash Proceeds" and (ii) expenditures relating
to any Involuntary Disposition to the extent such
7
expenditures are used to restore, replace or rebuild property to the condition
of such property immediately prior to any damage, loss, destruction or
condemnation.
"Consolidated EBITDA" means, for any period, for the Parent and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus (a) (to the extent deducted in calculating such
Consolidated Net Income) (i) Consolidated Interest Charges for such period, (ii)
the provision for federal, state, local and foreign income taxes payable by the
Parent and its Subsidiaries for such period, (iii) the amount of depreciation
and amortization expense for such period, (iv) any non-recurring fees, charges
and cash expenses made or incurred in connection with the Transactions, (v) any
other non-cash charges for such period minus (b) (to the extent added back
pursuant to clause (a)(iv) above in a previous period) all cash charges made
during such period on account of reserves, restructuring charges and other
non-cash charges, all as determined in accordance with GAAP.
"Consolidated Funded Indebtedness" means Funded Indebtedness of the
Parent and its Subsidiaries on a consolidated basis determined in accordance
with GAAP.
"Consolidated Interest Charges" means, for any period, for the Parent
and its Subsidiaries on a consolidated basis, an amount equal to (i) all
interest, premium payments, debt discount, fees, charges and related expenses of
the Parent and its Subsidiaries in connection with borrowed money (including
capitalized interest, but excluding amortization of capitalized financing costs)
or in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, plus (ii) the portion of
rent expense of the Parent and its Subsidiaries with respect to such period
under capital leases that is treated as interest in accordance with GAAP minus
(iii) interest income of the Loan Parties for such period determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means, as of any date of
determination, the ratio of (a) Consolidated EBITDA for the period of the four
fiscal quarters most recently ended for which the Loan Parties have delivered
financial statements pursuant to Section 7.01(a) or (b) to (b) the cash portion
of Consolidated Interest Charges for the period of the four fiscal quarters most
recently ended for which the Loan Parties have delivered financial statements
pursuant to Section 7.01(a) or (b). Notwithstanding the foregoing, for purposes
of calculating the Consolidated Interest Coverage Ratio (i) as of the fiscal
quarter ending September 30, 2003, Consolidated Interest Charges for the twelve
month period ending September 30, 2003 shall be calculated on a pro forma basis
as if the Senior Subordinated Notes and any other Indebtedness outstanding were
incurred as of the first day of the applicable twelve month period, (ii) as of
the fiscal quarter ending December 31, 2003, Consolidated Interest Charges for
the twelve month period ending December 31, 2003 shall be deemed to be actual
Consolidated Interest Charges for the three month period ending December 31,
2003 multiplied by 4, (iii) as of the fiscal quarter ending March 31, 2004,
Consolidated Interest Charges for the twelve month period ending as of March 31,
2004 shall be deemed to be actual Consolidated Interest Charges for the six
month period ending March 31, 2004 multiplied by 2, and (iv) as of the fiscal
quarter ending June 30, 2004, Consolidated Interest Charges for the twelve month
period ending as of June 30, 2004 shall be deemed to be actual Consolidated
Interest Charges for the nine month period ending June 30, 2004 multiplied by
4/3.
"Consolidated Leverage Ratio" means, as of any date of determination,
the ratio of (a) the sum of (i) Consolidated Funded Indebtedness as of such date
minus (ii) (to the extent there are no Revolving Loans or Swingline Loans
outstanding as of such date) the amount of cash and Cash Equivalents in excess
of $5 million held by the Loan Parties at such time which would appear on a
consolidated balance sheet of the Borrower and its Subsidiaries to (b)
Consolidated EBITDA for the period of the four fiscal quarters most recently
ended for which the Loan Parties have delivered financial statements pursuant to
Section 7.01(a) or (b). Notwithstanding the foregoing, for purposes of
calculating the Consolidated Leverage Ratio as of the end of the fiscal quarter
ending September 30, 2003, Consolidated EBITDA for
8
the four fiscal quarters ending September 30, 2003 shall be deemed to be actual
Consolidated EBITDA for the nine month period ending September 30, 2003
multiplied by 4/3.
"Consolidated Net Income" means, for any period, for the Parent and its
Subsidiaries on a consolidated basis, the net income of the Parent and its
Subsidiaries (excluding extraordinary gains and extraordinary losses) for that
period.
"Consolidated Senior Leverage Ratio" means, as of any date of
determination, the ratio of (a) the sum of (i) Consolidated Funded Indebtedness
(other than the Subordinated Indebtedness and the Senior Subordinated Notes) as
of such date minus (ii) (to the extent there are no Revolving Loans or Swingline
Loans outstanding as of such date) the amount of cash and Cash Equivalents in
excess of $5 million held by the Loan Parties at such time which would appear on
a consolidated balance sheet of the Borrower and its Subsidiaries to (b)
Consolidated EBITDA for the period of the four fiscal quarters most recently
ended for which the Loan Parties have delivered financial statements pursuant to
Section 7.01(a) or (b). Notwithstanding the foregoing, for purposes of
calculating the Consolidated Senior Leverage Ratio as of the end of the fiscal
quarter ending September 30, 2003, Consolidated EBITDA for the four fiscal
quarters ending September 30, 2003 shall be deemed to be actual Consolidated
EBITDA for the nine month period ending September 30, 2003 multiplied by 4/3.
"Consolidated Scheduled Funded Indebtedness Payments" means, as of any
date for the four fiscal quarter period ending on such date with respect to the
Parent and its Subsidiaries on a consolidated basis, the sum of all scheduled or
mandatory payments of principal on Funded Indebtedness (excluding any voluntary
prepayments or mandatory prepayments required pursuant to Section 2.05), as
determined in accordance with GAAP.
"Consolidated Working Capital" means, at any time, the excess of (i)
current assets (excluding cash and Cash Equivalents) of the Parent and its
Subsidiaries on a consolidated basis at such time over (ii) current liabilities
of the Parent and its Subsidiaries on a consolidated basis at such time, all as
determined in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of "Affiliate."
"Controlled Subsidiary" has the meaning specified in Section 8.14.
"Credit Extension" means each of the following: (a) a Borrowing and
(b) an L/C Credit Extension.
"Debt Issuance" means the issuance by the Parent or any Subsidiary of
any Indebtedness other than Indebtedness permitted under Section 8.03.
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
9
"Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Loans, participations in L/C Obligations or participations in
Swing Line Loans required to be funded by it hereunder within one Business Day
of the date required to be funded by it hereunder, (b) has otherwise failed to
pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any Sale and Leaseback Transaction) of any Property
by the Parent or any Subsidiary (including the Capital Stock of any Subsidiary),
including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith, but excluding (i) the sale, lease, license, transfer or
other disposition of inventory in the ordinary course of business of the Parent
and its Subsidiaries, (ii) the sale, lease, license, transfer or other
disposition of machinery and equipment no longer used or useful in the conduct
of business of the Parent and its Subsidiaries, (iii) any sale, lease, license,
transfer or other disposition of Property by the Parent or any Subsidiary to any
Loan Party, provided that the Loan Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Administrative
Agent may request so as to cause the Loan Parties to be in compliance with the
terms of Section 7.14 after giving effect to such transaction, (iv) any
Involuntary Disposition by the Parent or any Subsidiary, (v) any Disposition by
the Parent or any Subsidiary constituting a Permitted Investment, (vi) the
Xxxxxxxx/Sandia Merger, (vii) non-exclusive licenses or sublicenses to use the
patents, trade secrets, know-how and other intellectual property of the Parent
or any of its Subsidiaries in the ordinary course of business and (viii) any
sale, lease, license, transfer or other disposition of Property by any Foreign
Subsidiary to another Foreign Subsidiary; provided, however, that the term
"Disposition" shall be deemed to include (a) any "Asset Sale" (or any comparable
term) under, and as defined in, the Subordinated Indebtedness Documents and (b)
any "Asset Sale" (or any comparable term) under, and as defined in, the Senior
Subordinated Note Documents.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means any Subsidiary that is organized under the
laws of any political subdivision of the United States.
"Earn Out Obligations" means, with respect to an Acquisition, all
obligations of the Parent or any Subsidiary to make earn out or other
contingency payments pursuant to the documentation relating to such Acquisition,
not including any amounts payable in any form of Capital Stock. For purposes of
determining the aggregate consideration paid for an Acquisition, the amount of
any Earn Out Obligations shall be deemed to be the reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith at the
time of such Acquisition. For purposes of determining the liability of the
Parent and its Subsidiaries for any Earn Out Obligation thereafter, the amount
of Earn Out Obligations shall be deemed to be the aggregate liability in respect
thereof as recorded on the balance sheet of the Parent and its Subsidiaries in
accordance with GAAP.
"Eligible Assignee" has the meaning specified in Section 11.07(g).
10
"Environmental Laws" means any and all federal, state, local, foreign
and other applicable statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Equity Issuance" means any issuance by the Parent or any Subsidiary to
any Person (other than a Loan Party) of shares of its Capital Stock, other than
(a) any issuance of shares of its Capital Stock pursuant to the exercise of
options or warrants, (b) any issuance of shares of its Capital Stock pursuant to
the conversion of any debt securities to equity or the conversion of any class
equity securities to any other class of equity securities, (c) any issuance of
options or warrants relating to its Capital Stock, (d) any issuance of shares of
Capital Stock by the Parent to officers, directors, employees or consultants of
a Loan Party pursuant to any stock option or incentive plans, (e) any issuance
of Capital Stock of the Parent, the Net Cash Proceeds of which are immediately
contributed as common equity by the Parent to a Loan Party (i) to fund a portion
of a Permitted Acquisition or Permitted Other Acquisition or (ii) as an
Investment permitted under Section 8.02 and (f) any issuance to the directors of
such entity to qualify such directors where required by applicable law. The term
"Equity Issuance" shall not be deemed to include any Disposition.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Internal Revenue Code (and Sections 414(m) and (o)
of the Internal Revenue Code for purposes of provisions relating to Section 412
of the Internal Revenue Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Eurodollar Base Rate" means, for any Interest Period with respect to
any Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the applicable British Bankers Association
Interest Settlement LIBOR rate for deposits in
11
Dollars as reported by any generally recognized financial institution
service (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
(b) if the rate referenced in the preceding clause (a) is not
available, the rate per annum (rounded upward to the next 1/100th of
1%) determined by the Administrative Agent as the rate of interest at
which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Bank One and
with a term equivalent to such Interest Period would be offered by Bank
One or one of its affiliate banks to first-class banks in the London
interbank eurodollar market for such currency at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent to
be equal to the quotient obtained by dividing (a) the Eurodollar Base Rate for
such Eurodollar Rate Loan for such Interest Period by (b) one minus the
Eurodollar Reserve Percentage for such Eurodollar Rate Loan for such Interest
Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate based
on the Eurodollar Rate.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day, whether or not applicable to any Lender,
under regulations issued from time to time by the FRB for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurodollar funding (currently
referred to as "Eurodollar liabilities"). The Eurodollar Rate for each
outstanding Eurodollar Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" has the meaning specified in Section 9.01.
"Excess Cash Flow" means, with respect to any fiscal year period of the
Parent and its Subsidiaries on a consolidated basis, an amount equal to (a)
Consolidated EBITDA minus (b) Consolidated Capital Expenditures minus (c) the
cash portion of Consolidated Interest Charges minus (d) Federal, state and other
taxes to the extent the same are paid in cash during such period by the Parent
and its Subsidiaries on a consolidated basis minus (e) Consolidated Scheduled
Funded Indebtedness Payments minus (f) increases in Consolidated Working Capital
plus (g) decreases in Consolidated Working Capital.
"Excluded Equity Issuance" means any issuance of shares of Capital
Stock by the Parent under the Subscription Agreement or otherwise to (i) the
Sponsor Group and (ii) any other purchasers identified on Annex I of the
Subscription Agreement as in effect on the Closing Date.
"Excluded Property" means, with respect to any Loan Party, including
any Person that becomes a Loan Party after the Closing Date as contemplated by
Section 7.12, (a) any owned or leased real or personal Property which is located
outside of the United States unless requested by the Administrative Agent or the
Required Lenders, (b) any personal Property (including, without limitation,
motor vehicles) in respect of which perfection of a Lien is not either (i)
governed by the Uniform Commercial Code or (ii) effected by appropriate evidence
of the Lien being filed in either the United States Copyright Office or the
United States Patent and Trademark Office, unless requested by the
Administrative Agent or the Required Lenders, (c) any Property which, subject to
the terms of Section 8.09, is subject to a Lien of the type described in Section
8.01(i) pursuant to documents which prohibit such Loan Party from granting any
12
other Liens in such Property, and (d) any permit, lease, license, contract or
instrument of a Loan Party if the grant of a security interest in such permit,
lease, license, contract or instrument in a manner contemplated by the Loan
Documents is, under the terms of such permit, lease, license, contract or
instrument or under applicable law, prohibited and would result in the
termination thereof or give the other parties thereto the right to terminate;
provided in each case that any such limitation on the security interests granted
under the Collateral Documents shall only apply to the extent that (A) after
reasonable efforts, consent from the relevant party or parties has not been
obtained and (B) any such prohibition could not be rendered ineffective pursuant
to the Uniform Commercial Code or any other applicable law (including Debtor
Relief Laws) or principles of equity.
"Exclusion Event" means an event or related events resulting in the
exclusion of the Parent or any of its Subsidiaries from participation in any
Medical Reimbursement Program.
"Existing Credit Agreement" means that certain Amended and Restated
Credit Agreement dated as of May 5, 2003 among the Borrower, the Parent and
certain other Subsidiaries, as guarantors, Bank One, NA, as administrative agent
and certain other lenders, as amended or modified from time to time.
"Existing Letters of Credit" means the letters of credit described by
date of issuance, letter of credit number, undrawn amount, name of beneficiary
and date of expiry on Schedule 1.01 attached hereto.
"Facilities" means, at any time, a collective reference to the
facilities and real properties owned, leased or operated by the Parent or any
Subsidiary.
"Federal Funds Rate" means, for any day, the 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 by the Federal Reserve Bank on such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the immediately preceding Business Day as so
published on the immediately preceding Business Day, and (b) if no such rate is
so published on such immediately preceding Business Day, the Federal Funds Rate
for such day shall be the average rate charged to Bank One at approximately
10:00 a.m. on such day on such transactions by three federal funds brokers of
recognized standing selected by the Administrative Agent in its sole discretion.
"Fixed Assets" means with respect to the Loan Parties all now or
hereafter owned or leased estates in real property, including, without
limitation, all fees, leaseholds and future interests, together with all of the
Loan Parties' now or hereafter owned or leased interests in the improvements
thereon, the fixtures attached thereto and the easements appurtenant thereto.
"Flood Hazard Property" has the meaning set forth in Section 5.01(g).
"Foreign Lender" has the meaning specified in Section 11.15(a)(i).
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"Funded Indebtedness" means, as to any Person at a particular time,
without duplication, all of the following, whether or not included as
indebtedness or liabilities in accordance with GAAP:
13
(a) all obligations for borrowed money, whether current or
long-term (including the Obligations) and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;
(b) all purchase money Indebtedness;
(c) the principal portion of all obligations under conditional
sale or other title retention agreements relating to Property purchased
by the Parent or any Subsidiary (other than customary reservations or
retentions of title under agreements with suppliers entered into in the
ordinary course of business);
(d) all obligations arising under letters of credit (including
standby and commercial), bankers' acceptances, bank guaranties, surety
bonds and similar instruments;
(e) all obligations in respect of the deferred purchase price
of property or services (other than trade accounts payable in the
ordinary course of business), including without limitation, any Earn
Out Obligations;
(f) all Attributed Indebtedness with respect to Capital Leases
and Synthetic Leases;
(g) all Attributed Indebtedness with respect to Securitization
Transactions;
(h) all preferred stock or other equity interests providing
for mandatory redemptions, sinking fund or like payments prior to the
Maturity Date ("Redeemable Stock"); provided that Redeemable Stock
shall not include any preferred stock or other equity interest subject
to mandatory redemption if (i) such mandatory redemption may be
satisfied by delivering common stock or some other equity interest not
subject to mandatory redemption or (ii) such mandatory redemption is
triggered solely by reason of a "change of control" and is not required
to be paid until after the Obligations are paid in full.
(i) all Funded Indebtedness of others to the extent secured by
(or for which the holder of such Funded Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, Property owned or
acquired by the Parent or any Subsidiary, whether or not the
obligations secured thereby have been assumed;
(j) all Guarantees with respect to Indebtedness of the types
specified in clauses (a) through (g) above of another Person; and
(k) all Indebtedness of the types referred to in clauses (a)
through (h) above of any partnership or joint venture (other than a
joint venture that is itself a corporation or limited liability
company) in which such Person is a general partner or joint venturer,
except to the extent that Indebtedness is expressly made non-recourse
to such Person.
For purposes hereof, (x) the amount of any direct obligation arising under
letters of credit (including standby and commercial), bankers' acceptances, bank
guaranties, surety bonds and similar instruments shall be the maximum amount
available to be drawn thereunder and (y) the amount of any Guarantee shall be
the amount of the Indebtedness subject to such Guarantee.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified
14
Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board, consistently applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Governmental Reimbursement Program Cost" means with respect to and
payable by the Parent and its Subsidiaries the sum of:
(i) all amounts (including punitive and other similar amounts)
agreed to be paid or payable (A) in settlement of claims or (B) as a
result of a final, non-appealable judgment, award or similar order, in
each case, relating to participation in Medical Reimbursement Programs;
(ii) all final, non-appealable fines, penalties, forfeitures
or other amounts rendered pursuant to criminal indictments or other
criminal proceedings relating to participation in Medical Reimbursement
Programs; and
(iii) the amount of final, non-appealable recovery, damages,
awards, penalties, forfeitures or similar amounts rendered in any
litigation, suit, arbitration, investigation, review or other legal or
administrative proceeding of any kind relating to participation in
Medical Reimbursement Programs.
"Guarantee" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term "Guarantee" as a verb has a corresponding meaning.
"Guaranty" means the Guaranty made by the Guarantors in favor of the
Administrative Agent and the Lenders pursuant to Article IV hereof.
"Guarantors" means the Parent, each Material Domestic Subsidiary of the
Borrower identified on the signature pages hereto as a "Guarantor" and each
other Person that joins as a Guarantor pursuant to Section 7.12, together with
their successors and permitted assigns.
15
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HCFA" means the United States Health Care Financing Administration and
any successor thereof, including the Centers for Medicare and Medicaid Services.
"HHS" means the United States Department of Health and Human Services
and any successor thereof.
"HIPAA" means the Health Insurance Portability and Accountability Act
of 1996, as the same may be amended, modified or supplemented from time to time,
and any successor statute thereto, and any and all rules or regulations
promulgated from time to time thereunder.
"HMO" means any health maintenance organization, managed care
organization, any Person doing business as a health maintenance organization or
managed care organization, or any Person required to qualify or be licensed as a
health maintenance organization or managed care organization under applicable
federal or state law (including, without limitation, HMO Regulations).
"HMO Business" means the business of owning and operating an HMO or
other similar regulated entity or business.
"HMO Event" means any material non-compliance by the Parent or any of
its Subsidiaries with any of the terms and provisions of the HMO Regulations
pertaining to its fiscal soundness, solvency or financial condition; or the
assertion in writing, after the date hereof, by an HMO Regulator that it intends
to take administrative action against the Parent or any of its Subsidiaries to
revoke or modify any license, charter or permit or to enforce the fiscal
soundness, solvency or financial provisions or requirements of the HMO
Regulations against the Parent or any of its Subsidiaries.
"HMO Regulations" means all laws, regulations, directives and
administrative orders applicable under federal or state law to any HMO
Subsidiary (and any regulations, orders and directives promulgated or issued
pursuant to any of the foregoing) and Subchapter XI of Title 42 of the United
States Code Annotated (and any regulations, orders and directives promulgated or
issued pursuant thereto, including, without limitation, Part 417 of Chapter IV
of 42 Code of Federal Regulations (1990)).
"HMO Regulator" means any Person charged with the administration,
oversight or enforcement of an HMO Regulation, whether primarily, secondarily or
jointly.
"HMO Subsidiary" means each of the Subsidiaries of the Parent
identified as an HMO Subsidiary on Schedule 6.13 hereto, and any other existing
or future Subsidiary of the Parent that is capitalized or licensed as an HMO,
conducting HMO Business or providing managed care services.
"Incremental Term Loan" has the meaning set forth in Section 2.01(b).
"Incremental Term Loan Borrowing Date" means any Business Day on which
Incremental Term Loans are incurred pursuant to Section 2.01(b), which dates
shall not occur after the Maturity Date.
"Incremental Term Loan Commitment" means, as to each Lender, any
commitment to make Incremental Term Loans provided by such Lender pursuant to
Section 2.01(c), in such amount as agreed to by such Lender in the respective
Incremental Term Loan Commitment Agreement and as set forth
16
opposite such Lender's name in Schedule 2.01 (as modified from time to time in
accordance with Section 2.01(d)) directly below the column entitled "Incremental
Term Loan Commitment" as the same may be terminated or reduced from time to time
pursuant to Section 2.05.
"Incremental Term Loan Commitment Agreement" means and includes each
Incremental Term Loan Commitment Agreement substantially in the form of Exhibit
D executed in accordance with Section 2.01(c).
"Incremental Term Loan Commitment Date" means each date upon which an
Incremental Term Loan Commitment under the Incremental Term Loan Commitment
Agreement becomes effective as provided in Section 2.01(c).
"Incremental Term Loan Lender" shall have the meaning provided in
Section 2.01(d).
"Incremental Term Note" has the meaning specified in Section 2.11(a).
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all Funded Indebtedness;
(b) net obligations under any Swap Contract;
(c) all Guarantees with respect to outstanding Indebtedness
of the types specified in clauses (a) and (b) above of any other
Person; and
(d) all Indebtedness of the types referred to in clauses (a)
through (c) above of any partnership or joint venture (other than a
joint venture that is itself a corporation or limited liability
company) in which the Borrower or a Subsidiary is a general partner or
joint venturer, unless such Indebtedness is expressly made non-recourse
to the Borrower or such Subsidiary.
For purposes hereof (y) the amount of any net obligation under any Swap
Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date and (z) the amount of any Guarantee shall be
the amount of the Indebtedness subject to such Guarantee.
"Indemnified Liabilities" has the meaning set forth in Section 11.05.
"Indemnitees" has the meaning set forth in Section 11.05.
"Indenture" means that certain Indenture dated as of August 19, 2003
among the Borrower, the Domestic Subsidiaries party thereto and U.S. Bank Trust
National Association, as trustee, as in effect on the Closing Date and as the
same may be amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
"Insurer" means a Person that insures a Patient against certain of the
costs incurred in the receipt by such Patient of Medical Services, or that has
an agreement with a Loan Party to compensate such Loan Party for providing
services to a Patient.
"Intercompany Note" means (a) with respect to Xxxxxxxx or any other HMO
Subsidiary providing a promissory note in accordance with Section 7.12(a)(iii)
hereof, a promissory note substantially in the form of Exhibit M executed by
Xxxxxxxx or any such HMO Subsidiary in favor of the Borrower in
17
accordance with the terms hereof, with (i) a maturity date that is after the
Maturity Date and (ii) such modifications thereto (including the insertion of
the applicable state law limitations in Section 14 of such promissory note) as
are necessary to be in compliance with applicable state law (any such
modifications (including any applicable state law limitations inserted into
Section 14 of such promissory note) to be acceptable to the Collateral Agent) or
(b) any promissory note provided by any Subsidiary or Joint Venture in
accordance with Section 8.02(g)(iii) or 8.02(h).
"Intercompany Security Documents" means the security agreement in the
form of Exhibit N and each other security agreement, pledge agreement, mortgage,
deed of trust or other security document reasonably requested by, and in form
and substance reasonably satisfactory to, the Collateral Agent, in each case
executed by an HMO Subsidiary or a Non-Guarantor Subsidiary in favor of the
Borrower in accordance with the terms hereof, with such modifications thereto as
are necessary to be in compliance with applicable state law (any such
modifications to be acceptable to the Collateral Agent).
"Intercreditor and Subordination Agreement" means the Intercreditor and
Subordination Agreement in the form of Exhibit A dated as of the Closing Date
among the Borrower, the Administrative Agent, the Collateral Agent and U.S. Bank
National Association, as trustee, as amended, modified, restated or supplemented
from time to time.
"Interest Payment Date" means (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the last Business Day of each March, June, September and December and the
Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three, six,
nine or twelve months thereafter, as selected by the Borrower in its Loan
Notice; provided that:
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity
Date.
"Interim Financial Statements" has the meaning set forth in Section
5.01(c).
"Internal Revenue Code" means the Internal Revenue Code of 1986.
"Investment" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of Capital Stock of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person, or (c) an Acquisition. For purposes of covenant
18
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
"Involuntary Disposition" means any loss of, damage to or destruction
of, or any condemnation or other taking for public use of, any Property of the
Parent or any Subsidiary.
"IP Rights" has the meaning set forth in Section 6.17.
"IRS" means the United States Internal Revenue Service.
"Joinder Agreement" means a joinder agreement substantially in the form
of Exhibit L executed and delivered by a Domestic Subsidiary in accordance with
the provisions of Section 7.12.
"Joint Venture" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity (a) of which less
than a majority of the shares of Capital Stock having ordinary voting power for
the election of directors or other governing body (other than Capital Stock
having such power only by reason of the happening of a contingency) are at the
time beneficially owned, directly, or indirectly through one or more
intermediaries, or both, by such Person and (b) which is not otherwise a
Subsidiary of such Person. Unless otherwise specified, all references herein to
a "Joint Venture" or to "Joint Ventures" shall refer to a Joint Venture or Joint
Ventures of the Parent.
"Laws" means, collectively, all international, foreign, federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding
of its participation in any L/C Borrowing in accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Borrowing of Revolving Loans.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank One in its capacity as issuer of Letters of
Credit hereunder or any successor issuer of Letters of Credit hereunder.
Notwithstanding the foregoing, Bank of America shall be the L/C Issuer with
respect to those Existing Letters of Credit identified in Part B of Schedule
1.01.
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.
"Lenders" means each of the Persons identified as a "Lender" on the
signature pages hereto and their successors and assigns and, as the context
requires, includes the L/C Issuer and the Swing Line Lender.
19
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Letter of Credit" means (a) any letter of credit issued hereunder and
(b) any Existing Letter of Credit. A Letter of Credit may be a commercial letter
of credit or a standby letter of credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a letter of credit in the form from time to time in
use by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to the lesser of the
Aggregate Revolving Commitments and $25,000,000. The Letter of Credit Sublimit
is part of, and not in addition to, the Aggregate Revolving Commitments.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"Loan Documents" means this Agreement, each Letter of Credit, each
Letter of Credit Application, each Note, each Joinder Agreement, each
Incremental Term Loan Commitment Agreement, the Collateral Documents, the
Intercreditor and Subordination Agreement, each Request for Credit Extension,
each Compliance Certificate, the Administrative Agent Fee Letter and each other
document, instrument or agreement from time to time executed by the Parent, the
Borrower or any of its Subsidiaries or any Responsible Officer thereof and
delivered in connection with this Agreement.
"Loan Notice" means a notice of (a) a Borrowing of Revolving Loans or
Incremental Term Loans, (b) a conversion of Loans from one Type to the other, or
(c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which,
if in writing, shall be substantially in the form of Exhibit E.
"Loan Parties" means, collectively, the Borrower and the Guarantors.
"Loans" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Revolving Loan, Swing Line Loan or an Incremental
Term Loan.
"Xxxxxxxx" means Xxxxxxxx Health Systems, Inc. a New Mexico
corporation.
"Xxxxxxxx/Sandia Merger" means the merger or consolidation of the
Sandia Parties with or into Xxxxxxxx.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Parent and its Subsidiaries taken as a whole; (b) a material impairment of the
ability of the Loan Parties taken as a whole to perform their obligations under
the Loan Documents; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document to which it is a party.
20
"Material Domestic Subsidiary" means any Domestic Subsidiary that (a)
as of the end of any fiscal quarter period, has total assets averaging greater
than $100,000 for such three month period, (b) has revenues for the most recent
twelve month period greater than $100,000, (c) as of the end of any fiscal
quarter period, has total assets (together with the total assets of the other
Domestic Subsidiaries (other than the Captive Insurance Subsidiary, any HMO
Subsidiary, any Controlled Subsidiary purchased pursuant to a Permitted Other
Acquisition or any Controlled Subsidiary created in accordance with Section
8.02(i)) that have not provided a Guaranty hereunder) averaging greater than
$500,000 in the aggregate for such three month period or (d) has total revenues
(together with the total revenues of the other Domestic Subsidiaries (other than
the Captive Insurance Subsidiary, any HMO Subsidiary or any Controlled
Subsidiary purchased pursuant to a Permitted Other Acquisition or any Controlled
Subsidiary created in accordance with Section 8.02(i)) that have not provided a
Guaranty hereunder) for the most recent twelve month period greater than
$500,000 in the aggregate.
"Maturity Date" means (a) with respect to all Loans other than the
Incremental Term Loans, August 19, 2008 and (b) with respect to any Incremental
Term Loan the maturity date for such Incremental Term Loan set forth in the
Incremental Term Loan Commitment Agreement relating thereto.
"Medicaid" means that means-tested entitlement program under Title XIX
of the Social Security Act, which provides federal grants to states for medical
assistance based on specific eligibility criteria, as set forth at Section 1396,
et seq. of Title 42 of the United Sates Code, as amended, and any statute
succeeding thereto.
"Medicaid Provider Agreement" means an agreement entered into between
a state agency or other such entity administering the Medicaid program and a
health care provider or supplier under which the health care provider or
supplier agrees to provide services for Medicaid patients in accordance with the
terms of the agreement and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act and any statutes succeeding thereto; (ii) all applicable provisions
of all federal rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes described
in clause (i) above and all federal administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law promulgated
pursuant to or in connection with the statutes described in clause (i) above;
(iii) all state statutes and plans for medical assistance enacted in connection
with the statutes and provisions described in clauses (i) and (ii) above; and
(iv) all applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (iii) above and all state administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (ii) above, in each case as may be amended, supplemented or
otherwise modified from time to time.
"Medical Reimbursement Programs" means a collective reference to the
Medicare, Medicaid, CHAMPUS and TRICARE programs and any other health care
program operated by or financed in whole or in part by any foreign or domestic
federal, state or local government and any other non-government funded third
party payor programs.
"Medical/Surgical Business" has the meaning set forth in Section
7.01(a).
"Medicaid/Medicare Account Debtor" means any Account Debtor which is
(i) the United States of America acting under the Medicaid/Medicare program
established pursuant to the Social Security Act,
21
(ii) any state or the District of Columbia acting pursuant to a health plan
adopted pursuant to Title XIX of the Social Security Act or (iii) any agent,
carrier, administrator or intermediary for any of the foregoing.
"Medicare" means that government-sponsored entitlement program under
Title XVIII of the Social Security Act, which provides for a health insurance
system for eligible elderly and disabled individuals, as set forth at Section
1395, et seq. of Title 42 of the United States Code, as amended, and any statute
succeeding thereto.
"Medicare Provider Agreement" means an agreement entered into between
HCFA or other such entity administering the Medicare program on behalf of the
HCFA, and a health care provider or supplier under which the health care
provider or supplier agrees to provide services for Medicare patients in
accordance with the terms of the agreement and Medicare Regulations.
"Medical Services" means medical and health care services provided to a
Patient, including, but not limited to, medical and health care services
provided to a Patient and performed by a Loan Party which are covered by a
policy of insurance issued by an Insurer, and includes physician services, nurse
and therapist services, dental services, hospital services, skilled nursing
facility services, comprehensive outpatient rehabilitation services, home health
care services, residential and out-patient behavioral healthcare services, and
medicine or health care equipment provided by a Loan Party to a Patient for a
necessary or specifically requested valid and proper medical or health purpose.
"Medicare Regulations" means, collectively, all federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statutes succeeding thereto;
together with all applicable provisions of all rules, regulations, manuals and
orders and administrative, reimbursement and other guidelines having the force
of law of all Governmental Authorities (including, without limitation, HCFA, the
OIG, HHS, or any person succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing having the
force of law, as each may be amended, supplemented or otherwise modified from
time to time.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Mortgage Instrument" has the meaning set forth in Section 5.01(g).
"Mortgaged Property" has the meaning set forth in Section 5.01(g).
"Mortgage Policy" has the meaning set forth in Section 5.01(g).
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"NAIC" means the National Association of Insurance Commissioners, a
national organization of insurance regulators.
"Net Cash Proceeds" means the aggregate cash or Cash Equivalents
proceeds received by the Parent or any Subsidiary in respect of any Disposition,
Equity Issuance, Debt Issuance or Involuntary Disposition, net of (a) direct
costs incurred in connection therewith (including, without limitation, legal,
accounting and investment banking fees, and sales commissions), (b) taxes paid
or payable as a result thereof and (c) in the case of any Disposition or
Involuntary Disposition, the amount necessary to retire any Indebtedness secured
by a Permitted Lien (ranking senior to any Lien of the Administrative Agent) on
the related Property; it being
22
understood that "Net Cash Proceeds" shall include, without limitation, any cash
or Cash Equivalents received upon the sale or other disposition of any non-cash
consideration received by the Parent or any Subsidiary in any Disposition,
Equity Issuance, Debt Issuance or Involuntary Disposition; provided, however,
that if in connection with a Disposition or Involuntary Disposition (x) the
Borrower shall deliver (A) a certificate of a Responsible Officer to the
Administrative Agent at the time of receipt thereof setting forth the Borrower's
intention to reinvest such proceeds in productive assets of a kind then used or
usable in the business of the Borrower and its Subsidiaries (including assets
acquired in a Permitted Acquisition or Permitted Other Acquisition) within 270
days of receipt of such proceeds and (y) no Default or Event of Default shall
have occurred and shall be continuing at the time of such certificate or at the
time such proceeds are contractually committed to be used, such proceeds shall
not constitute Net Cash Proceeds except to the extent not so used or
contractually committed to be used at the end of such 270-day period, at which
time such proceeds shall be deemed to be Net Cash Proceeds.
"Net Worth" means, as of any date, shareholders' equity or net worth of
such Person as determined in accordance with GAAP.
"Non-Guarantor Subsidiary" means any Subsidiary of the Parent (other
than an HMO Subsidiary) which is not a Loan Party.
"Note" or "Notes" means the Revolving Notes, the Swing Line Note and/or
the Incremental Term Notes, individually or collectively, as appropriate.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding. The foregoing
shall also include any Swap Contract between any Loan Party and any Lender or
Affiliate of a Lender.
"OIG" means the Office of Inspector General of HHS and any successor
thereof.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" has the meaning set forth in Section 3.01(b).
"Outstanding Amount" means (i) with respect to any Loans on any date,
the aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of any Loans occurring on such date;
and (ii) with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of
23
Credit or any reductions in the maximum amount available for drawing under
Letters of Credit taking effect on such date.
"Parent" means Ardent Health Services LLC, a Delaware limited liability
company.
"Patient" means any Person receiving Medical Services from a Loan Party
and all Persons legally liable to pay a Loan Party for such Medical Services
other than Insurers.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"Permitted Acquisition" means (a) an Acquisition approved in writing by
the Required Lenders in their sole discretion and (b) an Acquisition by any Loan
Party (other than the Parent) of at least a majority of the Voting Stock and the
Capital Stock of a Person (other than a Person involved in the HMO Business) or
a substantial portion of the Property of a Person not involved in the HMO
Business, provided that (i) the Property acquired (or the Property of the Person
acquired) in such Acquisition is used or useful in the same or a substantially
similar line of business as the Loan Parties are engaged in on the Closing Date,
(ii) the Person acquired in such Acquisition shall become a Guarantor in
accordance with Section 7.12 and the Administrative Agent shall have received
all items in respect of the Capital Stock or Property acquired in such
Acquisition required to be delivered by the terms of Section 7.12 and/or Section
7.14, (iii) in the case of an Acquisition of the Capital Stock of another
Person, the board of directors (or other comparable governing body) of such
other Person shall have duly approved such Acquisition, (iv) at least 5 days
prior to the date of closing of any such Acquisition where the aggregate
consideration for such Acquisition exceeds $2,500,000, the Borrower shall have
delivered to the Administrative Agent (A) financial statements of the Person
being acquired or the Person from which the Property is being acquired for its
most recent fiscal year and (B) a Pro Forma Compliance Certificate demonstrating
that, upon giving effect to such Acquisition on a Pro Forma Basis, (I) the
Consolidated Senior Leverage Ratio is at least 0.25 less than the ratio required
to be maintained at such time by Section 8.11(a), and (II) that the Loan Parties
are in compliance with Section 8.11, (v) the representations and warranties made
by the Loan Parties in any Loan Document shall be true and correct in all
material respects as of the date of such Acquisition (after giving effect
thereto) except to the extent such representations and warranties expressly
relate to an earlier date, (vi) after giving effect to any such individual
Acquisition, the aggregate consideration (including cash and non-cash
consideration, Earn Out Obligations exceeding $15 million in the aggregate, any
deferred capital expenditures as set forth in a certificate delivered pursuant
to the last paragraph of Section 8.11(e) and any assumption of liabilities, but
excluding any Equity Issuance made to the applicable seller as part of the
purchase price) for all such Acquisitions shall not exceed $250,000,000 and
(vii) immediately prior to and after giving effect to such Acquisition, no
Default or Event of Default shall exist. Notwithstanding the foregoing, a
Permitted Acquisition may consist of assets attributable to an HMO Business in
an amount not to exceed 7.5% of the total assets acquired in such Acquisition.
It is understood and agreed that any Acquisition may qualify in part as a
Permitted Acquisition and in part as a Permitted Other Acquisition.
"Permitted Other Acquisition" means an Acquisition (other than a
Permitted Acquisition) by the Borrower or any Subsidiary of (a) any Capital
Stock of any Person (including any Person involved in the HMO Business) or (b) a
substantial portion of the Property of any Person (including any Person involved
in the HMO Business), provided that (i) the Property acquired (or the Property
of the Person acquired) in such
24
Acquisition is used or useful in the same or a substantially similar line of
business as the Loan Parties are engaged in on the Closing Date, (ii) the
Administrative Agent shall have received all items in respect of the Capital
Stock or Property acquired in such Acquisition required to be delivered by the
terms of Section 7.12 and/or Section 7.14, (iii) the board of directors (or
other comparable governing body) of such other Person shall have duly approved
such Acquisition, (iv) the representations and warranties made by the Loan
Parties in any Loan Document shall be true and correct in all material respects
as of the date of such Acquisition (after giving effect thereto) except to the
extent such representations and warranties expressly relate to an earlier date,
(v) at least 5 days prior to the date of closing of any such Acquisition where
the aggregate consideration for such Acquisition exceeds $2,500,000, the
Borrower shall have delivered to the Administrative Agent (A) financial
statements of the Person being acquired or the Person from which the Property is
being acquired for its most recent fiscal year and (B) a Pro Forma Compliance
Certificate demonstrating that, upon giving effect to such Acquisition on a Pro
Forma Basis, (1) the Consolidated Senior Leverage Ratio is at least 0.25 less
than the ratio required to be maintained at such time by Section 8.11(a), and
(2) the Loan Parties are in compliance with Section 8.11, (vi) after giving
effect to such Acquisition, the aggregate consideration (including cash and
non-cash consideration, Earn Out Obligations, any deferred capital expenditures
as set forth in a certificate delivered pursuant to the last paragraph of
Section 8.11(e) and any assumption of liabilities) for all such Acquisitions
(together with any other equity investments or capital contributions made in HMO
Subsidiaries, Controlled Subsidiaries and Joint Ventures subsequent to the
Closing Date) shall not exceed $37,000,000 in the aggregate and (vii)
immediately prior to and after giving effect to such Acquisition, no Default or
Event of Default shall exist.
"Permitted Investments" means, at any time, Investments by the Parent
and its Subsidiaries permitted to exist at such time pursuant to the terms of
Section 8.02.
"Permitted Liens" means, at any time, Liens in respect of Property of
the Parent and its Subsidiaries permitted to exist at such time pursuant to the
terms of Section 8.01.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Internal Revenue Code or Title IV of
ERISA, any ERISA Affiliate.
"Pledge Agreement" means the Pledge Agreement in the form of Exhibit B
dated as of the Closing Date executed in favor of the Administrative Agent by
each of the Loan Parties, as amended, modified, restated or supplemented from
time to time.
"Pro Forma Basis" means, for all purposes hereof, that any Disposition,
Involuntary Disposition or Acquisition and the incurrence of any Incremental
Term Loan or any Additional Subordinated Indebtedness shall be deemed to have
occurred as of the first day of the most recent four fiscal quarter period
preceding the date of such transaction or incurrence for which the Loan Parties
have delivered financial statements pursuant to Section 7.01(a) or (b). In
connection with the foregoing, (a) with respect to any Disposition or
Involuntary Disposition, (i) income statement and cash flow statement items
(whether positive or negative) attributable to the Property disposed of shall be
excluded to the extent relating to any period occurring prior to the date of
such transaction and (ii) Indebtedness which is retired shall be excluded and
deemed to have been retired as of the first day of the applicable period and (b)
with respect to any Acquisition, (i) income statement items attributable to the
Person or Property acquired shall be included to the extent relating to any
period applicable in such calculations to the extent (A) such items are not
otherwise included in such income statement items for the Parent and its
Subsidiaries in
25
accordance with GAAP or in accordance with any defined terms set forth in
Section 1.01 and (B) such items are supported by financial statements or other
information reasonably satisfactory to the Administrative Agent and (ii) any
Indebtedness incurred or assumed by the Parent or any Subsidiary (including the
Person or Property acquired) in connection with such transaction and any
Indebtedness of the Person or Property acquired which is not retired in
connection with such transaction (A) shall be deemed to have been incurred as of
the first day of the applicable period and (B) if such Indebtedness has a
floating or formula rate, shall have an implied rate of interest for the
applicable period for purposes of this definition determined by utilizing the
rate which is or would be in effect with respect to such Indebtedness as at the
relevant date of determination. Furthermore, pro forma calculations of
Consolidated EBITDA shall not give effect to anticipated cost savings and/or
increases to Consolidated EBITDA for the applicable period, except in cases
where factually supportable and identifiable pro forma cost savings and/or
increases to Consolidated EBITDA for the applicable period (in each case
reasonably expected to occur within one year of the respective date of the
applicable Acquisition) that are attributable to such Acquisition are
demonstrated in writing by the Borrower (with supporting calculations) to the
Administrative Agent at the time of the relevant Acquisition; provided, further,
that the add backs for cost savings and/or increases to Consolidated EBITDA for
any applicable period for all Acquisitions shall not, without the written
consent of the Required Lenders, exceed fifteen percent (15%) of Consolidated
EBITDA after giving effect to such Acquisition for the applicable period.
"Pro Forma Compliance Certificate" means a certificate of a Responsible
Officer of the Borrower containing reasonably detailed calculations of the
financial covenants set forth in Section 8.11 as of the most recent fiscal
quarter end for which the Loan Parties has delivered financial statements
pursuant to Section 7.01(a) or (b) after giving effect to the applicable
transaction (and any other such transactions during such period) on a Pro Forma
Basis.
"Pro Rata Share" means, as to each Lender at any time, (a) with respect
to such Lender's Revolving Commitment at any time, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is
the amount of the Revolving Commitment of such Lender at such time and the
denominator of which is the amount of the Aggregate Revolving Commitments at
such time; provided that if the commitment of each Lender to make Revolving
Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have
been terminated pursuant to Section 9.02, then the Pro Rata Share of each Lender
shall be determined based on the Pro Rata Share of such Lender immediately prior
to such termination and after giving effect to any subsequent assignments made
pursuant to the terms hereof and (b) with respect to such Lender's outstanding
Incremental Term Loans at any time, a fraction (expressed as a percentage,
carried out to the ninth decimal place), the numerator of which is the principal
amount of the Incremental Term Loans held by such Lender at such time and the
denominator of which is the aggregate Incremental Term Loans at such time. The
initial Pro Rata Share of each Lender is set forth opposite the name of such
Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable.
"Property" means any interest of any kind in any property or asset,
whether real, personal or mixed, or tangible or intangible.
"Public Equity Offering" means an underwritten public offering of
common stock of and by the Parent or the Borrower pursuant to a registration
statement filed with the SEC in accordance with the Securities Act, which yields
not less than $50,000,000 in Net Cash Proceeds to the Parent or the Borrower, as
applicable.
"Qualified Account" means an Account of the Borrower or any Subsidiary
of the Borrower generated in the ordinary course of such Person's business from
the sale of goods or rendition of Medical
26
Services, net of allowances and reserves for doubtful or uncollectible accounts
and sales adjustments consistent with such Person's internal policies and in any
event in accordance with GAAP.
"Register" has the meaning set forth in Section 11.07(c).
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the thirty-day notice period has been
waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Loans, a Loan Notice, (b) with respect to an L/C
Credit Extension, a Letter of Credit Application, and (c) with respect to a
Swing Line Loan, a Swing Line Loan Notice.
"Required Lenders" means, at any time, Lenders holding in the aggregate
more than fifty percent (50%) of (a) the sum of the Revolving Commitments and
the outstanding Incremental Term Loans or (b) if the Revolving Commitments have
been terminated, the outstanding Loans, L/C Obligations, Swing Line Loans and
participations therein. The Revolving Commitments of, and the outstanding
Incremental Term Loans held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Lenders.
"Required Revolving Lenders" means, at any time, Lenders holding in the
aggregate more than fifty percent (50%) of (a) the sum of the Revolving
Commitments or (b) if the Revolving Commitments have been terminated, the
outstanding Revolving Loans, L/C Obligations, Swing Line Loans and
participations therein. The Revolving Commitments of any Defaulting Lender shall
be excluded for purposes of making a determination of Required Revolving
Lenders.
"Responsible Officer" means the chief executive officer, president,
chief financial officer controller or treasurer of a Loan Party. Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Capital Stock of the
Parent or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Capital Stock or of any option, warrant or other right to acquire any
such Capital Stock.
"Revolving Commitment" means, as to each Lender, its obligation to (a)
make Revolving Loans to the Borrower pursuant to Section 2.01, (b) purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.
"Revolving Loan" has the meaning specified in Section 2.01(a).
"Revolving Note" has the meaning specified in Section 2.11(a).
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
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"Sale and Leaseback Transaction" means, with respect to the Parent or
any Subsidiary, any arrangement, directly or indirectly, with any person whereby
the Parent or such Subsidiary shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred.
"Sandia Parties" means AHS Albuquerque Regional Medical Center, LLC,
AHS West Mesa Hospital, LLC, AHS Albuquerque Rehabilitation Hospital, LLC, AHS
Northeast Heights Hospital, LLC, AHS Albuquerque Physician Group, LLC and
Mesilla Valley Hospital, and "Sandia Party" means any one of them.
"SAP" means, with respect to each HMO Subsidiary, the statutory
accounting principles and procedures prescribed or permitted by applicable HMO
Regulations for such HMO Subsidiary, applied on a consistent basis.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Securitization Transaction" means any financing transaction or series
of financing transactions (including factoring arrangements) pursuant to which
the Parent or any Subsidiary may sell, convey or otherwise transfer, or grant a
security interest in, accounts, payments, receivables, rights to future lease
payments or residuals or similar rights to payment to a special purpose
subsidiary or affiliate of the Parent.
"Security Agreement" means the Security Agreement in the form of
Exhibit C dated as of the Closing Date executed in favor of the Administrative
Agent by each of the Loan Parties, as amended, modified, restated or
supplemented from time to time.
"Senior Subordinated Notes" means those 10% Senior Subordinated Notes
of the Borrower due 2013 issued pursuant to the Indenture, as in effect on the
Closing Date and as the same may be amended, modified or supplemented from time
to time in accordance with the terms hereof and thereof.
"Senior Subordinated Notes Documents" means the Senior Subordinated
Notes, the Indenture, the Intercreditor and Subordination Agreement and all
other documents executed and delivered in respect of the Senior Subordinated
Notes and the Indenture, in each case as in effect on the Closing Date and as
the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (a) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as they mature
in the ordinary course of business, (b) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature in their ordinary course,
(c) such Person is not engaged in a business or a transaction, and is not about
to engage in a business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is to
engage, (d) the fair value of the Property of such Person is greater than the
total amount of liabilities, including, without limitation, contingent
liabilities, of such Person and (e) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such
28
Person on its debts as they become absolute and matured. In computing the amount
of contingent liabilities at any time, it is intended that such liabilities will
be computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Sponsors" means (i) Welsh, Carson, Xxxxxxxx & Xxxxx, IX, L.P, (ii) FFC
Partners II, L.P. and (iii) BancAmerica Capital Investors I, L.P.
"Sponsor Fees" means the fees payable by the Parent to a Sponsor or any
Affiliate of such Sponsor pursuant to a management or services agreement
approved by the board of directors of the Parent.
"Sponsor Group" means the collective reference to (i) the Sponsors and
(ii) any other Person that (a) directly or indirectly, is in control of, is
controlled by, or is under common control with, the Sponsors and (b) is
organized primarily for the purpose of making debt or equity investments in one
or more companies. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Subordinated Indebtedness" means the unsecured Indebtedness of the
Parent under the Subordinated Indebtedness Documents, as amended and modified
from time to time in accordance with Section 8.12.
"Subordinated Indebtedness Documents" means (i) the Note and Equity
Purchase Agreement dated as of January 15, 2003 among the Parent, the Borrower
and WCAS Capital Partners III, L.P., (ii) the $36,000,000 Senior Subordinated
Note due August [___], 2014 issued by the Borrower in favor WCAS Capital
Partners III, L.P. dated as of January 15, 2003 (and as amended and restated on
August 19, 2003) and (iii) all other agreements, documents and instruments
evidencing or governing the Subordinated Indebtedness, as such Subordinated
Indebtedness Documents may be amended or modified from time to time in
accordance with the terms hereof.
"Subscription Agreement" means the Subscription Agreement dated as of
December 11, 2002 (and amended on February 7, 2003 to add BancAmerica Capital
Investors I, L.P. as a party thereto), by and among the Parent, the Sponsors and
the other purchasers identified on Annex I thereto, as amended or modified from
time to time.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of Capital Stock having ordinary voting power for the election of
directors or other governing body (other than Capital Stock having such power
only by reason of the happening of a contingency) are at the time beneficially
owned, or the management of which is otherwise controlled, directly, or
indirectly through one or more intermediaries, or both, by such Person. Unless
otherwise specified, all references herein to a "Subsidiary" or to
"Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Parent.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the
29
foregoing), whether or not any such transaction is governed by or subject to any
master agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a "Master Agreement"), including any such
obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Swing Line" means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.04.
"Swing Line Lender" means Bank One in its capacity as provider of Swing
Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.04(a).
"Swing Line Loan Notice" means a notice of a Borrowing of Swing Line
Loans pursuant to Section 2.04(b), which, if in writing, shall be substantially
in the form of Exhibit F.
"Swing Line Note" has the meaning specified in Section 2.11(a).
"Swing Line Sublimit" means an amount equal to the lesser of (a)
$10,000,000 and (b) the Aggregate Revolving Commitments. The Swing Line Sublimit
is part of, and not in addition to, the Aggregate Revolving Commitments.
"Syndication Agents" means Bank of America and UBS Securities LLC.
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing arrangement
whereby the arrangement is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease or does not otherwise appear on
the balance sheet under GAAP.
"Taxes" has the meaning specified in Section 3.01(a).
"Threshold Amount" means $3,000,000.
"Title Insurance Company" has the meaning set forth in Section 5.01(g).
"Total Revolving Outstandings" means the aggregate Outstanding Amount
of all Revolving Loans, all Swing Line Loans and all L/C Obligations.
"Transactions" means collectively, (a) the execution, delivery and
performance by the Loan Parties of the Loan Documents to which they are a party
and, in the case of the Borrower, the initial
30
Borrowings hereunder, (b) the execution, delivery and performance by the Loan
Parties of the Senior Subordinated Notes Documents to which they are a party
and, in the case of the Borrower, the issuance of the Senior Subordinated Notes,
(c) the refinancing and termination of the Existing Credit Agreement and (d)
payment of related fees and expenses.
"TRICARE" means the United States Department of Defense health care
program for service families including, but not limited to, TRICARE Prime,
TRICARE Extra and TRICARE Standard, and any successor to or predecessor thereof
(including, without limitation, CHAMPUS).
"Type" means, with respect to any Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Internal
Revenue Code for the applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).
"Voting Stock" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency; provided, however,
that Voting Stock shall not include any preferred class of Capital Stock of any
Person solely by reason of the right of such class to elect one or more members
of the board of directors (or similar governing body) of such Person, unless
such class is generally entitled to vote on any matter submitted to the holders
of common classes of Capital Stock.
"Wholly Owned Subsidiary" means any Person 100% of whose Capital Stock
is at the time owned by the Parent directly or indirectly through other Persons
100% of whose Capital Stock is at the time owned, directly or indirectly, by the
Parent.
1.02 OTHER INTERPRETIVE PROVISIONS.
With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder"
and words of similar import when used in any Loan Document shall refer
to such Loan Document as a whole and not to any particular provision
thereof.
(ii) Article, Section, Exhibit and Schedule
references are to the Loan Document in which such reference
appears.
(iii) The term "including" is by way of example and
not limitation.
31
(iv) The term "documents" includes any and all
instruments, documents, agreements, certificates, notices,
reports, financial statements and other writings, however
evidenced, whether in physical or electronic form.
(c) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including;" the words "to" and "until" each mean "to but excluding;"
and the word "through" means "to and including."
(d) Section headings herein and in the other Loan Documents
are included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS.
(a) Except as otherwise specifically prescribed herein, all accounting
terms not specifically or completely defined herein shall be construed in
conformity with, and all financial data (including financial ratios and other
financial calculations) required to be submitted pursuant to this Agreement
shall be prepared in conformity with, GAAP applied on a consistent basis, as in
effect from time to time, applied in a manner consistent with that used in
preparing the Audited Financial Statements; provided, however, that calculations
of Attributable Indebtedness under any Synthetic Lease or the implied interest
component of any Synthetic Lease shall be made by the Borrower in accordance
with accepted financial practice and consistent with the terms of such Synthetic
Leases.
(b) The Borrower will provide a written summary of material changes in
GAAP and in the consistent application thereof with each annual and quarterly
Compliance Certificate delivered in accordance with Section 7.02(b). If at any
time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrower or the
Required Lenders shall so request, the Administrative Agent, the Lenders and the
Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Lenders); provided that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and (ii) the Borrower shall provide to the Administrative
Agent and the Lenders financial statements and other documents required under
this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made before and
after giving effect to such change in GAAP.
(c) Notwithstanding the above, the parties hereto acknowledge and agree
that all calculations of the Consolidated Senior Leverage Ratio, Consolidated
Leverage Ratio, Consolidated Interest Coverage Ratio and Consolidated EBITDA for
purposes of determining compliance with Section 8.11 and determining the
Applicable Rate shall be made on a Pro Forma Basis; provided, however, that any
Acquisition, Disposition or Involuntary Disposition of assets with an aggregate
net book value of less than $2.5 million need not be taken into account on a Pro
Forma Basis.
1.04 ROUNDING.
Any financial ratios required to be maintained by the Loan Parties
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).
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1.05 REFERENCES TO AGREEMENTS AND LAWS.
Unless otherwise expressly provided herein, (a) references to
Organization Documents, agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements and other modifications thereto, but only
to the extent that such amendments, restatements, extensions, supplements and
other modifications are not prohibited by any Loan Document; and (b) references
to any Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.
1.06 TIMES OF DAY.
Unless otherwise specified, all references herein to times of day shall
be references to Eastern time (daylight or standard, as applicable).
1.07 LETTER OF CREDIT AMOUNTS.
Unless otherwise specified, all references herein to the amount of a
Letter of Credit at any time shall be deemed to mean the maximum face amount of
such Letter of Credit after giving effect to all increases thereof contemplated
by such Letter of Credit or the Letter of Credit Application therefor, whether
or not such maximum face amount is in effect at such time.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 REVOLVING LOANS AND INCREMENTAL TERM LOANS.
(a) Revolving Loans. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans (each such loan, a "Revolving
Loan") to the Borrower in Dollars from time to time on any Business Day during
the Availability Period in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Revolving Commitment; provided, however,
that after giving effect to any Borrowing of Revolving Loans, (i) the Total
Revolving Outstandings shall not exceed the lesser of (A) the Aggregate
Revolving Commitments and (B) the Borrowing Base and (ii) the aggregate
Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's Pro
Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender's
Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not
exceed the lesser of (A) such Lender's Revolving Commitment and (B) an amount
equal to such Lender's Pro Rata Share times the Borrowing Base. Within the
limits of each Lender's Revolving Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.01, prepay under
Section 2.05, and reborrow under this Section 2.01. Revolving Loans may be Base
Rate Loans or Eurodollar Rate Loans, as further provided herein.
(b) Incremental Term Loans. Subject to Section 2.01(c) and the other
terms and conditions set forth herein, each Lender with an Incremental Term Loan
Commitment severally agrees, at any time after the Closing Date and prior to the
Maturity Date, to make a term loan or term loans (each an "Incremental Term
Loan" and, collectively, the "Incremental Term Loans") to the Borrower in the
amount of such Lender's Pro Rata Share of the Total Incremental Term Loan
Commitment, which Incremental Term Loans (i) shall be incurred on an Incremental
Term Loan Borrowing Date, (ii) shall not exceed for any Lender, in initial
aggregate principal amount, that amount which equals the Incremental Term Loan
Commitment of such Lender at the time of incurrence thereof and (iii) shall not
exceed for all
33
Lenders, in initial aggregate principal amount, that amount which equals the
Total Incremental Term Loan Commitment at the time of incurrence thereof.
Amounts repaid on the Incremental Term Loans may not be reborrowed. The
Incremental Term Loans may consist of Base Rate Loans or Eurodollar Rate Loans,
as further provided herein.
(c) Incremental Term Loan Commitments. So long as no Default or Event
of Default then exists or would result therefrom, the Borrower shall, in
consultation with the Administrative Agent, have the right to request on one or
more occasions after the Closing Date and prior to the Maturity Date that the
Lenders or, subject to the right of first refusal referred to in clause (ii)
below, other Persons qualifying as an Eligible Assignee, provide Incremental
Term Loan Commitments and, subject to the terms and conditions contained in this
Agreement and the relevant Incremental Term Loan Commitment Agreement, make
Incremental Term Loans pursuant thereto, it being understood and agreed,
however, that (i) no Lender shall be obligated to provide an Incremental Term
Loan Commitment as a result of any request by the Borrower, until such time, if
any, as (x) such Lender has agreed in its sole discretion to provide an
Incremental Term Loan Commitment and executed and delivered to the
Administrative Agent an Incremental Term Loan Commitment Agreement as provided
in Section 2.01(d) and (y) the other conditions set forth in Section 2.01(d)
shall have been satisfied, (ii) the Lenders shall have ten (10) Business Days
from the date of receipt of notice by the Administrative Agent of the proposed
terms of such Incremental Term Loan to decide whether to provide an Incremental
Term Loan Commitment (it being understood and agreed that the failure to respond
within such 10 Business Day period shall be deemed an election by a Lender not
to participate in such Incremental Term Loan), (iii) any Lender (or, after the
10 day exercise period referenced above has lapsed, any other Person which will
qualify as an Eligible Assignee) may so provide an Incremental Term Loan
Commitment without the consent of any other Lender, (iv) each provision of
Incremental Term Loan Commitments pursuant to this Section 2.01(c) for any
Lender shall be in an amount of at least $5,000,000, (v) the aggregate amount of
all Incremental Term Loan Commitments permitted to be provided hereunder and the
aggregate principal amount of all Incremental Term Loans permitted to be made
hereunder shall not, in either case, exceed TWO HUNDRED MILLION DOLLARS
($200,000,000), (vi) the Applicable Rate with respect to any such Incremental
Term Loan and the fees payable to any Lender providing an Incremental Term Loan
Commitment shall be as set forth in the relevant Incremental Term Loan
Commitment Agreement, (vii) in no event shall the Maturity Date of such
Incremental Term Loan be earlier than the Maturity Date of the Revolving Loans
(viii) the scheduled principal payments with respect to the Incremental Term
Loans shall be as set forth in the applicable Incremental Term Loan Commitment
Agreement, provided that in no event shall the weighted average life to maturity
of such Incremental Term Loan be less than the weighted average life to maturity
of the Revolving Loans, (ix) the applicable Incremental Term Loan shall only be
permitted hereunder if after giving effect to such Incremental Term Loan on a
Pro Forma Basis, (a) the Consolidated Senior Leverage Ratio calculated on a Pro
Forma Basis is at least 0.25 less than the ratio required to be maintained at
such time by Section 8.11(a), and (b) the Loan Parties are in compliance with
Section 8.11, and (x) all actions taken by the Borrower pursuant to this Section
2.01(c) and Section 2.01(d) shall be done in coordination with the
Administrative Agent.
(d) Incremental Term Loan Commitment Agreement. At the time of any
provision of Incremental Term Loan Commitments pursuant to this Section 2.01,
the Borrower, the Administrative Agent and each Lender or other Eligible
Assignee (each an "Incremental Term Loan Lender") which agrees to provide an
Incremental Term Loan Commitment shall execute and deliver to the Administrative
Agent an Incremental Term Loan Commitment Agreement (appropriately completed),
with the effectiveness of such Lender's Incremental Term Loan Commitment to
occur upon the date set forth in such Incremental Term Loan Commitment Agreement
(and subject to any conditions set forth therein not in contravention of the
terms hereof) following delivery thereof to the Administrative Agent and the
payment of any fees required in connection therewith. The Administrative Agent
shall promptly notify each Incremental Term Loan Lender as to the effectiveness
of each Incremental Term Loan Commitment
34
Agreement, and at such time Schedule 2.01 shall be deemed modified to reflect
the Incremental Term Loan Commitments of such Lenders.
2.02 BORROWINGS; CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Each Borrowing, each conversion of Loans from one Type to the
other, and each continuation of Eurodollar Rate Loans shall be made upon the
Borrower's irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m. (i) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Eurodollar Rate Loans or any
conversion of Eurodollar Rate Loans to Base Rate Loans and (ii) on the requested
date of any Borrowing of Base Rate Loans. Each telephonic notice by the Borrower
pursuant to this Section 2.02(b) must be confirmed promptly by delivery to the
Administrative Agent of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion
to or continuation of Eurodollar Rate Loans shall be in a principal amount of
$2,500,000 or a whole multiple of $500,000 in excess thereof. Except as provided
in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate
Loans shall be in a principal amount of $1,000,000 or a whole multiple of
$500,000 in excess thereof. Each Loan Notice (whether telephonic or written)
shall specify (i) whether the Borrower is requesting a Borrowing, a conversion
of Loans from one Type to the other, or a continuation of Eurodollar Rate Loans,
(ii) the requested date of the Borrowing, conversion or continuation, as the
case may be (which shall be a Business Day), (iii) the principal amount of Loans
to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or
to which existing Loans are to be converted, and (v) if applicable, the duration
of the Interest Period with respect thereto. If the Borrower fails to specify a
Type of a Loan in a Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be made
as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans. If the Borrower
requests a Borrowing of, conversion to, or continuation of, Eurodollar Rate
Loans in any such Loan Notice, but fails to specify an Interest Period, it will
be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans described in the
preceding subsection. In the case of a Borrowing, each Lender shall make the
amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent's Office not later than 1:00 p.m. on
the Business Day specified in the applicable Loan Notice. Upon satisfaction of
the applicable conditions set forth in Section 5.02 (and, in the case of the
initial Credit Extension, Section 5.01), the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank One with the amount of such funds or (ii) wire transfer of such
funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) the Administrative Agent by the Borrower; provided, however, that
if, on the date a Borrowing of Revolving Loans, there are Swing Line Loans or
L/C Borrowings outstanding, then the proceeds of such Borrowing shall be
applied, first, to the payment in full of any such L/C Borrowings, second, to
the payment in full of any such Swing Line Loans, and third, to the Borrower as
provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of the Interest Period for such
Eurodollar Rate Loan. During the existence of a Default or Event of Default, no
Loans may be requested as, converted to or continued from one Interest Period to
another as Eurodollar Rate Loans without the consent of the Required Lenders,
and the
35
Required Lenders may demand that any or all of the then outstanding Eurodollar
Rate Loans be converted immediately to Base Rate Loans.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error.
(e) After giving effect to all Borrowings, all conversions of Loans
from one Type to the other, and all continuations of Loans as the same Type,
there shall not be more than (i) eight (8) Interest Periods in effect respect to
Revolving Loans and (ii) eight (8) Interest Periods in effect with respect to
the Incremental Term Loans.
2.03 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A)
the L/C Issuer agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.03, (1) from time to time on any
Business Day during the period from the Closing Date until the Letter
of Credit Expiration Date, to issue Letters of Credit in Dollars for
the account of the Borrower or any of its Subsidiaries, and to amend or
renew Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drafts under the Letters of
Credit; and (B) the Lenders severally agree to participate in Letters
of Credit issued for the account of the Borrower or any of its
Subsidiaries; provided that the L/C Issuer shall not be obligated to
make any L/C Credit Extension with respect to any Letter of Credit, and
no Lender shall be obligated to participate in any Letter of Credit if
as of the date of such L/C Credit Extension, (x) the Total Revolving
Outstandings would exceed the lesser of the Aggregate Revolving
Commitments and the Borrowing Base, (y) the aggregate Outstanding
Amount of the Revolving Loans of any Lender, plus such Lender's Pro
Rata Share of the Outstanding Amount of all L/C Obligations, plus such
Lender's Pro Rata Share of the Outstanding Amount of all Swing Line
Loans would exceed the lesser of such Lender's Revolving Commitment and
an amount equal to such Lender's Pro Rata Share times the Borrowing
Base, or (z) the Outstanding Amount of the L/C Obligations would exceed
the Letter of Credit Sublimit. Within the foregoing limits, and subject
to the terms and conditions hereof, the Borrower's ability to obtain
Letters of Credit shall be fully revolving, and accordingly the
Borrower may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit that have expired or that have been drawn
upon and reimbursed. Furthermore, each Lender acknowledges and confirms
that it has a participation interest in the liability of the L/C Issuer
under each Existing Letter of Credit in a percentage equal to their
respective initial Pro Rata Share of Revolving Loans. The Borrower's
reimbursement obligations in respect of each Existing Letter of Credit,
and each Lender's obligations in connection therewith, shall be
governed by the terms of this Agreement.
(ii) The L/C Issuer shall be under no obligation to issue any
Letter of Credit if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin
or restrain the L/C Issuer from issuing such Letter of Credit,
or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer
shall prohibit, or request that the L/C Issuer refrain from,
the issuance of letters of credit generally or such Letter of
Credit in particular or shall
36
impose upon the L/C Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for
which the L/C Issuer is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon the
L/C Issuer any unreimbursed loss, cost or expense which was
not applicable on the Closing Date and which the L/C Issuer in
good xxxxx xxxxx material to it;
(B) subject to Section 2.03(b)(iii), the expiry date
of such requested Letter of Credit would occur more than
twelve months after the date of issuance or last renewal,
unless the Required Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date,
unless all the Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would
violate one or more policies of the L/C Issuer; or
(E) such Letter of Credit is in an initial amount
less than $100,000, in the case of a commercial Letter of
Credit, or $500,000, in the case of a standby Letter of
Credit, or is to be denominated in a currency other than
Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.
(iv) The L/C Issuer shall be under no obligation to issue or
amend any Letter of Credit if the L/C Issuer has received written
notice from any Lender, the Administrative Agent or any Loan Party, on
or prior to the Business Day prior to the requested date of issuance or
amendment of such Letter of Credit, that one or more applicable
conditions contained in Article V shall not then be satisfied.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the
case may be, upon the request of the Borrower delivered to the L/C
Issuer (with a copy to the Administrative Agent) in the form of a
Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Borrower. Such Letter of Credit Application
must be received by the L/C Issuer and the Administrative Agent not
later than 11:00 a.m. at least two Business Days (or such later date
and time as the L/C Issuer may agree in a particular instance in its
sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be. In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall
be a Business Day); (B) the amount thereof; (C) the expiry date
thereof; (D) the name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by
such beneficiary in case of any drawing thereunder; and (G) such other
matters as the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C
Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof
37
(which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has received
a copy of such Letter of Credit Application from the Borrower and, if
not, the L/C Issuer will provide the Administrative Agent with a copy
thereof. Upon receipt by the L/C Issuer of confirmation from the
Administrative Agent that the requested issuance or amendment is
permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested
date, issue a Letter of Credit for the account of the Borrower or enter
into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer's usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer a risk participation in such
Letter of Credit in an amount equal to the product of such Lender's Pro
Rata Share times the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of
Credit Application, the L/C Issuer may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic
renewal provisions (each, an "Auto-Renewal Letter of Credit"); provided
that any such Auto-Renewal Letter of Credit must permit the L/C Issuer
to prevent any such renewal at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by
giving prior notice to the beneficiary thereof not later than a day
(the "Nonrenewal Notice Date") in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by the L/C Issuer, the Borrower shall not be
required to make a specific request to the L/C Issuer for any such
renewal. Once an Auto-Renewal Letter of Credit has been issued, the
Lenders shall be deemed to have authorized (but may not require) the
L/C Issuer to permit the renewal of such Letter of Credit at any time
to an expiry date not later than the Letter of Credit Expiration Date;
provided, however, that the L/C Issuer shall not permit any such
renewal if (A) the L/C Issuer has determined that it would have no
obligation at such time to issue such Letter of Credit in its renewed
form under the terms hereof (by reason of the provisions of Section
2.03(a)(ii) or otherwise), or (B) it has received notice (which may be
by telephone or in writing) on or before the day that is two Business
Days before the Nonrenewal Notice Date (1) from the Administrative
Agent that the Required Lenders have elected not to permit such renewal
or (2) from the Administrative Agent, any Lender or the Borrower that
one or more of the applicable conditions specified in Section 5.02 is
not then satisfied.
(iv) Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the L/C Issuer will also deliver
to the Borrower and the Administrative Agent a true and complete copy
of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit
of any notice of drawing under such Letter of Credit, the L/C Issuer
shall notify the Borrower and the Administrative Agent thereof. Not
later than 11:00 a.m. on the date of any payment by the L/C Issuer
under a Letter of Credit (each such date, an "Honor Date"), the
Borrower shall reimburse the L/C Issuer through the Administrative
Agent in an amount equal to the amount of such drawing. If the Borrower
fails to so reimburse the L/C Issuer by such time, the Administrative
Agent shall promptly notify each Lender of the Honor Date, the amount
of the unreimbursed
38
drawing (the "Unreimbursed Amount"), and the amount of such Lender's
Pro Rata Share thereof. In such event, the Borrower shall be deemed to
have requested a Borrowing of Base Rate Revolving Loans to be disbursed
on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.02
for the principal amount of Base Rate Loans, but subject to the amount
of the unutilized portion of the Aggregate Revolving Commitments and
the conditions set forth in Section 5.02 (other than the delivery of a
Loan Notice). Any notice given by the L/C Issuer or the Administrative
Agent pursuant to this Section 2.03(c)(i) may be given by telephone if
immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer)
shall upon any notice pursuant to Section 2.03(c)(i) make funds
available to the Administrative Agent for the account of the L/C Issuer
at the Administrative Agent's Office in an amount equal to its Pro Rata
Share of the Unreimbursed Amount not later than 1:00 p.m. on the
Business Day specified in such notice by the Administrative Agent,
whereupon, subject to the provisions of Section 2.03(c)(iii), each
Lender that so makes funds available shall be deemed to have made a
Base Rate Revolving Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the L/C
Issuer.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Borrowing of Base Rate Revolving Loans because
the conditions set forth in Section 5.02 cannot be satisfied or for any
other reason, the Borrower shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount
that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the
Default Rate. In such event, each Lender's payment to the
Administrative Agent for the account of the L/C Issuer pursuant to
Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under
this Section 2.03.
(iv) Until each Lender funds its Revolving Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any
amount drawn under any Letter of Credit, interest in respect of such
Lender's Pro Rata Share of such amount shall be solely for the account
of the L/C Issuer.
(v) Each Lender's obligation to make Revolving Loans or L/C
Advances to reimburse the L/C Issuer for amounts drawn under Letters of
Credit, as contemplated by this Section 2.03(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including
(A) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against the L/C Issuer, the Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of
a Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided, however, that each
Lender's obligation to make Revolving Loans pursuant to this Section
2.03(c) is subject to the conditions set forth in Section 5.02 (other
than delivery by the Borrower of a Loan Notice). No such making of an
L/C Advance shall relieve or otherwise impair the obligation of the
Borrower to reimburse the L/C Issuer for the amount of any payment made
by the L/C Issuer under any Letter of Credit, together with interest as
provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.03(c) by the time specified in Section 2.03(c)(ii),
the L/C Issuer shall
39
be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for
the period from the date such payment is required to the date on which
such payment is immediately available to the L/C Issuer at a rate per
annum equal to the Federal Funds Rate from time to time in effect. A
certificate of the L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this
clause (vi) shall be conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under
any Letter of Credit and has received from any Lender such Lender's L/C
Advance in respect of such payment in accordance with Section 2.03(c),
if the Administrative Agent receives for the account of the L/C Issuer
any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from the Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Lender its Pro
Rata Share thereof (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's L/C
Advance was outstanding) in the same funds as those received by the
Administrative Agent.
(ii) If any payment received by the Administrative Agent for
the account of the L/C Issuer pursuant to Section 2.03(c)(i) is
required to be returned under any of the circumstances described in
Section 11.06 (including pursuant to any settlement entered into by the
L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
(e) Obligations Absolute. The obligation of the Borrower to reimburse
the L/C Issuer for each drawing under each Letter of Credit and to repay each
L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, any other Loan Document or any other agreement
or instrument relating thereto;
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that the Borrower may have at any time against
any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be
acting), the L/C Issuer or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by such Letter
of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or any payment made by
the L/C Issuer under such Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator,
40
receiver or other representative of or successor to any beneficiary or
any transferee of such Letter of Credit, including any arising in
connection with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other circumstance
that might otherwise constitute a defense available to, or a discharge
of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the L/C Issuer, shall be liable or responsible for any of the
matters described in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Borrower which
the Borrower proves were caused by the L/C Issuer's willful misconduct or gross
negligence or the L/C Issuer's willful failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible 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.
(g) Cash Collateral. Upon the request of the Administrative Agent, (i)
if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount determined as of the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case
may be). For purposes hereof, "Cash Collateralize" means to pledge and deposit
with or deliver to the Administrative Agent, for the benefit of the L/C Issuer
and the Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance
41
satisfactory to the Administrative Agent and the L/C Issuer (which documents are
hereby consented to by the Lenders). Derivatives of such term have corresponding
meanings. The Borrower hereby grants to the Administrative Agent, for the
benefit of the L/C Issuer and the Lenders, a security interest in all such cash,
deposit accounts and all balances therein and all proceeds of the foregoing.
Cash collateral shall be maintained in blocked, non-interest bearing deposit
accounts at Bank One.
(h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed
by the L/C Issuer and the Borrower when a Letter of Credit is issued (including
any such agreement applicable to an Existing Letter of Credit), (i) the rules of
the "International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Pro Rata Share (i) a
Letter of Credit fee for each commercial Letter of Credit equal to the
Applicable Rate times the daily maximum amount available to be drawn under such
Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit) and (ii) a Letter of Credit fee for each standby Letter
of Credit equal to the Applicable Rate times the daily maximum amount available
to be drawn under such Letter of Credit (whether or not such maximum amount is
then in effect under such Letter of Credit). Such letter of credit fees shall be
computed on a quarterly basis in arrears. Such letter of credit fees shall be
due and payable on the first Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. If there is any change in the Applicable Rate during any
quarter, the daily maximum amount of each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a
fronting fee with respect to each Letter of Credit in an amount equal to 1/8 of
1% per annum on the daily maximum amount available to be drawn thereunder, due
and payable quarterly in arrears on the Business Day immediately following the
last Business Day of each March, June, September and December, commencing with
the first such date to occur after the issuance of such Letter of Credit, and on
the Letter of Credit Expiration Date. In addition, the Borrower shall pay
directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time in
effect. Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
(l) Designation of Subsidiaries as Account Parties. Notwithstanding
anything to the contrary set forth in this Agreement, including without
limitation Section 2.03(a), a Letter of Credit issued hereunder may contain a
statement to the effect that such Letter of Credit is issued for the account of
a Subsidiary of the Borrower, provided that notwithstanding such statement, the
Borrower shall be the actual account party for all purposes of this Credit
Agreement for such Letter of Credit and such statement shall not affect the
Borrower's reimbursement obligations hereunder with respect to such Letter of
Credit.
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2.04 SWING LINE LOANS.
(a) The Swing Line. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees to make loans (each such loan, a "Swing
Line Loan") to the Borrower in Dollars from time to time on any Business Day
during the Availability Period in an aggregate amount not to exceed at any time
outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that
such Swing Line Loans, when aggregated with the Pro Rata Share of the
Outstanding Amount of Revolving Loans and L/C Obligations of the Swing Line
Lender in its capacity as a Lender of Revolving Loans, may exceed the amount of
such Lender's Revolving Commitment; provided, however, that after giving effect
to any Swing Line Loan, (i) the Total Revolving Outstandings shall not exceed
the lesser of (A) the Aggregate Revolving Commitments and (B) the Borrowing
Base, and (ii) the aggregate Outstanding Amount of the Revolving Loans of any
Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C
Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of all
Swing Line Loans shall not exceed the lesser of (A) such Lender's Revolving
Commitment and (B) an amount equal to such Lender's Pro Rata Share times the
Borrowing Base, and provided, further, that the Borrower shall not use the
proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan.
Within the foregoing limits, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.04, prepay under Section
2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a Base
Rate Loan. Immediately upon the making of a Swing Line Loan, each Lender shall
be deemed to, and hereby irrevocably and unconditionally agrees to, purchase
from the Swing Line Lender a risk participation in such Swing Line Loan in an
amount equal to the product of such Lender's Pro Rata Share times the amount of
such Swing Line Loan.
(b) Borrowing Procedures. Each Borrowing of Swing Line Loans shall be
made upon the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $100,000, and (ii) the requested
borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of
the proposed Borrowing of Swing Line Loans (A) directing the Swing Line Lender
not to make such Swing Line Loan as a result of the limitations set forth in the
proviso to the first sentence of Section 2.04(a), or (B) that one or more of the
applicable conditions specified in Article V is not then satisfied, then,
subject to the terms and conditions hereof, the Swing Line Lender will, not
later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrower (which hereby
irrevocably requests and authorizes the Swing Line Lender to so request
on its behalf), that each Lender make a Base Rate Revolving Loan in an
amount equal to such Lender's Pro Rata Share of the amount of Swing
Line Loans then outstanding. Such request shall be made in writing
(which written request shall be deemed to be a Loan Notice for purposes
hereof) and in accordance with the requirements of Section 2.02,
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without regard to the minimum and multiples specified therein for the
principal amount of Base Rate Revolving Loans, but subject to the
unutilized portion of the Aggregate Revolving Commitments and the
conditions set forth in Section 5.02. The Swing Line Lender shall
furnish the Borrower with a copy of the applicable Loan Notice promptly
after delivering such notice to the Administrative Agent. Each Lender
shall make an amount equal to its Pro Rata Share of the amount
specified in such Loan Notice available to the Administrative Agent in
immediately available funds for the account of the Swing Line Lender at
the Administrative Agent's Office not later than 1:00 p.m. on the day
specified in such Loan Notice, whereupon, subject to Section
2.04(c)(ii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Revolving Loan to the Borrower in such amount.
The Administrative Agent shall remit the funds so received to the Swing
Line Lender.
(ii) If for any reason any Swing Line Loan cannot be
refinanced by such a Borrowing of Revolving Loans in accordance with
Section 2.04(c)(i), the request for Base Rate Revolving Loans submitted
by the Swing Line Lender as set forth herein shall be deemed to be a
request by the Swing Line Lender that each of the Lenders fund its risk
participation in the relevant Swing Line Loan and each Lender's payment
to the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.04(c)(i) shall be deemed payment in respect of
such participation.
(iii) If any Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any
amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.04(c) by the time specified in Section
2.04(c)(i), the Swing Line Lender shall be entitled to recover from
such Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment
is required to the date on which such payment is immediately available
to the Swing Line Lender at a rate per annum equal to the Federal Funds
Rate from time to time in effect. A certificate of the Swing Line
Lender submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.
(iv) Each Lender's obligation to make Revolving Loans or to
purchase and fund risk participations in Swing Line Loans pursuant to
this Section 2.04(c) shall be absolute and unconditional and shall not
be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right that such Lender may
have against the Swing Line Lender, the Borrower or any other Person
for any reason whatsoever, (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided, however, that each
Lender's obligation to make Revolving Loans pursuant to this Section
2.04(c) is subject to the conditions set forth in Section 5.02. No such
purchase or funding of risk participations shall relieve or otherwise
impair the obligation of the Borrower to repay Swing Line Loans,
together with interest as provided herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and funded a
risk participation in a Swing Line Loan, if the Swing Line Lender
receives any payment on account of such Swing Line Loan, the Swing Line
Lender will distribute to such Lender its Pro Rata Share of such
payment (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's risk
participation was funded) in the same funds as those received by the
Swing Line Lender.
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(ii) If any payment received by the Swing Line Lender in
respect of principal or interest on any Swing Line Loan is required to
be returned by the Swing Line Lender under any of the circumstances
described in Section 11.06 (including pursuant to any settlement
entered into by the Swing Line Lender in its discretion), each Lender
shall pay to the Swing Line Lender its Pro Rata Share thereof on demand
of the Administrative Agent, plus interest thereon from the date of
such demand to the date such amount is returned, at a rate per annum
equal to the Federal Funds Rate. The Administrative Agent will make
such demand upon the request of the Swing Line Lender.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Lender funds its Revolving Loans that are Base Rate Loan or
risk participation pursuant to this Section 2.04 to refinance such Lender's Pro
Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share
shall be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrower shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.
2.05 PREPAYMENTS.
(a) Voluntary Prepayments of Loans.
(i) Revolving Loans and Incremental Term Loans. The Borrower
may, upon notice from the Borrower to the Administrative Agent, at any
time or from time to time voluntarily prepay the Loans in whole or in
part without premium or penalty; provided that (i) such notice must be
received by the Administrative Agent not later than 11:00 a.m. (A)
three Business Days prior to any date of prepayment of Eurodollar Rate
Loans, and (B) on the date of prepayment of Base Rate Loans; (ii) any
such prepayment of Eurodollar Rate Loans shall be in a principal amount
of $5,000,000 or a whole multiple of $1,000,000 in excess thereof (or,
if less, the entire principal amount thereof then outstanding); and
(iii) any prepayment of Base Rate Loans shall be in a principal amount
of $1,000,000 or a whole multiple of $500,000 in excess thereof (or, if
less, the entire principal amount thereof then outstanding). Each such
notice shall specify the date and amount of such prepayment and the
Type(s) of Loans to be prepaid. The Administrative Agent will promptly
notify each Lender of its receipt of each such notice, and of the
amount of such Lender's Pro Rata Share of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due
and payable on the date specified therein. Any prepayment of a
Eurodollar Rate Loan shall be accompanied by all accrued interest
thereon, together with any additional amounts required pursuant to
Section 3.05. Each such prepayment shall be applied to the Loans of the
Lenders in accordance with their respective Pro Rata Shares.
(ii) Swing Line Loans. The Borrower may, upon notice to the
Swing Line Lender (with a copy to the Administrative Agent), at any
time or from time to time, voluntarily prepay Swing Line Loans in whole
or in part without premium or penalty; provided that (i) such notice
must be received by the Swing Line Lender and the Administrative Agent
not later than 1:00 p.m. on the date of the prepayment, and (ii) any
such prepayment shall be in a minimum principal amount of $100,000.
Each such notice shall specify the date and amount of such prepayment.
If such notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified therein.
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(b) Mandatory Prepayments of Loans.
(i) Aggregate Revolving Commitments. If for any reason the
Total Revolving Outstandings at any time exceed the lesser of the
Aggregate Revolving Commitments and the Borrowing Base, the Borrower
shall immediately prepay Revolving Loans and/or the Swing Line Loans
and/or Cash Collateralize the L/C Obligations in an aggregate amount
equal to such excess; provided, however, that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this
Section 2.05(b)(i)(A) unless after the prepayment in full of the
Revolving Loans and Swing Line Loans the Total Revolving Outstandings
exceed the lesser of the Aggregate Revolving Commitments and the
Borrowing Base.
(ii) Dispositions and Involuntary Dispositions. The Borrower
shall prepay the Incremental Term Loans in an aggregate amount equal to
100% of the Net Cash Proceeds of all Dispositions and Involuntary
Dispositions to the extent that the Net Cash Proceeds of all
Dispositions and Involuntary Dispositions received after the Closing
Date exceed $10 million (such prepayment to be applied as set forth in
clause (vi) below).
(iii) Debt Issuances. Immediately upon receipt by the Parent
or any Subsidiary of the Net Cash Proceeds of any Debt Issuance, the
Borrower shall prepay the Incremental Term Loans in an aggregate amount
equal to 100% of such Net Cash Proceeds (such prepayment to be applied
as set forth in clause (vi) below).
(iv) Equity Issuances. Immediately upon the receipt by the
Parent or any Subsidiary of the Net Cash Proceeds of any Equity
Issuance, the Borrower shall prepay the Incremental Term Loans in an
aggregate amount equal to (a) (I) 100% of such Net Cash Proceeds until
the Consolidated Leverage Ratio as of the end of the most recent fiscal
quarter on a Pro Forma Basis after giving effect to such prepayment is
equal to 3.25 to 1.0 and thereafter (II) 75% of such Net Cash Proceeds
or (b) 75% of such Net Cash Proceeds if as of the end of the most
recent fiscal quarter the Consolidated Leverage Ratio on a Pro Forma
Basis is less than 3.25 to 1.0 (such prepayment to be applied as set
forth in clause (vi) below). The Borrower shall deliver a Pro Forma
Compliance Certificate to the Administrative Agent concurrently with
such prepayment.
(v) Excess Cash Flow. Within ninety-five days after the end of
each fiscal year commencing with the fiscal year ending December 31,
2004, the Borrower shall prepay the Incremental Term Loans in an
aggregate amount equal to the difference between (a) fifty percent
(50%) of Excess Cash Flow for such fiscal year (such prepayment to be
applied as set forth in clause (vi) below) minus (b) the amount of any
voluntary prepayments of the Incremental Term Loans made in such fiscal
year.
(vi) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 2.05(b) shall be applied
as follows:
(a) with respect to all amounts prepaid pursuant to
Section 2.05(b)(i), to Revolving Loans and Swing Line Loans
and (after all Revolving Loans and all Swing Line Loans have
been repaid) to Cash Collateralize L/C Obligations; and
(b) with respect to all amounts prepaid pursuant to
Section 2.05(b)(ii), (iii), (iv) and (v), to the Incremental
Term Loans on a pro rata basis (to the remaining principal
amortization payments on a pro rata basis) until the
Incremental Term Loans have been paid in full.
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Within the parameters of the applications set forth
above, prepayments shall be applied first to Base Rate Loans
and then to Eurodollar Rate Loans in direct order of Interest
Period maturities. All prepayments under this Section 2.05(b)
shall be subject to Section 3.05, but otherwise without
premium or penalty, and shall be accompanied by interest on
the principal amount prepaid through the date of prepayment.
2.06 TERMINATION OR REDUCTION OF COMMITMENTS.
The Borrower may, upon notice from the Borrower to the Administrative
Agent, terminate the Aggregate Revolving Commitments or permanently reduce the
Aggregate Revolving Commitments to an amount not less than the Outstanding
Amount of Revolving Loans, Swing Line Loans and L/C Obligations; provided that
(i) any such notice shall be received by the Administrative Agent not later than
11:00 a.m. five Business Days prior to the date of termination or reduction and
(ii) any such partial reduction shall be in an aggregate amount of $10,000,000
or any whole multiple of $1,000,000 in excess thereof. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction
of the Aggregate Revolving Commitments. Any reduction of the Aggregate Revolving
Commitments shall be applied to the Revolving Commitment of each Lender
according to its Pro Rata Share. All commitment fees accrued until the effective
date of any termination of the Aggregate Revolving Commitments shall be paid on
the effective date of such termination.
2.07 REPAYMENT OF LOANS.
(a) The Borrower shall repay the outstanding principal amount of the
Revolving Loans in full on the Maturity Date.
(b) The Borrower shall repay each Swing Line Loan on the earlier to
occur of (i) the date five Business Days after such Loan is made and (ii) the
Maturity Date.
(c) The Borrower shall repay the outstanding principal amount of the
Incremental Term Loans in accordance with the terms of the applicable
Incremental Term Loan Commitment Agreement.
2.08 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the sum of the
Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii) each
Base Rate Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate.
(b) Upon the occurrence and during the continuation of an Event of
Default, the Borrower shall pay interest on the principal amount of all
outstanding Obligations at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
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2.09 FEES.
In addition to certain fees described in subsections (i) and (j) of
Section 2.03:
(a) Commitment Fee. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with
its Pro Rata Share, a commitment fee (the "Commitment Fee") equal to
the product of (i) 0.75% times the actual daily amount by which the
Aggregate Revolving Commitments exceed the sum of (y) the Outstanding
Amount of Revolving Loans and (z) the Outstanding Amount of L/C
Obligations if the average daily amount of the aggregate Outstanding
Amount of Revolving Loans and L/C Obligations for the applicable
quarter is less than 33% of the Aggregate Revolving Commitments or (ii)
0.50% times the actual daily amount by which the Aggregate Revolving
Commitments exceed the sum of (y) the Outstanding Amount of Revolving
Loans and (z) the Outstanding Amount of L/C Obligations if the average
daily amount of the aggregate Outstanding Amount of Revolving Loans and
L/C Obligations for the applicable quarter is equal to or greater than
33% of the Aggregate Revolving Commitments. Notwithstanding the
foregoing, the Commitment Fee will be set at 0.50% through the fiscal
quarter ending December 31, 2003. The Commitment Fee shall accrue at
all times during the Availability Period, including at any time during
which one or more of the conditions in Article V is not met, and shall
be due and payable quarterly in arrears on the last Business Day of
each March, June, September and December, commencing with the first
such date to occur after the Closing Date, and on the Maturity Date.
The Commitment Fee shall be calculated quarterly in arrears.
(b) Other Fees. The Borrower shall pay to the Arrangers and
the Administrative Agent for their own respective accounts fees in the amounts
and at the times specified in the Administrative Agent Fee Letter. Such fees
shall be fully earned when paid and shall be non-refundable for any reason
whatsoever.
2.10 COMPUTATION OF INTEREST AND FEES.
All computations of interest for Base Rate Loans when the Base Rate is
determined by Bank One's "prime rate" shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such portion
is paid, provided that any Loan that is repaid on the same day on which it is
made shall, subject to Section 2.12(a), bear interest for one day.
2.11 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by one
or more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the Borrower
and the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
48
(through the Administrative Agent) a promissory note, which shall evidence such
Lender's Loans in addition to such accounts or records. In the case of Revolving
Loans, each such promissory note shall be in the form of Exhibit G (a "Revolving
Note"), in the case of Swing Line Loans, in the form of Exhibit H (a "Swing Line
Note") and in the case of Incremental Term Loans, in the form of Exhibit I (an
"Incremental Term Note"). Each Lender may attach schedules to its Note and
endorse thereon the date, Type (if applicable), amount and maturity of its Loans
and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Lender of participations in Letters of Credit and Swing Line Loans. In the
event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.
2.12 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 12:00 noon
on the date specified herein. The Administrative Agent will promptly distribute
to each Lender its Pro Rata Share (or other applicable share as provided herein)
of such payment in like funds as received by wire transfer to such Lender's
Lending Office. All payments received by the Administrative Agent after 12:00
noon shall in each case be deemed received on the next succeeding Business Day
and any applicable interest or fee shall continue to accrue.
(b) Subject to the definition of "Interest Period", if any payment to
be made by the Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.
(c) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, L/C Borrowings,
interest and fees then due hereunder, such funds shall be applied (i) first,
toward costs and expenses (including Attorney Costs and amounts payable under
Article III) incurred by the Administrative Agent and each Lender, (ii) second,
toward repayment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (iii) third, toward repayment of principal and L/C
Borrowings then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and L/C Borrowings then due to such
parties.
(d) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the portion
of such assumed payment that was made available to such Lender in
immediately available funds, together with interest thereon in respect
49
of each day from and including the date such amount was made available
by the Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent in immediately available funds at
the Federal Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest thereon
for the period from the date such amount was made available by the
Administrative Agent to the Borrower to the date such amount is
recovered by the Administrative Agent (the "Compensation Period") at a
rate per annum equal to the Federal Funds Rate from time to time in
effect. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Loan included in the
applicable Borrowing. If such Lender does not pay such amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the Borrower
shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal
to the rate of interest applicable to the applicable Borrowing. Nothing
herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be
conclusive, absent manifest error.
(e) If any Lender makes available to the Administrative Agent funds for
any Loan to be made by such Lender as provided in the foregoing provisions of
this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article V are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(f) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit and Swing Line Loans are several and not
joint. The failure of any Lender to make any Loan or to fund any such
participation on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or purchase
its participation.
(g) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.13 SHARING OF PAYMENTS.
If, other than as expressly provided elsewhere herein, any Lender shall
obtain on account of the Loans made by it, or the participations in L/C
Obligations or in Swing Line Loans held by it (but not including any amounts
applied by the Swing Line Lender to outstanding Swing Line Loans), any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative
Agent of such fact, and (b) purchase from the other Lenders such participations
in the Loans made by them and/or such subparticipations in the participations in
L/C Obligations or Swing Line Loans held by them, as the case may be, as shall
be necessary to cause such purchasing Lender to share the excess payment in
respect of such Loans or participations, as the case may be, pro rata with each
of them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from
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the purchasing Lender under any of the circumstances described in Section 11.06
(including pursuant to any settlement entered into by the purchasing Lender in
its discretion), such purchase shall to that extent be rescinded and each other
Lender shall repay to the purchasing Lender the purchase price paid therefor,
together with an amount equal to such paying Lender's ratable share (according
to the proportion of (i) the amount of such paying Lender's required repayment
to (ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered, without further interest thereon. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 11.09) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section shall from and after such purchase have
the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Subject to Section 11.15, any and all payments by any Loan Party to
or for the account of the Administrative Agent or any Lender under any Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect thereto,
excluding, in the case of the Administrative Agent and each Lender, taxes
imposed on or measured by its overall net income, and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which the Administrative Agent or such
Lender, as the case may be, is organized or maintains a lending office (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter referred to
as "Taxes"). If any Loan Party shall be required by any Laws to deduct any Taxes
from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), each of the
Administrative Agent and such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Loan Party shall
make such deductions, (iii) such Loan Party shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable Laws, and (iv) within thirty days after the date of such payment,
such Loan Party shall furnish to the Administrative Agent (which shall forward
the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof, or if no receipt is available, other evidence of
payment reasonably satisfactory to the Administrative Agent.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
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(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been deducted or paid.
(d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under Section 3.01(c) and (iii) any liability (including additions to
tax, penalties, interest and expenses) arising therefrom or with respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. Payment
under this subsection (d) shall be made within thirty days after the date the
Lender or the Administrative Agent makes a demand therefor.
(e) If the Borrower (or any other Loan Party) is required to pay any
amount to any Lender or the Administrative Agent pursuant to subsection (c) or
(d) of this Section 3.01, then such Lender shall use reasonable efforts
(consistent with legal and regulatory restrictions) to change the jurisdiction
of its Lending Office so as to eliminate any such additional payment which may
thereafter accrue, if such change in the reasonable judgment of such Lender is
not otherwise disadvantageous to such Lender.
3.02 ILLEGALITY.
If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, then, on
notice thereof by such Lender to the Borrower through the Administrative Agent,
any obligation of such Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such
Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice,
the Borrower shall, upon demand from such Lender (with a copy to the
Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES.
If the Administrative Agent determines in connection with any request for a
Eurodollar Rate Loan or a conversion to or continuation thereof that for any
reason adequate and reasonable means do not exist for determining the Eurodollar
Base Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Base Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Eurodollar
Rate Loan, the Administrative Agent will promptly notify the Borrower and all
Lenders. Thereafter, the obligation of the Lenders to make or maintain
Eurodollar Rate Loans shall be suspended
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until the Administrative Agent revokes such notice. Upon receipt of such notice,
the Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Borrowing of Base Rate Loans in the
amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.
(a) If any Lender determines that as a result of the introduction of or
any change in or in the interpretation of any Law, or such Lender's compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans or (as the case may
be) issuing or participating in Letters of Credit, or a reduction in the amount
received or receivable by such Lender in connection with any of the foregoing
(excluding for purposes of this subsection (a) any such increased costs or
reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section
3.01 shall govern), (ii) changes in the basis of taxation of overall net income
or overall gross income by the United States or any foreign jurisdiction or any
political subdivision of either thereof under the Laws of which such Lender is
organized or has its Lending Office, and (iii) reserve requirements utilized, as
to Eurodollar Rate Loans, in the determination of the Eurodollar Rate), then
from time to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by such Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Lender's desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction.
3.05 FUNDING LOSSES.
Upon demand of any Lender (with a copy to the Administrative Agent) from time to
time, the Borrower shall promptly compensate such Lender for and hold such
Lender harmless from any loss, cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any
Loan other than a Base Rate Loan on a day other than the last day of
the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, continue or
convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other
than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 11.16;
including any foreign exchange losses and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan
(excluding any loss of anticipated profits) or from fees payable to terminate
the deposits from which such funds were obtained. The Borrower shall also pay
any customary administrative fees charged by such Lender in connection with the
foregoing.
53
For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining
the Eurodollar Rate for such Loan by a matching deposit or other borrowing in
the applicable offshore interbank market for a comparable amount and for a
comparable period, whether or not such Eurodollar Rate Loan was in fact so
funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth in reasonable detail the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, the Administrative
Agent or such Lender may use any reasonable averaging and attribution methods.
(b) Upon any Lender's making a claim for compensation under Section
3.01 or 3.04, the Borrower may replace such Lender in accordance with Section
11.16.
3.07 SURVIVAL.
All of the Borrower's obligations under this Article III shall survive
termination of the Commitments and repayment of all other Obligations hereunder.
ARTICLE IV
GUARANTY
4.01 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Swap Contract, and the
Administrative Agent as hereinafter provided, as primary obligor and not as
surety, the prompt payment of the Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Obligations are not paid
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), the
Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Obligations, the same will be promptly paid in
full when due (whether at extended maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) in accordance
with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Loan Documents or Swap Contracts, the obligations of each
Guarantor under this Agreement and the other Loan Documents shall be limited to
an aggregate amount equal to the largest amount that would not render such
obligations subject to avoidance under the Debtor Relief Laws or any comparable
provisions of any applicable state law.
4.02 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.01 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Loan
54
Documents or Swap Contracts, or any other agreement or instrument referred to
therein, or any substitution, release, impairment or exchange of any other
guarantee of or security for any of the Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.02 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Article IV until
such time as the Obligations have been paid in full and the Commitment have
expired or terminated. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the occurrence of any one
or more of the following shall not alter or impair the liability of any
Guarantor hereunder, which shall remain absolute and unconditional as described
above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Obligations shall be extended, or such performance or compliance
shall be waived;
(b) any of the acts mentioned in any of the provisions of any
of the Loan Documents, any Swap Contract between any Loan Party and any
Lender, or any Affiliate of a Lender, or any other agreement or
instrument referred to in the Loan Documents or such Swap Contracts
shall be done or omitted;
(c) the maturity of any of the Obligations shall be
accelerated, or any of the Obligations shall be modified, supplemented
or amended in any respect, or any right under any of the Loan
Documents, any Swap Contract between any Loan Party and any Lender, or
any Affiliate of a Lender, or any other agreement or instrument
referred to in the Loan Documents or such Swap Contracts shall be
waived or any other guarantee of any of the Obligations or any security
therefor shall be released, impaired or exchanged in whole or in part
or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative
Agent or any Lender or Lenders as security for any of the Obligations
shall fail to attach or be perfected; or
(e) any of the Obligations shall be determined to be void or
voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims of
any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby
expressly waives diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that the Administrative Agent or any
Lender exhaust any right, power or remedy or proceed against any Person under
any of the Loan Documents, any Swap Contract between any Loan Party and any
Lender, or any Affiliate of a Lender, or any other agreement or instrument
referred to in the Loan Documents or such Swap Contracts, or against any other
Person under any other guarantee of, or security for, any of the Obligations.
4.03 REINSTATEMENT.
The obligations of the Guarantors under this Article IV shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Obligations is rescinded or must be
otherwise restored by any holder of any of the Obligations, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, and each
Guarantor agrees that it will indemnify the Administrative Agent and each Lender
on demand for all reasonable costs and expenses (including, without limitation,
fees and expenses of counsel) incurred by the Administrative Agent or such
Lender in connection with such rescission or restoration, including any such
costs and expenses incurred in defending
55
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
4.04 CERTAIN ADDITIONAL WAIVERS.
Without limiting the generality of the provisions of this Article IV,
each Guarantor hereby agrees that such Guarantor shall have no right of recourse
to security for the Obligations, except through the exercise of rights of
subrogation pursuant to Section 4.02 and through the exercise of rights of
contribution pursuant to Section 4.06.
4.05 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Obligations may be declared to be forthwith due
and payable as provided in Section 9.02 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section
9.02) for purposes of Section 4.01 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Obligations from
becoming automatically due and payable) as against any other Person and that, in
the event of such declaration (or the Obligations being deemed to have become
automatically due and payable), the Obligations (whether or not due and payable
by any other Person) shall forthwith become due and payable by the Guarantors
for purposes of Section 4.01. The Guarantors acknowledge and agree that their
obligations hereunder are secured in accordance with the terms of the Collateral
Documents and that the Lenders may exercise their remedies thereunder in
accordance with the terms thereof.
4.06 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.06 shall be
subordinate and subject in right of payment to the Obligations until such time
as the Obligations have been paid in full and the Commitments have expired or
terminated, and none of the Guarantors shall exercise any right or remedy under
this Section 4.06 against any other Guarantor until such Obligations have been
paid in full and the Commitments have expired or terminated. For purposes of
this Section 4.06, (a) "Excess Payment" shall mean the amount paid by any
Guarantor in excess of its Ratable Share of any Guaranteed Obligations; (b)
"Ratable Share" shall mean, for any Guarantor in respect of any payment of
Obligations, the ratio (expressed as a percentage) as of the date of such
payment of Guaranteed Obligations of (i) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Loan Parties exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Loan Parties hereunder) of the Loan
Parties; provided, however, that, for purposes of calculating the Ratable Shares
of the Guarantors in respect of any payment of Obligations, any Guarantor that
became a Guarantor subsequent to the date of any such payment shall be deemed to
have been a Guarantor on the date of such payment and the financial information
for such Guarantor as of the date such Guarantor became a Guarantor shall be
utilized for such Guarantor in connection with such payment; (c) "Contribution
Share" shall mean, for any Guarantor in respect of any Excess Payment made by
any other Guarantor, the ratio (expressed as a percentage) as of the date of
such Excess Payment of (i) the amount by which the aggregate present fair
salable value of all of its assets and properties exceeds the amount of all
debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but
56
excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Loan Parties other than the maker of such Excess Payment
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Loan Parties) of the Loan Parties other than the maker of
such Excess Payment; provided, however, that, for purposes of calculating the
Contribution Shares of the Guarantors in respect of any Excess Payment, any
Guarantor that became a Guarantor subsequent to the date of any such Excess
Payment shall be deemed to have been a Guarantor on the date of such Excess
Payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such Excess Payment; and (d) "Guaranteed Obligations" shall mean the
Obligations guaranteed by the Guarantors pursuant to this Article IV. This
Section 4.06 shall not be deemed to affect any right of subrogation, indemnity,
reimbursement or contribution that any Guarantor may have under Law against the
Borrower in respect of any payment of Guaranteed Obligations. Notwithstanding
the foregoing, all rights of contribution against any Guarantor shall terminate
from and after such time, if ever, that such Guarantor shall be relieved of its
obligations in accordance with Section 10.11.
4.07 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.
The guarantee in this Article IV is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Obligations
whenever arising.
ARTICLE V
CONDITIONS PRECEDENT
5.01 CONDITIONS TO CLOSING.
The obligation of each Lender to enter into this Agreement is subject
to satisfaction of the following conditions precedent:
(a) Loan Documents. Receipt by the Administrative Agent of
executed counterparts of this Agreement and the other Loan Documents,
each properly executed by a Responsible Officer of the signing Loan
Party and, in the case of this Agreement, by each Lender.
(b) Opinions of Counsel. Receipt by the Administrative Agent
of a favorable opinion of counsel to the Loan Parties, addressed to the
Administrative Agent and each Lender, dated as of the Closing Date, and
in form and substance satisfactory to the Administrative Agent.
(c) Financial Statements. The Administrative Agent shall have
received:
(i) consolidated financial statements of the Parent
and its Subsidiaries for the fiscal year ended December 31,
2002, including balance sheets and income and consolidated
cash flow statements, in each case audited by independent
public accountants of recognized national standing and
prepared in conformity with GAAP; and
(ii) unaudited consolidated financial statements of
the Parent and its Subsidiaries for the fiscal quarter ending
June 30, 2003, including balance sheets and statements of
income or operations and shareholders' equity and consolidated
cash flow statements (the "Interim Financial Statements").
57
(d) Organization Documents, Resolutions, Etc. Receipt by the
Administrative Agent of the following, each of which shall be originals
or facsimiles (followed promptly by originals), in form and substance
satisfactory to the Administrative Agent and its legal counsel:
(i) copies of the Organization Documents of each Loan
Party certified to be true and complete as of a recent date by
the appropriate Governmental Authority of the state or other
jurisdiction of its incorporation or organization, where
applicable, and certified by a secretary or assistant
secretary of such Loan Party to be true and correct as of the
Closing Date;
(iii) such certificates of resolutions or other
action, incumbency certificates and/or other certificates of
Responsible Officers of each Loan Party as the Administrative
Agent may require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act
as a Responsible Officer in connection with this Agreement and
the other Loan Documents to which such Loan Party is a party;
and
(iv) such documents and certifications as the
Administrative Agent may reasonably require to evidence that
each Loan Party is duly organized or formed, and is validly
existing, in good standing and qualified to engage in business
in its state of organization or formation, the state of its
principal place of business and each other jurisdiction where
its ownership, lease or operation of properties or the conduct
of its business requires such qualification, except to the
extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect.
(e) Perfection and Priority of Liens. Receipt by the
Administrative Agent of the following:
(i) searches of Uniform Commercial Code filings in
the jurisdiction of formation of each Loan Party, the
jurisdiction of the chief executive office of each Loan Party
and each jurisdiction where any Collateral is located or where
a filing would need to be made in order to perfect the
Administrative Agent's security interest in the Collateral,
copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) all certificates evidencing any certificated
Capital Stock pledged to the Administrative Agent pursuant to
the Pledge Agreement, together with duly executed in blank,
undated stock powers attached thereto (unless, with respect to
the pledged Capital Stock of any Foreign Subsidiary, such
stock powers are deemed unnecessary by the Administrative
Agent in its reasonable discretion under the law of the
jurisdiction of incorporation of such Person);
(iii) searches of ownership of, and Liens on,
intellectual property of each Loan Party in the appropriate
governmental offices; and
(iv) duly executed notices of grant of security
interest in the form required by the Security Agreement as are
necessary, in the Administrative Agent's sole discretion, to
perfect the Administrative Agent's security interest in the
intellectual property of the Loan Parties.
(f) Evidence of Insurance. Receipt by the Administrative Agent
of copies of insurance policies or certificates of insurance of the
Loan Parties evidencing liability and casualty insurance
58
meeting the requirements set forth in the Loan Documents, including,
but not limited to, naming the Administrative Agent as additional
insured (in the case of liability insurance) or loss payee (in the case
of hazard insurance) on behalf of the Lenders.
(g) Real Property Collateral. The Administrative Agent shall
have received, in form and substance satisfactory to the Administrative
Agent:
(i) fully executed and notarized mortgages, deeds of
trust or deeds to secure debt (each, as the same may be
amended, modified, restated or supplemented from time to time,
a "Mortgage Instrument" and collectively the "Mortgage
Instruments") encumbering the fee interest and/or ground
leasehold interest of any Loan Party in each real property
interest of the Loan Parties (each such real property is a
"Mortgaged Property" and collectively all such real property
is the "Mortgaged Properties");
(ii) in the case of each ground real property
leasehold interest of any Loan Party constituting Mortgaged
Property, (a) such estoppel letters, consents and waivers from
the landlords on such Mortgaged Property as may be required by
the Administrative Agent, which estoppel letters shall be in
the form and substance reasonably satisfactory to the
Administrative Agent and (b) evidence that the applicable
lease, a memorandum of lease with respect thereto, or other
evidence of such lease in form and substance reasonably
satisfactory to the Administrative Agent, has been or will be
recorded in all places to the extent necessary or desirable,
in the reasonable judgment of the Administrative Agent, so as
to enable the Mortgage Instrument encumbering such ground
leasehold interest to effectively create a valid and
enforceable first priority lien (subject to Permitted Liens)
on such ground leasehold interest in favor of the
Administrative Agent (or such other Person as may be required
or desired under local law) for the benefit of Lenders;
(iii) an as-built survey of each of the sites of
those Mortgaged Properties that are set forth on Schedule
5.01(g) hereto, certified to the Administrative Agent and the
Title Insurance Company in a manner reasonably satisfactory to
each of the Administrative Agent and the Title Insurance
Company, dated a date reasonably satisfactory to each of the
Administrative Agent and the Title Insurance Company by an
independent professional licensed land surveyor, which surveys
shall be sufficient to delete any standard printed survey
exception contained in the applicable title policy and be made
in accordance with the Minimum Standard Detail Requirements
for Land Title Surveys jointly established and adopted by the
American Land Title Association and the American Congress on
Surveying and Mapping in 1999 with all items from Table A
thereof completed, except for Nos. 5 and 12;
(iv) ALTA (or equivalent) mortgagee title insurance
policies (the "Mortgage Policies") issued by a title insurance
company reasonably satisfactory to the Administrative Agent
(the "Title Insurance Company") with respect to each Mortgaged
Property, assuring the Administrative Agent that each of the
Mortgage Instruments creates a valid and enforceable first
priority mortgage lien on the applicable Mortgaged Property,
free and clear of all defects and encumbrances except
Permitted Liens, which Mortgage Policies shall otherwise be in
form and substance reasonably satisfactory to the
Administrative Agent and shall be in amounts satisfactory to
the Administrative Agent and shall include such coverages,
endorsements and reinsurance as are reasonably requested by
the Administrative Agent;
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(v) evidence as to (A) whether any Mortgaged Property
is in an area designated by the Federal Emergency Management
Agency as having special flood or mud slide hazards (a "Flood
Hazard Property") and (B) if any Mortgaged Property is a Flood
Hazard Property, (1) whether the community in which such
Mortgaged Property is located is participating in the National
Flood Insurance Program, (2) the applicable Loan Party's
written acknowledgment of receipt of written notification from
the Administrative Agent (a) as to the fact that such
Mortgaged Property is a Flood Hazard Property and (b) as to
whether the community in which each such Flood Hazard Property
is located is participating in the National Flood Insurance
Program and (3) copies of insurance policies or certificates
of insurance of the Consolidated Parties evidencing flood
insurance satisfactory to the Administrative Agent and naming
the Administrative Agent as sole loss payee on behalf of the
Lenders;
(vi) evidence in the form of appropriate reliance
letters reasonably satisfactory to the Administrative Agent
that each of the Mortgaged Properties, and the uses of the
Mortgaged Properties, are in compliance in all material
respects with all applicable zoning laws, regulations,
ordinances and requirements (the evidence submitted as to
which should include the zoning designation made for each of
the Mortgaged Properties, the permitted uses of each such
Mortgaged Properties under such zoning designation and, if
available, zoning requirements as to parking, lot size,
ingress, egress and building setbacks);
(vii) a legal opinion of special local counsel for
the Loan Parties for each state in which any Mortgaged
Property is located in form and substance reasonably
acceptable to the Administrative Agent; and
(viii) letters in form and substance satisfactory to the Administrative
Agent which provide adequate assurances that the Lenders may rely on the
environmental assessments of each Mortgaged Property that were previously
delivered to the Administrative Agent.
(h) No Material Adverse Change. There shall not have occurred
a material adverse change since December 31, 2002 in the business,
assets, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Parent and its
Subsidiaries taken as a whole.
(i) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect.
(j) Solvency. The Administrative Agent shall have received a
certificate executed by a Responsible Officer of the Parent as of the
Closing Date, in form and substance satisfactory to the Administrative
Agent, regarding the Solvency of the Loan Parties on a consolidated
basis.
(k) Fees. Payment by the Loan Parties of all fees and expenses
owed by them to the Lenders and the Administrative Agent as of the
Closing Date, including, without limitation, payment to the
Administrative Agent and the Syndication Agents of the fees set forth
in the Administrative Agent Fee Letter.
(l) Attorney Costs. Unless waived by the Administrative Agent,
the Borrower shall have paid all Attorney Costs of the Administrative
Agent to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute its reasonable
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estimate of Attorney Costs incurred or to be incurred by it through the
closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrower and the
Administrative Agent).
(m) Subordinated Debt. The Borrower shall have received at
least $225 million in gross proceeds from the issuance of the Senior
Subordinated Notes and shall have used the Net Cash Proceeds thereof to
refinance the Indebtedness under the Existing Credit Agreement. The
Administrative Agent shall have received copies, certified by an
officer of the Borrower as true and complete in all material respects,
of (i) the Senior Subordinated Notes Documents (including all exhibits
and schedules thereto) as originally executed and delivered, together
with any amendments or modifications to such Senior Subordinated Notes
Documents as of the Closing Date, such Senior Subordinated Notes
Documents and amendments or modifications to be in form and substance
reasonably acceptable to the Administrative Agent and the Syndication
Agents and (ii) Subordinated Indebtedness Documents (including all
exhibits and schedules thereto) as originally executed and delivered,
together with any amendments or modifications to such Subordinated
Indebtedness Documents as of the Closing Date, such Subordinated
Indebtedness Documents and amendments or modifications to be in form
and substance reasonably acceptable to the Administrative Agent and the
Syndication Agents.
(n) Opening Borrowing Base Certificate. Receipt by the
Administrative Agent of a Borrowing Base Certificate as of the Closing
Date and certified by the chief financial officer of the Borrower to be
true and correct as of the Closing Date.
(o) Existing Credit Agreement. Evidence that the Existing
Credit Agreement has been or concurrently with the Closing Date is
being terminated and all Liens securing obligations under the Existing
Credit Agreement have been or concurrently with the Closing Date are
being released.
(p) Other. Receipt by the Administrative Agent and the Lenders
of such other documents, instruments, agreements and information as
reasonably requested by the Administrative Agent or any Lender,
including, but not limited to, information regarding litigation, tax,
accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements,
property ownership, environmental matters, contingent liabilities and
management of the Parent and its Subsidiaries.
5.02 FURTHER CONDITIONS.
The obligation of each Lender to honor any Request for Credit Extension
(including making any Incremental Term Loan) is subject to the following
conditions precedent:
(a) The representations and warranties of the Borrower and
each other Loan Party contained in Article VI or any other Loan
Document, or which are contained in any document furnished at any time
under or in connection herewith or therewith, shall be true and correct
in all material respects on and as of the date of such Credit
Extension, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they
shall be true and correct as of such earlier date, and except that for
purposes of this Section 5.02, the representations and warranties
contained in subsections (a) and (b) of Section 6.05 shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a)
and (b), respectively, of Section 7.01.
(b) No Default shall exist, or would result from such proposed
Credit Extension.
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(c) There shall not have been commenced against the Parent or
any Subsidiary an involuntary case under any applicable Debtor Relief
Law, now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed.
(d) The Administrative Agent and, if applicable, the L/C
Issuer or the Swing Line Lender shall have received a Request for
Credit Extension in accordance with the requirements hereof.
(e) Other than Revolving Loans, Swing Line Loans and L/C
Obligations, neither the Borrower nor any of its Subsidiaries has
incurred any Indebtedness pursuant to Section 4.09(b)(i) of the
Indenture.
Each Request for Credit Extension submitted by the Borrower shall be
deemed to be a representation and warranty that the conditions specified in
Sections 5.02(a), (b) and (c) have been satisfied on and as of the date of the
applicable Credit Extension.
5.03 FURTHER CONDITIONS TO THE BORROWING OF INCREMENTAL TERM LOANS.
The obligation of any Lender to make an Incremental Term Loan is
subject to the satisfaction of the following conditions:
(a) Incremental Term Notes. On or prior to any Incremental
Term Loan Borrowing Date, there shall have been delivered to the
Administrative Agent for the account of each Lender making an
Incremental Term Loan, an Incremental Term Note executed by the
Borrower.
(b) Fees, etc. On any Incremental Term Loan Borrowing Date,
all costs, fees and expenses and all other compensation (including,
without limitation, Attorney Costs of the Administrative Agent to the
extent invoiced prior to the applicable Incremental Term Loan Borrowing
Date) payable to the Administrative Agent and the Lenders shall have
been paid to the extent then due.
(c) Opinions of Counsel. On any Incremental Term Loan
Borrowing Date, the Administrative Agent shall have received opinions
of counsel, including, without limitation, opinions that (i) the
applicable Incremental Term Loan will not conflict, breach or result in
a default under the Senior Subordinated Notes, (ii) the applicable
Incremental Term Loan is Senior Debt (as defined in the Senior
Subordinated Notes Indenture) and such other matters incident to the
transactions contemplated herein as the Administrative Agent and the
Required Lenders may reasonably request in form consistent with the
legal opinions provided to the Administrative Agent and the Lenders on
the Closing Date.
(d) Corporate Documents. On any Incremental Term Loan
Borrowing Date, the Administrative Agent shall have received (i)
Organization Documents of each Loan Party certified to be true and
complete as of a recent date by the appropriate Governmental Authority
of the state or other jurisdiction of its incorporation or
organization, where applicable, and certified by a secretary or
assistant secretary of such Loan Party to be true and correct as of
such Incremental Term Loan Borrowing Date and (ii) resolutions or other
action, incumbency certificates and/or other certificates of
Responsible Officers of each Loan Party as the Administrative Agent may
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require evidencing the identity, authority and capacity of each
Responsible Officer thereof authorized to act as a Responsible Officer
in connection with such Incremental Term Loan.
(e) Compliance with the Senior Subordinated Notes. On the
Incremental Term Loan Borrowing Date, the Borrower shall deliver to the
Administrative Agent a certificate (i) dated as of the Incremental Term
Loan Borrowing Date and (ii) certifying that (A) the Incremental Term
Loan Commitment Agreement and the incurrence of all Incremental Term
Loans pursuant thereto and as permitted under this Agreement are, and
when incurred or issued will be, permitted under the Senior
Subordinated Notes Indenture and shall constitute both "Senior Debt"
and "Designated Senior Debt" thereunder and (B) all necessary
governmental and material third party approvals required in connection
with the incurrence of such Incremental Term Loans have been obtained.
(f) Certificate. Receipt from the Borrower of a calculation
satisfactory to the Administrative Agent (i) calculating the Fixed
Charge Coverage Ratio (as defined in the Indenture) for the Borrower's
most recently ended four full fiscal quarters for which internal
financial statements are available at an amount of at least 2.0 to 1.0
on a pro forma basis, as if the applicable Incremental Term Loans had
been incurred at the beginning of such four-quarter period, and (ii)
demonstrating compliance on a Pro Forma Basis with the financial
covenants set forth in Section 8.11, in each case after giving effect
to the applicable Incremental Term Loan as of the Incremental Term Loan
Borrowing Date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Loan Parties represent and warrant to the Administrative Agent and
the Lenders that:
6.01 EXISTENCE, QUALIFICATION AND POWER.
Each Loan Party (a) is a corporation, partnership or limited liability company
duly organized or formed, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation or organization, (b) has all requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own its assets and carry on its business and (ii)
execute, deliver and perform its obligations under the Loan Documents to which
it is a party, and (c) is duly qualified and is licensed and in good standing
under the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification or
license; except in each case referred to in clause (b)(i) or (c), to the extent
that failure to do so could not reasonably be expected to have a Material
Adverse Effect.
6.02 AUTHORIZATION; NO CONTRAVENTION.
The execution, delivery and performance by each Loan Party of each Loan Document
to which such Person is party, have been duly authorized by all necessary
corporate or other organizational action, and do not (a) contravene the terms of
any of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under (i) any material
Contractual Obligation to which such Person is a party or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; (c) violate any Law (including,
without limitation, Regulation U or Regulation X issued by the FRB); or (d)
result in a limitation on any licenses, permits or other approvals applicable to
the business, operations or properties
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of any Loan Party or materially and adversely affect the ability of any Loan
Party to participate in any Medical Reimbursement Programs.
6.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS.
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person with
respect to any material Contractual Obligation is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, other than
(i) those that have already been obtained and are in full force and effect and
(ii) filings to perfect the Liens created by the Collateral Documents.
6.04 BINDING EFFECT.
This Agreement and each other Loan Document has been duly executed and
delivered by each Loan Party that is party thereto. This Agreement and each
other Loan Document constitutes a legal, valid and binding obligation of each
Loan Party that is party thereto, enforceable against each such Loan Party in
accordance with its terms except as enforceability may be limited by applicable
Debtor Relief Laws or by equitable principles relating to enforceability.
6.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in accordance
with GAAP (or, as applicable with respect to HMO Subsidiaries, SAP) consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; (ii) fairly present in all material respects the financial
condition of the Parent and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
(or, as applicable with respect to HMO Subsidiaries, SAP) consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein; and (iii) show, in accordance with GAAP (or, as applicable with respect
to HMO Subsidiaries, SAP), all material indebtedness and other liabilities,
direct or contingent, of the Parent and its Subsidiaries as of the date thereof,
including liabilities for taxes, commitments and Indebtedness.
(b) The Interim Financial Statements (i) were prepared in accordance
with GAAP (or, as applicable with respect to HMO Subsidiaries, SAP) consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; (ii) fairly present in all material respects the financial
condition of the Parent and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments; and (iii) show, in accordance with GAAP (or, as applicable with
respect to HMO Subsidiaries, SAP), all material indebtedness and other
liabilities, direct or contingent, of the Parent and its Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments and
Indebtedness.
(c) From the date of the Audited Financial Statements to and including
the Closing Date, there has been no Disposition by the Parent or any Subsidiary,
or any Involuntary Disposition, of any material part of the business or Property
of the Parent and its Subsidiaries, taken as a whole, and no purchase or other
acquisition by any of them of any business or property (including any Capital
Stock of any other Person) material in relation to the consolidated financial
condition of the Parent and its Subsidiaries, taken as a whole, in each case,
which is not reflected in the foregoing financial statements or in the notes
thereto and has not otherwise been disclosed in writing to the Lenders on or
prior to the Closing Date.
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(d) The financial statements delivered pursuant to Section 7.01(a) and
(b) have been prepared in accordance with GAAP (or, as applicable with respect
to HMO Subsidiaries, SAP) (except as may otherwise be permitted under Section
7.01(a) and (b)) and present fairly (on the basis disclosed in the footnotes to
such financial statements) the consolidated and, in the case of annual financial
statements delivered pursuant to Section 7.01(a), consolidating, financial
condition, results of operations and cash flows of the Parent and its
Subsidiaries as of such date and for such periods.
(e) Since the date of the Audited Financial Statements, there has been
no event or circumstance that has had or could reasonably be expected to have a
Material Adverse Effect.
6.06 LITIGATION.
There are no actions, suits, investigations, criminal prosecutions, civil
investigative demands, impositions of criminal or civil fines and penalties,
proceedings, claims or disputes pending or, to the knowledge of the Loan Parties
after due and diligent investigation, threatened or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, by or against the
Parent or any of its Subsidiaries or against any of their properties or revenues
that (a) purport to affect or pertain to this Agreement or any other Loan
Document or (b) if determined adversely, could reasonably be expected to have a
Material Adverse Effect.
6.07 CONTRACTUAL OBLIGATIONS.
Neither the Parent nor any Subsidiary is in default under or with
respect to any Contractual Obligation that could reasonably be expected to have
a Material Adverse Effect.
6.08 OWNERSHIP OF PROPERTY; LIENS.
Each of the Parent and its Subsidiaries has good record and marketable title in
fee simple to, or valid leasehold interests in, all real property necessary or
used in the ordinary conduct of its business, except for such defects in title
as could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The property of the Parent and its Subsidiaries is
subject to no Liens, other than Permitted Liens.
6.09 ENVIRONMENTAL COMPLIANCE.
Except as could not reasonably be expected to have a Material Adverse
Effect:
(a) Each of the Facilities and all operations at the
Facilities are in compliance with all applicable Environmental Laws,
and there is no violation of any Environmental Law with respect to the
Facilities or the Businesses, and there are no conditions relating to
the Facilities or the Businesses that could give rise to liability
under any applicable Environmental Laws.
(b) None of the Facilities contains, or has previously
contained, any Hazardous Materials at, on or under the Facilities in
amounts or concentrations that constitute or constituted a violation
of, or could give rise to liability under, Environmental Laws.
(c) Neither the Parent nor any Subsidiary has received any
written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Facilities or the
Businesses, nor does any Responsible
65
Officer of any Loan Party have knowledge or reason to believe that any
such notice will be received or is being threatened.
(d) Hazardous Materials have not been transported or disposed
of from the Facilities, or generated, treated, stored or disposed of
at, on or under any of the Facilities or any other location, in each
case by or on behalf the Parent or any Subsidiary in violation of, or
in a manner that would be reasonably likely to give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Responsible Officers of
the Loan Parties, threatened, under any Environmental Law to which the
Parent or any Subsidiary is or will be named as a party, nor are there
any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to
the Parent, any Subsidiary, the Facilities or the Businesses.
(f) There has been no release or, threat of release of
Hazardous Materials at or from the Facilities, or arising from or
related to the operations (including, without limitation, disposal) of
the Parent or any Subsidiary in connection with the Facilities or
otherwise in connection with the Businesses, in violation of or in
amounts or in a manner that could give rise to liability under
Environmental Laws.
6.10 INSURANCE.
The properties of the Parent and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the Parent
or any of its Subsidiaries, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Parent or the applicable
Subsidiary operates; provided, however, that such insurance shall not be
required to the extent provided by the Captive Insurance Subsidiary. The
insurance coverage of the Loan Parties as in effect on the Closing Date is
outlined as to carrier, policy number, expiration date, type, amount and
deductibles on Schedule 6.10.
6.11 TAXES.
The Parent and its Subsidiaries have filed or have caused to be filed all
federal, state and other material tax returns and reports required to be filed,
and have paid or caused to be paid all federal, state and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those which
are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in accordance with
GAAP. To the Loan Parties' knowledge, there is no proposed tax assessment
against the Parent or any Subsidiary that would, if made, reasonably be expected
to have a Material Adverse Effect.
6.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Internal Revenue Code and other federal or
state Laws. Each Plan that is intended to qualify under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the IRS
or an application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Loan Parties, nothing has
occurred which would prevent, or cause the loss of, such qualification. Each
Loan Party and each ERISA Affiliate have made all required contributions to
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each Plan subject to Section 412 of the Internal Revenue Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Internal Revenue Code has been made with respect
to any Plan.
(b) There are no pending or, to the best knowledge of the Loan Parties,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) no Loan Party nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) no Loan Party nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) no Loan Party nor any ERISA Affiliate
has engaged in a transaction that could be subject to Sections 4069 or 4212(c)
of ERISA.
6.13 SUBSIDIARIES.
Set forth on Schedule 6.13 is a complete and accurate list as of the
Closing Date of each Subsidiary, together with (i) jurisdiction of formation,
(ii) number of shares of each class of Capital Stock outstanding, (iii) number
and percentage of outstanding shares of each class owned (directly or
indirectly) by the Parent or any Subsidiary, (iv) number and effect, if
exercised, of all outstanding options, warrants, rights of conversion or
purchase and all other similar rights with respect thereto and (v) a statement
as to whether such Subsidiary is an HMO Subsidiary. The outstanding Capital
Stock of each Subsidiary is validly issued, fully paid and non-assessable.
6.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT.
(a) Neither the Parent nor any Subsidiary is not engaged and will not
engage, principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock. Following the application of the proceeds of each Borrowing or
drawing under each Letter of Credit, not more than 25% of the value of the
assets (either of the Parent only or of the Parent and its Subsidiaries on a
consolidated basis) subject to the provisions of Section 8.01 or Section 8.05 or
subject to any restriction contained in any agreement or instrument between the
Parent and any Lender or any Affiliate of any Lender relating to Indebtedness
and within the scope of Section 9.01(e) will be margin stock.
(b) None of the Parent, any Person Controlling the Parent, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940.
6.15 DISCLOSURE.
No report, financial statement, certificate or other information
furnished (whether in writing or orally) by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with
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the transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Loan Parties represent only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
6.16 COMPLIANCE WITH LAWS.
Each of the Parent and its Subsidiaries is in compliance with the
requirements of all Laws (including, without limitation, HMO Regulations,
Medicare Regulations, Medicaid Regulations, HIPAA, 42 U.S.C. Section 1320a-7b
and 42 U.S.C. Section 1395nn) and all orders, writs, injunctions, decrees,
licenses and permits applicable to it or to its properties, except in such
instances in which (a) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect. Without limiting the generality of
the foregoing:
(i) neither the Parent nor any Subsidiary, nor (to the
knowledge of the Parent or any Subsidiary) any individual employed by
the Parent or any Subsidiary, would reasonably be expected to have
criminal culpability or to be excluded from participation in any
Medical Reimbursement Program for corporate or individual actions or
failures to act known to the Parent or any Subsidiary where such
culpability or exclusion has resulted or could reasonably be expected
to result in an Exclusion Event;
(ii) no officer or other member of management continues to be
employed by the Parent or any Subsidiary who may reasonably be expected
to have individual culpability for matters under investigation by the
OIG or other Governmental Authority unless such officer or other member
of management has been, within a reasonable period of time after
discovery of such actual or potential culpability, either suspended or
removed from positions of responsibility related to those activities
under challenge by the OIG or other Governmental Authority;
(iii) current billing policies, arrangements, protocols and
instructions of the Parent and its Subsidiaries comply with
requirements of Medical Reimbursement Programs and are administered by
properly trained personnel, except where any such failure to comply
would not reasonably be expected to result in an Exclusion Event;
(iv) current medical director compensation arrangements of the
Parent and its Subsidiaries comply with state and federal
anti-kickback, fraud and abuse, and self-referral laws, including
without limitation 42 U.S.C. Section 1320a-7b and 42 U.S.C. Section
1395nn, and all regulations promulgated under such laws, except where
any such failure to comply would not reasonably be expected to result
in an Exclusion Event.
6.17 INTELLECTUAL PROPERTY; LICENSES, ETC.
The Parent and its Subsidiaries own, or possess the legal right to use,
all of the trademarks, service marks, trade names, copyrights, patents, patent
rights, franchises, licenses and other intellectual property rights
(collectively, "IP Rights") that are reasonably necessary for the operation of
their respective businesses. Set forth on Schedule 6.17 is a list of all IP
Rights registered or pending registration with the United States Copyright
Office or the United States Patent and Trademark Office and owned by each Loan
Party as of the Closing Date. Except for such claims and infringements that
could not reasonably be expected to have a Material Adverse Effect, no claim has
been asserted and is pending by any Person
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challenging or questioning the use of any IP Rights or the validity or
effectiveness of any IP Rights, nor does any Loan Party know of any such claim,
and, to the knowledge of the Responsible Officers of the Loan Parties, the use
of any IP Rights by the Parent or any Subsidiary or the granting of a right or a
license in respect of any IP Rights from the Parent or any Subsidiary does not
infringe on the rights of any Person. As of the Closing Date, none of the IP
Rights owned by any of the Loan Parties is subject to any licensing agreement or
similar arrangement except as set forth on Schedule 6.17.
6.18 SOLVENCY.
The Loan Parties are Solvent on a consolidated basis.
6.19 PERFECTION OF SECURITY INTERESTS IN THE COLLATERAL.
The Collateral Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens are currently perfected security interests and Liens, prior to all other
Liens other than Permitted Liens.
6.20 BUSINESS LOCATIONS.
Set forth on Schedule 6.20(a) is a list of all real property located in
the United States that is owned or leased by the Loan Parties as of the Closing
Date. Set forth on Schedule 6.20(b) is a list of all locations where any
tangible personal property of any Loan Party is located as of the Closing Date.
Set forth on Schedule 6.20(c) is the chief executive office of each Loan Party
as of the Closing Date. The exact legal name and state of organization of each
Loan Party is as set forth on the signature pages hereto.
6.21 BROKERS' FEES.
Neither the Parent nor any Subsidiary has any obligation to any Person
in respect of any finder's, broker's, investment banking or other similar fee in
connection with any of the transactions contemplated under the Loan Documents.
6.22 LABOR MATTERS.
As of the Closing Date, (a) there are no collective bargaining
agreements or Multiemployer Plans covering the employees of the Parent or any
Subsidiary and (b) neither the Parent nor any Subsidiary has suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the
last five years.
6.23 FRAUD AND ABUSE.
To the knowledge of the Responsible Officers of the Loan Parties,
neither the Parent nor any Subsidiary or any of their respective officers or
directors have engaged in any activities that are prohibited under Medicare
Regulations or Medicaid Regulations that could reasonably be expected to have a
Material Adverse Effect.
6.24 LICENSING AND ACCREDITATION.
(a) Except to the extent it would not reasonably be expected to have a
Material Adverse Effect, each of the Parent and its Subsidiaries has, to the
extent applicable: (i) obtained (or been duly assigned) all required
certificates of need or determinations of need as required by the relevant state
Governmental Authority for the acquisition, construction, expansion of,
investment in or operation of its businesses as currently operated; (ii)
obtained and maintains in good standing all required licenses,
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permits, authorizations and approvals of each Governmental Authority necessary
to the conduct of its business; (iii) to the extent prudent and customary in the
industry in which it is engaged, obtained and maintains accreditation from all
generally recognized accrediting agencies; (iv) entered into and maintains in
good standing its Medicare Provider Agreements and Medicaid Provider Agreements;
and (v) ensured that all such required licenses are in full force and effect on
the date hereof and have not been revoked or suspended or otherwise limited.
(b) The Parent will, and will cause each of its HMO Subsidiaries to,
preserve and maintain (i) the licensing and certification of each HMO Subsidiary
pursuant to the HMO Regulations, (ii) all certifications and authorizations
necessary to ensure that the HMO Subsidiaries are eligible for all
reimbursements available under the HMO Regulations to the extent applicable and
(iii) all licenses, permits, authorizations and qualifications required under
the HMO Regulations in connection with the ownership or operation of HMOs.
6.25 TAX SHELTER REGULATIONS.
The Borrower does not intend to treat the Loans and/or Letters of
Credit and related transactions as being a "reportable transaction" (within the
meaning of Treasury Regulation Section 1.6011-4). In the event the Borrower
determines to take any action inconsistent with such intention, it will promptly
notify the Administrative Agent thereof. If the Borrower so notifies the
Administrative Agent, the Credit Parties acknowledge that one or more of the
Lenders may treat its Loans and/or its interest in Swing Line Loans and/or
Letters of Credit as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will
maintain the lists and other records required by such Treasury Regulation.
6.26 SUBORDINATION.
The subordination provisions contained in the Senior Subordinated Notes
Documents are enforceable against the Borrower, the Guarantors and the holders
of the Senior Subordinated Notes, and all Obligations hereunder (including,
without limitation, the Incremental Term Loans) and under the other Loan
Documents are within the definitions of "Senior Debt" and "Designated Senior
Debt" included in such subordination provisions. There exists no Designated
Senior Debt for purposes of, and as defined in, the Indenture (other than the
Obligations).
The subordination provisions contained in the Subordinated Indebtedness
Documents are enforceable against the Borrower, the Guarantors and the holders
of the Subordinated Indebtedness, and all Obligations hereunder (including,
without limitation, the Incremental Term Loans) and under the other Loan
Documents are within the definitions of "Senior Indebtedness" included in such
subordination provisions.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Loan Parties shall and shall cause each
Subsidiary to:
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7.01 FINANCIAL STATEMENTS.
Deliver to the Administrative Agent and each Lender, in form and detail
satisfactory to the Administrative Agent and the Required Lenders:
(a) Annual Financial Statements.
(i) as soon as available, but in any event within
ninety days after the end of each fiscal year of the Parent,
(A) a consolidated balance sheet of the Parent and its
Subsidiaries as at the end of such fiscal year, and the
related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year, (B)
a balance sheet for the medical/surgical business of the
Parent and its Subsidiaries (the "Medical/Surgical Business")
as at the end of such fiscal year, and the related statements
of income or operations and shareholders' equity for the
Medical/Surgical Business for such fiscal year, (C) a
consolidated balance sheet for Xxxxxxxx and the Sandia Parties
as at the end of such fiscal year, and the related
consolidated statements of income or operations and
shareholders' equity for Xxxxxxxx the Sandia Parties for such
fiscal year and (D) a balance sheet for the behavioral
business of the Parent and its Subsidiaries (the "Behavioral
Business") as at the end of such fiscal year, and the related
statements of income or operations and shareholders' equity
for the Behavioral Business for such fiscal year, setting
forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a report and
opinion of an independent certified public accountant of
nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and
shall not be subject to any "going concern" or like
qualification or exception or any qualification or exception
as to the scope of such audit; and
(ii) with respect to each HMO Subsidiary, as soon as
available, but in any event not later than the time such
statements are required to be filed with the applicable
Governmental Authority, annual financial statements prepared
in accordance with SAP.
(b) Quarterly Financial Statements.
(i) as soon as available, but in any event within
forty-five days after the end of each of the first three
fiscal quarters of each fiscal year of the Parent, (A) a
consolidated balance sheet of the Parent and its Subsidiaries
as at the end of such fiscal quarter, and the related
consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal quarter and for the
portion of the Parent's fiscal year then ended, (B) a balance
sheet for the Medical/Surgical Business of the Parent and its
Subsidiaries as at the end of such fiscal quarter, and the
related statements of income or operations and shareholders'
equity for the Medical/Surgical Business for such fiscal
quarter and for the portion of the Parent's fiscal year then
ended, (C) a consolidated balance sheet for Xxxxxxxx and the
Sandia Parties as at the end of such fiscal quarter, and the
related consolidated statements of income or operations and
shareholders' equity for Xxxxxxxx and the Sandia Parties for
such fiscal quarter and for the portion of the Parent's fiscal
year then ended and (D) a balance sheet for the Behavioral
Business as at the end of such fiscal quarter, and the related
statements of income or operations and shareholders' equity
for the Behavioral Business for such fiscal quarter and for
the portion of the Parent's fiscal year then ended, setting
forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and
the
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corresponding portion of the previous fiscal year, all in
reasonable detail and certified by a Responsible Officer of
the Parent as fairly presenting in all material respects the
financial condition, results of operations, shareholders'
equity and cash flows of the Parent and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes.
(ii) with respect to each HMO Subsidiary, as soon as
available, but in any event not later than the time such
statements are required to be filed with the applicable
Governmental Authority, quarterly financial statements
prepared in accordance with SAP.
(c) Monthly Financial Statements. As soon as available, but in
any event within thirty days after the end of each calendar month of
fiscal year 2003 of the Parent, (A) a consolidated balance sheet of the
Parent and its Subsidiaries as at the end of such calendar month, and
the related consolidated statements of income or operations,
shareholders' equity and cash flows for such calendar month, (B) a
balance sheet for the Medical/Surgical Business of the Parent and its
Subsidiaries as at the end of such calendar month, and the related
statements of income or operations and shareholders' equity for the
Medical/Surgical Business for such calendar month, (C) a consolidated
balance sheet for Xxxxxxxx and the Sandia Parties as at the end of such
calendar month, and the related consolidated statements of income or
operations and shareholders' equity for Xxxxxxxx and the Sandia Parties
for such calendar month and (D) a balance sheet for the Behavioral
Business as at the end of such calendar month, and the related
statements of income or operations and shareholders' equity for the
Behavioral Business for such calendar month, setting forth in each case
in comparative form the figures for the corresponding calendar month of
the previous fiscal year, all in reasonable detail and certified by a
Responsible Officer of the Parent as fairly presenting in all material
respects the financial condition, results of operations, shareholders'
equity and cash flows of the Parent and its Subsidiaries in accordance
with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.
As to any information contained in materials furnished pursuant to
Section 7.02(d), the Loan Parties shall not be separately required to
furnish such information under clause (a) or (b) above, but the
foregoing shall not be in derogation of the obligation of the Loan
Parties to furnish the information and materials described in
subsections (a) and (b) above at the times specified therein.
7.02 CERTIFICATES; OTHER INFORMATION.
Deliver to the Administrative Agent and each Lender, in form and detail
satisfactory to the Administrative Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 7.01(a), a certificate of its independent
certified public accountants certifying such financial statements and
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or, if any such Default shall exist,
stating the nature and status of such event;
(b) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b), a duly completed Compliance
Certificate, in form and substance satisfactory to the Administrative
Agent (including data supporting covenant calculation and Pro Forma
adjustments), signed by a Responsible Officer of the Borrower;
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(c) within 15 days after the end of each calendar month, a
certificate as of the end of the immediately preceding month,
substantially in the form of Exhibit K and certified by a Responsible
Officer of the Borrower to be true and correct as of the date thereof
(a "Borrowing Base Certificate");
(d) at least 15 days prior to the end of each fiscal year of
the Parent, beginning with the fiscal year ending December 31, 2003, an
annual business plan and budget of the Parent and its Subsidiaries
containing, among other things, pro forma financial statements for each
quarter of the next fiscal year and projected Consolidated Capital
Expenditures (in reasonable detail) for such fiscal year.
(e) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b), a certificate of a Responsible
Officer of the Borrower containing information regarding (i) the amount
of all Dispositions, Involuntary Dispositions, Debt Issuances, Equity
Issuances and Acquisitions that occurred during the period covered by
such financial statements and (ii) the minimum statutory capital
requirement of each HMO Subsidiary as of the applicable fiscal quarter
end.
(f) promptly after any request by the Administrative Agent or
any Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit
committee of the board of directors) of the Parent by independent
accountants in connection with the accounts or books of the Parent or
any Subsidiary, or any audit of any of them;
(g) promptly after the same are publicly available, (i) copies
of each annual report, proxy or financial statement or other report or
communication sent to the unit holders of the Parent, and copies of all
annual, regular, periodic and special reports and registration
statements which the Parent may file or be required to file with the
SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 or
to a holder of any Indebtedness owed by the Parent or any Subsidiary in
its capacity as such a holder and not otherwise required to be
delivered to the Administrative Agent pursuant hereto and (ii) upon the
request of the Administrative Agent, all material reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters;
(h) promptly after the Borrower has notified the
Administrative Agent of any intention by the Borrower to treat the
Loans and/or Letters of Credit and related transactions as being a
"reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4), a duly completed copy of IRS Form 8886 or any
successor form; and
(i) promptly, such additional information regarding the
business, financial or corporate affairs of the Parent or any
Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may from time to time reasonably
request;
(j) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b), a certificate of a Responsible
Officer of the Borrower (i) listing (A) all applications, if any, for
Copyrights, Patents or Trademarks (each such term as defined in the
Security Agreement) made since the date of the prior certificate (or,
in the case of the first such certificate, the Closing Date), (B) all
issuances of registrations or letters on existing applications for
Copyrights, Patents and
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Trademarks (each such term as defined in the Security Agreement)
received since the date of the prior certificate (or, in the case of
the first such certificate, the Closing Date), and (C) all Trademark
Licenses, Copyright Licenses and Patent Licenses (each such term as
defined in the Security Agreement) entered into since the date of the
prior certificate (or, in the case of the first such certificate, the
Closing Date), and (ii) attaching the insurance binder or other
evidence of insurance for any insurance coverage of the Parent or any
Subsidiary that was renewed, replaced or modified during the period
covered by such financial statements; and
(k) (i) promptly upon filing with the applicable Governmental
Authority, copies of any request for an extension to the time period
within which financial statements prepared in accordance with SAP must
be filed with such Governmental Authority and (ii) promptly copies of
any extensions or rejections to extensions provided by any Governmental
Authority.
Documents required to be delivered pursuant to Section 7.01(a) or (b)
or Section 7.02(c) or (e) (to the extent any such documents are included in
materials otherwise filed with the SEC) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date (i) on which
the Parent posts such documents, or provides a link thereto on the Parent's
website on the Internet at the website address listed on Schedule 11.02; or (ii)
on which such documents are posted on the Parent's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that: (i)
the Loan Parties shall deliver paper copies of such documents to the
Administrative Agent or any Lender that requests the Loan Parties to deliver
such paper copies until a written request to cease delivering paper copies is
given by the Administrative Agent or such Lender and (ii) the Loan Parties shall
notify (which may be by facsimile or electronic mail) the Administrative Agent
and each Lender of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
the Loan Parties shall be required to provide paper copies of the Compliance
Certificates required by Section 7.02(b) to the Administrative Agent and each of
the Lenders. Except for such Compliance Certificates, the Administrative Agent
shall have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Loan Parties with any such request for delivery, and
each Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.
7.03 NOTICES.
(a) Promptly upon knowledge thereof, notify the Administrative Agent
and each Lender of the occurrence of any Default.
(b) Promptly upon knowledge thereof, notify the Administrative Agent
and each Lender of any matter that has resulted or could reasonably be expected
to result in a Material Adverse Effect, including (i) breach or non-performance
of, or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Parent or any Subsidiary, including
pursuant to any applicable Environmental Laws.
(c) Promptly upon knowledge thereof, notify the Administrative Agent
and each Lender of the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Parent and its Subsidiaries in an aggregate amount
exceeding the Threshold Amount.
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(d) Promptly notify the Administrative Agent and each Lender of any
material change in accounting policies or financial reporting practices by the
Parent or any Subsidiary.
(e) Promptly upon knowledge thereof, notify the Administrative Agent
and each Lender of (i) the institution of any investigation, review or
proceeding against the Parent or any Subsidiary to suspend, revoke or terminate
(or that may result in the termination of) any Medicaid Provider Agreement or
Medicare Provider Agreement, or any such investigation or proceeding that may
result in an Exclusion Event, (ii) a copy of any notice of intent to exclude,
any notice of proposal to exclude issued by the OIG or any other Exclusion
Event, (iii) all notices of loss or threatened loss of accreditation, loss of
participation under any Medical Reimbursement Program or loss of applicable
health care license or certificate of authority of any HMO Subsidiary, and all
other material deficiency notices, compliance orders or adverse reports issued
by any HMO Regulator or other Governmental Authority or private insurance
company pursuant to a provider agreement that, if not promptly complied with or
cured, could result in the suspension or forfeiture of any license,
certification, or accreditation necessary for such HMO Subsidiary to carry on
its business as then conducted or the termination of any insurance or
reimbursement program available to any HMO Subsidiary, or (iv) all
correspondence received by the Parent or any of its Subsidiaries from an HMO
Regulator asserting that the Parent or any of its Subsidiaries is not in
compliance in all material respects with HMO Regulations or threatening action
against the Parent or any of its Subsidiaries under the HMO Regulations.
(f) Within the period for delivery of the annual and quarterly
financial statements provided in Section 7.1(a) and Section 7.1(b), written
notification of Investments during such fiscal quarter by the Parent or any
Subsidiary in any HMO Subsidiary that, individually or in the aggregate in any
fiscal year of the Parent, exceed ten percent (10%) of the Company Action Level
or the relevant state's risk-based capital threshold, as applicable (in each
case as determined in accordance with SAP at the immediately preceding
fiscal-year-end determination thereof) of such HMO Subsidiary; provided that, to
the extent such Investments, individually or in the aggregate, materially
deviate from the business plan and budget delivered pursuant to Section 7.02(c),
written notification of such Investments shall be provided not later than
fifteen days following the end of the calendar month during which such
Investments are made.
(g) As soon as available, and in event within 120 days after the end of
each fiscal year of the Parent, a schedule setting forth in reasonable detail
the reinsurance arrangements maintained by each of the HMO Subsidiaries of the
Borrower as of the end of such fiscal year (with any changes subsequent to the
end of such fiscal year described therein).
(h) Upon the reasonable written request of the Administrative Agent
following the occurrence of any event or the discovery of any condition which
the Administrative Agent or the Required Lenders reasonably believe has caused
(or could be reasonably expected to cause) the representations and warranties
set forth in Section 6.09 to be untrue in any material respect, the Loan Parties
will furnish or cause to be furnished to the Administrative Agent, at the Loan
Parties' expense, a report of an environmental assessment of reasonable scope,
form and depth, (including, where appropriate, invasive soil or groundwater
sampling) by a consultant reasonably acceptable to the Administrative Agent as
to the nature and extent of the presence of any Materials of Environmental
Concern on any Real Properties (as defined in Section 6.09) and as to the
compliance by the Borrower or any Subsidiary with Environmental Laws at such
Real Properties. If the Loan Parties fail to deliver such an environmental
report within seventy-five (75) days after receipt of such written request then
the Administrative Agent may arrange for same, and the Loan Parties hereby grant
to the Administrative Agent and its representatives access to the Real
Properties to reasonably undertake such an assessment (including, where
appropriate, invasive soil or groundwater sampling). The reasonable cost of any
assessment arranged for by the Administrative Agent pursuant to this provision
will be payable by the Loan Parties on demand and added to the obligations
secured by the Collateral Documents.
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Each notice pursuant to this Section 7.03(a) through (e) shall be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto. Each notice
pursuant to Section 7.03(a) shall describe with particularity any and all
provisions of this Agreement and any other Loan Document that have been
breached.
7.04 PAYMENT OF TAXES.
Pay and discharge as the same shall become due and payable, all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Parent or such Subsidiary.
7.05 PRESERVATION OF EXISTENCE, ETC.
(a) Preserve, renew and maintain in full force and effect its legal
existence under the Laws of the jurisdiction of its organization except in a
transaction permitted by Section 8.04 or 8.05.
(b) Preserve, renew and maintain in full force and effect its good
standing under the Laws of the jurisdiction of its organization except in a
transaction permitted by Section 8.04 or 8.05.
(c) Take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of
its business, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(d) Preserve or renew all of its material registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
7.06 MAINTENANCE OF PROPERTIES.
(a) Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted.
(b) Make all necessary repairs thereto and renewals and replacements
thereof, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
(c) Use the standard of care typical in the industry in the operation
and maintenance of its facilities.
Notwithstanding the foregoing, nothing in this Section 7.06 shall prevent the
Borrower and its Subsidiaries from discontinuing the operation or maintenance of
any of its assets or properties if such discontinuance is, in the judgement of
its board of directors or similar body, desirable in the conduct of its
business.
7.07 MAINTENANCE OF INSURANCE.
Maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) with financially sound and reputable insurance companies
not Affiliates of the Parent or any Subsidiary, in such amounts, with such
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deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Parent or the applicable Subsidiary operates; provided that the Parent and
its Subsidiaries may reduce the amount of insurance required to be maintained
above to the extent the Parent and its Subsidiaries establish a self-insurance
program providing insurance coverage in lieu of such insurance. The
Administrative Agent shall be named as loss payee or mortgagee, as its interest
may appear, and/or additional insured with respect to any such insurance
providing coverage in respect of any Collateral, and each provider of any such
insurance shall agree, by endorsement upon the policy or policies issued by it
or by independent instruments furnished to the Administrative Agent, that it
will give the Administrative Agent thirty (30) days prior written notice before
any such policy or policies shall be altered or canceled.
7.08 COMPLIANCE WITH LAWS.
Except to the extent the failure to do so would not have or would not
reasonably be expected to have a Material Adverse Effect, the Parent will, and
will cause each of its Subsidiaries to, (a) comply with all Requirements of Law,
and all applicable restrictions imposed by all Governmental Authorities,
applicable to it and its Property (including, without limitation, Environmental
Laws and ERISA), (b) conform with and duly observe in all material respects all
laws, rules and regulations and all other valid requirements of any regulatory
authority with respect to the conduct of its business, including without
limitation Titles XVIII and XIX of the Social Security Act, Medicare
Regulations, Medicaid Regulations, and all laws, rules and regulations of
Governmental Authorities, pertaining to the business of the Parent and its
Subsidiaries; (c) obtain and maintain all licenses, permits, certifications and
approvals of all applicable Governmental Authorities as are required for the
conduct of its business as currently conducted and herein contemplated,
including without limitation professional licenses, CLIA certifications,
Medicare Provider Agreements and Medicaid Provider Agreements; (d) ensure that
(i) billing policies, arrangements, protocols and instructions will comply with
reimbursement requirements under Medicare, Medicaid and other Medical
Reimbursement Programs and will be administered by properly trained personnel;
and (ii) medical director compensation arrangements and other arrangements with
referring physicians will comply with applicable state and federal self-referral
and anti-kickback laws, including without limitation 42 U.S.C. Section
1320a-7b(b)(1) - (b)(2) 42 U.S.C. and 42 U.S.C. Section 1395nn and (e) make
commercially reasonable efforts to implement policies that are consistent with
the Standards for the Privacy of Individually Identifiable Health Information
(the "Privacy Standards") implementing the privacy requirements of the
Administrative Simplification subtitle of the Health Insurance Portability and
Accountability Act of 1996 (HIPAA) set forth at 45 CFR Parts 160 and 164 on or
before the date that such Privacy Standards become applicable to the Parent and
its Subsidiaries. Further, the Parent has in place a compliance program for the
Parent and its Subsidiaries which is reasonably designed to provide effective
internal controls that promote adherence to, prevent and detect material
violations of, any Laws applicable to the Parent and its Subsidiaries, and which
includes the implementation of internal audits and monitoring on a regular basis
to monitor compliance with the compliance program and with Laws.
7.09 BOOKS AND RECORDS.
(a) Maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and business of
the Parent or such Subsidiary, as the case may be.
(b) Maintain such books of record and account in material conformity
with all applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Parent or such Subsidiary, as the case may be.
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7.10 INSPECTION RIGHTS.
(a) Permit representatives and independent contractors of the
Administrative Agent and each Lender to visit and inspect any of its properties,
to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants
(provided that, so long as no Event of Default exists, the Borrower will be
provided an opportunity to attend such meetings), all at the reasonable expense
of the Borrower and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided, however, that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.
(b) If requested by the Administrative Agent in its sole discretion,
permit the Administrative Agent, and its representatives, upon reasonable
advance notice to the Borrower, to conduct an annual audit of the Collateral at
the expense of the Borrower. To the extent required by applicable Law, prior to
receiving any information that contains patient information subject to (i) state
privacy laws, (ii) the Drug Abuse Prevention, Treatment and Xxxxxxxxxxxxxx Xxx,
00 X.X.X. 000xx-0 et seq., (iii) the Health Insurance Portability and
Accountability Act of 1996, 42 U.S.C. 1320d et seq., or (iv) regulations
promulgated pursuant to the foregoing statutes, the Administrative Agent and the
Lenders agree to execute an agreement reasonably satisfactory to the
Administrative Agent and the Lenders that complies with the requirements
relating to "business associates" as set forth in 45 C.F.R. 502(e) and any
applicable state Laws.
7.11 USE OF PROCEEDS.
Use the proceeds of the Credit Extensions (a) to refinance existing
Indebtedness of the Borrower, (b) to pay costs and expenses related to the
transactions contemplated hereby and (c) to finance working capital, capital
expenditures and other general corporate purposes, provided that in no event
shall the proceeds of the Credit Extensions be used in contravention of any Law
or of any Loan Document.
7.12 ADDITIONAL SUBSIDIARIES.
(a) Within thirty (30) days after the acquisition or formation of any
Subsidiary of the Parent:
(i) notify the Administrative Agent thereof in writing,
together with (A) jurisdiction of formation, (B) number of shares of
each class of Capital Stock outstanding, (C) number and percentage of
outstanding shares of each class owned (directly or indirectly) by the
Borrower or any Subsidiary, (D) number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and all
other similar rights with respect thereto and (E) a statement as to
whether such Subsidiary is an HMO Subsidiary or a Controlled
Subsidiary;
(ii) if such Subsidiary is a Material Domestic Subsidiary
other than (A) an HMO Subsidiary which is prohibited from providing a
full and unconditional guaranty of the Obligations or (B) a Controlled
Subsidiary acquired pursuant to a Permitted Other Acquisition or
created pursuant to Section 8.02(i), cause such Person to (1) become a
Guarantor by executing and delivering to the Administrative Agent a
Joinder Agreement or such other documents as the Administrative Agent
shall deem appropriate for such purpose, and (2) deliver to the
Administrative Agent documents of the types referred to in Section
5.01(d) and favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity,
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binding effect and enforceability of the documentation referred to in
clause (1)), all in form, content and scope reasonably satisfactory to
the Administrative Agent; and
(iii) if such Subsidiary is an HMO Subsidiary that is
prohibited from providing a full and unconditional guaranty of the
Obligations, to the extent permitted by applicable state law, (A) cause
such Person to issue an Intercompany Note, in an amount equal to 75% of
the maximum amount permitted under applicable law or such lesser amount
approved by the Required Lenders, to the Borrower and deliver
Intercompany Security Documents to the Borrower, (B) deliver the
Collateral Assignment Documents to the Collateral Agent with respect to
such Intercompany Note and Intercompany Security Documents, and (C)
deliver to the Collateral Agent documents of the types referred to in
Section 5.01(d) and favorable opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect
and enforceability of such Collateral Assignment Documents and), all in
form, content and scope reasonably satisfactory to the Collateral
Agent.
(b) If at any time any Subsidiary that is not a Guarantor provides a
guarantee of the Borrower's obligations in respect of the Subordinated
Indebtedness and/or the Senior Subordinated Notes, then promptly (and in any
event within five (5) days), cause such Subsidiary to (i) become a Guarantor by
executing and delivering to the Administrative Agent a Joinder Agreement or such
other documents as the Administrative Agent shall deem appropriate for such
purpose, and (ii) deliver to the Administrative Agent documents of the types
referred to in Section 5.01(d) and favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to in clause (i)), all in form,
content and scope reasonably satisfactory to the Administrative Agent.
7.13 ERISA COMPLIANCE.
Do, and cause each of its ERISA Affiliates to do, each of the
following: (a) maintain each Plan in compliance in all material respects with
the applicable provisions of ERISA, the Internal Revenue Code and other federal
or state law; (b) cause each Plan that is qualified under Section 401(a) of the
Internal Revenue Code to maintain such qualification; and (c) make all required
contributions to any Plan subject to Section 412 of the Internal Revenue Code.
7.14 PLEDGED ASSETS.
Each Loan Party will (a) cause all of its owned and leased real and
personal Property (including, without limitation, its rights in each
Intercompany Note and the Intercompany Security Documents) other than Excluded
Property to be subject at all times to first priority, perfected and, in the
case of real Property (whether leased or owned), title insured Liens in favor of
the Administrative Agent (and with respect to any Intercompany Note and the
Intercompany Security Documents, in favor of the Collateral Agent) to secure the
Obligations pursuant to the terms and conditions of the Collateral Documents or,
with respect to any such Property acquired subsequent to the Closing Date, such
other additional security documents as the Administrative Agent shall reasonably
request, subject in any case to Permitted Liens and (b) deliver such other
documentation as the Administrative Agent (or the Collateral Agent with respect
to any Intercompany Note or Intercompany Security Document) may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, real estate title insurance policies,
surveys, environmental reports, landlord's waivers, certified resolutions and
other organizational and authorizing documents of such Person, favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above and the perfection of the Administrative Agent's Liens or the
Collateral Agent's Liens, as applicable, thereunder) and other items of the
types required to be delivered
79
pursuant to Section 5.01(d), all in form, content and scope (and prepared by
vendors selected by the Borrower) reasonably satisfactory to the Administrative
Agent. Without limiting the generality of the above, the Loan Parties will cause
(i) 100% of the issued and outstanding Capital Stock of each Material Domestic
Subsidiary owned by the Parent or any Material Domestic Subsidiary of the Parent
(other than the Capital Stock of an HMO Subsidiary if such pledge is prohibited
by law or not approved by the applicable Governmental Authority), (ii) 65% (or
such greater percentage that, due to a change in an applicable Law after the
date hereof, (A) could not reasonably be expected to cause the undistributed
earnings of such Foreign Subsidiary as determined for United States federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent and (B) could not reasonably be expected to
cause any material adverse tax consequences) of the issued and outstanding
Capital Stock entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each
Foreign Subsidiary directly owned by the Parent or any Material Domestic
Subsidiary of the Parent to be subject at all times to a first priority,
perfected Lien in favor of the Administrative Agent pursuant to the terms and
conditions of the Collateral Documents or such other security documents as the
Administrative Agent shall reasonably request, and (iii) (A) all intercompany
loans permitted by Sections 8.02(g) and (h) to be evidenced by Intercompany
Notes and secured by Intercompany Security Documents and (B) its rights in all
such Intercompany Notes and Intercompany Security Documents to be pledged to the
Collateral Agent pursuant to Collateral Assignment Documents and such other
security documents as the Collateral Agent may reasonably request.
Notwithstanding the foregoing, the parties hereto agree the Loan Parties shall
not be required to comply with the terms of this Section 7.14 with respect to
(i) Subsidiaries created subsequent to the Closing Date until the documentation
described in Section 7.12(a) is delivered or required to be delivered with
respect to such Subsidiary, and (ii) Xxxxxxxx until the consummation of the
Xxxxxxxx/Sandia Merger.
ARTICLE VIII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, no Loan Party shall, nor shall it permit any
Subsidiary to, directly or indirectly:
8.01 LIENS.
Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the Closing Date and listed on Schedule
8.01 and any renewals or extensions thereof not any less favorable to
the Lenders, provided that the property covered thereby is not
increased and any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 8.03(b);
(c) Liens (other than Liens imposed under ERISA) for taxes,
assessments or governmental charges or levies not yet due or which are
being contested in good faith and by appropriate proceedings diligently
conducted, if adequate reserves with respect thereto are maintained on
the books of the applicable Person in accordance with GAAP;
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(d) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade
contracts and leases (other than Indebtedness), statutory obligations,
surety bonds (other than bonds related to judgments or litigation),
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract
from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the applicable Person;
(h) Liens securing judgments for the payment of money (or
appeal or other surety bonds relating to such judgments) not in excess
of the Threshold Amount (except to the extent covered by independent
third-party insurance as to which the insurer has acknowledged in
writing its obligation to cover), unless any such judgment remains
undischarged for a period of more than thirty consecutive days during
which execution is not effectively stayed;
(i) Liens securing Indebtedness permitted under Section
8.03(e); provided that (i) such Liens do not at any time encumber any
Property other than the Property financed by such Indebtedness, (ii)
the Indebtedness secured thereby does not exceed the cost or fair
market value, whichever is lower, of the Property being acquired on the
date of acquisition and (iii) such Liens attach to such Property
concurrently with or within ninety days after the acquisition thereof;
(j) leases, subleases, licenses or sublicenses granted to
others not interfering in any material respect with the business of the
Parent or any Subsidiary;
(k) any interest of title of a lessor under, and Liens arising
from UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by
this Agreement;
(l) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 8.02;
(m) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(n) Liens of a collection bank arising under Section 4-210 of
the Uniform Commercial Code on items in the course of collection;
(o) Liens created or deemed to exist by the establishment of
trusts for the purpose of satisfying (A) Governmental Reimbursement
Program Costs and (B) other actions or claims
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pertaining to the same or related matters or other Medical
Reimbursement Programs, provided that the Parent, in each case, shall
have established adequate reserves for such claims or actions;
(p) Liens of sellers of goods to the Parent and any of its
Subsidiaries arising under Article 2 of the Uniform Commercial Code or
similar provisions of applicable law in the ordinary course of
business, covering only the goods sold and securing only the unpaid
purchase price for such goods and related expenses;
(q) Liens in favor of the Borrower on the assets of each HMO
Subsidiary or Non-Guarantor Subsidiary in accordance with the terms
hereof to secure the applicable Intercompany Note of such HMO
Subsidiary or Non-Guarantor Subsidiary;
(r) Liens on the assets of the Captive Insurance Subsidiary
created or deemed to exist in connection with the self-insurance
program of the Captive Insurance Subsidiary; and
(s) Liens in favor of the Collateral Agent pursuant to
Collateral Assignment Documents.
8.02 INVESTMENTS.
Make any Investments, except:
(a) Investments held by the Borrower or such Subsidiary in the
form of cash or Cash Equivalents;
(b) Investments existing as of the Closing Date and set forth
in Schedule 8.02;
(c) Investments in any Person that is a Loan Party prior to
giving effect to such Investment;
(d) Investments consisting of extensions of credit in the
nature of accounts receivable or notes receivable arising from the
grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof
from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss;
(e) Guarantees permitted by Section 8.03;
(f) Investments subsequent to the Closing Date in the form of
equity or capital contributions in HMO Subsidiaries, Non-Guarantor
Subsidiaries or Joint Ventures using cash invested in the Parent by the
Sponsor Group and immediately passed through by the Parent to the
applicable HMO Subsidiary, Non-Guarantor Subsidiary or Joint Venture;
(g) Investments consisting of (i) $70,000,000 intercompany
loan from the Borrower to Xxxxxxxx (it being understood and agreed that
the consideration giving rise to such intercompany loan shall not be
cash consideration but rather the value contributed to Xxxxxxxx
pursuant to the Xxxxxxxx/Sandia Merger), (ii) any intercompany loan
made in accordance with Section 7.12(a)(iii) (it being understood and
agreed that the consideration giving rise to each such intercompany
loan shall not be cash consideration but rather the surplus value
contributed to the applicable HMO Subsidiary by the Borrower) and (iii)
intercompany loans to HMO Subsidiaries that are not Loan Parties in an
amount not to exceed $20,000,000 in the aggregate; provided that (x)
each such intercompany loan is evidenced by an Intercompany Note and
secured by the assets of the applicable HMO Subsidiary
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pursuant to the Intercompany Security Documents and such other
documentation reasonably satisfactory to the Administrative Agent and
the Syndication Agents and (y) the rights of the applicable lender
under each such Intercompany Note and Intercompany Security Documents
have been pledged to the Collateral Agent pursuant to documentation
satisfactory to the Collateral Agent;
(h) Investments consisting of intercompany loans to
Non-Guarantor Subsidiaries and Joint Ventures in an amount not to
exceed $25,000,000 in the aggregate; provided that (x) each such
intercompany loan is evidenced by an Intercompany Note and secured by
the assets of the applicable Non-Guarantor Subsidiary or Joint Venture
pursuant to the Intercompany Security Documents and such other
documentation reasonably satisfactory to the Administrative Agent and
the Syndication Agents and (y) the rights of the applicable lender
under each such Intercompany Note and Intercompany Security Documents
have been pledged to the Collateral Agent pursuant to documentation
satisfactory to the Collateral Agent;
(i) Investments subsequent to the Closing Date in the form of
Permitted Other Acquisitions and equity or capital contributions in HMO
Subsidiaries, Subsidiaries or Joint Ventures (in each case that are not
Guarantors); provided that the aggregate amount of such Investments
outstanding at any time (together with the aggregate amount of
Permitted Other Acquisitions made subsequent to the Closing Date) shall
not exceed $37,000,000 in the aggregate;
(j) Permitted Acquisitions;
(k) Investments in the Captive Insurance Subsidiary in an
amount not to exceed the minimum amount of capital required under the
laws of the jurisdiction in which the Captive Insurance Subsidiary is
formed and other Investments in the Captive Insurance Subsidiary to
cover reasonable general corporate and overhead expenses of the Captive
Insurance Subsidiary;
(l) loans and advances in the ordinary course of business to
employees of the Parent or any of its Subsidiaries so long as the
aggregate principal amount of such advances outstanding at any time
shall not exceed $2,000,000;
(m) Investments consisting of non-cash consideration received
in connection with a sale of assets permitted under Section 8.05; and
(n) Investments of a nature not contemplated in the foregoing
clauses in an amount not to exceed $5,000,000 in the aggregate at any
time outstanding.
8.03 INDEBTEDNESS.
Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness of the Borrower and its Subsidiaries set
forth in Schedule 8.03 (and renewals, refinancings and extensions
thereof (not exceeding the principal amount of the Indebtedness so
renewed, refinanced or extended) on terms and conditions not materially
less favorable to the applicable debtor(s) or to the Lenders);
(c) intercompany Indebtedness permitted under Section 8.02;
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(d) obligations (contingent or otherwise) of the Borrower or
any Subsidiary existing or arising under any Swap Contract, provided
that (i) such obligations are (or were) entered into by such Person in
the ordinary course of business for the purpose of directly mitigating
risks associated with liabilities, commitments, investments, assets, or
property held or reasonably anticipated by such Person, or changes in
the value of securities issued by such Person, and not for purposes of
speculation or taking a "market view;" and (ii) such Swap Contract does
not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the
defaulting party;
(e) purchase money Indebtedness (including obligations in
respect of Capital Leases or Synthetic Leases) hereafter incurred by
the Borrower or any of its Subsidiaries to finance the purchase of
fixed assets, and renewals, refinancings and extensions thereof,
provided that (i) the total of all such Indebtedness for all such
Persons taken together shall not exceed an aggregate principal amount
of $10 million at any one time outstanding; (ii) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed;
and (iii) no such Indebtedness shall be refinanced for a principal
amount in excess of the principal balance outstanding thereon at the
time of such refinancing;
(f) Subordinated Indebtedness in an aggregate principal amount
of up to $36,000,000;
(g) the Senior Subordinated Notes in an aggregate principal
amount not to exceed $225,000,000;
(h) Additional Subordinated Indebtedness, provided that (i) no
Default or Event of Default shall exist prior to or after giving effect
to such issuance, (ii) the definitive documentation (including without
limitation the subordination provisions) for such Additional
Subordinated Indebtedness is no more restrictive to the Borrower than
the Senior Subordinated Notes, (iii) the Borrower shall have delivered
to the Administrative Agent a Pro Forma Compliance Certificate
demonstrating (A) that, upon giving effect to such Additional
Subordinated Indebtedness on a Pro Forma Basis, (I) the Consolidated
Leverage Ratio is at least 0.25 less than the ratio required to be
maintained at such time by Section 8.11(a), and (II) that the Loan
Parties are in compliance with Section 8.11, and (iv) the aggregate
principal amount of such Additional Subordinated Indebtedness plus the
aggregate principal amount of Senior Subordinated Notes outstanding as
permitted by Section 8.03(g) shall not exceed $350,000,000;
(i) other unsecured Indebtedness in an aggregate principal
amount not to exceed $5,000,000 at any one time outstanding;
(j) Indebtedness of the Borrower or any other Loan Party in
the form of loans from the Captive Insurance Subsidiary in an aggregate
principal amount at any time outstanding not to exceed twenty percent
(20%) of the total assets of the Captive Insurance Subsidiary, as shown
on the most recent balance sheet of the Captive Insurance Subsidiary in
accordance with GAAP;
(k) Earn Out Obligations not to exceed $20,000,000 in the
aggregate at any one time outstanding; and
(l) Guarantees (which Guarantees in respect of the Senior
Subordinated Notes and the Additional Subordinated Indebtedness shall
be similarly subordinated) with respect to Indebtedness permitted under
clauses (a) through (k) of this Section 8.03.
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provided, however, with respect to any Indebtedness incurred pursuant to clauses
(b), (e), (h) or (i) hereof, such Indebtedness shall be permitted under this
Section 8.03 only if the Administrative Agent shall have received a written
certification from the Borrower satisfactory to the Administrative Agent stating
that after giving effect to the incurrence of such Indebtedness an amount at
least equal to the Aggregate Revolving Commitments in effect at such time
remains available to the Borrower under Section 4.09(b)(i) of the Indenture for
the borrowing of Revolving Loans and Swing Line Loans and the issuances of
Letters of Credit hereunder (without giving effect to any such Loans or Letters
of Credit then outstanding).
8.04 FUNDAMENTAL CHANGES.
Merge, dissolve, liquidate, consolidate with or into another Person, or
Dispose of (whether in one transaction or in a series of related transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to or in favor of any Person; provided that, notwithstanding the foregoing
provisions of this Section 8.04 but subject to the terms of Sections 7.12 and
7.14, (a) any Loan Party other than the Parent may merge or consolidate with any
other Loan Party other than the Parent, provided that if the Borrower is a party
thereto, the Borrower shall be the continuing or surviving corporation, (b) any
Foreign Subsidiary may be merged or consolidated with or into any Loan Party
provided that such Loan Party shall be the continuing or surviving corporation,
(c) any Foreign Subsidiary may be merged or consolidated with or into any other
Foreign Subsidiary, (d) any Subsidiary may merge with any Person that is not a
Loan Party in connection with an Acquisition permitted hereunder provided that
such Loan Party shall be the continuing or surviving corporation and (e) the
Sandia Parties may merge or consolidate with Xxxxxxxx pursuant to the
Xxxxxxxx/Sandia Merger; provided that (i) Xxxxxxxx shall have delivered an
Intercompany Note in the amount of $70 million to the Borrower and pledged its
assets to the Borrower to secure such Intercompany Note pursuant to the
Intercompany Security Documents and (ii) the Borrower shall have delivered such
Intercompany Note to the Collateral Agent, executed Collateral Assignment
Documents and delivered such other documentation to the Collateral Agent in
accordance with Section 7.14.
8.05 DISPOSITIONS.
Make any Disposition (other than any Approved Hospital Swap) unless (a)
at least 75% of the total consideration received by the Borrower or such
Subsidiary in connection therewith shall be cash or Cash Equivalents paid
contemporaneous with consummation of the transaction and the total consideration
paid shall be in an amount not less than the fair market value of the Property
disposed of, (b) if such transaction is a Sale and Leaseback Transaction, such
transaction is not prohibited by the terms of Section 8.15, (c) such transaction
does not involve the sale or other disposition of a minority equity interest in
any Subsidiary, (d) such transaction does not involve a sale or other
disposition of receivables other than receivables owned by or attributable to
other Property concurrently being disposed of in a transaction otherwise
permitted under this Section 8.05, (e) the aggregate net book value of all of
the assets sold or otherwise disposed of by the Parent and its Subsidiaries in
all such transactions in any fiscal year of the Parent shall not exceed $25
million, and (f) in the case of any Disposition where the aggregate net book
value of all of the assets sold or otherwise disposed of exceeds $2.5 million,
no later than five (5) Business Days prior to such Disposition, the Borrower
shall have delivered to the Administrative Agent (i) a Pro Forma Compliance
Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such
transaction, the Loan Parties would be in compliance with the financial
covenants set forth in Section 8.11 as of the most recent fiscal quarter end for
which the Loan Parties have delivered financial statements pursuant to Section
7.01(a) or (b), and (ii) a certificate of a Responsible Officer of the Borrower
specifying the anticipated date of such Disposition, briefly describing the
assets to be sold or otherwise disposed of and setting forth the net book value
of such assets, the aggregate consideration and the Net Cash Proceeds to be
received for such assets in connection with such Disposition. Notwithstanding
the foregoing, the parties hereto agree that AHS Summit Hospital, LLC may donate
the Baton Rouge Property to the City of Baton Rouge or Louisiana State
University.
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8.06 RESTRICTED PAYMENTS.
Declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except that:
(a) (i) each Subsidiary may make Restricted Payments (directly
or indirectly) to any Loan Party and (ii) so long as there shall exist
no Default or Event of Default (both before and after giving effect to
the payment thereof) any Controlled Subsidiary may make cash dividends
on a pro rata basis to the holders of its Capital Stock;
(b) the Parent and each Subsidiary may declare and make
dividend payments or other distributions payable solely in the Capital
Stock of such Person;
(c) the Parent may repurchase the Capital Stock of the Parent
(or the Borrower may make Restricted Payments to the Parent to
consummate any such repurchase of Capital Stock) held by departing
employees, former employees, directors or former directors of the
Parent or any of its Subsidiaries in an amount not to exceed $1,500,000
in the aggregate during any fiscal year of the Parent;
(d) the Borrower may make dividends or other distributions to
the Parent to pay any taxes that are owed by the Parent as part of a
consolidated, combined or unitary or other group which includes the
Borrower, to cover that portion of such taxes which are reasonably
attributable to the Borrower and any other Subsidiaries of the Borrower
that are included in such group; and
(e) the Borrower may make distributions to the Parent in any
fiscal year, beginning with the fiscal year ended December 31, 2003, so
that the Parent may pay (i) any Sponsor Fees and reasonable
out-of-pocket expenses of the Sponsors, in an aggregate amount not to
exceed $1,500,000 in any fiscal year and (ii) any customary transaction
fees; provided, however, that no Default or Event of Default shall have
occurred and be continuing at the time of any such distribution or
payment or result therefrom.
8.07 CHANGE IN NATURE OF BUSINESS.
Engage in any material line of business substantially different from
those lines of business conducted by the Borrower and its Subsidiaries on the
Closing Date or any business substantially related or incidental thereto.
8.08 TRANSACTIONS WITH AFFILIATES AND INSIDERS.
Enter into or permit to exist any transaction or series of transactions
with any officer, director or Affiliate of such Person other than (a) advances
of working capital to any Loan Party, (b) transfers of cash and assets to any
Loan Party, (c) intercompany transactions expressly permitted by Section 7.07,
Section 8.02, Section 8.03, Section 8.04, Section 8.05 or Section 8.06, (d)
normal and reasonable compensation, reimbursement of expenses and
indemnification of officers and directors, (e) any Excluded Equity Issuance and
(f) except as otherwise specifically limited in this Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director or Affiliate.
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8.09 BURDENSOME AGREEMENTS.
(a) Enter into, or permit to exist, any Contractual Obligation that
encumbers or restricts the ability of any such Person to (i) pay dividends or
make any other distributions to any Loan Party on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits,
(ii) pay any Indebtedness or other obligation owed to any Loan Party, (iii) make
loans or advances to any Loan Party, (iv) sell, lease or transfer any of its
Property to any Loan Party, (v) pledge its Property pursuant to the Loan
Documents or any renewals, refinancings, exchanges, refundings or extension
thereof or (vi) act as a Loan Party pursuant to the Loan Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (i)-(v) above) for (1) this
Agreement and the other Loan Documents, (2) the Subordinated Indebtedness
Documents, (3) the Senior Subordinated Notes Documents, (4) any document or
instrument governing Indebtedness incurred pursuant to Section 8.03(e), provided
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (5) any Permitted Lien or any
document or instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien, (6) customary restrictions and conditions contained in any
agreement relating to the sale of any Property permitted under Section 8.05
pending the consummation of such sale, (7) Contractual Obligations of any Person
that becomes a Subsidiary after the date hereof, provided, that such Contractual
Obligations existed at the time such Person becomes a Subsidiary and was not
created in contemplation of or in connection with such Person becoming a
Subsidiary or (8) with respect to any Controlled Subsidiary, customary
supermajority voting provisions and customary provisions with respect to the
disposition or distribution of assets or property, in each case contained in
joint venture agreements.
(b) Enter into, or permit to exist, any Contractual Obligation that
prohibits or otherwise restricts the existence of any Lien upon any of its
Property in favor of the Administrative Agent (for the benefit of the Lenders)
for the purpose of securing the Obligations, whether now owned or hereafter
acquired, or requiring the grant of any security for any obligation if such
Property is given as security for the Obligations, except (i) any document or
instrument governing Indebtedness incurred pursuant to Section 8.03(e), provided
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (ii) in connection with any
Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien, (iii) pursuant to customary
restrictions and conditions contained in any agreement relating to the sale of
any Property permitted under Section 8.05, pending the consummation of such
sale, (iv) Contractual Obligations of any Person that becomes a Subsidiary after
the date hereof, provided, that such Contractual Obligations existed at the time
such Person becomes a Subsidiary and was not created in contemplation of or in
connection with such Person becoming a Subsidiary and (v) with respect to any
Controlled Subsidiary, customary supermajority voting provisions and customary
provisions with respect to the pledge, disposition or distribution of assets or
property, in each case contained in joint venture agreements.
8.10 USE OF PROCEEDS.
Use the proceeds of the Credit Extensions, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the FRB) or to extend
credit to others for the purpose of purchasing or carrying margin stock or to
refund indebtedness originally incurred for such purpose.
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8.11 FINANCIAL COVENANTS.
(a) Consolidated Senior Leverage Ratio. Permit the Consolidated Senior
Leverage Ratio as of the end of any fiscal quarter of the Parent to be greater
than the ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 2003 2.75 to 1.0
December 31, 2003 2.75 to 1.0
March 31, 2004 2.75 to 1.0
June 30, 2004 2.75 to 1.0
September 30, 2004 2.75 to 1.0
December 31, 2004 2.75 to 1.0
March 31, 2005 2.50 to 1.0
June 30, 2005 2.50 to 1.0
September 30, 2005 2.50 to 1.0
December 31, 2005 2.50 to 1.0
March 31, 2006 2.25 to 1.0
June 30, 2006 2.25 to 1.0
September 30, 2006 2.25 to 1.0
December 31, 2006 2.25 to 1.0
March 31, 2007 2.00 to 1.0
June 30, 2007 2.00 to 1.0
September 30, 2007 2.00 to 1.0
December 31, 2007 2.00 to 1.0
March 31, 2008 2.00 to 1.0
June 30, 2008 and thereafter 2.00 to 1.0
(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
as of the end of any fiscal quarter of the Parent to be greater than the ratio
set forth below opposite such fiscal quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 2003 4.50 to 1.0
December 31, 2003 4.50 to 1.0
March 31, 2004 4.50 to 1.0
June 30, 2004 4.50 to 1.0
September 30, 2004 4.50 to 1.0
December 31, 2004 4.50 to 1.0
March 31, 2005 4.25 to 1.0
June 30, 2005 4.25 to 1.0
September 30, 2005 4.00 to 1.0
December 31, 2005 4.00 to 1.0
March 31, 2006 4.00 to 1.0
June 30, 2006 4.00 to 1.0
September 30, 2006 3.75 to 1.0
December 31, 2006 3.75 to 1.0
March 31, 2007 3.75 to 1.0
June 30, 2007 3.75 to 1.0
September 30, 2007 3.50 to 1.0
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December 31, 2007 3.50 to 1.0
March 31, 2008 3.50 to 1.0
June 30, 2008 and thereafter 3.50 to 1.0
(c) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio as of the end of any fiscal quarter of the Parent to be
less than the ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 2003 1.90 to 1.0
December 31, 2003 1.90 to 1.0
March 31, 2004 2.00 to 1.0
June 30, 2004 2.00 to 1.0
September 30, 2004 2.25 to 1.0
December 31, 2004 2.25 to 1.0
March 31, 2005 2.50 to 1.0
June 30, 2005 2.50 to 1.0
September 30, 2005 2.75 to 1.0
December 31, 2005 2.75 to 1.0
March 31, 2006 3.00 to 1.0
June 30, 2006 3.00 to 1.0
September 30, 2006 3.00 to 1.0
December 31, 2006 3.00 to 1.0
March 31, 2007 3.25 to 1.0
June 30, 2007 3.25 to 1.0
September 30, 2007 3.25 to 1.0
December 31, 2007 3.25 to 1.0
March 31, 2008 3.25 to 1.0
June 30, 2008 and thereafter 3.25 to 1.0
(d) Consolidated EBITDA. Permit Consolidated EBITDA to be less than (i)
$35,000,000 for the nine month period ending September 30, 2003 and (ii)
$50,000,000 for the twelve month period ending December 31, 2003.
(e) Capital Expenditures. Permit Consolidated Capital Expenditures
(excluding expenditures relating to the acquisition of fixed asset or capital
assets acquired in Permitted Acquisitions or Permitted Other Acquisitions) to
exceed the amounts set forth below for the periods set forth below plus fifty
percent (50%) of the unused amount available for Consolidated Capital
Expenditures under this Section 8.12 for the immediately preceding fiscal year
(excluding any carry forward available from any prior fiscal year); provided,
however, that with respect to any fiscal year, Consolidated Capital Expenditures
made during such fiscal year shall be deemed to be made first with respect to
the applicable limitation for such fiscal year and then with respect to any
carry-forward from the immediately preceding fiscal year:
Period Amount
------ ------
July 1, 2003 through December 31, 2003 $35,000,000
Fiscal Year 2004 $40,000,000
Fiscal Year 2005 $40,000,000
Fiscal Year 2006 and thereafter $45,000,000
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Notwithstanding the foregoing, the amount of Consolidated Capital Expenditures
permitted above for any fiscal year shall be increased by (i) an amount equal to
three percent (3%) of the revenues of any Person in the Medical/Surgical
Business for the twelve month period preceding the Acquisition of such Person
pursuant to a Permitted Acquisition and (ii) an amount equal one and one-half
percent (1.5%) of the revenues of any Person in the Behavioral Business for the
twelve month period preceding the Acquisition of such Person pursuant to a
Permitted Acquisition.
In addition to the Consolidated Capital Expenditures permitted above, the
Borrower and its Subsidiaries may also make Consolidated Capital Expenditures in
an aggregate amount not to exceed $15 million during the term of this Agreement
provided that (i) in connection with any Permitted Acquisition or Permitted
Other Acquisition, the Borrower shall have delivered a certificate of a
Responsible Officer to the Administrative Agent setting forth the Borrower's
intention to make such Consolidated Capital Expenditures and (ii) such
Consolidated Capital Expenditures shall have been included for purposes of
determining the aggregate consideration paid for such Permitted Acquisition or
Permitted Other Acquisition.
(f) Minimum Statutory Net Worth. Permit Net Worth of Xxxxxxxx and any
other HMO Subsidiary to be less than the product of (i) 1.10 multiplied by (ii)
the amount of minimum Net Worth required to be maintained by such Person by the
applicable Governmental Authority.
8.12 PREPAYMENT OF OTHER INDEBTEDNESS, ETC.
(a) Amend or modify any of the terms of the Subordinated Indebtedness,
the Senior Subordinated Notes Documents or the Additional Subordinated
Indebtedness if any such amendment or modification would add or change any terms
in a manner adverse to the Parent or any Subsidiary or the Lenders, or shorten
the final maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto.
(b) Make (or give any notice with respect thereto) any voluntary or
optional payment or prepayment or redemption or acquisition for value of
(including without limitation, by way of depositing money or securities with the
trustee with respect thereto before due for the purpose of paying when due),
refund, refinance or exchange of the Subordinated Indebtedness, the Senior
Subordinated Notes or the Additional Subordinated Indebtedness.
(c) (i) Make or offer to make any principal payments with respect to
the Subordinated Indebtedness, the Senior Subordinated Notes or the Additional
Subordinated Indebtedness, (ii) redeem or offer to redeem any of the
Subordinated Indebtedness, the Senior Subordinated Notes or the Additional
Subordinated Indebtedness or (iii) deposit any funds intended to discharge the
Subordinated Indebtedness, the Senior Subordinated Notes or the Additional
Subordinated Indebtedness.
(d) Accept or permit to be made any principal payment on (i) the
intercompany loan made by the Borrower to Xxxxxxxx in accordance with the terms
hereof or (ii) any other intercompany loan made to an HMO Subsidiary in
accordance with the terms of Section 7.12(a)(iii) and Section 8.02(g)(ii).
8.13 ORGANIZATION DOCUMENTS; FISCAL YEAR; LEGAL NAME, STATE OF FORMATION AND
FORM OF ENTITY.
(a) Amend, modify or change its Organization Documents in a manner
adverse to the Lenders.
(b) Change its fiscal year.
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(c) Without providing ten (10) days prior written notice to the
Administrative Agent, change its name, state of formation or form of
organization.
8.14 OWNERSHIP OF SUBSIDIARIES.
Notwithstanding any other provisions of this Agreement or any other
Loan Document to the contrary, (i) permit any Person (other than the Parent or
any Wholly Owned Subsidiary of the Parent) to own any Capital Stock of any
Subsidiary of the Parent, except to qualify directors where required by
applicable law or to satisfy other requirements of applicable law with respect
to the ownership of Capital Stock of Foreign Subsidiaries, (ii) permit any
Subsidiary of the Parent to issue or have outstanding any shares of preferred
Capital Stock or (iii) create, incur, assume or suffer to exist any Lien on any
Capital Stock of any Subsidiary of the Parent, except for Permitted Liens;
provided, however, that Persons (other than the Parent or any Wholly Owned
Subsidiary of the Parent) ("Third Party Investors") may own shares of Capital
Stock in a Subsidiary of the Parent (each a "Controlled Subsidiary"); provided
further that after giving effect to the Acquisition or creation of any such
Controlled Subsidiary on a Pro Forma Basis, the amount of Consolidated EBITDA
attributable to all of the Non-Guarantor Subsidiaries (other than Xxxxxxxx) for
the most recent four fiscal quarter period shall not exceed 20% of total
Consolidated EBITDA for such period.
8.15 SALE LEASEBACKS.
Except as set forth on Schedule 8.15, enter into any Sale and Leaseback
Transaction unless (a) the sale of such property is permitted by Section 8.05
and (b) any Capital Lease or Synthetic Lease obligations or Liens arising in
connection therewith are permitted by Sections 8.01 and 8.03, as the case may
be.
8.16 LIMITATIONS ON PARENT.
Notwithstanding any other provisions of this Agreement or any other
Loan Document to the contrary, permit the Parent to:
(a) hold any assets other than the Capital Stock of its
Subsidiaries and cash and Cash Equivalents for the sole purpose of
paying liabilities referred to in clause (b) below;
(b) have any liabilities other than (A) the liabilities under
the Loan Documents, (B) liabilities under the Senior Subordinated Note
Documents, the Additional Subordinated Indebtedness documents and the
Subordinated Indebtedness Documents, (C) tax liabilities in the
ordinary course of business, (D) loans and advances permitted under
Section 8.02, (E) corporate, administrative and operating expenses in
the ordinary course of business and (F) Sponsor Fees and reasonable
out-of-pocket expenses of the Sponsors pursuant to management or
service arrangements with a Sponsor or its Affiliates; or
(c) engage in any business other than (i) owning the Capital
Stock of its Subsidiaries and activities incidental or related thereto,
(ii) acting as a Guarantor hereunder and granting Liens in all of its
Property to the Administrative Agent, for the benefit of the Lenders,
pursuant to the Collateral Documents (iii) acting as a guarantor in
respect of the Senior Subordinated Notes, the Additional Subordinated
Indebtedness and Subordinated Indebtedness.
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ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
9.01 EVENTS OF DEFAULT.
Any of the following shall constitute an Event of Default:
(a) Non-Payment. The Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, any amount of principal
of any Loan or any L/C Obligation, or (ii) within three days after the
same becomes due, any interest on any Loan or on any L/C Obligation, or
any commitment fee or other fee due hereunder, or (iii) within five
days after the same becomes due, any other amount payable hereunder or
under any other Loan Document; or
(b) Specific Covenants. (i) The Borrower fails to perform or
observe any term, covenant or agreement contained in any of Section
7.03, 7.05(a), 7.05(c), 7.05(d), 7.10, 7.11, 7.12, or 7.14 or Article
VIII or (ii) the Borrower fails to perform or observe any term,
covenant or agreement contained in Section 7.01 or 7.02 and such
default shall continue for five (5) or more Business Days or
(c) Other Defaults. Any Loan Party fails to perform or observe
any other covenant or agreement (not specified in subsection (a) or (b)
above) contained in any Loan Document on its part to be performed or
observed and such failure continues for thirty days after the earlier
of a Responsible Officer of a Loan Party becoming aware of such default
or notice thereof by the Administrative Agent; or
(d) Representations and Warranties. Any representation,
warranty, certification or statement of fact made or deemed made by or
on behalf of the Borrower or any other Loan Party herein, in any other
Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading in any material respect when
made or deemed made; or
(e) Cross-Default. The Parent or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any
Indebtedness or Guarantee (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, or (B) fails to observe
or perform any other agreement or condition relating to any such
Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit
the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or
to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay,
defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in
respect thereof to be demanded; or (ii) there occurs under any Swap
Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to
which the Parent or any Subsidiary is the Defaulting Party (as defined
in such Swap Contract) or (B) any Termination Event (as so defined)
under such Swap Contract as to which the Parent or any Subsidiary is an
Affected Party (as so defined) and, in either event, the Swap
Termination Value
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owed by the Parent or such Subsidiary as a result thereof is greater
than the Threshold Amount; or
(f) Insolvency Proceedings, Etc. Any Loan Party or any of its
Subsidiaries institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of
any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part
of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues
undischarged or unstayed for sixty calendar days; or any proceeding
under any Debtor Relief Law relating to any such Person or to all or
any material part of its property is instituted without the consent of
such Person and continues undismissed or unstayed for sixty calendar
days, or an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Parent or any
Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or
warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such
Person and is not released, vacated or fully bonded within thirty days
after its issue or levy; or
(h) Judgments. There is entered against the Parent or any
Subsidiary (i) one or more final judgments or orders for the payment of
money in an aggregate amount exceeding the Threshold Amount (to the
extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any
creditor upon such judgment or order, or (B) there is a period of ten
consecutive days during which a stay of enforcement of such judgment,
by reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower under Title IV of ERISA
to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of the Threshold Amount, or (ii) the Borrower or any
ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of the Threshold Amount; or
(j) Invalidity of Loan Documents. Any Loan Document, at any
time after its execution and delivery and for any reason other than as
expressly permitted hereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party
or any other Person contests in any manner the validity or
enforceability of any Loan Document; or any Loan Party denies that it
has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control; or
(l) Subordinated Debt Documentation. (i) There shall occur an
"Event of Default" (or any comparable term) under, and as defined in,
the Subordinated Indebtedness Documents, (ii) any of the Obligations
for any reason shall cease to be "Designated Senior Indebtedness" (or
any comparable term) under, and as defined in, the Subordinated
Indebtedness Documents, (iii) any Indebtedness other the Obligations
shall constitute "Designated Senior Indebtedness" (or any
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comparable term) under, and as defined in, the Subordinated
Indebtedness Documents or (iv) the subordination provisions of the
Subordinated Indebtedness Documents shall, in whole or in part,
terminate, cease to be effective or cease to be legally valid, binding
and enforceable against any holder of the Subordinated Indebtedness; or
(m) Senior Subordinated Notes. (i) There shall occur an "Event
of Default" (or any comparable term) under, and as defined in, the
Senior Subordinated Notes Documents, (ii) any of the Obligations for
any reason shall cease to be "Designated Senior Indebtedness" (or any
comparable term) under, and as defined in, the Senior Subordinated
Notes Documents, (iii) any Indebtedness other than the Obligations
shall constitute "Designated Senior Indebtedness" (or any comparable
term) under, and as defined in, the Senior Subordinated Notes Documents
or (iv) the subordination provisions of the Senior Subordinated Notes
Documents shall, in whole or in part, terminate, cease to be effective
or cease to be legally valid, binding and enforceable against any
holder of the Senior Subordinated Notes; or
(n) HMO Event. (i) An HMO Event shall remain unremedied for
thirty days after the occurrence thereof (or such lesser period of
time, if any, as the HMO Regulator administering the HMO Regulations
shall have imposed for the cure of such HMO Event), or (ii) any HMO
Subsidiary shall suffer the loss of twenty-five percent (25%) or more
of the enrolled recipients for which it is responsible as measured from
the beginning of the previous month or from the close of its
immediately preceding fiscal-year end that would result in a Material
Adverse Effect; or
(o) Exclusion Event. There shall occur an Exclusion Event that
would result in a Material Adverse Effect; or
(p) Intercompany Documents. There shall occur a "default" or
an "Event of Default" (or any comparable terms) under, and as defined
in, any Intercompany Note or any Intercompany Security Document.
9.02 REMEDIES UPON EVENT OF DEFAULT.
If any Event of Default occurs and is continuing, the Administrative
Agent shall, at the request of, or may, with the consent of, the Required
Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans and
any obligations of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be
terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts
owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by
the Borrower;
(c) require that the Borrower Cash Collateralize the L/C
Obligations (in an amount equal to the then Outstanding Amount
thereof); and
(d) exercise on behalf of itself and the Lenders all rights
and remedies available to it and the Lenders under the Loan Documents
or applicable law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to
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make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions
shall automatically terminate, the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable, and the obligation of the Borrower to Cash Collateralize the
L/C Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.
9.03 APPLICATION OF FUNDS.
After the exercise of remedies provided for in Section 9.02 (or after
the Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set
forth in the proviso to Section 9.02), any amounts received on account of the
Obligations shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and
amounts payable under Article III) payable to the Administrative Agent
or the Collateral Agent in their capacities as such;
Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest)
payable to the Lenders (including Attorney Costs and amounts payable
under Article III), ratably among them in proportion to the amounts
described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and L/C Borrowings and fees,
premiums and scheduled periodic payments, and any interest accrued
thereon, due under any Swap Contract between any Loan Party and any
Lender, or any Affiliate of a Lender, to the extent such Swap Contract
is permitted by Section 8.03(d), ratably among the Lenders (and, in the
case of such Swap Contracts, Affiliates of Lenders) in proportion to
the respective amounts described in this clause Third held by them;
Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings and breakage,
termination or other payments, and any interest accrued thereon, due
under any Swap Contract between any Loan Party and any Lender, or any
Affiliate of a Lender, to the extent such Swap Contract is permitted by
Section 8.03(d), and to Cash Collateralize that portion of L/C
Obligations comprised of the aggregate undrawn amount of Letters of
Credit, ratably among the Lenders (and, in the case of such Swap
Contracts, Affiliates of Lenders) in proportion to the respective
amounts described in this clause Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by
Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above
shall be applied to satisfy drawings under such Letters of Credit as they occur.
If any amount remains on deposit as Cash Collateral after all Letters of Credit
have either been fully drawn or expired, such remaining amount shall be applied
to the other Obligations, if any, in the order set forth above.
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ARTICLE X
ADMINISTRATIVE AGENT
10.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article X with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in this Article X and in the definition of
"Agent-Related Person" included the L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the L/C
Issuer.
(c) Each Lender hereby consents to and approves the terms of the
Intercreditor and Subordination Agreement, a copy of which is attached hereto as
Exhibit A. By execution hereof, the Lenders acknowledge the terms of the
Intercreditor and Subordination Agreement and agree to be bound by the terms
thereof and further authorize and direct the Administrative Agent to enter into
the Intercreditor and Subordination Agreement on behalf of all the Lenders.
10.02 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.
10.03 LIABILITY OF ADMINISTRATIVE AGENT.
No Agent-Related Person shall (a) be liable for any action taken or omitted to
be taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct in connection with its duties expressly set
forth herein), or (b) be responsible in any manner to any Lender or participant
for any recital, statement, representation or warranty made by any Loan Party or
any officer thereof, contained herein or
96
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Loan Party or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
or participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any Loan
Party or any Affiliate thereof.
10.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under any Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
10.05 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or the Borrower referring
to this Agreement, describing such Default and stating that such notice is a
"notice of default." The Administrative Agent will notify the Lenders of its
receipt of any such notice. The Administrative Agent shall take such action with
respect to such Default as may be directed by the Required Lenders in accordance
with Article IX; provided, however, that unless and until the Administrative
Agent has received any such direction, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable or in the best interest of
the Lenders.
10.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to
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constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent herein, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Loan Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.
10.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT.
Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of any Loan Party and without limiting the
obligation of any Loan Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person's own gross negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the Commitments, the
payment of all other Obligations and the resignation of the Administrative
Agent.
10.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
Bank One and its Affiliates may make loans to, issue letters of credit
for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Loan Parties and their respective Affiliates
as though Bank One were not the Administrative Agent or the L/C Issuer hereunder
and without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank One or its Affiliates may receive information
regarding any Loan Party or its Affiliates (including information that may be
subject to confidentiality obligations in favor of such Loan Party or such
Affiliate) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to
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them. With respect to its Loans, Bank One shall have the same rights and powers
under this Agreement as any other Lender and may exercise such rights and powers
as though it were not the Administrative Agent or the L/C Issuer, and the terms
"Lender" and "Lenders" include Bank One in its individual capacity.
10.09 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon thirty
days' notice to the Lenders; provided that any such resignation by Bank One
shall also constitute its resignation as L/C Issuer and Swing Line Lender. If
the Administrative Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor administrative agent for the
Lenders, which successor administrative agent shall be consented to by the
Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, the Person acting as
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent",
L/C Issuer and Swing Line Lender and the respective terms "Administrative
Agent", "L/C Issuer" and "Swing Line Lender" shall mean such successor
administrative agent, Letter of Credit issuer and swing line lender, and the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated and the retiring L/C Issuer's and Swing Line Lender's
rights, powers and duties as such shall be terminated, without any other or
further act or deed on the part of such retiring L/C Issuer or Swing Line Lender
or any other Lender, other than the obligation of the successor L/C Issuer to
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or to make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article X and Sections 11.04 and 11.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date thirty days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.
10.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C
Obligations and all other Obligations that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to
have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and
advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and
the
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Administrative Agent under Sections 2.03(i) and (j), 2.09 and 11.04)
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 11.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
10.11 COLLATERAL AND GUARANTY MATTERS.
The Lenders irrevocably authorize the Administrative Agent, at its
option and in its discretion,
(a) to release any Lien on any Collateral granted to or held
by the Administrative Agent under any Loan Document (i) upon
termination of the Commitments and payment in full of all Obligations
(other than contingent indemnification obligations) and the expiration
or termination of all Letters of Credit, (ii) that is transferred or to
be transferred as part of or in connection with any Disposition
permitted hereunder or under any other Loan Document or any Involuntary
Disposition, or (iii) as approved in accordance with Section 11.01;
(b) to release any Lien on any Collateral granted by any
Sandia Party to the Administrative Agent at such time as the
Administrative Agent has been provided with evidence satisfactory in
form and substance to the Administrative Agent demonstrating that such
Sandia Party has merged or consolidated with or into Xxxxxxxx provided
that (i) Xxxxxxxx shall have delivered an Intercompany Note, in the
amount of $70 million, to the Borrower and pledged its assets to the
Borrower to secure such Intercompany Note pursuant to Intercompany
Security Documents and such other documents reasonably required by the
Collateral Agent, (ii) the Borrower shall delivered such Intercompany
Note to the Collateral Agent, executed Collateral Assignment Documents
and delivered such other documentation in accordance with Section 7.14
such that the Collateral Agent shall have a first priority security
interest in such assets as required by Section 7.14 and (iii) the
Borrower shall have provided to the Administrative Agent a written
certification in form and substance satisfactory to the Administrative
Agent that no such Sandia Party has outstanding at the time of such
consolidation or merger any Indebtedness other than Indebtedness that
it would otherwise be permitted to incur at such time as a Restricted
Subsidiary (as defined in the Indenture) that is not a Subsidiary
Guarantor (as defined in the Indenture) under the Indenture.
(c) to subordinate any Lien on any Property granted to or held
by the Administrative Agent under any Loan Document to the holder of
any Lien on such Property that is permitted by Section 8.01(i); and
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(d) to release any Guarantor from its obligations under the
Guaranty, if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
or subordinate its interest in particular types or items of Property, or to
release any Guarantor from its obligations under the Guaranty pursuant to this
Section 10.11.
10.12 OTHER AGENTS; ARRANGERS AND MANAGERS.
None of the Lenders or other Persons identified on the facing page or
signature pages of this Agreement as a "syndication agent," "documentation
agent," "co-agent," "book manager," "lead manager," "arranger," "lead arranger"
or "co-arranger" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
ARTICLE XI
MISCELLANEOUS
11.01 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, waiver or consent shall:
(a) extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 9.02) without
the written consent of such Lender (it being understood and agreed that
a waiver of any condition precedent set forth in Section 5.02 or of any
Default or Event of Default or a mandatory reduction in Commitments is
not considered an extension or increase in Commitments of any Lender);
(b) postpone any date fixed by this Agreement or any other
Loan Document for any payment of principal (excluding mandatory
prepayments), interest, fees or other amounts due to the Lenders (or
any of them) hereunder or under any other Loan Document without the
written consent of each Lender directly affected thereby;
(c) reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or any fees or other amounts
payable hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby; provided, however,
that only the consent of the Required Lenders shall be necessary to
amend the definition of "Default Rate" or to waive any obligation of
the Borrower to pay interest at the Default Rate;
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(d) change Section 2.13 or Section 9.03 in a manner that would
alter the pro rata sharing of payments required thereby without the
written consent of each Lender directly affected thereby;
(e) change any provision of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number
or percentage of Lenders required to amend, waive or otherwise modify
any rights hereunder or make any determination or grant any consent
hereunder without the written consent of each Lender directly affected
thereby;
(f) except in connection with a Disposition permitted under
Section 8.05, release all or substantially all of the Collateral
without the written consent of each Lender directly affected thereby;
or
(g) release the Borrower or, except in connection with a
merger or consolidation permitted under Section 8.04 or a Disposition
permitted under Section 8.05, all or substantially all of the
Guarantors, from its or their obligations under the Loan Documents
without the written consent of each Lender directly affected thereby.
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any other
Letter of Credit Application relating to any Letter of Credit issued or to be
issued by it; (ii) no amendment, waiver or consent shall, unless in writing and
signed by the Swing Line Lender in addition to the Lenders required above,
affect the rights or duties of the Swing Line Lender under this Agreement; (iii)
no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; (iv) the Administrative Agent Fee Letter may be amended, or
rights or privileges thereunder waived, in a writing executed only by the
parties thereto; (vi) without the consent of the Lenders holding more than 50%
of the Incremental Term Loan Commitments, extend the time for, or reduce the
amount, or otherwise alter the manner of application of proceeds in respect of
the Incremental Term Loans on account of the mandatory prepayment provisions of
clauses (ii) through (v), inclusive, of Section 2.05(b) or the application
provisions of Section 2.05(b)(vi); provided further, without the consent of the
Required Revolving Lenders (1) no Default or Event of Default may be waived for
purposes of Section 5.02 for purposes of any Revolving Loan borrowing or L/C
Credit Extension and (2) no amendment, change, waiver, discharge or termination
of Section 2.01(a), 2.02, 2.03, 2.06, 2.05(b)(i), Section 8 or Section 9 shall
be effective.
Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders shall determine whether
or not to allow a Loan Party to use cash collateral in the context of a
bankruptcy or insolvency proceeding and such determination shall be binding on
all of the Lenders.
11.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or
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(subject to subsection (c) below) electronic mail address, and all notices and
other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, set forth for the applicable
party on Schedule 11.02 or to such other address, facsimile number, electronic
mail address or telephone number as shall be designated by such party in a
notice to the other parties.
All such notices and other communications shall be deemed to be given
or made upon the earlier to occur of (i) actual receipt by the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on
behalf of the relevant party hereto; (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
subsection (c) below), when delivered; provided, however, that notices and other
communications to the Administrative Agent, the L/C Issuer and the Swing Line
Lender pursuant to Article II shall not be effective until actually received by
such Person. In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a manually
signed original thereof; provided, however, that the failure to request or
deliver the same shall not limit the effectiveness of any facsimile document or
signature.
(c) Limited Use of Electronic Mail. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 7.02, and to
distribute Loan Documents for negotiation or execution by the parties thereto,
and may not be used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Loan Notices and Swing Line Loan Notices) purportedly
given by or on behalf of the Borrower even if (i) such notices were not made in
a manner specified herein, were incomplete or were not preceded or followed by
any other form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The Borrower
shall indemnify each Agent-Related Person and each Lender from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of the Borrower. All telephonic
notices to and other communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
11.03 NO WAIVER; CUMULATIVE REMEDIES.
No failure by any Lender or the Administrative Agent to exercise, and
no delay by any such Person in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
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11.04 ATTORNEY COSTS, EXPENSES AND TAXES.
The Borrower agrees (a) to pay or reimburse the Administrative Agent
for all reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation, negotiation and execution of this Agreement and
the other Loan Documents and any amendment, waiver, consent or other
modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs and costs and expenses in connection with
the use of Intralinks, Inc. or other similar information transmission systems in
connection with this Agreement, (b) the Syndication Agents for all reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation, negotiation and execution of this Agreement and the other Loan
Documents and (c) to pay or reimburse the Administrative Agent, the Collateral
Agent and each Lender for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or the other Loan Documents (including all such costs and
expenses incurred during any "workout" or restructuring in respect of the
Obligations and during any legal proceeding, including any proceeding under any
Debtor Relief Law), including all Attorney Costs. The foregoing costs and
expenses shall include all search, filing, recording, title insurance and
appraisal charges and fees and taxes related thereto, and other out-of-pocket
expenses incurred by the Administrative Agent and the cost of independent public
accountants and other outside experts retained by the Administrative Agent, the
Collateral Agent or any Lender. All amounts due under this Section 11.04 shall
be payable within ten Business Days after demand therefor. The agreements in
this Section shall survive the termination of the Commitments and repayment of
all other Obligations.
11.05 INDEMNIFICATION BY THE BORROWER.
Whether or not the transactions contemplated hereby are consummated,
the Borrower agrees to indemnify and hold harmless each Agent-Related Person,
each Lender and their respective Affiliates, directors, officers, employees,
counsel, agents and attorneys-in-fact (collectively the "Indemnitees") from and
against any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may at any
time be imposed on, incurred by or asserted against any such Indemnitee in any
way relating to or arising out of or in connection with (a) the execution,
delivery, enforcement, performance or administration of any Loan Document or any
other agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or the consummation of the transactions
contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the L/C Issuer
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (c) any actual or alleged presence or release of
Hazardous Materials on or from any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries, or any Environmental
Liability related in any way to any Loan Party or any of its Subsidiaries, or
(d) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory (including any investigation of, preparation for, or defense of any
pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee. No Indemnitee shall be
liable for any damages arising from the use by others of any information or
other materials obtained through IntraLinks or other similar information
transmission systems in connection with this Agreement, nor shall any Indemnitee
have any liability for any indirect or consequential
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damages relating to this Agreement or any other Loan Document or arising out of
its activities in connection herewith or therewith (whether before or after the
Closing Date). All amounts due under this Section 11.05 shall be payable within
ten Business Days after demand therefor; provided, however, that such Indemnitee
shall promptly refund such amount to the extent that there is a final judicial
or arbitral determination that such Indemnitee was not entitled to
indemnification or contribution rights with respect to such payment pursuant to
the express terms of this Section 11.05. The agreements in this Section shall
survive the resignation of the Administrative Agent, the replacement of any
Lender, the termination of the Commitments and the repayment, satisfaction or
discharge of all the other Obligations.
11.06 PAYMENTS SET ASIDE.
To the extent that any payment by or on behalf of any Loan Party is
made to the Administrative Agent or any Lender, or the Administrative Agent or
any Lender exercises its right of set-off, and such payment or the proceeds of
such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
11.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section or (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
subsection (f) of this Section (and any other attempted assignment or transfer
by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in L/C Obligations and in Swing Line Loans) at
the time owing to it); provided that (i) except in the case of an assignment of
the entire remaining amount of the assigning Lender's Commitment and the Loans
at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund (as defined in subsection (g) of this
Section) with respect to a Lender, the aggregate amount of the Commitment (which
for this purpose includes Loans outstanding thereunder) subject to each such
assignment, determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent or, if "Trade Date"
is specified in the Assignment and Assumption, as of the Trade Date, shall not
be less than $1,000,000 unless each of the Administrative Agent and, so long as
no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be
105
unreasonably withheld or delayed); (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to rights in respect of
Swing Line Loans; (iii) any assignment of a Revolving Commitment must be
approved by the Administrative Agent, the L/C Issuer and the Swing Line Lender
unless the Person that is the proposed assignee is itself a Lender (whether or
not the proposed assignee would otherwise qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500. Subject to acceptance and recording thereof by
the Administrative Agent pursuant to subsection (c) of this Section, from and
after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
3.01, 3.04, 3.05, 11.04 and 11.05 with respect to facts and circumstances
occurring prior to the effective date of such assignment). Upon request, the
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations in L/C
Obligations and/or Swing Line Loans) owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 11.01 that directly affects such Participant. Subject to subsection (e)
of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.11 as though it were a
Lender.
106
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 11.15 as though
it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its Note,
if any) to secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by (i) the Administrative Agent, the L/C
Issuer and the Swing Line Lender, and (ii) unless an Event of Default
has occurred and is continuing, the Borrower (each such approval not to
be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, "Eligible Assignee" shall not include the Borrower or any of
the Borrower's Affiliates or Subsidiaries.
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"Approved Fund" means any Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, if at
any time Bank One assigns all of its Commitment and Loans pursuant to subsection
(b) above, Bank One may, (i) upon thirty days' notice to the Borrower and the
Lenders, resign as L/C Issuer and/or (ii) upon thirty days' notice to the
Borrower, resign as Swing Line Lender. In the event of any such resignation as
L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder;
provided, however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank One as L/C Issuer or Swing Line Lender, as
the case may be. If Bank One resigns as L/C Issuer, it shall retain all the
rights and obligations of the L/C Issuer hereunder with respect to all Letters
of Credit outstanding as of the effective date of its resignation as L/C Issuer
and all L/C Obligations with respect thereto (including the right to require the
Lenders to make Base Rate Loans or fund risk participations in Unreimbursed
Amounts pursuant to Section 2.03(c)). If Bank One resigns as Swing Line Lender,
it shall retain all the rights of the Swing Line Lender provided for hereunder
with respect to Swing Line Loans made by it and outstanding as of the effective
date of such resignation, including the right to require the Lenders to make
Base Rate Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c).
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11.08 CONFIDENTIALITY.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder; (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any Eligible Assignee of or Participant
in, or any prospective Eligible Assignee of or Participant in, any of its rights
or obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to obligations of the Loan Parties; (g) with the consent of
the Borrower; (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Loan Parties; or (i) to the National Association of Insurance
Commissioners or any other similar organization or any nationally recognized
rating agency that requires access to information about a Lender's or its
Affiliates' investment portfolio in connection with ratings issued with respect
to such Lender or its Affiliates. In addition, the Administrative Agent and the
Lenders may disclose the existence of this Agreement and information about this
Agreement to market data collectors, similar service providers to the lending
industry, and service providers to the Administrative Agent and the Lenders in
connection with the administration and management of this Agreement, the other
Loan Documents, the Commitments, and the Credit Extensions. For the purposes of
this Section, "Information" means all information received from any Loan Party
relating to any Loan Party or its business, other than any such information that
is available to the Administrative Agent or any Lender on a nonconfidential
basis prior to disclosure by any Loan Party. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. Notwithstanding
anything herein to the contrary, "Information" shall not include, and the
Administrative Agent and each Lender may disclose without limitation of any
kind, any information with respect to the "tax treatment" and "tax structure"
(in each case, within the meaning of Treasury Regulation Section 1.6011-4) of
the transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to the Administrative Agent or
such Lender relating to such tax treatment and tax structure; provided that with
respect to any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transaction as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the Loans, Letters of Credit and transactions contemplated hereby.
11.09 SET-OFF.
In addition to any rights and remedies of the Lenders provided by law,
upon the occurrence and during the continuance of any Event of Default, each
Lender and any Affiliate of any Lender is authorized at any time and from time
to time, without prior notice to the Borrower or any other Loan Party, any such
notice being waived by the Borrower (on its own behalf and on behalf of each
Loan Party) to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the respective Loan Parties against any and all
Obligations owing to such
108
Lender hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document, irrespective
of whether the Loan Parties are otherwise fully secured and although such
Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or indebtedness. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.
11.10 INTEREST RATE LIMITATION.
Notwithstanding anything to the contrary contained in any Loan
Document, the interest paid or agreed to be paid under the Loan Documents shall
not exceed the maximum rate of non-usurious interest permitted by applicable Law
(the "Maximum Rate"). If the Administrative Agent or any Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Administrative Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by applicable
Law, (a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.
11.11 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11.12 INTEGRATION.
This Agreement, together with the other Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and thereof and supersedes all prior agreements, written or oral, on such
subject matter. In the event of any conflict between the provisions of this
Agreement and those of any other Loan Document, the provisions of this Agreement
shall control; provided that the inclusion of supplemental rights or remedies in
favor of the Administrative Agent or the Lenders in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
11.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof. Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
109
11.14 SEVERABILITY.
If any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.15 TAX FORMS.
(a) (i) Each Lender that is not a "United States person" within the
meaning of Section 7701(a)(30) of the Internal Revenue Code (a "Foreign Lender")
shall deliver to the Administrative Agent, prior to receipt of any payment
subject to withholding under the Internal Revenue Code (or upon accepting an
assignment of an interest herein), two duly signed completed copies of either
IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender and
entitling it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Foreign Lender by the Borrower pursuant to this
Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments
to be made to such Foreign Lender by the Borrower pursuant to this Agreement) or
such other evidence satisfactory to the Borrower and the Administrative Agent
that such Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the
Internal Revenue Code. Thereafter and from time to time, each such Foreign
Lender shall (A) promptly submit to the Administrative Agent such additional
duly completed and signed copies of one of such forms (or such successor forms
as shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to the Borrower and
the Administrative Agent of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to such Foreign
Lender by the Borrower pursuant to this Agreement, (B) promptly notify the
Administrative Agent of any change in circumstances which would modify or render
invalid any claimed exemption or reduction, and (C) take such steps as shall not
be materially disadvantageous to it, in the reasonable judgment of such Lender,
and as may be reasonably necessary (including the re-designation of its Lending
Office) to avoid any requirement of applicable Laws that the Borrower make any
deduction or withholding for taxes from amounts payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or
ceases to act for its own account with respect to any portion of any
sums paid or payable to such Lender under any of the Loan Documents
(for example, in the case of a typical participation by such Lender),
shall deliver to the Administrative Agent on the date when such Foreign
Lender ceases to act for its own account with respect to any portion of
any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed
copies of the forms or statements required to be provided by such
Lender as set forth above, to establish the portion of any such sums
paid or payable with respect to which such Lender acts for its own
account that is not subject to U.S. withholding tax, and (B) two duly
signed completed copies of IRS Form W-8IMY (or any successor thereto),
together with any information such Lender chooses to transmit with such
form, and any other certificate or statement of exemption required
under the Internal Revenue Code, to establish that such Lender is not
acting for its own account with respect to a portion of any such sums
payable to such Lender.
110
(iii) The Borrower shall not be required to pay any additional
amount to any Foreign Lender under Section 3.01 (A) with respect to any
Taxes required to be deducted or withheld on the basis of the
information, certificates or statements of exemption such Lender
transmits with an IRS Form W-8IMY pursuant to this Section 11.15(a) or
(B) if such Lender shall have failed to satisfy the foregoing
provisions of this Section 11.15(a); provided that if such Lender shall
have satisfied the requirement of this Section 11.15(a) on the date
such Lender became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing in this
Section 11.15(a) shall relieve the Borrower of its obligation to pay
any amounts pursuant to Section 3.01 in the event that, as a result of
any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person
for the account of which such Lender receives any sums payable under
any of the Loan Documents is not subject to withholding or is subject
to withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction, withhold
any Taxes required to be deducted and withheld from any payment under
any of the Loan Documents with respect to which the Borrower is not
required to pay additional amounts under this Section 11.15(a).
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Internal
Revenue Code shall deliver to the Administrative Agent two duly signed completed
copies of IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the
Internal Revenue Code, without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent
did not properly withhold or backup withhold, as the case may be, any tax or
other amount from payments made to or for the account of any Lender, such Lender
shall indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Commitments, repayment of all
other Obligations hereunder and the resignation of the Administrative Agent.
11.16 REPLACEMENT OF LENDERS.
Under any circumstances set forth herein providing that the Borrower
shall have the right to replace a Lender as a party to this Agreement, the
Borrower may, upon notice to such Lender and the Administrative Agent, replace
such Lender by causing such Lender to assign its Commitment and outstanding
Loans (with the assignment fee to be paid by the Borrower in such instance)
pursuant to Section 11.07(b) to one or more other Lenders or Eligible Assignees
procured by the Borrower; provided, however, that if the Borrower elects to
exercise such right with respect to any Lender pursuant to Section 3.06(b), it
shall be obligated to replace all Lenders that have made similar requests for
compensation pursuant to Section 3.01 or 3.04. The Borrower shall (x) pay in
full all principal, interest, fees and other amounts owing to such Lender
through the date of replacement (including any amounts payable pursuant to
Section 3.05), (y) provide appropriate assurances and indemnitees (which may
include letters of credit) to the L/C Issuer and the Swing Line Lender as each
may reasonably require with respect to any continuing obligation to fund
participation interests in any L/C Obligations or any Swing Line Loans then
outstanding, and (z) release such Lender from its obligations under the Loan
Documents. Any Lender
111
being replaced shall execute and deliver an Assignment and Assumption with
respect to such Lender's Commitment and outstanding Loans and participations in
L/C Obligations and Swing Line Loans.
11.17 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, the LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX
SITTING IN NEW YORK, NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER,
THE ADMINISTRATIVE Agent AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER,
THE ADMINISTRATIVE Agent AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING 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 ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE Agent AND EACH LENDER
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
11.18 WAIVER OF RIGHT TO TRIAL BY JURY.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY 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 TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.19 PUBLICITY.
The Borrower will not and will not permit its Affiliates to, in the
future, issue any press release or other public disclosure using the name of the
Administrative Agent, any Lender or any of their respective Affiliates or
referring to this Agreement or the other Loan Documents without at least two (2)
Business Days prior written notice to the Administrative Agent and each affected
Lender and without the prior written consent of the Administrative Agent and
each affected Lender unless (and only to the extent that) the Borrower or such
Affiliate of the Borrower is required to so disclose under law and then, in any
event, the Borrower or such Affiliate will consult with the Administrative Agent
and each affected Lender
112
before issuing such press release or other public disclosure. The Borrower
consents to the publication by the Administrative Agent and each Lender of a
tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement. The Borrower may disclose to third parties that
the Borrower has a borrowing relationship with the Administrative Agent and the
Lenders. Nothing contained in this Agreement is intended to permit or authorize
the Borrower to make any contract on behalf of Agent or any Lender.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BORROWER: ARDENT HEALTH SERVICES, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
GUARANTORS: ARDENT HEALTH SERVICES LLC,
a Delaware limited liability company
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
AHS ALBUQUERQUE HOLDINGS, LLC,
a New Mexico limited liability company
AHS ALBUQUERQUE REGIONAL MEDICAL CENTER, LLC,
a New Mexico limited liability company
AHS ALBUQUERQUE PHYSICIAN GROUP, LLC,
a New Mexico limited liability company
AHS ALBUQUERQUE REHABILITATION HOSPITAL, LLC,
a New Mexico limited liability company
AHS CUMBERLAND HOSPITAL, LLC,
a Virginia limited liability company
AHS KENTUCKY HOLDINGS, INC.,
a Delaware corporation
AHS KENTUCKY HOSPITALS, INC.,
a Delaware corporation
AHS LOUISIANA HOLDINGS, INC.,
a Delaware corporation
AHS LOUISIANA HOSPITALS, INC.,
a Delaware corporation
AHS MANAGEMENT COMPANY, INC.,
a Tennessee corporation
AHS NEW MEXICO HOLDINGS, INC.,
a New Mexico corporation
AHS NORTHEAST HEIGHTS HOSPITAL, LLC,
a New Mexico limited liability company
AHS SAMARITAN HOSPITAL, LLC,
a Kentucky limited liability company
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer of each of the foregoing Guarantors
[Signature Pages Follow]
AHS S.E.D. MEDICAL LABORATORIES, INC.,
a New Mexico corporation
AHS SUMMIT HOSPITAL, LLC,
a Delaware limited liability company
AHS WEST MESA HOSPITAL, LLC,
a New Mexico limited liability company
ARDENT MEDICAL SERVICES, INC.,
a Delaware corporation
BEHAVIORAL HEALTHCARE CORPORATION,
a Delaware corporation
BHC ALHAMBRA HOSPITAL, INC.,
a Tennessee corporation
BHC BELMONT PINES HOSPITAL, INC.,
a Tennessee corporation
BHC CEDAR VISTA HOSPITAL, INC.,
a California corporation
BHC COLUMBUS HOSPITAL, INC.,
a Tennessee corporation
BHC FAIRFAX HOSPITAL, INC.,
a Tennessee corporation
BHC FOX RUN HOSPITAL, INC.,
a Tennessee corporation
BHC FREMONT HOSPITAL, INC.,
a Tennessee corporation
BHC GULF COAST MANAGEMENT GROUP, INC.,
a Tennessee corporation
BHC HEALTH SERVICES OF NEVADA, INC.,
a Nevada corporation
BHC HERITAGE OAKS HOSPITAL, INC.,
a Tennessee corporation
BHC HOSPITAL HOLDINGS, INC.,
a Delaware corporation
BHC INTERMOUNTAIN HOSPITAL, INC.,
a Tennessee corporation
BHC LEBANON HOSPITAL, INC.,
a Tennessee corporation
BHC MANAGEMENT HOLDINGS, INC.,
a Delaware corporation
BHC MANAGEMENT SERVICES, LLC,
a Delaware limited liability company
BHC MANAGEMENT SERVICES OF INDIANA, LLC,
a Delaware limited liability company
BHC MANAGEMENT SERVICES OF KENTUCKY, LLC,
a Delaware limited liability company
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer of each of the foregoing Guarantors
[Signature Pages Follow]
BHC MANAGEMENT SERVICES OF NEW MEXICO, LLC,
a Delaware limited liability company
BHC MANAGEMENT SERVICES OF STREAMWOOD, LLC,
a Delaware limited liability company
BHC XXXXXXX PARTNER, INC.,
a Delaware corporation
BHC MONTEVISTA HOSPITAL, INC.,
a Nevada corporation
BHC OF INDIANA, GENERAL PARTNERSHIP,
a Tennessee general partnership
BHC OF NORTHERN INDIANA, INC.,
a Tennessee corporation
BHC PHYSICIAN SERVICES OF KENTUCKY, LLC,
a Delaware limited liability company
BHC PINNACLE POINTE HOSPITAL, INC.,
a Tennessee corporation
BHC PROPERTIES, INC.,
a Tennessee corporation
BHC SIERRA VISTA HOSPITAL, INC.,
a Tennessee corporation
BHC SPIRIT OF ST. LOUIS HOSPITAL, INC.,
a Tennessee corporation
BHC STREAMWOOD HOSPITAL, INC.,
a Tennessee corporation
BHC XXXXX VISTA HOSPITAL, INC.,
a Tennessee corporation
BHC WINDSOR HOSPITAL, INC.,
an Ohio corporation
BLOOMINGTON XXXXXXX, X.X.,
a Delaware general partnership
COLUMBUS HOSPITAL, LLC,
a Delaware limited liability company
INDIANA PSYCHIATRIC INSTITUTES, INC.,
a Delaware corporation
LEBANON HOSPITAL, LLC,
a Delaware limited liability company
MESILLA VALLEY GENERAL PARTNERSHIP,
a New Mexico general partnership
MESILLA VALLEY HOSPITAL, INC.,
a New Mexico corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer of each of the foregoing Guarantors
[Signature Pages Follow]
MESILLA VALLEY MENTAL HEALTH ASSOCIATES, INC.,
a New Mexico corporation
NORTHERN INDIANA HOSPITAL, LLC,
a Delaware limited liability company
XXXXX VISTA, LLC,
a Delaware limited liability company
WILLOW SPRINGS, LLC,
a Delaware limited liability company
AHS RESEARCH AND REVIEW, LLC,
a New Mexico limited liability company
BHC NORTHWEST PSYCHIATRIC HOSPITAL, LLC,
a Delaware limited liability company
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer of each of the foregoing Guarantors
[Signature Pages Follow]
ADMINISTRATIVE
AGENT: BANK ONE, NA,
as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: First Vice President
LENDERS: BANK ONE, NA
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: First Vice President
BANK OF AMERICA, N.A.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
XXXXXXX XXXXX CAPITAL, A DIVISION OF
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ [ILLEGIBLE]
-----------------------------------------
An Authorized Signatory
RESIDENTIAL FUNDING CORPORATION
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
FIFTH THIRD BANK
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
