AMENDED AND RESTATED
CREDIT AGREEMENT
By and Among
HOUSECALL MEDICAL RESOURCES, INC.,
HOUSECALL, INC.,
and
HOUSECALL-SIC MANAGEMENT, INC.,
as Co-Borrowers,
TORONTO DOMINION (TEXAS), INC.,
as Agent,
THE TORONTO-DOMINION BANK,
as Issuing Bank,
and
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Banks
Dated as of May 13, 1997
$40,000,000
TABLE OF CONTENTS
Page
ARTICLE 1 Definitions
ARTICLE 2 The Loans
2.1 Extension of Credit . . . . . . . . . . . . 28
(a) The Revolving Loans . . . . . . . . . 28
(b) The Term Loan . . . . . . . . . . . . 28
(c) The Letters of Credit . . . . . . . . 29
2.2 Manner of Advance and Disbursement of
Loans . . . . . . . . . . . . . . . . . . . 29
(a) Choice of Interest Rate, etc. . . . . 29
(b) Base Rate Loans . . . . . . . . . . . 29
(c) Eurodollar Loans . . . . . . . . . . 30
(d) Notification of Banks . . . . . . . . 30
(e) Disbursement . . . . . . . . . . . . 31
2.3 Interest . . . . . . . . . . . . . . . . . 32
(a) On Revolving and Term Loans . . . . . 32
(b) Applicable Margin . . . . . . . . . . 32
(c) Upon Default . . . . . . . . . . . . 33
(d) Computation of Interest . . . . . . . 33
2.4 Fees . . . . . . . . . . . . . . . . . . . 34
2.5 Prepayment/Reduction of Commitment . . . . 35
2.6 Repayment . . . . . . . . . . . . . . . . . 35
2.7 Other Mandatory Repayments . . . . . . . . 36
2.8 Notes; Loan Accounts . . . . . . . . . . . 37
2.9 Manner of Payment . . . . . . . . . . . . . 38
(a) When Payments Due . . . . . . . . . . 38
(b) No Deduction . . . . . . . . . . . . 38
2.10 Reimbursement . . . . . . . . . . . . . . . . 40
2.11 Pro Rata Treatment . . . . . . . . . . . . 41
(a) Loans . . . . . . . . . . . . . . . . 41
(b) Payments . . . . . . . . . . . . . . 41
2.12 Application of Payments . . . . . . . . . . 42
(a) Payments Prior to Acceleration . . . 42
(b) Payments Subsequent to
Acceleration . . . . . . . . . . . . 42
2.13 Use of Proceeds . . . . . . . . . . . . . . 43
2.14 Interest . . . . . . . . . . . . . . . . . 43
2.15 Guaranty . . . . . . . . . . . . . . . . . 44
2.16 Joint and Several Liability . . . . . . . . 47
ARTICLE 3The Letters of Credit
3.1 Issuance of Letters of Credit . . . . . . . 48
3.2 Draws Under Letters of Credit . . . . . . . 49
3.3 Actions by Issuing Bank . . . . . . . . . . 50
3.4 Increased Costs, Indemnification,
Expenses . . . . . . . . . . . . . . . . . 51
ARTICLE 4Conditions Precedent
4.1 Conditions to Initial Loan . . . . . . . . 53
4.2 Conditions to Each Loan . . . . . . . . . . 56
4.3 Conditions Precedent to Each Letter
of Credit . . . . . . . . . . . . . . . . . 57
4.4 Conditions for the Benefit of the
Agent and the Banks . . . . . . . . . . . . 58
ARTICLE 5 Representations and Warranties of the
Co-Borrowers
5.1 Due Organization . . . . . . . . . . . . . 59
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Page
5.2 Organization Standing and
Qualification of Subsidiaries . . . . . . . 59
5.3 Absence of Certain Activities . . . . . . . 60
5.4 Requisite Power . . . . . . . . . . . . . . 60
5.5 Healthcare Regulatory Matters . . . . . . . 60
5.6 Authorization . . . . . . . . . . . . . . . 61
5.7 Officer Authorization . . . . . . . . . . . 61
5.8 Binding Nature . . . . . . . . . . . . . . 61
5.9 No Conflict . . . . . . . . . . . . . . . . 61
5.10 No Event of Default . . . . . . . . . . . . 62
5.11 Financial Statements . . . . . . . . . . . 62
5.12 Real Property . . . . . . . . . . . . . . . 62
5.13 Title to Properties . . . . . . . . . . . . 63
5.14 Intellectual Property . . . . . . . . . . . 63
5.15 Liabilities, Litigation, etc . . . . . . . 63
5.16 No Adverse Change . . . . . . . . . . . . . 64
5.17 Tax Returns and Tax Matters . . . . . . . . 64
5.18 Employee Benefits . . . . . . . . . . . . . 64
5.19 Environmental Matters . . . . . . . . . . . 66
5.20 Insurance . . . . . . . . . . . . . . . . . 68
5.21 Compliance with Laws . . . . . . . . . . . 68
5.22 Statutory Regulation . . . . . . . . . . . 68
5.23 Use of Proceeds; Regulation U . . . . . . . 68
5.24 Solvency . . . . . . . . . . . . . . . . . 69
5.25 Fiscal Year . . . . . . . . . . . . . . . . 69
5.26 Survival of Representations and
Warranties, etc . . . . . . . . . . . . . . 69
ARTICLE 6 Affirmative Covenants
6.1 Accounting Records. . . . . . . . . . . . . 69
6.2 Financial Statements and Notices . . . . . 70
6.3 Inspection of Property Books and
Records . . . . . . . . . . . . . . . . . . 73
6.4 Access to Accountants . . . . . . . . . . . 74
6.5 Maintenance of Existence . . . . . . . . . 74
6.6 Tax Returns . . . . . . . . . . . . . . . . 74
6.7 Qualifications To Do Business . . . . . . . 74
6.8 Compliance with Laws . . . . . . . . . . . 74
6.9 Material Agreements . . . . . . . . . . . . 74
6.10 Insurance . . . . . . . . . . . . . . . . . 75
6.11 Facilities . . . . . . . . . . . . . . . . 75
6.12 Taxes and Other Liabilities . . . . . . . . 75
6.13 Governmental Approvals . . . . . . . . . . 75
6.14 Healthcare Regulatory Matters . . . . . . . 76
6.15 Environmental Laws . . . . . . . . . . . . 76
6.16 Tax Qualification . . . . . . . . . . . . . 77
6.17 Funding. . . . . . . . . . . . . . . . . . 77
6.18 Concentration Account . . . . . . . . . . . 77
6.19 Interest Rate Hedging . . . . . . . . . . . 78
6.20 Further Assurances . . . . . . . . . . . . 78
ARTICLE 7 Negative Covenants
7.1 Mergers . . . . . . . . . . . . . . . . . . 78
7.2 Change of Business . . . . . . . . . . . . 79
7.3 Capital Stock . . . . . . . . . . . . . . . 79
7.4 Accounting Policies . . . . . . . . . . . . 79
7.5 Investments; Acquisitions . . . . . . . . . 79
7.6 Negative Pledge . . . . . . . . . . . . . . 79
7.7 Guaranties . . . . . . . . . . . . . . . . 79
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Page
7.8 Indebtedness . . . . . . . . . . . . . . . 79
7.9 Sale of Assets . . . . . . . . . . . . . . 80
7.10 Sale-Leaseback Transactions . . . . . . . . 80
7.11 Capital Expenditures . . . . . . . . . . . 80
7.12 Transactions with Affiliates . . . . . . . 81
7.13 Restrictive Agreements . . . . . . . . . . 81
7.14 Creation of Subsidiaries; Conversion
to Material Subsidiaries . . . . . . . . . 81
7.15 Indebtedness Payments and
Prepayments. . . . . . . . . . . . . . . . 82
7.16 Certain ERISA Payments . . . . . . . . . . 82
7.17 Compliance with ERISA . . . . . . . . . . . 83
7.18 Use of Proceeds and Letters of Credit . . . 83
7.19 Fixed Charge Coverage Ratio . . . . . . . . 83
7.20 Funded Indebtedness/EBITDA Coverage
Ratio . . . . . . . . . . . . . . . . . . . 83
7.21 Minimum Net Worth . . . . . . . . . . . . . 84
7.22 Minimum EBITDA . . . . . . . . . . . . . . 84
7.23 Senior Debt/EBITDA Ratio . . . . . . . . . 85
7.24 Minimum Medicare Visits . . . . . . . . . . 86
7.25 Day Sales Outstanding . . . . . . . . . . . 86
7.26 No Further Negative Pledges . . . . . . . . 86
7.27 Limitation on Leases . . . . . . . . . . . 86
7.28 Shareholder Litigation . . . . . . . . . . 86
ARTICLE 8 Events of Default
8.1 Events of Default . . . . . . . . . . . . . 87
8.2 Remedies . . . . . . . . . . . . . . . . . 90
ARTICLE 9 The Agent
9.1 Appointment and Authorization . . . . . . . 91
9.2 Delegation of Duties . . . . . . . . . . . 91
9.3 Liability of Agent . . . . . . . . . . . . 92
9.4 Reliance by Agent . . . . . . . . . . . . . 92
9.5 Notice of Default . . . . . . . . . . . . . 93
9.6 Credit Decision . . . . . . . . . . . . . . 93
9.7 Indemnification . . . . . . . . . . . . . . 94
9.8 Agent in Individual Capacity . . . . . . . 94
9.9 Successor Agent . . . . . . . . . . . . . . 95
9.10 Agent May File Proofs of Claim . . . . . . 95
9.11 Collateral . . . . . . . . . . . . . . . . 96
9.12 Release of Collateral . . . . . . . . . . . 96
ARTICLE 10 Miscellaneous
10.1 Successors and Assigns and Sale of
Interests . . . . . . . . . . . . . . . . . 97
10.2 No Implied Waiver . . . . . . . . . . . . . 99
10.3 Amendments and Waivers . . . . . . . . . . 99
10.4 Remedies Cumulative . . . . . . . . . . . . 100
10.5 Severability . . . . . . . . . . . . . . . 100
10.6 Set-Off . . . . . . . . . . . . . . . . . . 100
10.7 Costs, Expenses and Attorneys' Fees. . . . 101
10.8 General Indemnification . . . . . . . . . . 101
10.9 Environmental Indemnification . . . . . . . 102
10.10 Notices . . . . . . . . . . . . . . . . . . 103
10.11 Entire Agreement . . . . . . . . . . . . . 104
10.12 Governing Law . . . . . . . . . . . . . . . 104
10.13 Replacement of Bank . . . . . . . . . . . . 104
10.14 Counterparts . . . . . . . . . . . . . . . 105
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Page
10.15 Headings . . . . . . . . . . . . . . . . . 105
10.16 Confidentiality. . . . . . . . . . . . . . 105
ARTICLE 11 Yield Protection
11.1 Eurodollar Rate Basis Determination . . . . 106
11.2 Illegality . . . . . . . . . . . . . . . . 106
11.3 Increased Costs . . . . . . . . . . . . . . 107
11.4 Effect On Other Loans . . . . . . . . . . . 108
11.5 Capital Adequacy . . . . . . . . . . . . . 108
11.6 Alternate Lending Offices . . . . . . . . . 109
ARTICLE 12 Waiver of Jury Trial, etc.
12.1 Jurisdiction and Service of Process . . . . 109
12.2 Consent to Venue . . . . . . . . . . . . . 110
12.3 Waiver of Jury Trial . . . . . . . . . . . 110
12.4 Amendment to Loan Documents;
Continuation of Security Interest and
Liens . . . . . . . . . . . . . . . . . . . 110
iv
EXHIBITS
Exhibit A-1 Form of Request for Advance
Exhibit A-2 Form of Notice of Conversion/Continuation
Exhibit B Form of Request for Issuance of Letter of
Credit
Exhibit C Form of Revolving Loan Note
Exhibit D Form of Term Note
Exhibit E Form of Loan Certificate
Exhibit F Form of Subsidiary Guaranty
Exhibit G Form of Subsidiary Security Agreement
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Deposit Account Pledge Agreement
SCHEDULES
Schedule 1 Material Subsidiaries
Schedule 5.2 List of Subsidiaries
Schedule 5.3 Partnerships
Schedule 5.4 Exceptions to Requisite Corporate
Power
Schedule 5.5(a) Healthcare Regulatory Matters
Schedule 5.5(b) Cost Report Audits
Schedule 5.5(c) List of CONs
Schedule 5.9 Exceptions to "No Conflicts"
Schedule 5.12(a) Leased Property
Schedule 5.12(b) Owned Property
Schedule 5.14 Intellectual Property
Schedule 5.15 Litigation and Contingent Liabilities
Schedule 5.17 Tax Matters
Schedule 5.18(i) ERISA Title IV Benefit Plans
Schedule 5.18(ii) Other Benefit Plans
Schedule 5.19 Environmental Matters
Schedule 5.20 List of Insurance Policies
v
Schedule 5.21 Exceptions to Compliance with Laws
Schedule 6.20 Post-Closing Matters
Schedule 7.6 List of Existing Permitted
Encumbrances
Schedule 7.8 Subordinated Indebtedness
Schedule 7.12 Existing Transactions with Affiliates
Schedule 10.10 Notice Addresses
vi
AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG HOUSECALL MEDICAL RESOURCES, INC.
HOUSECALL, INC., AND HOUSECALL-SIC MANAGEMENT, INC.;
THE FINANCIAL INSTITUTIONS WHOSE NAMES APPEAR AS BANKS
ON THE SIGNATURE PAGES HEREOF;
THE TORONTO-DOMINION BANK, AS ISSUING BANK;
AND TORONTO DOMINION (TEXAS), INC.,
AS AGENT FOR THE ISSUING BANK AND THE BANKS
This AMENDED AND RESTATED CREDIT AGREEMENT (the
"Agreement") dated as of May 13, 1997 is made by and among
Housecall Medical Resources, Inc., Housecall, Inc. and Housecall-
SIC Management, Inc. (collectively, the "Co-Borrowers"), Toronto
Dominion (Texas), Inc. as agent (the "Agent"), The Toronto-
Dominion Bank as issuing bank (the "Issuing Bank") and the other
financial institutions party hereto (collectively, the "Banks").
R E C I T A L S
WHEREAS, the Co-Borrowers, the Agent, the Issuing Bank
and the Bank are party to a certain Credit Agreement dated as of
October 30, 1996 pursuant to which the Bank provided to the Co-
Borrowers a revolving credit facility in the amount of
$15,000,000 (as amended, the "Prior Credit Agreement"); and
WHEREAS, the Co-Borrowers desire that the Banks modify
the Prior Credit Agreement to provide an $18,000,000 revolving
credit facility to the Co-Borrowers for general corporate
purposes and a $22,000,000 term loan to Housecall to finance the
Pending Transactions (as herein defined), and the Agent, the
Issuing Bank and the Banks are willing to do so, all in
accordance with and subject to the terms and conditions set forth
herein, and the Co-Borrowers, the Agent, the Issuing Bank and the
Banks have agreed in connection therewith to amend and restate
the Prior Credit Agreement in its entirety, as set forth herein;
and
WHEREAS, the Co-Borrowers acknowledge and agree that
the security interests granted to the Agent for the benefit of
the Issuing Bank and the Banks pursuant to the Prior Credit
Agreement and the Security Documents (as defined in the Prior
Credit Agreement), shall remain outstanding and in full force and
effect in accordance with the Prior Credit Agreement and shall
continue to secure the Obligations (as defined herein); and
WHEREAS, the Co-Borrowers and all other parties hereto
acknowledge and agree that (i) the Obligations (as defined
herein) represent, among other things, the amendment,
restatement, renewal, extension, consolidation and modification
of the Obligations (as defined in the Prior Credit Agreement)
arising in connection with the Prior Credit Agreement and the
other Loan Documents (as defined in the Prior Credit Agreement)
executed in connection therewith; (ii) the parties hereto intend
that the Prior Credit Agreement and the other Loan Documents (as
defined in the Prior Credit Agreement) executed in connection
therewith and the collateral pledged thereunder shall secure,
without interruption or impairment of any kind, all existing
Indebtedness under the Prior Credit Agreement and the other Loan
Documents (as defined in the Prior Credit Agreement) executed in
connection therewith as so amended, restated, renewed, extended,
consolidated and modified hereunder, together with all other
obligations hereunder; (iii) all Liens evidenced by the Prior
Credit Agreement and the other Loan Documents (as defined in the
Prior Credit Agreement) executed in connection therewith are
hereby ratified, confirmed and continued; and (iv) the Loan
Documents (as defined herein) are intended to restate, renew,
extend, consolidate, amend and modify the Prior Credit Agreement
and the other Loan Documents (as defined in the Prior Credit
Agreement) executed in connection therewith; and
WHEREAS, the parties hereto intend that (i) the
provisions of the Prior Credit Agreement and the other Loan
Documents (as defined in the Prior Credit Agreement) executed in
connection therewith, to the extent restated, renewed, extended,
consolidated, amended and modified hereby, be hereby superseded
and replaced by the provisions hereof and of the Loan Documents
(as defined herein); (ii) the Revolving Loan Notes (as
hereinafter defined) amend, renew, extend, modify, replace, be
substituted for and supersede in their entirety, but do not
extinguish, the Indebtedness arising under, the promissory notes
issued pursuant to the Prior Credit Agreement; and (iii) entering
into, and performing their respective obligations under, this
transaction not constitute a novation;
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, the parties hereby amend and restate
the Prior Credit Agreement as follows as of the 13th day of May,
1997:
ARTICLE 1
Definitions
In addition to any terms defined elsewhere in this
Agreement, the following terms have the meanings indicated for
purposes of this Agreement (such definitions being equally
applicable to the singular and plural forms of the defined term):
"Adjusted Net Revenues" shall mean Net Revenues plus,
in the case of the acquisition by Housecall or its Subsidiaries
of any Receivables in connection with any Permitted Acquisition
during any calculation period, the gross revenues of the Person
or business segment acquired relating to such Receivables (less
contractual adjustments) from the first day of such calculation
period through the date such Receivables are acquired.
"Affiliate" means with respect to any Person (a) each
Person that controls, is controlled by or is under common control
with such Person or any Affiliate of such Person, (b) each of
such Person's officers, directors, joint venturers and partners.
For the purpose 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.
2
"Agent" means Toronto Dominion (Texas), Inc., acting as
Agent for the Banks, and any successor agent pursuant to
Section 9.9 hereof.
"Agent-Related Persons" has the meaning set forth in
Section 9.3 hereof.
"Aggregate Revolving Credit Obligations" shall mean, as
of any particular time, the sum of (a) the aggregate principal
amount of all Revolving Loans under the Revolving Loan Commitment
then outstanding, plus (b) the aggregate amount of all Letter of
Credit Obligations then outstanding.
"Agreement" or "Credit Agreement" means this Credit
Agreement, as from time to time amended, modified or
supplemented.
"Agreement Date" means May 13, 1997.
"Applicable Law" shall mean, in respect of any Person,
all provisions of constitutions, statutes, rules, regulations,
and orders of governmental bodies or regulatory agencies
applicable to such Person, and all orders and decrees of all
courts and arbitrators in proceedings or actions to which the
Person in question is a party or by which it is bound.
"Applicable Margin" means
(a) with respect to Base Rate Loans, the
Base Rate Margin; and
(b) with respect to Eurodollar Loans, the
Eurodollar Margin.
"Assignee" has the meaning specified in Section 10.1(b)
hereof.
"Assignment and Acceptance" has the meaning specified
in Section 10.1(b) hereof.
"Assignment of Membership Interests" shall mean that
certain Assignment of Membership Interests executed by and
between Housecall and the Agent dated as of October 30, 1996, as
the same may be modified, amended or supplemented from time to
time.
"Assignment of Partnership Interests" shall mean (a)
that certain Assignment of Partnership Interests dated as of
October 30, 1996 executed by Housecall and Housecall Management,
Inc., in favor of the Agent, as the same may be amended,
supplemented or modified from time to time and (b) that certain
Assignment of Partnership Interests dated as of the date hereof
executed by HFI Acquisition Corp. and HFI Management, Inc. in
favor of the Agent, as same may be amended, supplemented or
modified from time to time.
"Authorized Officer" means Housecall's Chief Executive
Officer, Chief Financial Officer, Treasurer or any Vice President
or, with respect to any other Co-Borrower, such Co-Borrower's
Chief Executive Officer, Chief Financial Officer or Treasurer,
and each other officer or other designee of a corporation
authorized by the board of directors of that corporation to act
3
on behalf of that corporation under this Agreement or any of the
other Loan Documents.
"Authorized Representatives" shall mean those officers,
employees or other persons designated by any Co-Borrower on the
most current Notice of Authorized Representatives delivered to
the Agent as being authorized to request any borrowing, to make
any interest rate designation on behalf of any Co-Borrower
hereunder, or to give the Agent any other notice hereunder which
is contemplated by the terms hereof.
"Available Letter of Credit Amount" shall mean, as of
any particular time, an amount equal to the lesser of (a)
$5,000,000, and (b) the Available Revolving Loan Commitment.
"Available Revolving Loan Commitment" shall mean, as of
any particular time, (a) the amount of the Revolving Loan
Commitment minus (b) the Aggregate Revolving Credit Obligations
then outstanding.
"Bank Indemnitees" has the meaning set forth in
Section 10.8 hereof.
"Banks" shall mean those banks whose names are set
forth on the signature pages hereof under the heading "Banks" and
any assignees of the Banks who hereafter become parties hereto
pursuant to and in accordance with Section 10.1 hereof; and
"Bank" shall mean any one of the foregoing Banks.
"Base Rate" means at any time, the higher of (a) the
rate of interest adopted by the Agent as the reference rate for
the determination of interest rates for loans of varying
maturities in Dollars to United States residents of varying
degrees of creditworthiness and being quoted at such time by The
Toronto-Dominion Bank, New York Branch as its "base rate" or
"prime rate," or (b) the Federal Funds Rate plus one-half of one
percent (1/2%). The Base Rate is not necessarily the lowest rate
of interest charged to borrowers of the Agent or its Affiliates.
"Base Rate Margin" means, for Base Rate Loans
outstanding, the percentage per annum calculated as set forth in
Section 2.3(b) hereof.
"Base Rate Loan" shall mean a Loan which any Co-
Borrower requests to be made as a Base Rate Loan or which is
reborrowed as a Base Rate Loan, in accordance with the provisions
of Section 2.2 hereof and which bears interest at a per annum
rate equal to the Base Rate plus the Base Rate Margin in effect
from time to time.
"Business Day" means a day on which banks are not
authorized or required to be closed and foreign exchange markets
are open for the transaction of business required for this
Agreement in London, England, Houston, Texas, and New York, New
York, as relevant to the determination to be made or the action
to be taken.
"Capex Carry Forward Amount" means (a) for the fiscal
year ending June 30, 1997, $3,500,000 minus the aggregate amount
of Capital Expenditures made by Housecall and its Subsidiaries
during such fiscal year, and (b) for any fiscal year thereafter,
4
$5,000,000 minus the aggregate amount of Capital Expenditures
made by Housecall and its Subsidiaries during such fiscal year.
"Capital Expenditure" means any expenditure that would
be capitalized on the balance sheet of Housecall (consolidated
with its Subsidiaries) as of the end of the applicable period, in
conformity with GAAP, other than payment of the purchase price of
any fixed assets in connection with a Permitted Acquisition.
"Capitalized Lease" means any lease under which the
obligation of the lessee is required by GAAP to be shown as a
liability on the financial statements of the lessee.
"Capitalized Lease Obligation" means any lease
obligation that, in accordance with GAAP, is required to be shown
as a liability on the financial statements of the lessee. The
amount of a Capitalized Lease Obligation shall be the amount
required by GAAP so to be shown.
"Capital Stock" shall mean, as applied to any Person,
any capital stock of such Person, regardless of class or
designation, and all warrants, options, purchase rights,
conversion or exchange rights, voting rights, calls or claims of
any character with respect thereto.
"COBRA" means Title X of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended from time to time.
"Co-Borrower" means any one of Housecall, Housecall,
Inc. and Housecall SIC Management; and "Co-Borrowers" means all
such corporations collectively.
"Co-Borrower Loan Obligations" has the meaning set
forth in Section 2.15.
"Code" means the Internal Revenue Code of 1986, as
amended, together with the rules and regulations issued or
promulgated thereunder.
"Collateral" means, collectively, all of the assets and
property constituting collateral under the Security Documents or
any document or instrument executed pursuant thereto or under any
of the other Loan Documents.
"Commercial Letter of Credit" shall mean a documentary
letter of credit issued in respect of the purchase of goods or
services by any Co-Borrower in the ordinary course of its
business.
"Commitment" shall mean the several obligations of the
Banks to (a) extend Loans to the Co-Borrowers under the Revolving
Loan Commitment on or after the Agreement Date, in accordance
with their respective Commitment Percentages, pursuant to the
terms hereof, and as such amount may be reduced from time to
time, pursuant to the terms hereof, and (b) extend Loans to
Housecall under the Term Loan Commitment on the Agreement Date,
in accordance with their respective Commitment Percentages,
pursuant to the terms hereof.
"Commitment Amount" means, with respect to each Bank,
an amount equal to such Bank's Commitment Percentage multiplied
by the Commitment.
5
"Commitment Percentage" means the percentage set forth
after each Bank's name on Schedule 10.10 hereto, plus the
aggregate of any Commitment Percentages thereafter acquired by
such Bank as the Assignee pursuant to any Assignment and
Acceptances to which such Bank is a party, less the aggregate of
any Commitment Percentages assigned by such Bank pursuant to any
Assignment and Acceptances to which such Bank is a party, and, as
to any new Bank, the aggregate of any Commitment Percentages
acquired by such new Bank as the Assignee pursuant to any
Assignment and Acceptances to which such new Bank is a party,
less the aggregate of any Commitment Percentages assigned by such
new Bank as the Assignor pursuant to any Assignment and
Acceptances to which such new Bank is a party.
"CON" shall mean a certificate of need or other license
or permit issued by a state health facilities planning board or
similar agency or body required for the construction, expansion,
or investment in a health facility.
"Concentration Account" means an account into which
substantially all cash receipts of Housecall and its Material
Subsidiaries are deposited.
"Consolidated Net Income" means, for any period, the
net income of Housecall and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP;
provided, however, that in determining Consolidated Net Income,
there shall not be included in gross revenues any earnings of,
and dividends payable to, Housecall or any of its Subsidiaries in
a currency which at the time may not be converted into Dollars
under the laws of the nation issuing such currency.
"Controlled Group" means any Co-Borrower and all
Persons (whether or not incorporated) under common control or
treated as a single employer with any Co-Borrower pursuant to
section 414(b) or (c) of the Code.
"Date of Issue" shall mean the date on which an Issuing
Bank issues a Letter of Credit pursuant to Article 3 hereof.
"Day Sales Outstanding" shall mean as of any
calculation date, (a) Receivables of Housecall and its
Subsidiaries divided by (b) (i) Adjusted Net Revenues for the 3-
month period ending on the calculation date divided by (ii) 90.
"Default" shall mean any of the events specified in
Section 8.1 hereof regardless of whether there shall have
occurred any passage of time or giving of notice (or both) that
would be necessary in order to constitute such event an Event of
Default.
"Default Rate" shall mean a simple per annum interest
rate equal to, (a) with respect to the outstanding principal of
any Loan, the sum of (i) the applicable Interest Rate Basis, plus
(ii) the highest Applicable Margin, plus (iii) two percent (2%),
and (b) with respect to all other Obligations, the sum of (i) the
Base Rate, plus (ii) the highest Base Rate Margin, plus (iii) two
percent (2%).
"Dollars" and "$" mean United States Dollars.
6
"EBITDA" means, for any period, the sum of (a) the
Consolidated Net Income of Housecall and its Subsidiaries for
such period, plus (b) to the extent deducted in determining such
Consolidated Net Income, the sum of (i) Interest Expense,
(ii) consolidated depreciation, amortization and other similar
non-cash charges of Housecall and its Subsidiaries for such
period and (iii) any non-recurring charges as approved by the
Agent from time to time, plus (c) the amount of any consolidated
income taxes (or minus the amount of any consolidated tax
benefits) of Housecall and its Subsidiaries for such period;
provided, however, that for any calculation date prior to May 31,
1998, the EBITDA of the Healthfirst Group (on a consolidated
basis) shall be annualized for the period from May 1, 1997
through the applicable calculation date.
"EBITDAR" means, for any period, the sum of (a) EBITDA,
plus (b) consolidated operating lease rent expense of Housecall
and its Subsidiaries for such period.
"Employee Benefit Plan" means any Pension Plan or any
other employee benefit plan (as defined in section 3(3) of ERISA)
which any Co-Borrower or any member of the Controlled Group
maintains, or to which it makes or is obligated to make
contributions.
"Environmental Claim" means all claims, however
asserted, by any Governmental Authority or other Person alleging
potential liability or responsibility for violation of any
Environmental Law or for release or injury to the environment or
threat to public health, personal injury (including sickness,
disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response
costs, restitution, civil or criminal penalties, injunctive
relief, or other type of relief, resulting from or based upon (a)
the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental
placement, spills, leaks, discharges, emissions or releases) of
any Hazardous Material at, in or from property, whether or not
owned by Housecall or any Subsidiary of Housecall, or (b) any
other circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
"Environmental Laws" means any applicable Governmental
Requirement pertaining to land use, air, soil, surface water,
groundwater (including the protection, cleanup, removal,
remediation or damage thereof), public or employee health or
safety or any other environmental matter; including without
limitation, the following laws as the same may be amended from
time to time:
(a) Clean Air Act (42 U.S.C. Section 7401, et
seq.);
(b) Clean Water Act (33 U.S.C. Section 1251,
et seq.);
(c) Resource Conservation and Recovery Act
(42 U.S.C. Section 6901,
et seq.);
7
(d) Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C.
Section 9601, et seq.);
(e) Safe Drinking Water Act (42 U.S.C.
Section 300f, et seq.) ;
(f) Toxic Substances Control Act (15 U.S.C.
Section 2601, et seq. ) ;
(g) Rivers and Harbors Act (33 U.S.C. Section
401, et seq.);
(h) Endangered Species Act (16 U.S.C. Section
1531, et seq.); and
(i) Occupational Safety and Health Act (29
U.S.C. Section 651, et seq.);
together with any other applicable foreign or domestic laws
(federal, state, provincial or local) relating to emissions,
discharges, releases or threatened releases of any Hazardous
Substance into ambient air, land, surface water, groundwater,
personal property or structures, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, discharge or handling of any Hazardous
Substance.
"ERISA" means the Employee Retirement Income Security
Act of 1974, together with the rules and regulations promulgated
thereunder, as amended from time to time.
"ERISA Affiliate" means any "affiliate" of any
Co-Borrower or other member of the Controlled Group, within the
meaning of section 414 of the Code.
"Eurodollar Basis" shall mean a simple per annum
interest rate equal to the sum of (a) the quotient of (i) the
Eurodollar Rate divided by (ii) one minus the Eurodollar Reserve
Percentage, stated as a decimal. The Eurodollar Basis shall be
rounded upward to the nearest one sixteenth of one percent
(1/16%) and, once determined, shall remain unchanged during the
applicable Interest Period, except for changes to reflect
adjustments in the Eurodollar Reserve Percentage.
"Eurodollar Loan" shall mean a Loan which a Co-Borrower
requests to be made as a Eurodollar Loan or which is reborrowed
as a Eurodollar Loan in accordance with the provisions of
Section 2.2 hereof and which bears interest at a per annum rate
equal to the Eurodollar Basis plus the Eurodollar Margin in
effect from time to time.
"Eurodollar Margin" means, for Eurodollar Loans
outstanding, the percentage per annum calculated as set forth in
Section 2.3(b) hereof.
"Eurodollar Rate" shall mean, for any Interest Period,
the average (rounded upward to the nearest one sixteenth of one
percent (1/16%)) of the interest rates per annum which appear on
Telerate Page 4756 as of 11:00 a.m. (New York time), or, if
unavailable, any generally accepted successor rate selected by
the Agent, two (2) Business Days before the first day of such
8
Interest Period, in an amount approximately equal to the
principal amount of, and for a length of time approximately equal
to the Interest Period for, the Eurodollar Loan sought by any Co-
Borrower.
"Eurodollar Reserve Percentage" shall mean the
percentage which is in effect from time to time under Regulation
D of the Board of Governors of the Federal Reserve System, as
such regulation may be amended from time to time, as the maximum
reserve requirement applicable with respect to Eurocurrency
Liabilities (as that term is defined in Regulation D), whether or
not any Bank has any Eurocurrency Liabilities subject to such
reserve requirement at that time. The Eurodollar Basis for any
Eurodollar Loan shall be adjusted as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Event of Default" has the meaning set forth in Article
8 hereof.
"Excess Cash Flow" means for any fiscal year,
commencing with the fiscal year ending June 30, 1998,
Consolidated Net Income (or loss) (but excluding extraordinary
gains and extraordinary losses) for such fiscal year, plus
depreciation and amortization for such fiscal year, plus the non-
cash portion, if any, of Interest Expense, plus an amount equal
to any decrease in consolidated working capital during such
fiscal year, minus Capital Expenditures for such fiscal year,
minus the aggregate principal amount of all Indebtedness required
by its terms to be repaid during such fiscal year (to the extent
not deducted in determining such Consolidated Net Income), minus
the amount of all taxes paid during such fiscal year, to the
extent not deducted in determining such Consolidated Net Income,
minus cash dividends paid by Housecall during such fiscal year,
minus an amount equal to any increase in consolidated working
capital during such fiscal year, and minus the aggregate
principal amount of Indebtedness hereunder voluntarily prepaid
during such fiscal year.
"Existing Mortgage" shall mean that certain Mortgage
and Security Agreement dated as of October 30, 1996, entered into
between Medical Support Services of Tennessee, Inc. and the
Agent, pursuant to which Medical Support Services of Tennessee,
Inc. grants to the Agent, for its benefit and for the ratable
benefit of the Banks and the Issuing Bank, a Lien on all real
property owned by Medical Support Services of Tennessee, Inc., as
the same may be amended, supplemented or otherwise modified from
time to time.
"Federal Funds Rate" means, for any day, the rate set
forth in the weekly statistical release designated as H.15(519),
or any successor publication, published by the Federal Reserve
Board (including any such successor, "H.15(519)") for such day
opposite the caption "Federal Funds (Effective)." If on any
relevant day such rate is not yet published in H.15(519), the
rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor
publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds
Effective Rate." If on any relevant day the appropriate rate for
such day is not yet published in either H.15(519) or the
9
Composite 3:30 p.m. Quotations, the rate for such day will be the
arithmetic mean of the rates for the last transaction in
overnight federal funds arranged prior to 9:00 a.m. New York time
on that day by each of three leading brokers of federal funds
transactions in New York City, selected by the Agent.
"Fee Letters" means those certain letter agreements
dated as of October 30, 1996 and as of the Agreement Date,
respectively, regarding the payment of certain fees by the Co-
Borrowers to the Agent.
"Fixed Charge Coverage Ratio" means as of the last day
of any month of Housecall, the ratio of (a) the lesser of
(i) EBITDAR computed for the twelve-month period then ending or
(ii) EBITDAR computed for the three-month period then ending
times four (4), minus Capital Expenditures (computed for the
twelve-month period then ending considered as a single accounting
period) to (b) (i) the sum of Interest Expense, plus consolidated
operating lease rent expense of Housecall and its Subsidiaries,
plus scheduled maturities of long-term debt of Housecall and its
Subsidiaries as determined on a consolidated basis (each computed
for twelve-month period then ending considered as a single
accounting period) minus (ii) the aggregate amount of principal
payments made prior to the Agreement Date by Housecall and its
Subsidiaries on Indebtedness owed to NationsBank, N.A.
(Carolinas), as agent, computed for the twelve month period then
ending considered as a single accounting period.
"Funded Indebtedness" means, without duplication, all
obligations, liabilities and indebtedness of Housecall and its
Subsidiaries of the types described in subsections (a) - (e) of
the definition of Indebtedness as determined on a consolidated
basis.
"Funded Indebtedness/EBITDA Coverage Ratio" means as of
the last day of any month of Housecall, the ratio of (a) Funded
Indebtedness to (b) the lesser of (i) EBITDA computed for the
twelve-month period then ending or (ii) EBITDA computed for the
three-month period then ending times four (4).
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances
as of the date of determination.
"Governmental Approvals" means any consent, right,
exemption, concession, permit, license, authorization,
certificate, order, franchise, determination or approval of any
federal, state, provincial, municipal or governmental department,
commission, board, bureau, agency or instrumentality required for
the ownership of, or activities of Housecall or any of its
Subsidiaries or any other Person in connection with the business
of Housecall or any of its Subsidiaries.
"Governmental Authority" means any nation or
government, any state, province or other political subdivision
thereof or any entity exercising executive, legislative,
10
judicial, regulatory or administrative functions of or pertaining
to government.
"Governmental Requirements" means all legal
requirements in effect from time to time including all laws,
statutes, codes, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, permits, licenses,
authorizations, certificates, orders, franchises, determinations,
approvals, notices, demand letters, directions and requirements
of all governments, departments, commissions, boards, courts,
authorities, agencies, officials and officers, and all
instruments of record, foreseen or unforeseen, ordinary or
extraordinary, including but not limited to any change in any
law, regulation or the interpretation thereof by any foreign or
domestic governmental or other authority (whether or not having
the force of law), relating now or at any time heretofore or
hereafter to the business or operations of Housecall or any of
its Subsidiaries or to any of the property owned, leased or used
by Housecall or any of its Subsidiaries, including, without
limitation, the development, design, construction, acquisition,
start-up, ownership and operation and maintenance of property.
"Guaranty" or "guaranteed," as applied to an obligation
(each a "primary obligation"), shall mean and include (a) any
guaranty, direct or indirect, in any manner, of any part or all
of such primary obligation, and (b) any agreement, direct or
indirect, contingent or otherwise, the practical effect of which
is to assure in any way the payment or performance (or payment of
damages in the event of non-performance) of any part or all of
such primary obligation, including, without limiting the
foregoing, any reimbursement obligations as to amounts drawn down
by beneficiaries of outstanding letters of credit, and any
obligation of any Person, whether or not contingent, (i) to
purchase any such primary obligation or any property or asset
constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of such
primary obligation or (2) to maintain working capital, equity
capital or the net worth, cash flow, solvency or other balance
sheet or income statement condition of any other Person, (iii) to
purchase property, assets, securities or services primarily for
the purpose of assuring the owner or holder of any primary
obligation of the ability of the primary obligor with respect to
such primary obligation to make payment thereof or (iv) otherwise
to assure or hold harmless the owner or holder of such primary
obligation against loss in respect thereof.
"Hazardous Substance" means any pollutant, contaminant,
toxic or hazardous substance, material, constituent or waste as
such terms are defined in or pursuant to any Environmental Law.
"Hazardous Waste Facility Permit" means any permit,
license or other governmental authorization relating to the
storage, treatment or disposal of any Hazardous Substance
required pursuant to any Environmental Law.
"HCFA" means the Health Care Financing Administration
of HHS and any Person succeeding to the functions thereof.
"Health Facility License" shall mean a license or
permit under applicable law to provide any nursing, medical, or
other health related services, protection or supervision, or
11
assistance with the personal activities of daily living, or any
combination of those services.
"Healthfirst" means Healthfirst, Inc., a Delaware
corporation.
"Healthfirst Group" means Healthfirst, HFI Management,
Inc., HFI Home Care Management, L.P., Computer Masters of
Kentucky, Inc. and Health Care Resources, Inc.
"HHS" means the United States Department of Health and
Human Services and any Person succeeding to the functions
thereof.
"Highest Lawful Rate" shall mean the maximum non-
usurious interest rate, if any, that at any applicable time may
be contracted for, taken, reserved, charged or received on any
Loan or on the other amounts which may be owing to any Bank
pursuant to this Agreement under the laws applicable to such Bank
and this transaction.
"Housecall" means Housecall Medical Resources, Inc., a
Delaware corporation.
"Housecall, Inc." means Housecall, Inc., a Tennessee
corporation.
"Housecall SIC Management" means Housecall-SIC
Management, Inc., a Florida corporation.
"Indebtedness" of any Person means, without duplication
(a) any obligation for borrowed money; (b) any obligation
evidenced by bonds, debentures, notes or other similar
instruments; (c) any obligation to pay the deferred purchase
price of property or for services (other than in the ordinary
course of business); (d) any Capitalized Lease Obligation;
(e) any obligation or liability of others secured by a Lien on
property owned by such Person, whether or not such obligation or
liability is assumed; (f) any obligation under any Rate Contract;
(g) any Guaranty (other than those incurred in the ordinary
course of business); and (h) any other obligation or liability
which is required by GAAP to be shown as a liability on a
consolidated balance sheet of Housecall and its Subsidiaries.
"Indemnified Matters" shall have the meaning set forth
in Section 10.8 hereof.
"Intellectual Property Rights" has the meaning set
forth in Section 5.14 hereof.
"Interest Expense" means, for any period, the cash
interest expense (including, but not limited to, interest
associated with Capitalized Lease Obligations) and letter of
credit fee expense of Housecall and its Subsidiaries determined
on a consolidated basis for such period.
"Interest Period" means, with respect to any Eurodollar
Loan, a period from the borrowing date with respect to such Loan
(or the date of the expiration of the then current Interest
Period with respect to such Loan) to a date up to one (1), two
(2), three (3), or six (6) months thereafter, subject to the
following:
12
(i) if any Interest Period would otherwise
end on a day which is not a Business Day, that Interest
Period shall be extended to the next succeeding
Business Day, unless the result of such extension would
be to extend such Interest Period into another calendar
month, in which event such Interest Period shall end on
the immediately preceding Business Day;
(ii) any Interest Period which begins on a day
for which there is no numerically corresponding day in
the calendar month during which such Interest Period is
to end shall (subject to clause (i) above) end on the
last day of such calendar month; and
(iii) any Interest Period that would otherwise
extend beyond the Maturity Date shall end on the
Maturity Date or, if the Maturity Date shall not be a
Business Day, on the next preceding Business Day.
"Interest Rate Basis" shall mean the Base Rate or the
Eurodollar Basis, as appropriate.
"Investment" as applied to any Person, means any direct
or indirect ownership or purchase or other acquisition by that
Person of any Capital Stock, equity interest, obligations or
other securities, or of a beneficial interest in any Capital
Stock, equity interest, obligations or other securities, or all
or substantially all of the assets of any other Person (including
any Subsidiary), or any direct or indirect loan, advance (other
than advances to officers and employees for moving and travel
expenses, drawing accounts and similar expenditures in the
ordinary course of business) or capital contribution by that
Person to any other Person, including all indebtedness and
accounts receivable from that other Person which are not current
assets or did not arise from sales to that other Person in the
ordinary course of business.
"Issuing Bank" shall mean The Toronto-Dominion Bank,
and any other Person which The Toronto-Dominion Bank may
hereafter designate as a successor Issuing Bank pursuant to an
Assignment and Acceptance or otherwise.
"JCAHO" means the Joint Commission on Accreditation of
Healthcare Organizations.
"Letter of Credit Commitment" shall mean the obligation
of the Issuing Bank to issue Letters of Credit in an aggregate
face amount from time to time not to exceed the Available Letter
of Credit Amount.
"Letter of Credit Obligations" shall mean, at any time,
the sum of (a) an amount equal to the aggregate undrawn and
unexpired amount (including the amount to which any such Letter
of Credit can be reinstated pursuant to the terms hereof) of the
then outstanding Letters of Credit and (b) an amount equal to the
aggregate drawn, but unreimbursed drawings of any Letters of
Credit.
"Letter of Credit Reserve Account" shall mean any
account maintained by the Agent for the benefit of any Issuing
Bank, the proceeds of which shall be applied as provided in
Section 8.2(d) hereof.
13
"Letters of Credit" shall mean either Standby Letters
of Credit or Commercial Letters of Credit issued by the Issuing
Bank on behalf of any Co-Borrower from time to time in accordance
with Article 3 hereof.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preference, priority or
other security interest or preferential arrangement of any kind
or nature whatsoever (including, without limitation, those
created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
Capitalized Lease, any financing lease having substantially the
same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which
such lien relates as debtor, under the UCC or any comparable law,
but excluding therefrom any financing statement filed by a lessor
under an operating lease not intended as security) and any
contingent or other agreement to provide any of the foregoing.
"Loan Documents" shall mean this Agreement, the Notes,
the Security Documents, all reimbursement agreements relating to
Letters of Credit issued hereunder, the Fee Letters, all Requests
for Advance, all Requests for Issuance of Letters of Credit, Rate
Contracts between any Co-Borrower, on the one hand, and the Agent
(or an Affiliate of the Agent) or one or more of the Banks (or an
Affiliate of a Bank), on the other hand, and all other documents,
instruments, certificates, and agreements executed or delivered
in connection with or contemplated by this Agreement, including,
without limitation, any security agreements or guaranty
agreements from the Subsidiaries of any Co-Borrower to the Agent,
the Banks and the Issuing Bank.
"Loans" shall mean, collectively, the amounts advanced
by the Banks to any Co-Borrower under the Commitment, not to
exceed the amount of the Commitment, and evidenced by the Notes,
and shall include the Revolving Loans and the Term Loan.
"Majority Banks" means at any time Banks holding at
least sixty-six and two-thirds percent (66 %) of the then
aggregate unpaid principal amount of the Loans, or, if no such
principal amount is then outstanding, Banks having at least
sixty-six and two-thirds percent (66 %) of the Commitment
Percentages.
"Material Adverse Change" shall mean a material adverse
change in (a) the business, assets, operations, or financial
condition of Housecall and its Subsidiaries considered as a
whole, (b) the collective ability of Housecall and its
Subsidiaries to pay the Obligations in accordance with their
terms, or (c) the security interests or liens of the Agent and
the Banks on the Collateral or the priority of such security
interests or liens.
"Material Adverse Effect" means a material adverse
effect on (a) the business, assets, operations, or financial
condition of Housecall and its Subsidiaries considered as a
whole, or (b) the collective ability of Housecall and its
Subsidiaries to pay the Obligations in accordance with their
terms, and (c) the security interests or liens of the Agent and
the Banks on the Collateral or the priority of such security
interests or liens.
14
"Material Subsidiaries" shall mean those Subsidiaries
of Housecall listed on Schedule 1 hereto, and (a) any other
Subsidiary of Housecall, now or hereafter created, which owns
assets (including stock) having an aggregate market value in
excess of $200,000, (b) all Subsidiaries of Housecall, now or
hereafter created, which collectively own assets (including
stock) that when added to the assets of Housecall have an
aggregate value equal to ninety-five percent (95%) of all assets
of Housecall on a consolidated basis with its Subsidiaries, and
(c) each of the New Subsidiaries.
"Maturity Date" means May 1, 2000, or such earlier date
on which payment of the Loans shall become due and payable
(whether by virtue of acceleration or otherwise).
"Medicaid Certification" shall mean the certification
by the applicable state Medicaid agency or its successor that all
facilities comply with all the requirements for participation set
forth in the Medicaid Regulations.
"Medicaid Provider Agreement" shall mean an agreement
entered into with a state Medicaid agency or its successor or
other such entity administering the Medicaid program pursuant to
which the agency agrees to pay for covered services provided by
all facilities to eligible Medicaid recipients in accordance with
the terms of such agreement and Medicaid Regulations.
"Medicaid Regulations" shall mean collectively, (a) all
Federal statutes (whether set forth in Title XIX of the Social
Security Act or elsewhere) affecting the medical assistance
program established by Title XIX of the Social Security Act (42
U.S.C. Section 1396, et seq.); (b) all applicable provisions of
all federal rules, regulations, manuals, final orders and
administrative, reimbursement and other guidelines of all
Governmental Authorities (whether or not having the force of law)
promulgated pursuant to or in connection with the statutes
described in clause (a) above; (c) all state statutes and
regulations and plans for medical assistance enacted in
connection with the statutes and provisions described in clauses
(a) and (b) above; and (d) all applicable provisions of all
rules, regulations, manuals, final orders and administrative,
reimbursement and other applicable guidelines of all Governmental
Authorities (whether or not having the force of law) promulgated
pursuant to or in connection with any of the foregoing.
"Medicare Certification" shall mean certification by
HCFA or a state agency or entity under contract with HCFA that a
facility complies with all the applicable requirements for
participation set forth in the Medicare Regulations.
"Medicare Provider Agreement" shall mean an agreement
entered into with HCFA or a state agency under contract with HCFA
under which HCFA agrees to pay for covered services provided by a
facility to Medicare beneficiaries in accordance with the terms
of such agreement and Medicare Regulations.
"Medicare Regulations" shall mean collectively, all
Federal statutes (whether set forth in Title XVIII of the Social
Security Act or elsewhere) affecting the health insurance program
for the aged and disabled established by Title XVIII of the
Social Security Act (42 U.S.C. Section 1395, et seq.), together
with all applicable provisions of all rules, regulations,
15
manuals, final orders and administrative, reimbursement and other
applicable guidelines of all Governmental Authorities, including
HHS, HCFA, or the Office of the Inspector General of HHS, or any
Person succeeding to the functions of any of the foregoing
(whether or not having the force of law).
"Medicare Visit" shall mean any visit to the home of a
Medicare beneficiary where the cost of such visit is eligible for
reimbursement under the Medicare Regulations.
"Multiemployer Plan" means a "multiemployer plan" as
defined in section 4001(a)(3) of ERISA) and to which any
Co-Borrower or any other member of the Controlled Group makes, is
obligated to make or at any time has made or been obligated to
make contributions.
"Net Cash Proceeds" shall mean, with respect to any
sale, lease, transfer or other disposition of assets or
securities by Housecall or any of its Subsidiaries, the aggregate
amount of cash received for such assets or securities, net of
reasonable and customary transaction costs properly attributable
to such transaction and payable by Housecall or such Subsidiary
in connection with such sale, lease, transfer or other
disposition of assets or securities, including, without
limitation, sales commissions, and also net of (i) cash taxes
paid or payable by Housecall or such Subsidiary as a result of or
in connection with such sale, lease, transfer or other
disposition, (ii) any Indebtedness secured by a lien on any asset
subject to such sale, lease, transfer or other disposition and
required to be repaid in connection with such sale, lease,
transfer or other disposition and (iii) any portion of such
proceeds payable to any holder (other than Housecall or any of
its Subsidiaries or any of its Affiliates) of any direct or
indirect minority interest in such assets.
"Net Revenues" means gross revenues of Housecall on a
consolidated basis with its Subsidiaries less contractual
adjustments thereto.
"Net Worth" shall mean, at any time, with respect to
Housecall on a consolidated basis, the sum of (a) the
shareholders' equity of Housecall and its consolidated
Subsidiaries as set forth or reflected on the most recent
consolidated balance sheet of Housecall and its consolidated
Subsidiaries prepared in accordance with GAAP, plus (b) to the
extent deducted in determining such shareholders' equity, any
non-recurring charges as approved by the Agent from time to time.
"New Mortgage" shall mean that certain First Deed of
Trust, Security Agreement and Fixture Financing Statement entered
into between Healthfirst and the Agent, pursuant to which
Healthfirst grants to the Agent, for its benefit and for the
benefit of the Banks and the Issuing Bank, a Lien on certain real
property leased by Healthfirst, as the same may be amended,
supplemented or otherwise modified from time to time.
"New Subsidiaries" shall mean HFI Acquisition Corp.,
HFI Management, Inc., HFI Home Care Management, L.P.,
Healthfirst, Computer Masters of Kentucky, Inc. and Health Care
Resources, Inc.
16
"Notice of Conversion/Continuation" shall mean a notice
in substantially the form of Exhibit A-2 hereto.
"Notes" shall mean the Term Notes and the Revolving
Loan Notes.
"Obligations" means all loans, advances, debts,
liabilities, obligations, covenants and duties and other payment
and performance obligations owing to the Agent (or an Affiliate
of the Agent) or the Banks (or an Affiliate of any Bank) by any
Co-Borrower or any of their respective Subsidiaries of any kind
or nature, present or future, whether or not evidenced by any
note, guaranty or other instrument, arising under this Agreement,
any of the Notes, the Security Documents, the Fee Letters, or any
of the other Loan Documents, whether or not for the payment of
money, arising by reason of an extension of credit, absolute or
contingent, due or to become due, now existing or hereafter
arising, including all principal, interest, charges, expenses,
fees, attorneys' fees and disbursements and any other sum
chargeable to any Co-Borrower or any of their respective
Subsidiaries under this Agreement or any other Loan Document.
"Participant" has the meaning set forth in
Section 10.1(e) hereof.
"Payment Date" shall mean the last day of each Interest
Period for a Eurodollar Loan.
"Pending Transactions" shall mean the acquisition of
the Healthfirst Group.
"PBGC" means the Pension Benefit Guaranty Corporation
and any successor to all or any part of such corporation's
functions under ERISA.
"Pension Plan" means any Multiemployer Plan or any
other employee pension benefit plan (as defined in section 3(2)
of ERISA) that is subject to Title IV of ERISA and which any Co-
Borrower or any member of the Controlled Group maintains, or to
which it makes, is obligated to make or at any time during the
preceding five calendar years has made or has been obligated to
make contributions.
"Permitted Acquisitions" means any non-hostile
acquisition of all or substantially all of the Capital Stock of a
corporation, all or substantially all of the ownership interests
in any partnership, limited liability company or joint venture,
all or substantially all of the operating assets of any Person,
or assets which constitute all or substantially all of the assets
of a division or a separate or separable line of business,
provided that:
(a) (i) the corporation, partnership, limited
liability company, joint venture, operating assets or
line of business acquired is in a substantially similar
line of business as Housecall or any of its
Subsidiaries, (ii) the corporation, partnership,
limited liability company or joint venture acquired is
organized under the laws of, and operating in, the
United States or Canada, and (iii) the assets acquired
are located in the United States or Canada;
17
(b) the Agent shall have received adequate
financial information regarding the assets or business
to be acquired, including (i) the most recent audited
financial statements, if available, but in any case the
most recently prepared balance sheet and statement of
income for the assets or business to be acquired and
pro forma financial statements showing the effect of
the acquisition of the assets or business, including a
balance sheet for Housecall and its Subsidiaries on a
consolidated basis as of the time of the acquisition
and pro forma statements of income for Housecall and
its Subsidiaries on a consolidated basis through at
least the end of eight (8) complete fiscal quarters
after the acquisition, together with calculations
showing compliance with Sections 7.19, 7.20, 7.21,
7.22, 7.23, 7.24 and 7.25 hereof for such period, and
(ii) copies of all information presented to Housecall's
Board of Directors for its approval of such
acquisition;
(c) no Event of Default or Default shall
exist at the time of such acquisition or would result
on a pro forma basis after completion of such
acquisition and the Agent shall have received a
certificate of an Authorized Signatory to that effect;
(d) the Agent contemporaneously with the
closing of such acquisition shall have received such
documents and instruments as may be necessary to grant
or confirm to the Agent a lien on or security interest
in all of the assets so acquired and, if the
acquisition is an acquisition of Capital Stock of a
corporation or an interest in a partnership or a
limited liability company, to perfect a pledge of such
Capital Stock or security interest in such partnership
or limited liability company interest, and, the Agent
shall also have received a guaranty by the corporation,
limited liability company or partnership so acquired
and such legal opinions as the Agent may reasonably
request regarding the enforceability of such security
interests, pledge and guaranty;
(e) the Majority Banks shall have consented
to such acquisition; and
(f) Housecall, or Housecall's Wholly Owned
Subsidiary, if Housecall is not a party to such
acquisition, is the surviving entity in any acquisition
involving a merger, reorganization or recapitalization.
"Permitted Encumbrances" means: (a) carriers',
warehousemen's, mechanics', landlords', materialmen's,
suppliers', tax, assessment, governmental and other like liens
and charges arising in the ordinary course of business securing
obligations that are not incurred in connection with the
obtaining of any advance or credit and which are not more than
sixty (60) days overdue, or are being contested in good faith by
appropriate proceedings, provided that, in accordance with GAAP,
adequate reserves have been established; (b) liens arising in
connection with worker's compensation, unemployment insurance,
appeal and release bonds and progress payments under government
contracts; (c) judgment liens in existence less than thirty (30)
18
days after the entry of the judgment, or with respect to which
execution has been stayed, or the payment of which is covered in
full by insurance; (d) zoning restrictions, easements, licenses
or other restrictions on the use of real property, so long as the
same do not materially impair the use of such real property by
Housecall or any of its Subsidiaries or the value thereof to the
owner of such real property; (e) any lien existing or arising by
operation of law in the ordinary course of business, such as a
"banker's lien" or similar right of offset or inchoate ERISA
liens; (f) liens on the property of Housecall or any of its
Subsidiaries securing (i) the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, (ii) obligations on surety and appeal bonds, and
(iii) other obligations of a like nature incurred in the ordinary
course of business provided all such Liens in the aggregate have
no reasonable likelihood of causing a Material Adverse Effect;
(g) liens covering fixed assets (including liens in favor of a
lessor under a Capitalized Lease), which liens secure purchase
money financing for such fixed assets, provided that (A) any such
lien covers only the fixed assets so acquired, and (B) the
Indebtedness secured thereby is permitted pursuant to Section 7.8
hereof; (h) liens existing as the Agreement Date and identified
on Schedule 7.6 attached hereto; (i) liens and security interests
securing payment of the Obligations granted pursuant to any of
the Loan Documents; (j) any lien existing on any specific fixed
asset of any Person at the time such Person becomes a Subsidiary
of Housecall and not created in contemplation of such event; (k)
any lien on any specific fixed asset of any Person existing at
the time such Person is merged or consolidated with or into
Housecall or any of its Subsidiaries and not created in
contemplation of such event; (l) any lien existing on any
specific fixed asset prior to the acquisition thereof by
Housecall or any of its Subsidiaries and not created in
contemplation of such acquisition; and (m) any renewals or
extensions of any of the liens referred to in any of the
foregoing clauses (g), (h), (i), (j), (k) or (l), provided that
by any such renewal or extension no lien is extended to
additional property and that no monetary amount secured by any
such lien is increased; provided, however, that the liens set
forth and described in subclauses (j), (k) and (l) herein shall
not exceed $3,000,000 in the aggregate at any time.
"Permitted Investments" means (a) cash and demand
deposits, (b) investments in direct obligations of the Government
of the United States of America or any agency or instrumentality
thereof or any obligations guaranteed by the full faith and
credit of the Government of the United States of America, in each
case maturing within 360 days after the date of investment
therein, (c) commercial paper in an aggregate amount of up to
$5,000,000 per issuer outstanding at any time, issued by any
corporation organized in any State of the United States of
America, rated at least A-1 (or the then equivalent grade) by
Standard & Poor's Corporation ("S&P") or P-1 (or the then
equivalent grade) by Xxxxx'x Investor Services, Inc. ("Moody's"),
or the successor of either of them, (d) Dollar denominated
certificates of deposit of, eurodollar certificates of deposit
of, bankers acceptance of, or time deposits with, (x) any Bank or
(y) any commercial bank the short-term securities of which are
rated at least A-1 (or the then existing equivalent) by S&P or at
least P-1 (or the then existing equivalent) by Moody's, in each
case maturing within 360 days after the date of purchase,
acceptance or deposit, (e) taxable or tax-free money market funds
19
rated at least A (or the then equivalent grade) by S&P or
Moody's, or the successor of either of them, (f) taxable or tax-
exempt money market preferred stock funds rated at least A (or
the then equivalent grade) by S&P or Moody's, or the successor of
either of them, (g) tax-exempt variable rate demand notes backed
by municipal bonds (low floaters) supported by a letter of credit
from a commercial bank rated at least AA (or the then equivalent
grade) by S&P or Moody's, or the successor of either of them, (h)
asset-backed securities rated at least A (or the then equivalent
grade) by S&P or Moody's or the successor of either of them,
maturing within 90 days after the date of investment therein,
with a maximum investment of $5,000,000, (i) asset-backed
certificates of participation with a long-term rating of at least
A (or the then equivalent grade) by S&P or Moody's or a short
term rating of no less than A-1 by S&P or P-1 by Moody's, or the
successor of either of them, with an interest accrual period of
90 days or less whose certificate is deemed to be automatically
tendered at par at the end of each interest accrual period, and
(j) municipal notes maturing in six months or less and rated at
least SP-2 (or the then equivalent grade) by S&P, or its
successor, or at least Mig 2 (or the then equivalent grade) by
Moody's, or its successor.
"Person" means any individual, corporation,
partnership, limited liability company, trust, association or
other entity or organization, including any government, political
subdivision, agency or instrumentality thereof.
"Proprietary Information" has the meaning set forth in
Section 10.16.
"Rate Contracts" shall mean any interest rate swap,
cap, collar, floor, caption or swaption agreements, or any
similar arrangements designed to hedge the risk of variable
interest rate volatility or to reduce interest costs, arising at
any time between any Co-Borrower, on the one hand, and the Agent
or any one or more of the Banks, or any other Person (other than
an Affiliate of Housecall), on the other hand, as such agreement
or arrangement may be modified, supplemented and in effect from
time to time.
"Receivables" shall mean any right to payment, whether
or not it has been earned by performance, for goods sold or
leased or for services rendered in the ordinary course of
business, after adjustment for estimated settlements with third
party payors and after deduction for doubtful accounts.
"Reimbursement Obligations" shall mean the payment
obligations of the Co-Borrowers under Article 3 hereof.
"Replacement Event" shall have the meaning ascribed
thereto in Section 10.13 hereof.
"Replacement Bank" shall have the meaning set forth in
Section 10.13 hereof.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder other than
a Reportable Event as to which the provision of thirty (30) days'
notice to the PBGC is waived under applicable regulations. In
addition, a Reportable Event means a withdrawal from a plan
described in Section 4063 of ERISA or a cessation of operations
20
described in Section 4062(e) of ERISA, if such withdrawal or
cessation could reasonably be expected to result in a liability
of any Co-Borrower or member of the Controlled Group to the PBGC,
to a trustee or to a Multiemployer Plan in aggregate amount of
one million Dollars ($1,000,000) or more.
"Request for Advance" shall mean any certificate signed
by an Authorized Representative requesting a Loan hereunder which
will increase the aggregate amount of the Loans outstanding,
which certificate shall be denominated a "Request for Advance,"
and shall be in substantially the form of Exhibit A-1 attached
hereto. Each Request for Advance shall, among other things,
specify the Co-Borrower requesting the Loan, the date of the
Loan, which shall be a Business Day, the amount of the Loan, and
the type of Loan.
"Request for Issuance of Letter of Credit" shall mean
any certificate signed by an Authorized Representative requesting
that an Issuing Bank issue a Letter of Credit hereunder, which
certificate shall be in substantially the form of Exhibit B
attached hereto, and shall, among other things, (a) specify the
Co-Borrower requesting the issuance of the Letter of Credit, (b)
state whether the requested Letter of Credit is either a
Commercial Letter of Credit or a Standby Letter of Credit, (c)
the stated amount of the Letter of Credit (which shall be in
United States Dollars), (d) the effective date (which shall be a
Business Day) for the issuance of such Letter of Credit, (e) the
date on which such Letter of Credit is to expire (which shall be
a Business Day and which shall be subject to Section 3.1(a)
hereof), (f) the Person for whose benefit such Letter of Credit
is to be issued, (g) other relevant terms of such Letter of
Credit, and (h) the Available Letter of Credit Amount as of the
scheduled date of issuance of such Letter of Credit.
"Revolving Loan Commitment" shall mean the several
obligations of the Banks to advance a sum not to exceed
$18,000,000 at any one time outstanding, in accordance with their
respective Commitment Percentages, to the Co-Borrowers pursuant
to the terms hereof, as such obligations may be reduced from time
to time pursuant to the terms hereof.
"Revolving Loans" shall mean any amount advanced by the
Banks to the Co-Borrowers under the Revolving Loan Commitment
evidenced by the Revolving Loan Notes.
"Revolving Loan Notes" shall mean those certain amended
and restated promissory notes in the aggregate principal amount
of $18,000,000, one issued to each of the Banks by the Co-
Borrowers, each one substantially in the form of Exhibit C
attached hereto, and any extensions, renewals or amendments to
any of the foregoing.
"S&P" means Standard & Poor's Ratings Group, a division
of McGraw Hill, Inc. and any successor thereto that is a
nationally recognized rating agency.
"Sale-Leaseback Transaction" means an arrangement
relating to property now owned or hereafter acquired whereby
Housecall or one of its Subsidiaries transfers such property to a
Person and Housecall or one of its Subsidiaries leases it from
such Person.
21
"Security Agreement" shall mean that certain Security
Agreement executed by and among the Co-Borrowers and the Agent
dated as of October 30, 1996, as the same may be modified,
amended or supplemented from time to time.
"Security Documents" shall mean the Security Agreement,
the Stock Pledge Agreement, the Assignment of Partnership
Interests, the New Mortgage, the Existing Mortgage, the
Assignment of Membership Interests, the Trademark Security
Agreement, the Subsidiary Pledge Agreement, the Subsidiary
Guaranty, the Subsidiary Security Agreement, all documents
executed in connection with any of the foregoing, and all and any
other documents, instruments or agreements executed by Housecall
or any of its Subsidiaries granting Collateral for the Loans.
"Senior Debt" shall mean, as of any date (without
duplication), the aggregate outstanding amount of all Obligations
(arising under this Agreement and the other Loan Documents) and
all Capitalized Lease Obligations of the Co-Borrowers and their
respective Subsidiaries.
"Senior Debt/EBITDA Ratio" means, as of the last day of
any month, the ratio of (a) Senior Debt to (b) the lesser of
(i) EBITDA computed for the twelve-month period then ending or
(ii) EBITDA computed for the three-month period then ending times
four (4).
"Solvent" means, when used with respect to any Person,
that at the time of determination:
(a) the fair value of its assets (both at
fair valuation and at present fair salable value) is in
excess of the total amount of all of its Indebtedness,
including contingent, subordinated, unmatured and
unliquidated Indebtedness (but, in computing the amount
of any contingent or unliquidated Indebtedness, it is
intended that such Indebtedness will be computed at the
amount which, in light of all the facts and
circumstances existing at the time of the determination
thereof, represents the amount that can reasonably be
expected to become an actual or liquidated
Indebtedness);
(b) it is then able to pay its Indebtedness
as it becomes due; and
(c) it has capital sufficient to carry on its
business.
"Standby Letter of Credit" shall mean a Letter of
Credit issued to support obligations of any Co-Borrower incurred
in the ordinary course of its business, and which is not a
Commercial Letter of Credit.
"Stock Pledge Agreement" shall mean that certain Stock
Pledge Agreement executed by and among the Co-Borrowers and the
Agent dated as of October 30, 1996, as the same may be modified,
amended or supplemented from time to time.
"Subordinated Indebtedness" shall mean the Indebtedness
of Housecall or its Subsidiaries to any Person, which
Indebtedness is subordinated to the Obligations pursuant to
22
documents and instruments which are in form and substance
satisfactory to the Majority Banks.
"Subordinated Notes" shall mean that certain 10 1/2%
Subordinated Promissory Note in the original principal amount of
$2,500,000 issued by Housecall to WCAS Capital Partners II, L.P.
on June 30, 1994 and due on June 30, 2002, that certain 10 1/2%
Subordinated Promissory Note in the original principal amount of
$5,000,000 issued by Housecall to WCAS Capital Partners II, L.P.
on January 25, 1995 and due on June 30, 2002, and that certain
10 1/2% Subordinated Promissory Note in the original principal
amount of $2,500,000 issued by Housecall to WCAS Capital Partners
II, L.P. on May 31, 1995 and due on June 30, 2002.
"Subsidiary" of a Person means any corporation,
partnership, joint venture, limited liability company,
association or other business entity of which such Person now or
hereafter owns, directly or indirectly, securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other governing body
thereof.
"Subsidiary Guaranty" shall mean that certain Guaranty
Agreement executed by each Material Subsidiary dated as of
October 30, 1996 with respect to the Obligations, and shall
include any supplement to the Guaranty Agreement executed in
accordance with Section 7.14 hereof, as the same may be modified,
amended or supplemented from time to time.
"Subsidiary Pledge Agreement" shall mean that certain
Subsidiary Pledge Agreement dated as of October 30, 1996 executed
by certain Material Subsidiaries in favor of the Agent, and shall
include any supplement thereto executed in accordance with
Section 7.14 hereof, as the same may be amended, supplemented or
modified from time to time.
"Subsidiary Security Agreement" shall mean that certain
Subsidiary Security Agreement executed by and among each Material
Subsidiary and the Agent dated as of October 30, 1996, and shall
include any supplement thereto executed in accordance with
Section 7.14 hereof, as the same may be supplemented, modified or
amended from time to time.
"Term Loan" shall mean any amount advanced by the Banks
to Housecall under the Term Loan Commitment evidenced by the Term
Notes.
"Term Loan Commitment" shall mean the several
obligations of the Banks to advance the sum of up to $22,000,000,
in accordance with their respective Commitment Percentages, to
Housecall on the Agreement Date.
"Term Notes" shall mean those certain promissory notes
in the aggregate principal amount of $22,000,000, one issued to
each of the Banks by Housecall, each one substantially in the
form of Exhibit D attached hereto, and any extensions, renewals
or amendments to any of the foregoing.
"Trademark Security Agreement" shall mean that certain
Trademark Security Agreement dated as of October 30, 1996
executed by Housecall, Housecall, Inc. and Housecall Infusion
23
Alternatives, Inc. in favor of the Agent, as the same may be
amended, supplemented or modified from time to time.
"UCC" means the Uniform Commercial Code as in effect in
any jurisdiction.
"Uniform Customs" shall mean the Uniform Customs and
Practice for Documentary Credits (1994 Revision), International
Chamber of Commerce Publication No. 500, as the same may be
amended from time to time.
"Xxxxx Xxxxxx" means any one or more of (a) Welsh,
Carson, Xxxxxxxx & Xxxxx VI, L.P., (b) WCAS Capital Partners II,
L.P. and (c) WCAS Healthcare Partners, L.P.
"Wholly Owned Subsidiary" means any direct or indirect
Subsidiary of a Person where such Person's ownership of such
Subsidiary is through ownership of 100% of all issued and
outstanding Capital Stock (or other ownership interests, but
excluding any directors qualifying shares) and warrants, options
or rights to purchase Capital Stock (or other ownership
interests) at all levels.
Except where the context otherwise requires, all
definitions in this Article 1 imparting the singular shall also
include the plural and vice versa. Except where otherwise
specifically restricted, reference to a party to a Loan Document
includes that party and its successors and assigns. All terms
used herein which are defined in Article 9 of the Uniform
Commercial Code in effect in the State of New York on the date
hereof and which are not otherwise defined herein shall have the
same meanings herein as set forth therein. Each accounting term
not defined herein and each accounting term partly defined herein
to the extent not defined shall have the meaning given to it
under GAAP.
ARTICLE 2
The Loans
Section 2.1 Extension of Credit. Subject to the
terms and conditions of, and in reliance upon the representations
and warranties made in, this Agreement and the other Loan
Documents, the Banks agree, severally in accordance with their
respective Commitment Percentages and not jointly, to extend
credit in an aggregate principal amount not to exceed the
Commitment to the Co-Borrowers, as hereinafter provided.
(a) The Revolving Loans. The Banks agree,
severally in accordance with their respective Commitment
Percentages and not jointly, upon the terms and subject to the
conditions of this Agreement, to lend and relend to each of the
Co-Borrowers, prior to the Maturity Date, amounts which in the
aggregate for all of the Co-Borrowers combined at any one time
outstanding do not exceed the Revolving Loan Commitment. Subject
to the terms and conditions hereof, Loans under the Revolving
Loan Commitment may be repaid and reborrowed from time to time on
a revolving basis.
(b) The Term Loan. The Banks agree,
severally in accordance with their respective Commitment
24
Percentages and not jointly, upon the terms and subject to the
conditions of this Agreement, to lend to Housecall, on the
Agreement Date, amounts which in the aggregate at any one time
outstanding do not exceed the Term Loan Commitment. After the
Agreement Date, Loans under the Term Loan Commitment may be
continued and converted pursuant to a Notice of
Conversion/Continuation in the form of Exhibit A-2 hereto as
provided in Section 2.2(b)(ii) and Section 2.2(c)(ii) below in
order to reborrow Base Rate Loans or Eurodollar Loans for new
Interest Periods; provided, however, there shall be no increase
in the aggregate principal amount outstanding under the Term Loan
Commitment at any time after the Agreement Date.
(c) The Letters of Credit. Subject to the
terms and conditions hereof, the Issuing Bank agrees in
accordance with the Letter of Credit Commitment to issue Letters
of Credit for the account of any Co-Borrower pursuant to Article
3 hereof in an aggregate outstanding face amount not to exceed
the Letter of Credit Commitment at any time.
Section 2.2 Manner of Advance and Disbursement of
Loans.
(a) Choice of Interest Rate, etc. Any Loan
shall, at the option of the applicable Co-Borrower, be made as a
Base Rate Loan or a Eurodollar Loan; provided, however, that
(i) at such time as there shall have occurred and be continuing a
Default hereunder, the Co-Borrowers shall not have the right to
reborrow any Eurodollar Loans, and all subsequent Loans during
the period such Default continues, shall be made as Base Rate
Loans, (ii) if any Co-Borrower requesting a Loan fails to give
the Agent written notice specifying whether a Loan is to be
repaid or reborrowed on a Payment Date, such Loan shall be repaid
and then reborrowed as a Base Rate Loan on the Payment Date, and
(iii) the Co-Borrowers may not select a Eurodollar Loan with
respect to any Loan, the proceeds of which are to reimburse an
Issuing Bank pursuant to Article 3 hereof. Any notice given to
the Agent in connection with a requested Loan hereunder shall be
given to the Agent prior to 11:00 a.m. (Houston time) in order
for such Business Day to count toward the minimum number of
Business Days required. The Agent shall, upon reasonable request
of any Co-Borrower from time to time, provide to the Co-Borrower
such information with regard to the Eurodollar Basis as may be so
requested.
(b) Base Rate Loans.
(i) Initial and Subsequent Loans. The
Co-Borrowers shall give the Agent in the case of Base
Rate Loans not later than 11:00 a.m. (Houston time) on
the Business Day of the date of a proposed Loan,
irrevocable prior notice by telephone and telecopy and
shall confirm any such telephone notice with a written
Request for Advance; provided, however, that the
failure by such Co-Borrower to confirm any notice by
telephone and telecopy with a Request for Advance shall
not invalidate any notice so given.
(ii) Repayments and Reborrowings. Any Co-
Borrower may repay or prepay a Base Rate Loan and (a)
at any time reborrow all or a portion of the principal
amount thereof as one or more Base Rate Loans, (b) upon
25
at least two (2) Business Days' irrevocable prior
written notice to the Agent in the form of a Notice of
Conversion/Continuation, reborrow all or a portion of
the principal thereof as one or more Eurodollar Loans,
or (c) not reborrow all or any portion of such Base
Rate Loan. Upon the date indicated by such Co-
Borrower, such Base Rate Loan shall be so repaid and,
as applicable, reborrowed.
(c) Eurodollar Loans.
(i) Initial and Subsequent Loans. The
Co-Borrowers shall give the Agent in the case of
Eurodollar Loans at least three (3) Business Days'
irrevocable prior notice by telephone and telecopy and
shall immediately confirm any such telephone notice
with a written Request for Advance; provided, however,
that the failure by such Co-Borrower to confirm any
notice by telephone and telecopy with a Request for
Advance shall not invalidate any notice so given. The
Agent, whose determination shall be conclusive, shall
determine the available Eurodollar Basis as of the
second (2nd) Business Day prior to the date of the
requested Loan and shall notify such Co-Borrower of the
same.
(ii) Repayments and Reborrowings. At
least three (3) Business Days prior to each Payment
Date for a Eurodollar Loan, such Co-Borrower shall give
the Agent written notice in the form of a Notice of
Conversion/Continuation specifying whether all or a
portion of any Eurodollar Loan outstanding on the
Payment Date (a) is to be repaid and then reborrowed in
whole or in part as a new Eurodollar Loan, in which
case such notice shall also specify the Interest Period
which such Co-Borrower shall have selected for such new
Eurodollar Loan, (b) is to be repaid and then
reborrowed in whole or in part as a Base Rate Loan, or
(c) is to be repaid and not reborrowed. Upon such
Payment Date such Eurodollar Loan will, subject to the
provisions hereof, be so repaid and, as applicable,
reborrowed.
(iii) Miscellaneous. Notwithstanding any
term or provision of this Agreement which may be
construed to the contrary, each Eurodollar Loan shall
be in a principal amount of no less than $1,000,000 and
in an integral multiple of $500,000, and at no time
shall the aggregate number of all Eurodollar Loans then
outstanding exceed ten (10).
(d) Notification of Banks. Upon receipt of a
(i) Request for Advance or a telephone or telecopy request for
Loan, (ii) notification from an Issuing Bank that a draw has been
made under any Letter of Credit, or (iii) notice from any Co-
Borrower with respect to any outstanding Loan prior to the
Payment Date for such Loan, the Agent shall promptly notify each
Bank by telephone or telecopy of the contents thereof and the
amount of each Bank's portion of any such Loan. Each Bank shall,
not later than 1:00 p.m. (Houston time) on the date specified for
such Loan in such notice, make available to the Agent at the
Agent's office, or at such account as the Agent shall designate,
26
the amount of such Bank's portion of the Loan in immediately
available funds.
(e) Disbursement. Prior to 3:00 p.m.
(Houston time) on the date of a Loan hereunder, the Agent shall,
subject to the satisfaction of the conditions set forth in
Article 4 hereof, disburse the amounts made available to the
Agent by the Banks in like funds by transferring the amounts so
made available by deposit pursuant to the Co-Borrower's
instructions. Unless the Agent shall have received notice from a
Bank prior to 12:00 p.m. (Houston time) on the date of any Loan
that such Bank will not make available to the Agent such Bank's
ratable portion of such Loan, the Agent may assume that such Bank
has made or will make such portion available to the Agent on the
date of such Loan and the Agent may, in its sole discretion and
in reliance upon such assumption, make available to the Co-
Borrower on such date a corresponding amount. If and to the
extent such Bank shall not have so made such ratable portion
available to the Agent, such Bank agrees to repay to the Agent
forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made
available to such Co-Borrower until the date such amount is
repaid to the Agent, (x) for the first two Business Days, at the
rate on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day by the Federal Reserve Bank of New York,
and (y) thereafter, at the Base Rate. If such Bank shall repay
to the Agent such corresponding amount, such amount so repaid
shall constitute such Bank's portion of the applicable Loan for
purposes of this Agreement and if both such Bank and the Co-
Borrower shall pay and repay such corresponding amount, the Agent
shall promptly relend to each Borrower such corresponding amount.
If such Bank does not repay such corresponding amount immediately
upon the Agent's demand therefor, the Agent shall notify any Co-
Borrower and the Co-Borrowers shall immediately pay such
corresponding amount to the Agent. The failure of any Bank to
fund its portion of any Loan shall not relieve any other Bank of
its obligation, if any, hereunder to fund its respective portion
of the Loan on the date of such borrowing, but no Bank shall be
responsible for any such failure of any other Bank. In the event
that a Bank for any reason fails or refuses to fund its portion
of a Loan in violation of this Agreement, then, until such time
as such Bank has funded its portion of such Loan, or all other
Banks have received payment in full (whether by repayment or
prepayment) of the principal and interest due in respect of such
Loan, such non-funding Bank shall (i) have no right to vote
regarding any issue on which voting is required or advisable
under this Agreement or any other Loan Document, and (ii) shall
not be entitled to receive any payments of principal, interest or
fees from the Agent (or the other Banks) in respect of its Loans.
Section 2.3 Interest.
(a) On Revolving and Term Loans. Interest on
Loans under the Commitment subject to adjustment as set forth in
Section 2.3(c) hereof, shall be payable as follows:
(i) On Base Rate Loans. Interest on Base
Rate Loans shall be computed for the actual number of
days elapsed on the basis of a hypothetical year of 365
days and shall be payable in arrears on the last
Business Day of the months of March, June, September
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and December commencing on June 30, 1997. Interest on
Base Rate Loans then outstanding shall also be due and
payable on the Maturity Date. Interest shall accrue
and be payable on each Base Rate Loan at the simple per
annum interest rate equal to the sum of (A) the Base
Rate, and (B) the Base Rate Margin in effect from time
to time and as more fully set forth in Section 2.3(b)
below.
(ii) On Eurodollar Loans. Interest
on each Eurodollar Loan shall be computed for the
actual number of days elapsed on the basis of a
hypothetical 360-day year and shall be payable in
arrears on (x) the Payment Date for such Loan, and
(y) if the Interest Period for such Loan is greater
than three (3) months, on each three month anniversary
of such Loan. Interest on Eurodollar Loans then
outstanding shall also be due and payable on the
Maturity Date. Interest shall accrue and be payable on
each Eurodollar Loan at a rate per annum equal to
(A) the Eurodollar Basis applicable to such Eurodollar
Loan, plus (B) the Eurodollar Rate Margin in effect
from time to time and as more fully set forth in
Section 2.3(b) below.
(b) Applicable Margin. With respect to any
Loan under the Commitment, the Applicable Margin shall be the
interest rate margin determined by the Agent monthly based upon
the Senior Debt/EBITDA Ratio for the most recent month, effective
as of the second Business Day after the financial statements
referred to in Section 6.2(c) hereof, and an accompanying
certificate of an Authorized Representative certifying the
calculations of the Senior Debt/EBITDA Ratio as set forth in
Section 6.2(d) hereof, are delivered by the Co-Borrowers to the
Agent and each Bank for the month most recently ended expressed
as a per annum rate of interest as follows:
(i) As of the Agreement Date and
thereafter, subject to any adjustment required under
subparagraphs (ii) or (iii) below, the Eurodollar Rate
Margin shall be 3.00% and the Base Rate Margin shall be
2.0%.
(ii) Commencing with the second Business
Day after delivery of the financial statements and
certificate required by Section 6.2(c) and (d) (without
giving effect to any extension granted by the
Securities and Exchange Commission) with respect to a
fiscal month end during which the Senior Debt/EBITDA
Ratio was less than or equal to 3.5 to 1.0, the
Eurodollar Rate margin set forth in subparagraph (i)
above shall be reduced to 2.50% and the Base Rate
margin shall be reduced to 1.50%.
(iii) Commencing with the second
Business Day after delivery of the financial statements
and certificate required by Section 6.2(c) and (d)
(without giving effect to any extension granted by the
Securities and Exchange Commission) with respect to a
fiscal month ending on or after June 30, 1998, so long
as no Default exists, the Eurodollar Rate margin set
forth in subparagraph (i) above shall be reduced to
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2.00% and the Base Rate margin shall be reduced to
1.00%.
(iv) In the event that the Co-Borrowers
fail to timely provide the financial statements and
certificate referred to above in accordance with the
terms of Section 6.2(c) and (d) hereof (without giving
effect to any extension granted by the Securities and
Exchange Commission), and without prejudice to any
additional rights under Section 8.2 hereof, the
Applicable Margin shall be the Applicable Margin set
forth in subparagraph (i) above until the actual
delivery of such financial statements and certificate.
(c) Upon Default. Upon the occurrence and
during the continuation of an Event of Default, and at the
direction of the Majority Banks, interest on the outstanding
Obligations shall accrue at the Default Rate from the date of
such Event of Default. Interest accruing at the Default Rate
shall be payable on demand and in any event on the Maturity Date.
The Banks shall not be required to (i) accelerate the maturity of
the Loans, or (ii) exercise any other rights or remedies under
the Loan Documents in order to charge interest hereunder at the
Default Rate.
(d) Computation of Interest. In computing
interest on any Loan, the date of making the Loan shall be
included and the date of payment shall be excluded; provided,
however, that if a Loan is repaid on the date that it is made,
one (1) day's interest shall be due with respect to such Loan.
Section 2.4 Fees.
(a) Commitment Fee. The Co-Borrowers agree
to pay to the Banks, in accordance with the Banks' Commitment
Percentages, a commitment fee on the aggregate unused amount of
the Available Revolving Loan Commitment for each day from the
Agreement Date through the Maturity Date (or the date of any
earlier prepayment in full of the Obligations), at a rate per
annum of .375%. Such commitment fee shall be computed on the
basis of a hypothetical year of 360 days for the actual number of
days elapsed, shall be payable quarterly in arrears on the last
Business Day of the months of March, June, September and December
commencing on June 30, 1997, and if then unpaid, on the Maturity
Date (or the date of any earlier prepayment in full of the
Obligations), and shall be fully earned when due and non-
refundable when paid.
(b) The Co-Borrowers shall pay to the Banks,
in accordance with the Banks' respective Commitment Percentages,
a fee on the stated amount of any outstanding Letters of Credit
for each day from the Date of Issue through the Maturity Date (or
the date of any earlier prepayment in full of the Obligations) at
a rate per annum on the amount of the Letter of Credit
Obligations equal to the Eurodollar Rate Margin in effect from
time to time pursuant to Section 2.3(b) hereof. Such Letter of
Credit fee shall be computed on the basis of a hypothetical year
of 360 days for the actual number of days elapsed, shall be
payable quarterly in arrears on the last Business Day of the
months of March, June, September and December commencing on June
30, 1997, and if then unpaid, on the Maturity Date (or the date
29
of any earlier prepayment in full of the Obligations), and shall
be fully earned when due and non-refundable when paid.
(c) The Co-Borrowers shall pay to the Issuing
Bank, (A) a fee on the stated amount of each Letter of Credit
issued by the Issuing Bank for each day from the Date of Issue
through the expiration date of each such Letter of Credit (or any
earlier prepayment in full of the Obligations) at a rate of one-
eighth of one percent (1/8%) per annum, which fee shall be
computed on the basis of a hypothetical year of 360 days for the
actual number of days elapsed, shall be payable quarterly in
arrears on the last Business Day of the months of March, June,
September and December commencing on June 30, 1997, and, if
unpaid on the Maturity Date (or any earlier prepayment in full of
the Obligations), and (B) a fee in the amount of $125.00 for
issuing, amending and renewing any Letter of Credit, which fee
shall be due and payable on the date of each issuance, amendment
or renewal of any Letter of Credit. Each of the foregoing fees
shall be fully earned when due, and non-refundable when paid.
(d) Other Fees. The Co-Borrowers agree to
pay such other fees to the Agent as may be set forth in the Fee
Letters.
Section 2.5 Prepayment/Reduction of Commitment.
(a) The principal amount of any Base Rate
Loan may be prepaid in full or in part at any time, without
penalty; and the principal amount of any Eurodollar Loan may be
prepaid prior to the applicable Payment Date, upon three (3)
Business Days' prior written notice to the Agent, provided that
each Co-Borrower shall reimburse the Banks and the Agent, on the
earlier of demand or the Maturity Date, for any loss or out-of-
pocket expense incurred by the Banks or the Agent in connection
with such prepayment, as set forth in Section 2.10 hereof. Each
notice of prepayment shall be irrevocable. Upon receipt of any
notice of prepayment, the Agent shall promptly notify each Bank
of the contents thereof by telephone or telecopy and of such
Bank's portion of the prepayment. Prepayments of principal
hereunder with respect to Eurodollar Rate Loans shall be in
minimum amounts of $1,000,000 and integral multiples of $500,000.
(b) The Co-Borrowers shall have the right, at
any time and from time to time after the Agreement Date and prior
to the Maturity Date, upon at least three (3) Business Days'
prior written notice to the Agent, without premium or penalty, to
cancel or reduce permanently all or a portion of the Revolving
Loan Commitment, on a pro rata basis among the Banks in
accordance with the Commitment Percentages, provided that any
such partial reduction shall be made in an amount not less than
$5,000,000 and in integral multiples of $1,000,000 in excess
thereof. As of the date of cancellation or reduction set forth
in such notice, the Revolving Loan Commitment shall be
permanently reduced to the amount stated in such Co-Borrower's
notice for all purposes herein, and the Co-Borrowers shall pay to
the Agent for the Banks the amount necessary to reduce the
principal amount of the Revolving Loans, then outstanding to not
more than the amount of the Revolving Loan Commitment as so
reduced, together with accrued interest on the amount so prepaid
and the commitment fee set forth in Section 2.4(a) accrued
through the date of the reduction with respect to the amount
reduced, and shall reimburse the Agent and the Banks for any loss
30
or out-of-pocket expense incurred by any of them in connection
with such payment as set forth in Section 2.10.
Section 2.6 Repayment.
(a) The Revolving Loans. All unpaid principal
and accrued interest on the Revolving Loans shall be due and
payable in full on the Maturity Date.
(b) The Term Loan. Commencing on June 30,
1998, and on the last day of every third month thereafter through
and including the Maturity Date, Housecall shall make a permanent
repayment of the principal balance of the Term Loan as follows:
Date Amount of Permanent Repayment
June 30, 1998 $3,500,000
September 30, 1998 $2,000,000
December 31, 1998 $2,000,000
March 31, 1999 $2,000,000
June 30, 1999 $1,500,000
September 30, 1999 $3,000,000
December 31, 1999 $3,000,000
March 31, 2000 $3,000,000
Maturity Date $2,000,000
All principal and interest then outstanding on the Term Loan
shall be due and payable on the Maturity Date. In the event that
the Co-Borrowers make a Term Loan prepayment other than as
required by this Section 2.6(b) (mandatory or optional), the
payments hereunder shall be reduced in the inverse order of
maturity.
Section 2.7 Other Mandatory Repayments.
(a) Sale of Capital Stock. In the event that
Housecall shall issue for cash any Capital Stock (other than to
Xxxxx Xxxxxx or upon exercise of the Warrants), one hundred
percent (100%) of the Net Cash Proceeds received by Housecall
from such Capital Stock issuance shall be paid within five (5)
Business Days from the date of receipt of proceeds thereof by
Housecall to the Banks as a mandatory payment of the Term Loan in
accordance with Section 2.6(b) hereof, together with interest
accrued thereon to the date of prepayment, with any remainder
after full repayment of the Term Loan being applied as a
mandatory repayment of the Revolving Loans. The Revolving Loan
Commitment shall be permanently reduced by the amount of any
payment of the Revolving Loans due under this Section 2.7(a)
whether or not such payment is actually made.
(b) Asset Sale. In the event that Housecall
shall sell any assets in a transaction covered by Section 7.9(c)
or 7.9(d) hereof (with the consent of the Majority Banks in the
case of sales pursuant to Section 7.9 (d)), one hundred percent
31
(100%) of the Net Cash Proceeds received by Housecall from such
sale shall be paid within five (5) Business Days from the date of
receipt of proceeds thereof by Housecall to the Banks as a
mandatory payment of the Term Loan in accordance with
Section 2.6(b) hereof, together with interest accrued thereon to
the date of prepayment, with any remainder after full payment of
the Term Loan being applied as a mandatory repayment of the
Revolving Loans. The Revolving Loan Commitment shall not be
permanently reduced by the amount of any payment of the Revolving
Loans due under this Section 2.7(b) whether or not such payment
is actually made.
(c) Over Funded Pension Plans. Within five
Business Days (or such longer period of time agreed to by the
Banks) of each receipt by Housecall or any of its Subsidiaries of
any proceeds on account of any over funded pension plans,
Housecall shall prepay, or cause such Subsidiary to prepay on
behalf of Housecall, to the Agent for the account of the Banks,
an amount equal to 100% of all of such proceeds; provided,
however, Housecall shall not be obligated to make such
prepayments until the aggregate cumulative amount of such
proceeds received by it or such Subsidiary on and after the date
hereof shall exceed $25,000.00. Prepayments pursuant to this
subsection shall be made as a mandatory payment of the Term Loan
in accordance with Section 2.6(b) hereof, together with interest
accrued thereon to the date of prepayment, with any remainder
after full payment of the Term Loan being applied as a mandatory
repayment of the Revolving Loans. The Revolving Loan Commitment
shall not be permanently reduced by the amount of any payment of
the Loans under this Section 2.7(c).
(d) Excess Cash Flow. Within ninety (90) days
after the end of each fiscal year (commencing with fiscal year
ending June 30, 1998) (or such longer period of time agreed to by
the Majority Banks), Housecall shall prepay the outstanding
principal balance of the Loans by making a prepayment to the
Agent for the account of the Banks in an amount equal to seventy-
five percent (75%) of Excess Cash Flow for such fiscal year.
Prepayments pursuant to this subsection shall be made as a
mandatory payment of the Term Loan in accordance with Section
2.6(b) hereof, together with interest accrued thereon to the date
of prepayment, with any remainder after full payment of the Term
Loan being applied as a mandatory repayment of the Revolving
Loans. The Revolving Loan Commitment shall not be permanently
reduced by the amount of any payment of the Loans due under this
Section 2.7(d)
(e) Reimbursement. In the event of any
prepayment under this Section 2.7 of a Eurodollar Loan other than
on the last day of the Interest Period therefor, the applicable
Co-Borrower shall be obligated to reimburse the Banks in respect
thereof pursuant to Section 2.10.
Section 2.8 Notes; Loan Accounts.
(a) The Loans shall be repayable in
accordance with the terms and provisions set forth herein, and
shall be evidenced by the Notes. One Revolving Loan Note and one
Term Note shall be payable to the order of each Bank in
accordance with the respective Commitment Percentage of such
Bank.
32
(b) The Agent may open and maintain on its
books in the name of each Co-Borrower a loan account with respect
to the Loans made to such Co-Borrower and interest thereon. The
Agent shall debit such loan account for the principal amount of
each Loan made by it on behalf of the Banks to such Co-Borrower,
the accrued interest thereon, and all other amounts which shall
become due from each Co-Borrower pursuant to this Agreement and
shall credit such loan account for each payment made by or on
behalf of such Co-Borrower in respect to the Obligations. The
records of the Agent with respect to each such loan account shall
be conclusive, absent manifest error, of the principal amount of
the Loans and accrued interest thereon.
Section 2.9 Manner of Payment.
(a) When Payments Due.
(i) Each payment (including any
prepayment) by any Co-Borrower on account of the
principal of or interest on the Loans, fees, and any
other amount owed to the Banks or the Agent under this
Agreement, the Notes, or the other Loan Documents shall
be made not later than 1:00 p.m. (New York time) on the
date specified for payment under this Agreement or any
other Loan Document to the Agent at the Agent's Office,
for the account of the Banks or the Agent, as the case
may be, in lawful money of the United States of America
in immediately available funds. Any payment received
by the Agent after 1:00 p.m. (New York time) shall be
deemed received on the next Business Day. In the case
of a payment for the account of a Bank, the Agent will
promptly thereafter distribute the amount so received
in like funds to such Bank. If the Agent shall not
have received any payment from the Co-Borrowers as and
when due, the Agent will promptly notify the Banks
accordingly.
(ii) If any payment under this
Agreement or any of the Notes shall be specified to be
made upon a day which is not a Business Day, it shall
be made on the next succeeding day which is a Business
Day, and such extension of time shall in such case be
included in computing interest and fees, if any, in
connection with such payment.
(b) No Deduction.
(i) Each Co-Borrower agrees to pay
principal, interest, fees, and all other amounts due
hereunder or under the Notes without set-off or
counterclaim or any deduction whatsoever. If any Co-
Borrower shall hereafter be required by law to deduct
any taxes from or in respect of any sum payable
hereunder or under any Note to any Bank (other than
taxes imposed on or measured by such Bank's income, or
franchise or branch profit taxes imposed on such Bank,
by the jurisdiction under the laws of which such Bank
is organized or any political subdivision thereof and
also excluding, in the case of each Bank, taxes imposed
on its income, and franchise and branch profit taxes
imposed on it, by the jurisdiction of such Bank's
applicable lending office or any political subdivision
33
thereof), Issuing Bank or the Agent, (A) the sum
payable shall be increased as may be necessary so that
after making all required deductions (including
deductions applicable to additional sums payable under
this Section 2.9(b)), such Bank, Issuing Bank or the
Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions
been made, (B) such Co-Borrower shall make such
deductions and (C) such Co-Borrower shall pay the full
amount deducted to the relevant taxation authority or
other authority in accordance with Applicable Law.
(ii) (A) Each Bank that is organized
under the laws of a jurisdiction other than the United
States of America or any state thereof (including the
District of Columbia) agrees to furnish to the Co-
Borrowers and the Agent, prior to time it becomes a
Bank hereunder, two (2) copies of either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 or any successor forms thereto
(wherein such Bank claims entitlement to complete
exemption from or a reduced rate of U.S. federal
withholding tax on interest paid by the Co-Borrowers
hereunder) and to provide to the Co-Borrowers and the
Agent a new Form 4224 or Form 1001 or any successor
forms thereto if any previously delivered form is found
to be incomplete or incorrect in any material respect
or upon the obsolescence of any previously delivered
form; provided, however, that no Bank shall be required
to furnish any such form under this paragraph if it is
not entitled to claim an exemption from or reduced rate
of withholding tax under Applicable Law. Any Bank that
is not entitled to claim an exemption from or a reduced
rate of withholding tax under Applicable Law, promptly
upon written request of the Co-Borrowers, shall so
inform the Co-Borrowers and the Agent in writing.
(B) No Co-Borrower shall be required
to pay any amounts pursuant to this Section 2.9(b) to
any Bank for the account of such Bank in respect of any
United States withholding taxes payable hereunder (and
each Co-Borrower, if required by law to do so, shall be
entitled to withhold such amounts and to pay such
amounts to the United States Internal Revenue Service)
if the obligation to pay such additional amounts would
not have arisen but for the failure by such Bank to
comply with its obligations under the immediately
preceding paragraph of this Section, and such Bank
shall not be entitled to exemption from deduction or
withholding of United States federal income tax in
respect of the payment of any such sum by any Co-
Borrower hereunder for, in each case, any reason other
than a change in the United States law or regulations
or any applicable tax treaty or regulations or in the
official interpretation of any such law, treaty or
regulations by any governmental authority charged with
the interpretation or administration thereof (whether
or not having the force of law) after the date such
Bank becomes a Bank hereunder.
(C) Within sixty (60) days after the
written request of any Co-Borrower, each Bank shall
34
execute and deliver such certificates, forms or other
documents, which in each such case can be reasonably
furnished by such Bank consistent with the facts and
which are reasonably necessary to assist any Co-
Borrower in applying for refunds of taxes remitted by
such Co-Borrower hereunder.
Section 2.10 Reimbursement. Whenever any Bank shall sustain or
incur any losses or out-of-pocket expenses in connection with (i)
failure by any Co-Borrower to borrow or reborrow any Eurodollar
Loan, or reborrow any Loan as a Eurodollar Loan, in each case,
after having given notice of its intention to borrow in
accordance with Section 2.2 hereof (whether by reason of the
election of each Co-Borrower not to proceed or the non-
fulfillment of any of such conditions set forth in Article 4), or
(ii) prepayment of any Eurodollar Loan in whole or in part
(whether as a result of a voluntary prepayment, a mandatory
prepayment, acceleration of all sums due hereunder, or
otherwise), the applicable Co-Borrower agrees to pay to such
Bank, upon the earlier of such Bank's demand or the Maturity
Date, an amount sufficient to compensate such Bank for all such
losses and-out-of-pocket expenses. Such Bank's good faith
determination of the amount of such losses and out-of-pocket
expenses, absent manifest error, shall be binding and conclusive.
Losses subject to reimbursement hereunder shall include, without
limiting the generality of the foregoing, expenses incurred by
any Bank or any participant of such Bank permitted hereunder in
connection with the re-employment of funds prepaid, repaid, not
borrowed, or paid, as the case may be, and any lost profit of
such Bank or any participant of such Bank over the remainder of
the Interest Period for such prepaid Loan. Lost profit of a Bank
arising by reason of liquidation or redeployment of deposits or
other funds acquired by any Bank to fund or maintain Eurodollar
Loans shall be calculated as the remainder obtained by
subtracting: (x) the interest which would be payable at the
Eurodollar Basis for an amount equal or comparable to such
borrowing for the period of time commencing on the date of the
payment, prepayment or failure to borrow and ending on the last
day of the subject Interest Period, (such Eurodollar Basis to be
based on the number of months within such period rounding upward
for any fraction of a month) from (y) the interest which would
have been paid had there been no such payment, prepayment or
failure to borrow for the period commencing on the date of such
payment, prepayment or failure to borrow and ending on the last
day of such Interest Period. The obligations of the Co-Borrowers
under this Section shall survive the termination of this
Agreement and the payment of the Notes.
Section 2.11 Pro Rata Treatment.
(a) Loans. Each Loan from the Banks under
this Agreement shall be made pro rata on the basis of their
respective Commitment Percentages.
(b) Payments. Each payment and prepayment of
the principal of the Loans and each payment of interest on the
Loans received from each Co-Borrower shall be promptly made by
the Agent to the Banks pro rata on the basis of their respective
unpaid principal amounts outstanding immediately prior to such
payment or prepayment (except in cases when a Bank's right to
receive payments is restricted pursuant to Section 2.2(e)
hereof). If any Bank shall obtain any payment (whether
35
involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Loans in excess of its ratable share
of the Loans under its Commitment Percentage (or in violation of
any restriction set forth in Section 2.2(e) hereof), such Bank
shall forthwith purchase from the other Banks such participation
in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Bank,
such purchase from each Bank shall be rescinded and such Bank
shall repay to the purchasing Bank the purchase price to the
extent of such recovery without interest thereon unless the Bank
obligated to repay such amount is required to pay interest. Each
Co-Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 2.11(b) may, to the
fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such
participation as fully as if such Bank were the direct creditor
of such Co-Borrower in the amount of such participation.
Section 2.12 Application of Payments.
(a) Payments Prior to Acceleration. Prior to
the acceleration of the Loans under Section 8.2 hereof, and other
than with respect to payments required to be made pursuant to
Section 2.7 hereof (which shall be applied as set forth in
Section 2.7 hereof), if some but less than all amounts due from
the Co-Borrowers are received by the Agent, the Agent shall
distribute such amounts in the following order of priority:
FIRST, to the payment of interest then due and payable on the
Loans; SECOND, to the payment of principal then due and payable
on the Term Loan; THIRD, to the payment of principal then due and
payable on the Revolving Loans, FOURTH, to the payment of any
fees then due and payable to the Agent hereunder or under any
other Loan Document; FIFTH, to the payment of any fees then due
and payable to the Banks or the Issuing Bank hereunder or under
any other Loan Document; SIXTH, to the extent of any Letter of
Credit Obligations then outstanding, to the Letter of Credit
Reserve Account; SEVENTH, to the actual and reasonable costs and
expenses (including attorneys' fees and expenses), if any,
incurred by the Agent in the collection of such amounts under
this Agreement or any of the other Loan Documents; EIGHTH, to the
payment of all other Obligations not otherwise referred to in
this Section 2.12(a) then due and payable hereunder or under the
other Loan Documents; and NINTH, upon satisfaction in full of all
outstanding monetary Obligations, to the Co-Borrowers.
(b) Payments Subsequent to Acceleration.
Subsequent to the acceleration of the Obligations under
Section 8.2 hereof, payments and prepayments with respect to the
Obligations made to the Agent, the Banks, the Issuing Bank or
otherwise received by the Agent, any Bank, the Issuing Bank (from
realization on Collateral or otherwise) shall be distributed in
the following order of priority (subject, as applicable, to
Section 2.10 hereof): FIRST, to the actual and reasonable costs
and expenses (including attorneys' fees and expenses), if any,
incurred by the Agent or any Bank or an Issuing Bank in the
collection of such amounts under this Agreement or of the Loan
Documents, including, without limitation, any costs incurred in
connection with the sale or disposition of any Collateral;
SECOND, to any fees then due and payable to the Agent under this
Agreement or any other Loan Document; THIRD, to any fees then due
36
and payable to the Banks and the Issuing Bank under this
Agreement or any other Loan Document; FOURTH, to the payment of
interest then due and payable on the Loans; FIFTH, to the payment
of the principal of the Term Loan then outstanding; SIXTH, to the
payment of the principal of any Revolving Loans then outstanding;
SEVENTH, to the extent of any Letter of Credit Obligations then
outstanding, to the Letter of Credit Reserve Account; EIGHTH, to
the payment of any obligation under any Rate Contract between any
Co-Borrower, on the one hand, and the Agent (or an affiliate of
the Agent) or one or more Banks (or an affiliate of a Bank), on
the other hand; NINTH, to any other Obligations not otherwise
referred to in this Section 2.12(b); TENTH, to damages incurred
by the Agent or any Bank by reason of any breach hereof or of any
other Loan Document; and ELEVENTH, upon satisfaction in full of
all Obligations to the Co-Borrowers or as otherwise required by
law.
Section 2.13 Use of Proceeds. The proceeds of the
Loans shall be used by the Co-Borrowers as follows:
(a) Revolving Loans. The proceeds of the
Revolving Loans shall be used for the Co-Borrowers' general
working capital needs, including, but not limited to, the payment
of transaction costs relating to the Pending Transactions, to the
extent not inconsistent with the provisions of this Agreement;
and
(b) Term Loan. The proceeds of the Term Loan
shall be used to finance the Pending Transactions and related
transaction costs.
Section 2.14 Interest. Anything in this Agreement to
the contrary notwithstanding, the Co-Borrowers shall never be
required to pay unearned interest on any Loan and shall never be
required to pay interest on any Loan at a rate in excess of the
Highest Lawful Rate, and if the effective rate of interest which
would otherwise be payable under this Agreement would exceed the
Highest Lawful Rate, or if any Bank shall receive any unearned
interest or shall receive monies that are deemed to constitute
interest which would increase the effective rate of interest
payable under this Agreement to a rate in excess of the Highest
Lawful Rate, then (a) in lieu of the amount of interest which
would otherwise be payable under this Agreement, the Co-Borrowers
shall pay the Highest Lawful Rate, and (b) any unearned interest
paid by the Co-Borrowers or any interest paid by the Co-Borrowers
in excess of the Highest Lawful Rate shall be credited on the
principal of such Loan, and, thereafter, refunded to the Co-
Borrowers. It is further agreed that, without limitation of the
foregoing, all calculations of the rate of interest contracted
for, charged or received by any Bank under this Agreement that
are made for the purpose of determining whether such rate exceeds
the Highest Lawful Rate applicable to such Bank (such Highest
Lawful Rate being such Bank's "Maximum Permissible Rate"), shall
be made, to the extent permitted by usury laws applicable to such
Bank (now or hereafter enacted), by amortizing, prorating and
spreading in equal parts during the period of the full stated
term of the Loans all interest at any time contracted for,
charged or received by such Bank in connection therewith. If at
any time and from time to time (i) the amount of interest payable
to any Bank on any date shall be computed at such Bank's Maximum
Permissible Rate pursuant to this Section 2.14 and (ii) in
respect of any subsequent interest computation period the amount
37
of interest otherwise payable to such Bank would be less than the
amount of interest payable to such Bank computed at such Bank's
Maximum Permissible Rate, then the amount of interest payable to
such Bank in respect of such subsequent interest computation
period shall continue to be computed at such Bank's Maximum
Permissible Rate until the total amount of interest payable to
such Bank shall equal the total amount of interest which would
have been payable to such Bank if the total amount of interest
had been computed without giving effect to this Section.
Section 2.15 Guaranty. (a) Each Co-Borrower hereby
unconditionally guarantees to the Banks, the Issuing Bank and the
Agent and their respective permitted successors and assigns and
the subsequent holders of the Notes, irrespective of the validity
and enforceability of this Agreement, the Notes, or the other
Loan Documents or the obligations of any other Co-Borrower or
other guarantor thereunder, the value or sufficiency of any
Collateral or any other circumstance that might otherwise affect
the liability of a guarantor, that: (i) the principal of and
interest on the Loans made to any other Co-Borrower, any Note
executed by any other Co-Borrower, and all other obligations of
any other Co-Borrower arising from, in connection with or related
to any Loan to such other Co-Borrower, including, without
limitation, breakage costs pursuant to Section 2.10 hereof,
taxes, fees, and any and all expenses which may be incurred by
the Agent, the Issuing Bank or any Bank in enforcing or
collecting any rights arising in connection with such Loans
(collectively, the "Co-Borrower Loan Obligations"), shall be
promptly paid in full when due, whether at stated maturity, by
acceleration or otherwise, in accordance with the terms hereof
and thereof; and (ii) in case of any extension of time of payment
or renewal of any Note executed by any other Co-Borrower, or any
of such Co-Borrower Loan Obligations, the same shall be promptly
paid in full when due in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration
or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, such Co-Borrower will be
obligated to pay the same immediately.
(b) Each Co-Borrower hereby waives
presentment, protest, demand of payment, notice of dishonor and
all other notices and demands whatsoever. Each Co-Borrower
further agrees that, as between such Co-Borrower, on the one
hand, and the Agent, the Issuing Bank and the Banks, on the other
hand, (i) the maturity of the Co-Borrower Loan Obligations
guaranteed hereby may be accelerated as provided in Section 8.2
hereof for the purposes of this guarantee, notwithstanding any
stay, injunction or other prohibition preventing such
acceleration in respect of the Co-Borrower Loan Obligations
guaranteed hereby, and (ii) in the event of any declaration of
acceleration of such Co-Borrower Loan Obligations as provided in
Section 8.2 hereof, such Co-Borrower Loan Obligations (whether or
not due and payable) shall forthwith become due and payable by
each Co-Borrower for purposes of this guarantee. The obligations
of each Co-Borrower under this Section 2.15 shall be
automatically reinstated if and to the extent that for any reason
any payment by or on behalf of any other Co-Borrower is rescinded
or must otherwise be restored by any holder of any of the Co-
Borrower Loan Obligations guaranteed hereunder, whether as a
result of any proceedings in bankruptcy or reorganization or
otherwise, and each Co-Borrower agrees that it will indemnify the
Issuing Bank, the Banks and the Agent on demand for actual and
38
reasonable costs and expenses (including, without limitation,
reasonable fees and expenses of counsel) incurred by the Issuing
Bank, the Banks, or the Agent in connection with such rescission
or restoration.
(c) The guaranty of each Co-Borrower set
forth herein shall remain in full force and effect until the
Obligations are indefeasibly paid in full. No payment or
payments made by any other Co-Borrower or any other Person or
received or collected by the Agent or any Bank from any other Co-
Borrower or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any
time or from time to time in reduction of or in payment of the
Co-Borrower Loan Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of such Co-Borrower
pursuant to this Section 2.15, which liability shall,
notwithstanding any such payment or payments, other than payments
made by such Co-Borrower in respect of the Co-Borrower Loan
Obligations, remain for the Co-Borrower Loan Obligations until
the Co-Borrower Loan Obligations are paid in full. Each Co-
Borrower agrees that whenever, at any time, or from time to time,
it shall make any payment to the Agent or any Bank on account of
its liability under this Section 2.15, it will notify the Agent
in writing that such payment is made under its guaranty
obligations of this Section 2.15 for such purpose. Anything
herein, or in any other Loan Document, to the contrary
notwithstanding, the maximum liability of each Co-Borrower under
this Section 2.15 shall in no event exceed the amount which can
be guaranteed by such Co-Borrower under applicable federal or
state laws relating to the insolvency of debtors.
(d) Without in any manner limiting the
generality of the foregoing, each Co-Borrower agrees that the
Agent, the Majority Banks or the Banks may, in accordance with
Section 10.3 hereof, from time to time, consent to any action or
non-action of any Co-Borrower which, in the absence of such
consent, violates or may violate this Agreement, with or without
consideration, on such terms and conditions as may be acceptable
to the Agent, the Majority Banks and the Banks, without in any
manner affecting or impairing the liability of any other
Co-Borrower hereunder. Each Co-Borrower waives any defense
arising by reason of any inability to pay or any defense based on
bankruptcy or insolvency or other similar limitations on
creditors' remedies. Each Co-Borrower authorizes the Agent and
Banks, without notice or demand and without affecting such
Co-Borrower's liability hereunder or under any of the other Loan
Documents, from time to time to: (i) renew, extend, accelerate or
otherwise change the time or place for payment of, or otherwise
change the terms of, the Notes or the Obligations or any part
thereof including, without limitation, increase or decrease of
the rate of interest thereon; (ii) take and hold security, and
exchange, enforce, waive and release any collateral or security
or any part thereof or any such other security or surrender,
modify, impair, change, alter, renew, continue, compromise or
release in whole or in part of any such security, or fail to
perfect its interest in any such security or to establish its
priority with respect thereof; (iii) apply such security and
direct the order or manner or sale thereof as the Agent and
Majority Banks in their sole discretion may determine; (iv)
release or substitute any other Co-Borrower, in whole or in part
or any of the endorsers or guarantors of the Obligations or any
part thereof; (v) settle or compromise any or all of the
39
Obligations with any other Co-Borrower or any endorser or
guarantor of the Obligations; and (vi) subordinate any or all of
the Obligations to any other obligations of or claim against any
other Co-Borrower, whether owing to or existing in favor of the
Agent or the Banks or any other party.
(e) The Agent, the Majority Banks or the
Banks, as the case may be, may, at their election, exercise any
right or remedy they may have against any Co-Borrower or any
security now or hereafter held by or for the benefit of the Agent
or the Banks including, without limitation, the right to
foreclose upon any such security by judicial or nonjudicial sale,
without affecting or impairing in any way the liability of any
other Co-Borrower hereunder, except to the extent the Obligations
may thereby be paid. Each Co-Borrower waives any defense arising
out of the absence, impairment or loss of any right of
reimbursement or other right or remedy against any other
Co-Borrower or any such security, whether resulting from the
election by the Agent, the Banks or the Majority Banks to
exercise any right or remedy they may have against any other
Co-Borrower, any defect in, failure of, or loss or absence of
priority with respect to the interest of the Agent or the Banks
in such security, or otherwise. In the event that any
foreclosure sale is deemed to be not commercially reasonable,
each Co-Borrower waives any right that it may have to have any
portion of the Obligations discharged except to the extent of the
amount actually bid and received by the Banks at any such sale.
Neither the Agent nor any Bank shall be required to institute or
prosecute proceedings to recover any deficiency as a condition of
payment hereunder or enforcement hereof.
(f) Each Co-Borrower waives the benefit of
any statute of limitations affecting its liability hereunder or
the enforcement thereof, to the extent permitted by law. Any
part performance of the Obligations by a Co-Borrower, or any
other event or circumstances, which operate to toll any statute
of limitations as to such Co-Borrower, shall not operate to toll
the statute of limitations as to any other Co-Borrower. Each
Co-Borrower waives any defense arising by reason of any
disability or other defense of any other Co-Borrower or by reason
of the cessation from any cause whatsoever of the liability of
any other Co-Borrower. Each Co-Borrower waives any setoff,
defense or counterclaim which any other Co-Borrower may have or
claim to have against the Agent or the Banks.
Section 2.16 Joint and Several Liability. (a) Each
Co-Borrower expressly represents and acknowledges that any
financial accommodations by the Agent, the Issuing Bank and the
Banks, or any of them, to any other Co-Borrower hereunder and
under the other Loan Documents are and will be of direct
interest, benefit and advantage to all the Co-Borrowers. Each
Co-Borrower acknowledges that any notice given by the Agent, the
Issuing Bank or any Bank to any Co-Borrower shall be effective
with respect to all Co-Borrowers. Each Co-Borrower shall be
entitled to subrogation and contribution rights from and against
any other Co-Borrower to the extent such Co-Borrower is required
to pay to the Banks any amount in excess of the Loans advanced
hereunder directly to such Co-Borrower or as otherwise available
under Applicable Law; provided, however, that such subrogation
and contribution rights are and shall be subject to the terms and
conditions of Section 2.16(b) hereof. The provisions of this
Section 2.16(a) shall in no way limit the obligations and
40
liabilities of any Co-Borrower to the Agent, the Issuing Bank and
the Banks and each Co-Borrower shall remain liable to the Agent,
the Issuing Bank and the Banks for the full amount of the
Obligations.
(b) No Co-Borrower will exercise any rights
which it may acquire by way of subrogation hereunder or under any
other Loan Document or at law by any payment made hereunder or
otherwise, nor shall any Co-Borrower seek or be entitled to seek
any contribution or reimbursement from any other Co-Borrower in
respect of payments made by such Co-Borrower hereunder or under
any other Loan Document, until all amounts owing to the Agent,
the Issuing Bank and the Banks on account of the Obligations are
paid in full and the Commitments are terminated. If any amounts
shall be paid to any Co-Borrower on account of such subrogation
or contribution rights at any time when all of the Obligations
shall not have been paid in full, such amount shall be held by
such Co-Borrower in trust for the Agent, the Issuing Bank and the
Banks, segregated from other funds of such Co-Borrower, and
shall, forthwith upon receipt by such Co-Borrower, be turned over
to the Agent in the exact form received by such Co-Borrower (duly
endorsed by such Co-Borrower to the Agent, if required), to be
applied against the Obligations, whether matured or unmatured, as
provided for herein.
ARTICLE 3
The Letters of Credit
Section 3.1 Issuance of Letters of Credit.
(a) Subject to the terms and conditions
hereof, the Issuing Bank, on behalf of the Banks, and in reliance
on the agreements of the Banks set forth in Section 3.2 below,
hereby agrees to issue one or more Letters of Credit up to an
aggregate face amount equal to the Letter of Credit Commitment;
provided, however, that the Issuing Bank shall not issue any
Letter of Credit unless the conditions precedent to the issuance
thereof set forth in Section 4.3 hereof have been satisfied, and
shall have no obligation to issue any Letter of Credit if any
Default then exists or would be caused thereby or if, after
giving effect to such issuance, the Available Revolving Loan
Commitment would be less than zero and; provided further,
however, that at no time shall the total Letter of Credit
Obligations outstanding hereunder exceed the Letter of Credit
Commitment. Each Letter of Credit shall (1) be denominated in
U.S. dollars, and (2) expire no later than the earlier to occur
of (A) the Maturity Date, and (B) one year after its date of
issuance (but may contain provisions for automatic renewal
provided that no Default or Event of Default exists on the
renewal date or would be caused by such renewal). Each Letter of
Credit shall be subject to the Uniform Customs and, to the extent
not inconsistent therewith, the laws of the State of New York.
The Issuing Bank shall not at any time be obligated to issue, or
cause to be issued, any Letter of Credit if such issuance would
conflict with, or cause the Issuing Bank to exceed any limits
imposed by, any Applicable Law.
(b) Any Co-Borrower may from time to time
request that an Issuing Bank issue a Letter of Credit. The Co-
Borrower shall execute and deliver to the Agent and applicable
41
Issuing Bank a Request for Issuance of Letter of Credit for each
Letter of Credit to be issued by such Issuing Bank, not later
than 11:00 a.m. (Houston time) on the fifth (5th) Business Day
preceding the date on which the requested Letter of Credit is to
be issued, or such shorter notice as may be acceptable to the
Issuing Bank and the Agent. Upon receipt of any such Request for
Issuance of Letter of Credit, subject to satisfaction of all
conditions precedent thereto as set forth in Section 4.3 hereof,
the Issuing Bank shall process such Request for Issuance of
Letter of Credit and the certificates, documents and other papers
and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue
the Letter of Credit requested thereby. The Issuing Bank shall
furnish a copy of such Letter of Credit to such Co-Borrower and
the Agent following the issuance thereof. The Co-Borrowers shall
pay or reimburse the Issuing Bank for normal and customary costs
and expenses incurred by the Issuing Bank in issuing, effecting
payment under, amending or otherwise administering the Letters of
Credit.
Section 3.2 Draws Under Letters of Credit.
(a) At such time as the Agent shall be
notified by the Issuing Bank that the beneficiary under any
Letter of Credit has drawn on the same, the Agent shall promptly
notify the applicable Co-Borrower and each Bank, by telephone or
telecopy, of the amount of the draw and, in the case of each
Bank, such Bank's portion of such draw amount as calculated in
accordance with its Commitment Percentage.
(b) Each Co-Borrower hereby agrees to
immediately reimburse an Issuing Bank for amounts paid by such
Issuing Bank in respect of draws under a Letter of Credit. In
order to facilitate such repayment, each Co-Borrower hereby
irrevocably requests the Banks, and the Banks hereby severally
agree, on the terms and conditions of this Agreement (other than
as provided in Article 2 hereof with respect to the amounts of,
the timing of requests for, and the repayment of Loans hereunder
and in Article 4 hereof with respect to conditions precedent to
Loans hereunder), with respect to any drawing under a Letter of
Credit prior to the occurrence of an event described in clauses
(g) or (h) of Section 8.1 hereof, to make a Base Rate Loan to the
applicable Co-Borrower on each day on which a draw is made under
any Letter of Credit and in the amount of such draw, and to pay
the proceeds of such Loan directly to the Issuing Bank to
reimburse the Issuing Bank for the amount paid by it upon such
draw and the applicable Co-Borrower shall deliver to the Agent a
Request for Advance requesting the making of such Base Rate Loan
on the day of any such draw; provided, however, the failure of
the applicable Co-Borrower to deliver a Request for Advance shall
not effect the validity of any Base Rate Loan made hereunder.
Each Bank shall fund its share of such Base Rate Loan by paying
its portion of such Loan to the Agent in accordance with
Section 2.2(e) hereof and its Commitment Percentage, without
reduction for any set-off or counterclaim of any nature
whatsoever and regardless of whether any Default or Event of
Default (other than with respect to an event described in clauses
(g) or (h) of Section 8.1 hereof) then exists or would be caused
thereby. If at any time that any Letters of Credit are
outstanding, any of the events described in clauses (g) or (h) of
Section 8.1 hereof shall have occurred, then each Bank shall,
automatically upon the occurrence of any such event and without
42
any action on the part of the Issuing Bank, the Co-Borrowers, the
Agent or the Banks, be deemed to have purchased an undivided
participation in the face amount of all Letters of Credit then
outstanding in an amount equal to such face amount of the Letters
of Credit outstanding multiplied by such Bank's Commitment
Percentage, and each Bank shall, notwithstanding such Event of
Default, upon a drawing under any Letter of Credit, immediately
pay to the Agent for the account of the Issuing Bank, in
immediately available funds, the amount of such Bank's
participation (and the Issuing Bank shall deliver to such Bank a
loan participation certificate dated the date of the occurrence
of such event and in the amount of such Bank's Commitment
Percentage). The disbursement of funds in connection with a draw
under a Letter of Credit pursuant to this Section hereunder shall
be subject to the terms and conditions of Section 2.2(e) hereof.
The obligation of each Bank to make payments to the Agent, for
the account of the Issuing Bank, in accordance with this
Section 3.2 shall be absolute and unconditional and no Bank shall
be relieved of its obligations to make such payments by reason of
noncompliance by any other Person with the terms of the Letter of
Credit or for any other reason. The Agent shall promptly remit
to the Issuing Bank the amounts so received from the other Banks.
Any overdue amounts payable by the Banks to the Issuing Bank in
respect of a draw under any Letter of Credit shall bear interest,
payable on demand, (x) for the first two Business Days, at the
rate on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day by the Federal Reserve Bank of New York,
and (y) thereafter, at the Base Rate.
(c) Each Co-Borrower agrees that each Loan by
the Banks to reimburse the Issuing Bank for draws under any
Letter of Credit, shall, for all purposes hereunder, be deemed to
be a Base Rate Loan under the Commitment and shall be payable and
bear interest in accordance with all other Loans.
Section 3.3 Actions by Issuing Bank.
(a) Each Co-Borrower agrees that any action
taken or omitted to be taken by the Issuing Bank in connection
with any Letter of Credit, except for such actions or omissions
as shall constitute gross negligence or willful misconduct on the
part of the Issuing Bank as determined by a final non-applicable
order of a court of competent jurisdiction, shall be binding on
each Co-Borrower as between such Co-Borrower and the Issuing
Bank, and shall not result in any liability of the Issuing Bank
to the Co-Borrowers. The obligation of the Co-Borrowers to
reimburse an Issuing Bank for a drawing under any Letter of
Credit or the Banks for Loans made by them to the Issuing Bank on
account of draws made under the Letters of Credit shall be
absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all
circumstances whatsoever, including, without limitation, the
following circumstances:
(i) Any lack of validity or
enforceability of any Loan Document;
(ii) Any amendment or waiver of or consent
to any departure from any or all of the Loan Documents;
43
(iii) Any improper use which may be made of
any Letter of Credit or any improper acts or omissions
of any beneficiary or transferee of any Letter of
Credit in connection therewith;
(iv) The existence of any claim, set-off,
defense or any right which any Co-Borrower may have at
any time against any beneficiary or any transferee of
any Letter of Credit (or Persons for whom any such
beneficiary or any such transferee may be acting), any
Bank or any other Person, whether in connection with
any Letter of Credit, any transaction contemplated by
any Letter of Credit, this Agreement, or any other Loan
Document, or any unrelated transaction;
(v) Any statement or any other documents
presented under any Letter of Credit proving to be
insufficient, forged, fraudulent or invalid in any
respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(vi) The insolvency of any Person issuing
any documents in connection with any Letter of Credit;
(vii) Any breach of any agreement between
any Co-Borrower and any beneficiary or transferee of
any Letter of Credit;
(viii) Any irregularity in the transaction
with respect to which any Letter of Credit is issued,
including any fraud by the beneficiary or any
transferee of such Letter of Credit;
(ix) Any errors, omissions, interruptions
or delays in transmission or delivery of any messages,
by mail, cable, telegraph, wireless or otherwise,
whether or not they are in code;
(x) Any act, error, neglect or default,
omission, insolvency or failure of business of any of
the correspondents of the Issuing Bank; and
(xi) Any other circumstances arising from
causes beyond the control of the Issuing Bank.
Section 3.4 Increased Costs, Indemnification, Expenses.
(a) If any change in Applicable Law, any
change in the interpretation or administration thereof, or any
change in compliance with Applicable Law by the Issuing Bank as a
result of any request or directive of any Governmental Authority,
central bank or comparable agency (whether or not having the
force of law) after the Agreement Date shall (i) impose, modify
or deem applicable any reserve (including, without limitation,
any imposed by the Board of Governors of the Federal Reserve
System), special deposit, capital adequacy, assessment or other
requirements or conditions against letters of credit issued by
the Issuing Bank or (ii) impose on the Issuing Bank any other
condition regarding this Agreement or any Letter of Credit or any
participation therein, and the result of any of the foregoing in
the determination of the Issuing Bank is to increase the cost to
the Issuing Bank of issuing or maintaining any Letter of Credit
44
or purchasing or maintaining any participation therein, then, on
the earlier of the Maturity Date or a date not more than fifteen
(15) days after demand by the Issuing Bank, each Co-Borrower
agrees to pay to the Issuing Bank, from time to time as specified
by the Issuing Bank, such additional amount or amounts as the
Issuing Bank determines will compensate it for such increased
costs, from the date such change or action is effective, together
with interest on each such amount from the Maturity Date or the
date demanded, as applicable, until payment in full thereof at
the Base Rate. A certificate as to such increased cost incurred
by the Issuing Bank as a result of any event referred to in this
paragraph submitted by the Issuing Bank to each Co-Borrower shall
be conclusive, absent manifest error, as to the amount thereof.
(b) Each Co-Borrower will indemnify and hold
harmless the Agent, the Issuing Bank and each other Bank and each
of their respective employees, representatives, officers and
directors from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever (including reasonable attorneys' fees, but excluding
taxes) which may be imposed on, incurred by or asserted against
the Agent, the Issuing Bank or any such other Bank in any way
relating to or arising out of the issuance of a Letter of Credit,
except that the Co-Borrowers shall not be liable to the Agent,
the Issuing Bank or any such Bank for any portion of such claims,
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, or disbursements resulting
from the gross negligence or willful misconduct of the Agent, the
Issuing Bank or such Bank, as the case may be, as determined by a
non-appealable order of a court of competent jurisdiction. This
Section 3.4(b) shall survive termination of this Agreement.
(c) Each Bank shall be responsible for its
pro rata share (based on such Bank's Commitment Percentage) of
any and all reasonable out-of-pocket costs, expenses (including
reasonable legal fees) and disbursements which may be incurred or
made by the Issuing Bank in connection with the collection of any
amounts due under, the administration of, or the presentation or
enforcement of any rights conferred by any Letter of Credit, any
Co-Borrower's or any guarantor's obligations to reimburse draws
thereunder or otherwise. In the event the Co-Borrowers shall
fail to pay such expenses of the Issuing Bank within thirty (30)
days of demand for payment by the Issuing Bank, each Bank shall
thereupon pay to the Issuing Bank its pro rata share (based on
such Bank's Commitment Percentage) of such expenses within ten
(10) days from the date of the Issuing Bank's notice to the Banks
of the Co-Borrowers failure to pay; provided, however, that if
the Co-Borrowers shall thereafter pay such expenses, the Issuing
Bank will repay to each Bank the amounts received from such Bank
hereunder.
ARTICLE 4
Conditions Precedent
Section 4.1 Conditions to Initial Loan. The
obligation of the Banks to undertake the Commitment and to make
the initial Loans hereunder shall be subject to the prior or
contemporaneous satisfaction of each of the following conditions
precedent:
45
(a) The Agent, the Issuing Bank and the Banks
shall have received each of the following, in form and substance
satisfactory to the Agent and the Banks:
(i) This duly executed Agreement;
(ii) A duly executed Revolving Loan Note to
the order of each Bank in the amount of such Bank's pro
rata share of the Revolving Loan Commitment;
(iii) A duly executed Term Note to the order of
each Bank in the amount of such Bank's pro rata share
of the Term Loan Commitment.
(iv) A loan certificate from each Co-Borrower
signed by an Authorized Representative of each Co-
Borrower setting forth the changes, if any, from the
loan certificate information provided to the Agent in
connection with the closing of the Prior Credit
Agreement;
(v) A loan certificate from each Material
Subsidiary setting forth the changes, if any, from the
loan certificate information provided to the Agent in
connection with the closing of the Prior Credit
Agreement;
(vi) A loan certificate from each New
Subsidiary signed by an Authorized Representative of
such New Subsidiary in substantially the form of
Exhibit E attached hereto, including a certificate of
incumbency with respect to each Authorized
Representative of such New Subsidiary, together with
appropriate attachments which shall include, without
limitation, the following: (A) a copy of the
Certificate of Incorporation of such New Subsidiary
certified to be true, complete and correct by the
Secretary of State for the jurisdiction of its
incorporation, (B) a true, complete and correct copy of
the By-Laws of such New Subsidiary, (C) a true,
complete and correct copy of the resolutions of such
New Subsidiary authorizing the execution, delivery and
performance of each Loan Document to which it is a
party, (D) certificates of good standing from each
jurisdiction in which such New Subsidiary is qualified
to do business, and (E) copies of employment contracts
for key management level employees of such New
Subsidiary, certified to be true, complete and correct
by an Authorized Representative of such New Subsidiary.
(vii) A Supplement to the Subsidiary Security
Agreement duly executed by each of the New
Subsidiaries;
(viii) A Supplement to the Subsidiary
Guaranty duly executed by each of the New Subsidiaries;
(ix) An Assignment of Partnership Interests
duly executed by HFI Acquisition Corp. and HFI
Management, Inc.;
46
(x) A Supplement to the Subsidiary Pledge
Agreement duly executed by HFI Acquisition Corp. and
Healthfirst, Inc. and a supplement or amendment to the
Stock Pledge Agreement duly executed by Housecall;
(xi) The stock certificates evidencing all
Capital Stock of HFI Acquisition Corp., HFI Management,
Inc., Healthfirst, Computer Masters of Kentucky, Inc.
and Health Care Resources, Inc. and related stock
powers duly endorsed in blank;
(xii) The New Mortgage duly executed by
Healthfirst and duly executed UCC-1 Financing
Statements under the applicable Uniform Commercial
Code, or other filings under Applicable Law, to be
filed in connection with such New Mortgage in form and
substance satisfactory to Agent to perfect the Lien
created by the New Mortgage;
(xiii) Copies of all documents executed in
connection with the Pending Transactions certified as
true, correct and complete by an Authorized
Representative of Housecall;
(xiv) Original Uniform Commercial Code
financing statements signed by each New Subsidiary as
debtor and naming the Agent as secured party to be
filed in all appropriate jurisdictions, in such form as
shall be satisfactory to the Agent;
(xv) The opinion of (a) Xxxxxxxxxx
Xxxxxxxx LLP, counsel to the Co-Borrowers and the
Material Subsidiaries, in form and substance
satisfactory to the Agent, (b) local counsel for
Tennessee and Kentucky in form and substance
satisfactory to the Agent, and (c) Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP, counsel to the Agent;
(xvi) Letters to the Agent permitting the
Banks to rely upon the opinion issued to Housecall by
counsel for Healthfirst and by counsel for HFI
Management, Inc. and HFI Home Care Management L.P. in
connection with Housecall's acquisition of the
Healthfirst Group;
(xvii) An Assignment of Representations,
Warranties and Covenants duly executed by the Housecall
and HFI Acquisition Corp. in such form as shall be
satisfactory to the Agent;
(xviii) The duly executed Request for Advance
for the initial Loans;
(xix) Copies of certificates of insurance, loss
payee endorsements, and the related insurance policies
covering the assets of each Co-Borrower and otherwise
meeting the requirements of Section 6.10 hereof;
(xx) Payment of all fees and expenses payable
to the Agent and the Banks in connection with the
execution and delivery of this Agreement, including,
47
without limitation, fees described in the Fee Letters
and fees and expenses of counsel to the Agent; and
(xxi) All such other documents as the Agent
may reasonably request, certified by an appropriate
governmental official or an Authorized Representative
if so requested.
(b) No Existing Default. No Default or Event
of Default shall exist on the Agreement Date or after giving
effect to the transactions contemplated to take place hereunder
on such date;
(c) Pending Transactions. In connection with
the Pending Transactions, the Agent shall have received adequate
financial information regarding the assets or business to be
acquired pursuant to the Pending Transactions, including (i) the
most recent audited financial statements, if available, but in
any case the most recently prepared balance sheet and statement
of income for the assets or business to be acquired pursuant to
the Pending Transactions and pro forma financial statements
showing the effect of the Pending Transactions, including a
balance sheet for Housecall and its Subsidiaries on a
consolidated basis as of the time of the consummation of the
Pending Transactions and pro forma statements of income for
Housecall and its Subsidiaries on a consolidated basis through at
least the end of eight (8) complete fiscal quarters after the
consummation of the Pending Transactions, together with
calculations showing compliance with Sections 7.19, 7.20, 7.21,
7.22, 7.23, 7.24 and 7.25 hereof for such period, and (ii) copies
of all material information presented to Housecall's Board of
Directors for its approval of the Pending Transactions;
(d) Representations and Warranties Correct.
The representations and warranties set forth in Article 5 hereof
and in the Subsidiary Guaranty shall be true and correct on the
Agreement Date, and after giving effect to the transactions
contemplated to occur on such date, (x) as stated, as to
representations and warranties which contain express materiality
limitations or qualifications and (y) in all material respects,
as to all other representations and warranties;
(e) Legality of Transactions. It shall not
be unlawful for the Co-Borrowers, the Material Subsidiaries, the
Agent or the Banks to carry out their respective obligations
under this Agreement;
(f) Solvency. The Agent shall have received
a certificate of the Chief Financial Officer of Housecall in form
and substance satisfactory to the Majority Banks that Housecall
and each of its Subsidiaries is Solvent on and as of the
Agreement Date;
(g) Written Receipt. If any part of the
proceeds of the Loan is to be disbursed to a Person other than a
Co-Borrower, the Agent shall have received from the Co-Borrowers
written disbursement instructions and a written receipt for such
proceeds;
(h) Litigation Review. The Agent shall have
received and reviewed such information as it may request
regarding all pending and threatened litigation involving
48
Housecall or any of its Subsidiaries, and shall be satisfied with
the results of such review; and
(i) Other Documents. The Agent shall have
received any other document, instrument, undertaking or
certificate stated in any of the Loan Documents to be delivered
on or prior to the Agreement Date.
Section 4.2 Conditions to Each Loan. The obligation
of the Banks to make each Loan including the initial Loan
hereunder (but excluding Loans, the proceeds of which are to be
reimburse the Issuing Bank for amounts drawn under a Letter of
Credit), is subject to the fulfillment of each of the following
conditions immediately prior to or contemporaneously with such
Loan:
(a) All of the representations and warranties
of each Co-Borrower under this Agreement, which, pursuant to
Section 5.26 hereof, are made at and as of the time of such Loan,
shall be true and correct at such time, both before and after
giving effect to the application of the proceeds of the Loan,
(x) as stated, as to representations and warranties which contain
express materiality limitations or qualifications, and (y) in all
material respects, as to all other representations and
warranties, and the Agent shall have received a certificate
(which may be a Request for Advance) to that effect signed by the
Authorized Representative of each Co-Borrower and dated the date
of such Loan;
(b) The incumbency of the Authorized
Representatives shall be as stated in the certificate of
incumbency contained in the certificate of each Co-Borrower
delivered pursuant to Section 4.1(a) or as subsequently modified
and reflected in a certificate of incumbency delivered to the
Agent and the Banks;
(c) There shall not exist on the date of such
Loan and after giving effect thereto, a Default or Event of
Default hereunder;
(d) The Agent shall have received a duly
executed Request for Advance from the applicable Co-Borrower;
(e) If such Loan is for the purpose of making
a Permitted Acquisition, the Agent shall have received all
documents and financial information required under the definition
of Permitted Acquisition; and
(f) The Agent and the Banks shall have
received all such other certificates, reports, statements, or
other documents as the Agent or the Banks may reasonably request
and all other conditions to the making of such Loan which are set
forth in this Agreement shall have been fulfilled.
Each Co-Borrower hereby agrees that the delivery of any Request
for Advance hereunder shall be deemed to be the certification of
the Authorized Representative of the Co-Borrowers that there does
not exist, on the date of the making of the Loan and after giving
effect thereto, a Default or an Event of Default hereunder.
Section 4.3 Conditions Precedent to Each Letter of
Credit. The obligation of the Issuing Bank to issue each Letter
49
of Credit is subject to the fulfillment of each of the following
conditions immediately prior to or contemporaneously with the
issuance of such Letter of Credit:
(a) All of the representations and warranties
of the Co-Borrowers under this Agreement, which, pursuant to
Section 5.26 hereof, are made at and as of the time of the
issuance of such Letter of Credit, shall be true and correct at
such time, both before and after giving effect to the issuance of
the Letter of Credit, (x) as stated, as to representations and
warranties which contain express materiality limitations or
qualifications, and (y) in all material respects, as to all other
representations and warranties, and the Agent shall have received
a certificate (which may be a request for issuance of Letter of
Credit) to that effect signed by the Authorized Representative
and dated the date of the issuance of such Letter of Credit;
(b) The incumbency of the Authorized
Representatives shall be as stated in the certificate of
incumbency contained in the certificate of the Co-Borrowers
delivered pursuant to Section 4.1(a) or as subsequently modified
and reflected in a certificate of incumbency delivered to the
Agent and the Banks;
(c) There shall not exist on the date of
issuance of such Letter of Credit, and after giving effect
thereto, a Default, or an Event of Default hereunder; and
(d) The Agent and the Issuing Bank shall have
received a duly executed Request for Issuance of Letter of Credit
from such Co-Borrower; and
(e) The Agent and the Issuing Bank shall have
received all such other certificates, reports, statements, or
other documents as the Agent or Issuing Bank may reasonably
request and all other conditions to the issuance of such Letter
of Credit which are set forth in this Agreement shall have been
fulfilled.
The Co-Borrowers hereby agree that the delivery of any Request
for Issuance of a Letter of Credit hereunder shall be deemed to
be the certification of the Authorized Representative thereof
that there does not exist, on the date of the request for
issuance of the Letter of Credit and after giving effect thereto,
a Default hereof, or an Event of Default hereunder.
Section 4.4 Conditions for the Benefit of the Agent
and the Banks. The conditions set forth in this Article 4 are
for the exclusive benefit of the Banks, the Issuing Bank and the
Agent and may be waived only by a written waiver signed by all
the Banks or the Agent, as applicable. For purposes of
determining satisfaction of the conditions set forth in
Section 4.1 hereof, each Bank agrees that, by funding its
Commitment Percentage of the initial Loan subsequent to the
Agreement Date, it will be deemed to have approved any matter in
such conditions requiring its approval. For purposes of
determining satisfaction or waiver of the conditions set forth in
Section 4.2 hereof for any Loan subsequent to such initial Loan,
each Bank which funds its Commitment Percentage of such
subsequent Advance shall be deemed to have approved any matter
disclosed by any Co-Borrower in writing to such Bank (and to the
Agent) at least two (2) days prior to such Loan, which writing
50
refers specifically to Sections 4.2 and 4.4 hereof and includes a
statement to the effect that such Bank's funding shall be deemed
a waiver of the applicable condition with respect to such matter.
Such waiver shall not be deemed a waiver with respect to the
conditions applicable to any subsequent Loan, but the Co-
Borrowers shall not be required to send the Banks or the Agent
any additional written notice with respect to such matters that
were previously disclosed by a Co-Borrower pursuant to this
Section 4.4.
ARTICLE 5
Representations and Warranties of the Co-Borrowers
In order to induce the Agent, the Issuing Bank and the
Banks to enter into or become parties to this Agreement and to
extend the Loans, each of the Co-Borrowers makes the following
representations and warranties to the Agent, the Issuing Bank and
the Banks:
Section 5.1 Due Organization. Each of Housecall and
its Material Subsidiaries is a corporation or partnership, duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, and
each of Housecall and its Material Subsidiaries, other than the
New Subsidiaries, is duly licensed or qualified to conduct
business, and each is in good standing in, each jurisdiction
wherein the character of the property owned or the nature of the
business transacted by it makes such licensing or qualification
necessary and where the failure to be so licensed or qualified
could reasonably be expected to have a Material Adverse Effect.
Section 5.2 Organization Standing and Qualification
of Subsidiaries.
(a) Set forth in Schedule 5.2 attached hereto
is a complete and accurate list of Housecall's Subsidiaries
showing their respective jurisdictions of incorporation or
organization; the jurisdictions in which each is qualified to do
business and the shareholders or partners, as the case may be, of
each such Subsidiary.
(b) The corporate charter or articles of
incorporation and all amendments thereto or the partnership
agreement or other constituent document and all amendments
thereto for Housecall and each of its Subsidiaries have been duly
filed (where required) and are in proper order. All of the
outstanding Capital Stock of Housecall and its Subsidiaries has
been validly issued in compliance with all federal and state
securities laws and is fully paid and nonassessable. Except as
specified in Schedule 5.2, all of the Capital Stock of or other
ownership interest in each of the Subsidiaries listed in
Schedule 5.2 attached hereto is owned by Housecall or one of its
Subsidiaries free and clear of all Liens. After giving effect to
the Pending Transactions on the Agreement Date, the corporate
organization chart of Housecall, as of the Agreement Date, is as
set forth in Schedule 5.2 hereof.
(c) Neither Housecall nor any of its
Subsidiaries is subject to any obligation (contingent or
51
otherwise) to repurchase or otherwise acquire or retire any
shares of its Capital Stock or any other equity interest therein.
Section 5.3 Absence of Certain Activities. Except as
set forth on Schedule 5.3 attached hereto, neither Housecall nor
any of its Subsidiaries is a partner in any partnership or a
joint venturer in any joint venture.
Section 5.4 Requisite Power. Except as set forth in
Schedule 5.4 attached hereto, Housecall and each of its Material
Subsidiaries have all requisite corporate or partnership power
and all material governmental licenses, permits, authorizations,
consents and approvals necessary to own and operate its
respective properties and to carry on its respective business as
now conducted and as proposed to be conducted. Each of the
Co-Borrowers has and each of the Material Subsidiaries has all
requisite power to borrow the sums provided for in this Agreement
and to execute, deliver, issue and perform this Agreement, the
Notes, the Security Documents and the other Loan Documents to
which any of them is a party.
Section 5.5 Healthcare Regulatory Matters.
(i) Except as disclosed on Schedule 5.5(a)
hereof, each facility operated by Housecall or any of
Housecall's Subsidiaries has: (a) where required by
Applicable Law, obtained all CONs; (b) obtained and
maintains in good standing all required Health Facility
Licenses; (c) obtained and maintains any required
accreditation from JCAHO for such facilities; (d)
obtained and maintains any required Medicaid
Certification and Medicare Certification; (e) entered
into and maintains in good standing any required
Medicaid Provider Agreement and any required Medicare
Provider Agreement;
(ii) Any and all Medicare cost reports for
each facility and of the home office of Housecall have
been properly completed in all material respects and
duly filed with the Medicare intermediary or other HCFA
agents for all cost reporting periods;
(iii) Any and all Medicaid cost reports for
each facility and the home office of Housecall have
been properly completed in all material respects and
duly filed with the agencies or agents responsible for
audits of same for all cost reporting periods. The
status of each audit with respect to such cost reports
is described on Schedule 5.5(b) hereto;
(iv) All CONs of Housecall or any of
Housecall's Subsidiaries as of the Agreement Date are
described on Schedule 5.5(c) hereto; and
(v) The Receivables of Housecall and its
Subsidiaries have been and will continue to be adjusted
to reflect reimbursement policies of third party payors
such as Medicare, Medicaid, Blue Cross/Blue Shield,
private insurance companies, Health Maintenance
Organizations ("HMOs"), Preferred Provider
Organizations ("PPOs"), alternative delivery systems,
managed care systems, and other third party payors.
52
Section 5.6 Authorization. All action on the part of
Housecall and each Subsidiary and their respective directors,
stockholders and partners necessary for the authorization,
execution and delivery and performance of this Agreement, the
Notes, the Security Documents and the other Loan Documents has
been duly taken and is in full force and effect.
Section 5.7 Officer Authorization. Each natural
person executing this Agreement or any of the other Loan
Documents on behalf of any Co-Borrower or any Material Subsidiary
is (as of the date of such execution) duly and properly in office
and fully authorized to execute and deliver the same.
Section 5.8 Binding Nature. This Agreement, the
Notes, the Security Documents and each of the other Loan
Documents is, or upon the execution and delivery thereof will be,
a legal, valid and binding obligation of the Co-Borrowers or of
the Material Subsidiaries, where any of such parties is a
signatory thereto, in full force and effect and enforceable in
accordance with its respective terms, except for the effect of
Applicable Laws regarding bankruptcy or insolvency and the effect
of equitable principles generally.
Section 5.9 No Conflict. Except as set forth in
Schedules 5.4 and 5.9, neither the execution nor delivery of this
Agreement, the Notes, the Security Documents or any of the other
Loan Documents nor performance of nor compliance with the terms
and provisions hereof or thereof will (a) conflict with or result
in a breach of any Governmental Requirement, or of any other
material agreement or instrument binding upon Housecall or any of
its Subsidiaries, or conflict with or result in a breach of any
provision of the corporate charter or by-laws, partnership, or
other constituent document of Housecall or any of its
Subsidiaries, or (b) result in the creation or imposition of any
Lien upon any property of Housecall or any of its Subsidiaries
pursuant to any such agreement or instrument (other than pursuant
to the Security Documents). No authorization, consent or
approval or other action by, and no notice to or filing with, any
Governmental Authority is required to be obtained or made by
Housecall or any of its Subsidiaries, other than those which will
be obtained or made prior to the Agreement Date, for the due
execution, delivery and performance by Housecall or any of its
Subsidiaries of this Agreement, the Notes, the Security Documents
or any of the other Loan Documents or for the validity or
enforceability thereof.
Section 5.10 No Event of Default. No Event of Default
or Default has occurred and is continuing or would result from
the execution, delivery or performance of this Agreement, the
Notes, the Security Documents or any of the other Loan Documents.
Section 5.11 Financial Statements. The financial
statements most recently delivered to the Agent pursuant to
Section 6.2 hereof, fairly present the financial condition and
results of operations of Housecall on a consolidated basis with
its Subsidiaries. All such financial statements were prepared in
accordance with GAAP consistently applied throughout the
respective periods covered thereby, except that financial
statements not dated as of the end of a fiscal year are subject
to adjustments upon audit. Except as disclosed in such financial
statements or otherwise disclosed in writing to the Banks,
neither Housecall nor any Subsidiary of Housecall is liable for
53
any material liability, direct or contingent, including, but not
limited to, liabilities for taxes, long-term leases or long-term
commitments, which would be required to be shown as a liability
or otherwise disclosed in current financial statements.
Section 5.12 Real Property. All real property leased by any
Co-Borrower or Material Subsidiary as of the Agreement Date, and
the name of the lessor of any such real property used by any Co-
Borrower or Material Subsidiary as its administrative or division
office, is set forth in Schedule 5.12(a). The respective leases
of each Co-Borrower are valid, enforceable and in full force and
effect. All real property owned by any Co-Borrower or any
Material Subsidiary as of the Agreement Date is set forth in
Schedule 5.12(b). Each Co-Borrower and each Material Subsidiary
owns good and marketable fee simple title to all of their
respective owned real property, and none of their respective
owned real property is subject to any Liens, except Permitted
Encumbrances and from and after the Agreement Date, the Lien in
favor of the Banks. None of the Co-Borrowers or any Material
Subsidiary owns or holds, or is obligated under or a party to,
any option, right of first refusal or any other contractual right
to purchase, acquire, sell, assign or dispose of any real
property respectively owned or leased by it; and no portion of
any real property respectively owned or leased by any Co-Borrower
or any Material Subsidiary has suffered any material damage by
fire or other casualty loss which has not heretofore been
completely repaired and restored to its original condition. All
material permits required to have been issued or appropriate to
enable the real property owned or leased by any Co-Borrower or
any Material Subsidiary to be lawfully occupied and used for all
of the purposes for which they are currently occupied and used,
have been lawfully issued and are, as of the date hereof, in full
force and effect.
Section 5.13 Title to Properties. Housecall and each of its
Material Subsidiaries has good, marketable, and legal title to,
or a valid leasehold interest in, all of its respective material
properties and assets, and none of such properties or assets is
subject to any Liens (other than Permitted Encumbrances) which
materially detract from the value of such properties or assets or
materially interferes with the business or operations of
Housecall or such Material Subsidiary as presently conducted or
proposed to be conducted.
Section 5.14 Intellectual Property. Schedule 5.14
attached hereto contains a complete and correct list of all
patents, copyrights, trademarks, licenses, service marks, trade
names and other similar rights (the "Intellectual Property
Rights") used by Housecall or any of its Subsidiaries. No
proceedings have been instituted or are pending or have been
threatened in writing which challenge the validity, ownership or
use of any such Intellectual Property Rights which could
reasonably be expected to have a Material Adverse Effect. To the
best knowledge of each of the Co-Borrowers, no infringement of
any Intellectual Property Right of any third party has occurred
or would result in any way from the operations or business of
Housecall or any of its Material Subsidiaries, and, except as set
forth in Schedule 5.15, no claim has been made by any such third
party based on allegation of any such infringement which could
reasonably be expected to have a Material Adverse Effect.
54
Section 5.15 Liabilities, Litigation, etc. Except for
liabilities incurred in the normal course of business, neither
Housecall nor any of its Subsidiaries has any material
(individually or in the aggregate) liabilities, direct or
contingent, except as disclosed or referred to in the financial
statements referred to in Section 5.11 above. Except as
described on Schedule 5.15 attached hereto, (a) there is no
litigation, legal or other action of any nature pending or, to
the knowledge of Housecall, threatened against or affecting
Housecall or any of its Subsidiaries, or any of their respective
properties that involves an amount in controversy in excess of
$1,000,000 and that is not covered by insurance, and (b) there is
no administrative proceeding or investigation of any nature
pending or, to the knowledge of Housecall, threatened against or
affecting Housecall or any of its Subsidiaries, or any of their
respective properties. None of such litigation disclosed on
Schedule 5.15 individually or collectively, involves the
possibility of any judgment or liability not fully covered by
insurance, or, if determined adversely to Housecall or such
Subsidiary, would have a Materially Adverse Effect. Housecall
does not know of any unusual or unduly burdensome material
restriction, restraint, or hazard relative to the business or
properties of Housecall or its Subsidiaries that is not customary
for or generally applicable to similarly situated businesses in
the same industry as Housecall or such Subsidiary.
Section 5.16 No Adverse Change. Since December 31,
1996, there has been no Material Adverse Change, and there has
occurred no event which would have a Material Adverse Effect, on
any of the Co-Borrowers or any Material Subsidiary.
Section 5.17 Tax Returns and Tax Matters. Housecall
and each of its Subsidiaries have filed all federal and state
income tax returns which are required to be filed, and each has
paid all taxes as shown on said returns and on all assessments
received by it to the extent that such taxes have become due and
there is no proposed, asserted or assessed material tax
deficiency against Housecall or any of its Subsidiaries, except
those taxes, assessments or deficiencies being contested in good
faith and for which such reserve as is required by GAAP has been
created. As of the Agreement Date, neither Housecall nor any of
its Subsidiaries is presently being audited by, or received
notice of any future audit from, the Internal Revenue Service or
any other tax authority except as disclosed on Schedule 5.17.
Section 5.18 Employee Benefits.
(a) Plans Maintained. Except as provided in
Schedule 5.18(i) with respect to clause (i) below or in
Schedule 5.18(ii) with respect to clauses (ii) and (iii) below,
no Co-Borrower is, and no Controlled Group member is, a party to,
contributes to or is currently obligated to contribute to any
plans, programs, agreements, policies, commitments or other
arrangements (whether or not set forth in a written document) in
the following categories:
(i) Any funded employee pension benefit
plan subject to Title IV of ERISA, including (without
limitation) any Multiemployer Plan,
(ii) Any material retiree health care
plan other than COBRA (as described in Section 5.18(g)
55
below) and any material retiree life insurance plan,
and
(iii) Any material plan that is an excess
benefit plan or a "top hat" plan, as defined in section
3(36) or section 301(a) (3) of ERISA, and is unfunded,
as described in section 4(b) (5) or section 301(a) (3)
of ERISA.
(b) Reporting and Disclosure. With respect
to each Employee Benefit Plan, including employee welfare benefit
plans not required to be listed in Schedule 5.18 (i) or
Schedule 5.18 (ii), and which is subject to the reporting,
disclosure and record retention requirements set forth in Part 1
of Subtitle B of Title I of ERISA and the regulations thereunder,
each of such requirements has been fully met on a timely basis,
except where instances of failing to do so could not reasonably
be expected, considered in the aggregate, to have a Material
Adverse Effect.
(c) Qualification of Plans. Except as
provided on Schedule 5.18(i), each plan which is listed in
Schedule 5.18(i) attached hereto, and which is intended to be
qualified under section 401(a) of the Code, has been determined
by the Internal Revenue Service in writing to be so qualified.
To the best knowledge of the Co-Borrowers, since the Internal
Revenue Service issued its determination with respect to any such
plan, there has been no occurrence (including, without
limitation, a plan amendment, the enactment of legislation or the
adoption of regulations) that could cause such plan not to be so
qualified. Within the applicable remedial amendment period
described in the regulations under section 401(b) of the Code, an
application for such a determination was or will be filed with
the Internal Revenue Service with respect to each amendment to
any such plan for which a failure to do so could reasonably be
expected to have a Material Adverse Effect. Each such plan has
in all material respects been administered in accordance with its
terms and the applicable provisions of ERISA and the Code and the
regulations thereunder.
(d) Contributions and Premiums. All material
contributions, premiums or other payments due from any
Co-Borrower or any other member of the Controlled Group to (or
under) any Employee Benefit Plan have been fully paid or
adequately provided for on the books and financial statements of
such Co-Borrower or other member of the Controlled Group.
(e) Employee Benefit Plans, Litigation and
Extraordinary Claims. There are no pending or, to the best
knowledge of the Co-Borrowers, threatened claims, actions or
lawsuits, other than routine claims for benefits in the usual and
ordinary course, asserted or instituted against (i) any Employee
Benefit Plan, (ii) any member of the Controlled Group with
respect to any Employee Benefit Plan, or (iii) any fiduciary with
respect to any Employee Benefit Plan, for which any Co-Borrower
may be directly or indirectly liable, through indemnification
obligations or otherwise that, in the aggregate could reasonably
be expected to have a Material Adverse Effect.
(f) Prohibited Transactions. To the best
knowledge of the Co-Borrowers, with respect to each Employee
Benefit Plan which is subject to Part 4 of Subtitle B of Title I
56
of ERISA, there does not now exist, nor has there existed within
the six-year period ending on the date hereof, any act or
omission which constitutes a violation of sections 406 or 407 of
ERISA and is not exempted by section 408 of ERISA or which
constitutes a violation of section 4975(c) of the Code and is not
exempted by section 4975(d) of the Code, except for violations
which, considered in the aggregate, would not have a Material
Adverse Effect.
(g) COBRA. To the best knowledge of the
Co-Borrowers, the Co-Borrowers and all of their Subsidiaries are
in compliance with the requirements of Title X of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended from time to time, except for violations which,
considered in the aggregate, would not have a Material Adverse
Effect.
Section 5.19 Environmental Matters. Except as set
forth on Schedule 5.19 hereto:
(a) No written notice, notification, demand,
request for information, citation, summons, complaint or order
has been received by Housecall or its Subsidiaries and to the
knowledge of Housecall, no penalty has been assessed and no
investigation or review is pending or threatened by any
governmental or other entity, (i) with respect to any alleged
violation of any Environmental Laws in connection with the
conduct of Housecall or its Subsidiaries and relating to a
Hazardous Substance or (ii) with respect to any alleged failure
to have any permit, certificate, license, approval, registration
or authorization required in connection with the conduct of
Housecall or its Subsidiaries relating to a Hazardous Substance
or (iii) with respect to any generation, treatment, storage,
recycling, transportation, disposal, or release (including a
release as defined in 42 U.S.C. Section 9601(22)) ("Release") of
any Hazardous Substance owned or leased by Housecall or its
Subsidiaries, which alleged violation, alleged failure to have
any required permit, certificate, license, approval, or
registration, or generation, treatment, storage, recycling,
transportation, disposal or release, individually or in the
aggregate, is reasonably likely to result in liability to
Housecall or its Subsidiaries in excess of $250,000.00.
(b) (i) To the best of Housecall's
knowledge, there has been no Release of a Hazardous
Substance at, on or under any property owned or leased
by Housecall or for which Housecall or any of its
Subsidiaries would be liable, which Release,
individually, is reasonably likely to result in
liability to Housecall or its Subsidiaries in excess of
$250,000.00;
(ii) neither Housecall nor any of its
Subsidiaries has, other than as a generator or in a
manner not regulated under the Environmental Laws,
stored or treated any "hazardous waste" (as defined in
42 U.S.C. Section 6903(5)) on any property owned or
leased by Housecall or its Subsidiaries or for which
Housecall or any of its Subsidiaries would be liable,
except for such storage or treatment which individually
or in the aggregate is not reasonably likely to result
in liability to Housecall or any of its Subsidiaries in
57
excess of $250,000.00; and (iii) no polychlorinated
biphenyl ("PCB") in concentrations greater than 50
parts per million, friable asbestos, or underground
storage tank (in use or abandoned) is at any property
owned or leased by Housecall or for which Housecall or
any of its Subsidiaries would be liable, except for
such PCBs, friable asbestos or underground storage
tanks that are not reasonably likely, individually or
in the aggregate, to result in liability to Housecall
or any of its Subsidiaries in excess of $250,000.00.
(c) To the best knowledge of Housecall,
neither Housecall nor any of its Subsidiaries has transported or
arranged for the transportation (directly or indirectly) of any
Hazardous Substance to any location which is listed under the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), on the Comprehensive
Environmental Response, Compensation and Liability Information
System, as amended ("CERCLIS"), or on any similar state list or
which is the subject of any federal, state or local enforcement
action or other investigation which may lead to claims for
clean-up costs, remedial work, damages to natural resources or
for personal injury claims, including, but not limited to, claims
under CERCLA that are reasonably likely, individually or in the
aggregate, to result in liability to Housecall or any of its
Subsidiaries in excess of $250,000.00.
(d) No written notification of a Release of a
Hazardous Substance has been filed by or on behalf of Housecall
or any of its Subsidiaries, which individually or in combination
with other such Releases, is reasonably likely to result in
liability for Housecall or any of its Subsidiaries in excess of
$250,000.00.
(e) There have been no environmental audits
or similar investigations conducted by or which are in the
possession of Housecall or any of its Subsidiaries in relation to
any property owned or leased by Housecall or for which Housecall
or any of its Subsidiaries would be liable, which identify one or
more environmental liabilities of Housecall or any of its
Subsidiaries which are reasonably likely to exceed $250,000.00
individually or in the aggregate.
Section 5.20 Insurance. Schedule 5.20 attached hereto
contains a complete and accurate list, as of the Agreement Date,
of all liability and property insurance policies maintained by
Housecall or any of its Material Subsidiaries. Housecall and
each of its Material Subsidiaries have (either in the name of
Housecall or in such Subsidiary's own name) insurance, which
includes self-insurance which is reasonable and in accordance
with sound industry practice taking into account the nature of
their respective businesses (and which self-insurance is fully
described on Schedule 5.20) on all of their respective properties
in at least such amounts and against at least such risks as are
usually insured against in the same geographic area by companies
of established repute engaged in the same or similar business.
All such insurance is in full force and effect and all premiums
due in respect thereof have been paid.
Section 5.21 Compliance with Laws. Except as set
forth in Schedule 5.21 attached hereto, as of the Agreement Date,
Housecall and each of its Material Subsidiaries are in compliance
58
in all material respects with all Governmental Requirements
applicable to their properties, assets and business. There are
no proceedings pending or, to the best of their knowledge,
threatened, to terminate or modify any material Governmental
Approvals.
Section 5.22 Statutory Regulation. Neither Housecall
nor any of its Subsidiaries is an investment company within the
meaning of the Investment Company Act of 1940, as amended, or is,
directly or indirectly, controlled by or acting on behalf of any
person which is an investment company, within the meaning of said
Act. Neither Housecall nor any of its Subsidiaries is subject to
any state law or regulation regulating public utilities or
similar entities, or is, within the meaning of the Public Utility
Holding Company Act of 1935, as amended, (a) a holding company;
(b) a subsidiary or affiliate of a holding company; or (c) a
public utility. Neither Housecall nor any of its Subsidiaries is
subject to regulation under the Interstate Commerce Act or the
Federal Power Act or under any other federal or state statute or
regulation limiting or placing conditions upon their respective
power or right to borrow money.
Section 5.23 Use of Proceeds; Regulation U. Neither
Housecall nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System of the United States). No part of the
proceeds of the Loans will be used to purchase or carry any such
margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock, except in
compliance with such regulations. No part of the proceeds of the
Loans will be used for any purpose which violates the provisions
of Regulation G, T, U or X of said Board of Governors.
Section 5.24 Solvency. As of the Agreement Date and
after giving effect to the transactions contemplated by this
Agreement and the other Loan Documents, including all of the
Loans made and to be made hereunder, each of the Co-Borrowers is
Solvent and each of the Material Subsidiaries is Solvent.
Section 5.25 Fiscal Year. The fiscal year of
Housecall ends on June 30.
Section 5.26 Survival of Representations and
Warranties, etc. All representations and warranties made under
this Agreement shall be deemed to be made, and shall be true and
correct, at and as of the Agreement Date and the date of each
Loan, or upon the issuance of a Letter of Credit hereunder,
except to the extent previously fulfilled in accordance with the
terms hereof and to the extent subsequently inapplicable. All
representations and warranties made under this Agreement shall
survive, and not be waived by, the execution hereof by the Banks,
the Agent, and the Issuing Bank, any investigation or inquiry by
any Bank, Issuing Bank, or the Agent, or the making of any
Advance or the issuance of any Letter of Credit under this
Agreement.
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ARTICLE 6
Affirmative Covenants
Each of the Co-Borrowers covenants and agrees that so long as any
Obligation is outstanding or any Commitment is in effect it will
comply with and, if applicable, cause each of its Subsidiaries to
comply with the following provisions:
Section 6.1 Accounting Records. Housecall and each
of its Subsidiaries shall maintain adequate books and accounts in
accordance with sound business practices and GAAP consistently
applied. In the event of any changes in GAAP or in the
application of GAAP to Housecall and its Subsidiaries, the
parties shall, unless they agree otherwise, continue to determine
the compliance of the Co-Borrowers with the covenants herein set
forth and otherwise interpret the provisions of this Agreement
based on GAAP prior to any such changes.
Section 6.2 Financial Statements and Notices.
Housecall shall furnish directly to the Agent and each Bank the
following financial statements, information and notices:
(a) As soon as available and in any event
within 90 days after the end of each fiscal year of Housecall or
such longer period as may be the subject of an extension granted
by the Securities and Exchange Commission (but in no event later
than 120 days after the end of such fiscal year), a consolidated
and consolidating balance sheet of Housecall and its Subsidiaries
as of the end of such fiscal year and the related consolidated
and consolidating statements of income and consolidated statement
of cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, and,
with respect to such financial information for Housecall, such
consolidated statements shall be audited statements by Ernst &
Young or other independent public accountants of nationally
recognized standing and containing an unqualified report of such
accountants (other than as to the consolidating financial
statements);
(b) As soon as available and in any event
within 45 days after the end of each of the first 3 fiscal
quarters of each fiscal year of Housecall or such longer period
as may be the subject of an extension granted by the Securities
and Exchange Commission (but in no event later than 75 days after
the end of such fiscal quarter), an unaudited consolidated and
consolidating balance sheet of Housecall and its Subsidiaries as
of the end of such fiscal quarter and the related unaudited
consolidated and consolidating statement of income and
consolidated statement of cash flows for such quarter, setting
forth in each case in comparative form the figures for the
corresponding quarter of the previous fiscal year and setting
forth all variances from budget, all certified (subject to normal
year-end adjustments and the absence of certain notes) as to
fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer of
Housecall;
(c) As soon as available and in any event
within 45 days after the end of each month, an unaudited
consolidated and consolidating balance sheet of Housecall and its
Subsidiaries as of the end of such month and the related
60
unaudited consolidated and consolidating statements of income and
consolidated statement of cash flows for such month, setting
forth in each case in comparative form the figures for the
corresponding month of the previous fiscal year and setting forth
all variances from budget, all certified (subject to normal year-
end adjustments and the absence of certain notes) as to fairness
of presentation, generally accepted accounting principles and
consistency by the chief financial officer of Housecall;
(d) Simultaneously with the delivery of each
set of financial statements referred to in subsections (a), (b)
and (c) of this Section, a certificate of the chief financial
officer of Housecall (i) stating whether, to the best of such
officer's knowledge after due inquiry, there exists on the date
of such certificate any Default and, if any Default then exists,
setting forth the details thereof and the action that Housecall
is taking or proposes to take with respect thereto, (ii) stating
whether, since the date of the most recent financial statements
previously delivered pursuant to subsection (a) or (b) of this
Section, there has been a change in the generally accepted
accounting principles applied in preparing the financial
statements then being delivered from those applied in preparing
the most recent audited financial statements so delivered which
is material to the financial statements then being delivered,
(iii) furnishing calculations demonstrating the compliance by
Housecall of the covenants contained in Sections 7.19 , 7.20,
7.21, 7.22, 7.23, 7.24 and 7.25 hereof, (iv) attaching
management's summary of the results contained in such financial
statements, and (v) listing all Subsidiaries of Housecall (other
than Material Subsidiaries) and setting forth the total value of
assets owned by each such Subsidiary;
(e) Simultaneously with the delivery of each
set of financial statements referred to in clause (a) above, a
statement of the firm of independent public accountants which
reported on such statements whether anything has come to their
attention to cause them to believe that any Default existed on
the date of such statements;
(f) As soon as available and in any event
within ninety (90) days after the end of each fiscal year of
Housecall, financial forecasts and projections of Housecall and
its Subsidiaries for each fiscal quarter in the first succeeding
fiscal year and financial forecasts and projections of Housecall
and its Subsidiaries for the second and third succeeding fiscal
years together with a certificate of the chief financial officer
of Housecall setting forth that such financial forecasts and
projections (i) have in all material respects been prepared in
accordance with Housecall's normal accounting procedures on the
basis of reasonable assumptions, (ii) fairly represent in all
material respects the expectation of Housecall as to the matters
covered thereby, (iii) were prepared by Housecall in good faith
and (iv) remain unchanged in all material respects as of the date
delivered;
(g) Within five (5) Business Days after any
Authorized Officer obtains knowledge of any Default, if such
Default is then continuing, a certificate of the chief financial
officer of Housecall setting forth the details thereof and the
action which Housecall is taking or proposes to take with respect
thereto;
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(h) Contemporaneously with each year-end
financial report required by the foregoing paragraph (a), a
schedule identifying all insurance (including any self-insurance
programs) then in effect and certificates evidencing such
insurance;
(i) Promptly after they are released, sent,
made available or filed, copies of all press releases, material
reports, proxy statements and financial statements that Housecall
sends or makes available to its stockholders generally and all
registration statements and reports that Housecall files with the
Securities and Exchange Commission; copies of all such reports
provided that include the information required to be provided
pursuant to Section 6.2(a) or 6.2(b) shall to that extent be
deemed to satisfy such requirements;
(j) As soon as available, any written report
involving the internal controls of Housecall and its Subsidiaries
submitted to Housecall by its independent public accountants in
connection with their annual or interim special audit of the
financial condition of Housecall and its Subsidiaries;
(k) Promptly but in no event later than
five (5) calendar days after an Authorized Officer learns
thereof, written notice of any actual or threatened claim,
litigation, suit, investigation, proceeding or dispute against or
affecting Housecall or any of its Subsidiaries, which: (i) if
determined adversely, could reasonably be expected to have a
Material Adverse Effect; (ii) involves a monetary amount in
excess of one million Dollars ($1,000,000) and is not covered by
insurance; (iii) is reasonably expected to result in a strike,
work stoppage, boycott, shutdown or other labor disruption
against or involving Housecall or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect;
(iv) could reasonably be expected materially to limit, prohibit
or restrict the manner in which Housecall or any of its
Subsidiaries currently conducts its business; or (v) concerns any
alleged violation by Housecall or any of its Subsidiaries, or any
of their respective predecessors, of any Environmental Law, where
there exists a reasonable possibility that such violation could
materially affect any of the properties or the operations of
Housecall or such Subsidiary or any alleged material
noncompliance of any of the properties or the operations of
Housecall or such Subsidiary therewith;
(l) As soon as possible, and in any event
within twenty (20) calendar days, after an Authorized Officer
learns that any of the following events has occurred, such
Authorized Officer shall deliver to the Agent a statement
describing such event and any action that the Co-Borrowers
propose to take with respect thereto: (i) any Reportable Event
with respect to a Pension Plan; (ii) the institution of
proceedings by the PBGC to terminate any Pension Plan or to have
a trustee appointed to administer such plan, or receipt of notice
of any intention by the PBGC to do so; (iii) the filing of a
request for a minimum funding waiver by a Co-Borrower or a member
of the Controlled Group under section 412 of the Code with
respect to any Pension Plan or any employee pension benefit plan
(as defined in section 3(2) of ERISA) maintained by any ERISA
Affiliate; or (iv) the receipt by any Co-Borrower or any other
member of the Controlled Group of a material demand for
withdrawal liability under section 4219 or 4202 of ERISA;
62
(m) As soon as possible, and in any event
within ten (10) days after receipt of a written request from the
Agent or the Majority Banks, the Co-Borrowers shall deliver to
the Agent, as requested by either the Agent or the Majority
Banks: (i) a copy of any Employee Benefit Plan or summary
description of such plan; (ii) a copy of any report, description
or other document filed with any governmental agency with respect
to any Employee Benefit Plan or any plan (as defined in section
3(3) of ERISA) maintained by any Co-Borrower or any ERISA
Affiliate; or (iii) a copy of any notice, determination letter,
ruling or opinion-that any Co-Borrower or any other Controlled
Group member receives from any governmental agency with respect
to any Employee Benefit Plan;
(n) Within a reasonable time after a request
therefor, such other information as the Agent or the Majority
Banks may reasonably request regarding Housecall, its
Subsidiaries or their assets, operations, financial condition or
management; and
(o) Within fifteen (15) days from the end of
each calendar month, commencing on May 15, 1997, a report setting
forth the month end balance as of the end of such calendar month
in each deposit account maintained by Housecall and each of its
Subsidiaries.
Section 6.3 Inspection of Property Books and Records.
(a) Except to the extent prohibited by Applicable Law, Housecall
and each of its Subsidiaries shall permit the Agent or any of the
Banks, at such reasonable times and intervals as the Agent or
Banks may designate, by and through the representatives of the
Agent or any of the Banks, to inspect, audit and examine their
respective books and records, to make copies thereof, to discuss
their respective affairs, finances and accounts with their
respective officers and independent public accountants, and to
visit and inspect their respective properties; provided, however,
when an Event of Default exists representatives of the Agent or
any of the Banks may visit and inspect at any time and without
advance notice.
(b) Housecall and its Subsidiaries shall
extend their cooperation and assistance and comply with the
requests of the Agent or the Majority Banks or their respective
representatives in connection with any audit regarding the
Collateral and will furnish any information requested in respect
thereof, including, without limitation, appraisals of the
Collateral, lien search reports, and physical counts. At the
request of the Agent or the Majority Banks, the Co-Borrowers
shall pay the reasonable fees and expenses of an accounting firm
selected by the Majority Banks to conduct examinations of the
books and records of Housecall and its Subsidiaries from time to
time. The Co-Borrowers shall also pay all reasonable
out-of-pocket expenses of the Agent in connection with any other
audit or examination of the Collateral hereunder.
Section 6.4 Access to Accountants. Each Co-Borrower
hereby authorizes the Agent to discuss the financial condition of
such Co-Borrower with such Co-Borrower's independent public
accountants upon reasonable notification to such Co-Borrower of
the Agent's intention to do so. Each Co-Borrower shall be given
the reasonable opportunity to participate in any such discussion.
Each Co-Borrower shall deliver to its independent public
63
accountants a letter authorizing and instructing them to comply
with the provisions of this Section 6.4.
Section 6.5 Maintenance of Existence. Housecall and
each of its Material Subsidiaries shall preserve and maintain
their respective existences and all of their material licenses,
permits, privileges and franchises and other rights necessary or
desirable in the normal course of their businesses, and will use
reasonable efforts, in the ordinary course and consistent with
past practice, to preserve their respective business organization
and preserve the goodwill and business of the customers,
suppliers and others having business relations with them.
Section 6.6 Tax Returns. Housecall and each of its
Subsidiaries shall file all federal and state income tax returns
which are required to be filed, and shall pay all taxes as shown
on said returns and on all assessments received by it to the
extent that such taxes have become due, except any such taxes or
assessments which are being contested in good faith and for which
such reserve as is required by GAAP has been created.
Section 6.7 Qualifications To Do Business. Housecall
and each of its Subsidiaries shall qualify to do business and
shall remain in good standing in each jurisdiction in which the
nature of their business requires them to be so qualified, except
where the failure to so qualify could not reasonably be expected
to, in the aggregate, have a Material Adverse Effect.
Section 6.8 Compliance with Laws. Housecall and its
Subsidiaries shall comply with all Governmental Requirements,
except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
Section 6.9 Material Agreements. Housecall and its
Subsidiaries shall comply in all respects with the terms of each
agreement to which any of them is a party, except where all
instances of any failure to so comply would not, in the
aggregate, have a Material Adverse Effect.
Section 6.10 Insurance. Housecall and its Material
Subsidiaries shall maintain in full force and effect insurance of
such types and in such amounts as are customarily carried in
their respective lines of business by companies of established
repute engaged in similar businesses, including, but not limited
to, fire, hazard, public liability, property damage, products
liability, professional liability and workers' compensation
insurance, which insurance may include self-insurance which is
reasonable and in accordance with sound industry practice taking
into account the nature of their respective businesses and fully
disclosed to the Agent. All such insurance policies which insure
real or personal property shall include a standard form loss
payee endorsement, naming the Agent as loss payee. All such
insurance policies which insure liability shall name the Agent as
additional insured for the benefit of the Agent and each Bank.
All such insurance policies shall provide that the insurance
companies will give the Agent at least thirty (30) days prior
written notice before any such policy or policies of insurance
shall be altered or canceled. Housecall shall deliver or cause
to be delivered to the Agent, as the Agent may from time to time
request, schedules identifying all insurance then in effect with
respect to Housecall and its Material Subsidiaries and
certificates evidencing such insurance.
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Section 6.11 Facilities. Housecall and its Material
Subsidiaries shall keep the material properties (in the
aggregate) used in their respective businesses in good repair,
working order and condition, and from time to time shall make
necessary repairs or replacements thereto so that their property
shall be maintained adequately for its intended use.
Section 6.12 Taxes and Other Liabilities. Housecall
and its Material Subsidiaries shall pay and discharge when due
any and all material indebtedness, obligations, liabilities,
assessments and real and personal property taxes, including, but
not limited to, federal and state personal and real property
taxes, except as may be subject to good faith contest or as to
which a bona fide dispute may arise; provided, however, that
adequate reserves in accordance with GAAP or other provision is
made to the satisfaction of the Majority Banks for prompt payment
thereof in the event that it is found that any of the above are
due and owing.
Section 6.13 Governmental Approvals. Housecall and
its Material Subsidiaries shall apply for, diligently pursue, and
obtain or cause to be obtained, and shall thereafter maintain in
full force and effect all material Governmental Approvals that
shall now or hereafter be necessary under any Governmental
Requirement (i) for land use, public and employee health and
safety, pollution or protection of the environment, and (ii) for
the operation of the business of Housecall and the Subsidiaries.
Housecall shall promptly notify the Agent in the event of any,
and provide the Agent with a copy of all notices of, denial,
suspension, or revocation of any material Governmental Approvals.
Housecall and each of its Material Subsidiaries shall comply with
all terms and conditions of all Governmental Approvals and with
all other limitations, restrictions, obligations, schedules,
timetables and reporting requirements in any Governmental
Requirements in all material respects.
Section 6.14 Healthcare Regulatory Matters. Housecall
shall, and shall cause each of its Subsidiaries to, at all times:
(a) comply with all applicable CON
requirements in jurisdictions where Housecall or its Subsidiaries
operate;
(b) maintain in good standing all required
Health Facilities Licenses for each facility operated by
Housecall or its Subsidiaries;
(c) maintain any required accreditation of
each facility operated by Housecall and its Subsidiaries by JCAHO
for facilities of the type operated by Housecall and its
Subsidiaries; provided, that if any such accreditation becomes
conditional, Housecall will cure or otherwise address the reasons
for such conditional accreditation within twelve months of
learning of such status;
(d) maintain any required Medicaid
Certification and Medicare Certification presently in effect or
hereafter obtained with respect to each facility operated by
Housecall and its Subsidiaries; and
(e) maintain each Medicaid Provider Agreement
and each Medicare Provider Agreement presently in effect or
65
hereafter entered into with respect to each facility operated by
Housecall and its Subsidiaries.
Section 6.15 Environmental Laws. Housecall shall, and
shall cause each of its Subsidiaries to, conduct its respective
operations and keep and maintain its respective property in
substantial compliance with all Environmental Laws. Housecall
and its Subsidiaries shall (i) conduct their operations in such a
way as to prevent material contamination of any part of their
respective properties by any Hazardous Substance; (ii) manage all
Hazardous Substances in a manner that does not require a
Hazardous Waste Facility Permit, and in compliance in all
material respects with all Governmental Requirements and
Governmental Approvals; and (iii) not intentionally or
recklessly, and endeavor not to unintentionally, and not permit
any other Person to, emit, release or discharge into air, soil,
surface water or groundwater, any Hazardous Substance in excess
of permitted levels or reportable quantities, or other
concentrations, standards, or limitations under any Governmental
Requirements or Governmental Approvals if such emission, release
or discharge could reasonably be expected to give rise to a
liability in excess of $100,000 on the part of Housecall or any
of its Subsidiaries.
Section 6.16 Tax Qualification. For any Employee
Benefit Plan which is intended to be qualified under section
401(a) of the Code, the Co-Borrowers shall, or shall use their
best efforts to cause the respective member of the Controlled
Group to:
(a) Use its best efforts to seek and receive
determination letters from the Internal Revenue Service stating
that such plan, or any material amendment to such plan, meets the
requirements for qualification under section 401(a) of the Code,
unless there is no reasonable possibility that the failure to do
so would have a Material Adverse Effect;
(b) Use its best efforts to cause such plan
to meet such requirements in operation and to be administered in
accordance with the requirements of the Code and ERISA, unless
the failure to do so could not reasonably be expected to result
in a liability of Housecall or any of its Subsidiaries in excess
of $500,000; and
(c) Use its best efforts to refrain from
taking any action that would cause such plan to lose its
qualification under section 401(a) of the Code or to violate the
requirements of the Code or ERISA if such loss or violation could
reasonably be expected to result in a liability of Housecall or
any of its Subsidiaries in excess of $500,000.
Section 6.17 Funding. Each Co-Borrower shall, and
shall use its best efforts to cause each other member of the
Controlled Group to, make all material contributions that it is
required to make by law or by any plan prior to the earliest date
when statutory Liens could be imposed under the Code or ERISA on
any assets of such Co-Borrower or any other Subsidiary of
Housecall in order to satisfy payment of such contributions.
Each Co-Borrower shall not, and shall use its best efforts to not
permit any other member of the Controlled Group to, allow or
suffer any material statutory Lien to be placed upon the assets
of Housecall or any of its Subsidiaries under the Code or ERISA.
66
Section 6.18 Concentration Account. The Co-Borrowers
shall establish and maintain the Concentration Account with a
financial institution which is acceptable to the Agent and the
Co-Borrowers will, and will cause such financial institution to,
execute a deposit account pledge agreement substantially in the
form of Exhibit I attached hereto granting a Lien on such account
to the Agent on behalf of the Banks. All other bank accounts
maintained by Housecall and any of its Material Subsidiaries
(other than accounts maintained exclusively for the purpose of
making disbursements) shall be and at all times remain subject to
instructions to transfer all funds out of such accounts into the
Concentration Account on a daily basis.
Section 6.19 Interest Rate Hedging. Within ninety
(90) days after the Agreement Date, Housecall shall enter into
one or more Rate Contracts with respect to all Obligations under
the Term Loan for a period of not less than eighteen (18) months.
Such Rate Contracts shall provide interest rate protection on
terms reasonably acceptable to the Agent. All obligations of any
Co-Borrower to any Bank or the Agent or any Affiliate of any Bank
or the Agent pursuant to a Rate Contract shall rank pari passu
with all other Obligations.
Section 6.20 Further Assurances. Each Co-Borrower
will promptly cure, or cause to be cured, defects in the creation
and issuance of any of the Notes and the execution and delivery
of the Loan Documents (including this Agreement), resulting from
any act or failure to act by any Co-Borrower or any employee or
officer thereof. Each Co-Borrower at its expense will promptly
execute and deliver to the Agent and the Banks, or cause to be
executed and delivered to the Agent and the Banks, all such other
and further documents, agreements, and instruments in compliance
with or accomplishment of the covenants and agreements of each
Co-Borrower in the Loan Documents, including this Agreement, or
to correct any omissions in the Loan Documents, or more fully to
state the obligations set out herein or in any of the Loan
Documents, or to obtain any consents, all as may be necessary or
appropriate in connection therewith and as may be reasonably
requested by the Agent. The Co-Borrowers shall complete all
matters listed on Schedule 6.20 hereto in accordance therewith
and by the date of completion set forth thereon.
ARTICLE 7
Negative Covenants
Each of the Co-Borrowers covenants and agrees that so
long as any Obligation is outstanding or any Commitment is in
effect, it will comply with and, if applicable, cause each of its
Subsidiaries to comply with the following provisions:
Section 7.1 Mergers. Neither Housecall nor any of
its Subsidiaries shall enter into any merger, consolidation,
reorganization or recapitalization, or any agreement to do any of
the foregoing, except pursuant to a Permitted Acquisition and
except that any Subsidiary of Housecall may be merged into or
consolidated with Housecall or another Wholly Owned Subsidiary of
Housecall; provided that Housecall is the surviving entity in any
such merger or consolidation, or if Housecall is not a party to
such merger or consolidation but any Material Subsidiary is a
67
party to such merger or consolidation, the surviving entity is a
Material Subsidiary.
Section 7.2 Change of Business. Neither Housecall
nor any of its Subsidiaries shall change the nature of its
business or engage in any other business other than the
businesses which are substantially similar to the lines of
business in which Housecall and its Subsidiaries are engaged as
of the Agreement Date.
Section 7.3 Capital Stock. Neither Housecall nor any
of its Subsidiaries shall repurchase, retire or redeem any of its
respective Capital Stock. Housecall will not pay dividends on,
or make any other direct or indirect distributions to any Person
on account of, any of its Capital Stock.
Section 7.4 Accounting Policies. Except in order to
comply with GAAP, Housecall shall not materially change any of
its accounting policies or change its fiscal year or the fiscal
year of any of its Subsidiaries from June 30.
Section 7.5 Investments; Acquisitions. Neither
Housecall nor any of its Subsidiaries shall make (or acquire as
part of an acquisition) any Investment, except Investments (a) in
Subsidiaries listed on Schedule 5.2 or in any additional
Subsidiaries created in accordance with Section 7.14 hereof;
(b) in connection with a Permitted Acquisition and (c) Permitted
Investments. Neither Housecall nor its Subsidiaries shall
acquire all or any substantial part of the assets, property or
business of, or any assets that constitute a division or
operating unit of the business of, any other Person, except for
Permitted Acquisitions.
Section 7.6 Negative Pledge. Neither Housecall nor any of
its Subsidiaries shall mortgage, pledge, grant or permit to exist
a security interest in, or Lien upon, any of their respective
assets of any kind now owned or hereafter acquired, or any income
or profits therefrom, except for Permitted Encumbrances.
Section 7.7 Guaranties. Neither Housecall nor any of
its Subsidiaries shall become liable, directly or indirectly, for
any Guaranty except: (a) endorsements for collection or deposit
in the ordinary course of business; (b) obligations entered into
in connection with the acquisition of services, supplies and
equipment in the ordinary course of business of Housecall or such
Subsidiary; and (c) obligations of the Subsidiaries pursuant to
the Loan Documents.
Section 7.8 Indebtedness. Neither Housecall nor any
of its Subsidiaries shall incur, create, assume or permit to
exist any Indebtedness except: (a) the Obligations; (b)
Indebtedness secured by a Lien of the type described in clause
(g) of the definition of "Permitted Encumbrances" not to exceed
$3,500,000 in the aggregate at any one time outstanding for
Housecall and its Subsidiaries; (c) taxes, assessments and
governmental charges or levies which are not delinquent or which
are being contested in good faith and for which, in accordance
with GAAP adequate reserves have been set aside on the books of
Housecall or the affected Subsidiary of Housecall; (d) current
liabilities incurred in connection with the obtaining of goods or
services in the ordinary course of business; (e) Subordinated
Indebtedness in existence as of the Agreement Date and described
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on Schedule 7.8 attached hereto, and any additional Subordinated
Indebtedness approved in writing by the Majority Banks; (f)
Indebtedness owing from Housecall to a Wholly Owned Subsidiary of
Housecall from which the Agent has received a Subsidiary Guaranty
or from one Wholly Owned Subsidiary of Housecall from which the
Agent has received a Subsidiary Guaranty to Housecall or another
Wholly Owned Subsidiary of Housecall from which the Agent has
received a Subsidiary Guaranty; (g) Guaranties permitted under
Section 7.7 hereof; (h) obligations with respect to Rate
Contracts having notional amounts not in excess of $40,000,000 in
the aggregate; and (i) additional unsecured Indebtedness (other
than Indebtedness permitted under any of clauses (a) through (h)
above) of up to $500,000 in the aggregate at any time
outstanding.
Section 7.9 Sale of Assets. Neither Housecall nor any of
its Subsidiaries shall sell, transfer or otherwise dispose of any
of their respective assets (including, but not limited to, sales
of stock of Subsidiaries, sales of CONs and sales of Medicare
Visits, but excluding sales, transfers, leases or other
dispositions between or among any of Housecall and any of its
Material Subsidiaries), other than (a) sales of inventory in the
ordinary course of business at the fair market value thereof and
for cash or cash equivalents, (b) physical assets used, consumed
or otherwise disposed of in the ordinary course of business,
(c) sales of duplicate CONs, and (d) sales of other CONs and
Medicare Visits with the consent of the Majority Banks; provided
that the Net Proceeds from sales under clauses (c) and (d) above
are used to repay the Loans as provided in Section 2.7.
Section 7.10 Sale-Leaseback Transactions. Neither
Housecall nor any of its Subsidiaries shall enter into any
Sale-Leaseback Transaction.
Section 7.11 Capital Expenditures. Housecall and its
Subsidiaries, considered in the aggregate, shall not (a) during
the fiscal year ending June 30, 1997, make Capital Expenditures
in an aggregate amount in excess of $3,500,000 and (b) during
each fiscal year thereafter, make Capital Expenditures in an
aggregate amount in excess of (i) $5,000,000, plus (ii) the Capex
Carry Forward Amount, if any, from the immediately preceding
fiscal year.
Section 7.12 Transactions with Affiliates. Housecall
shall not, and shall not permit its Subsidiaries to, enter into
or be a party to any agreement or transaction with any Affiliate
of Housecall except as listed in Schedule 7.12, or in the
ordinary course of and pursuant to the reasonable requirements of
Housecall's or such Subsidiary's business and upon fair and
reasonable terms that are no less favorable to Housecall or such
Subsidiary than it would obtain in a comparable arms length
transaction with a Person not an Affiliate of Housecall, and on
terms consistent with the business relationship of Housecall or
such Subsidiary and such Affiliate prior to the Agreement Date,
if any. Nothing contained in this Agreement shall prohibit
increases in compensation and benefits for officers and employees
of Housecall or its Subsidiaries which are customary in the
industry or consistent with the past business practice of
Housecall or such Subsidiary, or payment of customary directors'
fees and indemnities.
69
Section 7.13 Restrictive Agreements. Housecall shall
not and shall not permit any of its Subsidiaries to enter into
any agreement (other than the Loan Documents) which restricts the
ability or right of any such Subsidiary to make payments to
Housecall or another Subsidiary of Housecall by way of dividends,
distributions, returns of capital, advances, reimbursement or
otherwise.
Section 7.14 Creation of Subsidiaries; Conversion to
Material Subsidiaries. Housecall will not, nor will it permit
any of its Subsidiaries to, create any Subsidiary, and Housecall
will not permit any of its Subsidiaries to become a Material
Subsidiary, unless (i) such Subsidiary is organized under the
laws of a jurisdiction within the United States of America and
(ii) if such Subsidiary is or becomes a Material Subsidiary, (A)
such Subsidiary executes at the time of its creation (or within
thirty (30) days after it becomes a Material Subsidiary) a
Supplement to the Subsidiary Guaranty in favor of the Banks in
the form of Exhibit F attached hereto and a Supplement to the
Subsidiary Security Agreement in favor of the Agent in the form
of Exhibit G attached hereto and delivers to the Agent a
mortgage, deed of trust or deed to secure debt encumbering any
material real property owned by such Subsidiary as may be
requested by the Majority Banks, (B) if a Co-Borrower or any
Material Subsidiary is an owner of such Subsidiary, such
Co-Borrower or Material Subsidiary executes an amendment to the
Stock Pledge Agreement or a Supplement to the Subsidiary Pledge
Agreement, as applicable, for purposes of pledging the stock of
such Subsidiary to the Agent pursuant to the terms of the Stock
Pledge Agreement or the Subsidiary Pledge Agreement, as the case
may be, and (C) Housecall and such Subsidiary take all steps
required and execute all necessary documents (including UCC-1
financing statements) to perfect the security interest of the
Agent in the stock of such Subsidiary and the assets of such
Subsidiary and (iii) no Default exists immediately prior to or
after the creation of such Subsidiary.
Section 7.15 Indebtedness Payments and Prepayments.
Housecall shall not, nor shall it permit any of its Subsidiaries
to, prepay, redeem, defease (whether actually or in substance) or
purchase in any manner (or deposit or set aside funds for the
purpose of any of the foregoing), make any payment in respect of
principal of, or make any payment in respect of interest on, or
permit any of its Subsidiaries to prepay, redeem, or purchase in
any manner, make any payment in respect of principal of, or make
any payment in respect of interest on, any Funded Indebtedness of
Housecall or any of its Subsidiaries (including the Subordinated
Notes) except for (a) regularly scheduled payments of principal
or interest required in accordance with the terms of the
instruments governing any Funded Indebtedness (other than the
Subordinated Notes) permitted hereunder, (b) payments with
respect to the Obligations and (c) (i) so long as no Default
exists, prior to July 1, 1997, payments of regularly scheduled
interest under the Subordinated Notes in cash; (ii) from July 1,
1997 and thereafter, but not during any period for which cash
payments are being made pursuant to subparagraph (iii) of this
Section 7.15(c), "paid in kind" non-cash payments to holders of
the Subordinated Notes for accrued interest thereon in amounts
not in excess of the amount of interest provided for in such
Subordinated Notes as in effect on the Agreement Date, and
(iii) so long as no Default exists, on or after June 30, 1998,
regularly scheduled payments of interest accruing from January 1,
70
1998 (but not during any period for which payments "in kind" are
being made pursuant to subparagraph (ii) of this Section 7.15(c))
under the Subordinated Notes in cash if the lesser of (x) EBITDA
for the twelve-month period ending on each of the fiscal quarters
ending September 30, 1997, December 31, 1997, March 31, 1998 and
June 30, 1998 or (y) EBITDA for the three-month period ending on
each of such dates times four (4), is equal to or greater than
$11,000,000; and provided, that Housecall shall not violate the
subordination provisions of the Subordinated Notes, as such
Subordinated Notes have been modified pursuant to that certain
letter agreement dated October 30, 1996, issued by Housecall and
WCAS Capital Partners II, L.P. to the Agent. Housecall has not
modified the terms of the Subordinated Notes since October 30,
1996 and shall not modify or amend the terms of the Subordinated
Notes without the prior written consent of the Majority Banks,
except for modifications necessary to comply with this
Section 7.15.
Section 7.16 Certain ERISA Payments. No Co-Borrower
shall, and none of their respective Subsidiaries shall, make any
payment of any material liability arising under ERISA or under
the Code of any Controlled Group member which is not a Subsidiary
of such Co-Borrower.
Section 7.17 Compliance with ERISA. No Co-Borrower
shall, directly or indirectly, and each Co-Borrower shall use its
best efforts to prevent any Controlled Group member from directly
or indirectly undertaking to:
(a) Maintain, become a party to, contribute
to or become or be obligated to contribute to a Pension Plan, if
such maintenance or contribution would result in material
unfunded liabilities on the part of Housecall or any of its
Subsidiaries in excess of one million Dollars ($1,000,000)
immediately following such action;
(b) Maintain, become a party to, contribute
to or become obligated to contribute to a material plan
maintained outside of the United States primarily for the benefit
of persons substantially all of whom are nonresident aliens, as
described in section 4(b) (4) of ERISA; or
(c) Maintain, become a party to, contribute
to or being obligated to contribute to or otherwise provide
material health care or material life insurance benefits to
retirees or survivors of employees.
Section 7.18 Use of Proceeds and Letters of Credit. The
proceeds of the Term Loan will be used to finance the Pending
Transactions and related transaction costs and the proceeds of
the Revolving Loans will be used to finance Permitted
Acquisitions and the working capital and general corporate
purposes of the Co-Borrowers, including, but not limited to, the
payment of transaction costs relating to the Pending
Transactions. The Letters of Credit will be issued for the
general corporate purposes of the Co-Borrowers.
Section 7.19 Fixed Charge Coverage Ratio. As of the last
day of each month during the term of this Agreement, commencing
on June 30, 1997, Housecall shall not permit the Fixed Charge
Coverage Ratio for the immediately preceding twelve-month period
ending therewith to be less than the ratio set forth below:
71
Month Ending Ratio
June 30, 1997 through March 1.25 to 1.0
31, 1998
April 30, 1998 through March 1.15 to 1.0
31, 1999
April 30, 1999 through the 1.25 to 1.0
Maturity Date
Section 7.20 Funded Indebtedness/EBITDA Coverage Ratio. As
of the last day of each month during the term of this Agreement,
commencing June 30, 1997, Housecall shall not permit the Funded
Indebtedness/EBITDA Coverage Ratio for the immediately preceding
twelve-month period ending therewith to exceed the ratio set
forth below:
Month Ending Ratio
June 30, 1997 through August
31, 1997 5.75 to 1.00
September 30, 1997 through 4.50 to 1.00
November 30, 1997
December 31, 1997 through 4.25 to 1.00
February 28, 1998
March 31, 1998 through May 31, 3.75 to 1.00
1998
June 30, 1998 through 3.50 to 1.00
March 31, 1999
April 30, 1999 through the 2.50 to 1.00
Maturity Date
Section 7.21 Minimum Net Worth. Housecall shall not (a)
permit its Net Worth as of June 30, 1997 to be less than
$63,000,000 and (b) permit its Net Worth as of the end of each
month thereafter during the term of this Agreement to be less
than the amount of its Net Worth as of June 30, 1997; provided,
however, such amount shall be increased at the end of each fiscal
year (commencing with the fiscal year ending June 30, 1998) by an
amount equal to (a) 75% of the cumulative Consolidated Net Income
(minus extraordinary gains) of Housecall for the fiscal year
ending June 30, 1998 and each fiscal year end thereafter through
such calculation date (but in no event decreased by losses for
any such fiscal year), plus (b) 100% of the equity and capital
contributed to Housecall by its shareholders during the fiscal
year ending June 30, 1998 and each fiscal year end thereafter
through such calculation date.
Section 7.22 Minimum EBITDA. As of the last day of each
month during the term of this Agreement, commencing June 30,
1997, Housecall shall not permit the lesser of (a) EBITDA for the
immediately preceding twelve-month period or (b) EBITDA for the
immediately preceding three-month period times four (4), to be
less than the amounts set forth below:
Month Ending Minimum EBITDA
June 30, 1997 through August $8,500,000
31, 1997
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Month Ending Minimum EBITDA
September 30, 1997 through $11,000,000
November 30, 1997
December 31, 1997 through $11,500,000
February 28, 1998
March 31, 1998 through May 31, $13,000,000
1998
June 30, 1998 through August $14,000,000
31, 1998
September 30, 1998 through $15,000,000
November 30, 1998
December 31, 1998 through $17,000,000
February 28, 1999
March 31, 1999 through May 31, $18,000,000
1999
June 30, 1999 through August $20,000,000
31, 1999
September 30, 1999 through $20,000,000
November 30, 1999
December 31, 1999 through $22,000,000
February 29, 2000
March 31, 2000 through the $25,000,000
Maturity Date
Section 7.23 Senior Debt/EBITDA Ratio. As of the last day
of each month during the term of this Agreement, Housecall shall
not permit the Senior Debt/EBITDA Ratio for the immediately
preceding twelve-month period ending therewith to exceed the
ratio set forth below:
Month Ending Ratio
June 30, 1997 through August 4.75 to 1.00
31, 1997
September 30, 1997 through 3.50 to 1.00
November 30, 1997
December 31, 1997 through 3.50 to 1.00
February 28, 1998
March 31, 1998 through August 3.00 to 1.00
31, 1998
September 30, 1998 through 2.75 to 1.00
November 30, 1998
December 31, 1998 through 2.50 to 1.00
February 28, 1999
March 31, 1999 through May 31, 2.25 to 1.00
1999
June 30, 1999 through the 2.00 to 1.00
Maturity Date
Section 7.24 Minimum Medicare Visits. As of the last day of
each month during the term of this Agreement, Housecall shall not
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permit the total number of Medicare Visits of Housecall and its
Subsidiaries completed during the immediately preceding month
times twelve (12) to be less than (a) 1,500,000 or (b) if any
CONs or Medicare Visits are sold in accordance with Section 7.9
hereof, such lesser amount as the Majority Banks and the Co-
Borrowers shall agree.
Section 7.25 Day Sales Outstanding. As of the last day of
each month during the term of this Agreement, Housecall shall not
allow Day Sales Outstanding to be greater than sixty-five (65)
days.
Section 7.26 No Further Negative Pledges. Housecall will
not, nor will it permit any of its Subsidiaries to, enter into,
assume or become subject to any agreement prohibiting or
otherwise restricting the creation or assumption of any Lien upon
its properties or assets, whether now owned or hereafter
acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation, other
than (i) pursuant to this Agreement or any other Loan Document
(ii) pursuant to operating leases with respect to any leased
asset, or (iii) pursuant to any Medicaid Provider Agreements or
Medicare Provider Agreements.
Section 7.27 Limitation on Leases. Neither Housecall nor
its Subsidiaries will create, incur, assume, or suffer to exist,
any obligation for the payment of rent or hire for property or
assets of any kind whatsoever, whether real or personal, under
leases or lease agreements (other than Capitalized Lease
Obligations) which would cause the aggregate amount of all
payments made by Housecall and its Subsidiaries, pursuant to such
leases or lease agreements to exceed 4.00% of Net Revenues during
any fiscal year.
Section 7.28 Shareholder Litigation. Housecall shall not
enter into any consent order, compromise or other settlement of
those certain actions filed against Housecall by various
shareholders of Housecall, and more fully described in item 67 of
Schedule 5.15 attached hereto, or any other actions filed against
Housecall by various shareholders of Housecall after the
Agreement Date, which would result in an aggregate payment in
cash or property (other than the Capital Stock of Housecall) by
or on behalf of Housecall or its subsidiaries (other than
payments made by insurance carriers pursuant to insurance
policies maintained by Housecall of its Subsidiaries) in excess
of $2,000,000 without the prior consent of the Majority Banks.
ARTICLE 8
Events of Default
Section 8.1 Events of Default. Each of the following
shall constitute an Event of Default, whatever the reason for
such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment or order
of any court or any order, rule, or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under
this Agreement shall prove incorrect or misleading in any
74
material respect when made or deemed to have been made pursuant
to Section 5.26 hereof;
(b) (i) Any payment of any interest under the
Notes or any reimbursement obligations with respect to any Letter
of Credit, or any fees payable hereunder or under the other Loan
Documents shall not be received by the Agent within five (5) days
from the day such payment is due, or (ii) any payment of any
principal under the Notes shall not be received by the Agent on
the day such payment is due;
(c) Any Co-Borrower shall at any time default
in the performance or observance of any agreement or covenant
contained in (i) Sections 6.2, 6.10 or 6.17 hereof and such
default shall not be cured to the Majority Banks' satisfaction
within five (5) days from the date of occurrence thereof,
(ii) Sections 7.19, 7.20, 7.21, 7.22, 7.23, 7.24 and 7.25 hereof
and a period of thirty (30) days shall have passed from the
occurrence of such default, or (iii) Section 6.18 or Article 7
(other than Sections 7.19, 7.20, 7.21, 7.22, 7.23, 7.24 and 7.25)
hereof;
(d) Any Co-Borrower shall default in the
performance or observance of any agreement or covenant contained
in this Agreement not specifically referred to elsewhere in this
Section 8.1, and such default shall not be cured to the Majority
Banks' satisfaction within a period of thirty (30) days from the
earlier of (i) the date that the Agent or any Bank shall give any
Co-Borrower written notice of the occurrence of such default or
(ii) the date any Co-Borrower knew or should have known of the
occurrence of such default;
(e) There shall occur any default in the
performance or observance of any agreement or covenant or breach
of any representation or warranty contained in any of the Loan
Documents (other than this Agreement or as otherwise provided in
Section 8.1 of this Agreement), which shall not be cured to the
Majority Banks' satisfaction by the applicable Co-Borrower or
Material Subsidiary or any other Person within the lesser of
(i) the applicable cure period, if any, provided for in such Loan
Document and (ii) a period of thirty (30) days from the date that
the Agent or any Bank shall give any Co-Borrower written notice
of such default;
(f) Any Person (other than Xxxxx Xxxxxx,
Xxxxx X. Xxxx, Xxxxxx X. Small, Xxxxxx X. Xxxxxxxxxx, Xxxxxx Xxxx
or Xxxx Xxxxxxx) or group (as such term is used in Rule 13d-5
under the Securities Exchange Act of 1934) of Persons shall
(other than Xxxxx Xxxxxx, Xxxxx X. Xxxx, Xxxxxx X. Small, Xxxxxx
X. Xxxxxxxxxx, Xxxxxx Xxxx or Xxxx Xxxxxxx), as a result of a
tender or exchange offer, open market purchases, merger,
privately negotiated purchases or otherwise, have become,
directly or indirectly, the beneficial owner (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934) of
securities having twenty-five percent (25%) or more of the
ordinary voting power of then outstanding securities of
Housecall.
(g) There shall be entered a decree or order
for relief in respect of any Co-Borrower or any Material
Subsidiary under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable federal
75
or state bankruptcy law or other similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator,
or similar official of any Co-Borrower or any Material Subsidiary
or of any substantial part of any of their respective properties,
or ordering the winding-up or liquidation of the affairs of any
Co-Borrower or any Material Subsidiary or an involuntary petition
shall be filed against any Co-Borrower or any Material Subsidiary
and a temporary stay entered, and (i) such petition and stay
shall not be diligently contested, or (ii) any such petition and
stay shall continue undismissed for a period of sixty (60)
consecutive days;
(h) Any Co-Borrower or any Material
Subsidiary shall file a petition, answer, or consent seeking
relief under Title 11 of the United States-Code, as now
constituted or hereafter amended, or any other applicable federal
or state bankruptcy law or other similar law, or any Co-Borrower
or any Material Subsidiary shall consent to the institution of
proceedings thereunder or to the filing of any such petition or
to the appointment or taking of possession of a receiver,
liquidator, assignee, trustee, custodian, sequestrator, or other
similar official of such Co-Borrower or such Material Subsidiary,
or of any substantial part of any of their respective properties,
or any Co-Borrower or any Material Subsidiary shall fail
generally to pay its debts as they become due, or any Co-Borrower
or any Material Subsidiary shall take any action in furtherance
of any such action;
(i) A final judgment (other than a money
judgment fully covered by insurance as to which the insurance
company has acknowledged coverage) shall be entered by any court
against any Co-Borrower or any Material Subsidiary for the
payment of money which exceeds $1,000,000, or a warrant of
attachment or execution or similar process shall be issued or
levied against property of any Co-Borrower or any Material
Subsidiary pursuant to a final judgment which, together with all
other such property of such Co-Borrower or such Material
Subsidiary subject to other such process, exceeds in value
$1,000,000 in the aggregate, and if, within sixty (60) days after
the entry, issue, or levy thereof, such judgment, warrant, or
process shall not have been paid or discharged or stayed pending
appeal, or if, after the expiration of any such stay, such
judgment, warrant, or process shall not have been paid or
discharged;
(j) (i) A trustee shall be appointed by a
United States District Court to administer any Employee Benefit
Plan maintained by any Co-Borrower or its ERISA Affiliates, or to
which either Co-Borrower, any Material Subsidiary or any of its
ERISA Affiliates has any liabilities, or any trust created
thereunder, or the PBGC shall institute proceedings to terminate
any such Employee Benefit Plan, or any Co-Borrower or any of
their ERISA Affiliates shall enter into or become obligated to
contribute to a Multiemployer Plan, if such appointment,
termination or contribution would have or could reasonably be
expected to have a Materially Adverse Effect; or (ii) any of the
following shall occur and have or be reasonably expected to have
a Materially Adverse Effect: (x) there shall be at any time any
"accumulated funding deficiency," as defined in ERISA or in
Section 412 of the Code, with respect to any Employee Benefit
Plan maintained by any Co-Borrower or its ERISA Affiliates, or to
which any Co-Borrower or any of its ERISA Affiliates has any
76
liabilities, or any trust created thereunder; or (y) any Co-
Borrower and its ERISA Affiliates shall incur any liability to
the PBGC in connection with the termination of any such Employee
Benefit Plan; or (z) any Employee Benefit Plan or trust created
under any Employee Benefit Plan of any Co-Borrower and their
ERISA Affiliates shall engage in a non-exempt "prohibited
transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) which would subject any such Employee
Benefit Plan, any trust created thereunder, any trustee or
administrator thereof, or any party dealing with any such
Employee Benefit Plan or trust to the tax or penalty on
"prohibited transactions" imposed by Section 502 of ERISA or
Section 4975 of the Code;
(k) There shall occur any default (after the
expiration of any applicable cure period) under any indenture,
agreement, or instrument evidencing Indebtedness of any Co-
Borrower in an aggregate principal amount exceeding $1,000,000;
or
(l) All or any material portion of any
Security Document shall at any time and for any reason be
declared to be null and void, or a proceeding shall be commenced
by any Co-Borrower, any Material Subsidiary or any of their
respective Affiliates, or by any governmental authority having
jurisdiction over any Co-Borrower, any Material Subsidiary or any
of their respective Affiliates, seeking to establish the
invalidity or unenforceability thereof (exclusive of questions of
interpretation of any provision thereof), or any Co-Borrower, any
Material Subsidiary or any of their respective Affiliates shall
deny that it has any liability or obligation for the payment of
principal or interest purported to be created under any Loan
Document
Section 8.2 Remedies. If an Event of Default shall
have occurred and be continuing,
(a) With the exception of an Event of Default
specified in Section 8.1(g) or (h), the Agent, at the direction
of the Majority Banks, shall (i) terminate the Commitment and the
Letter of Credit Commitment, and/or (ii) declare the principal of
and interest on the Loans and the Notes and all other Obligations
to be forthwith due and payable without presentment, demand,
protest, or notice of any kind, all of which are hereby expressly
waived, anything in this Agreement or in the Notes to the
contrary notwithstanding, or both.
(b) Upon the occurrence and continuance of an
Event of Default specified in Sections 8.1(g) or (h), such
principal, interest, and other Obligations shall thereupon and
concurrently therewith become due and payable, and the Commitment
and the Letter of Credit Commitment, shall forthwith terminate,
all without any action by the Agent or the Banks or the Majority
Banks or the holders of the Notes and without presentment,
demand, protest, or other notice of any kind, all of which are
expressly waived, anything in this Agreement or in the Notes to
the contrary notwithstanding.
(c) The Agent, with the concurrence of the
Majority Banks, shall exercise all of the post default rights
granted to it and to them under the Loan Documents or under
Applicable Law. The Agent, for the benefit of itself, the
77
Issuing Bank and the Banks, shall have the right to the
appointment of a receiver for the property of each Co-Borrower,
and each Co-Borrower hereby consents to such rights and such
appointment and hereby waives any objection such Co-Borrower may
have thereto or the right to have a bond or other security posted
by the Agent, the Issuing Bank or the Banks in connection
therewith.
(d) In regard to all Letters of Credit with
respect to which presentment for honor shall not have occurred at
the time of any acceleration of the Obligations pursuant to the
provisions of this Section 8.2, the Co-Borrowers shall promptly
upon demand by the Agent deposit in a Letter of Credit Reserve
Account opened by Agent for the benefit of the Issuing Bank and
the Banks an amount equal to one hundred five percent (105%) of
the aggregate then undrawn and unexpired amount of such Letter of
Credit Obligations. Amounts held in such Letter of Credit
Reserve Account shall be applied by the Agent to the payment of
drafts drawn under such Letters of Credit, and the unused portion
thereof after such Letters of Credit shall have expired or been
fully drawn upon, if any, shall be applied to repay other
obligations of the Co-Borrowers hereunder and under the Notes in
the manner set forth in Section 2.12 hereof. Pending the
application of such deposit to the payment of the Obligations,
the Agent shall, to the extent reasonably practicable, invest
such deposit in an interest bearing open account or similar
available savings deposit account and all interest accrued
thereon shall be held with such deposit as additional security
for the Reimbursement Obligations. After all such Letters of
Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied, and all
other Obligations shall have been paid in full, the balance, if
any, in such Letter of Credit Reserve Account shall be returned
to the Co-Borrowers. Except as expressly provided hereinabove,
presentment, demand, protest and all other notices of any kind
are hereby expressly waived by each Co-Borrower.
(e) The rights and remedies of the Agent and
the Banks hereunder shall be cumulative, and not exclusive.
ARTICLE 9
The Agent
Section 9.1 Appointment and Authorization. Each Bank
hereby irrevocably appoints, designates and authorizes the Agent
to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document, the Agent shall
not have any duties or responsibilities, except those expressly
set forth herein, or any fiduciary relationship with any Bank,
and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or
any other Loan Document or otherwise exist against the Agent.
Section 9.2 Delegation of Duties. The Agent may
execute any of its duties under this Agreement or any other Loan
78
Document by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Agent shall not be responsible
for the negligence or misconduct of any agent or attorney-in-fact
that has been selected with reasonable care.
Section 9.3 Liability of Agent. Neither the Agent,
nor any of its Affiliates, nor any of their respective officers,
directors, employees, agents, or attorneys-in-fact (collectively,
the "Agent-Related Persons") shall (a) be liable for any action
taken or omitted to be taken by any of them under or in
connection with this Agreement (except for their own gross
negligence or willful misconduct as determined by a final non-
appealable order of a court of competent jurisdiction) or (b) be
responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Co-Borrowers or
any Subsidiary of Housecall or any officer thereof contained in
this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or for the value
of any Collateral or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Co-Borrower or any other
party to any Loan Document to perform its obligations hereunder
or thereunder. No Agent-Related Person shall be under any
obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in,
or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of Housecall or any
of its Subsidiaries.
Section 9.4 Reliance by Agent.
(a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter,
facsimile or telephone message, statement or other document or
conversation believed by the Agent to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including
counsel to Housecall or any of its Subsidiaries), independent
accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless the
Agent shall first receive such advice or concurrence of the
Majority Banks as the Agent shall deem appropriate and, if the
Agent so requests, the Agent shall first be indemnified to its
satisfaction by the Banks against any and all liability and
expense which may be incurred by the Agent by reason of taking or
continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Banks (or all of the Banks, as
may be expressly required by Section 10.3 hereof) and such
request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
(b) For purposes of determining compliance
with the conditions specified in Sections 4.1 and 4.2 hereof,
each Bank shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter
79
required thereunder to be consented to or approved by or
acceptable or satisfactory to the Majority Banks unless an
officer of the Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice
from a Bank prior to the extension of a Loan specifying its
objection thereto and either such objection shall not have been
withdrawn by notice to the Agent to that effect or such Bank
shall not have made available to the Agent the Bank's ratable
portion of such Loan.
Section 9.5 Notice of Default. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults in
the payment of principal, interest and fees payable to the Agent
for the account of the Banks or the Issuing Bank, unless the
Agent shall have received written notice from a Bank or the
Issuing Bank or a Co-Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to
the Banks. The Agent shall take such action with respect to such
Default or Event of Default as shall be requested by the Majority
Banks in accordance with Article 8; provided, however, that
unless and until the Agent shall have received any such request,
the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default
or Event of Default as the Agent shall deem advisable in the best
interests of the Banks.
Section 9.6 Credit Decision. Each Bank expressly
acknowledges that none of the Agent-Related Persons has made any
representation or warranty to it and that no act by the Agent
hereinafter taken, including any review of the affairs of
Housecall and its Subsidiaries shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without
reliance upon the Agent and based on such documents and
information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of
Housecall and its Subsidiaries and made its own decision to enter
into this Agreement and extend credit to the Co-Borrowers
hereunder. Each Bank also represents that it will, independently
and without reliance upon the Agent and based on such documents
and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and
creditworthiness of Housecall and its Subsidiaries. Except for
notices, reports and other documents expressly required to be
furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any
credit or other information concerning the business, prospects,
operations, property, financial and other condition or
creditworthiness of Housecall and its Subsidiaries which may come
into the possession of any of the Agent-Related Persons.
Section 9.7 Indemnification. The Banks agree to
indemnify the Agent-Related Persons (to the extent not reimbursed
by or on behalf of the Co-Borrowers and without limiting the
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obligation of the Co-Borrowers to do so), ratably according to
the respective amounts of their outstanding Loans, or, if no
Loans are outstanding, their outstanding Commitment Percentages,
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses
and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Loans) be
imposed on, incurred by or asserted against any such person any
way relating to or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken
or omitted by any such person under or in connection with any of
the foregoing; provided, however, that no Bank shall be liable
for the payment to the Agent-Related Persons of any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting solely from such person's gross negligence or willful
misconduct as determined by a final non-appealable order of a
court of competent jurisdiction. Without limitation of the
foregoing, each Bank shall reimburse the Agent promptly upon
demand for its ratable share of any costs or out-of-pocket
expenses (including attorneys' fees and the allocated cost of
in-house counsel) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein
to the extent that the Agent is not reimbursed for such expenses
by or on behalf of the Co-Borrowers.
Section 9.8 Agent in Individual Capacity. The Agent
and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from and generally engage in any
kind of business with Housecall or any of its Subsidiaries as
though the Agent were not the Agent hereunder and without notice
to the Banks. With respect to its Loans, the Agent shall have the
same rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Agent, and the
terms "Bank" and "Banks" shall include the Agent in its
individual capacity.
Section 9.9 Successor Agent. Subject to the
appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving written notice
thereof to the Banks and each Co-Borrower. Upon any such
resignation, the Majority Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so
appointed by the Majority Banks, and shall have accepted such
appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent which shall be any
Bank or a commercial bank organized under the laws of the United
States of America or any political subdivision thereof which has
combined capital and reserves in excess of $250,000,000. Upon
the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges,
duties, and obligations of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article 9 and Sections 10.7, 10.8
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and 10.9 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was
acting as the Agent.
Section 9.10 Agent May File Proofs of Claim. The
Agent may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of
the Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Agent, its agents,
financial advisors and counsel), the Banks and the Issuing Bank
allowed in any judicial proceedings relative to any Co-Borrower,
any Material Subsidiary or any of their respective creditors or
property, and shall be entitled and empowered to collect, receive
and distribute any monies, securities or other property payable
or deliverable on any such claims, and any custodian in any such
judicial proceedings is hereby authorized by each Bank and
Issuing Bank to make such payments to the Agent and, in the event
that the Agent shall consent to the making of such payments
directly to the Banks and the Issuing Bank, to pay to the Agent
any amount due to the Agent for the reasonable compensation,
expenses, disbursements and advances of the Agent, its agents,
financial advisors and counsel, and any other amounts due the
Agent under Section 10.7 hereof. Nothing contained in the Loan
Agreement or the Loan Documents shall be deemed to authorize the
Agent to authorize or consent to or accept or adopt on behalf of
any Bank or the Issuing Bank any plan of reorganization,
arrangement, adjustment or composition affecting the Notes, the
Letters of Credit or the rights of any holder thereof, or to
authorize the Agent to vote in respect of the claim of any Bank
or Issuing Bank in any such proceeding.
Section 9.11 Collateral. The Agent is hereby
authorized to hold all Collateral pledged pursuant to any Loan
Document and to act on behalf of the Banks and the Issuing Bank,
in its own capacity and through other agents appointed by it,
under the Security Documents; provided, that the Agent shall not
agree to the release of any Collateral except in accordance with
the terms hereof.
Section 9.12 Release of Collateral.
(a) Each Bank hereby directs, in accordance with
the terms of this Agreement, the Agent to release or to
subordinate any Lien held by the Agent for the benefit of the
Banks and the Issuing Bank:
(i) against all of the
Collateral, upon final and
indefeasible payment in full of the
Obligations and termination of this
Agreement;
(ii) against any part of the Collateral
sold or disposed of by Housecall or any
Material Subsidiary if such sale or disposition
is permitted by Section 7.9 hereof or is
otherwise consented to by the Banks for such
release as set forth in Section 10.3 hereof; or
(iii) against any part of the Collateral
constituting property in which no Co-Borrower
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nor Material Subsidiary owned any interest at
the time the Lien was granted.
(b) Each Bank and the Issuing Bank hereby directs
the Agent to execute and deliver or file such termination and
partial release statements and do such other things as are
necessary to release Liens to be released pursuant to this
Section 9.12 promptly upon the effectiveness of any such release.
Upon request by the Agent at any time, the Banks and the Issuing
Bank will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this
Section 9.12.
ARTICLE 10
Miscellaneous
Section 10.1 Successors and Assigns and Sale of Interests.
(a) The terms and provisions of this
Agreement shall be binding upon, and, subject to the provisions
of this Section 10.1, the benefits thereof shall inure to, the
parties hereto and their respective successors and assigns;
provided, however, that no Co-Borrower may assign this Agreement
or any of the rights, duties or obligations of such Co-Borrower
hereunder without the prior written consent of all of the Banks.
(b) Any Bank, with the written consent of
Housecall, which consent shall not be unreasonably withheld, and
with the written consent of the Agent, which consent shall not be
unreasonably withheld, and upon three (3) Business Days' written
notice to the Agent, may at any time assign and delegate to any
Person, or, with notice to Housecall and the Agent but without
the consent of either Housecall or the Agent, may assign and
delegate to any of its Affiliates (each an "Assignee") all or any
part of the Loans or the Commitments or any other rights or
obligations of such Bank hereunder, provided, (x) the assignor
Bank shall have a Commitment Amount of not less than Five Million
Dollars ($5,000,000) upon the effectiveness of any such
assignment, (y) unless otherwise agreed to by the Agent and
Housecall, all assignments shall be in a minimum principal amount
of Five Million Dollars ($5,000,000) and in One Million Dollar
($1,000,000) integrals in excess thereof and (z) unless otherwise
approved by the Agent, each assignment shall assign to the
Assignee a pro rata share of the Assignor Bank's interest in the
Term Loan and the Revolving Loan Commitment; provided, however,
that the Co-Borrowers and the Agent may continue to deal solely
and directly with such Bank in connection with the interests so
assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and
related information with respect to the Assignee, shall have been
given to the Co-Borrowers and the Agent by such Bank and the
Assignee; and (ii) such Bank and its Assignee shall have
delivered to the Co-Borrowers and the Agent an Assignment and
Acceptance in the form of Exhibit H (an "Assignment and
Acceptance") together with any Note or Notes subject to such
assignment; and (iii) the processing fee of Three Thousand Five
Hundred Dollars ($3,500) shall have been paid to the Agent by the
Assignee. Notwithstanding the foregoing, any Bank may at any
time, with notice to Housecall and the Agent but without the
consent of either Housecall or the Agent, assign and delegate all
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or any part of the Loans or the Commitments or any other rights
or obligations of such Bank hereunder to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating
Circular issued by such Federal Reserve Bank, so long as such
assignment does not relieve such Bank from its obligations
hereunder.
(c) From and after the date that the Agent
notifies the assignor Bank that it has received the executed
Assignment and Acceptance, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Bank
under the Loan Documents and (ii) assignor Bank shall, to the
extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan
Documents.
(d) Within five (5) Business Days after its
receipt of notice by the Agent that it has received an executed
Assignment and Acceptance, the Co-Borrowers shall execute and
deliver to the Agent new Notes evidencing such Assignee's
assigned Loans and Commitment Amount and, if the assignor Bank
has retained a portion of its Loans and its Commitment Amount,
replacement Notes in the Commitment Amount retained by the
assignor Bank (such Notes to be in exchange for, but not in
payment of, the Notes held by such Bank). Immediately upon each
Assignee's making its payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the
extent, but only to the extent necessary to reflect the addition
of the Assignee and the resulting adjustment of the Assignor's
Commitment Amount arising therefrom. The Commitment Amount
allocated to each Assignee shall reduce such the Commitment
Amount of the assigning Bank pro tanto.
(e) Any Bank may at any time sell to one or
more banks or other entities (a "Participant") participating
interests in any Loans, the Commitment Amount of that Bank or any
other interest of that Bank hereunder in a minimum amount of Five
Million Dollars ($5,000,000) and in One Million Dollar
($1,000,000) integrals in excess thereof; provided, however, that
(i) the Bank's obligations under this Agreement shall remain
unchanged, (ii) the selling Bank shall remain solely responsible
for the performance of such obligations, (iii) the Co-Borrowers
and the Agent shall continue to deal solely and directly with the
selling Bank in connection with such Bank's rights and
obligations under this Agreement, and (iv) no Bank shall transfer
or grant any participating interest under which the Participant
shall have rights to approve any amendment to, or any consent or
waiver with respect to this Agreement except to the extent such
amendment, consent or waiver would require unanimous consent as
described in the first proviso to Section 10.3 hereof. In the
case of any such participation, the Participant shall not have
any rights under this Agreement, or any of the other Loan
Documents, and all amounts payable by the Co-Borrowers hereunder
shall be determined as if such Bank had not sold such
participation, except that if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or
shall have become due and payable upon the occurrence of an Event
of Default, each Participant shall be deemed to have the right of
84
set-off in respect of its participating interest in amounts owing
under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under
this Agreement.
Section 10.2 No Implied Waiver. No delay or omission
to exercise any right, power or remedy accruing to the Agent or
any Bank upon any breach or default of any of the Co-Borrowers
under this Agreement or under any of the other Loan Documents
shall impair any such right, power or remedy of the Agent or any
Bank, nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar
breach or default occurring thereafter, nor shall any waiver of
any single breach or default be deemed a waiver of any other
breach or default occurring theretofore or thereafter.
Section 10.3 Amendments and Waivers. No amendment or
waiver of any provision of this Agreement or any other Loan
Document and no consent with respect to any departure by any of
the Co-Borrowers therefrom, shall be effective unless the same
shall be in writing and signed by the Co-Borrowers and the
Majority Banks, and then such waiver shall be effective only in
the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Banks, do
any of the following:
(a) increase the Commitment Amount of any
Bank or subject any Bank to any additional obligations;
(b) postpone or delay any date (including,
without limitation, the Maturity Date) fixed for any payment of
principal, interest, fees or other amounts due hereunder or under
any Loan Document;
(c) reduce the principal of, or the rate of
interest specified herein on any Loan, or of any fees or other
amounts payable hereunder or under any Loan Document;
(d) change the definition of "Majority Banks"
or the percentage of the aggregate Commitment Percentages or of
the aggregate unpaid principal amount of the Loans which shall be
required for the Banks or any of them to take any action
hereunder;
(e) amend the definition of "Permitted
Acquisition", Section 7.9, or this Section 10.3; or
(f) release any guarantor of the Obligations
or any Collateral, unless any such release of Collateral is in
connection with an asset sale permitted by Section 7.9 hereof or
is otherwise permitted by Section 9.12 hereof;
and, provided, further, that (i) no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to
the Majority Banks, affect the rights or duties of the Agent
under this Agreement, and (ii) the definition of "Majority Banks"
or the percentage of the aggregate Commitment Percentages or of
the aggregate principal amount of the Loans which shall be
required for the Banks or any of them to take any action
hereunder may be changed without the consent of the Co-Borrowers.
85
Section 10.4 Remedies Cumulative. All rights and
remedies, either under this Agreement, by law or otherwise
afforded to the Agent or the Banks shall be cumulative and not
exclusive, and any single or partial exercise of any power or
right hereunder or thereunder does not preclude other or further
exercise thereof, or the exercise of any other power or right.
Section 10.5 Severability. Any provision of this
Agreement, the Notes or any of the other Loan Documents which is
prohibited or unenforceable in any jurisdiction, shall be, only
as to such jurisdiction, ineffective to the extent of such
prohibition or unenforceability, but all the remaining provisions
of this Agreement, the Notes and the other Loan Documents shall
remain valid.
Section 10.6 Set-Off. 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
continuation of an Event of Default, the Banks and any subsequent
holder or holders of the Notes are hereby authorized by each Co-
Borrower at any time or from time to time, without notice to any
Co-Borrower or to any other Person, any such notice being hereby
expressly waived, to set-off and to appropriate and apply any and
all deposits (general or special, time or demand, including, but
not limited to, Indebtedness evidenced by certificates of
deposit, in each case whether matured or unmatured) and any other
Indebtedness at any time held or owing by the Banks or such
holder to or for the credit or the account of the Co-Borrowers,
against and on account of the obligations and liabilities of the
Co-Borrowers, to the Banks or such holder under this Agreement,
the Notes, and any other Loan Document, including, but not
limited to, all claims of any nature or description arising out
of or connected with this Agreement, the Notes, or any other Loan
Document, irrespective of whether or not (a) the Banks or the
holder of the Notes shall have made any demand hereunder or
(b) the Banks shall have declared the principal of and interest
on the Loans and Notes and other amounts due hereunder to be due
and payable as permitted by Section 8.2 and although said
obligations and liabilities, or any of them, shall be contingent
or unmatured. Any sums obtained by any Bank or by any subsequent
holder of the Notes shall be subject to the application of
payments provisions of Article 2 hereof. Upon direction by the
Agent, with the consent of the Majority Banks, each Bank holding
deposits of any Co-Borrower shall exercise its set-off rights as
so directed.
Section 10.7 Costs, Expenses and Attorneys' Fees. The
Co-Borrowers shall reimburse the Agent for all actual and
reasonable costs and expenses, including, but not limited to,
reasonable attorneys' and other professionals' fees and expenses
and appraisal, audit, review, travel, search and filing fees and
expenses, expended or incurred by the Agent in connection with
the preparation, negotiation, execution and administration of
this Agreement, in connection with the initial Advance, in
amending this Agreement, or extending any waiver or consent
hereunder, or in any transaction referred to in Section 10.1(b)
hereof, and shall reimburse the Agent and the Banks for all
actual and reasonable costs and expenses, including, but not
limited to, reasonable attorneys' fees (including the allocated
costs of internal counsel, if any) and expenses expended or
incurred by the Agent or any Bank in collecting any sum which
becomes due under the Notes or under this Agreement or any of the
86
other Loan Documents, or in the protection, perfection,
preservation and enforcement of any and all rights of the Agent
or any Bank in connection with the Loan Documents, including,
without limitation, the fees and costs incurred in any
out-of-court work-out or a bankruptcy or reorganization
proceeding. This obligation on the part of the Co-Borrowers
shall survive the expiration or termination of this Agreement,
with or without occurrence of the Agreement Date.
Section 10.8 General Indemnification. The
Co-Borrowers shall indemnify and hold each Bank, the Issuing
Bank, the Agent and each of their directors, officers, employees,
Affiliates, attorneys and agents (collectively referred to herein
as the "Bank Indemnitees") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of
any kind or nature whatsoever (including, without limitation, any
actual and reasonable expenses (including attorneys' fees and the
allocated cost of in-house counsel) incurred by any such Bank
Indemnitee in connection with any investigation, or discovery
served upon such Bank Indemnitee, in connection with any such
matter, whether or not any such Bank Indemnitee shall be
designated a party thereto) which may be imposed on, incurred by
or asserted against such Bank Indemnitees by any Person other
than the Bank with which such Bank Indemnitee is affiliated
(whether direct, indirect or consequential and whether based on
any federal or state laws or other statutory regulations,
including, without limitation, securities, environmental and
commercial laws and regulations, under common law or at equitable
cause, or on contract or otherwise) in any manner relating to or
arising out of this Agreement, any term sheets or commitment
letters relating thereto, any other Loan Documents, or any act,
event or transaction related or attendant thereto; or to the
making of Loans hereunder, or the management of the Loans
(including any liability under federal, state or local
environmental laws or regulations), the use or intended use of
the proceeds of the Loans (collectively, the "Indemnified
Matters"); provided, however, that the Co-Borrowers shall have no
obligation to any Bank Indemnitee under this Section 10.8 with
respect to Indemnified Matters to the extent such Indemnified
Matters were caused by or resulted from (i) the gross negligence
or willful misconduct of a Bank Indemnitee as determined by a
final non-appealable order of a court of competent jurisdiction
or (ii) claims of Banks against other Banks or the Agent not
attributable to any act or failure to act of any Co-Borrower and
for which the Co-Borrowers otherwise have no liability hereunder.
To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the
Co-Borrowers shall contribute to the payment and satisfaction of
all Indemnified Matters incurred by the Bank Indemnitees the
maximum portion which the Co-Borrowers are permitted to pay and
satisfy under Applicable Law. This indemnification shall survive
repayment by the Co-Borrowers of all Loans made under this
Agreement and the termination of this Agreement.
Section 10.9 Environmental Indemnification. The
Co-Borrowers hereby agree to indemnify, defend and hold harmless
each Bank Indemnitee, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, charges, expenses or disbursements
(including attorneys' fees and the allocated cost of in-house
87
counsel), which may be incurred by or asserted against such Bank
Indemnitee in connection with or arising out of any pending or
threatened investigation, litigation or proceeding, or any action
taken by any Person, with respect to any Environmental Claim
arising out of or related to any property of Housecall or any of
its Subsidiaries subject to a mortgage in favor of the Agent or
any Bank. No action taken by legal counsel chosen by the Agent
or any Bank in defending against any such investigation,
litigation or proceeding or requested remedial, removal or
response action shall vitiate or any way impair the Co-Borrowers'
obligations and duties hereunder to indemnify and hold harmless
the Agent and each Bank. In no event shall site visit,
observation, or testing by the Agent or any Bank be a
representation that Hazardous Materials are or are not present
in, on, or under the site, or that there has been or shall be
compliance with any law, regulation, or ordinance pertaining to
Hazardous Materials or any other applicable governmental law.
Neither the Co-Borrowers nor any other party is entitled to rely
on any site visit, observation, or testing by the Agent or any
Bank. Neither the Agent nor any Bank owes any duty of care to
protect any Co-Borrower or any other party against, or to inform
any Co-Borrower or any other party of, any Hazardous Materials or
any other adverse condition affecting any site or property.
Neither the Agent nor any Bank shall be obligated to disclose to
any Co-Borrower or any other party any report or findings made as
a result of, or in connection with, any site visit, observation,
or testing by the Agent or any Bank. This indemnification shall
survive repayment of all Loans made under this Agreement and
termination of the Commitments, and the termination of this
Agreement.
Section 10.10 Notices. Any notice which the
Co-Borrowers, the Agent, the Issuing Bank or any of the Banks may
be required or may desire to give to the other parties under any
provision of this Agreement shall be in writing by electronic
facsimile transmission and shall be deemed to have been given or
made when transmitted and addressed as follows:
(i) To any of the Co-Borrowers:
Housecall Medical Resources, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxx 000, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Facsimile: (000) 000-0000
Copy to:
W. Xxxxx Xxxxx, Esq.
Xxxxxxxxxx Xxxxxxxx LLP
Suite 2800, 0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
(ii) To the Agent:
Toronto Dominion (Texas), Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Manager, Agency
Facsimile: (000) 000-0000
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Copy to:
Toronto Dominion Securities (USA), Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
and:
Xxxxx X. Xxxxx, Esq.
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
(iii) To the Banks, to them at the addresses
set forth on Schedule 10.10 (or in an
Assignment and Acceptance) hereto.
(iv) To the Issuing Bank, at the address set
forth on Schedule 10.10 (or in an
Assignment and Acceptance) hereto.
Any party may change the address to which all notices, requests
and other communications are to be sent to it by giving written
notice of such address change to the other parties in conformity
with this paragraph, but such change shall not be effective until
notice of such change has been received by the other parties.
Section 10.11 Entire Agreement. This
Agreement, together with the exhibits to this Agreement and all
of the other Loan Documents, is intended by the Co-Borrowers, the
Agent, the Issuing Bank and the Banks as a final expression of
their agreement and, together with all of the other Loan
Documents, is intended as a complete statement of the terms and
conditions of their agreement. This Agreement and the other Loan
Documents contain all of the agreements and understandings
between or among the Co-Borrowers, the Agent, the Issuing Bank
and the Banks concerning the Loans and the other transactions
contemplated hereby.
Section 10.12 Governing Law. This Agreement
and the Loan Documents shall be construed in accordance with and
governed by the laws of the State of New York, without reference
to the conflict or choice of law principles thereof.
Section 10.13 Replacement of Bank. In the
event that a Replacement Event occurs and is continuing with
respect to any Bank, the Co-Borrowers may designate another
financial institution (such financial institution being herein
called a "Replacement Bank") acceptable to the Agent, and which
is not any Co-Borrower nor an Affiliate of any Co-Borrower, to
assume such Bank's Commitment hereunder, to purchase the Loans
and participations of such Bank and such Bank's rights hereunder
and (if such Bank is an Issuing Bank) to issue Letters of Credit
in substitution for all outstanding Letters of Credit issued by
such Bank, without recourse to or representation or warranty by,
or expense to, such Bank for a purchase price equal to the
outstanding principal amount of the Loans payable to such Bank
plus any accrued but unpaid interest on such Loans and accrued
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but unpaid commitment fees and letter of credit fees owing to
such Bank, and upon such assumption, purchase and substitution,
and subject to the execution and delivery to the Agent by the
Replacement Bank of documentation satisfactory to the Agent
(pursuant to which such Replacement Bank shall assume the
obligations of such original Bank under this Agreement), the
Replacement Bank shall succeed to the rights and obligations of
such Bank hereunder and such Bank shall no longer be a party
hereto or have any rights hereunder provided that the obligations
of the Co-Borrowers to indemnify such Bank with respect to events
occurring or obligations arising before such replacement shall
survive such replacement. "Replacement Event" means, with
respect to any Bank, (i) the commencement of any bankruptcy or
insolvency proceeding or the taking of possession by, a receiver,
custodian, conservator, trustee or liquidator of such Bank, or
the declaration by the appropriate regulatory authority that such
Bank is insolvent, or (ii) such Bank is the only Bank hereunder
that makes a demand for payment of any material additional
amounts as compensation for increased costs or for its reduced
rate of return pursuant to Section 11.3 or 11.5 hereof.
Section 10.14 Counterparts. This Agreement
may be executed in any number of counterparts each of which shall
be an original with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Section 10.15 Headings. Captions, headings
and the table of contents in this Agreement are for convenience
only, and are not to be deemed part of this Agreement.
Section 10.16 Confidentiality. Unless
otherwise agreed to in writing by Housecall, all Proprietary
Information (as defined below) received by the Agent and the
Banks shall be held in confidence by the Agent and the Banks,
except for disclosures made (i) to actual or potential assignees,
participants, or transferees of such Bank, and then only upon a
confidential basis in any such case, (ii) as otherwise required
to be disclosed by banking regulations, law, rule, regulation,
judicial process, or other Applicable Law, or to government
regulators, (iii) in connection with litigation arising from this
Agreement or to which the Agent or a Bank is a party, (iv) to its
(or its Affiliates') directors, officers, employees, agents or
representatives in connection with their activities concerning
this Agreement or the transactions contemplated hereby, (v) to
the attorneys, accountants, and other consultants for the Agent
or a Bank or any Affiliate thereof (who shall be requested to
similarly hold such information in confidence), or (vi) as
otherwise permitted hereunder. For purposes of this Agreement,
the term "Proprietary Information" shall mean all information
about Housecall or any of its Subsidiaries which has been
furnished to the Agent or any Bank by or on behalf of Housecall
or any of its Subsidiaries before or after the date hereof or
which is obtained by any Bank or the Agent made pursuant to
Section 6.3 or 6.4 hereof; provided, however, that the term
"Proprietary Information" does not include information which
(x) is or becomes publicly available (other than as a result of
an unauthorized disclosure of the Agent or a Bank), (y) is
possessed by or available to the Agent or any Bank on a
non-confidential basis prior to its disclosure to the Agent or
such Bank by any Co-Borrower or Subsidiary or (z) becomes
available to the Agent or any Bank on a non-confidential basis
from a Person which, to the knowledge of the Agent or such Bank,
90
as the case may be, was not prohibited from disclosing it by any
duty of confidentiality to Housecall or any of its Subsidiaries.
ARTICLE 11
Yield Protection
Section 11.1 Eurodollar Rate Basis
Determination. Notwithstanding anything contained herein which
may be construed to the contrary, if with respect to any proposed
Eurodollar Loan for any Interest Period, the Agent determines
that deposits in dollars (in the applicable amount) are not being
offered to the Agent in the relevant market for such Interest
Period, the Agent shall forthwith give notice to the Co-Borrowers
and the Banks, whereupon until the Agent notifies the Co-
Borrowers that the circumstances giving rise to such situation no
longer exist, the obligations of the Banks to make such types of
Eurodollar Loans shall be suspended.
Section 11.2 Illegality. If after the
Agreement Date any Applicable Law, rule, or regulation, or any
change therein, or any interpretation or change in interpretation
or administration thereof by any governmental authority, central
bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any
request or directive (whether or not having the force of law) of
any such authority, central bank, or comparable agency, shall
make it unlawful or impossible for any Bank to make, maintain, or
fund its Eurodollar Loans, such Bank shall so notify the Agent,
and the Agent shall forthwith give notice thereof to the other
Banks and the Co-Borrowers. Upon receipt of such notice,
notwithstanding anything contained in Article 2 hereof, the Co-
Borrowers shall repay in full the then outstanding principal
amount of each affected Eurodollar Rate Loan of such Bank,
together with accrued interest thereon, either (a) on the last
day of the then current Interest Period applicable to such
Eurodollar Loan if such Bank may lawfully continue to maintain
and fund such Eurodollar Loan to such day or (b) immediately if
such Bank may not lawfully continue to fund and maintain such
Eurodollar Loan to such day. Concurrently with repaying each
affected Eurodollar Loan of such Bank, notwithstanding anything
contained in Article 2 hereof, the Co-Borrowers shall borrow a
Base Rate Loan from such Bank, and such Bank shall make such Loan
in an amount such that the outstanding principal amount of the
Note held by such Bank shall equal the outstanding principal
amount of such Note immediately prior to such repayment.
Section 11.3 Increased Costs.
(a) If after the Agreement date any
Applicable Law, rule, or regulation, or any change therein, or
any interpretation or change in interpretation or administration
thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or
administration thereof or compliance by any Bank with any request
or directive (whether or not having the any such authority,
central bank, or comparable agency:
(i) Shall subject any Bank to any
tax, duty, or other charge with respect to its
obligation to make Eurodollar Loans, or its
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Eurodollar Loans, or shall change the basis of
taxation of payments to any Bank of the principal
of or interest on its Eurodollar Loans or in
respect of any other amounts due under this
Agreement in respect of its Eurodollar Loans or
its obligation to make Eurodollar Loans (except
for changes in the rate of tax on the overall net
income of such Bank imposed by the jurisdiction
in which such Bank's principal executive office
is located); or
(ii) Shall impose, modify, or deem
applicable any reserve (including, without
limitation, any imposed by the Board of Governors
of the Federal Reserve System, but excluding any
included in an applicable Eurodollar Reserve
Percentage), special deposit, capital adequacy,
assessment, or other requirement or condition
against assets of, deposits with or for the
account of, or commitments or credit extended by
any Bank, or shall impose on any Bank or the
eurodollar interbank borrowing market any other
condition affecting its obligation to make such
Eurodollar Loans or its Eurodollar Loans; and the
result of any of the foregoing is to increase the
cost to such Bank of making or maintaining any
such Eurodollar Loans, or to reduce the amount of
any sum received or receivable by the Bank under
this Agreement or under its Notes with respect
thereto, and such increase is not given effect in
the determination of the Eurodollar Rate then,
on the earlier of (x) 15 days after demand by such Bank or
(y) the Maturity Date, each Borrower agrees to pay to such Bank
such additional amount or amounts as will compensate such Bank
for such increased costs. Each Bank will promptly notify the Co-
Borrowers and the Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Bank to
compensation pursuant to this Section 11.3.
(b) A certificate of any Bank claiming
compensation under this Section 11.3 and setting forth the
additional amount or amounts to be paid to it hereunder and
calculations therefor shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use
any reasonable averaging and attribution methods. If any Bank
demands compensation under this Section 11.3, the Co-Borrowers
may at any time, upon at least five (5) Business Days' prior
notice to such Bank, prepay in full the then outstanding affected
Eurodollar Loans of such Bank (together with the compensation
demanded by such Bank), together with accrued interest thereon to
the date of prepayment, along with any reimbursement required
under Section 2.10 hereof. Concurrently with prepaying such
Eurodollar Loans the Co-Borrowers shall borrow a Base Rate Loan,
or a Eurodollar Loan not so affected, from such Bank, and such
Bank shall make such Loan in an amount such that the outstanding
principal amount of the Notes held by such Bank shall equal the
outstanding principal amount of such Notes immediately prior to
such prepayment.
Section 11.4 Effect On Other Loans. If
notice has been given pursuant to Section 11.1, 11.2 or 11.3
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suspending the obligation of any Bank to make any type of
Eurodollar Loan, or requiring Eurodollar Loans of any Bank to be
repaid or prepaid, then, unless and until such Bank notifies the
Co-Borrowers that the circumstances giving rise to such repayment
no longer apply, all Loans which would otherwise be made by such
Bank as to the type of Eurodollar Loans affected shall, at the
option of the Co-Borrowers, be made instead as Base Rate Loans.
Section 11.5 Capital Adequacy. If any Bank
or Issuing Bank or any Affiliate of any Bank shall have
reasonably determined that the adoption after the Agreement Date
of any Applicable Law, governmental rule, regulation or order
regarding the capital adequacy of banks or bank holding
companies, or any change therein, or any change after the
Agreement Date in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by such Bank or Issuing Bank or any Affiliate of any
Bank with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental
authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on such Bank's or
Issuing Bank's or any Affiliate of such Bank capital as a
consequence of such Bank's or Issuing Bank's Commitment or
obligations hereunder to a level below that which it could have
achieved but for such adoption, change or compliance (taking into
consideration such Bank's or Issuing Bank's or any Affiliate of
such Bank's policies with respect to capital adequacy immediately
before such adoption, change or compliance and assuming that such
Bank's or Issuing Bank's or any Affiliate's of such Bank, capital
was fully utilized prior to such adoption, change or compliance),
then, by the earlier of (x) 15 days after demand by such Bank or
Issuing Bank, or (y) the Maturity Date, the Co-Borrowers shall
immediately pay to such Bank or Issuing Bank such additional
amounts as shall be sufficient to compensate such Bank or Issuing
Bank for any such reduction actually suffered; provided, however,
that there shall be no duplication of amounts paid to a Bank
pursuant to this sentence and Section 11.3 hereof. A certificate
of such Bank or Issuing Bank setting forth the amount to be paid
to such Bank or Issuing Bank by the Co-Borrowers as a result of
any event referred to in this paragraph shall, absent manifest
error, be conclusive.
Section 11.6 Alternate Lending Offices. Each
Bank agrees, if requested by the Co-Borrowers, it will use
reasonable efforts (subject to the overall policy considerations
of such Bank) to designate an alternate lending office with
respect to Loans affected by any of the matters or circumstances
prescribed in Section 2.9(b), 11.2, 11.3 or 11.5 hereof in order
to reduce the liability of the Co-Borrowers or avoid the results
provided thereunder, so long as such designation is not
disadvantageous to such Bank as determined by such Bank, which
determination, if made in good faith, shall be conclusive and
binding on all parties hereto. Nothing in this Section 11.6
shall affect or postpone any of the obligation of the Co-
Borrowers hereunder or any right of any Bank hereunder.
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ARTICLE 12
Waiver of Jury Trial, etc.
Section 12.1 Jurisdiction and Service of
Process. For purposes of any legal action or proceeding brought
by the Agent, the Issuing Bank or the Banks with respect to this
Agreement or any other Loan Document, each Co-Borrower hereby
irrevocably submits to the personal jurisdiction of the federal
and state courts sitting in the state of New York and hereby
irrevocably designates and appoints, as its authorized agent for
service of process in the State of New York, CT Corporation
System, whose address is 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or such other person as the Co-Borrowers shall designate
hereafter by written notice given to the Agent. The consent to
jurisdiction herein shall not be exclusive. The Agent and the
Banks shall for all purposes automatically, and without any act
on their part, be entitled to treat such designee of the Co-
Borrowers as the authorized agent to receive for and on behalf of
the Co-Borrowers service of writs, or summons or other legal
process in the State of New York, which service shall be deemed
effective personal service on each Co-Borrower served when
delivered, whether or not such agent gives notice to the Co-
Borrowers; and delivery of such service to its authorized agent
shall be deemed to be made when personally delivered or five (5)
Business Days after mailing by registered or certified mail
addressed to such authorized agent. Each Co-Borrower further
irrevocably consents to service of process in any such action or
proceeding by the mailing of copies thereof by registered or
certified mail to the Co-Borrowers at the address set forth
above, such service to become effective five (5) Business Days
after such mailing. In the event that, for any reason, such
agent or his or her successors shall no longer serve as agent of
either Co-Borrower to receive service of process in the State of
New York, such Co-Borrower shall serve and advise the Agent
thereof so that at all times the Co-Borrowers will maintain an
agent to receive service of process in the State of New York on
behalf of the Co-Borrowers with respect to this Agreement and all
other Loan Documents. In the event that, for any reason, service
of legal process cannot be made in the manner described above,
such service may be made in such manner as permitted by law.
Section 12.2 Consent to Venue. Each Co-
Borrower hereby irrevocably waives any objection it would make
now or hereafter for the laying of venue of any suit, action, or
proceeding arising out of or relating to this Agreement or any
other Loan Document brought in the federal courts of the United
States of America sitting in New York, New York, and hereby
irrevocably waives any claim that any such suit, action, or
proceeding has been brought in an inconvenient forum.
Section 12.3 Waiver of Jury Trial. EACH
BORROWER AND EACH OF THE AGENT, THE BANKS AND THE ISSUING BANK TO
THE EXTENT PERMITTED BY APPLICABLE LAW WAIVE, AND OTHERWISE AGREE
NOT TO REQUEST, A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM OF ANY TYPE IN WHICH ANY BORROWER, ANY
OF THE BANKS, THE ISSUING BANK, THE AGENT, OR ANY OF THEIR
RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS
AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT,
ANY OF THE NOTES OR THE OTHER LOAN DOCUMENTS AND THE RELATIONS
AMONG THE PARTIES LISTED IN THIS ARTICLE 12.
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Section 12.4 Amendment to Loan Documents;
Continuation of Security Interest and Liens. Each Loan Document
is hereby amended and modified, as necessary, to conform such
document to the terms and conditions of this Agreement. Upon the
effectiveness of this Agreement, on and after the date hereof,
each reference in the Loan Documents to the "Credit Agreement",
"thereunder," "thereof" or words of like import referring to the
Prior Credit Agreement, shall mean and be a reference to this
Agreement as amended hereby and as the same may be amended
hereafter. The Co-Borrowers acknowledge and agree that the
security interests granted to the Agent for the benefit of the
Banks pursuant to the Prior Credit Agreement and the Security
Documents (as defined in the Prior Credit Agreement), shall
remain outstanding and in full force and effect in accordance
with the Prior Credit Agreement and shall continue to secure the
Obligations. The Co-Borrowers and all other parties hereto
acknowledge and agree that all Liens evidenced by the Prior
Credit Agreement and the other Loan Documents (as defined in the
Prior Credit Agreement) executed in connection therewith are
hereby ratified, confirmed and continued.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed under seal by their duly
authorized officers, all as of the day and year first above
written.
CO-BORROWERS: HOUSECALL MEDICAL RESOURCES, INC.
By:__________________________________
Its: ________________________________
HOUSECALL, INC.
By:__________________________________
Its:_________________________________
HOUSECALL-SIC MANAGEMENT, INC.
By: _________________________________
Its: ________________________________
AGENT: TORONTO DOMINION (TEXAS), INC.
By:_________________________________
Its:________________________________
ISSUING BANK: THE TORONTO-DOMINION BANK
By:_________________________________
Its: _______________________________
BANKS: TORONTO DOMINION (TEXAS), INC.
By:_________________________________
Its: _______________________________
