EXHIBIT 10.2
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AMENDED AND RESTATED CREDIT AGREEMENT*
Dated December 12, 2001
among
RADIOLOGIX, INC.,
as Borrower,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
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* Amending and Restating that certain Credit Agreement among the above parties,
dated November 26, 1997, as amended prior to the date of such amendment and
restatement.
(i)
Table of Contents
Page
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1. AMOUNT AND TERMS OF CREDIT......................................................................1
1.1 Revolving Credit Facility..............................................................1
1.2 Letters of Credit......................................................................2
1.3 Prepayments and Commitment Reductions..................................................2
1.4 Use of Proceeds........................................................................4
1.5 Interest and Applicable Margins........................................................4
1.6 Fees...................................................................................7
1.7 Receipt of Payments....................................................................7
1.8 Application and Allocation of Payments.................................................7
1.9 Loan Account and Accounting............................................................8
1.10 Indemnity..............................................................................8
1.11 Access.................................................................................9
1.12 Taxes.................................................................................10
1.13 Capital Adequacy; Increased Costs; Illegality.........................................11
1.14 Single Loan...........................................................................12
1.15 Cash Management System................................................................13
1.16 Amendment and Restatement; No Novation................................................13
2. CONDITIONS PRECEDENT...........................................................................13
2.1 Conditions to the Initial Loans.......................................................13
2.2 Further Conditions to Each Loan.......................................................14
3. REPRESENTATIONS AND WARRANTIES.................................................................15
3.1 Existence; Compliance with Law........................................................15
3.2 Executive Offices; FEIN...............................................................16
3.3 Corporate or Partnership Power, Authorization, Enforceable Obligations................16
3.4 Financial Statements and Projections..................................................16
3.5 Material Adverse Effect...............................................................17
3.6 Ownership of Property; Liens..........................................................18
3.7 Labor Matters.........................................................................18
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.............18
3.9 Government Regulation.................................................................19
3.10 Margin Regulations....................................................................19
3.11 Taxes.................................................................................19
3.12 ERISA.................................................................................20
3.13 No Litigation.........................................................................20
3.14 Brokers...............................................................................21
3.15 Intellectual Property.................................................................21
3.16 Full Disclosure.......................................................................21
3.17 Environmental Matters.................................................................22
3.18 Insurance.............................................................................22
3.19 Deposit and Disbursement Accounts.....................................................22
3.20 Agreements and Other Documents........................................................22
3.21 Solvency..............................................................................23
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Table of Contents
(continued)
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3.22 Third Party Reimbursement.............................................................23
4. FINANCIAL STATEMENTS AND INFORMATION...........................................................23
4.1 Reports and Notices...................................................................23
4.2 Communication with Accountants........................................................23
5. AFFIRMATIVE COVENANTS..........................................................................23
5.1 Maintenance of Existence and Conduct of Business......................................23
5.2 Payment of Obligations................................................................24
5.3 Books and Records.....................................................................24
5.4 Insurance.............................................................................24
5.5 Compliance with Laws..................................................................25
5.6 Supplemental Disclosure...............................................................25
5.7 Intellectual Property.................................................................26
5.8 Environmental Matters.................................................................26
5.9 Leases................................................................................26
5.10 Compliance with Service Agreements....................................................26
5.11 Further Assurances....................................................................26
5.12 Accreditation and Licensing...........................................................26
6. NEGATIVE COVENANTS.............................................................................27
6.1 Mergers, Subsidiaries, Etc............................................................27
6.2 Investments; Loans and Advances.......................................................29
6.3 Indebtedness..........................................................................30
6.4 Employee Loans and Affiliate Transactions.............................................31
6.5 Business..............................................................................32
6.6 Intentionally Omitted.................................................................32
6.7 Liens.................................................................................32
6.8 Sale of Stock and Assets..............................................................32
6.9 ERISA.................................................................................33
6.10 Financial Covenants...................................................................33
6.11 Hazardous Materials...................................................................33
6.12 Intentionally Omitted.................................................................33
6.13 Intentionally Omitted.................................................................33
6.14 Restricted Payments...................................................................33
6.15 Change of Corporate Name or Location..................................................33
6.16 No Impairment of Intercompany Transfers...............................................34
6.17 Intentionally Omitted.................................................................34
6.18 Changes Relating to Subordinated Debt.................................................34
6.19 Location of Assets....................................................................34
7. TERM...........................................................................................34
7.1 Termination...........................................................................34
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Table of Contents
(continued)
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7.2 Survival of Obligations Upon Termination of Financing Arrangements....................34
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES.........................................................35
8.1 Events of Default.....................................................................35
8.2 Remedies..............................................................................37
8.3 Waivers by Credit Parties.............................................................37
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT............................................38
9.1 Assignment and Participations.........................................................38
9.2 Appointment of Agent..................................................................40
9.3 Agent's Reliance, Etc.................................................................40
9.4 GE Capital and Affiliates.............................................................41
9.5 Lender Credit Decision................................................................41
9.6 Indemnification.......................................................................41
9.7 Successor Agent.......................................................................42
9.8 Setoff and Sharing of Payments........................................................42
9.9 Advances; Payments; Non-Funding Lenders; Information..................................43
10. SUCCESSORS AND ASSIGNS.........................................................................45
10.1 Successors and Assigns................................................................45
11. MISCELLANEOUS..................................................................................45
11.1 Complete Agreement; Modification of Agreement.........................................45
11.2 Amendments and Waivers................................................................45
11.3 Fees and Expenses.....................................................................46
11.4 No Waiver.............................................................................48
11.5 Remedies..............................................................................48
11.6 Severability..........................................................................48
11.7 Conflict of Terms.....................................................................48
11.8 Confidentiality.......................................................................48
11.9 GOVERNING LAW.........................................................................49
11.10 Notices...............................................................................49
11.11 Section Titles........................................................................50
11.12 Counterparts..........................................................................50
11.13 WAIVER OF JURY TRIAL..................................................................50
11.14 Press Releases........................................................................50
11.15 Reinstatement.........................................................................51
11.16 Advice of Counsel.....................................................................51
11.17 No Strict Construction................................................................51
11.18 No Third-Party Beneficiary............................................................51
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INDEX OF APPENDICES
Exhibit 1.1(a) Form of Notice of Revolving Credit Advance
Exhibit 1.1(b) - Form of Revolving Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 6.1(a) - Form of Acquisition Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Responsible Individual
Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Schedule 3.2 - Executive Offices; FEIN
Schedule 3.4(A) - Financial Statements
Schedule 3.4(B) - Pro Forma
Schedule 3.4(C) - Projections
Schedule 3.6 - Real Estate and Leases
Schedule 3.7 - Labor Matters
Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Schedule 3.11 - Tax Matters
Schedule 3.12 - ERISA Plans
Schedule 3.13 - Litigation
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Hazardous Materials
Schedule 3.19 - Disbursement Account
Schedule 3.20 Material Agreements
Schedule 5.1 - Trade Names
Schedule 5.4 - Insurance
Schedule 6.1(b) - Existing Permitted Joint Ventures
Schedule 6.3 - Indebtedness
Schedule 6.7 - Existing Liens
Schedule A-19 - Prior Lender Obligations
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 2.1(a)) - Schedule of Additional Closing Documents
Annex D (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex E (Section 6.10) - Financial Covenants
Annex F (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex G (Section 11.10) - Notice Addresses
Annex H (Section 1.15) - Cash Management System
(v)
AMENDED AND RESTATED
CREDIT AGREEMENT (the "Agreement"), dated
December 12, 2001 among RADIOLOGIX, INC., a Delaware corporation ("Borrower"),
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual
capacity, "GE Capital"), for itself, as Lender, and as Agent for Lenders, and
the other Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Borrower, certain lenders party thereto (the
"Original Lenders"), and GE Capital, as agent for the Original Lenders (the
"Original Agent"), are party to that certain
Credit Agreement, dated November
26, 1997 (as amended, the "Original
Credit Agreement"), pursuant to which the
Original Lenders agreed to make certain loans and other credit available to
Borrower; and
WHEREAS, pursuant to that certain Consent and Assignment
Agreement, dated of even date herewith (the "Assignment Agreement"), the
Original Lenders have assigned to GE Capital all of their right, title and
interest in and to the Original
Credit Agreement, each instrument, agreement or
document executed by Borrower and its Subsidiaries (as hereafter defined) in
connection with the Original
Credit Agreement, and the Obligations thereunder;
and
WHEREAS, the Borrower and GE Capital desire to continue the
Original
Credit Agreement but to make certain amendments and modifications
thereto and to certain of the Loan Documents delivered in connection therewith
(as amended, the "Original Loan Documents"), including reducing the commitments,
eliminating the Swing Line Facility and making certain other changes with
respect thereto, all as reflected in this Amendment and Restatement, which upon
execution will supercede and replace the Original
Credit Agreement effective as
of the Closing Date (as hereafter defined); and
WHEREAS, capitalized terms used in this Agreement shall have
the meanings ascribed to them in Annex A. All Annexes, Disclosure Schedules,
Exhibits and other attachments (collectively, "Appendices") hereto, or expressly
identified to this Agreement, are incorporated herein by reference, and taken
together, shall constitute but a single agreement. These Recitals shall be
construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Revolving Credit Facility.
(a) Revolving Credit Facility. Subject to the terms and
conditions hereof, each Revolving Lender agrees to make available from time to
time until the Commitment Termination Date its Pro Rata Share of advances (each,
a "Revolving Credit Advance"). The Pro Rata Share of the Revolving Loan of any
Revolving Lender shall not at any time exceed its separate Revolving Loan
Commitment. The obligations of each Revolving Lender hereunder shall be several
and not joint. The aggregate amount of Revolving Credit Advances outstanding
shall not
exceed at any time the lesser of (A) the Maximum Amount and (B) the Revolving
Credit Availability, in each case less the sum of the Letter of Credit
Obligations outstanding at such time ("Borrowing Availability"). Until the
Commitment Termination Date, Borrower may from time to time borrow, repay and
reborrow under this Section 1.1. Each Revolving Credit Advance shall be made on
notice by Borrower to the representative of Agent identified on Schedule 1.1 at
the address specified thereon. Those notices must be given no later than (1)
11:00 a.m. (New York time) on the Business Day of the proposed Revolving Credit
Advance, in the case of an Index Rate Loan, or (2) 1:00 p.m. (New York time) on
the date which is three (3) Business Days prior to the proposed Revolving Credit
Advance, in the case of a LIBOR Loan. Each such notice (a "Notice of Revolving
Credit Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a), and shall include the information
required in such Exhibit and such other information as may be required by Agent.
If Borrower desires to have the Revolving Credit Advances bear interest by
reference to a LIBOR Rate, it must comply with Section 1.5(e).
(b) Borrower shall execute and deliver to each Revolving
Lender a note to evidence the Revolving Loan Commitment of that Revolving
Lender. Each note shall be in the principal amount of the Revolving Loan
Commitment of the applicable Revolving Lender and substantially in the form of
Exhibit 1.1(b) (including all amendments, modifications, replacements, and
renewals thereof, each a "Revolving Note" and, collectively, the "Revolving
Notes"). Each Revolving Note shall represent the obligation of Borrower to pay
the amount of each Revolving Lender's Revolving Loan Commitment or, if less, the
applicable Revolving Lender's Pro Rata Share of the aggregate unpaid principal
amount of all Revolving Credit Advances to Borrower together with interest
thereon as prescribed in Section 1.5. The entire unpaid balance of the Revolving
Loan and all other non-contingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date.
1.2 Letters of Credit. Subject to and in accordance with the
terms and conditions contained herein and in Annex B, Borrower shall have the
right to request, and Lenders agree to incur, or purchase participations in,
Letter of Credit Obligations in respect of Borrower.
1.3 Prepayments and Commitment Reductions.
(a) Voluntary Commitment Reductions. Borrower may at any time
on at least 15 Business Days' prior written notice to Agent voluntarily and
permanently reduce or terminate the Revolving Loan Commitment; provided that (A)
any such partial reduction shall be in a minimum amount of $5,000,000 and
integral multiples of $250,000 in excess of such amount, and (B) the Revolving
Loan Commitment shall not be reduced to an amount less than the L/C Sublimit
unless it is terminated. Upon the effective date of any such termination all
Advances and other Obligations shall be immediately due and payable in full. Any
such voluntary reduction or termination of the Revolving Loan Commitment must be
accompanied by the payment, if any, required by Section 1.3(b)(i) below, plus
any LIBOR funding breakage costs resulting therefrom in accordance with Section
1.10(b). Each notice of partial reduction of the Revolving Loan Commitment shall
designate whether such reduction shall apply to reduce the L/C Sublimit. Upon
any such reduction or termination of the Revolving Loan Commitment,
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Borrower's right to request Revolving Credit Advances, or request that Letter of
Credit Obligations be incurred on its behalf, shall simultaneously be
permanently reduced or terminated, as the case may be.
(b) Mandatory Prepayments and Commitment Reductions. (i) If at
any time the outstanding balance of the Revolving Loan exceeds the lesser of (A)
the Maximum Amount and (B) the Revolving Credit Availability, Borrower shall
immediately repay the outstanding Revolving Credit Advances to the extent
required to eliminate such excess. If any such excess remains after repayment in
full of the aggregate outstanding Revolving Credit Advances, Borrower shall
provide cash collateral for the Letter of Credit Obligations in the manner set
forth in Annex B to the extent required to eliminate such excess.
(ii) Immediately upon receipt by any Credit Party of proceeds
of any asset disposition (including condemnation proceeds, but
excluding proceeds of asset dispositions permitted by Section 6.8(a) or
(b)), Borrower shall prepay the Loans in an amount equal to the amount
by which all such proceeds, net of (1) commissions and other reasonable
and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by Borrower in connection
therewith (in each case, paid to non-Affiliates), (2) transfer taxes,
(3) amounts payable to holders of senior Liens (to the extent such
Liens constitute Permitted Encumbrances hereunder), if any, and (4) an
appropriate reserve for income taxes in accordance with GAAP in
connection therewith, exceeds $1,500,000 in any Fiscal Year; provided
that such prepayments shall be made in increments of $100,000 only (any
amount not paid as a result of this requirement shall be accumulated
and paid when the aggregate amount of such accumulation shall meet the
required prepayment increment). For the purposes of this Section
1.3(b)(ii)(A), the Credit Parties shall not be deemed to have received
proceeds of any disposition permitted pursuant to Section 6.8(c) or (d)
to the extent that such proceeds are redeployed to replace the asset
disposed of in the manner and within the time period provided in such
sections. To the extent that such proceeds are not so redeployed within
such time period, such proceeds shall be deemed received by the Credit
Parties upon the expiration of such period. Any such prepayment shall
be applied in accordance with clause (c) below.
(iii) If any Credit Party issues Stock or any Indebtedness,
other than stock or Indebtedness issued as a part of the consideration
for a Permitted Acquisition and other than Indebtedness permitted
pursuant to Section 6.3, then no later than the Business Day following
the date of receipt of the proceeds thereof, Borrower shall prepay the
Revolving Loan in an amount equal to all such proceeds, net of
underwriting discounts and commissions and other reasonable costs paid
to non-Affiliates in connection therewith. Any such prepayment shall be
applied in accordance with clause (c) below.
(iv) Notwithstanding anything else in this Agreement to the
contrary, all Obligations shall be due and payable, and all Letters of
Credit (or standby guarantees therefor) shall be cancelled or returned
or cash collateralized in accordance with Annex B, on the Commitment
Termination Date.
3
(c) Application of Certain Mandatory Prepayments. Any
prepayments made by Borrower pursuant to clause (b)(ii) or (b)(iii) above, or
under Section 5.4(c), shall be applied as follows: first, to the outstanding
principal balance of Revolving Credit Loans until the same shall have been paid
in full; and second, to any Letter of Credit Obligations or to provide cash
collateral therefor in the manner set forth in Annex B, until all such Letter of
Credit Obligations have been fully cash collateralized or secured in the manner
set forth in Annex B.
(d) Commitment Reductions. The Revolving Loan Commitment shall
(i) terminate on the Commitment Termination Date, and (ii) permanently reduce by
the amount of any payment or prepayment of Revolving Loans made pursuant to
Sections 1.3(b)(ii).
(e) Nothing in this Section 1.3 shall be construed to
constitute Agent's or any Lender's consent to any transaction referred to in
clauses (b)(ii) or (b)(iii) above which is not permitted by other provisions of
this Agreement or the other Loan Documents.
1.4 Use of Proceeds. Borrower shall utilize the proceeds of
the Revolving Loans solely for the purpose of refinancing certain Indebtedness
of the Borrower, paying working capital, ordinary course business expenses and
Permitted Acquisitions and for other general corporate purposes.
1.5 Interest and Applicable Margins. (a) Borrower shall pay
interest to Agent, for the ratable benefit of each Lender on the outstanding
principal amount of such Lender's Loans, for each day, from and including the
date of the making thereof through but excluding the date of repayment, at the
Index Rate plus the Applicable Index Margin per annum or, at the election of
Borrower made in accordance with Section 1.5(e), the applicable LIBOR Rate plus
the Applicable LIBOR Margin per annum. Such interest with respect to Loans shall
be paid in arrears on the applicable Interest Payment Date.
The Applicable Index Margin, Applicable LIBOR Margin and the
Applicable L/C Margin initially will be 2.00%, 3.25%, and 3.25% per annum,
respectively, commencing on the date hereof. Commencing with the date that the
Borrower delivers consolidated quarterly Financial Statements for the Fiscal
Quarter that ends June 30, 2002, the Applicable Margins will be adjusted (up or
down) prospectively on a quarterly basis based upon the Borrower and its
Restricted Subsidiaries' Total Debt Leverage Ratio for the applicable test
period ended on the last day of such Fiscal Quarter. Adjustments in Applicable
Margins will be determined by reference to the following grids:
IF TOTAL DEBT LEVEL OF
LEVERAGE RATIO IS: APPLICABLE MARGINS:
< 2.00 Level I
> (greater than or equal to) 2.00, but
< (less than or equal to) 3.25 Level II
> 3.25 Xxxxx XXX
0
XXXXXXXXXX XXXXXXX
XXXXX X XXXXX XX XXXXX XXX
Applicable 1.75% 2.0% 2.25%
Index Margin
Applicable LIBOR 3.00% 3.25% 3.50%
Margin
Applicable L/C Margin 3.00% 3.25% 3.50%
All adjustments in the Applicable Margins based on changes in
performance level will be implemented quarterly on a prospective basis, for each
calendar month commencing at least five (5) days after the date of delivery to
Lenders of the quarterly unaudited or annual audited (as applicable) Financial
Statements of Borrower evidencing the need for a performance level adjustment.
Concurrently with the delivery of those Financial Statements, Borrower shall
deliver to Agent and Lenders a certificate, signed by its chief financial
officer, setting forth in reasonable detail the basis for the continuance of, or
any change in, the Applicable Margins based on performance level. If an Event of
Default shall have occurred and be continuing, at the election of the Agent, the
Applicable Margins shall immediately increase to the highest level set forth on
the foregoing grid (as adjusted pursuant to the sentence immediately following
that grid) effective as of the initial date of such Event of Default until the
date on which such Event of Default is waived in writing or cured to the
satisfaction of the Requisite Lenders.
(b) If any payment on any Obligation becomes due and payable
on a day other than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day (except as set forth in the definition of LIBOR
Period) and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis
and interest shall be made by Agent on the basis of a 360-day year, in each case
for the actual number of days occurring in the period for which such interest
and Fees are payable. The Index Rate shall be determined each day based upon the
Index Rate as in effect each day. Each determination by Agent of an interest
rate hereunder shall be conclusive, absent manifest error.
(d) So long as an Event of Default described in Section
8.1(a), (h) or (i) shall have occurred and be continuing (a "Payment Default"),
or so long as any other Event of Default shall have occurred and be continuing
and at the election of Agent (or upon the written request of Requisite Lenders)
confirmed by written notice from Agent to Borrower, the interest rates
applicable to the Obligations and the Letter of Credit Fees shall be increased
by two percentage points (2%) per annum above the rates of interest or the rate
of such Letter of Credit Fees ("Default Rate"), and all outstanding Obligations
shall bear interest at the Default Rate applicable to such Obligations. Interest
and Letter of Credit Fees at the Default Rate shall accrue
5
from the initial date of such Event of Default until the date on which such
Event of Default is cured or waived and shall be payable upon demand.
(e) So long as no Default or Event of Default shall have
occurred and be continuing, and subject to the additional conditions precedent
set forth in Section 2.2 and the definition of LIBOR Period, Borrower shall have
the option to: (i) request that any Loans be made as a LIBOR Loan, (ii) convert
at any time all or any part of any outstanding Loan from an Index Rate Loan to a
LIBOR Loan, (iii) convert any LIBOR Loan to an Index Rate Loan, subject to
payment of LIBOR breakage costs in accordance with Section 1.10(b) if such
conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iv) continue all or any portion of any Loan as a LIBOR Loan upon
the expiration of the applicable LIBOR Period and the succeeding LIBOR Period of
that continued LIBOR Loan shall commence on the last day of the LIBOR Period of
the Loan to be continued. The aggregate amount of Loans to be made or continued
as, or converted into, a LIBOR Loan must be in a minimum amount of $1,000,000
and integral multiples of $250,000 in excess of such amount. Any such election
must be made by 1:00 p.m. (New York time) on the third (3rd) Business Day prior
to (1) the date of any proposed Advance which is to be made as part of a LIBOR
Loan, (2) the end of each LIBOR Period with respect to any LIBOR Loans to be
continued as such, or (3) the date on which Borrower wishes to convert any Index
Rate Loan to a LIBOR Loan. If no election is received with respect to a LIBOR
Loan by 1:00 p.m. (New York time) on the third (3rd) Business Day prior to the
end of the LIBOR Period with respect thereto (or if a Default or an Event of
Default shall have occurred and be continuing or the additional conditions
precedent set forth in Section 2.2 shall not have been satisfied), that LIBOR
Loan shall be converted to an Index Rate Loan at the end of its LIBOR Period.
Borrower must make such election by notice to Agent in writing, by telecopy or
overnight courier. In the case of any conversion or continuation, such election
must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit 1.5(e).
(f) Notwithstanding anything to the contrary set forth in this
Section 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest which would have been received had
the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in Sections 1.5(a) through (e)
above, unless and until the rate of interest again exceeds the Maximum Lawful
Rate, and at that time this paragraph shall again apply. In no event shall the
total interest received by any Lender pursuant to the terms hereof exceed the
amount which such Lender could lawfully have received had the interest due
hereunder been calculated for the full term hereof at the Maximum Lawful Rate.
If the Maximum Lawful Rate is calculated pursuant to this paragraph, such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction
6
shall finally determine that a Lender has received interest hereunder in excess
of the Maximum Lawful Rate, Agent shall, to the extent permitted by applicable
law, promptly apply such excess in the order specified in Section 1.8 and
thereafter shall refund any excess to Borrower or as a court of competent
jurisdiction may otherwise order.
1.6 Fees. (a) Borrower shall pay to GE Capital, individually,
the Fees specified in that certain fee letter of even date herewith among
Borrower and GE Capital (the "GE Capital Fee Letter"), at the times specified
for payment therein.
(b) As additional compensation for the Lenders, Borrower
agrees to pay to Agent, for the ratable benefit of such Lenders, in arrears, on
the first Business Day of each Fiscal Quarter that occurs following the Closing
Date and prior to the Commitment Termination Date and on the Commitment
Termination Date, for each day from and including the Closing Date, to but
excluding the Commitment Termination Date, a fee for the Lenders making
available the Revolving Credit Commitment in an amount equal to either:
(1) where the average daily closing principal balance of the
Revolving Loan outstanding during such period is less than or equal to
one-half of the Maximum Amount, three fourths of one percent (.75%) per
annum (calculated on the basis of a 360-day year for actual days
elapsed) of the difference between (x) the Maximum Amount (as in effect
from time to time) and (y) the average for the period of the daily
closing principal balance of the Revolving Loan outstanding during the
period for which such fee is due; or
(2) where the average daily closing principal balance of the
Revolving Loan outstanding during such period is greater than one-half
of the Maximum Amount, one half of one percent (.50%) per annum
(calculated on the basis of a 360-day year for actual days elapsed) of
the difference between (x) the Maximum Amount (as in effect from time
to time) and (y) the average for the period of the daily closing
principal balance of the Revolving Loan outstanding during the period
for which such fee is due.
(c) Borrower shall pay to Agent, for the ratable benefit of
Revolving Lenders, the Letter of Credit Fee as provided in Annex B.
1.7 Receipt of Payments. Borrower shall make each payment
under this Agreement not later than 12:00 noon (New York time) on the day when
due in immediately available funds in Dollars to the Collection Account. For
purposes of computing interest and Fees and determining Borrowing Availability
or Net Borrowing Availability as of any date, all payments shall be deemed
received on the day of receipt of immediately available funds therefor in the
Collection Account prior to 12:00 noon New York time. Payments received after
12:00 noon New York time on any Business Day shall be deemed to have been
received on the following Business Day.
1.8 Application and Allocation of Payments. So long as no
Event of Default shall have occurred and be continuing, (i) payments matching
specific scheduled payments then due shall be applied to those scheduled
payments; (ii) voluntary prepayments shall be applied as determined by Borrower;
and (iii) mandatory prepayments shall be applied as set forth in Section
7
1.3. As to each other payment, and as to all payments made when an Event of
Default shall have occurred and be continuing or following the Commitment
Termination Date, Borrower hereby irrevocably waives the right to direct the
application of any and all payments received from or on behalf of Borrower, and
Borrower hereby irrevocably agrees that Agent shall have the continuing
exclusive right to apply any and all such payments against the Obligations as
Agent may deem advisable notwithstanding any previous entry by Agent in the Loan
Account or any other books and records. In the absence of a specific
determination by Agent with respect thereto, payments shall be applied to
amounts then due and payable in the following order: (1) to Fees and Agent's
expenses reimbursable hereunder; (2) to interest on the Loans, ratably in
proportion to the interest accrued as to each Loan; (3) to principal payments on
the Loans and to provide cash collateral for Letter of Credit Obligations in the
manner described in Annex B, ratably to the aggregate, combined principal
balance of the other Loans and outstanding Letter of Credit Obligations; and (4)
to all other Obligations including expenses of Lenders to the extent
reimbursable under Section 11.3.
1.9 Loan Account and Accounting. Agent shall maintain a loan
account (the "Loan Account") on its books to record: (a) all Advances and Letter
of Credit Obligations, (b) all payments made by Borrower, and (c) all other
debits and credits as provided in this Agreement with respect to the Loans or
any other Obligations. All entries in the Loan Account shall be made in
accordance with Agent's customary accounting practices as in effect from time to
time. The balance in the Loan Account, as recorded on Agent's most recent
printout or other written statement, shall be presumptive evidence of the
amounts due and owing to Agent and Lenders by Borrower; provided that any
failure to so record or any error in so recording shall not limit or otherwise
affect Borrower's duty to pay the Obligations. Agent shall render to Borrower a
monthly accounting of transactions with respect to the Revolving Loan setting
forth the balance of the Loan Account. Unless Borrower notifies Agent in writing
of any objection to any such accounting (specifically describing the basis for
such objection), within thirty (30) days after the Borrower's receipt thereof,
each and every such accounting shall (absent manifest error) be deemed final,
binding and conclusive upon Borrower in all respects as to all matters reflected
therein. Only those items expressly objected to in such notice shall be deemed
to be disputed by Borrower.
1.10 Indemnity. (a) Whether or not any Advance is ever made or
Letter of Credit ever issued hereunder, Borrower shall indemnify and hold
harmless each of Agent, the L/C Issuers, Lenders and their respective
Affiliates, and each such Person's respective officers, directors, employees,
attorneys, agents and representatives (each, an "Indemnified Person"), from and
against any and all suits, actions, proceedings, claims, damages, losses,
liabilities and expenses (including attorneys' fees and disbursements and other
costs of investigation or defense, including those incurred upon any appeal)
which may be instituted or asserted against or incurred by any such Indemnified
Person as the result of credit having been extended, suspended or terminated
under this Agreement and the other Loan Documents or the administration of such
credit, or the execution, delivery or performance of the Loan Documents, or
otherwise in connection with or arising out of the transactions contemplated
hereunder and thereunder (including, without limitation, any Permitted
Acquisition) and any actions or failures to act in connection therewith,
including any and all Environmental Liabilities and legal costs and expenses
arising out of or incurred in connection with disputes between or among any
parties to any of the Loan Documents (collectively, "Indemnified Liabilities");
provided, that Borrower
8
shall not be liable for any indemnification to an Indemnified Person to the
extent that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from that Indemnified Person's gross negligence or willful
misconduct, as finally determined by a court of competent jurisdiction. NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR
ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR
AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the
terms provided herein, if (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether that repayment is
made pursuant to any provision of this Agreement or any other Loan Document or
is the result of acceleration, by operation of law or otherwise); (ii) Borrower
shall default in payment when due of the principal amount of or interest on any
LIBOR Loan; (iii) Borrower shall default in making any borrowing of, conversion
into or continuation of LIBOR Loans after Borrower has given notice requesting
the same in accordance herewith; or (iv) Borrower shall fail to make any
prepayment of a LIBOR Loan after Borrower has given a notice thereof in
accordance herewith, then Borrower shall indemnify and hold harmless each Lender
from and against all losses, costs and expenses resulting from or arising from
any of the foregoing. Such indemnification shall include any loss (including
loss of margin) or expense arising from the reemployment of funds obtained by it
or from fees payable to terminate deposits from which such funds were obtained.
For the purpose of calculating amounts payable to a Lender under this
subsection, each Lender shall be deemed to have actually funded its relevant
LIBOR Loan through the purchase of a deposit bearing interest at the LIBOR Rate
in an amount equal to the amount of that LIBOR Loan and having a maturity
comparable to the relevant LIBOR Interest Period; provided, however, that each
Lender may fund each of its LIBOR Loans in any manner it sees fit, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this subsection. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder. As promptly as practicable under the circumstances, each Lender shall
provide Borrower with its written calculation of all amounts payable pursuant to
this Section 1.10(b), and such calculation shall be binding on the parties
hereto unless Borrower shall object in writing within ten (10) Business Days of
receipt thereof, specifying the basis for such objection in detail.
1.11 Access. Borrower and each of its Subsidiaries shall,
during normal business hours, from time to time upon five (5) Business Days'
prior notice as frequently as Agent reasonably determines to be appropriate: (a)
provide Agent and any of its officers, employees and agents access to its
properties, facilities, advisors and employees (including officers) and (b)
permit Agent, and any of its officers, employees and agents, to inspect, audit
and make extracts from its books and records. If an Event of Default shall have
occurred and be continuing, each of the Borrower and its Subsidiaries shall
provide such access to Agent at all times and without advance notice.
9
1.12 Taxes. (a) Any and all payments by Borrower hereunder or
under the Notes shall be made, in accordance with this Section 1.12, free and
clear of and without deduction for any and all present or future Taxes. If
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under the Notes, (i) the sum payable shall be increased
as much as shall be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
1.12) Agent, the L/C Issuers or Lenders, as applicable, receive an amount equal
to the sum they would have received had no such deductions been made, (ii)
Borrower shall make such deductions, and (iii) Borrower shall pay the full
amount deducted to the relevant taxing or other authority in accordance with
applicable law. Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Agent the original or a certified copy of a receipt
evidencing payment thereof.
(b) Borrower shall indemnify and, within ten (10) days of
demand therefor, pay Agent, each L/C Issuer and each Lender for the full amount
of Taxes (including any Taxes imposed by any jurisdiction on amounts payable
under this Section 1.12) paid by Agent, such L/C Issuer or such Lender, as
appropriate, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction
outside the United States (a "Foreign Lender") as to which payments to be made
under this Agreement or under the Notes are exempt from United States
withholding tax under an applicable statute or tax treaty shall provide to
Borrower and Agent a properly completed and executed IRS Form 4224 or Form 1001
or other applicable form, certificate or document prescribed by the IRS or the
United States certifying as to such Foreign Lender's entitlement to such
exemption (a "Certificate of Exemption"). Any foreign Person that seeks to
become a Lender under this Agreement shall provide a Certificate of Exemption to
Borrower and Agent prior to becoming a Lender hereunder. No foreign Person may
become a Lender hereunder if such Person is unable to deliver a Certificate of
Exemption.
(d) Each Lender also agrees to deliver to Borrower and the
Agent such other supplemental forms as may at any time be required as a result
of the passage of time or changes in applicable law or regulation in order to
confirm or maintain in effect its entitlement to exemption from U.S. withholding
tax on any payments hereunder, provided, that the circumstances of the Lender at
the relevant time and applicable laws permit it to do so. If a Lender
determines, as a result of any change in either (1) applicable law, regulation
or treaty, or in any official application thereof or (2) its circumstances, that
it is unable to submit any form or certificate that it is obligated to submit
pursuant to this Section 1.12(d), or that it is required to withdraw or cancel
any such form or certificate previously submitted, it shall promptly notify the
Lender and the Agent of such fact. If a Lender is organized under the laws of a
jurisdiction outside the United States, and Borrower and the Agent have not
received forms, certificates or other instruments indicating to their
satisfaction that all payments to be made to such Lender hereunder are not
subject to U.S. withholding tax, Borrower shall withhold taxes from such
payments at the applicable statutory rate. Each Lender shall indemnify and hold
Borrower and the Agent harmless from any United States taxes, penalties,
interest and other expenses, costs and losses incurred or payable by them as a
result of either (A) such Lender's failure to submit
10
any form or certificate that it is required to provide pursuant to this Section
1.12(d) or (B) reliance by Borrower or the Agent on any such form or certificate
which such Lender has provided to them pursuant to this Section 1.12(d), but in
the case of (B), only to the extent accrued or incurred with respect to payments
made prior to such certificate being withdrawn.
1.13 Capital Adequacy; Increased Costs; Illegality. (a) If the
Agent, any L/C Issuer or any Lender shall have determined that the adoption
after the date hereof of any law, treaty, governmental (or quasi-governmental)
rule, regulation, guideline or order regarding capital adequacy, reserve
requirements or similar requirements or compliance by the Agent, any L/C Issuer
or any Lender after the date hereof with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law) from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by the Agent, such L/C Issuer or such
Lender and thereby reducing the rate of return on such Person's capital as a
consequence of its obligations hereunder, then Borrower shall from time to time
upon demand by such Person (with a copy of such demand to Agent) pay to Agent,
for the account of such Person, additional amounts sufficient to compensate such
Person for such reduction but only to the extent that such Person reasonably
determines such increase in capital to be allocable to the existence of such
Person's Commitment, Loans or interest in Letter of Credit Obligations hereunder
and similar amounts are being charged generally to other companies with similar
commitments from such Person. A certificate as to the amount of that reduction
and showing the basis of the computation thereof submitted by such Person to
Borrower and to Agent shall, absent manifest error, be final, conclusive and
binding for all purposes.
(b) If, due to either (i) the introduction of or any change in
any law or regulation (or any change in the interpretation thereof) after the
date hereof or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law) after the date hereof, there shall be any increase in the cost to any
Lender or L/C Issuer of agreeing to make or making, funding or maintaining any
Advance or of agreeing to issue or purchase a participation interest in or in
issuing or purchasing a participation interest in any Letter of Credit or Letter
of Credit Obligation, then Borrower shall from time to time, upon demand by such
Lender or L/C Issuer (with a copy of such demand to Agent), pay to Agent for the
account of such Lender or L/C Issuer additional amounts sufficient to compensate
such Lender or L/C Issuer for such increased cost. A certificate as to the
amount of such increased cost, submitted to Borrower and to Agent by such Lender
or L/C Issuer, shall be conclusive and binding on Borrower for all purposes,
absent manifest error. Each Lender or L/C Issuer agrees that, as promptly as
practicable after it becomes aware of any circumstances referred to above which
would result in any such increased cost, the affected Lender or L/C Issuer
shall, to the extent not inconsistent with such Lender's or L/C Issuer's
internal policies of general application, use reasonable commercial efforts to
minimize costs and expenses incurred by it and payable to it by Borrower
pursuant to this Section 1.13(b).
(c) Notwithstanding anything to the contrary contained herein,
if the introduction of or any change after the date hereof in any law or
regulation (or any change after the date hereof in the interpretation thereof)
shall make it unlawful, or any central bank or other Governmental Authority
shall assert that it is unlawful, for any Lender to agree to make or to make or
to continue to fund or maintain any LIBOR Loan, then, unless that Lender is able
to
11
make or to continue to fund or to maintain such LIBOR Loan at another branch or
office of that Lender without, in that Lender's sole good faith determination,
adversely affecting it or its Loans or the income obtained therefrom, on notice
thereof and demand therefor by such Lender to Borrower through Agent, (i) the
obligation of such Lender to agree to make or to make or to continue to fund or
maintain LIBOR Loans shall terminate and (ii) Borrower shall forthwith prepay in
full all outstanding LIBOR Loans owing to such Lender, together with interest
accrued thereon, unless Borrower, within five (5) Business Days after the
delivery of such notice and demand, converts all such Loans into Advances
bearing interest based on the Index Rate.
(d) Replacement of Lender in Respect of Increased Costs.
Within fifteen (15) days after receipt by Borrower of written notice and demand
from any Lender (an "Affected Lender") for payment of additional amounts or
increased costs as provided in Section 1.12(a), 1.12(b), 1.13(a) or 1.13(b),
Borrower may, at its option, notify Agent and such Affected Lender of its
intention to replace the Affected Lender. So long as no Default or Event of
Default shall have occurred and be continuing, Borrower, with the consent of
Agent, may obtain, at Borrower's expense, a replacement Lender ("Replacement
Lender") for the Affected Lender, which Replacement Lender must be satisfactory
to Agent. If Borrower obtains a Replacement Lender within ninety (90) days
following notice of its intention to do so, the Affected Lender must sell and
assign its Advances, its interest in the Letter of Credit Obligations and
Commitments to such Replacement Lender for an amount equal to the principal
balance of the Revolving Loan held by the Affected Lender and all accrued
interest and Fees with respect thereto through the date of such sale, provided
that Borrower shall have reimbursed such Affected Lender for the additional
amounts or increased costs that it is entitled to receive under this Agreement
through the date of such sale and assignment.
Notwithstanding the foregoing, Borrower shall not have the right to obtain a
Replacement Lender if the Affected Lender rescinds its demand for increased
costs or additional amounts within fifteen (15) days following its receipt of
Borrower's notice of intention to replace such Affected Lender. Furthermore, if
Borrower gives a notice of intention to replace and does not so replace such
Affected Lender within ninety (90) days thereafter, Borrower's rights under this
Section 1.13(d) shall terminate.
(e) Each Lender will notify Borrower of any event occurring
after the date of this Agreement which will entitle such Lender to compensation
pursuant to this Section 1.13 as promptly as practicable, and in any event
within ninety (90) days, after such Lender obtains knowledge of the occurrence
of such event. In no event will Borrower be obligated to compensate any Lender
pursuant to this Section 1.13 for any amounts described in clauses (a) or (b)
above that accrued more than ninety (90) days prior to the date that delivery of
such notice was required.
1.14 Single Loan. All Advances to Borrower, all Letter of
Credit Obligations and all of the other Obligations of Borrower arising under
this Agreement and the other Loan Documents shall constitute one general
obligation of Borrower secured, until the Termination Date, by all of its
Collateral.
12
1.15 Cash Management System. Borrower shall establish and
maintain the cash management system in the manner and to the extent described in
Annex H hereto (the "Cash Management System").
1.16 Amendment and Restatement; No Novation. This Agreement
constitutes an amendment and restatement of the Original
Credit Agreement
effective from and after the date hereof. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby are not
intended by the parties to be, and shall not constitute, a novation or an accord
and satisfaction of the Obligations or any other obligations owing to the
Lenders or the Agent under the Original Credit Agreement or any other Loan
Documents. On the date hereof, the credit facilities and the terms and
conditions thereof described in the Original Credit Agreement shall be amended
and replaced by the credit facilities and the terms and conditions thereof
described herein, and all Loans and other Obligations of Borrower outstanding as
of such date under the Original Credit Agreement shall be deemed to be Loans and
Obligations outstanding under the corresponding facilities described herein
(such that all Revolving Credit Advances and Letter of Credit Obligations which
are outstanding on the Closing Date under the Original Credit Agreement and not
refinanced on the Closing Date shall become Revolving Credit Advances and Letter
of Credit Obligations under this Agreement, respectively), without further
action by any Person (except the Lenders shall make such payments on the Closing
Date between themselves, which payments shall constitute Revolving Credit
Advances, so that after giving effect thereto the aggregate outstanding amount
of the Revolving Credit Advances of each Lender as of the Closing Date do not
exceed either (i) such Lender's Pro Rata Share of Revolving Credit Advances, or
(ii) such Lender's Revolving Loan Commitment).
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans.
No Lender shall be obligated to make any Loan and none of the
Lenders, the Agent or any L/C Issuer shall be required to incur any Letter of
Credit Obligations on the Closing Date, or to take, fulfill, or perform any
other action hereunder, until the following conditions have been satisfied or
provided for in a manner satisfactory to Agent, or waived in writing by Agent
and the Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrower, the Credit Parties signatory hereto, Agent and Lenders; and Agent
shall have received such documents, instruments, agreements and legal opinions
as Agent shall request in connection with the transactions contemplated by this
Agreement and the other Loan Documents, including all those listed in the
Closing Checklist attached hereto as Annex C, each in form and substance
satisfactory to Agent.
(b) Repayment of Prior Lender Obligations. (i) Agent shall
have received payment in full of the Prior Lender Obligations and duly executed
copies of the Consent and Assignment Agreement and all documents relating to the
Senior Notes Financing, which shall have been consummated on terms and
conditions satisfactory to the Agent for gross proceeds of not less than
$160,000,000.
13
(c) Approvals. Agent shall have received (i) satisfactory
evidence that the Credit Parties have obtained all required consents and
approvals of all Persons including all requisite Governmental Authorities, to
the execution, delivery and performance of this Agreement and the other Loan
Documents and the consummation of the Related Transactions or (ii) an officer's
certificate in form and substance satisfactory to Agent affirming that no such
consents or approvals are required.
(d) Payment of Fees. Borrower shall have paid the Fees
required to be paid on the Closing Date in the respective amounts specified in
Section 1.6, and shall have reimbursed Agent for all reasonable fees, costs and
expenses of closing presented as of the Closing Date.
(e) Capital Structure: Other Indebtedness. The capital
structure of Borrower and each of its Subsidiaries and the terms and conditions
of all Indebtedness of such Credit Party shall be consistent with the Borrower's
prior written disclosures to the Agent, or otherwise acceptable to Agent in its
sole discretion.
(f) Total Leverage Ratio on Closing Date. The Total Leverage
Ratio of the Borrower and its Subsidiaries on the Closing Date shall not exceed
3.5 to 1.0.
2.2 Further Conditions to Each Loan. Except as otherwise
expressly provided herein, no Lender shall be obligated to fund any Advance,
convert or continue any Loan as a LIBOR Loan or incur any Letter of Credit
Obligation, and no L/C Issuer shall be required to issue any Letter of Credit
if, as of the date thereof:
(a) Any representation or warranty by any Credit Party
contained herein or in any of the other Loan Documents shall be untrue or
incorrect as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date and except for changes therein
expressly permitted or expressly contemplated by this Agreement; or
(b) Any event or circumstance having a Material Adverse Effect
shall have occurred since the date hereof; or
(c) (i) Any Event of Default shall have occurred and be
continuing or would result after giving effect to any Advance or the incurrence
of any Letter of Credit Obligation, or (ii) a Default shall have occurred and be
continuing or would result after giving effect to any Advance, and Requisite
Lenders shall have determined not to make any Advance or incur any Letter of
Credit Obligation so long as that Default is continuing; or
(d) After giving effect to any Advance or the incurrence of
any Letter of Credit Obligation, the outstanding principal amount of the
Revolving Loan would exceed the lesser of the Revolving Credit Availability and
the Maximum Amount; or
(e) Following a request therefor by the Agent, the Borrower
shall not have established to the Agent's reasonable satisfaction that the
proceeds of any Advance will be used in accordance with Section 1.4; or
14
(f) Following a request therefor by the Agent, the Borrower
shall have failed to deliver to the Agent a certificate of Borrower's Chief
Financial Officer which demonstrates, to the satisfaction of the Agent, that
after giving pro forma effect to any requested Advance, the outstanding
Revolving Loans would not exceed the Revolving Credit Availability.
The request and acceptance by Borrower of the proceeds of any Advance, the
incurrence, or request for the incurrence of any Letter of Credit Obligations or
the conversion or continuation of any Loan into, or as, a LIBOR Loan or any
request therefor, as the case may be, shall be deemed to constitute, as of the
date of such request or acceptance, (i) a representation and warranty by
Borrower that the conditions in this Section 2.2 have been satisfied and (ii) a
reaffirmation by Borrower of the granting and continuance of Agent's Liens, on
behalf of itself and Lenders, pursuant to the Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to induce the Lenders
and the L/C Issuers to incur Letter of Credit Obligations, the Credit Parties,
jointly and severally, make the following representations and warranties to
Agent, the L/C Issuers and each Lender, each and all of which shall survive the
execution and delivery of this Agreement.
3.1 Existence; Compliance with Law. (a) Each Credit Party (i)
is a corporation or partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation; (ii) is duly
qualified to conduct business and is in good standing in each other jurisdiction
where its ownership or lease of property or the conduct of its business requires
such qualification except where the failure to be so qualified or to be in good
standing, individually or when aggregated with all such failures, has not had
and could not reasonably be expected to have or result in a Material Adverse
Effect; (iii) has the requisite corporate or partnership power and authority and
the legal right to own, pledge, mortgage or otherwise encumber and operate its
properties, to lease the property it operates under lease and to conduct its
business as now, heretofore and proposed to be conducted; (iv) has all licenses,
permits, consents or approvals from or by, and has made all filings with, and
has given all notices to, all Governmental Authorities having jurisdiction, to
the extent required for such ownership, operation and conduct, except, in each
case, to the extent that the failure to have such licenses, permits, consents or
approvals or to make such filings or give such notices, individually or in the
aggregate, has not had and could not reasonably be expected to have or result in
a Material Adverse Effect; (v) is in compliance with its charter and by-laws;
and (vi) subject to specific representations set forth herein regarding ERISA,
Environmental Laws, tax and other laws, is in compliance with all applicable
provisions of law, except where the failure to comply, individually or in the
aggregate, has not had and could not reasonably be expected to have or result in
a Material Adverse Effect.
(b) To the Borrower's knowledge, each Managed Practice has all
licenses, permits, consents or approvals from or by, and has made all filings
with, and has given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for the ownership of its property and the
operation and conduct of its business (including, as applicable, accreditations,
licenses and certifications as a provider of health care services including
those necessary for it to be eligible to receive payment and compensation and to
participate under
15
Medicare, Medicaid, TRICARE or CHAMPVA or any Blue Cross/Blue Shield or
equivalent program) and is in compliance with all of the foregoing and all
applicable laws relating to its business, except, in each case, to the extent
that the failure to have such licenses, permits, consents or approvals or to
make such filings or give such notices or to be in such compliance, individually
or in the aggregate, has not had and could not reasonably be expected to have or
result in a Material Adverse Effect.
3.2 Executive Offices; FEIN. As of the Closing Date, the
current location of each Credit Party's chief executive office and principal
place of business, and the jurisdiction of incorporation or organization for
each Credit Party, is set forth in Disclosure Schedule (3.2) and none of such
locations have changed within the twelve (12) months preceding the Closing Date.
In addition, Disclosure Schedule (3.2) lists the federal employer identification
number of each Credit Party.
3.3 Corporate or Partnership Power, Authorization, Enforceable
Obligations. (a) The execution, delivery and performance by each Credit Party of
the Related Transaction Documents to which it is a party and the creation of all
Liens provided for therein: (i) are within such Person's corporate or
partnership power; (ii) have been duly authorized by all necessary or proper
corporate and shareholder action or partnership action; (iii) do not contravene
any provision of such Person's charter or bylaws or other organizational
documents; (iv) do not violate any law or regulation, or any order or decree of
any court or Governmental Authority; (v) do not conflict with or result in the
breach or termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Person is a party or
by which such Person or any of its property is bound; (vi) do not result in the
creation or imposition of any Lien upon any of the property of such Person other
than those in favor of Agent, on behalf of itself and Lenders, pursuant to the
Loan Documents; and (vii) do not require the consent or approval of any
Governmental Authority or any other Person, except those referred to in Section
2.1(c), all of which will have been duly obtained, made or complied with prior
to the Closing Date. On or prior to the Closing Date the Credit Agreement and
each of the other Loan Documents shall have been duly executed and delivered by
each Credit Party thereto and each such Loan Document shall then constitute a
legal, valid and binding obligation of such Person enforceable against it in
accordance with its terms.
(b) Each Service Agreement, and each of the transactions
contemplated thereunder does not violate any applicable rule or regulation: (i)
relating to the eligibility of a Managed Practice to receive payment and to
participate as an accredited and certified provider of health care services
under Medicare, Medicaid, TRICARE, CHAMPVA or any Blue Cross/Blue Shield or
equivalent program, (ii) applicable to such Person as a result of its
participation in such programs, (iii) relating to the licenses and permits
required therein in connection therewith, or (iv) relating to the practice of
medicine or the sharing of fees generated in connection therewith; except in
each case ((i), (ii), (iii) and (iv)), for such violations, as individually or
in the aggregate with all such events, have not had and could not reasonably be
expected to have or result in a Material Adverse Effect.
3.4 Financial Statements and Projections. Except for the
Projections, all Financial Statements concerning Borrower and its Subsidiaries
which are referenced below have
16
been prepared in accordance with GAAP consistently applied throughout the
periods covered (except as disclosed therein and except, with respect to
unaudited Financial Statements, for the absence of footnotes and normal year-end
audit adjustments) and present fairly in all material respects the financial
position of the Persons covered thereby as at the dates thereof and the results
of their operations and cash flows for the periods then ended.
(a) The Financial Statements listed on Disclosure Schedule
(3.4(A)) have been delivered on the date hereof.
(b) Pro Forma. The Pro Forma delivered on the date hereof and
described on Disclosure Schedule (3.4(B)) was prepared by Borrower giving pro
forma effect to the Related Transaction, was based on the unaudited consolidated
and consolidating balance sheets described on such Disclosure Schedule 3.4(B)
was prepared in accordance with GAAP, with only such adjustments thereto as
would be required in accordance with GAAP.
(c) Projections. The Projections delivered on the date hereof
and described on Disclosure Schedule (3.4(C)) have been prepared by Borrower in
light of the past operations of its businesses, but including future payments of
known contingent liabilities and reflect projections for the five (5) year
period beginning on January 1, 2002, on an annual basis. The Projections are
based upon estimates and assumptions stated therein, all of which Borrower
believes to be reasonable and fair in light of current conditions and current
facts known to Borrower and, as of the Closing Date, reflect Borrower's good
faith and reasonable estimates of the future financial performance of Borrower
and of the other information projected therein for the period set forth therein.
3.5 Material Adverse Effect. Between September 30, 2001 and
the Closing Date, (a) neither the Borrower nor any of its Subsidiaries has
incurred any obligations, contingent or non-contingent liabilities, liabilities
for Charges, long-term leases or unusual forward or long-term commitments which
are not reflected in the Pro Forma and which, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (b) no contract, lease
or other agreement or instrument has been entered into by the Borrower or any of
its Subsidiaries or has become binding upon any such Person's assets and no law
or regulation applicable to the Borrower or any of its Subsidiaries has been
adopted which has had or could reasonably be expected to have a Material Adverse
Effect, and (c) neither the Borrower nor any of its Subsidiaries is in default
and to the best of Borrower's knowledge no third party is in default under any
material contract, lease or other agreement or instrument, which alone or in the
aggregate could reasonably be expected to have a Material Adverse Effect. None
of the Borrower, any of its Subsidiaries, any Permitted Joint Venture or (to the
knowledge of Borrower) any Managed Practice has received notification from any
Governmental Authority that any such Governmental Authority has taken or intends
to take action to revoke, terminate or adversely amend any license, certificate,
certification or permit of such Person to engage in the practice of medicine, to
operate a healthcare facility or to participate under Medicare, Medicaid,
TRICARE or CHAMPVA, which revocation, termination or amendment, singly or in the
aggregate, with all other such events, could reasonably be expected to have or
result in a Material Adverse Effect. Since September 30, 2001 no event has
occurred, which alone or together with other events, has had, or could
reasonably be expected to have or result in a Material Adverse Effect.
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3.6 Ownership of Property; Liens. As of the Closing Date, the
real estate ("Real Estate") listed on Disclosure Schedule (3.6) constitutes all
of the real property owned, leased, subleased, or used by any Credit Party. Each
Credit Party owns good and indefeasible fee simple title to all of its owned
real estate, and valid and subsisting leasehold interests in all of its leased
Real Estate, all as described on Disclosure Schedule (3.6). Disclosure Schedule
(3.6) further describes any Real Estate with respect to which any Credit Party
is a lessor, sublessor or assignor as of the Closing Date. Each Credit Party
also has good and indefeasible title to, or valid leasehold interests in, all of
its personal properties and assets. As of the Closing Date, none of the
properties and assets of any Credit Party is subject to any Liens other than
Permitted Encumbrances, and there are no facts, circumstances or conditions
known to the Borrower that may result in any Liens (including Liens arising
under Environmental Laws) other than Permitted Encumbrances.
3.7 Labor Matters. As of the Closing Date (a) no strikes or
other material labor disputes against any Credit Party or, to the Borrower's
knowledge, any Managed Practice are pending or, to the Borrower's knowledge,
threatened; (b) hours worked by and payment made to employees of each Credit
Party and, to the Borrower's knowledge, the Managed Practices comply with the
Fair Labor Standards Act and each other federal, state, local or foreign law
applicable to such matter, except for such non compliances as, singly or in the
aggregate, have not had and could not reasonably be expected to have or result
in a Material Adverse Effect; (c) all payments due from any Credit Party or, to
the Borrower's knowledge, any Managed Practice for employee health and welfare
insurance have been paid or accrued as a liability on the books of such Person,
except for such non-payments or non-accruals as, individually or in the
aggregate, have not had and could not reasonably be expected to have or result
in a Material Adverse Effect; (d) except as set forth in Disclosure Schedule
(3.7), no Credit Party or, to the Borrower's knowledge, any Managed Practice is
a party to or bound by any collective bargaining agreement, management
agreement, consulting agreement or any material employment agreement (and true
and complete copies of any agreements described on Disclosure Schedule (3.7)
have been delivered to Agent); (e) there is no organizing activity involving any
Credit Party or, to the Borrower's knowledge, the Managed Practices pending or,
to Borrower's knowledge, threatened by any labor union or group of employees;
(f) there are no representation proceedings pending or, to the Borrower's
knowledge, threatened with the National Labor Relations Board, and no labor
organization or group of employees of any such Person has made a pending demand
for recognition; and (g) except as set forth in Disclosure Schedule (3.7), there
are no complaints or charges against any Credit Party or, to the Borrower's
knowledge, any Managed Practice pending or, to the knowledge of the Borrower,
threatened to be filed with any Governmental Authority or arbitrator based on,
arising out of, in connection with, or otherwise relating to the employment or
termination of employment by any such Person of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of the
Closing Date: (a) the Borrower has no Subsidiaries, (b) no Credit Party is
engaged in any joint venture or partnership with any other Person or is an
Affiliate of any other Person, (c) each of Borrower's Restricted Subsidiaries
and each Permitted Joint Venture Holding Company is a wholly-owned Subsidiary of
Borrower and (d) there are no outstanding rights to purchase, options, warrants
or similar rights or agreements pursuant to which any Credit Party may be
required to issue, sell,
18
repurchase or redeem any of its Stock or any Stock of its Subsidiaries. All
outstanding Indebtedness of the Borrower and its Restricted Subsidiaries as of
the Closing Date is described in Section 6.3 (including Disclosure Schedule
(6.3)).
3.9 Government Regulation. No Credit Party is an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940 as amended. No Credit Party is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, or any
other federal or state statute that restricts or limits its ability to incur
Indebtedness or to perform its obligations hereunder. The making of the Advances
by Lenders to Borrower, the incurrence of the Letter of Credit Obligations on
behalf of Borrower, the application of the proceeds thereof and repayment
thereof and the consummation of the Related Transactions will not violate any
provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission.
3.10 Margin Regulations. No Credit Party is engaged, nor will
it engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
security" as such terms are defined in Regulation U of the Federal Reserve Board
as now and from time to time hereafter in effect (such securities being referred
to herein as "Margin Stock"). No Credit Party owns any Margin Stock (except for
investments permitted pursuant to Section 6.2(v)), and none of the proceeds of
the Loans or other extensions of credit under this Agreement will be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin
Stock, for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry any Margin Stock or for any other
purpose which might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulation T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action which might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.11 Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate Governmental Authority and all
Charges have been paid prior to the date on which any fine, penalty, interest or
late charge may be added thereto for nonpayment thereof (or any such fine,
penalty, interest, late charge or loss has been paid), excluding Charges or
other amounts being contested in accordance with Section 5.2(b), except for such
filings or payments, the non-payment of which, individually or in the aggregate,
have not had and could not reasonably be expected to have or result in a
Material Adverse Effect. Proper and accurate amounts have been withheld by each
Credit Party from its respective employees for all periods in full and complete
compliance with all applicable federal, state, local and foreign law and such
withholdings have been timely paid to the respective Governmental Authorities
except for such withholdings and payments, the failure to make which,
individually or in the aggregate, have not had and could not reasonably be
expected to have or result in a Material Adverse Effect. Disclosure Schedule
(3.11) sets forth as of the Closing Date those taxable years for which any
Credit Party's tax returns are currently being audited by the IRS or any other
applicable Governmental Authority and any assessments or threatened assessments
in connection with such audit, or otherwise currently outstanding. Except as
described on Disclosure Schedule (3.11), no Credit Party has executed or filed
with the IRS or any other Governmental Authority any
19
agreement or other document extending, or having the effect of extending, the
period for assessment or collection of any Charges. No Credit Party or, to the
Borrower's knowledge, their respective predecessors are liable for any Charges:
(a) under any agreement (including any tax sharing agreements) or (b) to
Borrower's knowledge, as a transferee.
3.12 ERISA. (a) As of the Closing Date, Disclosure Schedule
(3.12) lists and separately identifies all Title IV Plans, Multiemployer Plans,
ESOPs and Retiree Welfare Plans. Copies of all such listed Plans, together with
a copy of the latest form 5500 for each such Plan, have been delivered to Agent.
Each Qualified Plan has been determined by the IRS to qualify under Section 401
of the IRC, and the trusts created thereunder have been determined to be exempt
from tax under the provisions of Section 501 of the IRC, and nothing has
occurred which would cause the loss of such qualification or tax-exempt status.
Each Plan is in material compliance with the applicable provisions of ERISA and
the IRC, including the filing of reports required under the IRC or ERISA.
Neither the Borrower nor any ERISA Affiliate has failed to make any contribution
or pay any amount due as required by either Section 412 of the IRC or Section
302 of ERISA or the terms of any such Plan. Neither the Borrower nor any ERISA
Affiliate has engaged in a prohibited transaction, as defined in Section 4975 of
the IRC, in connection with any Plan, which would subject any of the Borrower's
or its Subsidiaries to a material tax on prohibited transactions imposed by
Section 4975 of the IRC.
(b) Except as set forth in Disclosure Schedule (3.12): (i) no
Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur, which individually or in the
aggregate, has had or could reasonably be expected to have or result in a
Material Adverse Effect; (iii) there are no pending, or to the knowledge of
Borrower, threatened claims (other than claims for benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted against any Plan
or any Person as fiduciary or sponsor of any Plan, which have a reasonable risk
of being determined adversely and which, if so determined, individually or in
the aggregate, could have a Material Adverse Effect; (iv) neither the Borrower
nor any ERISA Affiliate has incurred or reasonably expects to incur any
liability as a result of a complete or partial withdrawal from a Multiemployer
Plan; (v) within the last five years no Title IV Plan with Unfunded Pension
Liabilities has been transferred outside of the "controlled group" (within the
meaning of Section 4001(a)(14) of ERISA) of the Borrower or any ERISA Affiliate;
and (vi) no liability under any Title IV Plan has been satisfied with the
purchase of a contract from an insurance company that is not rated AAA by the
Standard & Poor's Corporation or the equivalent by another nationally recognized
rating agency.
3.13 No Litigation. No action, claim, lawsuit, demand,
investigation or proceeding is now pending or, to the knowledge of Borrower,
threatened against any of the Borrower, any of its Subsidiaries or, to the
knowledge of the Borrower, any Managed Practice, before any Governmental
Authority or before any arbitrator or panel of arbitrators (collectively,
"Litigation"), (a) which challenges any Credit Party's or any Managed Practice's
right or power to enter into or perform any of its obligations under the Related
Transaction Documents to which it is a party, or the validity or enforceability
of any Related Transaction Document or any action taken thereunder, or (b) which
has a reasonable risk of being determined adversely to any of the Borrower, any
of its Subsidiaries or, to the knowledge of the Borrower, any Managed Practice
and which, if so determined, could have a Material Adverse Effect. Except as set
forth on
20
Disclosure Schedule (3.13), as of the Closing Date there is no Litigation
pending or threatened which seeks damages in excess of $500,000 over
acknowledged insurance coverage from a recognized carrier or injunctive relief
or alleges criminal misconduct of any of the Borrower or any of its Subsidiaries
or, to the knowledge of the Borrower, any Managed Practice. There is no pending
investigation of any of the Borrower, any of its Subsidiaries, any Permitted
Joint Venture or, to the knowledge of the Borrower, any Managed Practice by CMS
or any other Governmental Authority, which investigation is not otherwise
conducted in the ordinary course of business and no criminal, civil or
administrative action, audit, or investigation by a fiscal intermediary or by or
on behalf of any Governmental Authority exists or, to the best knowledge of the
Borrower, is threatened with respect to any of the Borrower, any of its
Subsidiaries or, to the knowledge of the Borrower, any Managed Practice, which
has had or could reasonably be expected to have or result in a Material Adverse
Effect (including by way of an adverse effect on such Person's right to receive
Medicare, Medicaid, TRICARE or CHAMPVA reimbursement to which such Person would
otherwise be entitled, or right to participate in the Medicare, Medicaid,
TRICARE or CHAMPVA programs or on the ability of such Person to engage in the
practice of medicine or to fulfill its obligations as contemplated under the
Loan Documents or any Service Agreement), and, to the best knowledge of the
Borrower, no such Person is subject to any pending but unassessed Medicare,
Medicaid, TRICARE or CHAMPVA claim payment adjustments, except to the extent
that such Person is contesting such assessment in good faith by appropriate
proceedings diligently pursued and has established and will maintain adequate
reserves for such adjustments in accordance with GAAP, except to the extent that
any such payment adjustment, individually or in the aggregate, has not had and
could not reasonably be expected to have or result in a Material Adverse Effect.
3.14 Brokers. No broker or finder acting on behalf of any
Credit Party brought about the obtaining, making or closing of the Loans or the
Related Transactions, and no Credit Party has any obligation to any Person in
respect of any finder's or brokerage fees in connection therewith.
3.15 Intellectual Property. As of the Closing Date, each
Credit Party owns or has rights to use all Intellectual Property necessary to
continue to conduct its business as now or heretofore conducted by it or
proposed to be conducted by it, and each Patent, Trademark, Copyright and
License is listed, together with application or registration numbers, as
applicable, in Disclosure Schedule (3.15) hereto. Each Credit Party conducts its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any manner that, individually or in
the aggregate, has had or could reasonably be expected to have or result in a
Material Adverse Effect.
3.16 Full Disclosure. No information contained in this
Agreement, any of the other Loan Documents, any Projections, or Financial
Statements or other reports from time to time delivered hereunder or any written
statement furnished by Borrower or on its behalf or on behalf of any of its
Subsidiaries or Permitted Joint Venture or, to the knowledge of the Borrower,
any Managed Practice to Agent or any Lender pursuant to the terms of this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made. The Liens granted to Agent, on behalf of itself and
Lenders, pursuant to the Collateral Documents will at all times be fully
perfected first priority
21
Liens in and to the Collateral described therein, subject, as to priority, only
to Permitted Encumbrances.
3.17 Environmental Matters. Except as set forth in Disclosure
Schedule (3.17), as of the Closing Date: the Credit Parties and, to the
knowledge of the Borrower, the Managed Practices (i) are and have been in
compliance with all Environmental Laws; (ii) have obtained, and are in
compliance with, all Environmental Permits required by Environmental Laws for
the operations of their respective businesses as presently conducted or as
proposed to be conducted and all such Environmental Permits are valid,
uncontested and in good standing; (iii) are not involved in operations that are
likely to create, and know of no facts, circumstances or conditions that are
likely to result in, any Environmental Liabilities of such Person, and have not
permitted any current or former tenant or occupant of the Real Estate to engage
in any such operations; (iv) are aware of no Litigation arising under or related
to any Environmental Laws, Environmental Permits or Hazardous Material; (v) have
not been notified that they may be a "potentially responsible party" or received
a request for information under CERCLA or analogous state statutes; (vi) are
aware of no facts, circumstances or conditions that may result in any one of
them being identified as a "potentially responsible party" under CERCLA or
analogous state statutes; and (vii) have provided to Agent copies of all
existing environmental reports, reviews and audits and all written information
pertaining to actual or potential Environmental Liabilities, in each case
relating to any such Person; except for any of the foregoing as individually or
in the aggregate with all such events, have not had and could not reasonably be
expected to have or result in a Material Adverse Effect.
3.18 Insurance. Disclosure Schedule (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each such
policy and a description of the malpractice insurance required to be maintained
by each Managed Practice.
3.19 Deposit and Disbursement Accounts. Disclosure Schedule
(3.19) lists all banks and other financial institutions at which any Credit
Party maintains deposit or other accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number
therefor.
3.20 Agreements and Other Documents. As of the Closing Date,
each Credit Party has provided to Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following agreements
or documents to which it or, to its knowledge, any Managed Practice, is subject
and each of which are listed on Disclosure Schedule (3.20): (a) provider
agreements not terminable by such Person or any Managed Practice within sixty
(60) days following written notice issued by such Person and involving
transactions in excess of $10,000,000 per annum; (b) any lease of Equipment
having a remaining term of one year or longer and requiring aggregate rental and
other payments in excess of $1,000,000 per annum; (c) licenses and permits held
by any of the Credit Parties, the absence of which could be reasonably likely to
have a Material Adverse Effect; (d) instruments or documents evidencing
Indebtedness of any Credit Party and any security interest granted by any Credit
Party with respect thereto; (e) all Service Agreements to which it is or is to
become a party; and (f) instruments and agreements
22
evidencing the issuance of any equity securities, warrants, rights or options to
purchase equity securities of any Credit Party.
3.21 Solvency. Both before and after giving effect to (a) the
Loans and Letter of Credit Obligations to be made or extended on the Closing
Date or such other date as Loans and Letter of Credit Obligations requested
hereunder are made or extended, (b) the disbursement of the proceeds of such
Loans pursuant to the instructions of Borrower, (c) the Refinancing and the
consummation of the other Related Transactions and (d) the payment and accrual
of all transaction costs in connection with the foregoing, each Credit Party is
Solvent.
3.22 Third Party Reimbursement. If the Borrower, any
Subsidiary, any Permitted Joint Venture or any Managed Practice is or has been
audited by Medicare, Medicaid, TRICARE, CHAMPVA or similar governmental Third
Party Payors, to the Borrower's knowledge, (a) none of such audits provides for
adjustments in reimbursable costs or asserts claims for reimbursement or
repayment by such Person of costs and/or payments theretofore made by such
governmental Third Party Payor that, if adversely determined, individually or in
the aggregate, could reasonably be expected to have or result in a Material
Adverse Effect and (b) no Managed Practice has had requests or assertions of
claims for reimbursement or repayment by it of costs and/or payments heretofore
made by any other Third Party Payor that, if adversely determined, individually
or in the aggregate, could reasonably be expected to have or result in a
Material Adverse Effect.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices. The Borrower hereby agrees that from
and after the Closing Date and until the Termination Date, it shall deliver to
Agent and/or Lenders, as required, the Financial Statements, notices,
Projections and other information at the times, to the Persons and in the manner
set forth in Annex D.
4.2 Communication with Accountants. The Borrower authorizes
Agent and, so long as an Event of Default shall have occurred and be continuing,
each Lender, to communicate directly with its and its Subsidiaries' independent
certified public accountants, and authorizes and shall instruct those
accountants to disclose and make available to Agent and each Lender any and all
Financial Statements and other supporting financial documents, schedules and
information relating to any Credit Party or other Subsidiary (including copies
of any issued management letters) with respect to the business, financial
condition and other affairs of any Credit Party or other Subsidiary.
5. AFFIRMATIVE COVENANTS
The Borrower agrees that from and after the date hereof and
until the Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each
Credit Party shall: (a) do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate or partnership existence and its
rights and franchises, except for such rights and franchises, the failure to
preserve which individually or in the aggregate, has not had and could not
reasonably be expected to have or result in a Material Adverse Effect; (b)
continue to
23
conduct its business substantially as now conducted or as otherwise permitted
hereunder; (c) at all times maintain, preserve and protect all of its assets and
properties used or useful in the conduct of its business, and keep the same in
good repair, working order and condition (taking into consideration ordinary
wear and tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices, except for such failures to maintain, preserve, protect,
repair, replace or improve as individually or in the aggregate, has not had and
could not reasonably be expected to have or result in a Material Adverse Effect;
and (d) transact business only in such corporate and trade names as are set
forth in Disclosure Schedule 5.1 or of which the Agent has otherwise received
prior written notice.
5.2 Payment of Obligations. (a) Subject to Section 5.2(b),
each Credit Party shall pay and discharge or cause to be paid and discharged
promptly all Charges payable by it, including (A) Charges imposed upon it, its
income and profits, or any of its property (real, personal or mixed) and all
Charges with respect to tax, social security and unemployment withholding with
respect to its employees, and (B) lawful claims for labor, materials, supplies
and services or otherwise, before any thereof shall become past due; except for
such Charges and claims, the failure to pay which individually or in the
aggregate, has not had and could not reasonably be expected to have or result in
a Material Adverse Effect.
(b) Each Credit Party may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges or claims
described in Section 5.2(a); provided, that (i) adequate reserves with respect
to such contest are maintained on the books of the Borrower, in accordance with
GAAP, (ii) such contest is maintained and prosecuted continuously and with
diligence and operates to suspend collection or enforcement of such Charges or
claims or any Lien in respect thereof, (iii) none of the Collateral becomes
subject to forfeiture or loss as a result of such contest, (iv) no Lien shall be
imposed to secure payment of such Charges or claims other than Permitted
Encumbrances, (v) such Credit Party shall promptly pay or discharge such
contested Charges or claims and all additional charges, interest, penalties and
expenses, if any, and shall deliver to Agent evidence acceptable to Agent of
such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Credit Party or the conditions set forth in this
Section 5.2(b) are no longer met, and (vi) Agent has not advised Borrower in
writing that Agent reasonably believes that nonpayment or nondischarge thereof
could have or result in a Material Adverse Effect.
5.3 Books and Records. Each Credit Party shall keep adequate
books and records with respect to its business activities in which proper
entries, reflecting all financial transactions, are made in accordance with GAAP
and on a basis consistent with the Financial Statements attached as Disclosure
Schedule (3.4(A)).
5.4 Insurance. (a) The Credit Parties shall, at their sole
cost and expense, maintain the policies of insurance described on Disclosure
Schedule (3.18) in form and amounts and with insurers reasonably acceptable to
Agent.
(b) Agent reserves the right at any time upon any change in
any Credit Party's risk profile (including any change in the product mix
maintained by any Credit Party or any laws affecting the potential liability of
such Credit Party) to require additional forms and limits of
24
insurance to, in Agent's reasonable opinion (after consultation with the
Borrower), adequately protect both Agent's and Lender's interests in all or any
portion of the Collateral and to ensure that each Credit Party is protected by
insurance in amounts and with coverage customary for its industry. If reasonably
requested by Agent, each Credit Party shall deliver to Agent from time to time a
report of a reputable insurance broker, reasonably satisfactory to Agent, with
respect to its insurance policies.
(c) Each Credit Party irrevocably makes, constitutes and
appoints Agent (and all officers, employees or agents designated by Agent), so
long as any Event of Default has occurred and is continuing, as each Credit
Party's true and lawful agent and attorney-in-fact for the purpose of making,
settling and adjusting claims under such "All Risk" policies of insurance,
endorsing the name of each Credit Party on any check or other item of payment
for the proceeds of such "All Risk" policies of insurance and for making all
determinations and decisions with respect to such "All Risk" policies of
insurance. Agent shall have no duty to exercise any rights or powers granted to
it pursuant to the foregoing power-of-attorney. After deducting from such
proceeds the expenses, if any, incurred by Agent in the collection or handling
thereof, Agent may, at its option, apply such proceeds to the reduction of the
Obligations in accordance with Section 1.3(c).
5.5 Compliance with Laws. (a) The Borrower and each of its
Subsidiaries shall comply with all federal, state, local and foreign laws and
regulations applicable to it, including those relating to licensing, ERISA and
labor matters, Healthcare Laws and Environmental Laws and Environmental Permits,
except to the extent that the failure to comply, individually or in the
aggregate, has not had and could not reasonably be expected to have or result in
a Material Adverse Effect.
(b) Borrower shall cause each Managed Practice to comply with
all applicable federal, state and local laws, rules, regulations and
restrictions in the conduct of such Managed Practice's business, including
without limitation all laws applicable to the operation of such Managed Practice
in the generation, transportation, treatment, storage, disposal or other
handling of radioactive, medical, biological or hazardous materials or wastes;
except where the failure to comply, individually or in the aggregate, has not
had and could not reasonably be expected to have or result in a Material Adverse
Effect.
5.6 Supplemental Disclosure. From time to time as may be
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of a Default or an Event of
Default), each Credit Party shall supplement each Disclosure Schedule hereto, or
any representation herein or in any other Loan Document, with respect to any
matter hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or which is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall be or be
deemed a waiver of any Default or Event of Default resulting from the matters
disclosed therein, except as
25
consented to by Agent and Requisite Lenders in writing; and (b) no supplement
shall be required as to representations and warranties that relate solely to the
Closing Date.
5.7 Intellectual Property. Each Credit Party shall conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person where such infringement or
interference could reasonably be expected to have or result in a Material
Adverse Effect.
5.8 Environmental Matters. Each Credit Party shall: (a)
conduct its operations and keep and maintain its Real Estate in compliance with
all Environmental Laws and Environmental Permits other than noncompliance which
could not reasonably be expected to have a Material Adverse Effect; and (b)
notify Agent promptly after Borrower becomes aware of any violation of
Environmental Laws or Environmental Permits or any Release by the Borrower or
any of its Restricted Subsidiaries or on or affecting the property of such
Person which could reasonably be expected to have or result in a Material
Adverse Effect.
5.9 Leases. Each Credit Party shall timely and fully pay and
perform such Person's obligations under all leases and other agreements with
respect to each leased location of such Person.
5.10 Compliance with Service Agreements. Each Credit Party
shall use its reasonable best efforts to cause, each Managed Practice to comply
with the terms of the applicable Service Agreement in all material respects.
5.11 Further Assurances. Each Credit Party shall, at the
Borrower's expense and upon request of Agent, duly execute and deliver, or cause
to be duly executed and delivered, to Agent such further instruments and do and
cause to be done such further acts as may be necessary or proper in the
reasonable opinion of Agent to carry out more effectually the provisions and
purposes of this Agreement or any other Loan Document.
5.12 Accreditation and Licensing. (a) The Borrower and each of
its Subsidiaries and each Permitted Joint Venture shall keep itself fully
licensed with all licenses required to operate such Person's business under
applicable law, maintain such Person's qualification to practice medicine in the
manner contemplated under the applicable Service Agreement and for participation
in, and payment under, Medicare, Medicaid, TRICARE, CHAMPVA and any other
federal, state or local governmental program or private program providing for
payment or reimbursement for services rendered by such Person, except to the
extent that the loss or relinquishment of such qualification would not or could
not reasonably be expected to have or result in a Material Adverse Effect. The
Borrower will promptly furnish or cause to be furnished to the Agent copies of
all reports and correspondence it or any Subsidiary sends or receives relating
to any loss or revocation (or threatened loss or revocation) of any
qualification described in this Section.
(b) Borrower shall cause each Managed Practice to: (i) provide
professional services to its patients in compliance with ethical standards,
laws, rules and regulations applicable to the operations of such Managed
Practice; (ii) assure that each physician employee of such Managed Practice has
all required licenses, credentials, approvals and other certifications
26
to perform his or her duties and services for such Managed Practice; and (iii)
maintain all licenses required to operate such Managed Practices' business under
applicable law; except to the extent, with respect to each of clauses (i), (ii),
and (iii) above, where the failure to comply, individually or in the aggregate,
has not had and could not reasonably be expected to have or result in a Material
Adverse Effect.
6. NEGATIVE COVENANTS
The Borrower agrees that, without the prior written consent of
the Requisite Lenders, from and after the date hereof until the Termination
Date:
6.1 Mergers, Subsidiaries, Etc.; Unrestricted Subsidiaries.
(a) No Credit Party shall directly or indirectly, by operation of law or
otherwise: (x) form, acquire or own Stock in any Person except for (1) a
Restricted Subsidiary that complies with the requirements of Section 6.1(b), (2)
an Unrestricted Subsidiary that complies with the requirements of Section
6.1(c), (3) Stock in itself to the extent specifically permitted elsewhere in
this Agreement, (4) Stock that constitutes a permitted investment by virtue of
clauses (A) through (H) of subsection (v) of Section 6.2, or (y) merge with,
consolidate with, acquire all or substantially all of the assets or capital
stock of, or otherwise combine with or acquire, any Person except as permitted
pursuant to Section 6.1(d). Every Subsidiary shall be deemed a Restricted
Subsidiary unless it qualifies as an Unrestricted Subsidiary pursuant to Section
6.1(c).
(b) Each Restricted Subsidiary must at all times meet all of
the following requirements:
(i) it must be wholly owned by a Credit Party;
(ii) it must be a party to the Subsidiary Guaranty and the
Subsidiary Security Agreement; and
(iii) its Stock and any Stock that it owns of any other
Person must have been delivered to the Agent in
pledge as security for the Obligations, except that
no such pledge and delivery shall be required in the
case of Stock owned by a Restricted Subsidiary (as
opposed to Stock issued by such Restricted
Subsidiary) in an Existing Permitted Joint Venture or
Acquired Permitted Joint Venture to the extent that
the organizational documents of such Existing
Permitted Joint Venture or Acquired Permitted Joint
Venture in effect at the time of the acquisition
thereof prohibit the pledge of its Stock.
(c) Each Unrestricted Subsidiary shall be designated as such
by the Borrower and shall constitute either a Permitted Joint Venture or a
Permitted Joint Venture Holding Company. All Unrestricted Subsidiaries are
listed on Schedule 6.1(c). The Borrower may at any time, subject to compliance
with the requirements hereof, redesignate any Unrestricted Subsidiary as a
Restricted Subsidiary, but not vice versa, provided that both before and after
such redesignation (and after giving effect thereto) no Default or Event of
Default shall have occurred and be continuing. The Borrower shall notify the
Agent within 5 days of the creation of any
27
Unrestricted Subsidiary or any change in the status of any Unrestricted
Subsidiary to a Restricted Subsidiary.
(d) Notwithstanding clause (y) of Section 6.1(a), (1) any
Restricted Subsidiary may merge or consolidate with any other Restricted
Subsidiary, (2) any Credit Party may acquire Stock in any Unrestricted
Subsidiary, subject to the requirements of Section 6.1(c), and (3) any Credit
Party may acquire all or substantially all of the assets or 100% of the Stock of
any Person (an "Acquisition Target") that is or owns a radiology medical
practice or radiology medical practice group, medical imaging center or a
business that provides services similar or ancillary to those provided by such a
practice, practice group, imaging center or similar business or that provides
services to such practices, practice groups, imaging centers or similar
businesses (provided that the requirement to acquire all or substantially all of
the assets of any practice or practice group shall not be deemed to require the
acquisition of assets customarily retained by a Managed Practice following such
an acquisition), provided that (in the case of this clause (3) only) such
transaction meets each of the following conditions (each such acquisition that
meets the requirements of this clause (3), including this proviso, is
hereinafter referred to as a "Permitted Acquisition"):
(i) the Agent shall receive at least 15 days prior written
notice of such proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of the Acquisition Target and
the terms of such proposed Permitted Acquisition;
(ii) such Permitted Acquisition shall involve an
Acquisition Target operating solely within one or more of the 50 states
of the United States of America or the District of Columbia, shall be
consensual, shall have been approved by the Acquisition Target's board
of directors or other governing authority or its authorized legal
representative;
(iii) the Agent shall have received on or within 10 days
following the closing date of any such Permitted Acquisition: (A)(1)
with respect to a Practice Acquisition, copies of each of the Service
Agreements, acquisition or merger agreements, professional employment
and non-competition agreements and all other agreements executed in
connection with such acquisition, the terms and conditions of which
agreements shall be substantially consistent with past practices (which
terms and conditions shall include, without limitation, the duration of
the Service Agreements and employment agreements, the termination and
practice repurchase provisions, practice governance provisions and
provisions regarding the assignability as security to the Agent and
which terms and conditions the Borrower shall use its reasonable best
efforts to cause to include limitations on Managed Practice
liabilities), and (2) with respect to other acquisitions, copies of the
acquisition or merger agreements and all other agreements executed in
connection with such acquisition, and (B) such opinions, certificates,
lien search results and other documents as may be reasonably requested
by Agent;
(iv) on or prior to the date of such Permitted
Acquisition, Agent shall have received, in form and substance
satisfactory to Agent, such documents and instruments as it shall
require to evidence the joinder of any new Restricted Subsidiary to
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the Subsidiary Guaranty and Subsidiary Security Agreement and the
perfection of all liens created thereunder; and
(v) any seller notes issued in connection with the
Permitted Acquisition shall be subordinated to the Obligations upon
terms and conditions satisfactory to the Agent; and
(vi) the aggregate consideration (including, without
limitation, but without duplication, cash paid, stock issued or
Indebtedness or liabilities issued or assumed; the "Total
Consideration") to be paid in conjunction with such acquisition shall
not exceed $7,500,000 (except in the case of the acquisition of a PPM
in which case such Total Consideration shall not exceed $2,500,000),
and the Total Consideration to be paid in conjunction with such
acquisition together with all other acquisitions made during the
preceding twelve months, shall not exceed $25,000,000
(vii) at the time of such acquisition and after giving pro
forma effect thereto, no Default or Event of Default shall have
occurred and be continuing;
6.2 Investments; Loans and Advances. Except as otherwise
expressly permitted by this Section 6.2, no Credit Party shall make or permit to
exist any investment in, or make, accrue or permit to exist loans or advances of
money to, any Person, through the direct or indirect lending of money, holding
of securities or otherwise, except that:
(i) (any Credit Party may make loans or advances to
employees for reimbursable expenses in the ordinary course of business
and as permitted in Section 6.4(b);
(ii) the Borrower may make and maintain equity investments
in its Restricted Subsidiaries and may make and maintain loans or
advances to its Restricted Subsidiaries and the Restricted Subsidiaries
may make and maintain loans and advances to the Borrower, provided that
such loans or advances are evidenced by notes and all such equity
investments and loans or advances are pledged to the Agent as security
for the Obligations;
(iii) any Credit Party may make and maintain equity
investments in, and make and maintain loans and advances to, any
Unrestricted Subsidiary provided that no such loans, advances or
investments may be made during the occurrence and continuance of a
Default or Event of Default, and provided further that the aggregate
amount that may be loaned, advanced or invested in Unrestricted
Subsidiaries by the Borrower and its Restricted Subsidiaries, taken as
a whole, shall not exceed $12,000,000 in any Fiscal Year;
(iv) Borrower and its Restricted Subsidiaries may make
Managed Practice Advances to Managed Practices, provided that the
aggregate unpaid amount of such advances does not exceed $5,000,000 at
any time outstanding; and
(v) so long as no Event of Default shall have occurred and
be continuing, Borrower may make investments in the aggregate, in:
29
(A) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof,
(B) commercial paper maturing no more than one year from the
date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc.,
(C) certificates of deposit, maturing no more than one year
from the date of creation thereof, issued by commercial banks
incorporated under the laws of the United States of America, each
having combined capital, surplus and undivided profits of not less than
$300,000,000 and having a senior secured rating of "A" or better by a
nationally recognized rating agency (an "A Rated Bank"),
(D) time deposits, maturing no more than 180 days from the
date of creation thereof with A Rated Banks,
(E) marketable direct obligations issued by a state of the
United States or a political subdivision thereof that is rated A (or
the then equivalent grade) or better by Xxxxx'x Investor Service, Inc.
or Standard & Poor's Corporation and maturing within one (1) year from
the date of acquisition thereof,
(F) funds or similar vehicles which invest exclusively in
obligations of the type described in clauses (A) through (E) above,
(G) secured repurchase agreements relating to investments of
the types described in clauses (A) or (E) above, provided that for any
such repurchase agreement the counterparty thereto is a government
securities dealer designated by the Federal Reserve Bank of New York as
a "reporting dealer" and whose financial statements indicate capital of
at least $50,000,000, and
(H) other investments not exceeding $5,000,000 in the
aggregate at any time outstanding.
6.3 Indebtedness. (a) No Credit Party shall, create, incur,
assume or permit to exist any Indebtedness, except (without duplication):
(i) the Revolving Loan and the other Obligations,
(ii) existing Indebtedness described in Disclosure
Schedule 6.3 and refinancings thereof or amendments or modifications
thereof which do not have the effect of increasing the principal amount
thereof or changing the amortization thereof (other than to extend the
same) and which are otherwise on terms and conditions no less favorable
to any of the Borrower, any Restricted Subsidiary, Agent or any Lender,
as determined by Agent, than the terms of the Indebtedness being
refinanced, amended or modified,
30
(iii) Indebtedness of the Borrower of the type described
in clause (f) of the definition of Indebtedness, but only to the extent
incurred to hedge the interest rate on Indebtedness permitted
hereunder,
(iv) Indebtedness of the Borrower to the seller of an
Acquisition Target incurred in connection with a Permitted Acquisition,
but only to the extent that the terms of such Indebtedness, are
acceptable to the Requisite Lenders in their sole discretion,
(v) Indebtedness consisting of intercompany loans and
advances made by Borrower to any of its Restricted Subsidiaries or by
any wholly owned Restricted Subsidiary to Borrower; provided, that such
loans or advances are evidenced by a note pledged to the Agent as
security for the Obligations,
(vi) Indebtedness that constitutes a primary obligation of
any Permitted Joint Venture that also constitutes a contingent
obligation of the Borrower, in an amount not to exceed at any time
outstanding $5,000,000 (such debt, "Permitted Recourse Debt"),
(vii) Guaranteed Indebtedness consisting of endorsements
of negotiable instruments for deposit or collection in the ordinary
course of business, and
(viii) other Indebtedness in an amount not to exceed at
any time outstanding $28,200,000; provided, that $13,200,000 may be
used only for the purpose of converting existing equipment operating
leases with GE Capital to Capital Leases on terms and conditions
previously disclosed to the Agent by the Borrower.
The Agent and the Lenders agree to respond as promptly as practicable to any
request to approve the terms of any Indebtedness issued in compliance with
clauses (iii) and (v) of this Section 6.3(a).
(b) No Credit Party shall directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations, (ii) Indebtedness which is prepaid in connection with a refinancing
thereof that is permitted pursuant to Section 6.3(a)(ii) or that is prepaid with
common stock and (iii) Indebtedness constituting purchase money Indebtedness
secured by tangible assets or capital leases.
6.4 Employee Loans and Affiliate Transactions. (a) Except as
provided in this Section 6.4, Section 6.2 with respect to advances to employees,
or Section 6.14 with respect to the repurchase of stock from Affiliates, no
Credit Party shall enter into or be a party to any transaction with any
Affiliate except in the ordinary course of business and pursuant to the
reasonable requirements of such Credit Party's business and upon fair and
reasonable terms that are no less favorable to such Credit Party than would be
obtained in a comparable arm's length transaction with a Person not an
Affiliate.
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of the Borrower or a Subsidiary, except loans to
their respective employees in the
31
ordinary course of business in an amount outstanding at any time, that when
added to amounts spent pursuant to Section 6.14(d) over the term of this
Agreement does not exceed $2,000,000.
6.5 Business. No Credit Party shall engage in any business
other than the businesses currently engaged in by it or businesses reasonably
related thereto.
6.6 Intentionally Omitted
6.7 Liens. No Credit Party shall create, incur, assume or
permit to exist any Lien on or with respect to its properties or assets (whether
now owned or hereafter acquired) except for (i) Permitted Encumbrances; (ii)
Liens in existence on the date hereof and summarized on Disclosure Schedule 6.7;
and (iii) other Liens securing Indebtedness permitted by Section 6.3(a)(viii),
provided that, in the case of any Indebtedness described in such section, such
Lien shall extend only to any assets acquired or financed with the proceeds of
such Indebtedness and no other. In addition, no Credit Party shall become a
party to any agreement, note, indenture or instrument, or take any other action,
which would prohibit the creation of a Lien on any of its properties or other
assets in favor of Agent, on behalf of itself and Lenders, as collateral for the
Obligations, except operating leases, Capital Leases or Licenses which prohibit
Liens upon the assets that are subject thereto.
6.8 Sale of Stock and Assets. No Credit Party shall sell,
transfer, convey, assign or otherwise dispose of any of its properties or other
assets, including the Stock of any of such Person's Subsidiaries, other than (a)
the sale of Inventory in the ordinary course of business, (b) transfers of
assets constituting investments permitted pursuant to Section 6.2(v), (c) the
sale, transfer, lease or conveyance of equipment or other fixed assets for fair
value (other than a sale of substantially all of the assets of a Subsidiary
described in clause (e) below which shall be governed by such clause (e)),
provided that the proceeds of such sale, transfer, lease or conveyance are used
to replace the assets disposed of with substantially similar assets within 270
days of such sale, transfer, lease or conveyance; (d) dispositions resulting
from casualty losses, provided that the proceeds thereof are used to purchase
assets substantially similar to the assets disposed of within 270 days of such
disposition; (e) the sale of the Stock or assets of a Restricted Subsidiary for
fair value provided that: (i) in the case of a sale of the Stock or assets of
any Restricted Subsidiary such sale constitutes a sale of 100% of the Stock or
substantially all of the assets of such Person, (ii) in any Fiscal Year (the
"Test Year") the EBITDA during the prior Fiscal Year that was attributable to
all of the Restricted Subsidiaries whose stock or assets were sold during the
Test Year, did not exceed 5% of the EBITDA of the Borrower and its Restricted
Subsidiaries during such prior Fiscal Year, (iii) prior to any such sale, the
Borrower must deliver to the Agent a certificate demonstrating its compliance
with the financial covenants for the four fiscal quarters most recently ended on
a pro forma basis which excludes any EBITDA attributable to the Subsidiary whose
Stock or assets are being sold and any Indebtedness of the Borrower and/or such
Restricted Subsidiary that is being retired or reduced in such transaction (to
the extent reduced or retired); and (f) (i) the sale, transfer, conveyance or
other disposition by the Borrower or such Restricted Subsidiary of equipment,
fixtures or real estate that are obsolete or no longer used or useful in such
Person's business, and (ii) sales, transfers, conveyances or other dispositions
that, but for the failure to redeploy the proceeds in the time required would be
permitted under clauses (c) and (d) above, which in the aggregate ((i) and (ii))
do not have a value that exceeds $3,000,000 in any Fiscal Year.
32
6.9 ERISA. Neither the Borrower nor any of its Restricted
Subsidiaries shall, or shall cause or permit any ERISA Affiliate to, cause or
permit to occur an event which could result in the imposition of a Lien under
the IRC or ERISA.
6.10 Financial Covenants. Borrower shall not breach or fail to
comply with any of the Financial Covenants (the "Financial Covenants") set forth
in Annex E.
6.11 Hazardous Materials. Neither the Borrower nor any of its
Restricted Subsidiaries shall cause or permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of its real property
where such Release would violate in any respect, or form the basis for any
Environmental Liabilities under, any Environmental Laws or Environmental Permits
other than such violations which could not reasonably be expected to have or
result in a Material Adverse Effect.
6.12 Intentionally Omitted.
6.13 Intentionally Omitted.
6.14 Restricted Payments. Neither the Borrower nor any of its
Restricted Subsidiaries shall make any Restricted Payment, except (a)
intercompany loans and advances between Borrower and Subsidiaries to the extent
permitted by Section 6.3 above, (b) dividends and distributions by Subsidiaries
of Borrower paid to Borrower, (c) employee loans permitted under Section 6.4(b)
above, (d) repurchases of Stock of the Borrower from employees and board members
and their estates or members of their immediate families upon the resignation,
termination or death of such employee or board member, provided that the
aggregate amount of all such purchases pursuant to this clause (d) over the term
of this Agreement does not exceed $2,000,000 less the outstanding amount of
loans to employees pursuant to Section 6.4(b) at the time of repurchase and at
the time of such repurchase, no Default or Event of Default shall have occurred
and be continuing, (f) scheduled payments of interest with respect to the
Subordinated Debt, provided that any such payments under this clause (f) may be
made only with in-kind securities (i.e., additional evidences of Subordinated
Debt which are issued on the same terms and conditions, except for principal
amount, as the Subordinated Debt receiving such interest payments, or common
stock), (g) any payment on convertible debt to the extent made with common stock
of the Borrower and (h) cash payments of scheduled interest under the
Subordinated Notes provided that both before and after giving effect to such
scheduled interest payment, no Default or Event of Default shall have occurred
and be continuing.
6.15 Change of Corporate Name or Location. Neither the
Borrower nor any Restricted Subsidiary shall (a) change its corporate name, (b)
change its corporate structure, or (c) change its chief executive office,
principal place of business, corporate offices or the location of its records,
or (d) change its jurisdiction of incorporation or organization, in any case
without at least thirty (30) days prior written notice to Agent together with
all documentation that Agent may require from such Credit Party to evidence the
continuation of the priority and perfection of the Agent's security interest in
the Collateral, and provided that such jurisdiction or new location shall be in
the continental United States.
33
6.16 No Impairment of Intercompany Transfers. Neither the
Borrower nor any of its Restricted Subsidiaries shall directly or indirectly
enter into or become bound by any agreement, instrument, indenture or other
obligation (other than this Agreement and the other Loan Documents) which could
directly or indirectly restrict, prohibit or require the consent of any Person
with respect to the payment of dividends or distributions or the making or
repayment of intercompany loans by a Restricted Subsidiary of Borrower to
Borrower.
6.17 Intentionally Omitted.
6.18 Changes Relating to Subordinated Debt. Neither the
Borrower nor any of its Restricted Subsidiaries shall change or amend the terms
of any Subordinated Debt (or any indenture or agreement in connection therewith)
if the effect of such amendment is to: (a) increase the interest rate on such
Subordinated Debt; (b) change the dates upon which payments of principal or
interest are due on such Subordinated Debt other than to extend such dates; (c)
change any default or event of default or covenant other than to delete or make
less restrictive any default or covenant provision therein, or add any covenant
with respect to such Subordinated Debt; (d) change the redemption or prepayment
provisions of such Subordinated Debt other than to extend the dates therefor or
to reduce the premiums payable in connection therewith; (e) grant any security,
collateral or guaranty to secure payment of such Subordinated Debt; (f) change
the terms upon which such Subordinated Debt is subordinated to the Obligations
or in any respect diminish the rights of the Agent and the Lenders with respect
to such subordination; or (g) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights to the holder of such Subordinated Debt in a manner
adverse to the Borrower, any Restricted Subsidiary, the Agent or any Lender.
6.19 Location of Assets. The aggregate value, as determined by
the Lenders, of all assets owned by any Credit Party which are located on any
premises not operated by a Credit Party shall not exceed $2,000,000 at any time.
7. TERM
7.1 Termination. The financing arrangements contemplated
hereby shall be in effect until the Commitment Termination Date, and the Loans
and all other Obligations shall be automatically due and payable in full on such
date.
7.2 Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Borrower and its Subsidiaries or the
rights of Agent and Lenders relating to any unpaid portion of the Loans or any
other Obligations, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Borrower and its Subsidiaries, and all
rights of Agent and each Lender, all as contained in the Loan Documents, shall
not terminate or expire, but rather shall survive any such termination or
cancellation and shall
34
continue in full force and effect until the Termination Date; provided however,
that in all events the provisions of Section 11, the payment obligations under
Sections 1.12 and 1.13, and the indemnities contained in the Loan Documents
shall survive the Termination Date.
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of
the following events (regardless of the reason therefor) shall constitute an
"Event of Default" hereunder:
(a) Borrower (i) fails to make any payment of principal of the
Loans or the Letter of Credit Obligations when and as due and payable, or (ii)
fails to make any payment of interest or letter of credit fees when and as due
and payable and such failure shall continue for 3 days or (iii) fails to make
any payment on any of the other Obligations within 10 days following Agent's
demand for such payment.
(b) Borrower or any of its Restricted Subsidiaries shall fail
or neglect to perform, keep or observe any of the provisions of Section 1.4,
Section 1.15, Section 6, or any of the provisions set forth in Annex E or Annex
H.
(c) Borrower or any of its Restricted Subsidiaries shall (i)
fail or neglect to perform, keep or observe any of the provisions of clauses
(e), (f), (g), (i) or (j) of Annex D or, (ii) shall fail or neglect to perform,
keep or observe any other provision of Section 4 or any other provision set
forth in Annex D, which failure described in this clause (ii) of this
subparagraph (c) shall remain unremedied for five (5) days or more after notice
from the Agent.
(d) Borrower or any of its Restricted Subsidiaries shall fail
or neglect to perform, keep or observe any other provision of this Agreement or
of any of the other Loan Documents (other than any provision embodied in or
covered by any other clause of this Section 8.1) and the same shall remain
unremedied for thirty (30) days or more following the date that the Borrower
shall have obtained knowledge or received notice thereof.
(e) A default or breach shall occur under any other agreement,
document or instrument to which any Credit Party is a party which is not cured
within any applicable grace period, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness (other than
the Obligations) of such Person in excess of $2,000,000 in the aggregate, or
(ii) causes, or permits any holder of such Indebtedness or a trustee to cause,
Indebtedness or a portion thereof in excess of $2,000,000 in the aggregate to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, regardless of whether such right is exercised, by such holder
or trustee.
(f) Any representation or warranty herein or in any Loan
Document or in any written statement, report, financial statement or certificate
made or delivered to Agent or any Lender by Borrower or any of its Subsidiaries
is untrue or incorrect in any material respect as of the date when made or
deemed made.
(g) Assets of any Credit Party with a fair market value of
$2,000,000 or more shall be attached, seized, levied upon or subjected to a writ
or distress warrant, or come within
35
the possession of any receiver, trustee, custodian or assignee for the benefit
of creditors of any Credit Party and such condition continues for 30 days or
more.
(h) A case or proceeding shall have been commenced against any
Credit Party seeking a decree or order in respect of such Person (i) under Title
11 of the United States Code, as now constituted or hereafter amended or any
other applicable federal, state or foreign bankruptcy or other similar law, (ii)
appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) for such Person or of any substantial part of any such
Person's assets, or (iii) ordering the winding-up or liquidation of the affairs
of any such Person, and such case or proceeding shall remain undismissed or
unstayed for sixty (60) days or more or such court shall enter a decree or order
granting the relief sought in such case or proceeding.
(i) Any Credit Party (i) shall file a petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) shall fail to contest in a timely and appropriate manner or
shall consent to the institution of proceedings thereunder or to the filing of
any such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official) of
such Person or of any substantial part of any such Person's assets, (iii) shall
make an assignment for the benefit of creditors, (iv) shall take any corporate
action in furtherance of any of the foregoing, or (v) shall admit in writing its
inability to, or shall be generally unable to, pay its debts as such debts
become due.
(j) A final judgment or judgments for the payment of money in
excess of $2,000,000 in the aggregate at any time outstanding shall be rendered
against any Credit Party and the same shall not, within thirty (30) days after
the entry thereof, have been discharged or execution thereof stayed or bonded
pending appeal, or shall not have been discharged prior to the expiration of any
such stay.
(k) Any material provision of any Loan Document shall for any
reason cease to be valid, binding and enforceable in accordance with its terms
(or any Credit Party shall challenge the enforceability of any Loan Document or
shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any security interest created under any Loan Document shall cease to be a
valid and perfected first priority security interest or Lien (except as
otherwise permitted herein or therein) in any of the Collateral purported to be
covered thereby other than as a result of the failure of the Agent to timely
file any continuation statement or maintain possession of any collateral under
its control.
(l) Any Change of Control shall occur.
(m) The termination of, or the receipt by any Credit Party of
notice of the termination of, or the occurrence of any event or condition which
would, with the passage of time or the giving of notice or both, constitute an
event of default under or permit the termination of, any one or more Service
Agreements with respect to any Material Managed Practice.
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(n) Any Credit Party or any Managed Practice shall be
prohibited or otherwise restrained from conducting the business theretofor
conducted by it in any manner that has or could reasonably be expected to have
or result in a Material Adverse Effect by virtue of any determination, ruling,
decision, decree or order of any court or Governmental Authority of competent
jurisdiction.
(o) The introduction of, or any change in, any law or
regulation governing or affecting a physician practice management company or any
practice or practice group managed thereby, including without limitation any
Healthcare Laws, which could reasonably be expected to have a Material Adverse
Effect.
(p) A default or breach shall occur under any other agreement,
document or instrument to which any Material Managed Practice is a party which
is not cured within any applicable grace period, and such default or breach,
individually or when aggregated with all such defaults or breaches, could
reasonably be expected to have or result in a Material Adverse Effect.
(q) A "Change of Control" under and as defined in the
Subordinated Notes.
8.2 Remedies. (a) If any Event of Default shall have occurred
and be continuing, or if a Default shall have occurred and be continuing and
Agent or Requisite Lenders shall have determined not to make any Advances or
incur any Letter of Credit Obligations so long as that specific Default is
continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice, suspend this facility with respect to further Advances
and/or the incurrence of further Letter of Credit Obligations whereupon any
further Advances and Letter of Credit Obligations shall be made or extended in
Agent's sole discretion (or in the sole discretion of the Requisite Lenders, if
such suspension occurred at their direction) so long as such Default or Event of
Default is continuing. If any Payment Default shall have occurred and be
continuing, Agent may (and at the written request of Requisite Lenders shall),
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Loans and the Letter of Credit Fees to the Default
Rate.
(b) If any Event of Default shall have occurred and be
continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice, (i) terminate this facility with respect to further
Advances or the incurrence of further Letter of Credit Obligations; (ii) declare
all or any portion of the Obligations, including all or any portion of any Loan
to be forthwith due and payable, and require that the Letter of Credit
Obligations be cash collateralized as provided in Annex B, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrower and each other Credit Party; and (iii) exercise any
rights and remedies provided to Agent under the Loan Documents and/or at law or
equity, including all remedies provided under the Code; provided, however, that
upon the occurrence of an Event of Default specified in Sections 8.1(h) or (i),
all of the Obligations, including the Revolving Loan, shall become immediately
due and payable without declaration, notice or demand by any Person.
8.3 Waivers by Credit Parties. Except as otherwise provided
for in this Agreement or by applicable law, each of Borrower and its
Subsidiaries waives: (a) presentment,
37
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Agent on which any Credit Party may in any way be
liable, and hereby ratifies and confirms whatever Agent may do in this regard,
(b) all rights to notice and a hearing prior to Agent's taking possession or
control of, or to Agent's replevy, attachment or levy upon, the Collateral or
any bond or security which might be required by any court prior to allowing
Agent to exercise any of its remedies, and (c) the benefit of all valuation,
appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations. Subject to the provisions
of paragraphs (a) and (b) below, the Borrower hereby consents to any Lender's
assignment of, and/or sale of participations in, at any time or times, the Loan
Documents, Loans, Letter of Credit Obligations and any Commitment or of any
portion thereof or interest therein, including any Lender's rights, title,
interests, remedies, powers or duties thereunder, whether evidenced by a writing
or not.
(a) Any assignment by a Lender shall (i) require the consent
of Agent and, absent the occurrence and continuance of an Event of Default,
Borrower (which consent, in each case, shall not be unreasonably withheld or
delayed) and the execution of an assignment agreement (an "Assignment Agreement"
substantially in the form attached hereto as Exhibit 9.1(a) and otherwise in
form and substance satisfactory to, and acknowledged by, Agent); (ii) be
conditioned on such assignee Lender representing to the assigning Lender and
Agent that it is purchasing the applicable Loans to be assigned to it for its
own account, for investment purposes and not with a view to the distribution
thereof; (iii) if a partial assignment, be in an amount at least equal to
$5,000,000 and, after giving effect to any such partial assignment, the
assigning Lender shall have retained Commitments in an amount at least equal to
$5,000,000; (iv) include a payment to Agent of an assignment fee of $3,500; and
(v) absent the occurrence and continuance of an Event of Default, be only to an
Eligible Assignee. In the case of an assignment by a Lender under this Section
9.1, the assignee shall have, to the extent of such assignment, the same rights,
benefits and obligations as it would if it were a Lender hereunder. The
assigning Lender shall be relieved of its obligations hereunder with respect to
its Commitments or assigned portion thereof from and after the date of such
assignment. Borrower hereby acknowledges and agrees that any assignment will
give rise to a direct obligation of Borrower to the assignee and that the
assignee shall be considered to be a "Lender". In all instances, each Lender's
liability to make Loans hereunder shall be several and not joint and shall be
limited to such Lender's Pro Rata Share of the applicable Commitment. In the
event Agent or any Lender assigns or otherwise transfers all or any part of a
Note, Agent or any such Lender shall so notify Borrower and Borrower shall, upon
the request of Agent or such Lender, execute new Notes in exchange for the Notes
being assigned. Notwithstanding the foregoing provisions of this Section 9.1(a),
any Lender may at any time pledge or assign all or any portion of such Lender's
rights under this Agreement and the other Loan Documents to a Federal Reserve
Bank; provided, however, that no such pledge or assignment shall release such
Lender from such Lender's obligations hereunder or under any other Loan
Document.
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(b) Any participation by a Lender of all or any part of its
Commitments shall be in an amount at least equal to $5,000,000, and with the
understanding that all amounts payable by Borrower hereunder shall be determined
as if that Lender had not sold such participation, and that the holder of any
such participation shall not be entitled to require such Lender to take or omit
to take any action hereunder except actions directly affecting (i) any reduction
in the principal amount of, or interest rate or Fees payable with respect to,
any Loan in which such holder participates, (ii) any extension of the scheduled
amortization of the principal amount of any Loan in which such holder
participates or the final maturity date thereof, and (iii) any release of all or
substantially all of the Collateral (other than in accordance with the terms of
this Agreement, the Collateral Documents or the other Loan Documents). Solely
for purposes of Sections 1.10, 1.12, 1.13 and 9.8, Borrower acknowledges and
agrees that a participation shall give rise to a direct obligation of Borrower
to the participant and the participant shall be considered to be a "Lender".
Except as set forth in the preceding sentence neither Borrower nor any other
Credit Party shall have any obligation or duty to any participant. Neither Agent
nor any Lender (other than the Lender selling a participation) shall have any
duty to any participant and may continue to deal solely with the Lender selling
a participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no
Lender shall, as between Borrower and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Borrower and each of its Subsidiaries shall assist any
Lender permitted to sell assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and
the delivery of informational materials for, and the participation of management
in meetings with, potential assignees or participants. Borrower and each of its
Subsidiaries shall certify the correctness, completeness and accuracy of all
descriptions of such Credit Party and their affairs contained in any selling
materials provided by it and all other information provided by it and included
in such materials, except that any Projections delivered by Borrower shall only
be certified by Borrower as having been prepared by Borrower in compliance with
the representations contained in Section 3.4(c).
(e) A Lender may furnish any information concerning Borrower
in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants). Each Lender shall obtain
from assignees or participants confidentiality covenants substantially
equivalent to those contained in Section 11.8.
(f) So long as no Event of Default shall have occurred and be
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant, if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under Section 1.13(a),
increased costs under Section 13(b), an inability to fund LIBOR Loans under
Section 1.13(c), or withholding taxes in accordance with Section 1.13(d).
39
9.2 Appointment of Agent. GE Capital is hereby appointed to
act on behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of
Agent and Lenders and no Credit Party nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Credit Party or any other Person. Agent shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents. The duties of Agent shall be mechanical and administrative
in nature and Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Loan Document or otherwise a fiduciary relationship in
respect of any Lender. Neither Agent nor any of its Affiliates nor any of their
respective officers, directors, employees, agents or representatives shall be
liable to any Lender for any action taken or omitted to be taken by it hereunder
or under any other Loan Document, or in connection herewith or therewith, except
for damages caused by its or their own gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders or
all affected Lenders with respect to any act or action (including failure to
act) in connection with this Agreement or any other Loan Document, then Agent
shall be entitled to refrain from such act or taking such action unless and
until Agent shall have received instructions from Requisite Lenders or all
affected Lenders, as the case may be, and Agent shall not incur liability to any
Person by reason of so refraining. Agent shall be fully justified in failing or
refusing to take any action hereunder or under any other Loan Document (a) if
such action would, in the opinion of Agent, be contrary to law or the terms of
this Agreement or any other Loan Document, (b) if such action would, in the
opinion of Agent, expose Agent to Environmental Liabilities or (c) if Agent
shall not first be indemnified to its satisfaction against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against Agent as a result of Agent acting or
refraining from acting hereunder or under any other Loan Document in accordance
with the instructions of Requisite Lenders or all affected Lenders, as
applicable.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its
Affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or the other Loan Documents, except for
damages caused by its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, Agent: (a) may treat the
payee of any Note as the holder thereof until Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to Agent; (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the other
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity,
40
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; and (f) shall incur no liability under or in respect of this Agreement
or the other Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
9.4 GE Capital and Affiliates. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
Person who may do business with or own securities of any Credit Party or any
such Affiliate, all as if GE Capital were not Agent and without any duty to
account therefor to Lenders. GE Capital and its Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital as a
Lender holding disproportionate interests in the Loans and GE Capital as Agent.
9.5 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon Agent or any other Lender and based
on the Financial Statements referred to in Section 3.4(a) and such other
documents and information as it has deemed appropriate, made its own credit and
financial analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the
extent not reimbursed by Borrower and without limiting the obligations of
Borrower hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent in connection therewith;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement and each other Loan Document, to the extent that Agent is not
reimbursed for such expenses by Borrower and its Subsidiaries.
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9.7 Successor Agent. Agent may resign at any time by giving
not less than 30 days' prior written notice thereof to Lenders and Borrower.
Upon any such resignation, the Requisite Lenders shall have the right to appoint
a successor Agent, which successor, absent the occurrence and continuance of any
Event of Default, shall be consented to by the Borrower (such consent not to be
unreasonably withheld or delayed). If no successor Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within 30 days after the resigning Agent's giving notice of resignation, then
the resigning Agent may, on behalf of Lenders, appoint a successor Agent, which
shall be a Lender, if a Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary of
a commercial bank or financial institution if such commercial bank or financial
institution is organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at least
$300,000,000. If no successor Agent has been appointed pursuant to the
foregoing, by the 30th day after the date such notice of resignation was given
by the resigning Agent, such resignation shall become effective and the
Requisite Lenders shall thereafter perform all the duties of Agent hereunder
until such time, if any, as the Requisite Lenders appoint a successor Agent as
provided above. Any successor Agent appointed by Requisite Lenders hereunder
shall be subject to the approval of Borrower, such approval not to be
unreasonably withheld or delayed; provided that such approval shall not be
required if a Default or an Event of Default shall have occurred and be
continuing. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent. Upon the
earlier of the acceptance of any appointment as Agent hereunder by a successor
Agent or the effective date of the resigning Agent's resignation, the resigning
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents, except that any indemnity rights or other rights
in favor of such resigning Agent shall continue. After any resigning Agent's
resignation hereunder, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents. Agent may be removed at the
written direction of the holders (other than Agent) of two-thirds or more of the
Commitments (excluding Agent's Commitment); provided that in so doing, such
Lenders shall be deemed to have waived and released any and all claims they may
have against Agent.
9.8 Setoff and Sharing of Payments. In addition to any rights
now or hereafter granted under applicable law and not by way of limitation of
any such rights, upon the occurrence and during the continuance of any Event of
Default, each Lender and each holder of any Note is hereby authorized at any
time or from time to time, without notice to Borrower or any of its Subsidiaries
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and to apply any and all balances held by it at any of
its offices for the account of Borrower or any of its Subsidiaries (regardless
of whether such balances are then due to Borrower) and any other properties or
assets any time held or owing by that Lender or that holder to or for the credit
or for the account of Borrower or any of its Subsidiaries against and on account
of any of the Obligations which are not paid when due. Any Lender or holder of
any Note exercising a right to set off or otherwise receiving any payment on
account of the Obligations in excess of its Pro Rata Share thereof shall
purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
set off or otherwise received with each other Lender or holder in accordance
with their respective Pro Rata
42
Shares. Borrower and each of its Subsidiaries agree, to the fullest extent
permitted by law, that (a) any Lender or holder may exercise its right to set
off with respect to amounts in excess of its Pro Rata Share of the Obligations
and may sell participations in such amount so set off to other Lenders and
holders and (b) any Lender or holders so purchasing a participation in the Loans
made or other Obligations held by other Lenders or holders may exercise all
rights of set-off, bankers' lien, counterclaim or similar rights with respect to
such participation as fully as if such Lender or holder were a direct holder of
the Loans and the other Obligations in the amount of such participation.
Notwithstanding the foregoing, if all or any portion of the set-off amount or
payment otherwise received is thereafter recovered from the Lender that has
exercised the right of set-off, the purchase of participations by that Lender
shall be rescinded and the purchase price restored without interest.
9.9 Advances; Payments; Non-Funding Lenders; Information.
(a) Advances; Payments. (i) Each Lender shall make the amount
of such Lender's Pro Rata Share of each Advance available to Agent in same day
funds by wire transfer to Agent's account as set forth in Annex F not later than
12:00 noon (New York time) on the requested funding date. After receipt of such
wire transfers (or, in the Agent's sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Agent shall make the requested Advance
to Borrower. All payments by each Lender shall be made without setoff,
counterclaim or deduction of any kind.
(ii) Upon the receipt of any payment from the Borrower with
respect to any Obligation, Agent will advise each Lender by telephone,
or telecopy of the amount of such Lender's Pro Rata Share of principal,
interest and Fees paid for the benefit of Lenders with respect to each
applicable Loan. Provided that such Lender has made all payments
required to be made by it under this Agreement and the other Loan
Documents as of such settlement date, Agent will pay to each Lender
such Lender's Pro Rata Share of principal, interest and Fees paid by
Borrower since the previous settlement date for the benefit of that
Lender on the Loans held by it. Such payments shall be made by wire
transfer to such Lender's account (as specified by such Lender in Annex
F or the applicable Assignment Agreement) not later than 3:00 p.m. (New
York time) on the Business Day of such receipt.
(b) Availability of Lender's Pro Rata Share. Agent may assume
that each Lender will make its Pro Rata Share of each Revolving Credit Advance
available to Agent on each funding date. If such Pro Rata Share is not, in fact,
paid to Agent by such Lender when due, Agent will be entitled to recover such
amount on demand from such Lender without set-off, counterclaim or deduction of
any kind. If any Lender fails to pay the amount of its Pro Rata Share forthwith
upon Agent's demand, Agent shall promptly notify Borrower and Borrower shall
immediately repay such amount to Agent. Nothing in this Section 9.9(b) or
elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Agent to advance funds on behalf of any Lender or to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Borrower may have against any Lender as a result of any default by
such Lender hereunder. To the extent that Agent advances funds to Borrower on
behalf of any Lender and is not reimbursed therefor on the same Business Day as
such Advance
43
is made, Agent shall be entitled to retain for its account all interest accrued
on such Advance until reimbursed by the applicable Lender.
(c) Return of Payments. (i) If Agent pays an amount to a
Lender under this Agreement in the belief or expectation that a related payment
has been or will be received by Agent from Borrower and such related payment is
not received by Agent, then Agent will be entitled to recover such amount from
such Lender on demand without set-off, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received
by Agent under this Agreement must be returned to Borrower or paid to
any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any
other Loan Document, Agent will not be required to distribute any
portion thereof to any Lender. In addition, each Lender will repay to
Agent on demand any portion of such amount that Agent has distributed
to such Lender, together with interest at such rate, if any, as Agent
is required to pay to Borrower or such other Person, without set-off,
counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Lender (such
Lender, a "Non-Funding Lender") to make any Revolving Credit Advance on the date
specified therefor shall not relieve any other Lender (each such other Lender,
an "Other Lender") of its obligations to make such Advance, but neither any
Other Lender nor Agent shall be responsible for the failure of any Non-Funding
Lender to make an Advance to be made by such Non-Funding Lender, and no
Non-Funding Lender shall have any obligation to Agent or any Other Lender for
the failure by such Non-Funding Lender. Notwithstanding anything set forth
herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
"Lender" or a "Lender" (or be included in the calculation of "Requisite Lenders"
hereunder) for any voting or consent rights under or with respect to any Loan
Document.
(e) Dissemination of Information. Agent will use reasonable
efforts to provide Lenders with any notice of Default or Event of Default
received by Agent from, or delivered by Agent to, any Credit Party, with notice
of any Event of Default of which Agent has actually become aware and with notice
of any action taken by Agent following any Event of Default; provided, however,
that Agent shall not be liable to any Lender for any failure to do so, except to
the extent that such failure is attributable to Agent's gross negligence or
willful misconduct. Lenders acknowledge that Borrower is required to provide
Financial Statements to Lenders in accordance with Annex D hereto and agree that
Agent shall have no duty to provide the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of set-off) without
first obtaining the prior written consent of Agent or Requisite Lenders, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and at the
direction or with the consent of Agent.
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10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of Borrower, its
Subsidiaries, Agent, Lenders and their respective successors and assigns
(including, in the case of any Credit Party, a debtor-in-possession on behalf of
such Credit Party), except as otherwise provided herein or therein. Neither the
Borrower nor any of its Subsidiaries may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and the Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by any Credit Party without the prior express written consent
of Agent and the Lenders shall be void. The terms and provisions of this
Agreement are for the purpose of defining the relative rights and obligations of
Borrower, Agent and Lenders with respect to the transactions contemplated hereby
and no Person shall be a third party beneficiary of any of the terms and
provisions of this Agreement or any of the other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2 below. Any letter of interest, commitment letter, fee
letter or confidentiality agreement between any Credit Party and Agent or any
Lender or any of their respective affiliates, predating this Agreement and
relating to a financing of substantially similar form, purpose or effect shall
be superseded by this Agreement.
11.2 Amendments and Waivers. (a) Except for actions expressly
permitted to be taken by Agent, no amendment, modification, termination or
waiver of any provision of this Agreement or any of the Notes or any other Loan
Documents, or any consent to any departure by any Credit Party therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Borrower and by Requisite Lenders, Supermajority Lenders or all Lenders, as
applicable. Except as set forth in clauses (b) and (c) below, all such
amendments, modifications, terminations or waivers requiring the consent of any
Lenders shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver shall,
unless in writing and signed by each Lender, do any of the following: (i)
increase the principal amount of any Lender's Commitment or subject the Lenders
to any additional monetary obligation; (ii) reduce the principal of, rate of
interest on or Fees payable with respect to any Loan or Letter of Credit
Obligations; (iii) extend any scheduled payment date or final maturity date of
the principal amount of any Loan; (iv) waive, forgive, defer, extend or postpone
any payment of interest or Fees; (v) release any Guaranty or all or
substantially all of the Collateral; (vi) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Loans which shall
be required for Lenders or any of them to take any action hereunder; and (vii)
amend or waive this Section 11.2 or the definitions of the term "Requisite
Lenders" or "Supermajority Lenders" insofar as such definitions affect the
substance of this Section 11.2. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent or any
45
L/C Issuer under this Agreement or any other Loan Document shall be effective
unless in writing and signed by Agent or such L/C Issuer, as applicable, in
addition to Lenders required hereinabove to take such action. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver shall be required for Agent to take
additional Collateral pursuant to any Loan Document. No amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the holder of that Note. No notice to or demand on
any Credit Party in any case shall entitle such Credit Party or any other Credit
Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.2 shall be binding upon each holder
of the Notes at the time outstanding and each future holder of the Notes.
(c) If, in connection with any proposed amendment,
modification, waiver or termination (a "Proposed Change") requiring the consent
of all Lenders or the Supermajority Lenders, the consent of Requisite Lenders is
obtained, but the consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not obtained being referred to as a
"Non-Consenting Lender") then, so long as Agent is not a Non-Consenting Lender,
at Borrower's request Agent, or a Person acceptable to Agent, shall have the
right with Agent's consent and in Agent's sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent's request, sell and
assign to Agent or such Person, all of the Commitments of such Non-Consenting
Lender for an amount equal to the principal balance of all Loans held by the
Non-Consenting Lender and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.
(d) Upon indefeasible payment in full in cash and performance
of all of the Obligations (other than indemnification Obligations under Section
1.10), termination of the Commitments and a release of all claims against Agent
and Lenders, and so long as no suits, actions proceedings, or claims are pending
or threatened against any Indemnified Person asserting any damages, losses or
liabilities that are Indemnified Liabilities, Agent shall deliver to Borrower
termination statements, mortgage releases and other documents necessary or
appropriate to evidence the termination of the Liens securing payment of the
Obligations.
11.3 Fees and Expenses. Borrower shall reimburse Agent for all
out-of-pocket expenses incurred in connection with the preparation of the Loan
Documents (including the reasonable fees and expenses of all of its special loan
counsel, advisors, consultants and auditors retained in connection with the Loan
Documents and the Related Transactions and advice in connection therewith).
Borrower shall reimburse Agent (and, with respect to clauses (c) and (d) below,
all Lenders) for all fees, costs and expenses, including the fees, costs and
expenses of counsel or other advisors (including environmental and management
consultants and appraisers) for advice, assistance, or other representation in
connection with:
(a) the forwarding to Borrower or any other Person on behalf
of Borrower by Agent of the proceeds of the Loans;
46
(b) any amendment, modification or waiver of, or consent with
respect to, any of the Loan Documents or advice in connection with the
administration of the Loans made pursuant hereto or its rights hereunder or
thereunder;
(c) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Agent, any Lender, Borrower or any other Person)
in any way relating to the Collateral, any of the Loan Documents or any other
agreement to be executed or delivered in connection therewith or herewith,
whether as party, witness, or otherwise, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against Borrower or any other Person that
may be obligated to Agent by virtue of the Loan Documents; including any such
litigation, contest, dispute, suit, proceeding or action arising in connection
with any work-out or restructuring of the Loans during the pendency of one or
more Events of Default; provided that in the case of reimbursement of counsel
for Lenders other than Agent, such reimbursement shall be limited to one counsel
for all such Lenders;
(d) any attempt to enforce any remedies of Agent or any Lender
against any or all of the Credit Parties or any other Person that may be
obligated to Agent or any Lender by virtue of any of the Loan Documents;
including any such attempt to enforce any such remedies in the course of any
work-out or restructuring of the Loans during the pendency of one or more Events
of Default; provided that in the case of reimbursement of counsel for Lenders
other than Agent, such reimbursement shall be limited to one counsel for all
such Lenders;
(e) any work-out or restructuring of the Loans during the
pendency of one or more Events of Default;
(f) efforts to verify, protect, evaluate and assess and
(following the occurrence of any Event of Default) to appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral; and
(g) quarterly reviews of the accounts receivable of Borrower
and each of its Subsidiaries, including all attorneys' and other professional
and service providers' fees arising from such services, including those in
connection with any appellate proceedings; and all expenses, costs, charges and
other fees incurred by such counsel and others in any way or respect arising in
connection with or relating to any of the events or actions described in this
Section 11.3 shall be payable, on demand, by Borrower to Agent. Without limiting
the generality of the foregoing, such expenses, costs, charges and fees may
include: fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other consultants and paralegals;
court costs and expenses; photocopying and duplication expenses; court reporter
fees, costs and expenses; long distance telephone charges; air express charges;
telegram or telecopy charges; secretarial overtime charges; and expenses for
travel, lodging and food paid or incurred in connection with the performance of
such legal or other advisory services. Notwithstanding the foregoing, all fees,
costs and expenses incurred in connection with paragraph (g) shall not exceed
$10,000 for any quarterly review per Fiscal Quarter unless a Default or Event of
Default has occurred and is continuing at any time during such review.
47
11.4 No Waiver. Agent's or any Lender's failure, at any time
or times, to require strict performance by the Credit Parties of any provision
of this Agreement and any of the other Loan Documents shall not waive, affect or
diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable required Lenders and directed to Borrower specifying
such suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under
this Agreement shall be cumulative and nonexclusive of any other rights and
remedies which Agent or any Lender may have under any other agreement, including
the other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
11.6 Severability. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
11.7 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in any of the
other Loan Documents, the provision contained in this Agreement shall govern and
control.
11.8 Confidentiality. Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts Agent or such Lender
applies to maintain the confidentiality of its own confidential information) to
maintain as confidential all confidential information provided to them by the
Credit Parties and designated as confidential for a period of two (2) years
following receipt thereof, and further agree not to use such confidential
information except in connection with the evaluation and administration of the
credit relationship governed by this Agreement; except that Agent and each
Lender may disclose such information (a) to Persons employed or engaged by Agent
or such Lender in evaluating, approving, structuring or administering the Loans
and the Commitments who agree to be bound by the terms of this Section; (b) to
any bona fide assignee or participant or potential assignee or participant that
has agreed to comply with the covenant contained in this Section 11.8 (and any
such bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described in
clause (a) above); (c) as required or requested by any Governmental Authority or
reasonably believed by Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, in the opinion of
Agent's or such Lender's counsel, required by law; (e) in connection with the
48
exercise of any right or remedy under the Loan Documents or in connection with
any Litigation to which Agent or such Lender is a party; or (f) which ceases to
be confidential through no fault of Agent or such Lender. The Agent and the
Lenders acknowledge that the confidential information may from time to time
include material non-public information relating to the Borrower or its
Subsidiaries, including information regarding potential acquisitions.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF
GEORGIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE)
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. BORROWER HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XX
XXXXXXX XX XXX XXXXX XX XXXXXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER, AGENT AND LENDERS PERTAINING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
PROVIDED, THAT AGENT, LENDERS AND BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THE CITY OF ATLANTA
IN THE STATE OF
GEORGIA AND, PROVIDED, FURTHER NOTHING IN THIS AGREEMENT SHALL
BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF AGENT. BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER
HEREBY WAIVES ANY OBJECTION WHICH SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN
ANNEX G OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE U.S. MAIL, PROPER POSTAGE PREPAID.
11.10 Notices. Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other parties, or whenever any
49
of the parties desires to give or serve upon any other parties any communication
with respect to this Agreement, each such notice, demand, request, consent,
approval, declaration or other communication shall be in writing and shall be
deemed to have been validly served, given or delivered (a) upon the earlier of
actual receipt and three (3) Business Days after deposit in the United States
Mail, registered or certified mail, return receipt requested, with proper
postage prepaid, (b) upon transmission, when sent by telecopy or other similar
facsimile transmission (with such telecopy or facsimile promptly confirmed by
delivery of a copy by personal delivery or United States Mail as otherwise
provided in this Section 11.10), (c) one (1) Business Day after deposit with a
reputable overnight courier with all charges prepaid or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address or facsimile number indicated on Annex G or to
such other address (or facsimile number) as may be substituted by notice given
as herein provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Failure or delay in
delivering copies of any notice, demand, request, consent, approval, declaration
or other communication to any Person (other than Borrower or Agent) designated
on Annex G to receive copies shall in no way adversely affect the effectiveness
of such notice, demand, request, consent, approval, declaration or other
communication.
11.11 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12 Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and separately
constitute one agreement. To the extent executed in counterparts, this Agreement
shall become effective when the Agent shall have notified the Borrower that the
Borrower's signature pages have been accepted by the Agent in Atlanta,
Georgia.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND BORROWER
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14 Press Releases. The Borrower agrees that neither it nor
its Affiliates will in the future issue any press releases or other public
disclosure using the name of GE Capital or its affiliates or referring to this
Agreement, the other Loan Documents without at least two (2)
50
Business Days' prior notice to GE Capital and without the prior written consent
of GE Capital unless (and only to the extent that) Borrower or its Affiliate is
required to do so under law and then, in any event, Borrower or its Affiliate
will consult with GE Capital before issuing such press release or other public
disclosure. The Borrower consents to the publication by Agent or any Lender of a
tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement.
11.15 Reinstatement. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against Borrower for liquidation or reorganization, should Borrower become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of
Borrower's assets, and shall continue to be effective or to be reinstated, as
the case may be, if at any time payment and performance of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
11.16 Advice of Counsel. Each of the parties represents to
each other party hereto that it has discussed this Agreement and, specifically,
the provisions of Sections 11.9 and 11.13, with its counsel.
11.17 No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
11.18 No Third-Party Beneficiary. Borrower's covenants in
Article 5, to cause, or to use its reasonable best efforts to cause, the Managed
Practices to take certain actions, are not intended to: (i) imply that Borrower,
or any of its Subsidiaries, has the power and authority to control a Managed
Practice; (ii) constitute an assumption by Borrower of any obligations of a
Managed Practice to any Person; or (iii) waive or release any claim or cause of
action that Borrower or a Subsidiary may have against a Managed Practice for
failing to comply with any of such Managed Practice's obligations under a
Service Agreement.
[Remainder of Page Intentionally Left Blank]
51
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first written above.
RADIOLOGIX, INC.
By:
---------------------------------------
Title:
------------------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender
Revolving Loan Commitment
($35,000,000): By:
---------------------------------------
Title:
------------------------------------
Signature Page - Amended And Restated Credit Agreement*
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have
(unless otherwise provided elsewhere in the Loan Documents) the following
respective meanings and all section references in the following definitions
shall refer to Sections of the Agreement:
"Account Debtor" shall mean any Person who may become
obligated to any Credit Party under, with respect to, or on account of, an
Account, Chattel Paper or General Intangibles (including a payment intangible).
"Accounts" shall mean all "accounts," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party, including (a)
all accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper, or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all health care insurance receivables and (f) all
collateral security of any kind, given by any Account Debtor or any other Person
with respect to any of the foregoing.
"Acquired Permitted Joint Venture" shall mean any Permitted
Joint Venture acquired by the Borrower or one of its Subsidiaries in an
acquisition permitted pursuant to Section 6.1(a).
"Acquisition Target" shall have the meaning assigned to it in
Section 6.1(a).
"Activation Event" and "Activation Notice" have the meanings
given such terms in Annex H.
"Adjusted EBITDA" shall mean EBITDA of Borrower and its
Subsidiaries plus any amount deducted from earnings with respect to corporate
overhead in determining such consolidated net income.
"Advance" shall mean any Revolving Credit Advance.
A-1
"Affiliate" shall mean, with respect to any Person, (a) each
Person that, directly or indirectly, owns or controls, whether beneficially, or
as a trustee, guardian or other fiduciary, five percent (5%) or more of the
Stock having ordinary voting power in the election of directors of such Persons,
(b) each Person that controls, is controlled by or is under common control with
such Person, and (c) each of such Person's officers, directors, joint venturers
and partners. For the purposes of this definition, "control" of a Person shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that the term
"Affiliate" shall specifically exclude Agent and each Lender.
"Agent" shall mean GE Capital or its successor appointed
pursuant to Section 9.7.
"Agreement" shall mean the Credit Agreement by and among
Borrower, the Credit Parties Signatory thereto, GE Capital, as Agent and Lender
and the other Lenders signatory from time to time to the Agreement.
"Appendices" shall have the meaning assigned to it in the
recitals to the Agreement.
"Applicable Index Margin" shall mean the per annum interest
rate margin from time to time in effect and payable in addition to the Index
Rate applicable to the Revolving Loan, as determined by reference to Section
1.5(a) of the Agreement.
"Applicable L/C Margin" shall mean the per annum fee, from
time to time in effect, payable with respect to outstanding Letter of Credit
Obligations as determined by reference to Section 1.5(a).
"Applicable LIBOR Margin" shall mean the per annum interest
rate margin from time to time in effect and payable in addition to the LIBOR
Rate applicable to the Revolving Loan, as determined by reference to Section
1.5(a) of the Agreement.
"Applicable Margins" shall mean collectively the Applicable
L/C Margin, the Applicable Index Margin, and the Applicable LIBOR Margin.
"Assignment Agreement" shall have the meaning assigned to it
in the second recital paragraph.
"Blocked Accounts" shall have the meaning ascribed to it in
Annex H.
"Blue Cross/Blue Shield" shall mean any and all contracts or
agreements in force between any of the Borrower, any Subsidiary or any Managed
Practice and any Blue Cross/Blue Shield plan.
"Borrower" shall have the meaning assigned to it in the
recitals to the Agreement.
"Borrower Security Agreement" shall mean that certain Amended
and Restated Security Agreement, dated as of the date hereof, by and among
Borrower and Agent, on behalf of itself and Lenders, granting a security
interest in all assets of the Borrower, including without
A-2
limitation the Service Agreements to which the Borrower is a party, all
Subsidiary Stock and all Intercompany Notes.
"Borrowing Availability" shall have the meaning assigned to it
in Section 1.1(a).
"Business Day" shall mean any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed in the
States of New York and/or
Georgia and in reference to LIBOR Loans shall mean any
such day that is also a LIBOR Business Day.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures (by the expenditure of cash or the incurrence of Indebtedness)
by such Person during any measuring period for any fixed assets or improvements
or for replacements, substitutions or additions thereto, that have a useful life
of more than one year and that are required to be capitalized under GAAP.
"Capital Lease" shall mean, with respect to any Person, any
lease of any property (whether real, personal or mixed) by such Person as lessee
that, in accordance with GAAP, would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person.
"Capital Lease Obligation" shall mean, with respect to any
Capital Lease of any Person, the amount of the obligation of the lessee
thereunder that, in accordance with GAAP, would appear on a balance sheet of
such lessee in respect of such Capital Lease.
"Cash Management System" shall have the meaning ascribed to
such term in Section 1.15.
"CHAMPVA" shall mean, collectively, the Civilian Health and
Medical Program of the Department of Veteran Affairs, a program of medical
benefits covering retirees and dependents of former members of the armed
services administered by the United States Department of Veteran Affairs, and
all laws, rules, regulations, manuals, orders, guidelines or requirements
pertaining to such program including (a) all federal statutes (whether set forth
in 38 U.S.C. ss.1713 or elsewhere) affecting such program or, to the extent
applicable to CHAMPVA; and (b) all rules, regulations (including 38 C.F.R.
ss.17.54), manuals, orders and administrative, reimbursement and other
guidelines of all governmental authorities promulgated in connection with such
program (whether or not having the force of law), in each case as the same may
be amended, supplemented or otherwise modified from time to time.
"Change of Control" means:
(1) any sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation) of all or
substantially all of Borrower's assets, on a consolidated basis, in one
transaction or a series of related transactions, to any person (including any
group that is deemed to be a "person");
(2) the consummation of any transaction, including,
without limitation, any merger or consolidation, whereby any person (or any
group that is deemed to be a "person")
A-3
is or becomes the "beneficial owner," directly or indirectly, of more than 35%
of the aggregate voting Stock of the transferee(s) or surviving entity or
entities;
(3) the Continuing Directors cease for any reason to
constitute a majority of Borrower's Board of Directors then in office; or
(4) Borrower adopts a plan of liquidation.
As used in this definition, "person" (including any group that
is deemed to be a "person") has the meaning given by Section 13(d) of the
Securities Exchange Act of 1934, as amended.
"Charges" shall mean all federal, state, county, city,
municipal, local, foreign or other governmental taxes (including taxes owed to
the PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income or gross receipts of the
Borrower, any of its Subsidiaries or any Managed Practice, (d) any such Person's
ownership or use of any properties or other assets, or (e) any other aspect of
any such Person's business.
"Chattel Paper" shall mean any "chattel paper," as such term
is defined in the Code, including electronic chattel paper, now owned or
hereafter acquired by any Credit Party.
"Closing Date" shall mean December 12, 2001.
"Closing Checklist" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as Annex C.
"CMS" is the Centers for Medicare and Medicaid Services
(formerly HCFA), which administers the Medicare and Medicaid Program under the
Department of Health and Human Services (HHS).
"Code" shall mean the Uniform Commercial Code as the same may,
from time to time, be enacted and in effect in the State of
Georgia; provided,
however, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of Agent's or any Lender's security
interest in any Collateral is governed by the Uniform Commercial Code as enacted
and in effect in a jurisdiction other than the State of
Georgia, the term "Code"
shall mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to
such provisions.
"Collateral" shall mean the property covered by the Security
Agreements, the Pledge Agreements and the other Collateral Documents and any
other property, real or personal, tangible or intangible, now existing or
hereafter acquired, that may at any time be or become subject to a security
interest or Lien in favor of Agent, on behalf of itself and Lenders, to secure
the Obligations.
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"Collateral Documents" shall mean the Pledge Agreements, the
Guaranties, the Security Agreement, and all similar agreements entered into
guaranteeing payment of, or granting a Lien upon property as security for
payment of, the Obligations.
"Collection Account" shall mean the following account of
Agent:
GECC/CAF Depository
Account #:00-000-000
Bankers Trust Company
0 Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA #: 000-000-000
Attention: Xxx Xxx
Reference: CFA 6102, Radiologix, Inc.
"Commitments" shall mean (a) as to any Lender, the aggregate
of such Lender's Revolving Loan Commitment as set forth on the signature page
hereof or in the most recent Assignment Agreement executed by such Lender and
(b) as to all Lenders, the aggregate of all Lenders' Revolving Loan Commitments.
"Commitment Termination Date" shall mean the earliest of (a)
December 12, 2004, (b) the date of termination of Lenders' obligations to make
Advances and/or incur Letter of Credit Obligations or permit existing Loans to
remain outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrower of the Loans and the cancellation and return of
all Letters of Credit or the cash collateralization (or stand-by guarantee) of
all Letter of Credit Obligations pursuant to Annex B and the permanent reduction
of the Revolving Loan Commitment to zero dollars ($0), in accordance with the
provisions of Section 1.3(a).
"Compliance Certificate" shall have the meaning assigned to it
in Annex D.
"Concentration Accounts" shall have the meaning ascribed to it
in Annex H.
"Continuing Directors" means during any period of twelve
consecutive months after the Closing Date, individuals who at the beginning of
any such twelve-month period constituted the Board of Directors of Borrower
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of Borrower was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved, including new directors designated in or
provided for in an agreement regarding the merger, consolidation or sale,
transfer or other conveyance, of all or substantially all of the assets of
Borrower, if such agreement was approved by a vote of such majority of
directors).
"Contracts" shall mean all "contracts," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party, in any
event, including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or
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interest, including any agreement relating to the terms of payment or the terms
of performance of any Account.
"Copyright License" shall mean any and all rights now owned or
hereafter acquired by any Credit Party under any written agreement granting any
right to use any Copyright or Copyright registration.
"Copyrights" shall mean all of the following now owned or
hereafter adopted or acquired by any Credit Party: (a) all copyrights and
General Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof, and (b) all reissues, extensions or renewals thereof.
"Credit Parties" shall mean Borrower and each of Borrower's
Restricted Subsidiaries.
"Current Assets" means, with respect to any Person, all
current assets of such Person as of any date of determination calculated in
accordance with GAAP, but excluding cash, cash equivalents and debts due from
Affiliates other than Permitted Joint Ventures.
"Current Liabilities" means, with respect to any Person, all
liabilities that should, in accordance with GAAP, be classified as current
liabilities, and in any event shall include all Indebtedness payable on demand
or within one year from any date of determination without any option on the part
of the obligor to extend or renew beyond such year, and all accruals for federal
or other taxes based on or measured by income and payable within such year, but
shall exclude the current portion of long-term debt required to be paid within
one year and the aggregate outstanding principal balance of the Revolving Loan.
"Default" shall mean any event which, with the passage of time
or notice or both, would, unless cured or waived, become an Event of Default.
"Default Rate" shall have the meaning assigned to it in
Section 1.5(d).
"Deposit Accounts" shall mean all "deposit accounts" as such
term is defined in the Code, now or hereafter held in the name of any Credit
Party.
"Disbursement Accounts" has the meaning ascribed to it in
Annex H.
"Disclosure Schedules" shall mean the Schedules prepared by
Borrower and denominated as such in the Agreement.
"Documents" shall mean all "documents," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located.
"Dollars" or "$" shall mean lawful currency of the United
States of America.
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"EBITDA" shall mean for any fiscal period (calculated without
duplication), an amount equal to (a) consolidated net income of the Borrower and
its Restricted Subsidiaries for such period, minus (b) the sum of (i) income tax
credits, (ii) interest income, (iii) (A) any item of extraordinary gain or (B)
any item of nonrecurring gain from the sale or other disposition of assets
outside the ordinary course of business or from the issuance or sale of any
capital stock, for such period, and (iv) any aggregate net gain during such
period arising from the sale, exchange or other disposition of capital assets by
such Persons (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities), in each case to the extent included in the calculation of
consolidated net income of such Persons for such period in accordance with GAAP,
but without duplication, minus (c) any cash payments made in respect of (A) any
item of extraordinary loss or (B) any item of nonrecurring loss from the sale or
other disposition of assets outside the ordinary course of business or from the
issuance or sale of any capital stock, accrued during a prior period and added
back to EBITDA in such prior period pursuant to clause (d)(v) below, plus (d)
the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii) the
amount of depreciation and amortization for such period, (iv) the amount of any
deduction to consolidated net income as the result of any stock option expense,
and (v) the amount of any item of (A) nonrecurring loss from the sale or other
disposition of assets outside the ordinary course of business or from the
issuance or sale of any capital stock and (B) extraordinary loss, in each case
((A) and (B)) to the extent not paid in cash in such period, in each case ((i)
through (iv)) to the extent included in the calculation of consolidated net
income of the Borrower and its Restricted Subsidiaries for such period in
accordance with GAAP, but without duplication. For purposes of this definition
and without duplication, the following items shall be excluded in determining
consolidated net income of the Borrower and its Restricted Subsidiaries: (1) the
undistributed earnings of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any contractual obligation or
requirement of law applicable to such Subsidiary; (2) EBITDA from any
Unrestricted Subsidiary to the extent not actually received in cash by the
Borrower or a Restricted Subsidiary or to the extent that the aggregate of such
EBITDA actually so received shall exceed 20% of the consolidated EBITDA from the
Borrower and its Restricted Subsidiaries for such period); (3) any restoration
to income of any extraordinary contingency reserve, except to the extent that
provision for such reserve was made out of income accrued during such period;
and (4) any item of expense related to goodwill impairment or valuation losses
as reflected in the Borrower's and its Restricted Subsidiaries' financial
statements.
"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any state thereof, having a combined
capital and surplus of at least $100,000,000; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof, and having a combined capital and surplus of at least
$100,000,000; (iii) a commercial bank organized under the laws of any other
country which is a member of the OECD, or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided, that, such bank is acting through a branch, agency or Affiliate
located in the United States or managed and controlled by a branch, agency or
affiliate located in the United States; (iv) any affiliate of any Lender if such
Affiliate has total assets in excess of $100,0000,000; (v) any insurance company
organized under the laws of the United States or any state thereof, and having
total assets in excess of $100,000,000, (vi) any
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other commercial financial entity having total assets in excess of $100,000,000;
and (vii) any other Person mutually agreed to in writing by the Borrower and the
Agent.
"Environmental Laws" shall mean all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42 U.S.C.
Sections 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.), each as from time to time amended, and any and all regulations
promulgated thereunder, and all analogous state, local and foreign counterparts
or equivalents and any transfer of ownership notification or approval statutes.
"Environmental Liabilities" shall mean, with respect to any
Person, all liabilities, obligations, responsibilities, response, remedial and
removal costs, investigation and feasibility study costs, capital costs,
operation and maintenance costs, losses, damages, punitive damages, property
damages, natural resource damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" shall mean all permits, licenses,
authorizations, certificates, approvals, registrations or other written
documents required by any Governmental Authority under any Environmental Laws.
"Equipment" shall mean mean all "equipment," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located and, in any event, including all such Credit Party's machinery
and equipment, including processing equipment, conveyors, machine tools, data
processing and computer equipment, including embedded software and peripheral
equipment and all engineering, processing and manufacturing equipment, office
machinery, furniture, materials handling equipment, tools, attachments,
accessories, automotive equipment, trailers, trucks, forklifts, molds, dies,
stamps, motor vehicles, rolling stock and other equipment of every kind and
nature, trade fixtures and fixtures not forming a part of real property,
together with all additions and accessions thereto, replacements
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therefor, all parts therefor, all substitutes for any of the foregoing, fuel
therefor, and all manuals, drawings, instructions, warranties and rights with
respect thereto, and all products and proceeds thereof and condemnation awards
and insurance proceeds with respect thereto.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974 (or any successor legislation thereto), as amended from time to time,
and any regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to any of the
Borrower and its Subsidiaries, any trade or business (whether or not
incorporated) which, together with such Person, are treated as a single employer
within the meaning of Sections 414(b), (c), (m) or (o) of the IRC.
"ERISA Event" shall mean, with respect to any Credit Party or
any ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Credit Party or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit
Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h)
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 of
ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt status.
"ESOP" shall mean a Plan which is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"Event of Default" shall have the meaning assigned to it in
Section 8.1.
"Existing Permitted Joint Venture" shall mean any Permitted
Joint Venture listed on Schedule 6.1(b).
"Federal Funds Rate" shall mean, for any day, a floating rate
equal to the weighted average of the rates on overnight federal funds
transactions among members of the Federal Reserve System, as determined by
Agent.
"Federal Reserve Board" shall mean the Board of Governors of
the Federal Reserve System, or any successor thereto.
"Fees" shall mean any and all fees payable to Agent, any L/C
Issuer or any Lender pursuant to the Agreement or any of the other Loan
Documents.
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"Financial Statements" shall mean the consolidated income
statements, statements of cash flows and balance sheets of Borrower delivered in
accordance with Section 3.4 of the Agreement and Annex D to the Agreement.
"Fiscal Month" shall mean any of the monthly accounting
periods of Borrower.
"Fiscal Quarter" shall mean any of the quarterly accounting
periods of Borrower, ending on March 31, June 30, September 30 and December 31
of each year.
"Fiscal Year" shall mean any of the annual accounting periods
of Borrower ending on December 31 of each year.
"Fixed Charges" shall mean for any fiscal period for the
Borrower and its Restricted Subsidiaries, the aggregate of all Interest Expense
paid or accrued by such Persons during such period (excluding any original issue
discount, interest paid in kind or amortized debt discount, to the extent
included in determining Interest Expense), plus scheduled payments of principal
with respect to Indebtedness of the Borrower and its Restricted Subsidiaries
during such period.
"Fixed Charge Coverage Ratio" shall mean for any fiscal
period, the ratio of (a) the sum during such period of (i) EBITDA, minus (ii)
cash payments of income taxes, minus (iii) Capital Expenditures minus (iv)
additions to working capital, plus (v) decreases in working capital minus (vi)
cash investments in Unrestricted Subsidiaries, in each case (ii), (iii), (iv),
(v) and (vi) for the Borrower and its Restricted Subsidiaries, to (b) Fixed
Charges for such period; provided that, in the case of any calculation made for
any test period which ends on a date in 2001, EBITDA shall be calculated for the
number of months ended in such period following December 31, 2000, annualized
and the other items in such computation shall be the actual amounts for the 12
months then ended.
"Fixtures" shall mean any "fixtures" as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect on the Closing Date, consistently
applied. Unless otherwise specifically provided herein, any accounting term used
in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied.
"GE Capital Fee Letter" shall have the meaning assigned to it
in Section 1.6.
"General Intangibles" shall mean all "general intangibles," as
such term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software,
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databases, data, skill, expertise, experience, processes, models, drawings,
materials and records, goodwill (including the goodwill associated with any
Trademark or Trademark License), all rights and claims in or under insurance
policies (including insurance for fire, damage, loss and casualty, whether
covering personal property, real property, tangible rights or intangible rights,
all liability, life, key man and business interruption insurance, and all
unearned premiums), uncertificated securities, choses in action, deposit,
checking and other bank accounts, rights to receive tax refunds and other
payments, rights to receive dividends, distributions, cash, Instruments and
other property in respect of or in exchange for pledged Stock and Investment
Property, rights of indemnification, all books and records, correspondence,
credit files, invoices and other papers, including without limitation all tapes,
cards, computer runs and other papers and documents in the possession or under
the control of such Credit Party or any computer bureau or service company from
time to time acting for such Credit Party.
"Goods" shall mean all "goods" as defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, including
embedded software to the extent included in "goods" as defined in the Code,
manufactured homes, standing timber that is cut and removed for sale and unborn
young of animals.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranteed Indebtedness" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("primary obligations") of any other Person (the "primary
obligor") in any manner, including any obligation or arrangement of such Person
(a) to purchase or repurchase any such primary obligation, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet condition
of the primary obligor, (c) 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 (d) to indemnify the owner of such primary obligation against
loss in respect thereof. The amount of any Guaranteed Indebtedness at any time
shall be deemed to be an amount equal to the lesser at such time of (x) the
stated or determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is made and (y) the maximum amount for which such Person
may be liable pursuant to the terms of the instrument embodying such Guaranteed
Indebtedness; or, if not stated or determinable, the maximum reasonably
anticipated liability (assuming full performance) in respect thereof.
"Guaranties" shall mean, collectively, each Subsidiary
Guaranty and any other guaranty executed by any Guarantor in favor of Agent and
Lenders in respect of the Obligations.
"Guarantors" shall mean each Restricted Subsidiary of
Borrower, and each other Person, if any, which executes a guarantee or other
similar agreement in favor of Agent in connection with the transactions
contemplated by the Agreement and the other Loan Documents.
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"Hazardous Material" shall mean any substance, material or
waste which is regulated by or forms the basis of liability now or hereafter
under, any Environmental Laws.
"Healthcare Law" shall mean, collectively, any and all
federal, state or local laws, rules, regulations, manuals, orders, guidelines
and requirements pertaining to the delivery of services by the Managed Practices
or to the practice of medicine thereby, including without limitation all laws,
rules, regulations, manuals, orders, guidelines and requirements pertaining to
TRICARE, CHAMPVA, Medicaid or Medicare.
"Indebtedness" of any Person shall mean without duplication
(a) all obligations of such Person for borrowed money or for the deferred
purchase price of property or services, but excluding trade accounts payable
incurred and paid in the ordinary course of business that are not deferred or
overdue by more than six (6) months unless being contested in good faith, (b)
all reimbursement and other obligations with respect to letters of credit,
bankers' acceptances and surety bonds, whether or not contingent on matured, (c)
all obligations evidenced by notes, bonds, debentures or similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations, (f) all obligations of such Person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter the
risks of that Person arising from fluctuations in currency values or interest
rates, in each case whether contingent or matured, (g) all equity securities of
such Person subject to repurchase or redemption other than at the sole option of
such Person, (h) all obligations of such Person to purchase securities (or other
property) which arise out of or in connection with the sale of the same or
substantially similar securities (or property), (i) any of the foregoing
referred to above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property or other assets (including accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, and (j) Guaranteed Indebtedness.
"Indemnified Liabilities" shall have the meaning assigned to
it in Section 1.10.
"Index Rate" shall mean, for any day, a floating rate equal to
the higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if The Wall Street Journal ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus fifty (50) basis points per annum. Each change
in any interest rate provided for in the Agreement based upon the Index Rate
shall take effect at the time of such change in the Index Rate.
"Index Rate Loan" shall mean a Loan or portion thereof bearing
interest by reference to the Index Rate.
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"Instruments" shall mean all "instruments," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located, and, in any event, including all certificated securities, all
certificates of deposit, and all promissory notes and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.
"Intellectual Property" shall mean any and all Licenses,
Patents, Copyrights, Trademarks and trade secrets.
"Intercompany Notes" shall have the meaning assigned to it in
Section 6.3.
"Interest Expense" shall mean, with respect to any Person for
any fiscal period, interest expense (whether cash or non-cash) of such Person
determined in accordance with GAAP for such period, including, in any event,
interest expense with respect to any Indebtedness of such Person.
"Interest Payment Date" means (a) as to any Index Rate Loan,
the first Business Day of each Fiscal Quarter to occur while such Loan is
outstanding, (b) as to any LIBOR Loan, the last day of the applicable LIBOR
Period; provided that, in addition to the foregoing, each of (x) the date upon
which all of the Commitments have been terminated and the Loans have been paid
in full and (y) the Commitment Termination Date shall be deemed to be an
"Interest Payment Date" with respect to any interest which is then accrued under
the Agreement.
"Inventory" shall mean all "inventory," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located, and in any event including inventory, merchandise, goods and
other personal property that are held by or on behalf of any Credit Party for
sale or lease or are furnished or are to be furnished under a contract of
service, or that constitute raw materials, work in process, finished goods,
returned goods, or materials or supplies of any kind, nature or description used
or consumed or to be used or consumed in such Credit Party's business or in the
processing, production, packaging, promotion, delivery or shipping of the same,
including all supplies and embedded software.
"Investment Property" shall mean all "investment property" as
such term is defined in the Code now owned or hereafter acquired by any Credit
Party, wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRC" shall mean the Internal Revenue Code of 1986, as
amended, and any successor thereto.
"IRS" shall mean the Internal Revenue Service, or any
successor thereto.
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"L/C Issuer" shall have the meaning assigned to it in Annex B.
"L/C Request" shall have the meaning assigned to it in Annex
B.
"L/C Sublimit" shall have the meaning assigned to it in Annex
B.
"Lenders" shall mean GE Capital, the other Lenders named on
the signature page of the Agreement, and, if any such Lender shall decide to
assign all or any portion of the Obligations, such term shall include such
Lender's assignee.
"Letter of Credit Fee" has the meaning assigned to it in Annex
B.
"Letter of Credit Obligations" shall mean all outstanding
obligations incurred by Agent and Lenders at the request of Borrower, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of a reimbursement agreement or guaranty by Agent with respect to
any Letter of Credit. The amount of such Letter of Credit Obligations shall
equal the maximum amount which may be payable by Agent or Lenders thereupon or
pursuant thereto.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights"
as such term is defined in the Code, now owned or hereafter acquired by any
Credit Party, including rights to payment or performance under a letter of
credit, whether or not such Credit Party, as beneficiary, has demanded or is
entitled to demand payment or performance.
"Letters of Credit" shall mean commercial or standby letters
of credit issued for the account of Borrower by any L/C Issuer, and bankers'
acceptances issued by Borrower, for which Agent and Lenders have incurred Letter
of Credit Obligations.
"LIBOR Business Day" shall mean a Business Day on which banks
in the city of London are generally open for interbank or foreign exchange
transactions.
"LIBOR Loan" shall mean a Loan or any portion thereof bearing
interest by reference to the LIBOR Rate.
"LIBOR Period" shall mean, with respect to any LIBOR Loan,
each period commencing on a LIBOR Business Day selected by Borrower pursuant to
the Agreement and ending one, two or three months thereafter, as selected by
Borrower's irrevocable notice to Agent as set forth in Section 1.5(e); provided
that the foregoing provision relating to LIBOR Periods is subject to the
following:
(a) if any LIBOR Period would otherwise end on a day that is
not a LIBOR Business Day, such LIBOR Period shall be extended to the
next succeeding LIBOR Business Day unless the result of such extension
would be to carry such LIBOR Period into another calendar month in
which event such LIBOR Period shall end on the immediately preceding
LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end two (2) LIBOR Business Days prior
to such date;
A-14
(c) any LIBOR Period pertaining to a LIBOR Loan that begins on
the last LIBOR 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 LIBOR Period) shall end on the last LIBOR Business Day of a
calendar month; and
(d) Borrower shall select LIBOR Periods so that there shall be
no more than seven (7) separate LIBOR Loans in existence at any one
time.
"LIBOR Rate" shall mean for each LIBOR Period, a rate of
interest determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for
the applicable LIBOR Period which appears on Dow Xxxxx Markets Page
3750 as of 11:00 a.m., London time, on the second full LIBOR Business
Day next preceding the first day of each LIBOR Period (unless such date
is not a Business Day, in which event the next succeeding Business Day
will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve system or other
governmental authority having jurisdiction with respect thereto, as now
and from time to time in effect) for Eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such
Board) which are required to be maintained by a member bank of the
Federal Reserve System (such rate to be adjusted to the nearest one
sixteenth of one percent (1/16th of 1%) or, if there is not a nearest
one sixteenth of one percent (1/16th of 1%), to the next highest one
sixteenth of one percent (1/16th of 1%).
If such interest rates shall cease to be available from Dow
Xxxxx Markets, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to Agent and
Borrower.
"License" shall mean any Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any Capital Lease or other
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or comparable law of any
jurisdiction).
"Litigation" shall have the meaning assigned to it in Section
3.13.
"Loans" shall mean the Revolving Loan.
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"Loan Account" shall have the meaning assigned to it in
Section 1.9.
"Loan Documents" shall mean the Agreement, the Notes, the
Collateral Documents, the GE Capital Fee Letter, any agreement among the
Borrower or the Borrower and the Credit Parties and one or more Lenders that
governs an obligation described in clause (f) of the definition of Indebtedness
which obligation is permitted pursuant to Section 6.3(a)(iv), and all other
agreements, instruments, documents and certificates identified in the Closing
Checklist executed and delivered to, or in favor of, Agent and/or Lenders and
including all other pledges, powers of attorney, consents, assignments,
contracts, notices, and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Credit Party, or any employee of any
Credit Party, and delivered to Agent or any Lender in connection with the
Agreement or the transactions contemplated hereby. Any reference in the
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to such Agreement as
the same may be in effect at any and all times such reference becomes operative.
"Managed Practice" shall mean any radiologist, professional
corporation, professional association, partnership or similar Person that
pursuant to a Service Agreement, provides radiology or other related
professional medical services at a medical office, clinic or other facility
operated by the Borrower or any of Borrower's Subsidiaries, or at a hospital or
hospital department with which the Borrower or any Subsidiary (or any Permitted
Joint Venture) has a service contract.
"Managed Practice Advance" shall mean, with respect to any
Managed Practice, on any day, the cumulative excess on such day of (i) amounts
paid to or for the benefit of such Managed Practice (other than amounts paid as
part of the initial acquisition consideration with respect to the assets of such
Managed Practice and amounts paid with respect to practice expenses which are
deducted from the net revenues of the Managed Practice prior to calculating
amounts payable in respect of practice compensation or management fees) over
(ii) accrued net revenues of such Managed Practice.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, assets, operations, prospects or financial or other
condition of the Borrower and its Restricted Subsidiaries taken as a whole or
the industry in which such Persons operate, (b) the business, assets,
operations, prospects or financial or other condition of the Borrower and its
Subsidiaries taken as a whole, or the industry in which they operate, (c)
Borrower's ability to pay any of the Loans or any of the other Obligations in
accordance with the terms of the Agreement, (d) the Collateral or Agent's Liens,
on behalf of itself and Lenders, on the Collateral or the priority of such
Liens, or (e) Agent's or any Lender's rights and remedies under the Agreement
and the other Loan Documents.
"Material Managed Practice" shall mean any Managed Practice
that generates 10% or more of the revenues or the Adjusted EBITDA of the
Borrower and its Subsidiaries on a consolidated basis.
A-16
"Maximum Amount" shall mean, at any particular time, an amount
equal to the Revolving Loan Commitment of all Lenders.
"Medicaid" shall mean, collectively, the health care
assistance program established by Title XIX of the Social Security Act (42
U.S.C. ss.ss.1396 et seq.) and any statutes succeeding thereto, and all laws,
rules, regulations, manuals, orders, guidelines or requirements pertaining to
such program including (a) all federal statutes (whether set forth in Title XIX
of the Social Security Act or elsewhere) affecting such program; (b) all state
statutes and plans for medical assistance enacted in connection with such
program and federal rules and regulations promulgated in connection with such
program; and (c) all applicable provisions of all rules, regulations, manuals,
orders and administrative, reimbursement, guidelines and requirements of all
government authorities promulgated in connection with such program (whether or
not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"Medicaid Certification" shall mean certification of a
facility by CMS or a state agency or entity under contract with CMS that such
healthcare facility fully complies with all the conditions of Medicaid.
"Medicaid Provider Agreement" shall mean an agreement entered
into between a state agency or other entity administering Medicaid in such state
and a health care facility or physician under which the health care facility or
physician agrees to provide services or merchandise for Medicaid patients.
"Medicare" shall mean, collectively, the health insurance
program for the aged and disabled established by Title XVIII of the Social
Security Act (42 U.S.C. ss.ss.1395 et seq.) and any statutes succeeding thereto,
and all laws, rules, regulations, manuals, orders or guidelines pertaining to
such program including (a) all federal statutes (whether set forth in Title
XVIII of the Social Security Act or elsewhere) affecting such program; and (b)
all applicable provisions of all rules, regulations, manuals, orders and
administrative, reimbursement, guidelines and requirements of all governmental
authorities promulgated in connected with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.
"Medicare Certification" shall mean certification of a
facility by CMS or a state agency or entity under contract with CMS that such
healthcare facility fully complies with all conditions for such facility's
participation in Medicare.
"Medicare Provider Agreement" shall mean an agreement entered
into between a state agency or other entity administering Medicare in such state
and a health care facility or physician under which the health care facility or
physician agrees to provide services or merchandise for Medicare patients.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA
Affiliate is making, is obligated to make, has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
A-17
"Net Borrowing Availability" shall mean as of any date of
determination, the lesser of (i) the Maximum Amount and (ii) the Revolving
Credit Availability, in each case less the sum of the Revolving Loan and the
Letter of Credit Obligations then outstanding.
"Notes" shall mean the Revolving Notes.
"Notice of Conversion/Continuation" shall have the meaning
assigned to it in Section 1.5(e).
"Notice of Revolving Credit Advance" shall have the meaning
assigned to it in Section 1.1(a).
"Obligations" shall mean all loans, advances, debts,
liabilities and obligations, for the performance of covenants, tasks or duties
or for payment of monetary amounts (whether or not such performance is then
required or contingent, or such amounts are liquidated or determinable) owing by
any Credit Party to Agent or any Lender, and all covenants and duties regarding
such amounts, of any kind or nature, present or future, whether or not evidenced
by any note, agreement or other instrument, arising under the Agreement or any
of the other Loan Documents. This term includes all principal, interest
(including all interest which accrues after the commencement of any case or
proceeding in bankruptcy after the insolvency of, or for the reorganization of
any Credit Party, whether or not allowed in such proceeding), Fees, Charges,
expenses, attorneys' fees and any other sum chargeable to any Credit Party under
the Agreement or any of the other Loan Documents.
"Original Agent" shall have the meaning assigned to it in the
first Recital paragraph.
"Original Credit Agreement" shall have the meaning assigned to
it in the first Recital paragraph.
"Original Lenders" shall have the meaning assigned to it in
the first Recital paragraph.
"Original Loan Documents" shall have the meaning assigned to
it in the third Recital paragraph.
"Patent License" shall mean rights under any written agreement
now owned or hereafter acquired by any Credit Party granting any right with
respect to any invention on which a Patent is in existence.
"Patents" shall mean all of the following in which any Credit
Party now holds or hereafter acquires any interest: (a) all letters patent of
the United States or any other country, all
A-18
registrations and recordings thereof, and all applications for letters patent of
the United States or any other country, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State, or any other country, and (b)
all reissues, continuations, continuations-in-part or extensions thereof.
"Payment Default" shall have the meaning assigned to such term
in Section 1.5(d).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Permitted Acquisition" shall have the meaning assigned to it
in Section 6.1.
"Permitted Encumbrances" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental Charges
not yet due and payable; (b) pledges or deposits of money securing obligations
under workmen's compensation, unemployment insurance, social security or public
liability laws or similar legislation; (c) pledges or deposits of money securing
bids, tenders, contracts (other than contracts for the payment of money) or
leases to which any Credit Party is a party as lessee made in the ordinary
course of business; (d) deposits of money securing statutory obligations of any
Credit Party; (e) inchoate and unperfected workers', mechanics', landlords', or
similar liens arising in the ordinary course of business, so long as such Liens
attach only to Equipment, Fixtures and/or Real Estate; (f) deposits securing, or
in lieu of, surety, appeal or customs bonds in proceedings to which any Credit
Party is a party; (g) any attachment or judgment lien not constituting an Event
of Default under Section 8.1(j), so long as such Lien attaches only to Real
Estate; (h) zoning restrictions, easements, licenses, or other restrictions on
the use of any Real Estate or other minor irregularities in title (including
leasehold title) thereto, so long as the same do not materially impair the use,
value, or marketability of such Real Estate; (i) presently existing or
hereinafter created Liens in favor of Agent, on behalf of Lenders; and (j) Liens
expressly permitted under clauses (a)(ii) and (iii) of Section 6.7 of the
Agreement.
"Permitted Joint Venture" shall mean a Person: (i) the Stock
of which is held by the Borrower or its Subsidiaries and a hospital or other
health care organization not owned by the Borrower or one of its Subsidiaries,
(ii) over which the Borrower or one of its Subsidiaries has management control,
either as general partner, managing partner, by contract or as holder of the
controlling interest, provided that this clause (ii) shall not apply to MRI of
Kansas, L.P. or MRI of Kansas, Inc., (iii) the sole activity of which is to own,
lease or operate a radiological diagnostic, treatment or imaging center, device,
or department and/or facilities providing services ancillary to such center,
device or department and (iv) is subject to no provision in its organizational
documents or any contract to which it is a party that restricts the payment of
dividends from such entity to the Borrower or any Subsidiary thereof that owns
the Stock of such Permitted Joint Venture, provided that this restriction shall
not prohibit provisions contained in documents governing Indebtedness to Persons
not affiliates of such Permitted Joint Ventures that restrict the payment of
dividends to payments made with funds remaining after the payment of all debt
service on such Indebtedness.
A-19
"Permitted Joint Venture Holding Company" shall mean a
wholly-owned Subsidiary of the Borrower or any Restricted Subsidiary that has no
assets other than (i) minute books, its corporate name and licenses, and other
assets of insignificant value arising incidentally to its existence and (ii) its
Stock and other permitted investments (if any) in a single Permitted Joint
Venture and has no Indebtedness or liabilities except (x) contingent liabilities
in respect of Indebtedness and liabilities of any Permitted Joint Venture in
which it holds Stock and (y) Indebtedness and liabilities to the Borrower and
its Restricted Subsidiaries.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation,
other entity or government (whether federal, state, county, city, municipal,
local, foreign, or otherwise, including any instrumentality, division, agency,
body or department thereof).
"Plan" shall mean, at any time, an employee benefit plan, as
defined in Section 3(3) of ERISA, which any Credit Party maintains, contributes
to or has an obligation to contribute to on behalf of participants who are or
were employed by any Credit Party.
"Pledge Agreements" shall mean the Borrower Pledge Agreement,
the Subsidiary Pledge Agreement and any other pledge agreement entered into
after the Closing Date by any Subsidiary (as required by the Agreement or any
other Loan Document).
"PPM" shall mean a Person (other than a physician or physician
practice group) that, as one of its principal activities, engages in the
business of owning the assets used by, and managing, one or more physicians or
physician practice groups.
"Practice Acquisition" shall mean a Permitted Acquisition that
results in the acquisition by the Borrower or any Restricted Subsidiary of all
or substantially all of the non-medical assets of a physician or physician group
providing radiology or other professional services.
"Prior Lender" shall mean the lenders listed on Schedule A-19
hereto.
"Prior Lender Obligations" shall mean all amounts to be repaid
to the Original Lenders under the Original Credit Agreement on the Closing Date
as set forth on Schedule 1.0 to the Consent and Assignment Agreement.
"Proceeds" shall mean "proceeds," as such term is defined in
the Code, including (a) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to any Credit Party from time to time with respect
to any of the Collateral, (b) any and all payments (in any form whatsoever) made
or due and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the
A-20
Collateral including claims arising out of the loss or nonconformity of,
interference with the use of, defects in, or infringement of rights in, or
damage to, Collateral, (e) all amounts collected on, or distributed on account
of, other Collateral, including dividends, interest, distributions and
Instruments with respect to Investment Property and pledged Stock, and (f) any
and all other amounts, rights to payment or other property acquired upon the
sale, lease, license, exchange or other disposition of Collateral and all rights
arising out of Collateral.
"Pro Forma" means the unaudited consolidated and consolidating
balance sheet of Borrower and its Subsidiaries as of September 30, 2001 after
giving pro forma effect to the Related Transactions.
"Projections" means Borrower's forecasted consolidated: (a)
balance sheets; (b) profit and loss statements; (c) cash flow statements; and
(d) capitalization statements, all consistent with the historical Financial
Statements of Borrower, together with appropriate supporting details and a
statement of underlying assumptions.
"Pro Rata Share" shall mean with respect to all matters
relating to any Lender (a) with respect to all Loans, the percentage obtained by
dividing (i) the aggregate Commitments of that Lender by (ii) the aggregate
Commitments of all Lenders, and (b) with respect to all Loans on and after the
Commitment Termination Date, the percentage obtained by dividing (i) the
aggregate outstanding principal balance of the Loans held by that Lender, by
(ii) the outstanding principal balance of the Loans held by all Lenders.
"Purchase Money Indebtedness" means (i) Indebtedness of the
Borrower and/or its Subsidiaries (including, without limitation, a Capital
Lease) that, within 90 days of such purchase, is incurred to finance part or all
of (but not more than) the purchase price of tangible assets purchased by the
Borrower or such Subsidiary in which no Credit Party had at any time prior to
such purchase any interest other than a security interest and/or (ii)
Indebtedness of an entity acquired by the Borrower or any Subsidiary that is
assumed by the Borrower and/or any of its Subsidiaries in connection with such
acquisition of such entity or that continues following such acquisition (whether
assumed or not), if at the time such Indebtedness was originally incurred by
such acquired entity, such Indebtedness would have qualified as Purchase Money
Debt by virtue of clause (i) if such entity had been a Subsidiary at the time of
such incurrence.
"Qualified Plan" shall mean a Plan which is intended to be
tax-qualified under Section 401(a) of the IRC.
"Real Estate" shall have the meaning assigned to it in Section
3.6.
"Refinancing" shall mean the repayment by Borrower of the
Prior Lender Obligations on the Closing Date.
"Related Transactions" means each borrowing under the
Revolving Loan Commitments on the Closing Date, the Refinancing, the Issuance of
the Senior Notes, the payment of all fees, costs and expenses associated with
all of the foregoing and the execution and delivery of all of the Related
Transactions Documents.
A-21
"Related Transactions Documents" shall mean the Loan Documents
and the documents related to the Senior Notes.
"Release" shall mean any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material in the indoor or outdoor environment, including the movement
of Hazardous Material through or in the air, soil, surface water, ground water
or property.
"Requisite Lenders" shall mean (a) Lenders having more than
fifty-one percent (51%) of the Commitments of all Lenders, or (b) if the
Commitments have been terminated, more than fifty-one percent (51%) of the
aggregate outstanding amount of the Loans and Letter of Credit Obligations.
"Restricted Payment" shall mean (a) the declaration or payment
of any dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets (other than in stock of the
same class as the Stock with respect to which such dividend or distribution is
being made) in respect of a Person's Stock, (b) any payment on account of the
purchase, redemption, defeasance, sinking fund or other retirement of a Person's
Stock or any other payment or distribution made in respect thereof, either
directly or indirectly, (c) any payment or prepayment of principal of, premium,
if any, or interest, fees or other charges on or with respect to, and any
redemption, purchase, retirement, defeasance, sinking fund or similar payment
and any claim for rescission with respect to, any Subordinated Debt; (d) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire Stock
of such Person now or hereafter outstanding; (e) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of, any shares of such Person's Stock or of a claim for
reimbursement, indemnification or contribution arising out of or related to any
such claim for damages or rescission, except to the extent covered by insurance;
and (f) any payment, loan, contribution, or other transfer of funds or other
property to any Stockholder of such Person in its capacity as a Stockholder.
"Restricted Subsidiary" shall mean any Subsidiary of the
Borrower other than an Unrestricted Subsidiary.
"Retiree Welfare Plan" shall mean, at any time, a Plan that is
a "welfare plan" as defined in Section 3(2) of ERISA, that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
"Revolving Credit Advance" shall have the meaning assigned to
it in Section 1.1(a).
"Revolving Credit Availability" shall mean, as of any date of
determination, an amount equal to: 1.15 multiplied by: (a) the consolidated
EBITDA for the most recently preceding twelve (12) months for which financial
statements have been provided pursuant to
A-22
Annex D (computed on a pro forma basis to include the EBITDA of any Permitted
Acquisitions), less (b) the aggregate amount of Revolving Loans outstanding,
less (c) the aggregate principal amount of all other Senior Secured Debt of the
Borrower and its Restricted Subsidiaries; provided that, in the case of any
calculation made for any test period which ends on a date in 2001, EBITDA shall
be calculated for the number of months ended in such period following December
31, 2000, annualized and the other items in such computation shall be the actual
amounts for the 12 months then ended; and, provided further, that the 1.15
multiplier set forth above shall permanently reduce to 1.00 on the first
occasion that the Applicable Margin in effect pursuant to Section 1.5 reduces
based on the performance grid.
"Revolving Lenders" shall mean those Lenders having Revolving
Loan Commitments.
"Revolving Loan" shall mean, at any time, the sum of (i) the
aggregate amount of Revolving Credit Advances outstanding to Borrower plus (ii)
the aggregate Letter of Credit Obligations incurred on behalf of Borrower.
"Revolving Loan Commitment" shall mean (a) as to any Lender,
the commitment of such Lender to make Revolving Credit Advances and/or incur
Letter of Credit Obligations as set forth in the signature page to the Agreement
or in the most recent Assignment Agreement executed by such Lender and (b) as to
all Lenders, the aggregate commitment of all Lenders to make Revolving Credit
Advances and/or incur Letter of Credit Obligations, which aggregate commitment
shall be $35,000,000 on the Closing Date, as such amount may be adjusted, if at
all, from time to time in accordance with the Agreement.
"Revolving Note" shall have the meaning assigned to it in
Section 1.1(b).
"Security Agreements" shall mean the Borrower Security
Agreement, the Subsidiary Security Agreement, and any other security agreement
entered into from time to time by any Credit Party in favor of the Agent on
behalf of itself and the Lenders.
"Senior Secured Debt" shall mean the Obligations and all other
Indebtedness of the Borrower and its Restricted Subsidiaries secured by any Lien
upon any asset of the Borrower or any Restricted Subsidiary.
"Senior Notes" shall mean the $160,000.00, 10.5% Senior Notes
of the Borrower due December 15, 2008.
"Service Agreement" shall mean an agreement between the
Borrower or one or more of Borrower's Subsidiaries and one or more Managed
Practices (or a radiologist, professional corporation, professional association,
partnership, or similar Person that would constitute a "Managed Practice," but
for its failure to satisfy one of the two criteria described in clause (ii) of
the definition of "Managed Practice") pursuant to which the Borrower or such
Subsidiaries agree to provide or arrange for comprehensive management,
administrative and other non-medical support services to such Managed
Practice(s) or other Person(s) in exchange for the payment by the Managed
Practice or such other Person to the Borrower or such Subsidiary of a service
fee.
A-23
"Software" shall mean all "software" as such term is defined
in the Code, now owned "or hereafter acquired by any Credit Party, other than
software embedded in any category of Goods, including all computer programs and
all supporting information provided in connection with a transaction related to
any program.
"Solvent" shall mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including 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 a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities (such as litigation, guarantees and pension
plan liabilities) at any time shall be computed as the amount which, in light of
all the facts and circumstances existing at the time, represents the amount
which can be reasonably be expected to become an actual or matured liability.
"Stock" shall mean all shares, options, warrants, general or
limited partnership interests, membership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity whether voting or nonvoting, including
common stock, preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).
"Subordinated Debt" shall mean (i) the Indebtedness under the
Subordinated Notes, and (ii) any other Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Requisite Lenders in their good faith discretion, as to right and time of
payment and as to any other rights and remedies thereunder.
"Subordinated Notes" shall mean those certain Convertible
Junior Subordinated Promissory Notes, dated as of July 30, 1999, issued pursuant
to that certain Securities Purchase Agreement, dated as of July 30, 1999, and
entered into between the Borrower and BT Capital SBIC, L.P.
"Subsidiary" shall mean, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock of
any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person and/or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of fifty percent (50%) or more of such Stock
whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%). Unless the context otherwise requires, each reference to a
Subsidiary shall be a reference to a Subsidiary of a Borrower.
A-24
"Subsidiary Guaranty" shall mean the Amended and Restated
Subsidiary Guaranty of even date herewith executed by each Restricted Subsidiary
of Borrower in favor of Agent, on behalf of itself and Lenders.
"Subsidiary Security Agreement" shall mean that certain
Amended and Restated Subsidiary Security Agreement, dated as of the date hereof,
by and among each Restricted Subsidiary of the Borrower and Agent, on behalf of
itself and Lenders, granting a security interest in all assets of such
Restricted Subsidiaries, including without limitation the Service Agreements to
which such Restricted Subsidiaries are a party and all stock owned by such
Person and all Intercompany Notes.
"Supporting Obligations" shall mean all "supporting
obligations" as such term is defined in the Code, including letters of credit
and guaranties issued in support of Accounts, Chattel Paper, Documents, General
Intangibles, Instruments, or Investment Property.
"Taxes" shall mean taxes, levies, imposts, deductions, Charges
or withholdings, and all liabilities with respect thereto, excluding taxes
imposed on or measured by the net income or revenue of Agent or a Lender by the
jurisdictions under the laws of which Agent and Lenders are organized or
maintain their principal office, or any political subdivision thereof.
"Termination Date" shall mean the date on which the Loans have
been indefeasibly repaid in full and all other Obligations under the Agreement
and the other Loan Documents have been completely discharged and Letter of
Credit Obligations have been cash collateralized, canceled or backed by stand-by
letters of credit in accordance with Annex B, and Borrower shall not have any
further right to borrow any monies under the Agreement.
"Third Party Payor" shall mean any governmental entity,
insurance company, health maintenance organization, professional provider
organization or similar entity that is obligated to make payments on behalf of
any Account Debtor of any Person.
"Title IV Plan" shall mean an employee pension benefit plan,
as defined in Section 3 (2) of ERISA (other than a Multiemployer Plan), which is
covered by Title IV of ERISA, and which any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"Total Debt Leverage Ratio" shall mean, at any time, the ratio
of: (A) the amount of Indebtedness of Borrower and its Restricted Subsidiaries
outstanding at such time to (B) EBITDA for the most recently ended four Fiscal
Quarters for which financial statements have been delivered (unless such test
period ends during the Fiscal Year ending December 31, 2001, in which event
EBITDA shall be calculated for the number of months in such Fiscal Year shown in
the most recent monthly financial statements required to be delivered to the
Agent pursuant to Annex D and annualized).
"Trademark License" shall mean rights under any written
agreement now owned or hereafter acquired by any Credit Party granting any right
to use any Trademark.
"Trademarks" shall mean all of the following now owned or
hereafter existing or adopted or acquired by any Credit Party: (a) all
trademarks, trade names, corporate names,
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business names, trade styles, service marks, logos, other source or business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, designs and general intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state or territory thereof, or any other country or
any political subdivision thereof; (b) all reissues, extensions or renewals
thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.
"TRICARE" shall mean, collectively, a program of medical
benefits covering former and active members of the uniformed services and
certain of their dependents, financed and administered by the United States
Departments of Defense, Health and Human Services and Transportation, which
program was formerly known as the Civilian Health and Medical Program of the
Uniformed Services (CHAMPUS), and all laws, rules, regulations, manuals, orders
and administrative, reimbursement and other guidelines of all governmental
authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.
"Unfunded Pension Liability" shall mean, at any time, the
aggregate amount, if any, of the sum of (a) the amount by which the present
value of all accrued benefits under each Title IV Plan exceeds the fair market
value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, all determined as of the most recent
valuation date for each such Title IV Plan using the actuarial assumptions for
funding purposes in effect under such Title IV Plan, and (b) for a period of
five (5) years following a transaction which might reasonably be expected to be
covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that
could be avoided by any Credit Party or any ERISA Affiliate as a result of such
transaction.
"Unrestricted Subsidiary" shall mean any Permitted Joint
Venture and any Permitted Joint Venture Holding Company.
All other undefined terms contained in any of the Loan
Documents shall, unless the context indicates otherwise, have the meanings
provided for by the Code as in effect in the State of
Georgia to the extent the
same are used or defined therein. Unless otherwise specified, references in the
Agreement or any of the Appendices to a Section, subsection or clause refer to
such Section, subsection or clause as contained in the Agreement. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the
same may from time to time be amended, restated, modified or supplemented, and
not to any particular section, subsection or clause contained in the Agreement
or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter genders. The words "including",
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental
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Persons, Persons, if any, succeeding to the relevant functions of such Persons;
all references to statutes and related regulations shall include any amendments
of the same and any successor statutes and regulations; and, unless otherwise
specifically provided herein, references to any agreement or contract are to
such agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof. Whenever any provision in
any Loan Document refers to the knowledge (or an analogous phrase) of any Credit
Party, such words are intended to signify that such Credit Party has actual
knowledge or awareness of a particular fact or circumstance.
X-00
XXXXX X (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the
Agreement, Agent and Lenders agree to incur, from time to time prior to the
Commitment Termination Date, upon the request of Borrower and for Borrower's
account, Letter of Credit Obligations by causing Letters of Credit to be issued
(by a bank or other legally authorized Person selected by or acceptable to Agent
in its sole discretion (each, an "L/C Issuer")) for Borrower's account and
guaranteed by Agent; provided, however, that if the L/C Issuer is a Lender, then
such Letters of Credit shall not be guaranteed by Agent but rather each Lender
shall, subject to the terms and conditions hereinafter set forth, purchase (or
be deemed to have purchased) risk participations in all such Letters of Credit
issued with the written consent of Agent, as more fully described in paragraph
(b)(ii) below. The aggregate amount of all such Letter of Credit Obligations
shall not at any time exceed the least of (i) Ten Million Dollars
($10,000,000.00) (the "L/C Sublimit"), (ii) the Maximum Amount less the
aggregate outstanding principal balance of the Revolving Credit Advances, and
(iii) the Revolving Credit Availability less the aggregate outstanding principal
balance of the Revolving Credit Advances. No such Letter of Credit shall have an
expiry date which is more than one year following the date of issuance thereof,
and neither Agent nor Lenders shall be under any obligation to incur Letter of
Credit Obligations in respect of, or purchase risk participations in, any Letter
of Credit having an expiry date which is later than the Commitment Termination
Date.
(b) (i) Advances Automatic; Participations. In the event that
Agent or any Lender shall make any payment on or pursuant to any Letter of
Credit Obligation, such payment shall then be deemed automatically to constitute
a Revolving Credit Advance under Section 1.1(a) of the Agreement regardless of
whether a Default or Event of Default shall have occurred and be continuing and
notwithstanding Borrower's failure to satisfy the conditions precedent set forth
in Section 2, and each Lender shall be obligated to pay its Pro Rata Share
thereof in accordance with the Agreement. The failure of any Lender to make
available to Agent for Agent's own account its Pro Rata Share of any such
Revolving Credit Advance or payment by Agent under or in respect of a Letter of
Credit shall not relieve any other Lender of its obligation hereunder to make
available to Agent its Pro Rata Share thereof, but no Lender shall be
responsible for the failure of any other Lender to make available such other
Lender's Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for Borrower to incur
Revolving Credit Advances as contemplated by paragraph (b)(i) above
because of an Event of Default described in Section 8.1(h) or (i) or
otherwise or if it shall be illegal or unlawful for any Lender to be
deemed to have assumed a ratable share of the reimbursement obligations
owed to an L/C Issuer, or if the L/C Issuer is a Lender, then (i)
immediately and without further action whatsoever, each Lender shall be
deemed to have irrevocably and unconditionally purchased from Agent (or
such L/C Issuer, as the case may be) an undivided interest and
participation equal to such Lender's Pro Rata Share (based on the
Revolving Loan Commitments) of the Letter of Credit Obligations in
respect of all
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Letters of Credit then outstanding and (ii) thereafter, immediately
upon issuance of any Letter of Credit, each Lender shall be deemed to
have irrevocably and unconditionally purchased from Agent (or such L/C
Issuer, as the case may be) an undivided interest and participation in
such Lender's Pro Rata Share (based on the Revolving Loan Commitments)
of the Letter of Credit Obligations with respect to such Letter of
Credit on the date of such issuance. Each Lender shall fund its
participation in all payments or disbursements made under the Letters
of Credit in the same manner as provided in the Agreement with respect
to Revolving Credit Advances.
(c) Cash Collateral. If Borrower is required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement prior
to the Commitment Termination Date, Borrower will pay to Agent for the benefit
of Lenders cash or cash equivalents acceptable to Agent ("Cash Equivalents") in
an amount equal to 105% of the maximum amount then available to be drawn under
each applicable Letter of Credit outstanding. Such funds or Cash Equivalents
shall be held by Agent in a cash collateral account (the "Cash Collateral
Account") maintained at a bank or financial institution acceptable to Agent. The
Cash Collateral Account shall be in the name of Borrower and shall be pledged
to, and subject to the control of, Agent, for the benefit of Agent and Lenders,
in a manner satisfactory to Agent. Borrower hereby pledges and grants to Agent,
on behalf of Lenders, a security interest in all such funds and Cash Equivalents
held in the Cash Collateral Account from time to time and all proceeds thereof,
as security for the payment of all amounts due in respect of the Letter of
Credit Obligations and other Obligations, whether or not then due. The
Agreement, including this Annex B, shall constitute a security agreement under
applicable law.
If any Letter of Credit Obligations, whether or not then due
and payable, shall for any reason be outstanding on the Commitment Termination
Date, Borrower shall either (i) provide cash collateral therefor in the manner
described above, or (ii) cause all such Letters of Credit and guaranties thereof
to be canceled and returned, or (iii) deliver a stand-by letter (or letters) of
credit in guarantee of such Letter of Credit Obligations, which stand-by letter
(or letters) of credit shall be of like tenor and duration as, and in an amount
equal to 105% of the aggregate maximum amount then available to be drawn under,
the Letters of Credit to which such outstanding Letter of Credit Obligations
relate and shall be issued by a Person, and shall be subject to such terms and
conditions, as are be satisfactory to Agent in its sole discretion.
From time to time after funds are deposited in the Cash
Collateral Account by Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held in
the Cash Collateral Account to the payment of any amounts, in such order as
Agent may elect, as shall be or shall become due and payable by Borrower to
Lenders with respect to such Letter of Credit Obligations of Borrower and, upon
the satisfaction in full of all Letter of Credit Obligations of Borrower, to any
other Obligations then due and payable.
Neither Borrower nor any Person claiming on behalf of or
through Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrower to Lenders in respect thereof, any funds remaining in the
Cash Collateral Account shall be applied to other Obligations when due and owing
and upon payment
B-2
in full of such Obligations, any remaining amount shall be paid to Borrower or
as otherwise required by law; provided that, prior to the Commitment Termination
Date and absent the occurrence and continuation of an Event of Default, any
amounts remaining in the Cash Collateral account upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by Borrower
to Lenders in respect thereof shall be returned to the Borrower upon the
Borrower's request therefor.
(d) Fees and Expenses. Borrower agrees to pay to Agent for the
benefit of Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (x) all costs and expenses incurred by Agent or
any Lender on account of such Letter of Credit Obligations, and (y) for each
during which any Letter of Credit Obligation shall remain outstanding, a fee
(the "Letter of Credit Fee") in an amount equal to the Applicable L/C Margin
from time to time in effect multiplied by the daily average the amount undrawn
under the Letter of Credit for such. The Letter of Credit Fee shall be paid to
Agent for the benefit of the Lenders in arrears, on the first day of each month.
In addition, Borrower shall pay to any L/C Issuer, on demand, such fees
(including all per annum fees), charges and expenses of such L/C Issuer in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.
(e) Request for Incurrence of Letter of Credit Obligations.
Borrower shall give Agent at least five (5) Business Days prior written notice
(the "L/C Request") requesting the incurrence of any Letter of Credit
Obligation, specifying the date such Letter of Credit Obligation is to be
incurred, identifying the beneficiary to which such Letter of Credit Obligation
relates and describing the nature of the transactions proposed to be supported
thereby. The notice shall be accompanied by the form of the Letter of Credit
(which shall be acceptable to the L/C Issuer) to be guarantied. Notwithstanding
anything contained herein to the contrary, Letter of Credit applications by
Borrower and approvals by Agent may be made and transmitted pursuant to
electronic codes and security measures mutually agreed upon and established by
and among Borrower, Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrower to
reimburse Agent and Lenders for payments made with respect to any Letter of
Credit Obligation shall be absolute, unconditional and irrevocable, without
necessity of presentment, demand, protest or other formalities, and the
obligations of each Lender to make payments to Agent with respect to Letters of
Credit shall be unconditional and irrevocable. Such obligations of Borrower and
Lenders shall be paid strictly in accordance with the terms hereof under all
circumstances including the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit or the Agreement or the other Loan Documents or any other
agreement;
(ii) the existence of any claim, set-off, defense or other
right which Borrower or any of its Affiliates or any Lender may at any
time have against a beneficiary or any transferee of any Letter of
Credit (or any Persons or entities for whom any such transferee may be
acting), Agent, any Lender, or any other Person, whether in connection
with the Agreement, the Letter of Credit, the transactions contemplated
herein or therein
B-3
or any unrelated transaction (including any underlying transaction
between Borrower or any of its Affiliates and the beneficiary for which
the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly provided
in paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of
Credit or guaranty thereof against presentation of a demand, draft or
certificate or other document which does not comply with the terms of
such Letter of Credit or such guaranty;
(v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
(vi) the fact that a Default or an Event of Default shall have
occurred and be continuing.
(g) Indemnification; Nature of Lenders' Duties. (i) In
addition to amounts payable as elsewhere provided in the Agreement, Borrower
hereby agrees to pay and to protect, indemnify, and save harmless Agent and each
Lender from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including attorneys' fees and allocated
costs of internal counsel) which Agent or any Lender may incur or be subject to
as a consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or guaranty thereof, or (B) the failure of Agent or any Lender seeking
indemnification or of any L/C Issuer to honor a demand for payment under any
Letter of Credit or guaranty thereof as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent resulting from the
gross negligence or willful misconduct of Agent or such Lender (as finally
determined by a court of competent jurisdiction).
(ii) As between Agent and any Lender and Borrower, Borrower
assumes all risks of the acts and omissions of, or misuse of any Letter
of Credit by beneficiaries of any Letter of Credit. In furtherance and
not in limitation of the foregoing, to the fullest extent permitted by
law neither Agent nor any Lender shall be responsible: (A) for the
form, validity, sufficiency, accuracy, genuineness or legal effect of
any document issued by any party in connection with the application for
and issuance of any Letter of Credit, even if it should in fact prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason other than, only in the case of a purported
transfer of the entire Letter of Credit and not a right to draw or
receive payment thereunder, the fact that the instrument purports to
transfer a Letter of Credit which states on its face that it is
non-transferable; (C) for failure of the beneficiary of any Letter of
Credit to comply fully with conditions required in order to demand
payment under such Letter of Credit; provided that, in the case of any
payment by Agent or L/C Issuer under any Letter of Credit or
B-4
guaranty thereof, Agent or such L/C Issuer, as the case may be, shall
be liable to the extent such payment was made as a result of its gross
negligence or willful misconduct (as finally determined by a court of
competent jurisdiction) in determining that the demand for payment
under such Letter of Credit or guaranty thereof complies on its face
with any applicable requirements for a demand for payment under such
Letter of Credit or guaranty thereof; (D) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (E) for errors in interpretation of technical terms; (F) for
any loss or delay in the transmission or otherwise of any document
required in order to make a payment under any Letter of Credit or
guaranty thereof or of the proceeds thereof; (G) for the credit of the
proceeds of any drawing under any Letter of Credit or guaranty thereof;
and (H) for any consequences arising from causes beyond the control of
Agent or any Lender. None of the above shall affect, impair, or prevent
the vesting of any of Agent's or any Lender's rights or powers
hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to
expand any waivers, covenants or indemnities made by Borrower in favor
of any L/C Issuer in any letter of credit application, reimbursement
agreement or similar document, instrument or agreement between Borrower
and such L/C Issuer.
(iv) Nothing contained herein shall waive, release or limit
the Borrower's rights, claims and remedies as against any beneficiary
of a Letter of Credit.
B-5
ANNEX C (SECTION 2.1(a))
TO
CREDIT AGREEMENT
SCHEDULE OF ADDITIONAL CLOSING DOCUMENTS
In addition to, and not in limitation of, the conditions described in Section
2.1 of the Agreement, pursuant to Section 2.1(a), the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to the
initial Advance following the Closing Date (each capitalized term used but not
otherwise defined herein shall have the meaning ascribed thereto in Annex A to
the Agreement):
A. Appendices. All Appendices to the Agreement updated to the Closing
Date, in form and substance satisfactory to Agent.
B. Revolving Notes. Duly executed originals of the Revolving Notes for
each applicable Lender, dated the Closing Date.
C. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect.*
D. Security Interests and Code Filings. Evidence satisfactory to Agent
that Agent (for the benefit of itself and Lenders) has a valid and perfected
first priority security interest in the Collateral, including (i) such documents
duly executed by each Credit Party (including financing statements under the
Code and other applicable documents under the laws of any jurisdiction with
respect to the perfection of Liens) as Agent may request in order to perfect its
security interests in the Collateral (including such additional filings as may
be deemed necessary or reasonably appropriate in the opinion of the Agent to
comply with recent revisions to Article 9 of the Code) and (ii) copies of Code
search reports listing all effective financing statements that name any Borrower
or any Subsidiary as debtor, together with copies of such financing statements,
none of which shall cover the Collateral, except for those relating to the
Permitted Encumbrances permitted to be prior to the Agent's security interest
pursuant to the terms hereof.
E. Assignment Agreement. Copies of the duly executed Assignment
Agreement, by and between all parties to the Original Credit Agreement
evidencing the paydown of the prior Lender Obligations, reducing the Commitments
and assigning the same to GE Capital, in form and substance satisfactory to
Agent, manually signed by the Prior Lenders.
F. Subsidiary Guaranties. Guaranties executed by each Restricted
Subsidiary in favor of Agent, for the benefit of Lenders.
G. Initial Notice of Revolving Credit Advance. Duly executed originals
of a Notice of Revolving Credit Advance, dated the date of the initial Advance
following the Closing Date,
----------
C-1
with respect to the initial Revolving Credit Advance to be requested by Borrower
after the Closing Date.
H. Charter and Bylaws. For Borrower and each of its Restricted
Subsidiaries, a certificate from an authorized officer thereof as to such
Person's charter and all amendments thereto and its Bylaws and all amendments
thereto, stating that since the date of the last delivery thereof to the Agent,
there have been no changes thereto that are not reflected in such certificates.
I. Good Standing Certificates. Good standing certificates for Borrower
and each of its Restricted Subsidiaries in their respective state of
incorporation and good standing certificates and certificates of qualification
to conduct business in each jurisdiction where their respective ownership or
lease of property or the conduct of their respective business requires such
qualification, each dated a recent date prior to the Closing Date and certified
by the applicable Secretary of State or other authorized Governmental Authority.
J. Resolutions. For Borrower and each of its Restricted Subsidiaries, a
certificate from an authorized officer thereof as to resolutions of such
Person's Board of Directors (or other governing body), approving and authorizing
the execution, delivery and performance of the Loan Documents to which such
Person is a party and the transactions to be consummated in connection
therewith, each certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being in full force and effect without
any modification or amendment.
K. Incumbency Certificates. For Borrower and each of its Restricted
Subsidiaries, signature and incumbency certificates of the officers of each such
Person executing any of the Loan Documents, certified as of the Closing Date by
such Person's corporate secretary or an assistant secretary as being true,
accurate, correct and complete.
L. Opinions of Counsel. Duly executed originals of opinions of Xxxxxx
and Xxxxx, L.L.P. counsel for Borrower and its Restricted Subsidiaries, together
with any local counsel opinions requested by Agent, each in form and substance
satisfactory to the Lenders, dated the Closing Date. Each Credit Party,
authorizes and directs such counsel to address its opinion to Agent, on behalf
of Lenders, and to include in such opinion or in a letter accompanying such
opinion an express statement to the effect that Agent and Lenders are authorized
to rely on such opinion.
M. Pledge Agreements. Duly executed originals of each of the Pledge
Agreements accompanied by (as applicable and to the extent not previously
provided to the Agent) (a) share certificates representing all of the
outstanding Stock being pledged pursuant to such Pledge Agreement and stock
powers for such share certificates executed in blank and (b) the original
Intercompany Notes and other instruments evidencing Indebtedness being pledged
pursuant to such Pledge Agreement, duly endorsed in blank.
N. Security Agreements. Duly executed originals of the Security
Agreements accompanied by all schedules thereto.
O. Officer's Certificate. Agent shall have received duly executed
originals of a certificate of the Chief Executive Officer and Chief Financial
Officer of Borrower, dated the
C-2
Closing Date, stating that, since September 30, 2001 (a) no event or condition
has occurred or is existing which could reasonably be expected to have a
Material Adverse Effect; (b) there has been no material adverse change in the
industry in which Borrower operates; (c) no Litigation has been commenced which,
if successful, would have a Material Adverse Effect or could challenge any of
the transactions contemplated by the Agreement and the other Loan Documents; (d)
there have been no Restricted Payments made by Borrower or any of its Restricted
Subsidiaries; and (e) there has been no material increase in liabilities,
liquidated or contingent, and no material decrease in assets of Borrower or any
of its Restricted Subsidiaries.
P. Audited Financials; Financial Condition. Agent shall have received a
certificate of the Chief Executive Officer and/or the Chief Financial Officer of
Borrower, based on the Pro Forma and Projections provided or referred to in
Section 3.4, to the effect that (a) Borrower and each of its Restricted
Subsidiaries will be Solvent upon the consummation of the Related Transactions
and the transactions contemplated herein; (b) the Pro Forma fairly presents the
financial condition of Borrower and each of its Restricted Subsidiaries as of
the date thereof after giving effect to the transactions contemplated by the
Loan Documents and the Related Transactions; (c) the Projections are based upon
estimates and assumptions stated therein, all of which Borrower believes to be
reasonable and fair in light of current conditions and current facts known to
Borrower and, as of the Closing Date, reflect Borrower's good faith and
reasonable estimates of its future financial performance and of the other
information projected therein for the period set forth therein; and (d)
containing such other statements with respect to the solvency of Borrower and
each of its Restricted Subsidiaries and matters related thereto as Agent shall
request.
Q. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as Agent may, in its sole discretion, request.
C-3
ANNEX D (SECTION 4.1(a))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrower shall deliver or cause to be delivered to Agent or to
Agent and Lenders, as indicated, the following:
(a) (i) Monthly Financials. To Agent, within thirty (30) days
after the end of each Fiscal Month commencing with the first full Fiscal Month
elapsed following the Closing Date (but in the case of such month including the
results since the Closing Date), (A) financial information regarding Borrower
and its Subsidiaries, certified by the Chief Financial Officer of Borrower,
consisting of: (1) unaudited consolidated balance sheets as of the close of such
Fiscal Month and the related consolidated statements of income for that portion
of the Fiscal Year ending as of the close of such Fiscal Month; and (2)
unaudited consolidated statements of income for such Fiscal Month, and (B)
regarding each Subsidiary, unaudited statements of income for such Managed
Practice for such Fiscal Month. Such financial information shall be accompanied
by the certification of the Chief Financial Officer of Borrower (a "Monthly
Compliance Certificate") that any information presented is true, correct and
complete in all material respects and that there was no Default or Event of
Default in existence as of such time or, if a Default or Event of Default shall
have occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default and such Monthly Compliance
Certificate shall also contain a statement in reasonable detail showing the
calculations used in determining compliance with each financial covenant set
forth on Annex E which is tested on a monthly basis;
(ii) Quarterly Certificate. To Agent, within forty-five
(45) days after the end of each Fiscal Quarter a statement in reasonable detail
(each, a "Quarterly Compliance Certificate") showing the calculations used in
determining compliance with each financial covenant set forth on Annex E which
is tested on a quarterly basis, the calculations used in determining the
applicable margins pursuant to Section 1.5 (a) and Revolving Credit Availability
as of the last day of such quarter.
(b) Budget. To Agent, as soon as available, but not later than
thirty (30) days after the end of each Fiscal Year, an annual operating plan for
Borrower, approved by the Board of Directors of Borrower, for the following
year, which will include a statement of all of the material assumptions on which
such plan is based, will include quarterly balance sheets and a quarterly budget
for the following year and will integrate sales, operating expenses, operating
profit, EBITDA and cash flow projections all prepared on the same basis and in
similar detail as that on which operating results are reported (and in the case
of cash flow projections, representing management's good faith estimates of
future financial performance based on historical performance), and including
plans for Capital Expenditures and acquisitions;
(c) Annual Financials. To Agent, within ninety (90) days after
the end of each Fiscal Year, audited Financial Statements for Borrower and its
Subsidiaries on a
D-1
consolidated basis, consisting of balance sheets and statements of income and
retained earnings and cash flows, setting forth in comparative form in each case
the figures for the previous Fiscal Year and the figures contained in the
Projections for such Fiscal Year, which Financial Statements shall be prepared
in accordance with GAAP, certified without qualification, by an independent
certified public accounting firm of national standing or otherwise acceptable to
Agent (other than the Projections which are not required to be certified or
audited). Such Financial Statements shall be accompanied by (i) a statement
prepared in reasonable detail showing the calculations used in determining
compliance with each of the financial covenants set forth on Annex E and the
other items described in Section (a)(ii) of this Annex E, (ii) a report from
such accounting firm to the effect that, in connection with their audit
examination, nothing has come to their attention to cause them to believe that a
Default or Event of Default has occurred (or specifying those Defaults and
Events of Default that they became aware of), it being understood that such
audit examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, and (iii) the certification of the Chief Executive Officer or Chief
Financial Officer of Borrower that all such Financial Statements present fairly
in accordance with GAAP the financial position, results of operations and
statements of cash flows of Borrower and its Subsidiaries on a consolidated
basis, as at the end of such year and for the period then ended, and that there
was no Default or Event of Default in existence as of such time or, if a Default
or Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default;
(d) Management Letters. To Agent, within five (5) Business
Days after receipt thereof by Borrower or any of its Subsidiaries, copies of all
management letters, exception reports or similar letters or reports received by
such Credit Party from its independent certified public accountants;
(e) Default and Other Notices. To Agent, as soon as
practicable, and in any event within five (5) Business Days after an executive
officer of Borrower has actual knowledge of the existence of any Default, Event
of Default or any event respecting a Managed Practice described in Section
8.1(m), (n), (o) or (p), or other event which has had, or could reasonably be
expected to have, a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day;
(f) SEC Filings and Press Releases. To Agent, promptly upon
their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by Borrower or any of its
Subsidiaries to its security holders; (ii) all regular and periodic reports and
all registration statements and prospectuses, if any, filed by any Credit Party
with any securities exchange or with the Securities and Exchange Commission or
any governmental or private regulatory authority; and (iii) all press releases
and other statements made available by any Credit Party to the public concerning
material adverse changes or developments in the business of any such Person;
(g) Senior Notes, Subordinated Debt and Equity Notices. To
Agent, as soon as practicable, copies of all material written notices given or
received by any Credit Party with
D-2
respect to (1) the Senior Notes, (2) the Subordinated Notes or (3) any
Subordinated Debt or Stock of such Person, and, within two (2) Business Days
after any Credit Party obtains knowledge of any matured or unmatured event of
default with respect to (1) the Senior Notes, (2) the Subordinated Notes or (3)
any Subordinated Debt, notice of such event of default;
(h) Supplemental Schedules. To Agent, supplemental
disclosures, if any, required by Section 5.6 of the Agreement;
(i) Litigation. To Agent in writing, promptly upon learning
thereof, notice of any Litigation commenced or threatened against any Credit
Party or Managed Practice that (i) seeks damages in excess of $500,000, (ii)
seeks injunctive relief, (iii) is asserted or instituted against any Plan, its
fiduciaries or its assets or against any Credit Party or ERISA Affiliate in
connection with any Plan, (iv) alleges criminal misconduct by any Credit Party,
or (v) alleges the violation of any law regarding, or seeks remedies in
connection with, any Environmental Liabilities; and
(j) Other Documents. To Agent and Lenders, such other
financial and other information respecting the Borrower's or any of its
Subsidiaries' business or financial condition as Agent or any Lender shall, from
time to time, request, provided that such right to request other information
shall not include a right to require additional periodic reports unless an Event
of Default shall have occurred and be continuing at the time of such request.
D-3
ANNEX E (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP:
(a) Minimum Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio for the 4 quarters ended during each of the periods set forth below shall
not be less than the ratio set forth below opposite such period:
PERIOD RATIO
------ -----
Closing Date through 3/31/02 1.45x
4/1/02 through 6/30/02 1.25x
7/1/02 through 9/30/02 1.15x
10/1/02 through 3/31/03 1.00x
4/1/03 through 6/30/03 1.10x
7/1/03 through 12/31/03 1.20x
Thereafter 1.25x
(b) Maximum Leverage Ratio. At no time shall the Total Debt Leverage
Ratio exceed 4.0 to 1.0.
(c) Pro Forma Adjustments. In calculating compliance with the covenants
specified in paragraphs (a) and (b) above, the following adjustments shall be
made to reflect the effect of acquisitions, dispositions and Service Agreement
terminations (in the case of Service Agreement terminations where the terminated
Service Agreement is not contemporaneously replaced by a Service Agreement with
the same Managed Practice and which new agreement provides substantially the
same EBITDA as the terminated Service Agreement) occurring after the Closing
Date and during the relevant test period:
(i) EBITDA shall be adjusted with respect to any entity
acquired, or disposed of or any Services Agreement terminated during
any period for which EBITDA is calculated of such acquired or disposed
of entity, or that is attributable to such terminated Service Agreement
for such period, as if such acquisition, disposition or termination had
occurred immediately prior to the first day of such period but shall be
further adjusted (where appropriate) to reflect the Radiologix
Physician compensation model; and
(ii) Fixed Charges shall be adjusted: (1) to include, as of
the first day of such period and for the entire period, any Fixed
Charges associated with any acquired entity, including, any interest
attributable to any Indebtedness incurred in connection with such
acquisition (as if such Indebtedness had been incurred and remained
outstanding and had
E-1
borne interest throughout the entire test period), but (2) to exclude
any interest or other Fixed Charges attributable to any Indebtedness
repaid, retired, disposed of or refinanced in such acquisition
(including any portion thereof used to fund the aforementioned
refinancing).
E-2
ANNEX F (SECTION 9.9(a))
TO
CREDIT AGREEMENT
LENDERS' WIRE TRANSFER INFORMATION
General Electric Capital Corporation:
GECC/CAF Depository
Account #: 00-000-000
Bankers Trust Company
0 Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA #: 000-000-000
Attention:
--------------------------------
Reference: CFA 4622, Radiologix, Inc.
F-1
ANNEX G (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Xxxxxxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, III, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to Borrower, at
Radiologix, Inc.
3600 Chase Tower
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
G-1
With copies to:
Radiologix, Inc.
3600 Chase Tower
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
G-2
ANNEX H (SECTION 1.15)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
Borrower shall, and shall cause its Restricted Subsidiaries
to, establish and maintain the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination
Date, Borrower shall (i) establish lock boxes ("Lock Boxes") or, at Agent's
discretion, blocked accounts ("Blocked Accounts") at one or more of the banks
set forth in Disclosure Schedule (3.19), and shall request in writing and
otherwise take such reasonable steps to ensure that all Account Debtors forward
payment directly to such Lock Boxes, and (ii) deposit and cause its Restricted
Subsidiaries to deposit or cause to be deposited promptly, and in any event no
later than the first Business Day after the date of receipt thereof, all cash,
checks, drafts or other similar items of payment relating to or constituting
payments made in respect of any and all Collateral (whether or not otherwise
delivered to a Lock Box) into one or more Blocked Accounts in Borrower's name or
any such Restricted Subsidiary's name and at a bank identified in Disclosure
Schedule (3.19) (each, a "Relationship Bank"). On or before the Closing Date,
Borrower shall have established a concentration account in its name (the
"Concentration Account") at the bank that shall be designated as the
Concentration Account bank for Borrower in Disclosure Schedule (3.19) (the
"Concentration Account Bank") which bank shall be reasonably satisfactory to
Agent.
(b) Borrower may maintain, in its name, an account (each a
"Disbursement Account" and collectively, the "Disbursement Accounts") at a bank
acceptable to Agent into which Agent shall, from time to time, deposit proceeds
of Revolving Credit Advances made to Borrower pursuant to Section 1.1 for use by
Borrower in accordance with the provisions of Section 1.4.
(c) On or before the Closing Date (or such later date as Agent
shall consent to in writing), the Concentration Account Bank, each bank where a
Disbursement Account is maintained and all other Relationship Banks, shall have
entered into tri-party blocked account agreements with Agent, for the benefit of
itself and Lenders, and Borrower and Restricted Subsidiaries thereof, as
applicable, in form and substance reasonably acceptable to Agent, which shall
become operative on or prior to the Closing Date. Each such blocked account
agreement shall provide, among other things, that (i) all items of payment
deposited in such account and proceeds thereof are held by such bank as agent or
bailee-in-possession for Agent, on behalf of itself and Lenders, (ii) the bank
executing such agreement has no rights of setoff or recoupment or any other
claim against such account other than for payment of its service fees and other
charges directly related to the administration of such account and for returned
checks or other items of payment, and (iii) from and after (A) the Closing Date
with respect to each Blocked Account and (B) the receipt by such bank of a
notice (an "Activation Notice") from Agent (which Activation Notice may be given
by Agent at any time at which an Event of Default has occurred and is
continuing), to commence a process of daily sweeps (x) in the case of each
Blocked Account, from such Blocked Account into the Concentration Account and
(y) in the
H-1
case of the Concentration Account to immediately forward all amounts received in
the Concentration Account to the Collection Account through daily sweeps from
such Concentration Account into the Collection Account. From and after the date
Agent has delivered an Activation Notice to any bank with respect to any Blocked
Account(s), Borrower shall not, and shall not cause or permit any Restricted
Subsidiary thereof to, accumulate or maintain cash in Disbursement Accounts or
payroll accounts as of any date of determination in excess of checks outstanding
against such accounts as of that date and amounts necessary to meet minimum
balance requirements.
(d) So long as no Default or Event of Default has occurred and
is continuing, Borrower may amend Disclosure Schedule (3.19) to add or replace a
Relationship Bank, Lock Box or Blocked Account or to replace any Concentration
Account or any Disbursement Account; provided, that (i) Agent shall have
consented in writing in advance to the opening of such account or Lock Box with
the relevant bank and (ii) prior to the time of the opening of such account or
Lock Box, Borrower or its Restricted Subsidiaries, as applicable, and such bank
shall have executed and delivered to Agent a tri-party blocked account
agreement, in form and substance reasonably satisfactory to Agent. Borrower
shall close any of its or its Restricted Subsidiaries' accounts (and establish
replacement accounts in accordance with the foregoing sentence) promptly and in
any event within 30 days following notice from Agent that the creditworthiness
of any bank holding an account is no longer acceptable in Agent's reasonable
judgment, or as promptly as practicable and in any event within 60 days
following notice from Agent that the operating performance, funds transfer or
availability procedures or performance with respect to accounts or Lock Boxes of
the bank holding such accounts or Agent's liability under any tri-party blocked
account agreement with such bank is no longer acceptable in Agent's reasonable
judgment.
(e) The Lock Boxes, Blocked Accounts, Disbursement Accounts
and the Concentration Account shall be cash collateral accounts, with all cash,
checks and other similar items of payment in such accounts securing payment of
the Loans and all other Obligations, and in which Borrower and each Restricted
Subsidiary thereof shall have granted a Lien to Agent, on behalf of itself and
Lenders, pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be
deemed received by Agent in accordance with Section 1.7 and shall be applied
(and allocated) by Agent in accordance with Section 1.8. In no event shall any
amount be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
(g) Borrower shall and shall cause its Affiliates, officers,
employees, agents, directors or other Persons acting for or in concert with
Borrower (each a "Related Person") to (i) hold in trust for Agent, for the
benefit of itself and Lenders, all checks, cash and other items of payment
received by Borrower or any such Related Person, and (ii) within 1 Business Day
after receipt by Borrower or any such Related Person of any checks, cash or
other items of payment, deposit the same into a Blocked Account. Borrower and
each Related Person thereof acknowledges and agrees that all cash, checks or
other items of payment constituting proceeds of Collateral are part of the
Collateral. All proceeds of the sale or other disposition of any Collateral,
shall be deposited directly into Blocked Accounts.
H-2
SCHEDULE 1.1
RESPONSIBLE INDIVIDUAL
Xxx Xxx
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
SCHEDULE 1.4
SOURCES AND USES OF FUNDS
SOURCES USES
[TO BE DETERMINED]
SEE PAY PROCEEDS LETTER FOR DETAILED FUNDS FLOW.
