CREDIT AGREEMENT
CREDIT AGREEMENT dated as of December 17, 1998, among PROMEDCO
MANAGEMENT COMPANY, a Delaware corporation (the "Borrower"), the lenders from
time to time parties to this Agreement (the "Lenders"), NATIONSBANK, N.A., a
national banking association, as agent for the Lenders hereunder, and
NATIONSBANC XXXXXXXXXX SECURITIES LLC, as arranger (the "Arranger").
Preliminary Statements
1. The Lenders have been requested to make extensions of credit to the
Borrower to finance the ongoing working capital and general corporate
requirements of the Borrower and its Subsidiaries.
2. The Lenders have agreed to make such extensions of credit, subject to
the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Acquired Asset" means the Capital Stock, assets, control of a
Physician Group or management rights with respect to a Physician Group
acquired by the Borrower or any Subsidiary pursuant to a Permitted
Physician Transaction.
"Acquired EBITDA" means, with respect to any Acquired Assets
for any time period prior to the acquisition of such assets by the
Borrower or any Subsidiary, the Pro Forma ProMedCo Distribution for
such period attributable to such assets plus depreciation for such
period attributable to such assets.
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to be
equal to the quotient obtained by dividing (a) the Eurodollar Rate for
such Eurodollar Loan for such Interest Period by (b) 1 minus the
Reserve Requirement for such Eurodollar Loan for such Interest Period.
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"Affiliate" means as to any Person, any other Person that,
directly or indirectly, controls, is controlled by, or is under common
control with, such Person or is a director or officer of such Person.
For purposes of this definition, "control" (including the terms
"controlled by" and "under common control with") of a Person means the
power, directly or indirectly, either to (a) vote 5% or more of the
Capital Stock having ordinary voting power for the election of
directors or other managers of such Person or (b) direct or cause the
direction of the management or policies of such Person, whether through
ownership, by contract or otherwise.
"Affiliated Provider" means any Person that employs physicians
for the purpose of rendering medical care and that has entered into a
Service Agreement with the Borrower or any of its Subsidiaries, and any
individual physician or other licensed health care provider, including,
but not limited to, a physician's assistant or nurse practitioner, who
is employed by such Person.
"Agent" means NationsBank, N.A., a national banking
association, in its capacity as the agent for the Lenders under this
Agreement and the other Loan Documents, and its successors and
permitted assigns in such capacity.
"Agreement" means this Credit Agreement, as amended,
supplemented, modified or restated from time to time.
"Aggregate Outstanding Revolving Credit" means as to any
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Loans made by such Lender then outstanding and
(b) such Lender's Revolving Credit Commitment Percentage of the LC
Obligations then outstanding.
"Aggregate Revolving Credit Commitments" means, at any time,
an amount equal to the sum of the Revolving Credit Commitments of all
Lenders.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an
Affiliate of such Lender) designated for such Type of Loan on Schedule
1.1(d) or such other office of such Lender (or an Affiliate of such
Lender) as such Lender may from time to time specify to the Agent and
the Borrower by written notice in accordance with the terms hereof as
the office by which its Loans of such Type are to be made and
maintained.
"Applicable Margin" means, for purposes of calculating the
applicable interest rate for any day for Eurodollar Loans and Base Rate
Loans and the applicable rate for the Commitment Fee for any day for
purposes of subsection 3.2(a), the appropriate applicable percentage
set forth below corresponding to the Leverage Ratio as of the most
recent Calculation Date:
-------------- ------------------------- -------------------- ---------------------- --------------------
Applicable Margin Applicable Applicable
Pricing Leverage For Margin For Margin For
Level Ratio Eurodollar Loans Base Rate Loans Commitment Fees
-------------- ------------------------- -------------------- ---------------------- --------------------
-------------- ------------------------- -------------------- ---------------------- --------------------
I < 1.000 to 1.000 1.250% 0 .300%
-------------- ------------------------- -------------------- ---------------------- --------------------
V $3.250 to 1.000 2.250% .750% .500%
-------------- ------------------------- -------------------- ---------------------- --------------------
Each Applicable Margin shall be determined and adjusted quarterly on
each Calculation Date occurring after the date hereof on the basis of
the financial statements delivered by the Borrower pursuant to
subsection 6.1(a) or 6.1(b), as applicable, and the Compliance
Certificate delivered by the Borrower pursuant to subsection 6.2(b);
provided, however, that (a) each initial Applicable Margin shall be
based on Pricing Level IV (as shown above) and shall remain at Pricing
Level IV until the first Calculation Date occurring subsequent to March
31, 1999 and, thereafter, each Applicable Margin shall be based on the
Pricing Level (as shown above) corresponding to the Leverage Ratio as
of the last day of the most recently ended fiscal quarter or year of
the Borrower preceding the applicable Calculation Date, (b) if the
Borrower fails to deliver to the Agent and the Lenders such financial
statements and Compliance Certificate for the most recently ended
fiscal quarter or year of the Borrower preceding the applicable
Calculation Date, each Applicable Margin from such Calculation Date
shall be based on Pricing Level V (as shown above) until the date such
financial statements and Compliance Certificate are delivered to the
Agent and the Lenders, after which each Applicable Margin shall be
based on the Pricing Level (as shown above) corresponding to the
Leverage Ratio as of the last day of the most recently ended fiscal
quarter or year of the Borrower preceding such Calculation Date, (c)
each Applicable Margin shown above shall be increased by .25% on the
Termination Date if the Borrower shall have converted the Loans to term
loans pursuant to Section 2.4 and (d) if and for so long as any Default
or Event of Default shall have occurred and be continuing, each
Applicable Margin shall be based on Pricing Level V (as shown above).
Each Applicable Margin shall be effective from one Calculation Date
until the next Calculation Date. Any adjustment in the Applicable
Margins shall be applicable to all Loans then existing or subsequently
made.
"Application" means an application, in such form as the
Issuing Lender may specify from time to time, requesting the Issuing
Lender to issue a Letter of Credit.
"Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit L.
"Available Revolving Credit Commitment" means, as to any
Lender at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment at such time, over (b) such
Lender's Aggregate Outstanding Revolving Credit.
"Base Rate" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of
one percent (.5%) and (b) the Prime Rate for such day. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Rate.
"Base Rate Loans" means Loans that bear interest at rates
based upon the Base Rate.
"Borrowing Date" means any Business Day specified in a notice
pursuant to Section 2.2 as a date on which the Borrower requests the
Lenders to make Loans hereunder.
"Business" has the meaning specified in subsection 5.17(b).
"Business Day" means (a) a Domestic Business Day and (b) with
respect to any Eurodollar Loans, a Domestic Business Day on which
dealings in Dollar deposits are carried out in the London interbank
market.
"Calculation Date" means each date on or after March 31, 1999
that is the fifth Business Day following receipt by the Agent and the
Lenders of both (a) the financial statements required to be delivered
pursuant to subsection 6.1(a) or 6.1(b), as applicable, for the most
recently completed fiscal period of the Borrower and (b) the related
Compliance Certificate required to be delivered pursuant to subsection
6.2(b).
"Capital Expenditures" means, as to any Person for any period,
the aggregate amount paid or accrued by such Person and its
Subsidiaries for rental, lease, purchase (including by way of the
acquisition of securities of a Person), construction or use of any
property during such period, the value or cost of which, in accordance
with GAAP, would appear on such Person's consolidated balance sheet in
the category of property, plant or equipment at the end of such period.
"Capital Lease Obligations" means, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease
of (or other agreement conveying the right to use) real and/or personal
property which obligations are required to be classified and accounted
for as a capital lease on a balance sheet of such Person under GAAP
and, for purposes of this Agreement, the amount of such obligations
shall be the capitalized amount thereof, determined in accordance with
GAAP.
"Capital Stock" means, as to any Person, the equity interests
in such Person, including, without limitation, the shares of each class
of capital stock in any Person that is a corporation, each class of
partnership interest (including, without limitation, general, limited
and preference units) in any Person that is a partnership, and each
class of member interest in any Person that is a limited liability
company and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents" means with respect to the Borrower and each
of its Subsidiaries (a) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or
less from the date of acquisition and overnight bank deposits of any
Lender or of any commercial bank having capital and surplus in excess
of $500,000,000, (c) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than thirty days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least
A-2 by S&P or P-2 by Xxxxx'x, (e) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities
of which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at least
A by S&P or A by Xxxxx'x, (f) securities with maturities of one year or
less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements
of clause (b) of this definition or (g) shares of money market mutual
or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"CHAMPUS" means the Civilian Health and Medical Program of the
Uniformed Service, a program of medical benefits covering former and
active members of the uniformed services and certain of their
dependents, financed and administered by the United States Departments
of Defense, Health and Human Services and Transportation and
established pursuant to 10 USC xx.xx. 1071-1106, and all regulations
promulgated thereunder including without limitation (a) all federal
statutes (whether set forth in 10 USC xx.xx. 1071-1106 or elsewhere)
affecting CHAMPUS and (b) all rules, regulations (including 32 CFR
199), manuals, orders and administrative, reimbursement and other
guidelines of all Governmental Authorities (including, without
limitation, the Department of Health and Human Services, the Department
of Defense, the Department of Transportation, the Assistant Secretary
of Defense (Health Affairs), and the Office of CHAMPUS, or any Person
succeeding to the functions of any of the foregoing) promulgated
pursuant to or in connection with any of the foregoing (whether or not
having the force of law), in each case as may be amended, supplemented
or otherwise modified from time to time.
"CHAMPVA" means the Civilian Health and Medical Program of the
Department of Veteran Affairs, a program of medical benefits covering
retirees and dependents of a former member of the armed services,
established pursuant to 38 U.S.C. xx.xx. 7301-1713 and administered by
the Secretary of Veteran Affairs, and all regulations promulgated
thereunder including without limitation (a) all federal statutes
(whether set forth in 10 USC xx.xx. 1071-1713 or elsewhere) affecting
CHAMPVA, (b) to the extent applicable to CHAMPVA, the CHAMPUS
regulations and (c) all rules, regulations (including 38 CFR xx.xx.
17.54), manuals, orders and administrative, reimbursement and other
guidelines of all Governmental Authorities (including, without
limitation, the Department of Health and Human Services, the Department
of Defense, the Department of Transportation, the Department of Veteran
Affairs, the Assistant Secretary of Defense (Health Affairs), and the
Office of CHAMPUS, or any Person succeeding to the functions of any of
the foregoing) promulgated pursuant to or in connection with any of the
foregoing (whether or not having the force of law), in each case as may
be amended, supplemented or otherwise modified from time to time.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means all assets of the Loan Parties, now owned
or hereafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commitment Fee" has the meaning specified in subsection
3.2(a).
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate" means a compliance certificate in the
form of Exhibit I.
"Consolidated EBITDA" shall mean, for any period, the sum of
(a) Consolidated Net Income for such period, plus (b) an amount which,
in the determination of Consolidated Net Income for such period, has
been deducted for (i) Consolidated Interest Expense, (ii) total
federal, state and local income taxes and (iii) depreciation and
amortization expense, all as determined in accordance with GAAP.
Notwithstanding the foregoing (and without duplication), (a) if an
Acquired Asset has not been an Acquired Asset of the Borrower and its
Subsidiaries for an entire fiscal quarter of the Borrower, Consolidated
EBITDA shall include the Acquired EBITDA attributable to such Acquired
Asset for the entire four quarter period for which Consolidated EBITDA
is being measured, and (b) if an Acquired Asset has been an Acquired
Asset for one or more but less than four full fiscal quarters of the
Borrower, Consolidated EBITDA for such Acquired Asset shall be
calculated by annualizing the actual Consolidated EBITDA attributable
to such Acquired Asset for such period of completed fiscal quarters
over a period of four fiscal quarters.
"Consolidated Fixed Charges" means for any period for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a)
Consolidated Interest Expense for such period (less interest income of
the Borrower and its Subsidiaries received in cash during such period),
plus (b) all required payments of principal of Indebtedness of the
Borrower and its Subsidiaries during such period (including any
redemption or purchase of such Indebtedness) and discount or premium
relating to any such Indebtedness (but excluding mandatory prepayments
of the Loans pursuant to subsection 3.7(b) during the Revolving Credit
Commitment Period), plus (c) all dividends paid by the Borrower in cash
or property during such period, plus (d) an amount equal to 20% of the
Aggregate Outstanding Revolving Credit on the last day of such period,
in each case determined on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" means, for any period, the
amount of interest expense, both expensed and capitalized, in respect
of Indebtedness of the Borrower or any of its Consolidated Subsidiaries
outstanding during such period (including imputed interest on Capital
Lease Obligations) determined on a consolidated basis in accordance
with GAAP.
"Consolidated Net Income" means, for any period, the net
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP, for such period; provided
that there shall be excluded from such calculation of net income (or
loss) (a) the income (if positive) of any Person in which any other
Person (other than the Borrower or any of its Subsidiaries) has any
interest, unless the Borrower has the legal right to cause (through
control or otherwise) dividends or other distributions to be paid to
the Borrower or any of its Subsidiaries by such Person during such
period in an amount equal to (i) the amount of such income, multiplied
by (ii) the percentage ownership interest of the Borrower and its
Subsidiaries in such Person, (b) the income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of the Borrower or is
merged into or consolidated with the Borrower or any of its
Subsidiaries or the date such Person's assets are acquired by the
Borrower or any of its Subsidiaries and (c) the income of any
Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary of
that income is not at the time permitted by any Requirement of Law or
Contractual Obligation applicable to such Subsidiary.
"Consolidated Net Worth" means, as of the date of any
determination thereof, the amount of the shareholders' equity of the
Borrower and its Consolidated Subsidiaries as would be shown on the
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries determined on a consolidated basis in accordance with
GAAP.
"Consolidated Senior Indebtedness" means all Indebtedness of
the Borrower and its Subsidiaries, except (a) Subordinated
Indebtedness, (b) any commitment or obligation of the Borrower or any
Subsidiary to fund or advance premiums for split-dollar life insurance
policies permitted by subsection 7.8(j) and (c) Indebtedness of the
type referred to in clause (m) of the definition of "Indebtedness" in
this Section 1.1.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Borrower in its consolidated financial
statements as of such date.
"Continue," "Continuation," and "Continued" shall refer to the
continuation pursuant to subsection 3.5(b) of a Eurodollar Loan from
one Interest Period to the next Interest Period.
"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, including, without
limitation, any provision in any Medicare or Medicaid provider
agreement to which such Person is a party.
"Convert," "Conversion," and "Converted" shall refer to a
conversion pursuant to subsection 3.5(a) or Section 3.12 of one Type of
Loan into another Type of Loan.
"Debt Issuance" means the issuance by the Borrower or any
Subsidiary of indebtedness for borrowed money evidenced by notes,
bonds, debentures or similar instruments in the private placement,
public debt, loan or syndicated loan markets, including without
limitation Subordinated Debt and debt convertible into equity or
Capital Stock.
"Default" means any Event of Default, whether or not any
requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Deposit Account" has the meaning specified in the Guarantee
and Collateral Agreement.
"Deposit Agreement" means a Deposit Agreement, substantially
in the form of Exhibit F, with such changes or additions to such form
as shall be approved by the Agent, among a Depository Bank, a Loan
Party and the relevant Affiliated Provider.
"Depository Bank" means each bank which shall enter into a
Deposit Agreement as a "Depository Bank" thereunder and as defined
therein, which shall be (a) a Lender or (b) a Qualified Bank. Each
Depository Bank and Deposit Account as of the Closing Date is listed on
Schedule 1.1(a).
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Charlotte, North
Carolina, are required or authorized by law to close.
"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a
Lender and (c) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 10.6, the Borrower,
such approval not to be unreasonably withheld or delayed by the
Borrower and such approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the Agent from the
Borrower within two Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower;
provided, however, that neither the Borrower nor an Affiliate of the
Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means any and all foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, bases of liability, requirements of any
Governmental Authority or other Requirements of Law (including common
law) regulating, relating to or imposing liability or standards of
conduct concerning the regulation or protection of health, safety or
the environment, as now or may at any time hereafter be in effect.
"Equity Issuance" means any issuance by the Borrower or any
Subsidiary of Capital Stock to any Person or the receipt by the
Borrower or any Subsidiary of a capital contribution from any other
Person. The term "Equity Issuance" shall include the issuance by the
Borrower or any Subsidiary of Capital Stock pursuant to the exercise of
options or warrants and the conversion of any Indebtedness to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"Eurodollar Loans" means Loans that bear interest at rates
based upon the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Eurodollar Rate" shall mean, for any Eurodollar
Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to
such Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to
the nearest 1/100 of 1%).
"Event of Default" means any of the events specified in
Section 8, provided that any requirement for the giving of notice, the
lapse of time, or both, or any other condition, has been satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Existing Credit Agreement" means that certain Second Amended
and Restated Credit Agreement dated as of April 16, 1998, among the
Borrower, the lenders referred to therein and NationsCredit Commercial
Corporation, as agent for the lenders, as the same may have been
amended or modified.
"Existing Subordinated Indebtedness" means all Indebtedness of
the Borrower and its Subsidiaries that, as of the Closing Date, is
subordinated to the prior payment in full of the Obligations.
"Extension of Credit" means, as to any Lender, the making of,
or the issuance of, or participation in, a Loan by such Lender or the
issuance of, or participation in, a Letter of Credit by such Lender.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) 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 of New York on the Business Day next succeeding 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 next preceding
Business Day as so published on the next succeeding Business Day and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Agent (in its individual capacity) on such day on such
transactions as determined by the Agent.
"Fixed Charge Coverage Ratio" means, for any day, the ratio of
(a) Consolidated EBITDA for the period of four consecutive fiscal
quarters of the Borrower ending on, or most recently preceding, such
day, to (b) Consolidated Fixed Charges for such period.
"GAAP" means generally accepted accounting principles in the
United States of America applied on a consistent basis, subject to the
terms of Section 1.3.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Governmental Programs" means Medicare, Medicaid, CHAMPUS,
CHAMPVA and all other governmental health care benefit programs.
"Guarantee" means (a) the Guarantee and Collateral Agreement
or (b) any other guarantee delivered to the Agent guaranteeing the
Obligations.
"Guarantee and Collateral Agreement" means the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each of its Subsidiaries substantially in the form of Exhibit D, as the
same may be amended, restated, supplemented, or otherwise modified from
time to time.
"Guarantee Obligation" means as to any Person (the
"guaranteeing person"), any obligation of (a) the guaranteeing person
or (b) another Person (including, without limitation, any bank under
any letter of credit) to induce the creation of which the guaranteeing
person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation,
any obligation of the guaranteeing person, whether or not contingent,
(i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary
obligation or (B) to maintain working capital, equity capital, earnings
or other financial performance of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantor" means any Person delivering a Guarantee pursuant
to this Agreement.
"HCFA" means the Health Care Financing Administration, an
agency of the United States Department of Health and Human Services, or
any successor.
"Health Care Permit" means any license, certification,
registration, permit, approval, accreditation or authorization,
including but not limited to, any state medical license, Drug
Enforcement Agency registration, state controlled substance
certificate, Clinical Laboratory Improvements of 1988 identification
number, pharmacy permit or business license that is required pursuant
to any Requirement of Law to provide medical care or other professional
health care services or to own, operate or manage an Affiliated
Provider practice.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts, and other similar
agreements.
"Highest Lawful Rate" means at the particular time in question
the maximum non-usurious rate of interest which, under applicable law,
the Lenders are then permitted to charge on the Obligations. If the
maximum rate of interest which, under applicable law, the Lenders are
permitted to charge on the Obligations shall change after the date
hereof, the Highest Lawful Rate shall be automatically increased or
decreased, as the case may be, from time to time as of the effective
time of each change in the Highest Lawful Rate without notice to the
Borrower. To the extent, if any, that Chapter 303 ("Chapter 303") of
the Texas Finance Code, as amended (the "Texas Finance Code")
establishes the Highest Lawful Rate, the Highest Lawful Rate shall be
the "weekly ceiling" (as defined in Chapter 303).
"Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (d) all obligations of
such Person for the deferred purchase price of property or services
(excluding trade accounts payable not more than ninety days past due
incurred in the ordinary course of business, but including commitments
or obligations to advance or fund premiums on split-dollar life
insurance policies), (e) all obligations of such Person secured by any
Lien on any property or asset owned by such Person, whether or not the
obligations of such Person secured thereby shall have been assumed, (f)
all Capital Lease Obligations of such Person, (g) all obligations of
such Person in respect of letters of credit, bankers' acceptances and
similar instruments, (h) all obligations of such Person under Hedge
Agreements, (i) any "withdrawal liability" of such Person as such term
is defined under Part I of Subtitle E of Title IV of ERISA, (j) the
principal portion of all obligations of such Person under any Synthetic
Lease, (k) all Guarantee Obligations of such Person, (l) all Redeemable
Securities of such Person, (m) at any date of determination, all
obligations or commitments of such Person to make or fund advances or
payments with respect to Program Loans during the twelve month period
following such date and (n) the aggregate amount of uncollected
accounts receivable of such Person subject at such time to a sale of
receivables (or similar transaction) regardless of whether such
transaction is effected without recourse to such Person or in a manner
that would not be reflected on the balance sheet of such Person in
accordance with GAAP. The Indebtedness of any Person shall include the
Indebtedness of any partnership or unincorporated joint venture in
which such Person is a general partner or joint venturer.
"Indemnified Party" has the meaning specified in subsection
10.5(c).
"Insolvency" means, with respect to any Multiemployer Plan,
the condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Intellectual Property" has the meaning specified in Section
5.9.
"Interest Payment Date" means (a) as to any Base Rate Loan,
the last day of each March, June, September and December, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period and (c) as to any Eurodollar Loan
having an Interest Period longer than three months, each day which is
three months after the first day of such Interest Period and the last
day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Loan:
(i) initially, the period commencing on the Borrowing Date or
Conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in its Notice of Borrowing or Notice of Conversion, as
the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Agent not less than three
Business Days prior to the last day of the then current Interest Period
with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to any Eurodollar Loan
would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day (unless in
the case of a Eurodollar Loan, the result of such extension would be to
carry such Interest Period into another calendar month in which event
such Interest Period shall end on the immediately preceding Business
Day);
(2) any Interest Period that would otherwise extend beyond the
Termination Date or beyond the Maturity Date shall end on the
Termination Date or the Maturity Date, as the case may be;
(3) any Interest Period pertaining to a Eurodollar Loan 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 a calendar month; and
(4) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Investments" has the meaning specified in Section 7.8.
"Issuing Lender" means NationsBank, in its capacity as issuer
of any Letter of Credit.
"Joinder Agreement" means a Joinder Agreement in substantially
the form of Exhibit M.
"LC Commitment" means $10,000,000.
"LC Fee Payment Date" means the last day of each March, June,
September and December.
"LC Obligations" means at any time, an amount equal to the sum
of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
subsection 2.8(a).
"LC Participants" means the collective reference to all the
Lenders other than the Issuing Lender.
"Lending Party" has the meaning specified in Section 10.15.
"Letters of Credit" has the meaning set forth in subsection
2.5(a).
"Leverage Ratio" shall mean, as of any day, the ratio of (a)
Total Debt (less Restricted Cash) as of such day to (b) Consolidated
EBITDA for the period of four consecutive fiscal quarters of the
Borrower ending on, or most recently preceding, such day.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge,
levy, execution, seizure, attachment, garnishment, security interest or
other encumbrance or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement having substantially the same economic effect as
any of the foregoing and any Synthetic Lease).
"Loan" has the meaning specified in Section 2.1. The term
"Loan" includes any Loan that has been converted to a term loan
pursuant to Section 2.4.
"Loan Documents" means this Agreement, the Notes, and the
Security Documents, in each case as amended, modified or supplemented
from time to time.
"Loan Parties" means the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Lockbox Account" has the meaning specified in the Guarantee
and Collateral Agreement.
"Lockbox Agreement" means a Lockbox Agreement, substantially
in the form of Exhibit E, with such changes or additions to such form
as shall be approved by the Agent, among a Loan Party, a Lockbox Bank
and the Agent, as the same may be amended, supplemented, waived or
otherwise modified from time to time.
"Lockbox Bank" means each bank which shall enter into a
Lockbox Agreement as the "Lockbox Bank" thereunder and as defined
therein, which shall be (a) a Lender or (b) a Qualified Bank. Each
Lockbox Bank and Lockbox Account as of the Closing Date is listed on
Schedule 1.1(b).
"Material Adverse Effect" means any act, circumstance or event
that (a) could be material and adverse to the business, operations,
property, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole, (b) in any manner
whatsoever could materially and adversely affect (i) the validity or
enforceability of this Agreement or any of the other Loan Documents,
(ii) the rights, remedies, powers or privileges of the Agent or the
Lenders under this Agreement or under any of the other Loan Documents
or (iii) the Collateral, or (c) changes, or could reasonably be
expected to change, the characterization and treatment of assignments
of Receivables from the Affiliated Providers to the Borrower and its
Subsidiaries pursuant to the Service Agreements as something other than
true sales.
"Material Contract" means, as to the Borrower and its
Subsidiaries, (a) any Service Agreement, and (b) any supply, purchase,
employment, tax, tax sharing, indemnity, shareholder, debt or other
agreement that, under applicable Requirements of Law (including,
without limitation, the rules, regulations and interpretations of the
Securities and Exchange Commission), is required to be disclosed to the
public.
"Material Environmental Amount" means an amount payable by the
Borrower and/or its Subsidiaries in excess of $100,000 for remedial
costs, compliance costs, compensatory damages, punitive damages, fines,
penalties or any combination thereof.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil) or petroleum products or any hazardous
or toxic substances, materials or wastes, defined, listed, classified
or regulated as such in or under any Environmental Law, including,
without limitation, asbestos, petroleum or petroleum products
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means the second anniversary of the
Termination Date.
"Medicaid" means the medical assistance program established by
Title XIX of the Social Security Act (42 USC xx.xx. 1396 et seq.) and
any statutes succeeding thereto, and all regulations promulgated
thereunder, including without limitation (a) all federal statutes
(whether set forth in Title XIX of the Social Security Act or
elsewhere) affecting Medicaid, (b) all state statutes and plans for
medical assistance enacted in connection with such statutes and federal
rules and regulations promulgated pursuant to or in connection with
such statutes and (c) all applicable provisions of all rules,
regulations, manuals, orders and administrative, reimbursement and
other guidelines of all Governmental Authorities (including, without
limitation, the Department of Health and Human Resources, HCFA, the
office of the Inspector General for the Department of Health and Human
Services, or any Person succeeding to the functions of any of the
foregoing) promulgated pursuant to or in connection with any of the
foregoing (whether or not having the force of law), in each case as
amended, supplemented or otherwise modified from time to time.
"Medicare" means the health insurance program for the aged and
disabled established by Title XVIII of the Social Security Act (42 USC
xx.xx. 1395 et seq.) and any statutes succeeding thereto, and all
regulations promulgated thereunder, including without limitation (a)
all federal statutes (whether set forth in Title XVIII of the Social
Security Act or elsewhere) affecting Medicare and (b) all applicable
provisions of all rules, regulations, manuals, orders and
administrative, reimbursement and other guidelines of all Governmental
Authorities (including, without limitation, the Department of Health
and Human Services, HCFA, the office of the Inspector General for the
Department of Health and Human Services, or any Person succeeding to
the functions of any of the foregoing) promulgated pursuant to or in
connection with any of the foregoing (whether or not having the force
of law), in each case as amended, supplemented or otherwise modified
from time to time.
"Moody's" means Xxxxx'x Investors Service, Inc.
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"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"NationsBank" means NationsBank, N.A., a national banking
association.
"Net Cash Proceeds" means with respect to any Equity Issuance
or Debt Issuance, the gross amount of cash proceeds paid to or received
by the Borrower or any Subsidiary in respect of such Equity Issuance or
Debt Issuance, as the case may be (including cash proceeds subsequently
received at any time in respect of such Equity Issuance or Debt
Issuance from non-cash consideration initially received or otherwise),
net of underwriting discounts and commissions or placement fees,
investment banking fees, legal fees, consulting fees, accounting fees
and other customary fees and expenses directly incurred by the Borrower
or any Subsidiary in connection therewith (other than those payable to
the Borrower or any Subsidiary or any Affiliate of any such Person).
"Note" has the meaning specified in subsection 3.3(e).
"Notice of Borrowing" means a notice in substantially the form
of Exhibit A.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit B.
"Obligations" means all present and future indebtedness,
obligations and liabilities of every type and description of the
Borrower or any other Loan Party at any time arising under or in
connection with this Agreement or any other Loan Document, whether
fixed or contingent, due or to become due to the Agent, any Lender, any
Person required to be indemnified under any Loan Document or any other
Person and shall include (a) all liability for principal of and
interest (including post-petition interest) on the Loans, the Notes and
Reimbursement Obligations and (b) all liability under the Loan
Documents for any additional interest, fees, taxes, compensation,
costs, losses, expense reimbursements and indemnification.
"Other Taxes" has the meaning specified in subsection 3.14(b).
"Participant" has the meaning specified in subsection 10.6(e).
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Pending Physician Transactions" means the Physician Transactions
identified on Schedule 1.1(c).
"Permitted Physician Transaction" means a Physician
Transaction that satisfies each of the following terms and conditions:
(i) the assets acquired, or the business of the Physician Group whose
Capital Stock is acquired, relates to a line of business permitted by
Section 7.16, (ii) a Physician Transaction structured as an asset
acquisition shall be for the entire business, division, facility,
operation or product line of such Physician Group, excluding medical
assets not acquired by the Borrower or a Subsidiary, (iii) a Physician
Transaction structured as a stock acquisition shall be effected through
the purchase of 100% of the Capital Stock of the Physician Group by the
Borrower or through a merger between such Physician Group and the
Borrower or a Wholly Owned Subsidiary of the Borrower, as the case may
be, so that after giving effect to such merger 100% of the Capital
Stock of the surviving corporation of such merger is owned by the
Borrower or a Wholly Owned Subsidiary of the Borrower, (iv) no Default
or Event of Default shall have occurred and be continuing or would
result from such Physician Transaction or the incurrence of any
Indebtedness in connection with such Physician Transaction, (v) as of
the date of such Physician Transaction (after giving effect to such
transaction), the representations and warranties of each Loan Party in
each Loan Document shall be true and correct on such date with the same
force and effect as if made on such date, (vi) prior to the date of
such Physician Transaction, such Physician Transaction shall have been
approved by the board of directors (or other governing body) and, if
applicable, the shareholders of the Physician Group whose Capital Stock
or assets are being acquired in connection with such Physician
Transaction and no claim or challenge shall have been threatened by any
shareholder or director of such Physician Group which could reasonably
be expected to have a material adverse effect on such Physician
Transaction or a Material Adverse Effect, (vii) the Transaction Amount
for each such Physician Transaction shall not exceed $10,000,000 and
(viii) the aggregate Transaction Amount for all Permitted Physician
Transactions (exclusive of Pending Physician Transactions) consummated
during any twelve month period after the Closing Date shall not exceed
$25,000,000; provided, however, that if the aggregate Transaction
Amount for Permitted Physician Transactions (exclusive of Pending
Physician Transactions) consummated during any twelve month period
after the Closing Date shall be greater than $25,000,000 (before or
after giving effect to the Physician Transaction in question), then the
Borrower or any Subsidiary may consummate any Physician Transaction (1)
involving no more than five doctors, (2) having a Transaction Amount
less than $1,500,000, (3) with respect to which clauses (i) through
(vi) above shall be satisfied and (4) that has not been objected to by
the Agent, at the request of Required Lenders, by notice to the
Borrower within seven days after delivery by the Borrower to the Agent
and the Lenders of a Physician Transaction Notice/Consent Request
required by subsection 6.2(h) with respect to such a Physician
Transaction. In the case of a Physician Transaction that does not
satisfy clause (vii) or (viii) above and is not subject to the
immediately preceding proviso, the Borrower may submit to the Agent at
least twenty-one days prior to the consummation of such Physician
Transaction a Physician Transaction Notice/Consent Request containing
the items specified in subsection 6.2(h) and requesting the consent of
the Required Lenders (at their sole discretion) to such Physician
Transaction. The Lenders shall use commercially reasonable efforts to
respond to such a request by the Borrower within fourteen days of
receipt by the Lenders of the information described in subsection
6.2(h); provided, however, that any failure by any Lender to approve or
disapprove such a request during such period shall not constitute an
approval.
"Person" means an individual, partnership, corporation,
limited liability company, limited liability partnership, business
trust, joint stock company, trust, unincorporated association, joint
venture, professional corporation, professional association,
Governmental Authority or other entity of whatever nature.
"Physician Group" means (a) any professional corporation or
professional association that employs or contracts with one or more
licensed physicians for the purpose of engaging in the delivery of
medical care, and (b) any physician practice management company owned
or controlled by the physician shareholders of any such professional
corporation or professional association.
"Physician Transaction" means any bona fide transaction or
series of related transactions, consummated after the date thereof, by
which the Borrower or any Subsidiary (i) acquires all or part of the
assets, or a going business or division, of a Physician Group, whether
through purchase of assets or securities, merger or otherwise, (ii)
directly or indirectly acquires control of any Physician Group or (iii)
acquires the right to manage the non-medical aspects of the business of
any Physician Group. For the purpose of this definition, "control"
means the possession, directly or indirectly, of the power to direct or
cause the direction of management and non-medical policies, whether
through the ownership of voting securities, by contract or otherwise.
Notwithstanding the above, "control" shall not include, and shall not
be construed to include, the power to direct any physician's practice
of medicine or the power to interfere in any physician/patient
relationship.
"Physician Transaction Notice/Consent Request" means a notice
of, or request for the Required Lenders to consent to, a Physician
Transaction, such notice or consent request to be substantially in the
form of Exhibit G.
"Plan" means, at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer"
as defined in Section 3(5) of ERISA.
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its customers.
"Principal Amortization Date" means the last day of each
March, June, September, and December.
"Pro Forma ProMedCo Distribution" means, with respect to any
Acquired Asset for any period, the Pro Forma ProMedCo Distribution (as
such term is defined in Schedule 1.1(f)) based upon the actual,
historical financial performance of such Acquired Asset.
"Program Loan" means a loan or advance by the Borrower or any
Subsidiary to a Physician Group, or a commitment to make any such loan
or advance, in connection with such Physician Group becoming an
Affiliated Provider pursuant to a Pending Physician Transaction, a
Permitted Physician Transaction or any other Physician Transaction
approved by the Required Lenders, the proceeds of which have been or
will be used by the Affiliated Provider to make loans or advances to
the physicians who are members of such Physician Group.
"Properties" has the meaning specified in Section 5.17.
"Qualified Bank" means any bank (a) having combined capital
and surplus of at least $50,000,000 and (b) the deposit accounts of
which are insured by the Federal Deposit Insurance Corporation (or any
successor).
"Receivable" means any right to payment for goods sold or
leased or for services rendered, whether or not such right is evidenced
by an Instrument or Chattel Paper and whether or not it has been earned
by performance (including, without limitation, any Account).
"Redeemable Securities" of any Person means any Capital Stock
of such Person which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (a) matures
or is mandatorily redeemable or subject to any mandatory repurchase
requirement, pursuant to a sinking fund obligation or otherwise, (b) is
convertible into or exchangeable or exercisable for Indebtedness or
Redeemable Securities or (c) is redeemable or subject to any repurchase
requirement arising at the option of the holder thereof, in whole or in
part, in each case on or prior to the first anniversary of the Maturity
Date.
"Register" has the meaning specified in subsection 10.6(c).
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as in effect from time to time.
"Regulations" means Regulations T, U and X of the Board of
Governors of the Federal Reserve System as in effect from time to time.
"Reimbursement Obligation" means the obligation of the
Borrower to reimburse the Issuing Lender pursuant to subsection 2.8(a)
for amounts drawn under Letters of Credit.
"Reorganization" means, with respect to any Multiemployer
Plan, the condition that such plan is in reorganization within the
meaning of Section 4241 of ERISA.
"Reportable Event" means any of the events set forth in
Section 4043(b) of ERISA, other than those events as to which the
thirty day notice period is waived under subsections .13, .14, .16,
.18, .19 or .20 of PBGC Reg. ss. 2615.
"Required Lenders" means at any time Lenders having at least
662/3% of the aggregate amount of the Revolving Credit Commitments or,
if the Revolving Credit Commitments shall have been terminated, holding
Extensions of Credit evidencing at least 662/3% of the Aggregate
Outstanding Revolving Credit.
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, statute, ordinance, code, order,
decree, treaty, rule or regulation or determination of an arbitrator or
a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person
or any of its property is subject, including, without limitation, all
laws, statutes, rules, regulations, ordinances, codes, decrees, orders
and guidelines governing, relating or otherwise applicable to
Governmental Programs to which such Person or its property is subject
or in which such Person has elected to participate or with which such
Person has contracted.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) by member banks of the
Federal Reserve System against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to any category of
liabilities which includes deposits by reference to which the Adjusted
Eurodollar Rate is to be determined. The Adjusted Eurodollar Rate shall
be adjusted automatically on and as of the effective date of any change
in the Reserve Requirement.
"Responsible Officer" means the chief executive officer and
the president of the Borrower or, with respect to financial matters,
the chief financial officer of the Borrower.
"Restricted Cash" means cash or Cash Equivalents of the
Borrower and its Subsidiaries that have been specifically escrowed in a
manner satisfactory to the Required Lenders for the payment of the
split-dollar life insurance premiums permitted by subsection 7.8(j).
"Restricted Payment" has the meaning specified in Section 7.7.
"Revolving Credit Commitment" means, as to any Lender, the
obligation of such Lender to make Loans and issue and/or participate in
Letters of Credit pursuant to Section 2 in an aggregate principal
and/or face amount not to exceed at any one time outstanding the amount
set forth opposite such Lender's name in Schedule 1.1(d) under the
heading "Revolving Credit Commitment" or, in the case of an Eligible
Assignee, the amount specified in the Assignment and Acceptance
pursuant to which it assumed its Revolving Credit Commitment (in each
case as such amount may be adjusted from time to time as provided
herein); collectively, as to all the Lenders, the "Revolving Credit
Commitments."
"Revolving Credit Commitment Percentage" means, as to any
Lender, the percentage of the aggregate Revolving Credit Commitments
constituted by its Revolving Credit Commitment (or, if the Revolving
Credit Commitments have terminated or expired, the percentage which (a)
the sum of (i) such Lender's then outstanding Loans plus (ii) such
Lender's interests in the aggregate LC Obligations then outstanding
then constitutes of (b) the sum of (i) the aggregate Loans of all the
Lenders then outstanding plus (ii) the aggregate LC Obligations then
outstanding).
"Revolving Credit Commitment Period" means the period from and
including the Closing Date to but not including the Termination Date,
or such earlier date as the Revolving Credit Commitments shall
terminate as provided herein.
"Security Documents" means the collective reference to the
Guarantee and Collateral Agreement, the Trademark Security Agreement,
the Lockbox Agreements, the Deposit Agreements and all other security
documents now or hereafter delivered to the Agent granting a Lien on
any asset or assets of any Person to secure the Obligations or any part
thereof.
"Seller Notes" means any promissory note or other instrument
evidencing a portion of the Transaction Amount for a Permitted
Physician Transaction issued by the Borrower or any Subsidiary to the
Physician Group that is a party to such transaction or any member
thereof.
"Service Agreement" means any agreement pursuant to which the
Borrower or any Subsidiary provides management services, facilities,
personnel, equipment, supplies or other services to a Physician Group
or an independent physicians association, as such agreement may be
amended, modified, or supplemented from time to time.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent" means with respect to any Person on a particular
date, the condition that on such date, (a) 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, (b) 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 Person on its debts as they become absolute
and matured, (c) 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 and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small amount of capital.
"S&P" means Standard and Poor's Rating Group.
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"Subordinated Indebtedness" means (a) the Existing
Subordinated Indebtedness and (b) any other unsecured Indebtedness of
the Borrower or any Subsidiary (i) no part of the principal of which is
required to be paid (whether by way of scheduled amortization,
mandatory sinking fund, mandatory redemption, mandatory prepayment or
otherwise) prior to the Termination Date (exclusive of future loans or
advances to pay premiums on split-dollar life insurance policies), (ii)
the payment of the principal of and interest on which and other
obligations of the Borrower or any Subsidiary in respect thereof are
subordinated to the prior payment in full of the principal of and
interest (including post-petition interest) on the Loans and all other
Obligations on terms and conditions at least as favorable to the
Lenders as those contained on Schedule 1.1(e) and (iii) all other terms
and conditions of which are satisfactory in form and substance to the
Required Lenders (as evidenced by their prior written approval
thereof).
"Subordinated Indebtedness Documentation" means the
agreements, indentures and other documentation pursuant to which any
Subordinated Indebtedness is or has been issued.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate or other
Person of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly, through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"Synthetic Lease" means any synthetic lease, tax retention
operating lease or off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes
but which is classified as an operating lease pursuant to GAAP.
"Taxes" has the meaning specified in subsection 3.14(a).
"Term Loan Election" has the meaning specified in Section 2.4.
"Termination Date" means December 17, 2001.
"Total Debt" shall mean, as of any day, the total amount of
Indebtedness of the Borrower and its Consolidated Subsidiaries as of
such day.
"Trademark Security Agreement" means the Trademark Security
Agreement to be executed and delivered by the Borrower to the Agent in
substantially the form of Exhibit N, as the same may be amended,
supplemented, or otherwise modified from time to time.
"Tranche" means the collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day); Tranches may be
identified as "Eurodollar Tranches," as applicable.
"Transaction Amount" means, with respect to any Physician
Transaction, the sum (without duplication) of the following, in each
case determined in accordance with GAAP: (a) the aggregate original
principal amount of all Loans the proceeds of which are utilized to
finance such Physician Transaction, in part or in whole, (b) the amount
of cash paid by the Borrower and its Subsidiaries in connection with
such Physician Transaction, (c) the outstanding principal amount of all
Indebtedness incurred, assumed or acquired in connection with such
Physician Transaction, (d) all additional purchase price amounts in the
form of notes and other contingent obligations, (e) all amounts paid in
consideration of parties' entering into covenants not to compete and
consulting agreements in connection with such Physician Transaction and
(f ) the aggregate fair market value of all other consideration
(including Program Loans and commitments to make loans or advances
thereunder) given by the Borrower and its Subsidiaries in connection
with such Physician Transaction (exclusive of Capital Stock issued by
the Borrower or any Subsidiary to the seller, but including any
treasury stock reissued by the Borrower pursuant to subsection 7.7(c)).
"Type" means any type of Loan (i.e., a Base Rate Loan or a
Eurodollar Loan).
"Uniform Customs" means the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Wholly Owned Subsidiary" means, as to any Person, any
Subsidiary of such Person of which such Person owns, directly or
indirectly through one or more Wholly Owned Subsidiaries, all of the
Capital Stock of such Subsidiary other than directors' qualifying
shares or shares held by nominees.
"Year 2000 Compliant" has the meaning specified in Section
5.20.
"Year 2000 Problem" has the meaning specified in Section 5.20.
1.2 Other Definitional Provisions. (a) Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used in
any Notes, any other Loan Documents or any certificate or other document made or
delivered pursuant hereto.
(b) For purposes of computation of time periods hereunder, the
word "from" means "from and including" and the words "to" and "until" each mean
"to but excluding."
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) Capitalized terms used herein that are defined in the
Uniform Commercial Code as adopted by the State of Texas and in effect on the
Closing Date, unless otherwise defined herein, shall have the meanings assigned
therein.
(e) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
1.3 Accounting Terms. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Agent and the Lenders hereunder shall be prepared, in
accordance with GAAP applied on a consistent basis. All calculations made for
the purposes of determining compliance with this Agreement shall (except as
otherwise expressly provided herein) be made by application of GAAP on a basis
consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 6.1 (or, prior to the delivery of the first
financial statements pursuant to Section 6.1, consistent with the audited
financial statements described in Section 5.1); provided, however, that if (a)
the Borrower shall object to determining such compliance on such basis at the
time of delivery of such financial statements due to any change in GAAP or the
rules promulgated with respect thereto or (b) the Agent or the Required Lenders
shall so object in writing within ninety days after delivery of such financial
statements, then such calculations shall be made on a basis consistent with the
most recent financial statements delivered by the Borrower to the Lenders as to
which no such objection shall have been made.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make one or more
loans (each a "Loan") to the Borrower from time to time during the Revolving
Credit Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender's Revolving Credit Commitment
Percentage of the sum of the then outstanding LC Obligations, does not exceed
the amount of such Lender's Revolving Credit Commitment then in effect. During
the Revolving Credit Commitment Period, the Borrower may use the Revolving
Credit Commitments by borrowing, prepaying the Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) The Loans shall be made in Dollars and may from time to
time be (i) Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination
thereof, as determined by the Borrower and notified to the Agent in accordance
with Sections 2.2 and 3.5, provided that no Loan shall be made as a Eurodollar
Loan after the day that is one month prior to the Termination Date.
2.2 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give the
Agent an irrevocable notice in the form of a Notice of Borrowing (which notice
must be received by the Agent prior to (a) 12:00 Noon (Charlotte, North Carolina
time) at least three Business Days prior to the requested Borrowing Date, if all
or any part of the requested Loans are to be initially Eurodollar Loans, or (b)
prior to 12:00 Noon (Charlotte, North Carolina time) on the requested Borrowing
Date, if the requested Loans are to be initially Base Rate Loans), specifying
(i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether
the borrowing is to be of Eurodollar Loans, Base Rate Loans, or a combination
thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar
Loans, the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Periods therefor. Each borrowing under the
Revolving Credit Commitments shall be in an amount equal to (x) in the case of
Base Rate Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof
(or, if the then Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Agent shall promptly notify each Lender
thereof. Subject to the satisfaction of the conditions precedent specified in
Section 4, each Lender will make the amount of its Revolving Credit Commitment
Percentage of each borrowing of Loans available to the Agent for the account of
the Borrower at the office of the Agent specified in Section 10.2 prior to 2:00
P.M. (Charlotte, North Carolina time) on the Borrowing Date requested by the
Borrower in Dollars and in funds immediately available to the Agent. Such
borrowing will then be made available to the Borrower by the Agent crediting an
account of the Borrower at such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received by the
Agent.
2.3 Termination or Reduction of Revolving Credit Commitments.
The Borrower shall have the right, upon not less than five Business Days
irrevocable notice to the Agent, to terminate the Revolving Credit Commitments
or, from time to time, to reduce the amount of the Revolving Credit Commitments,
provided that no such termination or reduction shall be permitted if, after
giving effect thereto and to any prepayments of the Loans made on the effective
date thereof, the Aggregate Outstanding Revolving Credit of all Lenders would
exceed the Revolving Credit Commitments then in effect. Any such reduction shall
be in an amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and shall reduce permanently the Revolving Credit Commitments then in
effect.
2.4 Term Loan Election. The Borrower may upon written notice
given to the Agent not earlier than ninety or later than sixty days prior to the
Termination Date, elect (the "Term Loan Election") to convert all of the Loans
outstanding on the Termination Date into term loans which the Borrower shall
repay in full in accordance with subsection 3.3(a); provided, however, the Term
Loan Election may not be exercised if a Default or Event of Default shall have
occurred and be continuing on the date the notice of Term Loan Election is given
to the Agent or on the Termination Date. Such notice by the Borrower shall be
irrevocable on the part of Borrower once given. In connection with any Term Loan
Election, the Borrower shall pay the fee required by subsection 3.2(b).
2.5 LC Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in subsection 2.7(a) agrees to issue letters of credit ("Letters of
Credit") for the account of the Borrower on any Business Day during the
Revolving Credit Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the LC Obligations would exceed the LC Commitment or (ii) the
Available Revolving Credit Commitment would be less than zero.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (1)
a standby letter of credit issued to support obligations of the
Borrower or any of its Subsidiaries, contingent or otherwise (a
"Standby Letter of Credit"), or (2) a commercial letter of credit
issued in respect of the purchase of goods or services by the Borrower
and its Subsidiaries in the ordinary course of business (a "Commercial
Letter of Credit");
(ii) expire no later than the Termination Date and
(iii) unless otherwise agreed to by the Agent, expire
no later than 365 days after the date of issuance in the case of
Standby Letters of Credit, and 180 days after the date of issuance in
the case of Commercial Letters of Credit.
(c) Each Letter of Credit shall be subject to the Uniform
Customs.
(d) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any LC Participant to exceed any limits imposed by,
any Requirement of Law.
2.6 Procedure for Issuance of Letters of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified herein
an Application therefor, completed to the satisfaction of the Issuing Lender,
and such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing
Lender and the Borrower. The Issuing Lender shall furnish a copy of such Letter
of Credit to the Borrower promptly following the issuance thereof.
2.7 LC Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each LC Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each LC Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such LC
Participant's own account and risk an undivided interest equal to such LC
Participant's Revolving Credit Commitment Percentage (determined on the date of
issuance of the relevant Letter of Credit) in the Issuing Lender's obligations
and rights under each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each LC Participant unconditionally
and irrevocably agrees with the Issuing Lender that, if a draft is paid under
any Letter of Credit for which the Issuing Lender is not reimbursed in full by
the Borrower in accordance with the terms of this Agreement, such LC Participant
shall pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such LC Participant's Revolving
Credit Commitment Percentage of the amount of such draft, or any part thereof,
which is not so reimbursed.
(b) If any amount required to be paid by any LC Participant to
the Issuing Lender pursuant to subsection 2.7(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such LC Participant shall pay to the Issuing Lender on demand an
amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any LC Participant pursuant to subsection
2.7(a) is not in fact made available to the Issuing Lender by such LC
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such LC Participant, on demand,
such amount with interest thereon calculated from such due date at the rate per
annum applicable to Base Rate Loans hereunder. A certificate of the Issuing
Lender submitted to any LC Participant with respect to any amounts owing under
this subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any LC Participant its
pro rata share of such payment in accordance with subsection 2.7(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by the Issuing Lender), or any payment of interest on account thereof, the
Issuing Lender will, if such payment is received prior to 1:00 P.M. (Charlotte,
North Carolina time) on a Business Day, distribute to such LC Participant its
pro rata share thereof prior to the end of such Business Day and otherwise the
Issuing Lender will distribute such payment on the next succeeding Business Day;
provided, however, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such LC
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
2.8 Reimbursement Obligation of the Borrower. (a) The Borrower
shall reimburse the Issuing Lender upon receipt by the Borrower of notice from
the Issuing Lender of the date and amount of a draft presented under any Letter
of Credit and paid by the Issuing Lender for the amount of (i) such draft so
paid and (ii) any taxes, fees, charges or other costs or expenses incurred by
the Issuing Lender in connection with such payment. Each such payment shall be
made to the Issuing Lender at its address for notices specified herein in
Dollars and in immediately available funds, on the Business Day immediately
following the date on which the Borrower receives such notice.
(b) Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this Section 2.8 from the date such amounts become
payable (whether at stated maturity, by acceleration or otherwise) until payment
in full at the rate which would be payable on any outstanding Base Rate Loans
which were then overdue.
2.9 Obligations Absolute. (a) The Borrower's obligations under
Sections 2.5 through 2.8 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender, any
LC Participant or any beneficiary of a Letter of Credit.
(b) The Borrower also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower's Reimbursement
Obligations under subsection 2.8(a) shall not be affected by, among other
things, (i) the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, (ii) any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or (iii) any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee.
(c) Neither the Issuing Lender nor any LC Participant shall be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit, except for errors or omissions caused by such Person's
gross negligence or willful misconduct.
(d) The Borrower agrees that any action taken or omitted by
the Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence or gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform Customs, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender or any LC Participant to the Borrower.
2.10 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower of the date and amount thereof. The responsibility
of the Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
2.11 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement, the provisions of this Agreement shall apply.
SECTION 3.. GENERAL PROVISIONS APPLICABLE TO
LOANS AND LETTERS OF CREDIT
3.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Adjusted Eurodollar Rate plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest for each day that
it is outstanding at a rate per annum equal to the Base Rate for such day plus
the Applicable Margin.
(c) Upon the occurrence, and during the continuance, of an
Event of Default, the principal of and, to the extent permitted by applicable
law, interest on the Loans and any other amounts owing hereunder or under the
other Loan Documents shall bear interest, at a per annum rate equal to (a) in
the case of principal of any Loan, the rate applicable to such Loan during such
period pursuant to Section 3.1, plus 2%, (b) in the case of interest on any
Loan, the Base Rate plus 2% and (c) in the case of any other amount, the Base
Rate plus 2%.
(d) Interest shall be payable in arrears on each Interest
Payment Date, the Termination Date and, if the Loans have been converted to term
loans pursuant to Section 2.4, on the Maturity Date; provided that interest
accruing pursuant to subsection 3.1(c), shall be payable from time to time on
demand.
3.2 Commitment Fee; Other Fees. (a) The Borrower shall pay to
the Agent for the account of each Lender a Commitment Fee (the "Commitment Fee")
for the period from and including the first day of the Revolving Credit
Commitment Period to the Termination Date, computed at a rate per annum equal to
the Applicable Margin for Commitment Fees on the amount of the Available
Revolving Credit Commitment of such Lender during the period for which payment
is made, payable quarterly in arrears on the last day of each March, June,
September and December and on the Termination Date or such earlier date as the
Revolving Credit Commitments shall terminate or be reduced as provided herein,
commencing on the first of such dates to occur after the date hereof.
(b) In the event that the Borrower elects to convert the Loans
to term loans pursuant to Section 2.4, the Borrower shall pay to the Agent for
the account of each Lender a conversion fee in an amount equal to .25% of the
outstanding Loans of such Lender that will be converted to term loans on the
Termination Date. Such fee shall be due and payable on the Business Day
immediately preceding the Termination Date and shall be nonrefundable.
(c) The Borrower shall pay to the Agent and the Arranger, each
for its own account, the fees on the dates and in the amounts specified in the
letter agreement dated October 2, 1998, among the Borrower, the Arranger and the
Agent. Such fees shall be nonrefundable.
(d) The Borrower shall pay to the Issuing Lender with respect
to each Letter of Credit issued by it under this Agreement, for the account of
the Issuing Lender, a fronting fee with respect to the period from the date of
issuance of such Letter of Credit to the expiration or termination date of such
Letter of Credit, computed at a rate of .125% per annum on the face amount of
such Letter of Credit during the period for which such fee is calculated. Such
fronting fee shall be payable in arrears on each LC Fee Payment Date occurring
after the issuance of such Letter of Credit and on the Termination Date (or on
such earlier date as the Revolving Credit Commitments terminate as provided
herein) and shall be nonrefundable.
(e) The Borrower shall pay to the Agent, for the account of
the LC Participants, a letter of credit commission with respect to each Letter
of Credit issued under this Agreement with respect to the period from the date
of issuance of such Letter of Credit to the expiration or termination date of
such Letter of Credit, computed at a rate per annum equal to the Applicable
Margin in respect of Loans which are Eurodollar Loans from time to time in
effect on the face amount of such Letter of Credit during the period for which
such fee is calculated. Such commission shall be shared ratably among the LC
Participants in accordance with their respective Revolving Credit Commitment
Percentages. Such commission shall be payable in arrears on each LC Fee Payment
Date to occur after the issuance of such Letter of Credit and on the Termination
Date (or on such earlier date as the Revolving Credit Commitments shall
terminate as provided herein) and shall be nonrefundable.
(f) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Lender for such normal and customary
costs and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, transferring, amending or otherwise administering any
Letter of Credit.
3.3 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Agent for the account of each
Lender (i) the then unpaid principal amount of each Loan of such Lender on the
Termination Date (or such earlier date on which the Loans become due and payable
pursuant to Section 8) unless the Loans outstanding on such date have been
converted into term loans pursuant to Section 2.4 and (ii) if the Loans shall
have been converted to term loans pursuant to Section 2.4, the Loans of such
Lender outstanding on the Termination Date in consecutive quarterly installments
of principal, the first such installment being payable on the first Principal
Amortization Date following the Termination Date, and on each Principal
Amortization Date thereafter, with all outstanding principal of the Loans being
due and payable on the Maturity Date (or such earlier date on which the Loans
become due and payable pursuant to Section 8). Except for the principal
installment due on the Maturity Date, each such installment of principal shall
be in an amount equal to 5% of the outstanding principal of the Loans on the
Termination Date. The Borrower hereby further agrees to pay interest on the
unpaid principal amount of the Loans from time to time outstanding from the date
hereof until payment in full thereof at the rates per annum, and on the dates,
set forth in Section 3.1.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Agent shall maintain the Register pursuant to
subsection 10.6(c), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan hereunder, the Type thereof and each
Interest Period, if any, applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) both the amount of any sum received by the Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 3.3(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Loans made to the Borrower by
such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that it will execute and deliver to
each Lender on or before the Closing Date, a promissory note of the Borrower
dated the date hereof evidencing the Loans of such Lender, substantially in the
form of Exhibit C, with a principal amount equal to such Lender's Revolving
Credit Commitment (each, as amended, modified, extended, renewed, or replaced
from time to time, a "Note").
3.4 Computation of Interest and Fees. (a) Interest, whenever
it is calculated on the basis of the Base Rate, shall be calculated on the basis
of a 365 (or 366, as the case may be) day year for the actual days elapsed.
Interest, whenever it is calculated on the basis of the Adjusted Eurodollar
Rate, the Commitment Fee and all other fees and commissions hereunder shall be
calculated on the basis of a 360-day year for the actual days elapsed. The Agent
shall as soon as practicable notify the Borrower and the Lenders of each
determination of the Adjusted Eurodollar Rate. Any change in the interest rate
on a Loan or any other obligation hereunder resulting from a change in the Base
Rate, the Federal Funds Rate, the Applicable Margin or the Reserve Requirement
shall become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The Agent shall,
at the request of the Borrower, deliver to the Borrower a statement showing the
quotations used by the Agent in determining any interest rate pursuant to
Section 3.1.
3.5 Conversion and Continuation Options. (a) The Borrower may
by notice to the Agent in accordance with subsection 3.5(c) elect from time to
time to Convert Eurodollar Loans to Base Rate Loans and to Convert Base Rate
Loans to Eurodollar Loans. All or any part of outstanding Eurodollar Loans and
Base Rate Loans may be Converted as provided herein, provided that (i) no Base
Rate Loan may be Converted into a Eurodollar Loan when any Default or Event of
Default has occurred and is continuing and, in the case of any Default, the
Agent has given notice to the Borrower that such a Conversion may not be made,
(ii) no Base Rate Loan may be Converted into a Eurodollar Loan after the date
that is one month prior to the Termination Date or, if the Loans have been
converted to term loans pursuant to Section 2.4, the Maturity Date and (iii) any
Conversion of Eurodollar Loans may only be made on the last day of the Interest
Period with respect thereto.
(b) Any Eurodollar Loans may be Continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in Section 1.1 and subsection
3.5(c), of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan may be Continued as such (i) when any
Default or Event of Default has occurred and is continuing and, in the case of
any Default, the Agent has given notice to the Borrower that such a Continuation
may not be made or (ii) after the date that is one month prior to the
Termination Date or, if the Loans have been converted to term loans pursuant to
Section 2.4, the Maturity Date, and provided, further, in the case of Eurodollar
Loans, if the Borrower shall fail to give any required notice as described above
in this paragraph or if such Continuation is not permitted pursuant to the
preceding proviso, such Eurodollar Loans shall be automatically Converted to
Base Rate Loans on the last day of such then expiring Interest Period.
(c) The Borrower shall deliver notices of Conversions and
Continuations to the Agent in the form of a Notice of Conversion/Continuation
prior to 12:00 Noon (Charlotte, North Carolina time) at least (i) three Business
Days prior to the requested date of Continuation, if Loans are to be Continued
as Eurodollar Loans, (ii) three Business Days prior to the requested date of
Conversion, if Base Rate Loans are to be Converted into Eurodollar Loans and
(iii) one Business Day prior to the requested date of Conversion, if Loans are
to be Converted into Base Rate Loans, specifying:
(A) the proposed date of Conversion or Continuation;
(B) the aggregate amount of Loans to be Converted or Continued;
(C) the Type of Loans resulting from the proposed Conversion or
Continuation; and
(D) except for Conversions into the Base Rate Loans, the duration of the
requested Interest Period.
(d) Notwithstanding anything to the contrary contained herein,
during the existence of a Default or an Event of Default and upon the request of
the Required Lenders, all or any part of any outstanding Eurodollar Loans shall
be Converted into Base Rate Loans. The Agent will promptly notify the Borrower
and the Lenders of any such Conversion request.
3.6 Pro Rata Treatment and Payments. (a) Each borrowing of
Loans by the Borrower from the Lenders hereunder, each payment by the Borrower
of the Commitment Fee and any reduction of the Revolving Credit Commitments of
the Lenders, shall be made pro rata according to the respective Revolving Credit
Commitment Percentages of the Lenders. Each payment (including each prepayment)
by the Borrower on account of principal of and interest on the Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Loans then held by the Lenders. All payments (including prepayments) to be made
by the Borrower under this Agreement and the other Loan Documents, whether on
account of principal, interest, fees or otherwise, shall be made without
set-off, deduction, recoupment, counterclaim or other defense and shall be made
prior to 2:00 P.M. (Charlotte, North Carolina time) on the due date thereof to
the Agent, for the account of the Lenders, at the Agent's office specified in
Section 10.2, in Dollars and in immediately available funds. Payments received
by the Agent after such time shall be deemed to have been received on the next
Business Day. The Agent shall distribute such payments to the Lenders, if any
such payment is received prior to 12:00 Noon (Charlotte, North Carolina time) on
a Business Day, in like funds as received prior to the end of such Business Day
and otherwise the Agent shall distribute such payment to the Lenders on the next
succeeding Business Day. If any payment hereunder becomes due and payable on a
day other than a Business Day, such payment shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension,
unless the result of such extension would be to extend such payment into another
calendar month, in which event, such payment shall be made on the immediately
preceding Business Day.
(b) Unless the Agent shall have been notified in writing by
any Lender prior to a borrowing of a Loan that such Lender will not make the
amount that would constitute its Revolving Credit Commitment Percentage of such
borrowing available to the Agent, the Agent may assume that such Lender is
making such amount available to the Agent, and the Agent may, in reliance upon
such assumption, make available to the Borrower in respect of such borrowing a
corresponding amount. If such amount is not made available to the Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Agent, on demand, such amount with interest thereon at a rate equal to the
Federal Funds Rate until such Lender makes such amount immediately available to
the Agent. A certificate of the Agent submitted to any Lender with respect to
any amounts owing under this Section 3.6 shall be conclusive in the absence of
manifest error. If such Lender's Revolving Credit Commitment Percentage of such
borrowing is not made available to the Agent by such Lender within three
Business Days of such Borrowing Date, the Agent shall also be entitled to
recover such amount with interest thereon calculated from such Borrowing Date at
the rate per annum equal to the Base Rate.
3.7 Optional and Mandatory Prepayments. (a) The Borrower may,
at any time and from time to time, prepay the Loans, in whole or in part,
without premium or penalty, upon at least one Business Days prior irrevocable
notice to the Agent, specifying the date and amount of prepayment and whether
the prepayment is of Eurodollar Loans, Base Rate Loans, or a combination
thereof, and, if a combination thereof, the principal amount allocable to each.
Upon receipt of any such notice, the Agent shall promptly notify each Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with any amounts
payable pursuant to Section 3.13 and, in the case of prepayments of the term
loans, accrued interest to such date on the amount prepaid. Partial prepayments
shall be in an aggregate principal amount of $1,000,000 or a whole multiple of
$1,000,000 in excess thereof.
(bi Concurrently with the receipt of Net Cash Proceeds from
any Debt Issuance (other than the issuance of Seller Notes) or Equity Issuance
(other than from the exercise of stock options held by employees of Borrower or
its Subsidiaries or the issuance of Capital Stock to a Physician Group or any
physician associated with a Physician Group as a portion of the Transaction
Amount for a Permitted Physician Transaction) by the Borrower or any Subsidiary,
the Borrower shall use, or cause such Subsidiary to use, all such Net Cash
Proceeds to prepay the Loans. If the Loans being so repaid have been converted
into term loans pursuant to Section 2.4, then the Net Cash Proceeds shall be
applied to payment of the principal installments in the inverse order of
maturity (after payment of all accrued and unpaid interest on the Loans and any
accrued and unpaid fees).
(ci To the extent that any prepayment of a Eurodollar Loan is
made on a date other than the last day of its Interest Period, the Borrower
shall compensate each Lender in accordance with Section 3.13. Amounts prepaid on
account of the term loans may not be reborrowed.
3.8 Minimum Amounts and Maximum Number of Eurodollar Tranches.
All borrowings, Conversions and Continuations of Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made
pursuant to such elections so that, after giving effect thereto, the aggregate
principal amount of the Loans comprising each Eurodollar Tranche shall be equal
to $5,000,000 or a whole multiple of $1,000,000 in excess thereof. In no event
shall there be more than eight Eurodollar Tranches outstanding at any time.
3.9 Increased Cost and Reduced Return. (a) If, after the date
hereof, the adoption of any Requirement of Law, or any change in any Requirement
of Law, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank, or
comparable agency:
(i0 shall subject such Lender (or its Applicable
Lending Office) to any tax, duty or other charge with respect to any
Eurodollar Loans, its Note or its obligation to make Eurodollar Loans,
or change the basis of taxation of any amounts payable to such Lender
(or its Applicable Lending Office) under this Agreement or its Note in
respect of any Eurodollar Loans (other than taxes imposed on the
overall net income of such Lender by the jurisdiction in which such
Lender has its principal office or such Applicable Lending Office);
(ii0 shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement (other
than the Reserve Requirement utilized in the determination of the
Adjusted Eurodollar Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments of,
such Lender (or its Applicable Lending Office), including the Revolving
Credit Commitment of such Lender hereunder; or
(iii0 shall impose on such Lender (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting this Agreement, its Note or any of such extensions of credit
or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Agreement or its Note
with respect to any Eurodollar Loans, then the Borrower shall pay to such Lender
on demand such amount or amounts as will compensate such Lender for such
increased cost or reduction. If any Lender requests compensation by the Borrower
under this subsection 3.9(a), the Borrower may, by notice to such Lender (with a
copy to the Agent), suspend the obligation of such Lender to make or Continue
Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the
event or condition giving rise to such request ceases to be in effect (in which
case the provisions of Section 3.12 shall be applicable); provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested.
(bi If, after the date hereof, any Lender shall have
determined that the adoption of any Requirement of Law regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, has or would have 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 to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(ci Each Lender shall promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Lender to compensation pursuant to this Section 3.9 and
will designate a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the judgment of such Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this Section 3.9 shall furnish to the Borrower and
the Agent a statement setting forth the additional amount or amounts to be paid
to it hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
(di Failure or delay on the part of any Lender to demand
compensation pursuant to this Section 3.9 shall not constitute a waiver of such
Lender's right to demand such compensation; provided, however, that the Borrower
shall not be required to compensate any Lender pursuant to this Section 3.9 for
any increased costs or reduction in amounts receivable or rate of return on
capital incurred more than 180 days prior to the date that such Lender notifies
the Borrower of the event or occurrence giving rise to such increased costs or
reductions and of such Lender's intention to claim compensation therefor;
provided, further that, if the event or occurrence giving rise to such increased
costs or reductions is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.
3.10 Limitation on Types of Loans. If on or prior to the first day of any
Interest Period for any Eurodollar Loan:
(ai the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period; or
(bi the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Adjusted Eurodollar Rate will not
adequately and fairly reflect the cost to the Lender of funding Eurodollar Loans
for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base Rate Loans
into Eurodollar Loans and the Borrower shall, on the last day(s) of the then
current Interest Period(s) for the outstanding Eurodollar Loans, either prepay
such Loans or Convert such Loans into Base Rate Loans in accordance with the
terms of this Agreement.
3.11 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Loans hereunder,
then such Lender shall promptly notify the Borrower thereof and such Lender's
obligation to make or Continue Eurodollar Loans and to Convert Base Rate Loans
into Eurodollar Loans shall be suspended until such time as such Lender may
again make, maintain, and fund Eurodollar Loans (in which case the provisions of
Section 3.12 shall be applicable).
3.12 Treatment of Affected Loans. If the obligation of any
Lender to make Eurodollar Loans or to Continue, or to Convert Base Rate Loans
into Eurodollar Loans shall be suspended pursuant to Section 3.9 or 3.11, such
Lender's Eurodollar Loans shall be automatically Converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) (or, in the case of a
Conversion required by Section 3.11, on such earlier date as such Lender may
specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 3.9 or 3.11 that gave rise to such Conversion no longer exists:
(ai to the extent that such Lender's Eurodollar Loans have
been so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied instead
to its Base Rate Loans; and
(bi all Loans that would otherwise be made or Continued by
such Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Loans of such Lenders that would otherwise be Converted into
Eurodollar Loans shall be Converted instead into (or shall remain as) Base Rate
Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.9 or 3.11 that gave rise to the Conversion
of such Lender's Eurodollar Loans pursuant to this Section 3.12 no longer exist
(which such Lender agrees to do promptly upon such circumstances ceasing to
exist) at a time when Eurodollar Loans made by other Lenders are outstanding,
such Lender's Base Rate Loans shall be automatically Converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar
Loans, to the extent necessary so that, after giving effect thereto, all Loans
held by the Lenders holding Eurodollar Loans and by such Lender are held pro
rata (as to principal amounts, Types, and Interest Periods) in accordance with
their respective Revolving Credit Commitments.
3.13 Compensation. Upon the request of any Lender, the
Borrower shall pay to such Lender such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for any loss, cost,
or expense (including loss of anticipated profits) incurred by it as a result
of:
(ai any payment, prepayment, or Conversion of a Eurodollar
Loan for any reason (including, without limitation, the acceleration of the
Loans pursuant to Section 8) on a date other than the last day of the Interest
Period for such Loan; or
(bi any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in Section
4 to be satisfied) to borrow, Convert, Continue or prepay a Eurodollar Loan on
the date for such borrowing, Conversion, Continuation or prepayment specified in
the relevant notice of borrowing, prepayment, Continuation or Conversion under
this Agreement.
3.14 Taxes. (a) Any and all payments by the Borrower to or for
the account of any Lender or the Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect, thereto, excluding, in the case
of each Lender and the Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or its
Applicable Lending Office) or the Agent (as the case may be) is organized or any
political subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable under this Agreement or any other
Loan Document to any Lender or the Agent, (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 3.14) such Lender or
the Agent receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Agent, at its address referred to in Section 10.2, the original
or a certified copy of a receipt evidencing payment thereof.
(bi In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made under this
Agreement or any other Loan Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(ci THE BORROWER AGREES TO INDEMNIFY EACH LENDER AND THE AGENT
FOR THE FULL AMOUNT OF TAXES AND OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY
TAXES OR OTHER TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE
UNDER THIS SECTION 3.14) PAID BY SUCH LENDER OR THE AGENT (AS THE CASE MAY BE)
AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST, AND EXPENSES) ARISING
THEREFROM OR WITH RESPECT THERETO.
(di Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Lender listed on the signature pages
hereof and on or prior to the date on which it becomes a Lender in the case of
each other Lender, and from time to time thereafter if requested in writing by
the Borrower or the Agent (but only so long as such Lender remains lawfully able
to do so), shall provide the Borrower and the Agent with (i) Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or certifying that
the income receivable pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the United States, (ii) Internal Revenue
Service Form W-8 or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service and (iii) any other form or certificate required by any
taxing authority (including any certificate required by Sections 871(h) and
881(c) of the Code), certifying that such Lender is entitled to an exemption
from or a reduced rate of tax on payments pursuant to this Agreement or any of
the other Loan Documents.
(ei For any period with respect to which a Lender has failed
to provide the Borrower and the Agent with the appropriate form pursuant to
subsection 3.14(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under subsection 3.14(a) with respect to Taxes imposed by the United States;
provided, however, that should a Lender, which is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to Taxes because of
its failure to deliver a form required hereunder, the Borrower shall take such
steps as such Lender shall reasonably request to assist such Lender to recover
such Taxes.
(fi If the Borrower is required to pay additional amounts to
or for the account of any Lender pursuant to this Section 3.14, then such Lender
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of such
Lender, is not otherwise disadvantageous to such Lender.
(gi Within thirty days after the date of any payment of Taxes
or Other Taxes, the Borrower shall furnish to the Agent the original or a
certified copy of a receipt evidencing such payment.
(hi Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.14 shall survive the termination of the Revolving
Credit Commitments and the payment in full of the Notes.
3.15 Replacement of Lenders. In the event (a) any Lender
requests compensation pursuant to Section 3.9, (b) any Lender delivers a notice
to the Borrower pursuant to Section 3.11 or (c) the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority on account of
any Lender pursuant to Section 3.14, the Borrower may, at its sole expense and
effort (including with respect to the processing and recordation fee referred to
in subsection 10.6(b)(iv)), upon notice to such Lender and the Agent, require
such Lender to transfer and assign, without recourse (in accordance with and
subject to the restrictions contained in Section 10.6), all of its interests,
rights and obligations under this Agreement and the other Loan Documents to an
Eligible Assignee that shall assume such assigned obligations (which assignee
may be another Lender, if a Lender accepts such assignment), provided that (i)
such assignment shall not conflict with any Requirement of Law, (ii) no Default
or Event of Default shall have occurred and be continuing and (iii) the Borrower
or such Eligible Assignee shall have paid to the affected Lender in immediately
available funds an amount equal to the sum of 100% of the principal of and
interest accrued to the date of such payment on the outstanding Loans and
Reimbursement Obligations of such Lender, respectively, plus all Commitment Fees
and other amounts accrued for the account of such Lender hereunder (including
any amounts under Sections 3.9, 3.13 and 3.14); provided further that if prior
to any such assignment the circumstances or event that resulted in such Lender's
request or notice under Section 3.9 or 3.11 or demand for additional amounts
under Section 3.14, as the case may be, shall cease to exist or become
inapplicable for any reason or if such Lender shall waive its rights in respect
of such circumstances or event under Section 3.9, 3.11 or 3.14, as the case may
be, then such Lender shall not be required to make such assignment hereunder.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial Extension of Credit requested to be made by
it is subject to the satisfaction, immediately prior to or concurrently with the
making of such Extension of Credit, of the following conditions precedent (in
form and substance acceptable to the Agent and the Lenders):
(ai Loan Documents. The Agent shall have received the following Loan
Documents, duly executed and delivered as required below:
(i0 this Agreement, executed and delivered by a duly authorized officer of
the Borrower, with a counterpart for each Lender;
(ii0 a Note, executed and delivered by a duly
authorized officer of the Borrower, payable to the order of each Lender
and in a principal amount for each Lender equal to its Revolving Credit
Commitment;
(iii0 the Guarantee and Collateral Agreement,
executed and delivered by duly authorized officers of the Borrower and
each of its Subsidiaries, with a counterpart or a conformed copy for
each Lender;
(iv0 the Lockbox Agreements and Deposit Agreements
required by the Guarantee and Collateral Agreement, executed and
delivered by duly authorized officers of the Loan Parties, the Lockbox
Banks, the Depository Banks, and the Affiliated Providers, as
applicable; and
(v0 the Trademark Security Agreement, executed by a
duly authorized officer of the Borrower, with a counterpart or
conformed copy for each Lender.
(bi Corporate Proceedings of the Loan Parties. The Agent shall
have received, with a counterpart for each Lender, a copy of the resolutions, in
form and substance satisfactory to the Agent, of the Board of Directors of each
of the Loan Parties authorizing (i) the execution, delivery and performance of
the Loan Documents to which it is a party and (ii) with respect to the Borrower
only, the borrowings contemplated hereunder, certified by the Secretary or an
Assistant Secretary of such Loan Party as of the Closing Date, which certificate
shall be in form and substance satisfactory to the Agent and shall state that
the resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(ci Incumbency Certificate. The Agent shall have received,
with a counterpart for each Lender, a certificate of each Loan Party, dated the
Closing Date, as to the incumbency and signature of the officers of such Loan
Party executing any Loan Document to which such Loan Party is a party, executed
by the Secretary or any Assistant Secretary of such Loan Party.
(di Corporate Documents. The Agent shall have received, with a
counterpart for each Lender, true and complete copies of (i) the certificate of
incorporation and by-laws (or other similar governing documents serving the same
purpose) of each Loan Party and (ii) certificates of good standing or existence
for each Loan Party issued by the appropriate Governmental Authority in its
state of incorporation as of a recent date, each certified as of the Closing
Date, as complete and correct copies thereof by the Secretary or an Assistant
Secretary of such Loan Party.
(ei Fees. The Agent shall have received payment of all fees
and expenses owed to it by the Borrower, including, without limitation, the fees
to be received on or before the Closing Date pursuant to subsection 3.2(c).
(fi Legal Opinions. The Agent shall have received, with a counterpart for
each Lender, the following executed legal opinions:
(i0 the executed legal opinion of Boult, Cummings, Xxxxxxx & Xxxxx, PLC,
counsel to the Borrower and its Subsidiaries, substantially in the form of
Exhibit H-1; and
(ii0 the executed legal opinion of Liddell, Sapp,
Zivley, Hill & XxXxxx, LLP, special Texas counsel for the Borrower and
its Subsidiaries, substantially in the form of Exhibit H-2.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agent may reasonably require.
(gi Actions to Perfect Liens Under Security Documents. The
Agent shall have received evidence in form and substance satisfactory to it that
all filings, recordings, registrations and other actions, including, without
limitation, the filing of duly executed financing statements on form UCC-1, the
delivery of certificates representing shares of stock pledged pursuant to any
Security Document, together with undated stock powers, and the delivery of the
promissory notes pledged pursuant to any Security Document, each endorsed in
blank, necessary or, in the opinion of the Agent, desirable to perfect the Liens
created by the Security Documents shall have been completed, and all agreements,
statements and other documents relating thereto shall be in form and substance
satisfactory to the Agent.
(hi Actions to Perfect Assignments of Receivables Under
Service Agreements. The Agent shall have received evidence in form and substance
satisfactory to it that (i) all filings, recordings, registrations and other
actions, including, without limitation, the filing of financing statements on
form UCC-1, necessary, or in the opinion of the Agent, desirable to perfect the
ownership interest of the Borrower and its Subsidiaries in all Receivables
assigned to the Borrower and its Subsidiaries from Affiliated Providers pursuant
to the Service Agreements, shall have been completed and (ii) all such filings,
recordings, registrations and other actions have been assigned of record to the
Agent.
(ii Lien Searches. The Agent shall have received the results
of a recent search by a Person satisfactory to the Agent, of the Uniform
Commercial Code, judgment and tax lien filings which may have been filed with
respect to personal property of the Borrower, its Subsidiaries and the
Affiliated Providers in any of the jurisdictions set forth in Schedule 4.1(i),
and the results of such search shall be satisfactory to the Agent.
(xx Xxxx Releases. The Agent shall have received such Lien releases as it
may request with respect to Liens on assets of the Borrower, its Subsidiaries
and the Affiliated Providers.
(ki Insurance. The Agent shall have received evidence in form
and substance satisfactory to it that all of the requirements of Section 5.3 of
the Guarantee and Collateral Agreement shall have been satisfied.
(li Financial Information. The Lenders shall have received
photocopies of and shall be satisfied, in form and substance, with (i) the
audited consolidated income statements, balance sheets and statements of
shareholders' equity and cash flows of the Borrower and its Consolidated
Subsidiaries for fiscal years ended on December 31, 1995, December 31, 1996, and
December 31, 1997, in each case accompanied by a report of Xxxxxx Xxxxxxxx LLP,
and (ii) the unaudited consolidated balance sheet and unaudited consolidated
statements of income and retained earnings and of cash flows of the Borrower and
its Consolidated Subsidiaries for each quarterly period ended after December 31,
1997, for which such statements are available.
(mi Related Agreements. The Agent shall have received, with a
copy for each Lender, true and correct copies, certified as to authenticity by
the Borrower, of each Service Agreement in effect on the Closing Date and each
agreement or instrument evidencing Existing Subordinated Indebtedness.
(ni Receivables Report. The Agent shall have received a copy
of the receivables report required to be delivered by the Borrower under the
Existing Credit Agreement with respect to Receivables outstanding on November
30, 1998.
(oi Due Diligence. The completion of due diligence with
respect to the Borrower and its Subsidiaries in scope and determination
satisfactory to the Agent in its sole discretion, including, without limitation,
due diligence with respect to historical financial information, litigation, tax,
accounting, labor, insurance, pension liabilities (actual or contingent), real
estate leases, Material Contracts, agreements evidencing Indebtedness,
contingent liabilities, property ownership, and compliance with Requirements of
Law.
(pi No Disruption of Financial Markets. The absence of any
disruption or adverse change in the financial or capital markets generally which
the Agent, in its sole discretion, deems material in connection with the
syndication of the credit facility evidenced by this Agreement.
(qi Termination of Lockbox Agreements under Existing Credit Agreement. The
Agent shall have received evidence of the termination of all lockbox agreements
under the Existing Credit Agreement.
(ri Form of Service Agreement. A copy of the form of Service Agreement
being used by the Borrower and its Subsidiaries on the Closing Date, certified
by the Secretary or an Assistant Secretary of the Borrower.
4.2 Conditions to Each Extension of Credit. The obligation of
each Lender to make any Extension of Credit (including, without limitation, its
initial Extension of Credit) is subject to the satisfaction of the following
conditions precedent:
(ai Representations and Warranties. Each of the
representations and warranties made by any of the Loan Parties in or pursuant to
the Loan Documents shall be true and correct on and as of the date of such
Extension of Credit as if made on and as of such date.
(bi No Default. No Default or Event of Default shall have occurred and be
continuing immediately before or after giving effect to such Extension of
Credit.
(ci Additional Matters. All corporate and other proceedings
and all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Agent, and the Agent shall have
received such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
Each Extension of Credit hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
this Section 4.2 have been satisfied.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this
Agreement and to make the Extensions of Credit, the Borrower hereby represents
and warrants to the Agent and each Lender that:
5.1 Financial Condition. The audited consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as at December 31, 1997,
and the related audited consolidated statements of income and of cash flows for
the fiscal year ended on such date, reported on by Xxxxxx Xxxxxxxx LLP, copies
of which have heretofore been furnished to each Lender, are complete and correct
and present fairly the consolidated financial condition of the Borrower and its
Consolidated Subsidiaries as at such date, and the consolidated results of their
operations and their consolidated cash flows for the fiscal year then ended. The
unaudited consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as at June 30, 1998, and the related unaudited consolidated
statements of income and of cash flows for the six month period ended on such
date, certified by a Responsible Officer, copies of which have heretofore been
furnished to each Lender, are complete and correct and present fairly the
consolidated financial condition of the Borrower and its Consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the six month period then ended (subject
to normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
such accountants or Responsible Officer, as the case may be, and as disclosed
therein). Neither the Borrower nor any of its Consolidated Subsidiaries had, at
the date of the most recent balance sheet referred to above, any material
Guarantee Obligation, contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment, including, without
limitation, any interest rate or foreign currency swap or exchange transaction,
which is not reflected in the foregoing statements or in the notes thereto.
Except as set forth on Schedule 5.1, during the period from December 31, 1997,
to and including the date hereof, there has been no sale, transfer or other
disposition by the Borrower or any of its Consolidated Subsidiaries of any
material part of its business or property and no purchase or other acquisition
of any business or property (including any Capital Stock of any other Person)
material in relation to the consolidated financial condition of the Borrower and
its Consolidated Subsidiaries at December 31, 1997.
5.2 No Change; Solvent. Since December 31, 1997, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect. The Borrower and its Subsidiaries, taken as a whole,
are Solvent.
5.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries and, to the best of its knowledge, each of the
Affiliated Providers (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except where failure to so qualify or be in good
standing could not reasonably be expected to have a Material Adverse Effect, (d)
has all licenses, accreditations, authorizations, permits, consents and
approvals (including, without limitation, all accreditations and certifications
as a provider of health care services eligible to receive payment and
compensation under, and to participate in, any Governmental Program) required to
carry on its business as now conducted, except where failure to have the same
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect and (e) is in compliance with all Requirements of Law,
except to the extent that the failure to comply therewith could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5.4 Corporate Power; Authorization; Enforceable Obligations.
The Borrower has the corporate power and authority, and the legal right, to
execute, deliver and perform the Loan Documents to which it is a party and to
borrow Loans hereunder, and has taken all necessary corporate action to
authorize the Loans on the terms and conditions of this Agreement, the Notes and
each other Loan Document to which it is a party and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required to be
obtained or made by or on behalf of the Borrower in connection with the
Extensions of Credit hereunder or with the execution, delivery, performance,
validity or enforceability of the Loan Documents to which the Borrower is a
party. This Agreement has been, and each other Loan Document to which it is a
party will be, duly executed and delivered on behalf of the Borrower. Each Loan
Document to which the Borrower is a party when executed and delivered will
constitute, a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, except as enforceability may
be limited by the effects of bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or at
law).
5.5 No Legal Bar. The execution, delivery and performance of
the Loan Documents to which the Borrower is a party, the Extensions of Credit
hereunder and the use of the proceeds thereof (a) will not violate any
Requirement of Law or Contractual Obligation of the Borrower and (b) will not
result in, or require, the creation or imposition of any Lien on any of its or
its Subsidiaries' respective properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation.
5.6 No Material Litigation. Except as disclosed in Schedule
5.6, no litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower, any Subsidiary or against any of its or
their respective properties or revenues (a) with respect to any of the Loan
Documents or any of the transactions contemplated hereby or thereby or (b) which
could reasonably be expected to have a Material Adverse Effect. Except as
disclosed in Schedule 5.6 and to the best of the Borrower's knowledge, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or threatened by or against any Affiliated
Provider or against any of its properties or revenues (a) with respect to any of
the Loan Documents or Service Agreements or any of the transactions contemplated
hereby or thereby or (b) which could reasonably be expected to have a Material
Adverse Effect.
5.7 No Default. Neither the Borrower nor any Subsidiary nor,
to the best of the Borrower's knowledge, any of the Affiliated Providers is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by Section 7.3. Schedule 5.8 hereto
lists all of the real property owned in fee or leased by the Borrower and its
Subsidiaries on the Closing Date.
5.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all patents, patent applications,
trademarks, trademark applications, tradenames, copyrights, technology, know-how
and processes necessary for the conduct of its business as currently conducted
or as proposed to be conducted (the "Intellectual Property"), except for those
the failure to own or license which could not reasonably be expected to have a
Material Adverse Effect. No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim. The use of such
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
5.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect. Schedule 5.10 sets
forth a complete and accurate list as of the Closing Date of each Material
Contract to which the Borrower or any Subsidiary is a party or by which it or
any of its assets are bound or subject. All of the Material Contracts are in
full force and effect, and neither the Borrower nor any Subsidiary is in default
under any Material Contract and no other Person that is a party thereto is in
default under any Material Contract, except for defaults that could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
5.11 Taxes. Each of the Borrower and its Subsidiaries has
filed or caused to be filed all tax returns which are required to be filed and
has paid all material taxes shown to be due and payable on said returns or on
any material assessments made against it or any of its property and all other
material taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than those taxes, fees or other charges the
amount or validity of which are currently being contested in good faith by
appropriate proceedings diligently conducted and with respect to which reserves
in conformity with GAAP have been provided on the books of the Borrower or its
Subsidiaries, as the case may be) and no tax Lien has been filed, and no claim
is being asserted, with respect to any such tax, fee or other charge.
5.12 Federal Regulations. No part of the proceeds of any Loan
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under the Regulations, including
without limitation, Regulation U. The Borrower is not engaged principally or as
one of its important activities in the business of extending credit for the
purpose of purchasing or carrying any margin stock within the meaning of any of
the Regulations. No more than 25% of the assets of the Borrower and its
Subsidiaries are margin stock. None of the Borrower and its Subsidiaries nor any
agent acting on their behalf, have taken or will take any action which might
cause the Borrower, the Lenders, this Agreement or any other Loan Document to
violate any regulation of the Board of Governors of the Federal Reserve System
or to violate the Exchange Act, in each case as in effect now or as the same may
hereafter be in effect. Neither the making of any Loans nor the application of
any proceeds thereof will violate, or be inconsistent with, the provisions of
any of the Regulations. If requested by any Lender or the Agent, the Borrower
will furnish to the Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in Regulation U.
5.13 ERISA. Schedule 5.13 sets forth a complete and accurate
list as of the Closing Date of all Plans. Neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan that could reasonably be expected to have a Material Adverse Effect, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred
that could reasonably be expected to have a Material Adverse Effect, and no Lien
on the property of the Borrower or any of its Subsidiaries in favor of the PBGC
or a Plan has arisen, during such five-year period. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that could reasonably be expected to have a Material Adverse
Effect, and neither the Borrower nor any Commonly Controlled Entity would become
subject to any liability under ERISA that could reasonably be expected to have a
Material Adverse Effect if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. There
have been no transactions that resulted or could result in any liability to the
Borrower or any Commonly Controlled Entity under Section 4069 of ERISA or
Section 4212(c) of ERISA that could reasonably be expected to have a Material
Adverse Effect.
5.14 Investment Company Act; Other Regulations. The Borrower
is not an "investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
5.15 Subsidiaries. Schedule 5.15 sets forth all the
Subsidiaries of the Borrower at the date hereof, the jurisdiction of their
incorporation and the direct or indirect ownership interest of the Borrower
therein.
5.16 Purpose of Loans. The proceeds of the Loans shall be used
by the Borrower to pay in full the Indebtedness of the Borrower under the
Existing Credit Agreement and for working capital purposes in the ordinary
course of business and Permitted Physician Transactions.
5.17 Environmental Matters. Except as set forth on Schedule 5.17:
(ai To the best knowledge of the Borrower, the facilities and
properties owned, leased or operated by the Borrower or any of its Subsidiaries
(the "Properties") do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations which (i)
constitute or constituted a violation of, or (ii) could reasonably be expected
to give rise to liability under, any Environmental Law except in either case
insofar as such violation or liability, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental Amount.
(bi To the best knowledge of the Borrower, the Properties and
all operations at the Properties are in compliance, and at all times during the
last five years have been in compliance, in all material respects with all
applicable Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to the
Properties or the business operated by the Borrower or any of its Subsidiaries
(the "Business") which could reasonably be expected to have a Material Adverse
Effect. The Borrower has not assumed any liability of any Person under
Environmental Laws.
(ci Neither the Borrower nor any of its Subsidiaries has
received or is aware of any claim or any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the Business, nor does the Borrower have knowledge or reason to believe that any
such claim or notice will be received or is being contemplated, considered or
threatened except insofar as such claim or notice or threatened claim or notice,
or any aggregation thereof, does not involve a matter or matters that is or are
reasonably likely to result in the payment of a Material Environmental Amount.
(di To the best knowledge of the Borrower after due inquiry,
Materials of Environmental Concern have not been transported or disposed of from
the Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under, any
applicable Environmental Law except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, is not reasonably
likely to result in the payment of a Material Environmental Amount.
(ei No judicial proceeding or governmental or administrative
action or investigation is pending or, to the best knowledge of the Borrower
after due inquiry, contemplated or threatened, under any Environmental Law to
which the Borrower or any Subsidiary is or will be named as a party with respect
to the Properties or the Business, 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 Properties or the Business except insofar as such
proceeding, action, decree, order or other requirement, or any aggregation
thereof, is not reasonably likely to result in the payment of a Material
Environmental Amount.
(fi To the best knowledge of the Borrower after due inquiry,
there has been no release or threat of release of Materials of Environmental
Concern at or from the Properties, or arising from or related to the operations
of the Borrower or any Subsidiary in connection with the Properties or otherwise
in connection with the Business, in violation of or in amounts or in a manner
that could reasonably give rise to liability under Environmental Laws except
insofar as any such violation or liability referred to in this paragraph, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
5.18 No Material Misstatements. The written information,
reports, financial statements, exhibits and schedules furnished by or on behalf
of the Borrower and its Subsidiaries to the Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto, taken as a whole, do not contain any material misstatement of fact and
do not omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not materially
misleading.
5.19 Labor Matters. Except as disclosed in Schedule 5.19,
there are no collective bargaining agreements covering the Borrower or any of
its Subsidiaries as of the Closing Date. There are no strikes pending or, to the
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. The hours worked and payments made
to employees of the Borrower and each of its Subsidiaries have not been in
violation of any applicable Requirements of Law, except where such violations
could not reasonably be expected to have a Material Adverse Effect.
5.20 Year 2000 Compliance. The Borrower has (a) initiated a
review and assessment of all material areas within its and each of its
Subsidiaries' business and operations (including those affected by suppliers,
vendors and customers that could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by the Borrower or
any of its Subsidiaries (or suppliers, vendors and customers) may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (b) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis and (c) to date,
implemented that plan in accordance with that timetable. Based on the foregoing,
the Borrower believes that all computer applications (including those of its
suppliers, vendors and customers) that are material to its or any of its
Subsidiaries' business and operations are reasonably expected on a timely basis
to be able to perform properly date-sensitive functions for all dates before and
after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent
that a failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.21 Debt Instruments. Schedule 5.21 sets forth a correct and
complete list, as of the Closing Date, of each instrument or agreement
evidencing Indebtedness of the Borrower or any of its Subsidiaries and
identifies all such Indebtedness that is Existing Subordinated Indebtedness.
5.22 Health Care Permits. (a) (i) The Borrower and each of the
Subsidiaries and, to the best of its knowledge, each of the Affiliated
Providers, now have, and have no reason to believe that they will not be able to
maintain in effect, all Health Care Permits necessary for the conduct of their
respective businesses or operations in accordance with all Requirements of Law,
(ii) all such Health Care Permits are in full force and effect and have not been
amended or otherwise modified, canceled, terminated, rescinded, revoked or
suspended, (iii) neither the Borrower nor any of its Subsidiaries nor, to the
best of its knowledge, any of the Affiliated Providers, is in default under, or
in violation of, any such Health Care Permit (and to the best knowledge of the
Borrower, no event has occurred, and no condition exists, which, with the giving
of notice or passage of time or both, would constitute a default thereunder or
violation thereof) that has caused or could reasonably be expected to cause the
loss of any such Health Care Permit, (iv) neither the Borrower nor any
Subsidiary nor, to the best of its knowledge, any Affiliated Provider has
received any notice of a violation of any Requirement of Law or Contractual
Obligation which has caused or could reasonably be expected to cause any such
Health Care Permit to be modified, canceled, terminated, rescinded, revoked or
suspended, (v) no condition exists or event has occurred which could reasonably
be expected to result in the suspension, cancellation, termination, revocation,
impairment, forfeiture or non-renewal of any such Health Care Permit and (vi)
the continuation, validity and effectiveness of all such Health Care Permits
will not in any way be adversely affected by the transactions contemplated by
this Agreement, except for such instances that could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(b) Each Affiliated Provider is (i) fully qualified to
participate in, receive payment under, and in compliance with the conditions of
participation in each Governmental Program in which such Affiliated Provider has
elected to participate or with which such Affiliated Provider has contracted,
and (ii) fully qualified and eligible to receive reimbursement from private and
commercial payors, including, but not limited to employers, insurers and health
maintenance organizations, except where the loss of the right to participate in
or receive payments under such Governmental Programs or from such payors or
organizations could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
5.23 Fraud and Abuse. Neither (i) the Borrower nor any
Subsidiary, (ii) nor any of their respective shareholders, officers, directors
or employees, (iii) nor, to the best of the Borrower's knowledge, any Affiliated
Provider, has engaged in or is being investigated (exclusive of routine audits
in the ordinary course of business) for any activities that are prohibited under
the Federal False Claims Act (31 U.S.C. xx.xx. 3729 - 3733), 42 U.S.C. 1395 nn,
18 U.S.C. ss. 1347 or the federal fraud and abuse laws (42 U.S.C. xx.xx. 1320a -
7a or 1320a - 7b), or the regulations promulgated pursuant to such statutes or
similar state or local statutes or regulations, or which are prohibited by rules
of professional conduct, including, but not limited to, the following: (a)
knowingly presenting or causing to be presented a false claim for payment, (b)
knowingly presenting or causing to be presented a false record in order to
receive payment for a claim, (c) knowingly and willfully making or causing to be
made a false statement or representation of a material fact in any application
for any benefit or payment, (d) knowingly and willfully making or causing to be
made any false statement or representation of a material fact for use in
determining rights to any benefit or payment, (e) failing to disclose knowledge
by a claimant of the occurrence of any event affecting the initial or continued
right to any benefit or payment on its own behalf or on behalf of another, with
intent to secure such benefit or payment fraudulently, (f) knowingly and
willfully soliciting or receiving any remuneration (including any kickback,
bribe or rebate), directly or indirectly, overtly or covertly, in cash or in
kind or offering to pay such remuneration (i) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare,
Medicaid or other third party payors, or (ii) in return for purchasing, leasing
or ordering or arranging for or recommending the purchasing, leasing or ordering
of any good, facility, service or item for which payment may be made in whole or
in part by Medicare, Medicaid or other third-party payors, or (g) referring a
patient for "designated health services" to a Person with which a physician has
a financial relationship, except for such instances of prohibited activities
that could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect. Neither the Borrower nor any Subsidiary or Affiliated
Provider, nor any of their respective officers or directors has been excluded
from participation in any Governmental Program.
5.24 Reimbursement from Third Party Payors. The Receivables
assigned to the Borrower and each Subsidiary by the Affiliated Providers have
been and will continue to be adjusted so as to comply with the reimbursement
policies of Government Programs and third party payors such as Blue Cross/Blue
Shield, private insurance companies, health maintenance organizations, preferred
provider organizations, alternative delivery systems, and managed care systems.
The Receivables so assigned do not and shall not exceed in any material respect
the amounts that the relevant Affiliated Providers are entitled to receive for
their services under any capitation arrangement, fee schedule, discount formula,
cost-based reimbursement or other adjustment or limitation to the usual charges
of such Affiliated Providers.
5.25 Title to Receivables. Upon the assignment of each
Receivable of an Affiliated Provider to the Borrower or a Subsidiary pursuant to
a Service Agreement, the Borrower or the relevant Subsidiary shall acquire all
of the right, title and interest of the Affiliated Provider in such Receivable
free and clear of any Lien or adverse claim and shall have a perfected, first
priority ownership interest in such Receivable (except for Liens created
pursuant to the Security Documents). Each assignment of a Receivable by an
Affiliated Provider to the Borrower or a Subsidiary pursuant to a Service
Agreement will constitute a true and absolute assignment (and not an assignment
for security purposes) under the laws of all relevant jurisdictions, and no such
assigned Receivable will constitute property of such Affiliated Provider. No
financing statement or other instrument similar in effect covering all or part
of any Receivable assigned by an Affiliated Provider to the Borrower or a
Subsidiary is on file in any filing or recording office, except as may have been
filed in favor of the Agent pursuant to the Security Documents or in favor of
the Borrower or a Subsidiary (with the Agent named as assignee) pursuant to the
relevant Service Agreement.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving
Credit Commitments remain in effect, any Note remains outstanding and unpaid or
any other Obligation is owing to any Lender or the Agent, the Borrower shall and
(except in the case of delivery of financial information, reports and notices)
shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the Agent and each Lender:
(a) as soon as available, but in any event within 100 days
after the end of each fiscal year of the Borrower, a copy of the consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as at the end of
such year and the related consolidated statements of income and retained
earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out of the
scope of the audit, by Xxxxxx Xxxxxxxx LLP or other independent certified public
accountants of nationally recognized standing acceptable to the Agent in its
reasonable judgment; and
(b) as soon as available, but in any event not later than 50
days after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and retained earnings and of cash
flows of the Borrower and its Consolidated Subsidiaries for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP.
6.2 Certificates; Other Information. Furnish to the Agent and each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (b), a Compliance Certificate signed by a
Responsible Officer (i) stating that, to the best of such officer's knowledge,
no Default or Event of Default exists, or if any Default or Event of Default
does exist, specifying the nature and extent thereof and what action the
Borrower proposes to take with respect thereto, (ii) setting forth in reasonable
detail the calculations required to determine (A) compliance with Section 7.1,
and (B) the Applicable Margin that will take effect on the Calculation Date
immediately following the date on which such Compliance Certificate is
delivered, (iii) stating that no Subsidiary has been formed or acquired (or, if
any Subsidiary has been formed or acquired, the Borrower has complied with the
requirements of Section 6.10 with respect thereto) and (iv) neither the Borrower
nor any of its Subsidiaries has changed its name, its principal place of
business, its chief executive office or the location of any material item of
tangible Collateral without complying with the requirements of the Loan
Documents with respect thereto;
(c) as soon as available, but in any event not later than
thirty days after the end of each fiscal year of the Borrower, (i) a copy of the
projections by the Borrower of the operating budget, cash flow budget and
capital budget of the Borrower and its Subsidiaries for the succeeding fiscal
year, such projections to be accompanied by a certificate of a Responsible
Officer to the effect that such projections have been prepared on the basis of
sound financial planning practice and that such officer has no reason to believe
they are incorrect or misleading in any material respect and (ii) in the event
that the budgeted Capital Expenditures of the Borrower and its Subsidiaries
contained in such projections exceed the amount of Capital Expenditures
permitted by Section 7.10, a request in the form of Exhibit J for the consent of
the Required Lenders (at their sole discretion) to such budgeted Capital
Expenditures;
(d) within five days after receipt thereof, a copy of any
report or "management letter" submitted by independent accountants to the
Borrower or any Subsidiary in connection with any annual, interim or special
audit of the books of such Person;
(e) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to its stockholders,
and within five days after the same are filed, copies of all financial
statements and reports which the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or analogous Governmental
Authority;
(f) within five days after the same are filed, copies of all
registration statements and any amendments and exhibits thereto, which the
Borrower may file with the Securities and Exchange Commission or any successor
or analogous Governmental Authority, and such other documents or instruments as
may be reasonably requested by the Agent in connection therewith;
(g) within one day after the issuance thereof, a copy of each
press release and other statement that the Borrower or any Subsidiary shall make
available generally to the public;
(h) not less than fourteen days prior to the consummation of
any Permitted Physician Transaction, a Physician Transaction Notice/Consent
Request containing the following items, each in form and substance reasonably
satisfactory to the Agent:
(i) a description of the Physician Group practice whose
Capital Stock or assets are to be acquired ("Practice");
(ii) a description of the material terms of such Permitted
Physician Transaction (including, without limitation, the purchase
price, method and structure of payment, and proposed closing date),
provided that a description of any additional or changed material terms
of such Permitted Physician Transaction shall be disclosed to the Agent
within three (3) days of such addition or change;
(iii) projected revenue and Consolidated EBITDA contribution
levels with respect to the Practice to be acquired, prepared on a
quarterly basis for the two-year period following the consummation of
such Permitted Physician Transaction, in reasonable detail;
(iv) confirmation, supported by reasonably detailed
calculations, of projected covenant compliance over the four quarter
period following such Permitted Physician Transaction after giving
effect to the pro forma consolidation of the Practice to be acquired
with the Borrower and its Subsidiaries; and
(v) a description of any Liens to be incurred or assumed
in connection with such Permitted Physician Transaction;
(i) within thirty days after the closing of each Physician
Transaction, a copy of each material Physician Transaction document, including
any acquisition agreement, merger agreement, master transaction agreement or
Service Agreement relating to such Physician Transaction;
(j) within thirty days after the last day of each fiscal
quarter of the Borrower, an Accounts Receivable Aging Report, in substantially
the form of Exhibit K, certified by a Responsible Officer;
(k) within ninety days after the Closing Date, a copy of a
corporate compliance program (covering, among other matters, compliance with
applicable healthcare and securities laws) satisfactory to the Agent which has
been adopted by the board of directors of the Borrower for implementation by the
Borrower and its Subsidiaries; and
(l) promptly, such additional financial and other information
as the Agent or any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence. Continue
to engage in business of the same general type as conducted by the Borrower and
its Subsidiaries on the Closing Date and preserve, renew and keep in full force
and effect its corporate existence and maintain all rights, privileges,
licenses, accreditations, authorizations, permits and franchises necessary or
desirable in the normal conduct of the business of the Borrower and its
Subsidiaries, except as otherwise permitted pursuant to Section 7.5; and comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith could not, in the aggregate, be reasonably
expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. Keep all property
useful and necessary in the business of the Borrower and its Subsidiaries in
good working order and condition; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption insurance) as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to each Lender, upon written request, information in full
detail as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants, in each
case at any reasonable time and as often as may reasonably be desired.
6.7 Notices. Promptly give notice to the Agent and each
Lender of:
(a) as soon as possible and in any event within five days
after the occurrence thereof, any Default or Event of Default;
(b) as soon as possible and in any event within five days
after the Borrower knows or reasonably should know thereof, any (i) default or
event of default under any Contractual Obligation of the Borrower or any of its
Subsidiaries or (ii) litigation, investigation or proceeding which may exist at
any time between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely determined, as the
case may be, could reasonably be expected to have a Material Adverse Effect;
(c) as soon as possible and in any event within two days after
the Borrower knows or reasonably should know thereof, any litigation or
proceeding affecting the Borrower or any of its Subsidiaries in which the amount
involved is $5,000,000 or more and not covered by insurance or in which
injunctive or similar relief is sought;
(d) any of the following events, as soon as possible and in
any event within thirty days after the Borrower knows or has reason to know
thereof: (i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or
the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii)
the institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the terminating, Reorganization or Insolvency
of, any Plan;
(e) any of the following events, as soon as possible and in
any event within thirty days after the Borrower knows or has reason to know
thereof: (i) any release or discharge by the Borrower or any Subsidiary of any
Materials of Environmental Concern required to be reported under Environmental
Laws to any Governmental Authority, (ii) any condition, circumstance, occurrence
or event that could result in liability under Environmental Laws in a Material
Environmental Amount or could result in the imposition of any Lien or other
restriction on the title, ownership or transferability of any Property and (iii)
any proposed action to be taken by the Borrower or any Subsidiary that could
subject the Borrower or any Subsidiary to any material additional or different
requirements or liabilities under Environmental Law;
(f) as soon as possible and in any event within five days
after the occurrence thereof, the termination, cancellation or repudiation of
any Service Agreement by any party thereto;
(g) any of the following events, as soon as possible and in
any event within five days, after the Borrower knows or reasonably should know
thereof, (i) notice of the occurrence of any event that is or would (with the
passage of time, notice or both) be a default under or a violation of any Health
Care Permit necessary for the lawful conduct of the business or operations of
the Borrower, any Subsidiary or any Affiliated Provider that could reasonably be
expected to have a Material Adverse Effect, (ii) any violation of any
Requirement of Law that could reasonably be expected to cause any such Health
Care Permit to be modified, suspended, canceled, terminated, or rescinded or
revoked, and (iii) any investigation of the Borrower, any Subsidiary or any
Affiliated Provider or its business by the Office of the Inspector General of
the United States Department of Health and Human Services, the United States
Department of Justice, or any other Governmental Authority;
(h) as soon as possible and in any event within five days
after receipt thereof by the Borrower or any Subsidiary, notice from any
Governmental Authority of a violation by the Borrower or any Subsidiary of any
Requirement of Law; and
(i) as soon as possible and in any event within five days
after the Borrower knows or reasonably should know thereof, any development or
event which could reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
6.8 Environmental Laws. (a) Comply with, and ensure compliance
by all tenants and subtenants, if any, with all applicable Environmental Laws
and obtain and comply with and maintain, and ensure that all tenants and
subtenants obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws except to the extent that failure to do so could not be reasonably expected
to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws except to the extent
that the same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not be reasonably expected to have a
Material Adverse Effect.
6.9 Further Assurances. Upon the request of the Agent,
promptly perform or cause to be performed any and all acts and execute or cause
to be executed any and all documents, instruments and agreements which are
necessary or advisable to carry out the provisions and purposes of this
Agreement and the Security Documents.
6.10 Additional Collateral; Service Agreements. (a) With
respect to any assets acquired after the Closing Date by the Borrower or any of
its Subsidiaries, promptly (and in any event within twenty days after the
acquisition thereof): (i) execute and deliver to the Agent such amendments to
the relevant Security Documents or such other documents as the Agent shall deem
necessary or advisable to grant to the Agent, for the benefit of the Agent and
the Lenders, a Lien on such assets, (ii) take all actions necessary or advisable
to cause such Lien to be duly perfected in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be requested by the Agent, (iii) with
respect to real property, deliver to the Agent such title insurance policies,
surveys, environmental reports and other documents as the Agent may require,
(iv) take all actions necessary or advisable to perfect its ownership interest
in all Receivables assigned to it from time to time by an Affiliated Provider
pursuant to a Service Agreement or otherwise in accordance with all applicable
Requirements of Law, including, without limitation, the filing of such financing
statements in such jurisdictions as may be requested by the Agent, (v) deliver
to the Agent Uniform Commercial Code and other Lien searches confirming the
perfection and priority of the Liens created pursuant to this subsection 6.10(a)
and (vi) if requested by the Agent, deliver to the Agent legal opinions relating
to the matters described in clauses (i), (ii) and (iv) immediately preceding,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Agent.
(b) With respect to any Person that, subsequent to the Closing
Date, becomes a Subsidiary, promptly (and in any event within twenty days afer
such Person becomes a Subsidiary): (i) execute and deliver to the Agent, for the
benefit of itself and the Lenders, a new pledge agreement or such amendments to
the Guarantee and Collateral Agreement as the Agent shall deem necessary or
advisable to grant to the Agent, for the benefit of the Lenders, a Lien on the
Capital Stock of such Subsidiary which is owned by the Borrower or any of its
Subsidiaries, (ii) deliver to the Agent the certificates representing such
Capital Stock, together with undated stock powers executed and delivered in
blank by a duly authorized officer of the Borrower or such Subsidiary, as the
case may be, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement, by execution and delivery to the Agent of a
Joinder Agreement, (B) to take all actions necessary or advisable to cause the
Lien created by the Guarantee and Collateral Agreement to be duly perfected in
accordance with all applicable Requirements of Law, including, without
limitation, the filing of financing statements in such jurisdictions as may be
requested by the Agent, (C) to take all actions necessary or advisable to
perfect such Subsidiary's ownership interest in all Receivables assigned from
time to time to such Subsidiary by an Affiliated Provider pursuant to a Service
Agreement or otherwise in accordance with all applicable Requirements of Law,
including, without limitation, the filing of financing statements in such
jurisdictions as may be requested by the Agent, (D) to take all actions
necessary or advisable to create and perfect a Lien in favor of the Agent on all
other assets of such Subsidiary, (E) with respect to real property, deliver to
the Agent such title insurance policies, surveys, and other documents as the
Agent may require and (F) to execute and deliver such documents and certificates
as the Agent or its counsel may reasonably request relating to the organization,
existence and good standing of such Subsidiary, the authorization of the
transactions contemplated hereby and by the other Loan Documents relating to
such Subsidiary and any other legal matters relating to such Subsidiary and the
Loan Documents to which it is or is to become a party, all in form and substance
satisfactory to the Agent and its counsel, (iv) deliver to the Agent Uniform
Commercial Code and other Lien searches confirming the perfection and priority
of the Liens created pursuant to clause (iii) above and (v) if requested by the
Agent, deliver to the Agent legal opinions relating to the matters described in
clauses (i), (ii) and (iii) immediately preceding, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Agent.
(c) With respect to each Service Agreement entered into by the
Borrower or any Subsidiary after the Closing Date, promptly (and in any event
within twenty days after the execution and delivery thereof): (i) deliver to the
Agent a copy of such Service Agreement and (ii) exercise its best efforts to
deliver to the Agent a copy of a legal opinion issued to the Borrower or such
Subsidiary by counsel for the Affiliated Provider that is a party to such
Service Agreement regarding the due organization and existence of the Affiliated
Provider, the due authorization of its execution and delivery of the Service
Agreement, the enforceability of the Service Agreement, and the perfection of
the ownership interest of the Borrower or such Subsidiary in Receivables
assigned to it thereunder; provided, however, that the Borrower shall not be
required to deliver such a legal opinion with respect to a Physician Transaction
involving no more than three physicians.
(d) Each Service Agreement entered into by the Borrower or any
Subsidiary with an Affiliated Provider after the Closing Date shall contain
terms and conditions substantially the same as those contained in Sections
3.1.10, 7, and 12.12 of the form of Service Agreement being used by the Borrower
and its Subsidiaries on the Closing Date.
6.11 Year 2000 Compliance. Promptly notify the Agent in the
event the Borrower discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is material to
its or any of its Subsidiaries' or Affiliated Providers' business and operations
will not be Year 2000 Compliant, except to the extent that such failure could
not reasonably be expected to have a Material Adverse Effect.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving
Credit Commitments remain in effect, any Note remains outstanding and unpaid or
any other Obligation is owing to any Lender or the Agent, the Borrower shall
not, and (except with respect to Section 7.1) shall not permit any of its
Subsidiaries to, directly or indirectly:
7.1 Financial Covenants.
-------------------
(a) Consolidated Net Worth. Permit Consolidated Net Worth as
of the last day of any fiscal quarter of the Borrower to be less than the
"Minimum Compliance Level". The Minimum Compliance Level shall be
$152,634,900.00 on the Closing Date, and shall be increased as of the last day
of each fiscal quarter of the Borrower ending after the Closing Date, commencing
with the fiscal quarter ending December 31, 1998, by an amount equal to the sum
of (i) 75% of Consolidated Net Income (if positive) for such fiscal quarter and
(ii) 75% of the amount of any Equity Issuance (net of reasonable transaction
costs) by the Borrower or any Subsidiary during such fiscal quarter (other than
any capital contribution by the Borrower or any of its Wholly Owned Subsidiaries
to any Wholly Owned Subsidiary of the Borrower). The foregoing increases in the
Minimum Compliance Level shall be fully cumulative and no reduction in the
Minimum Compliance Level shall be made to reflect negative Consolidated Net
Income for any period.
(b) Fixed Charge Coverage. Permit the Fixed Charge Coverage
Ratio, as of the last day of any fiscal quarter of the Borrower, to be less than
1.20 to 1.0.
(c) Ratio of Consolidated Senior Indebtedness to Consolidated
EBITDA. Permit at any time the ratio of (i) Consolidated Senior Indebtedness
(less Restricted Cash) to (ii) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower ending on, or most recently
preceding, the date of determination, to be greater than 3.0 to 1.0.
(d) Ratio of Total Debt to Consolidated EBITDA. Permit at any
time the ratio of (i) Total Debt (less Restricted Cash) to (ii) Consolidated
EBITDA for the period of four consecutive fiscal quarters of the Borrower ending
on, or most recently preceding, the date of determination, to be greater than
3.75 to 1.0.
(e) Minimum Consolidated EBITDA. Permit Consolidated EBITDA,
determined as of the last day of each calendar month, for the twelve month
period ending on the date of determination, to be less than $19,000,000.
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(c) Indebtedness of the Borrower and any of its Subsidiaries
incurred to finance the acquisition of fixed or capital assets (whether pursuant
to a loan, a Synthetic Lease, a Capital Lease Obligation or otherwise) in an
aggregate principal amount not exceeding as to the Borrower and its Subsidiaries
$10,000,000 at any time outstanding, provided that such Indebtedness is incurred
simultaneously with such acquisition;
(d) Indebtedness of the Borrower under Hedge Agreements
incurred in the ordinary course of business and not for speculative purposes
that have been approved by the Borrower's board of directors and that have an
aggregate notional amount not to at any time exceed, at the time any such Hedge
Agreement is entered into (and after giving effect to such Hedge Agreement), the
lesser of (i) $50,000,000 and (ii) 50% of the aggregate principal amount of the
Extensions of Credit outstanding at such time;
(e) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2 and any refinancings, refundings, renewals or extensions thereof on
financial and other terms, in the reasonable judgment of the Required Lenders,
no more onerous to the Borrower or any of its Subsidiaries than the financial
and other terms of such Indebtedness; provided that the amount of such
Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension;
(f) to the extent that any Guarantee Obligation permitted
under Section 7.4 constitutes Indebtedness, such Indebtedness;
(g) Indebtedness of a Person which becomes a Subsidiary after
the date hereof in accordance with Section 7.17, provided that (i) such
indebtedness existed at the time such Person became a Subsidiary and was not
created in anticipation thereof and (ii) immediately after giving effect to the
acquisition of such corporation by the Borrower no Default or Event of Default
shall have occurred and be continuing;
(h) unsecured Subordinated Indebtedness;
(i) Indebtedness of the Borrower or any Subsidiary with
respect to (x) split-dollar life insurance policies permitted by subsection
7.8(j) and (y) Program Loans permitted by subsection 7.8(k); and
(j) additional unsecured Indebtedness of the Borrower and its
Subsidiaries not otherwise permitted by the preceding clauses of this Section
7.2 not exceeding $1,000,000 in aggregate principal amount at any one time
outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted, provided that
adequate reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, landlords', mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business securing amounts which are not overdue for a period of more than sixty
days or which are being contested in good faith by appropriate proceedings
diligently conducted;
(c) pledges, deposits or other Liens in connection with
workers' compensation, unemployment insurance and other social security
benefits, including, without limitation, pledges or deposits securing liability
to insurance carriers under insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), obligations for utilities, leases,
statutory obligations (except pursuant to ERISA and Environmental Laws),
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) easements, zoning restrictions, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary course of
business 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 Borrower
or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule
7.3, securing Indebtedness permitted by subsection 7.2(e), provided that no such
Lien is spread to cover any additional property after the Closing Date and that
the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower and its
Subsidiaries permitted by subsection 7.2(c) incurred to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness, (iii) the amount of Indebtedness secured
thereby is not increased and (iv) the principal amount of Indebtedness secured
by any such Lien shall at no time exceed 100% of the original purchase price of
such property at the time it was acquired;
(h) Liens on the property or assets of a Person which becomes
a Subsidiary after the date hereof securing Indebtedness permitted by subsection
7.2(g), provided that (i) such Liens existed at the time such Person became a
Subsidiary and were not created in anticipation thereof, (ii) any such Lien is
not spread to cover any property or assets of such corporation after the time
such corporation becomes a Subsidiary and (iii) the amount of Indebtedness
secured thereby is not increased; and
(i) Liens created pursuant to the Security Documents.
7.4 Limitation on Guarantee Obligations. Create, incur, assume
or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed $1,000,000 at any one time outstanding;
(b) Guarantee Obligations with respect to Hedge Agreements
permitted by subsection 7.2(d);
(c) Guarantee Obligations incurred in the ordinary course of
business by the Borrower with respect to obligations of its Subsidiaries,
provided that such obligations of the Subsidiaries are otherwise permitted under
this Agreement; and
(d) the Guarantees.
7.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary may be merged or consolidated with or into
the Borrower (provided that the Borrower shall be the continuing or surviving
entity) or with or into a Wholly Owned Subsidiary (provided that (i) a Wholly
Owned Subsidiary shall be the continuing or surviving entity and (ii) the
surviving entity must be a Guarantor if any merged or consolidated entity is a
Guarantor);
(b) the Borrower may merge with and into any other Person to
effect a Permitted Physician Transaction so long as the surviving entity is the
Borrower;
(c) any Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise) to
the Borrower or any other Wholly Owned Subsidiary, provided that if the
Subsidiary whose assets are sold, leased, transferred or otherwise disposed of
is a Guarantor, any Subsidiary to which such assets are sold, leased,
transferred or otherwise disposed of must also be a Guarantor; and
(d) any Subsidiary may be merged with any other Person to
effect a Permitted Physician Transaction so long as the surviving entity is the
Subsidiary.
7.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any Wholly Owned Subsidiary of the Borrower, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business, provided that if the net cash
proceeds from any transaction or series of related transactions exceed $500,000,
then the Borrower shall immediately repay the Loans by the amount of the excess;
(b) the sale or other disposition of any property (other than
Receivables or property of the type described in clauses (a) and (c) of this
Section 7.6) in the ordinary course of business, provided that the aggregate
book value of all assets so sold or disposed of in any period of twelve
consecutive months shall not exceed 5% of consolidated tangible assets of the
Borrower and its Subsidiaries as at the beginning of such twelve-month period;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof; and
(e) as permitted by subsection 7.5(c).
7.7 Limitation on Restricted Payments. Declare or pay any
dividend (other than dividends payable solely in Capital Stock of the Borrower)
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any Capital Stock of the Borrower or any Subsidiary or any
warrants or options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary (such declarations, payments, setting apart, purchases,
redemptions, defeasances, retirements, acquisitions and distributions being
herein called "Restricted Payments"), except:
(a) any Subsidiary may declare and pay dividends to the
Borrower or a Wholly Owned Subsidiary;
(b) the Borrower may repurchase, redeem or otherwise acquire
or retire for value any Capital Stock of the Borrower held by employees of the
Borrower or any of its Subsidiaries pursuant to any employee equity subscription
agreement, stock option agreement or stock ownership arrangement, provided that
(i) the aggregate price paid for all such repurchased, redeemed, acquired or
retired Capital Stock during any fiscal year of the Borrower shall not exceed
$1,000,000 and (ii) no Default or Event of Default shall have occurred and be
continuing or would result therefrom; and
(c) the redemption or repurchase by the Borrower of its common
stock, provided that (i) any common stock so redeemed or repurchased must be
held by the Borrower as treasury stock or reissued as a portion of the
consideration for Permitted Physician Transactions, (ii) any such stock held in
treasury may not be canceled, (iii) the aggregate amount paid for the redemption
or repurchase of any such stock held in treasury by the Borrower at any
particular time shall not exceed $5,000,000, and (iv) no common stock of the
Borrower may be redeemed or repurchased if a Default or Event of Default shall
have occurred and be continuing or would result therefrom.
7.8 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person
(each an "Investment"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in cash and Cash Equivalents;
(c) Pending Physician Transactions that close within ninety
days after the Closing Date;
(d) Permitted Physician Transactions;
(e) Investments existing on the Closing Date and described on
Schedule 7.8, setting forth the respective amounts of such Investments as of the
Closing Date;
(f) loans and advances to officers, directors or employees of
the Borrower or its Subsidiaries in the ordinary course of business in an
aggregate amount for the Borrower and its Subsidiaries not to exceed $2,500,000
at any one time outstanding (inclusive of any such loans or advances listed on
Schedule 7.8), provided that (i) all such loans and advances shall be evidenced
by recourse promissory notes, (ii) such promissory notes shall not contain any
restriction on assignment or transfer and (iii) the Agent, for the ratable
benefit of itself and the other Lenders, shall hold a perfected, first priority
security interest in all such promissory notes and related security pursuant to
the Security Documents;
(g) loans and advances to physicians in connection with the
recruitment or retention of such physicians by Affiliated Providers, provided
that (i) the aggregate principal amount of all such loans and advances at any
time outstanding shall not exceed $5,000,000 (inclusive of any such loans or
advances listed on Schedule 7.8), (ii) the aggregate loans and advances to any
physician shall not exceed $300,000, (iii) no loan or advance shall have a
maturity greater than three years, (iv) all such loans and advances shall be
evidenced by recourse promissory notes, (v) such promissory notes shall not
contain any restriction on assignment or transfer and (vi) the Agent, for the
ratable benefit of itself and the other Lenders, shall hold a perfected, first
priority security interest in all such promissory notes and related security
pursuant to the Security Documents;
(h) Investments by the Borrower in its Subsidiaries and
investments by such Subsidiaries in the Borrower and in other Subsidiaries;
(i) Investments of the Borrower and its Subsidiaries under the
Hedge Agreements permitted by subsection 7.2(d);
(j) advances of premiums under split-dollar life insurance
policies, provided that (i) the owner of each such policy is a physician
employed by an Affiliated Provider, (ii) such split-dollar life insurance policy
was purchased as partial consideration for the employment of the physician by an
Affiliated Provider in connection with a Physician Transaction involving such
Affiliated Provider and (iii) the insurance policy has been assigned to the
Borrower or a Subsidiary to secure premium advances on such policy by the
Borrower or such Subsidiary and reassigned to the Agent, for the ratable benefit
of itself and the Lenders, pursuant to the Security Documents; and
(k) Program Loans by the Borrower and its Subsidiaries to
Affiliated Providers pursuant to Service Agreements, provided that (i) each
Program Loan shall be evidenced by a recourse promissory note, (ii) each such
promissory note shall not contain any restriction on assignment or transfer and
(iii) the Agent shall hold a perfected, first priority security interest in all
Program Loans and all security therefor, for the ratable benefit of itself and
the Lenders, pursuant to the Security Documents.
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments. (a) Make any optional payment or prepayment of principal of or any
redemption, purchase or defeasance of any Indebtedness (other than the Loans and
Reimbursement Obligations), (b) make any payment of principal of or interest on
or any other amount with respect to any Subordinated Indebtedness if any Default
or Event of Default shall have occurred and be continuing, or would result
therefrom, (c) amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms relating to any Subordinated
Indebtedness (other than any such amendment, modification or change which would
extend the maturity or reduce the amount of any payment of principal thereof or
which would reduce the rate or extend the date for payment of interest thereon)
or (d) amend the subordination provisions contained in the Subordinated
Indebtedness Documentation.
7.10 Limitation on Capital Expenditures. Make or commit to
make a Capital Expenditure, except Capital Expenditures in the ordinary course
of business not exceeding, in the aggregate for the Company and its Subsidiaries
during any fiscal year of the Borrower, an amount in excess of (a) 5% of
consolidated tangible assets of the Borrower and its Subsidiaries on the last
day of the immediately preceding fiscal year or (b) such greater amount as may
be approved for such fiscal year by the Required Lenders pursuant to a request
by the Borrower under subsection 6.2(c)(ii); provided, however, that in addition
to the Capital Expenditures permitted by clauses (a) and (b) above (which may be
used for information technology investments), the Borrower and its Subsidiaries
may make Capital Expenditures for investments in information technology in an
additional aggregate amount not to at any time exceed $5,000,000 during the term
of this Agreement.
7.11 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Borrower's or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate.
7.12 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary, except the sale and leaseback of equipment in the ordinary course of
business where the Borrower or a Subsidiary (a) transfers to such Person its
right to purchase such equipment within ninety days after the Borrower or such
Subsidiary has entered into an agreement to purchase such equipment and (b)
leases the equipment from such Person.
7.13 Limitation on Changes in Fiscal Year. Permit the fiscal
year of the Borrower to end on a day other than December 31.
7.14 Limitation on Negative Pledges. Enter into, assume or
become subject to any agreement prohibiting or otherwise restricting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation, except (a) pursuant
to this Agreement and the other Loan Documents or (b) pursuant to any document
or instrument governing Indebtedness incurred pursuant to subsection 7.2(c) or
7.2(g), provided that any such restriction contained therein relates only to the
asset or assets acquired in connection therewith.
7.15 Limitation on Restricted Actions. Enter into or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary to (a) pay dividends or make any other distributions
on its Capital Stock, (b) pay any Indebtedness or other obligation owed to the
Borrower or any other Subsidiary, (c) make loans or advances to the Borrower or
any other Subsidiary, (d) sell, lease or transfer any of its properties or
assets to the Borrower or any other Subsidiary or (e) act as a Guarantor under
the Loan Documents, except for such encumbrances or restrictions that exist in
the Loan Documents.
7.16 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary or joint venture or similar
arrangement, except for those businesses in which the Borrower and its
Subsidiaries are engaged on the date of this Agreement or which are directly
related thereto.
7.17 Limitations on Acquisitions. Acquire by purchase or
otherwise all or a substantial part of the business or assets of, or Capital
Stock or other evidences of beneficial ownership of, or any line of business or
division of, any Person, other than (a) Permitted Physician Transactions or (b)
Pending Physician Transactions that close within ninety days after the Closing
Date.
7.18 Health Care Permits and Approvals. Engage, or permit any
Affiliated Provider to engage, in any activity that (a) is or could reasonably
be expected to result in a default under or violation of any Health Care Permit
necessary for the lawful conduct of the business or operations of the Borrower,
any Subsidiary or any Affiliated Provider or (b) could reasonably be expected to
cause the loss by the Borrower, any Subsidiary or any Affiliated Provider of the
right to participate in, and receive payment under, any Governmental Program
with which it has contracted or in which it has elected to participate, or to
receive reimbursement from private and commercial payors and health maintenance
organizations, except where the loss of such Health Care Permit(s) or right(s)
to participate in or receive payments under such Governmental Programs or from
such payors or organizations could not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
7.19 Fraud and Abuse. Engage, or permit any Affiliated
Provider or any of the shareholders, officers, directors or employees of the
Borrower, any Subsidiary or any Affiliated Provider to engage, in any activities
that are prohibited under the Federal False Claims Act (31 U.S.C. xx.xx. 3729 -
3733), 42 U.S.C. ss. 1395 nn, 18 U.S.C. 1347 or the federal fraud and abuse laws
(42 U.S.C. xx.xx. 1320a - 7a or 1320a - 7b), or the regulations promulgated
pursuant to such statutes or similar state or local statutes or regulations, or
which are prohibited by rules of professional conduct, including, but not
limited to, the following: (a) knowingly presenting or causing to be presented a
false claim for payment, (b) knowingly making or using a false record in order
to receive payment for a claim, (c) knowingly and willfully making or causing to
be made a false statement or representation of a material fact in any
application for any benefit or payment, (d) knowingly and willfully making or
causing to be made any false statement or representation of a material fact for
use in determining rights to any benefit or payment, (e) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on its own behalf or on behalf of
another, with intent to secure such benefit or payment fraudulently, (f)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash
or in kind or offering to pay such remuneration (i) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare,
Medicaid or other third party payors or (ii) in return for purchasing, leasing
or ordering or arranging for or recommending the purchasing, leasing or ordering
of any good, facility, service or item for which payment may be made in whole or
in part by any Governmental Program or other third party payors or (g) referring
a patient for "designated health services" to a Person with which the referring
physician has a financial relationship, except for such instances of prohibited
activities that could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Neither the Borrower nor any Subsidiary or
Affiliated Provider, nor any of their respective officers, directors or
employees shall take any action or omit to take any action that will have the
effect of excluding the Borrower, any Subsidiary or any Affiliated Provider from
contracting with or participating in any Governmental Program.
7.20 Limitation on Modification of Other Agreements. Modify, terminate,
amend, supplement, or waive, or permit any modification, termination, amendment,
supplement or waiver of (a) any Material Contract, (b) the certificate of
incorporation or bylaws (or analogous constitutional documents) of the Borrower
of any Subsidiary or (c) any Health Care Permit, if any of the same,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
7.21 Accounting for Assignments of Receivables. Prepare any financial
statements, tax returns or schedules which shall account for the assignment of
any Receivable by an Affiliated Provider to the Borrower or any Subsidiary
pursuant to a Service Agreement or otherwise in any manner other than as a true
sale thereof, or in any other respect account for or treat any such assignment
in any manner other than as a true sale of such Receivable by the Affiliated
Provider to the Borrower or a Subsidiary.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder, within three
days after any such interest or other amount becomes due in accordance with the
terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document or which
is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 6.1 or 6.2, or
Section 7; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a) through (c) of
this Section 8), and such default shall continue unremedied for a period of
thirty days; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in any payment of principal of or interest of any Indebtedness (other than the
Loans or Reimbursement Obligations) or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; provided, however, that
no Default or Event of Default shall exist under this paragraph unless the
aggregate amount of Indebtedness in respect of which any default or other event
or condition referred to in this paragraph shall have occurred shall be equal to
at least $5,000,000; or
(f) (i) The Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets or the
Borrower or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of sixty days; or (iii) there shall be
commenced against the Borrower or any of its Subsidiaries any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged or stayed or bonded pending appeal within sixty days
from the entry thereof; or (iv) the Borrower or any of its Subsidiaries shall
take any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) the Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, involve an aggregate
amount in excess of $5,000,000; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $5,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within sixty days from the entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or the Borrower or any other Loan Party
which is a party to any of the Security Documents shall so assert or (ii) the
Lien created by any of the Security Documents shall cease to be perfected or
enforceable and of the same effect as to perfection and priority purported to be
created thereby; or
(j) Any Loan Document (other than any of the Security
Documents) shall cease, for any reason, to be in full force and effect or any
Loan Party shall so assert; or
(k) (i) Any Person or "group" (within the meaning of Section
13(d) or 14(d) of the Exchange Act) (A) shall have acquired beneficial ownership
of 30% or more of any outstanding class of Capital Stock having ordinary voting
power in the election of directors or other managers of the Borrower or (B)
shall obtain the power (whether or not exercised) to elect a majority of the
Borrower's directors or (ii) the Board of Directors of the Borrower shall not
consist of a majority of Continuing Directors; "Continuing Directors" shall mean
the directors of the Borrower on the Closing Date and each other director, if
such other director's nomination for election to the Board of Directors of the
Borrower is recommended by a majority of the then Continuing Directors; or
(l) Any Service Agreement(s), with respect to which more than
15% of the management fee revenue of the Borrower and its Subsidiaries for the
immediately preceding fiscal year was attributable, shall be (i) determined to
be illegal or invalid or not binding on one or more parties thereto by any
arbitrator or Governmental Authority and such Service Agreement(s) shall not
have been amended, modified or restated within sixty days after such
determination in a manner that corrects such illegality, invalidity or
nonbinding effect, or (ii) terminated or repudiated by any party thereto, except
pursuant to a termination permitted by the relevant Service Agreement(s) where
the relevant Affiliated Provider(s) repurchase for cash in accordance with the
terms of such Service Agreement(s) all assets sold by such Affiliated
Provider(s) to the Borrower or any Subsidiary for an amount equal to the
repurchase price specified in the relevant Service Agreement(s); or
(m) Any Service Agreement shall for any reason cease to
evidence the true and absolute assignment and transfer by an Affiliated Provider
to the Borrower or any Subsidiary (or any of their respective assignees or
transferees) of the full legal and equitable title to, and ownership of, each
Receivable assigned thereunder; or
(n) Any change shall occur in any Requirement of Law or in
Governmental Program reimbursement rates or payment methodologies that could
reasonably be expected to have a Material Adverse Effect;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Borrower, automatically the Revolving Credit Commitments (including, without
limitation, the obligation of the Issuing Lender to issue Letters of Credit)
shall immediately terminate and the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents shall immediately become due and payable and (B) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) with the consent of the Required Lenders, the Agent may, or upon the request
of the Required Lenders, the Agent shall, by notice to the Borrower declare the
Revolving Credit Commitments to be terminated (including, without limitation,
the obligation of the Issuing Lender to issue Letters of Credit) forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate and (ii)
with the consent of the Required Lenders, the Agent may, or upon the request of
the Required Lenders, the Agent shall, by notice to the Borrower, declare the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Agent an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit. The Borrower hereby
grants to the Agent, for the benefit of the Issuing Lender and the LC
Participants, a security interest in such cash collateral to secure the
Obligations. The Borrower shall execute and deliver to the Agent, for the
account of the Issuing Lender and the LC Participants, such further documents
and instruments as the Agent may request to evidence the creation and perfection
of such security interest in such cash collateral account. Amounts held in such
cash collateral account shall be applied by the Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay the other Obligations. After all such Letters of
Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other Obligations shall have been
paid in full, the balance, if any, in such cash collateral account shall be
returned to the Borrower.
Except as expressly provided above in this Section 8,
presentment, demand, protest, notice of acceleration or intent to accelerate,
and all other notices and formalities of any kind are hereby expressly waived by
the Borrower.
SECTION 9. THE AGENT
9.1 Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 9.5 and
the first sentence of Section 9.6 shall include its Affiliates and its own and
its Affiliates' officers, directors, employees, and agents): (a) shall not have
any duties or responsibilities except those expressly set forth in this
Agreement and shall not be a trustee or fiduciary for any Lender, (b) shall not
be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or provided for therein or for any failure by
any Loan Party or any other Person to perform any of its obligations thereunder,
(c) shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any Loan
Party or the satisfaction of any condition or to inspect the property (including
the books and records) of any Loan Party or any of its Subsidiaries or
Affiliates, (d) shall not be required to initiate or conduct any litigation or
collection proceedings under any Loan Document except pursuant to the request of
the Required Lenders (but subject to Sections 9.2 and 9.3), and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Loan Document, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Issuing Lender shall
act on behalf of the Lenders with respect to Letters of Credit issued under this
Agreement and the documents associated therewith. It is understood and agreed
that the Issuing Lender (a) shall have all of the benefits and immunities (i)
provided to the Agent in this Section 9 with respect to acts taken or omissions
suffered by the Issuing Lender in connection with Letters of Credit issued under
this Agreement and the documents associated therewith as fully as if the term
"Agent" as used in this Section 9 included the Issuing Lender with respect to
such acts or omissions and (ii) as provided elsewhere in this Agreement and (b)
shall have all of the benefits of the provisions of Section 9.5 as fully as if
the term "Agent" as used in Section 9.5 included the Issuing Lender.
9.2 Reliance by the Agent. The Agent shall be entitled to rely
upon any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any Loan Party), independent accountants, and
other experts selected by the Agent. The Agent may deem and treat the payee of
any Note as the holder thereof for all purposes hereof unless and until the
Agent receives and accepts an Assignment and Acceptance executed in accordance
with Section 10.6. As to any matters not expressly provided for by this
Agreement, the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding on all of the
Lenders; provided, however, that the Agent shall not be required to take any
action that exposes the Agent to personal liability or that is contrary to any
Loan Document or Requirement of Law or unless 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 any such action.
9.3 Defaults. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default (other than
nonpayment of principal of or interest on the Loans or Reimbursement
Obligations) unless the Agent has received written notice from a Lender or the
Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default." In the event that the Agent receives such a
notice of the occurrence of a Default or Event of Default or an Event or Default
occurs as a result of a failure of the Borrower to pay when due any principal of
or interest on the Loans or Reimbursement Obligations, the Agent shall give
prompt notice thereof to the Lenders. The Agent shall (subject to Section 9.2)
take such action with respect to such Default or Event of Default as shall
reasonably be directed by the Required Lenders; provided that, unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.4 Rights as Lender. With respect to its Revolving Credit
Commitment and the Loans made by it, NationsBank (and any successor acting as
Agent) in its capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity.
NationsBank (and any successor acting as Agent) and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Loan Party or any of its Subsidiaries
or Affiliates as if it were not acting as Agent, and NationsBank (and any
successor acting as Agent) and its Affiliates may accept fees and other
consideration from any Loan Party or any of its Subsidiaries or Affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
9.5 Indemnification. THE LENDERS AGREE TO INDEMNIFY THE AGENT
(TO THE EXTENT NOT REIMBURSED BY THE BORROWER, BUT WITHOUT LIMITING THE
OBLIGATION OF THE BORROWER TO DO SO) RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE
REVOLVING CREDIT COMMITMENT PERCENTAGES FOR ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES (INCLUDING ATTORNEYS' FEES), OR DISBURSEMENTS OF ANY KIND AND NATURE
WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT
(INCLUDING BY ANY LENDER) IN ANY WAY RELATING TO OR ARISING OUT OF ANY LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY OR ANY ACTION TAKEN OR OMITTED
BY THE AGENT UNDER ANY LOAN DOCUMENT (INCLUDING ANY OF THE FOREGOING ARISING
FROM THE ORDINARY NEGLIGENCE OF THE AGENT); PROVIDED THAT NO LENDER SHALL BE
LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED. WITHOUT
LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE THE AGENT PROMPTLY
UPON DEMAND FOR ITS RATABLE SHARE OF ANY COSTS OR EXPENSES PAYABLE BY THE
BORROWER UNDER SECTION 10.5, TO THE EXTENT THAT THE AGENT IS NOT PROMPTLY
REIMBURSED FOR SUCH COSTS AND EXPENSES BY THE BORROWER. THE AGREEMENTS CONTAINED
IN THIS SECTION 9.5 SHALL SURVIVE PAYMENT IN FULL OF THE LOANS AND REIMBURSEMENT
OBLIGATIONS AND ALL OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT.
9.6 Non-Reliance on the Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Loan Parties and their
Subsidiaries and its own decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under the Loan Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition, or business of any Loan Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Agent or any of its
Affiliates.
9.7 Resignation of the Agent. The Agent may resign at any time
by giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent which shall be a commercial
bank organized under the laws of the United States of America having combined
capital and surplus of at least $100,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor, such successor shall thereupon
succeed to and become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 9 shall continue
in effect for its benefit in respect of any actions taken or omitted to by taken
by it while it was acting as Agent.
9.8 Duties of Arranger. Notwithstanding any other provision
contained in this Agreement to the contrary, the Arranger shall have no duties
or obligations under this Agreement or any other Loan Document.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. Any provision of this Agreement or any other Loan Document may be
amended, supplemented, modified or waived if, but only if, such amendment,
supplement, modification or waiver is in writing and is signed by each Loan
Party that is a party thereto and the Required Lenders or the Agent with the
consent of the Required Lenders (and, if Section 9 or the rights or duties of
the Agent or the Issuing Lender are affected thereby, by the Agent or the
Issuing Lender, as the case may be); provided that no such amendment or waiver
shall, unless signed by all the Lenders, (a) increase the Revolving Credit
Commitments of the Lenders, (b) reduce the principal of or rate of interest
(other than as a result of waiving the applicability of any post default
increase in interest rates) on any Loan or Reimbursement Obligation or any fees
or other amounts payable hereunder, (c) postpone any date fixed for the payment
of any scheduled payment of principal of or interest on any Loan or
Reimbursement Obligation or any fees or other amounts payable hereunder or for
termination of any Revolving Credit Commitment, (d) change the percentage of the
Revolving Credit Commitments or of the unpaid principal amount of the Extensions
of Credit, or the number of Lenders, which shall be required for the Lenders or
any of them to take any action under this Section or any other provision of this
Agreement, (e) release any material Guarantor from its Guarantee under the Loan
Documents or (f) release all or substantially all of the Collateral from the
Liens created by the Security Documents. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the applicable Loan Parties, the Lenders, the Agent and all
future holders of the Loans. In the case of any waiver, the Loan Parties, the
Lenders and the Agent shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, five Business Days after
being deposited in the mails, postage prepaid or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower and the Agent, and as set forth in Schedule
1.1(d) in the case of the other parties hereto, or to such other address as may
be hereafter notified by the respective parties hereto and any future holders of
the Loans:
The Borrower: ProMedCo Management Company
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
The Agent: NationsBank, N.A.
NC1-001-15-04
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Facsimile: (000) 000-0000
with a copy to: NationsBank, N.A.
000 Xxxxxxxxx Xx., 0xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
provided that any notice, request or demand to or upon the Agent or the Lenders
pursuant to Section 2.2, 2.3, 2.4, 2.6, 3.5, 3.6, 3.7 or 6.2 shall not be
effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents 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.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
10.5 Payment of Expenses and Taxes; Indemnification. (a) the
Borrower agrees to pay on demand all costs and expenses of the Agent in
connection with the syndication, preparation, negotiation, execution, delivery,
administration, modification, and amendment of (and any waiver or consent with
respect to) this Agreement, the other Loan Documents, and the other documents to
be delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Agent with respect thereto (including, to the extent
permitted by applicable law, the cost of internal counsel) and with respect to
advising the Agent as to its rights and responsibilities under the Loan
Documents. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders (including, without limitation, reasonable
attorneys' fees and, with respect to the Agent and to the extent permitted by
applicable law, the cost of internal counsel) in connection with any Default or
Event of Default and the enforcement (whether through negotiations, legal
proceedings, or otherwise) of the Loan Documents and the other documents to be
delivered hereunder.
(b) THE BORROWER AGREES TO PAY, INDEMNIFY AND HOLD EACH LENDER
AND THE AGENT HARMLESS FROM, ANY AND ALL RECORDING AND FILING FEES AND ANY AND
ALL LIABILITIES WITH RESPECT TO, OR RESULTING FROM ANY DELAY IN PAYING, STAMP,
EXCISE AND OTHER TAXES, IF ANY, WHICH MAY BE PAYABLE OR DETERMINED TO BE PAYABLE
IN CONNECTION WITH THE EXECUTION AND DELIVERY OF, OR CONSUMMATION OR
ADMINISTRATION OF ANY OF THE TRANSACTIONS CONTEMPLATED BY, OR ANY AMENDMENT,
SUPPLEMENT OR MODIFICATION OF, OR ANY WAIVER OR CONSENT UNDER OR IN RESPECT OF,
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY SUCH OTHER DOCUMENTS.
(c) THE BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS THE
AGENT AND EACH LENDER AND EACH OF THEIR AFFILIATES AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND ADVISORS (EACH, AN "INDEMNIFIED
PARTY") FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS
AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND
EXPENSES) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY INDEMNIFIED
PARTY, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY REASON OF
(INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY INVESTIGATION,
LITIGATION, OR PROCEEDING OR PREPARATION OF DEFENSE IN CONNECTION THEREWITH) THE
LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR
PROPOSED USE OF THE PROCEEDS OF THE LOANS (INCLUDING ANY OF THE FOREGOING
ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED PARTY), EXCEPT TO THE EXTENT SUCH
CLAIM, DAMAGE, LOSS, LIABILITY, COST OR EXPENSE IS FOUND IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN THE
CASE OF AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY
IN THIS SUBSECTION 10.5(C) APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR
NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY THE BORROWER, ITS
DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY OTHER PERSON
OR ANY INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. THE BORROWER AGREES NOT TO
ASSERT ANY CLAIM AGAINST THE AGENT, ANY LENDER, ANY OF THEIR AFFILIATES, OR ANY
OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS AND
ADVISERS, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO THE LOAN DOCUMENTS, ANY
OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN OR THE ACTUAL OR PROPOSED USE
OF THE PROCEEDS OF THE LOANS.
(d) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 10.5 shall survive the termination of the Revolving
Credit Commitments and payment in full of the Loans and all other Obligations
payable under this Agreement.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Revolving Credit Commitment, the
Loans and Reimbursement Obligations owing to it and the Note held by it);
provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender or an assignment of all of a Lender's rights and obligations
under this Agreement, any such partial assignment shall be in an amount
at least equal to $10,000,000 or an integral multiple of $1,000,000 in
excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Agreement and the Note held by it; and
(iv) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and Acceptance,
together with any Note subject to such assignment and a processing fee
of $3,500.
Upon execution, delivery and acceptance of such Assignment and Acceptance and
payment to the Agent of the processing fee specified above, the assignee
thereunder shall be a party hereto and, to the extent of such assignment, have
the obligations, rights, and benefits of a Lender hereunder and the assigning
Lender shall, to the extent of such assignment, relinquish its rights and be
released from its obligations under this Agreement. Upon the consummation of any
assignment pursuant to this Section 10.6, the assignor, the Agent and the
Borrower shall make appropriate arrangements so that, if required, new Notes are
issued to the assignor and the assignee. If the assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to the Borrower and the Agent certification as to exemption from
deduction or withholding of Taxes in accordance with subsection 3.14(d).
(c) The Agent shall maintain at its address referred to in
Section 10.2 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Revolving Credit Commitment of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons
(each a "Participant") in all or a portion of its rights, obligations or rights
and obligations under this Agreement (including all or a portion of its
Revolving Credit Commitment or the Loans or Reimbursement Obligations held by
it); provided, however, 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, (iii) the
Participant shall be entitled to the benefit of the yield protection provisions
contained in Sections 3.9, 3.13 and 3.14 and the right of set-off contained in
Section 10.7 and (iv) the Borrower, the 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, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or Reimbursement Obligations owing to it and the Note held by it and to
approve any amendment, modification or waiver of any provision of this Agreement
(other than amendments, modifications, or waivers decreasing the amount of
principal of or the rate at which interest is payable on such Loans,
Reimbursement Obligations or Note, extending any scheduled principal payment
date or date fixed for the payment of interest on such Loans, Reimbursement
Obligations or Note or extending its Revolving Credit Commitment).
(f) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or any portion of
its Loans and Reimbursement Obligations and its Note to any Federal Reserve Bank
as collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release the
assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender from time
to time to assignees and Participants (including prospective assignees and
Participants), subject, however, to the provisions of Section 10.15.
10.7 Adjustments; Set-off. (a) Upon the occurrence and during
the continuance of any Event of Default, each Lender (and each of its
Affiliates) is hereby authorized at any time and from time to time, 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 and
other indebtedness at any time owing by such Lender (or any of its Affiliates)
to or for the credit or the account of the Borrower against any and all of the
Obligations of the Borrower held by such Lender, irrespective of whether such
Lender shall have made any demand under this Agreement or such Obligations and
although such Obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower 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. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of the Loans, Reimbursement Obligations or
other amounts owing to it hereunder, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans,
Reimbursement Obligations or other amounts owing to it hereunder, or interest
thereon, such benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans owing
to it, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that any Lender so purchasing a participation from a Lender
pursuant to this Section 10.7 may, to the fullest extent permitted by law,
exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Person were the direct
creditor of the Borrower in the amount of such participation.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be delivered to the
Borrower and the Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Entire Agreement. THIS AGREEMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
REGARDING THE SUBJECT MATTER HEREIN AND THEREIN AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES
HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
10.11 Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be governed by, and construed and
interpreted in accordance with, the law of the State of Texas without regard to
the principles of conflicts of laws thereof.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
Texas, the courts of the United States of America for the Northern District of
Texas, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 10.2 or at such other address of
which the Agent shall have been notified pursuant thereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction.
10.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
Agent and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.
10.14 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW,
THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. The Agent and each Lender (each, a
"Lending Party") agrees to keep confidential any information furnished or made
available to it by the Borrower pursuant to this Agreement that is marked
confidential; provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any Affiliate of
any Lending Party, or any officer, director, employee, agent, or advisor of any
Lending Party or Affiliate of any Lending Party, (b) to any other Person if
reasonably incidental to the administration of the credit facility provided
herein, (c) as required by any Requirement of Law, (d) upon the order of any
court or administrative agency, (e) upon the request or demand of any regulatory
agency or authority, (f) that is or becomes available to the public or that is
or becomes available to any Lending Party other than as a result of a disclosure
by any Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its Affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document and (i) subject to provisions
substantially similar to those contained in this Section 10.15, to any actual or
proposed Participant or assignee.
10.16 Interest and Charges. (a) It is not the intention of any
parties to this Agreement to make an agreement in violation of the laws of any
applicable jurisdiction relating to usury. Regardless of any provision in any
Loan Documents, no Lender shall ever be entitled to charge, receive, collect or
apply, as interest on the Obligations, any amount in excess of the Highest
Lawful Rate. If any Lender ever receives, collects or applies, as interest, any
such excess, such amount which would be excessive interest shall be deemed a
partial repayment of principal and treated hereunder as such; and if principal
is paid in full, any remaining excess shall be paid to the Borrower.
(b) The Borrower agrees that Chapter 346 of the Texas Finance
Code Annotated (which regulates certain revolving credit accounts) shall not
govern or in any manner apply to this Agreement or any of the Obligations.
(c) If at any time the interest rate (the "Contract Rate") for
any obligation of the Borrower under the Loan Documents shall exceed the Highest
Lawful Rate, thereby causing the interest accruing on such obligation to be
limited to the Highest Lawful Rate, then any subsequent reduction in the
Contract Rate for such obligation shall not reduce the rate of interest on such
obligation below the Highest Lawful Rate until the aggregate amount of interest
accrued on such obligation equals the aggregate amount of interest which would
have accrued on such obligation if the Contract Rate for such obligation had at
all times been in effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
BORROWER:
--------
PROMEDCO MANAGEMENT COMPANY
By:
Name:
Title:
ARRANGER:
--------
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
Name:
Title:
LENDERS:
-------
NATIONSBANK, N.A.
as the Agent and as a Lender
By:
Name:
Title:
AMSOUTH BANK
By:
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
Name:
Title:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH
By:
Name:
Title:
By:
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By:
Name:
Title:
