EXHIBIT 10.2
EXECUTION COPY
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF FEBRUARY 12, 2001
AMONG
OPC FINANCIAL CORPORATION,
ORTHOLINK PHYSICIANS CORPORATION,
THE LENDERS NAMED HEREIN
AND
BANK OF AMERICA, N.A.,
AS AGENT AND ISSUING BANK
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.....................................................................................1
Section 1.01 DEFINED TERMS.............................................................................1
Section 1.02 TERMS GENERALLY..........................................................................21
Section 1.03 TYPES OF BORROWINGS......................................................................22
ARTICLE II THE CREDITS...................................................................................22
Section 2.01 RESTRUCTURING OF LOANS..................................................................22
Section 2.02 COMMITMENT TO MAKE LOANS................................................................22
Section 2.03 LOANS...................................................................................23
Section 2.04 NOTICE OF BORROWINGS....................................................................25
Section 2.05 NOTES; REPAYMENT OF LOANS...............................................................25
Section 2.06 FEES....................................................................................25
Section 2.07 INTEREST ON LOANS.......................................................................26
Section 2.08 DEFAULT INTEREST........................................................................27
Section 2.09 ALTERNATE RATE OF INTEREST..............................................................27
Section 2.10 TERMINATION AND REDUCTION OF COMMITMENTS................................................28
Section 2.11 CONVERSION AND CONTINUATION OPTIONS.....................................................28
Section 2.12 MANDATORY REPAYMENTS AND PREPAYMENTS....................................................30
Section 2.13 OPTIONAL PREPAYMENTS....................................................................30
Section 2.14 RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES...........................................31
Section 2.15 CHANGE IN LEGALITY......................................................................32
Section 2.16 INDEMNITY...............................................................................33
Section 2.17 PRO RATA TREATMENT......................................................................34
Section 2.18 SHARING OF SETOFFS......................................................................34
Section 2.19 PAYMENTS................................................................................34
Section 2.20 TAXES...................................................................................35
Section 2.21 ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES;
DUTY TO MITIGATE........................................................................38
Section 2.22 LETTERS OF CREDIT.......................................................................39
ARTICLE III REPRESENTATIONS AND WARRANTIES............................... ...............................43
Section 3.01 ORGANIZATION; POWERS.....................................................................43
Section 3.02 AUTHORIZATION............................................................................43
Section 3.03 ENFORCEABILITY...........................................................................44
Section 3.04 CONSENTS AND GOVERNMENTAL APPROVALS......................................................44
Section 3.05 EXISTING PRACTICE REPORTS; UNDISCLOSED LIABILITIES.......................................44
Section 3.06 NO MATERIAL ADVERSE CHANGE...............................................................45
Section 3.07 TITLE TO PROPERTIES; POSSESSION UNDER LEASES.............................................45
Section 3.08 OWNERSHIP................................................................................45
Section 3.09 LITIGATION; COMPLIANCE WITH LAWS.........................................................46
Section 3.10 AGREEMENTS...............................................................................47
Section 3.11 FEDERAL RESERVE REGULATIONS..............................................................47
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Section 3.12 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT...............................47
Section 3.13 USE OF PROCEEDS..........................................................................47
Section 3.14 TAX RETURNS..............................................................................48
Section 3.15 NO MATERIAL MISSTATEMENTS................................................................48
Section 3.16 EMPLOYEE BENEFIT PLANS...................................................................48
Section 3.17 ENVIRONMENTAL AND SAFETY MATTERS.........................................................48
Section 3.18 SECURITY INTERESTS.......................................................................49
Section 3.19 SOLVENCY.................................................................................49
Section 3.20 TRANSACTIONS WITH AFFILIATES AND SHAREHOLDERS............................................50
Section 3.21 INSURANCE................................................................................50
Section 3.22 LABOR MATTERS............................................................................50
Section 3.23 [Intentionally Omitted]..................................................................51
Section 3.24 SECURITIES PURCHASE AGREEMENT............................................................51
Section 3.25 [Intentionally Omitted]..................................................................51
Section 3.26 YEAR 2000 COMPLIANCE.....................................................................51
Section 3.27 EURO.....................................................................................51
Section 3.28 REPRESENTATIONS AND WARRANTIES FOR OTHER AGREEMENTS......................................51
Section 3.29 CERTAIN TRANSACTIONS.....................................................................52
ARTICLE IV CONDITIONS OF LENDING.........................................................................52
Section 4.01 CONDITIONS PRECEDENT TO THE EFFECTIVE DATE...............................................52
Section 4.02 ALL CREDIT EVENTS........................................................................56
ARTICLE V AFFIRMATIVE COVENANTS..........................................................................57
Section 5.01 EXISTENCE; BUSINESSES AND PROPERTIES.....................................................57
Section 5.02 INSURANCE................................................................................58
Section 5.03 OBLIGATIONS AND TAXES....................................................................59
Section 5.04 FINANCIAL STATEMENTS, REPORTS, ETC.......................................................59
Section 5.05 OTHER INFORMATION........................................................................62
Section 5.06 ERISA....................................................................................63
Section 5.07 MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS................................63
Section 5.08 USE OF PROCEEDS..........................................................................64
Section 5.09 INTEREST RATE PROTECTION AGREEMENTS......................................................64
Section 5.10 FISCAL YEAR..............................................................................64
Section 5.11 COMPLIANCE WITH ENVIRONMENTAL LAWS; PREPARATION OF ENVIRONMENTAL REPORTS.................64
Section 5.12 SUBSIDIARIES.............................................................................64
Section 5.13 FURTHER ASSURANCES.......................................................................64
Section 5.14 YEAR 2000 COMPLIANCE.....................................................................65
ARTICLE VI NEGATIVE COVENANTS............................................................................65
Section 6.01 INDEBTEDNESS.............................................................................65
Section 6.02 NEGATIVE PLEDGE..........................................................................66
Section 6.03 SALE AND LEASE-BACK TRANSACTIONS.........................................................67
Section 6.04 INVESTMENTS, LOANS AND ADVANCES..........................................................67
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Section 6.05 MERGERS, CONSOLIDATIONS, DISPOSITIONS AND ACQUISITIONS...................................68
Section 6.06 DIVIDENDS, DISTRIBUTIONS AND OTHER RESTRICTED PAYMENTS...................................69
Section 6.07 IMPAIRMENT OF SECURITY INTERESTS.........................................................70
Section 6.08 LIMITATION ON RESTRICTED ACTIONS.........................................................70
Section 6.09 NO OTHER NEGATIVE PLEDGES................................................................70
Section 6.10 TRANSACTIONS WITH AFFILIATES.............................................................70
Section 6.11 BUSINESS OF BORROWER AND SUBSIDIARIES....................................................71
Section 6.12 CERTAIN AMENDMENTS.......................................................................71
Section 6.13 FINANCIAL COVENANTS......................................................................71
Section 6.14 CAPITAL EXPENDITURES.....................................................................72
Section 6.15 OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON HOLDINGS AND BORROWER..........................72
ARTICLE VII EVENTS OF DEFAULT............................................................................73
ARTICLE VIII THE AGENT AND ISSUING BANK..................................................................77
Section 8.01 APPOINTMENT AND AUTHORIZATION............................................................77
Section 8.02 LIABILITY OF AGENT.......................................................................78
Section 8.03 ACTION BY AGENT..........................................................................78
Section 8.04 SUCCESSOR AGENTS.........................................................................79
Section 8.05 AGENT AND AFFILIATE......................................................................79
Section 8.06 INDEMNIFICATION..........................................................................79
Section 8.07 CREDIT DECISION..........................................................................80
ARTICLE IX MISCELLANEOUS.................................................................................80
Section 9.01 NOTICES..................................................................................80
Section 9.02 SURVIVAL OF AGREEMENT....................................................................82
Section 9.03 BINDING EFFECT...........................................................................82
Section 9.04 SUCCESSORS AND ASSIGNS...................................................................82
Section 9.05 EXPENSES; INDEMNITY......................................................................85
Section 9.06 RIGHT OF SETOFF..........................................................................88
Section 9.07 APPLICABLE LAW...........................................................................88
Section 9.08 WAIVERS; AMENDMENT.......................................................................88
Section 9.09 INTEREST RATE LIMITATION.................................................................89
Section 9.10 ENTIRE AGREEMENT.........................................................................89
Section 9.11 SEVERABILITY.............................................................................89
Section 9.12 COUNTERPARTS.............................................................................90
Section 9.13 HEADINGS.................................................................................90
Section 9.14 REMEDIES.................................................................................90
Section 9.15 CONFIDENTIALITY..........................................................................90
Section 9.16 JURISDICTION; CONSENT TO SERVICE OF PROCESS..............................................91
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Schedules
Schedule 2.02 Commitments; Notice Addresses
Schedule 3.05 Liabilities
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation; Compliance with Laws
Schedule 3.10 Material Contracts
Schedule 3.18 Filings
Schedule 6.01 Indebtedness
Schedule 6.02 Liens
Schedule 6.04 Investments
Exhibits
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Exhibit A Form of Note
Exhibit B Form of Pledge Agreement
Exhibit C Form of Holdings Guarantee Agreement
Exhibit D Form of Intercompany Note
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Opinion of Counsel
Exhibit G Form of Compliance Certificate
Exhibit H Form of Perfection Certificate
Exhibit I Form of Supplemental Agreement
Exhibit J Form of Notice of Borrowing/Conversion
Exhibit K Sponsors' Guarantee Agreement
Exhibit L Form of Subsidiaries Consent and Agreement
Exhibit M Form of USPI Pledge Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of February 12, 2001,
among OPC FINANCIAL CORPORATION, a Delaware corporation ("Holdings"),
ORTHOLINK PHYSICIANS CORPORATION, a Delaware corporation, the Lenders (as
defined in this Amended Agreement) and BANK OF AMERICA, N.A. (formerly known
as NationsBank, N.A.), as Agent and Issuing Bank.
Pursuant to the terms of the Original Amended and Restated Credit
Agreement (as defined below), the Borrower (such term, and all other
capitalized terms in this paragraph, being used as defined in this Amended
Agreement below) requested the Lenders to extend, and the Lenders extended,
credit to the Borrower in the aggregate principal amount of up to
$45,000,000. The Borrower has requested that the Lenders (i) amend and
restate the Original Amended and Restated Credit Agreement in connection with
the acquisition of the Borrower by USPI and (ii) make certain other
amendments and modifications to the Original Amended and Restated Credit
Agreement. The Lenders are willing to make such amendments and modifications
to the Original Amended and Restated Credit Agreement upon the terms and
subject to the conditions set forth herein. Accordingly, the parties hereto
agree that, on the Effective Date, this Amended Agreement will become
effective and the Original Amended and Restated Credit Agreement will be
amended and restated to read as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINED TERMS. As used in this Amended Agreement, the
following terms shall have the meanings specified below:
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any Loan bearing interest at a rate determined
by reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"ACQUISITION" means the transactions contemplated by the Acquisition
Agreement.
"ACQUISITION AGREEMENT" shall mean the Agreement and Plan of Merger
dated December 6, 2000 among United Surgical Partners International, Inc.,
OPC Acquisition Corporation and OrthoLink Physicians Corporation.
"ACQUISITION DOCUMENTS" means the Acquisition Agreement, including
all exhibits and schedules thereto, and all documents conveying ownership of
the Borrower and its Subsidiaries to Holdings, in each case as the same may
be modified or supplemented from time to time in accordance with the
provisions of this Amended Agreement.
The term "ADDITIONAL AMOUNTS" shall have the meaning assigned to
that term in Section 2.20(a).
"ADJUSTED LIBO RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/100 of
1%) equal to the product of (a) the LIBO Rate in effect for that Interest
Period and (b) Statutory Reserves.
"ADMINISTRATIVE QUESTIONNAIRE" shall mean, with respect to each
Lender, the administrative questionnaire in the form submitted to that Lender
by the Agent and returned to the Agent duly completed by the applicable
Lender.
"AFFILIATE" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the person specified.
"AGENT" shall mean Bank of America, N.A. (formerly known as
NationsBank, N.A.), in its capacity as agent for the Lenders under this
Amended Agreement, and its successors in that capacity.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/100 of 1%) equal to the greater
of (a) the Federal Funds Effective Rate in effect on such day plus 0.50% and
(b) the Prime Rate in effect on such day. If the Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms of this Amended Agreement, the
Alternate Base Rate shall be determined without regard to clause (a) of the
first sentence of this definition until the circumstances giving rise to that
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of the applicable change in the Prime Rate or
the Federal Funds Effective Rate, respectively, without notice to the
Borrower.
"AMENDED AGREEMENT" shall mean this Amended and Restated Credit
Agreement, as amended, modified, extended, restated or supplemented from time
to time.
"ANNUAL PERIOD" shall mean a period beginning on and including the
Closing Date or any annual anniversary of the Closing Date (each a
"Commencement Date") and continuing through but excluding the date that is
the annual anniversary of the preceding Commencement Date.
"APPLICABLE LAWS" shall have the meaning assigned to that term in
Section 3.09(b).
"APPLICABLE PERCENTAGE" shall mean, (i) for purposes of calculating
(A) the applicable interest rate for any day for any Loan, (B) the applicable
rate of the Letter of Credit Fee for purposes of Section 2.06(b) and (C) the
applicable rate of the Commitment Fee for purposes of Section 2.06(a), the
appropriate applicable percentage set forth below corresponding to the
Consolidated Leverage Ratio as of the most recent Calculation Date:
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LOANS AND FEES (1), (2)
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Applicable Applicable Applicable
Percentage Applicable Percentage For Percentage for
Consolidated For LIBOR Percentage Letter of Commitment
Leverage Ratio* Loans For ABR Credit Fee Fees
Pricing Loans
Level
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I LESS THAN 2.00x 2.25% 1.25% 2.25% 0.375%
OR EQUAL TO
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II GREATER THAN 2.00x but
LESS THAN OR EQUAL TO 2.50x 2.50% 1.50% 2.50% 0.375%
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III GREATER THAN 2.50x but
LESS THAN OR EQUAL TO 3.00x 2.75% 1.75% 2.75% 0.375%
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IV GREATER THAN 3.00x but
LESS THAN OR EQUAL TO 3.50x 3.00% 2.00% 3.00% 0.50%
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V GREATER THAN 3.50x but
LESS THAN OR EQUAL TO 3.75 3.25% 2.25% 3.25% 0.50%
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Each Applicable Percentage shall be determined and adjusted
quarterly on the date (each a "CALCULATION DATE") five Business Days after
the date by which the Borrower is required to provide the officer's
certificate in accordance with the provisions of Section 5.04(d) for the most
recently ended fiscal quarter or year of the Borrower; PROVIDED, HOWEVER,
that each initial Applicable Percentage shall be based on Pricing Level IV
(as shown above) and shall remain at Pricing Level IV until the first
Calculation Date occurring after the end of the first fiscal quarter of the
Borrower subsequent to the Effective Date and thereafter, each Applicable
Percentage shall be based on the Pricing Level (as shown above) corresponding
to the Consolidated Leverage Ratio as of the last day of the most recently
ended fiscal quarter or year of the Borrower preceding the applicable
Calculation Date.
"ASSET SALE" shall mean any sale, lease, transfer, assignment,
condemnation, taking or other disposition or series of related sales, leases,
transfers, assignments or dispositions (including dispositions in the nature
of casualties, to the extent covered by insurance) of any businesses,
business units, assets (including licenses, trademarks and other intangibles
and the Capital Stock of any Subsidiary) or other properties of the Borrower
or any Subsidiary (each referred to for the purposes of this definition as a
"disposition") by the Borrower or any of its Subsidiaries (including any
disposition by means of a merger, consolidation or similar transaction) other
than (i) a disposition by a Subsidiary to the Borrower, (ii) a disposition by
the
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(1) In addition to the Applicable Percentage for the period from and
including July 1, 2001 to September 30, 2001, a premium in the amount of
0.25% shall be added to the Applicable Percentage (other than with respect to
the Commitment Fees).
(2) In addition to the Applicable Percentage for the period from and
including October 1, 2001 to the Maturity Date, a premium in the amount of
0.50% shall be added to the Applicable Percentage (other than with respect to
the Commitment Fees).
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Borrower or a Subsidiary to a Wholly Owned Subsidiary, (iii) a disposition
permitted by Sections 6.05(a), (b) and (c), and (iv) dispositions permitted
by Section 6.05(e) to the extent the Net Cash Proceeds therefrom are equal to
or less than $500,000 in any Fiscal Year.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Agent, in the
form of Exhibit E or such other form as shall be approved by the Agent.
"AVAILABILITY PERIOD" shall mean the period from and including the
Effective Date to but excluding the termination of the Commitments of the
Lenders in accordance with the terms hereof.
"BOARD" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"BORROWER" shall mean OrthoLink Physicians Corporation, a Delaware
corporation, and its successors.
"BORROWING" shall mean a group of Loans of a Type made by the
Lenders on a single date and as to which a single Interest Period is in
effect.
"BREAKAGE EVENT" shall have the meaning assigned to that term in
Section 2.16.
"BUSINESS DAY" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of North Carolina or New York)
on which banks are open for business in Charlotte, North Carolina and New
York City; PROVIDED, THAT, when used in connection with a LIBOR Loan, the
term "BUSINESS DAY" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period, the sum of all
expenditures (whether paid in cash or other consideration or accrued as a
liability) which would, in accordance with GAAP, be included on a
consolidated statement of cash flows of the Borrower and its Consolidated
Subsidiaries for such period as additions to property, plant and equipment,
Capital Lease Obligations or similar items; PROVIDED, THAT, the foregoing
shall exclude all such expenditures to the extent made with insurance
proceeds or condemnation awards as permitted pursuant to Section 6.05(d).
"CAPITAL LEASE OBLIGATIONS" of any person shall mean the obligations
of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for the purposes of this Amended Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
4
"CAPITAL STOCK" of any person shall mean any and all shares,
partnership, limited liability company and other interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) the equity of such person.
"CASH DIVIDEND EXPENSES" shall mean, for any period any cash
payment, distribution or dividend made or paid on the Capital Stock of the
Borrower. The foregoing definition shall not be deemed to imply that any such
payment, dividend or distribution is permitted under this Amended Agreement.
"CASH EQUIVALENTS" shall mean:
(a) direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the
United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States of
America), in each case maturing within 90 days from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 90
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from Standard & Poor's
Corporation or from Xxxxx'x Investors Service, Inc.;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 90 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any Lender or
any commercial bank organized under the laws of the United States of America
or any State thereof, which has a combined capital and surplus and undivided
profits of not less than $500,000,000;
(d) money market funds substantially all of whose
assets are comprised of securities of the types described in (a) through (c)
above;
(e) cash deposits in any deposit account or in any
cash collateral account with any Lender; and
(f) other investment instruments approved in writing
by the Agent and offered by financial institutions which have a combined
capital and surplus and undivided profits of not less than $500,000,000.
"CASH RENTAL EXPENSE" shall mean, for any period for any person, the
gross amount of cash rental expense of the Borrower and its Consolidated
Subsidiaries determined on a consolidated basis in accordance with GAAP
during such period (excluding Capital Lease Obligations).
"CASH TAX EXPENSE" shall mean, for any period for any person, the
amount of expense for Federal, state, local and other income taxes of such
person and its Consolidated Subsidiaries, determined on a consolidated basis
in accordance with GAAP (assuming such person was
5
deemed to be the common parent of an affiliated group (within the meaning of
Section 1504 of the Code) of which only such person and its subsidiaries were
members), for such period, but excluding deferred income tax expense.
A "CHANGE IN CONTROL" shall mean the occurrence of any of the
following events:
(i) Holdings shall beneficially own less than 100% of
the Capital Stock of the Borrower;
(ii) the Sponsor shall fail to own, directly or
indirectly, at least an amount of the outstanding shares of common stock of
USPI entitled to at least 45% of the Total Voting Power of USPI;
(iii) any person or "group" (within the meaning of Rule
13d-5 under the Exchange Act), together with its Affiliates, other than the
Permitted Holders, shall beneficially own, directly or indirectly, an amount
of the outstanding Capital Stock of the Borrower entitled to a greater
percentage of the Total Voting Power of USPI than the percentage of the Total
Voting Power of USPI represented by the outstanding shares of Capital Stock
held by the Sponsor;
(iv) the Continuing Directors in office at any time
shall not constitute a majority of the Board of Directors of USPI. For
purposes of the foregoing the term "CONTINUING DIRECTOR" shall mean, at any
date, an individual (a) who is a member of the Board of Directors of USPI on
the Effective Date, (b) who has been nominated to be a member of the Board of
Directors of USPI, directly or indirectly, by the Sponsor or the Management
Investors or persons nominated by either of them or (c) who has been
nominated to fill a vacancy on the Board of Directors of USPI by a majority
of the Continuing Directors then in office; or
(v) a public sale or distribution of the shares of
common stock of USPI or an Affiliate thereof pursuant to an effective
registration statement filed with the United States Securities and Exchange
Commission in accordance with the Securities Act of 1933, as amended, or a
similar sale or distribution through a broker, dealer or market maker in
compliance with Rule 144A under the Act (or any similar rule then in force).
"CHANGE IN MANAGEMENT" shall mean Xxxxxx X. Xxxxxx, President and
Chief Executive Officer and G. Xxxxxx Xxxxxxxxx Xx., Senior Vice President
and Chief Financial Officer shall cease to have, directly or indirectly, the
ability to direct or cause the direction of the management and policies of
Holdings and its Subsidiaries; provided, HOWEVER, that it shall not be a
"Change of Management" if Acceptable Management shall have, directly or
indirectly, the ability to direct or cause the direction of the management
and policies of Holdings and its Subsidiaries. ("Acceptable Management" shall
mean any person or persons approved by the Required Lenders which consent
shall not be unreasonably withheld).
"CHARGES" shall have the meaning assigned to that term in Section
9.09.
6
"CHASE CREDIT AGREEMENT" shall mean that certain Credit Agreement
dated as of June 29, 1999, between Chase Bank of Texas, National Association
predecessor to The Chase Manhattan Bank, as administrative agent and USPI, as
borrower, as amended pursuant to that certain First Amendment Agreement to
Credit Agreement dated February 12, 2001 by and among The Chase Manhattan
Bank, USPI and others, and as may be amended from time to time..
"CLOSING DATE" shall mean April 18, 1997.
"CODE" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.
"COLLATERAL" shall mean all the collateral pledged or purported to
be pledged pursuant to any of the Collateral Documents, including all
Intercompany Notes, the Capital Stock of all Subsidiaries owned by Holdings,
and all assets required to be pledged to the Agent and the Lenders pursuant
to Section 5.13.
"COLLATERAL DOCUMENTS" shall mean the Pledge Agreement, the USPI
Pledge Agreement, the Intercompany Notes, the Perfection Certificates and all
mortgages, deeds of trust, security agreements, pledge agreements or other
documents and instruments executed and delivered pursuant to the terms hereof
or thereof in order to secure any Obligations or perfect any Lien granted for
the benefit of the Lenders pursuant thereto, including, without limitation,
all documents and instruments executed and delivered pursuant to the terms of
Section 5.13.
"COMMITMENT" shall mean (a) with respect to each Lender, the
commitment of such Lender to make Loans hereunder as set forth in Schedule
2.02, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Commitment, as applicable, as the same may be (i) reduced from
time to time pursuant to Section 2.10 and (ii) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to Section 9.04
and (b), in the case of the Issuing Bank, the Letter of Credit Commitment.
"COMMITMENT PERCENTAGE" shall mean a fraction (expressed as a
percentage) the numerator of which is such Lender's Commitment and the
denominator of which is the aggregate of all Commitments.
"COMMITMENT FEE" shall have the meaning assigned to that term in
Section 2.06(a).
"COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with a Consolidated Party within
the meaning of Section 4001 of ERISA or is part of a group which includes a
Consolidated Party and which is treated as a single employer under Section
414 of the Code.
"CONFIDENTIAL INFORMATION" means information that the Sponsor,
Holdings, the Borrower, any Subsidiary or any employee, officer or director
thereof furnishes to the Agent or any Lender in a writing that is
conspicuously marked or labeled as confidential, but does not include any
such information that is or becomes generally available to the public.
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"CONSOLIDATED EBITDA" shall mean, for any period for any person,
Consolidated Net Income of such person for such period, PLUS, to the extent
deducted in computing such Consolidated Net Income for such period, (a) the
sum of (i) Consolidated Interest Expense for such period, (ii) Cash Tax
Expense for such period, (iii) depreciation, depletion, amortization of
intangibles and (iv) Non-Cash Charges and Transaction Expenses, MINUS, to the
extent added in computing such Consolidated Net Income for such period, (b)
any interest income, as determined on a consolidated basis with respect to
such person and its Consolidated Subsidiaries in accordance with GAAP.
"CONSOLIDATED EBITDAR" shall mean, for any period for any person,
Consolidated Net Income of such person for such period, PLUS, to the extent
deducted in computing such Consolidated Net Income for such period, (a) the
sum of (i) Consolidated Interest Expense for such period, (ii) Cash Tax
Expense for such period, (iii) depreciation, depletion, amortization of
intangibles, (iv) Non-Cash Charges and Transaction Expenses and (v) Cash
Rental Expense for such period, MINUS to the extent added in computing
Consolidated Net Income for such period, (b) any interest income, as
determined on a consolidated basis with respect to such person and its
Consolidated Subsidiaries in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean, for the
Borrower as of any date, the ratio of (a) Consolidated EBITDAR for the
Reference Period with respect to such date, less all Maintenance Capital
Expenditures for such Reference Period, to (b) the sum of all Consolidated
Interest Expense, plus all Cash Rental Expense, plus all Cash Dividend
Expenses for such Reference Period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period for any
person, the sum (without duplication) of (a) the gross amount of interest
expense, both expensed and capitalized, of such person and its Consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP for
such period and (b) all amounts paid (net of any amounts received) by such
person and its Consolidated Subsidiaries pursuant to Interest Rate Protection
Agreements for such period.
"CONSOLIDATED LEVERAGE RATIO" shall mean, for the Borrower, for any
date, the ratio of (a) Total Debt on such date to (b) Consolidated EBITDA for
the Reference Period applicable to such date.
"CONSOLIDATED NET INCOME" shall mean, for any period for any person,
net income or loss of such person and its wholly-owned Consolidated
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED NET WORTH" shall mean, as of any date of
determination, the total of all amounts which would in accordance with GAAP
be included on a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of such date as (a) the par or stated value of
all outstanding Capital Stock of the Borrower, (b) paid in capital or capital
surplus relating to such Capital Stock and (c) any retained earnings or
earned surplus less (i) any accumulated deficit and (ii) any amounts
attributable to Disqualified Stock.
8
"CONSOLIDATED PARTIES" shall mean Holdings, the Borrower and their
respective Consolidated Subsidiaries, and "CONSOLIDATED PARTY" shall mean any
one of them.
"CONSOLIDATED SUBSIDIARIES" shall mean, for any person, all
subsidiaries of such person that should be consolidated with such person for
financial reporting purposes in accordance with GAAP.
"CONTROL" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"CREDIT PARTIES" shall mean Holdings, the Borrower and the
Subsidiaries, and "CREDIT PARTY" shall mean any one of them.
"DEFAULT" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.
"DISQUALIFIED STOCK" of any person shall mean any Capital Stock of
such person which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable or exercisable), upon the
happening of any event or otherwise (a) matures or is mandatorily redeemable
or subject to any mandatory repurchase requirement, pursuant to a sinking
fund obligation or otherwise, (b) is convertible into or exchangeable or
exercisable for Indebtedness or Disqualified Stock or (c) is redeemable or
subject to any repurchase requirement exercisable at the option of the holder
thereof, in whole or in part, in each case on or prior to the first
anniversary of the Maturity Date (or, if earlier, the first anniversary of
the date on which all the Obligations have been indefeasibly paid in full in
cash and the Commitments have been terminated). It is understood that the
term "Disqualified Stock" includes all preferred stock.
"DOLLARS" or "$" shall mean lawful money of the United States of
America.
"EFFECTIVE DATE" shall have the meaning assigned to such term in
Section 4.01.
"EQUITY ISSUANCE" shall mean the issuance after the Effective Date
of any Capital Stock (including any issuance of Capital Stock of USPI) to any
person or receipt of any capital contribution by the Borrower, USPI,
Holdings, or any of the Subsidiaries from any person, including pursuant to
(a) any registered public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended or (b) a Rule 144A
sale or distribution (including without limitation, any such offering or sale
or distribution of the Capital Stock of UPSI. The foregoing definition shall
not include the sale of any Capital Stock owned by USPI or its subsidiaries
(other than Holdings, the Borrower and the Subsidiaries, but subject to the
exceptions contained in Section 6.15(a) hereof) in an orthopedic surgery
center or hospital. The foregoing definition shall not be deemed to imply
that any such Equity Issuance is permitted under this Amended Agreement.
9
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"EURO" shall mean a European single or common currency implemented
by the European economic and monetary union.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of LIBOR
Loans.
"EVENT OF DEFAULT" shall have the meaning assigned to that term in
Article VII.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCLUDED TAXES" shall have the meaning assigned to that term in
Section 2.20(a).
"EXISTING DEBT" shall mean the outstanding indebtedness of the
Borrower existing immediately prior to the first Borrowing hereunder.
"FACILITY" shall mean the Loans and the Letters of Credit provided
or participated in by the Lenders to the Borrower pursuant to the Original
Amended and Restated Credit Agreement and this Amended Agreement and the
other Loan Documents.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it.
Each change in the Federal Funds Effective Rate shall be effective on the
date thereof, without notice to the Borrower.
"FEE LETTER" shall have the meaning assigned to that term in Section
2.06(d).
"FEES" shall mean the Commitment Fees, the Letter of Credit Fees,
the Fronting Fees, and the other fees payable pursuant to the Fee Letter.
"FINANCIAL OFFICER" of any corporation shall mean the chief
financial officer, principal accounting officer or similar officer of such
corporation.
"FISCAL YEAR" shall mean with respect to the Borrower and each of
its Consolidated Subsidiaries, when used with respect to any year, the 365
day period (or 366 days, as applicable) ending on December 31 of such year.
"FRAUD AND ABUSE LAWS" shall mean Section 1128B(b) of the Social
Security Act, 42 U.S.C. Section 1320a-7b(b) and Section 1877 of the Social
Security Act, 42 U.S.C. Section 1395nn, as from time to time amended; any
successor statute(s) thereto; all rules and regulations promulgated
thereunder; and any other law relating to the ownership of medical facilities
by
10
providers of medical services or the referral of patients to medical
facilities owned by providers of medical services.
"FRONTING FEE" shall have the meaning assigned to that term in
Section 2.06(b)(ii).
"GAAP" shall mean United States generally accepted accounting
principles, applied on a consistent basis, subject to the terms of Section
1.02.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or
foreign governmental department, commission, board, bureau, authority,
agency, court, instrumentality or judicial or regulatory body or entity.
"GUARANTEE" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
to purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness;
PROVIDED, THAT, the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"GUARANTEE AGREEMENT" shall mean the Guarantee Agreement dated as of
December 18, 1998 among the Subsidiaries and the Agent, as amended from time
to time.
"GUARANTEE RATIO" shall mean, as of any date of determination, (a)
the aggregate amount of Indebtedness incurred by the Borrower pursuant to
Section 6.01(i) and that remains outstanding as of such date, to (b)
Consolidated EBITDA for the Reference Period applicable to such date.
"GUARANTOR" shall mean any guarantor under the Guarantee Agreement,
the Holdings Guarantee Agreement or the Sponsor Guarantee Agreement.
"HAZARDOUS MATERIALS" shall have the meaning assigned to that term
in Section 3.17
"HOLDINGS" shall mean OPC Financial Corporation, a Delaware
corporation.
"HOLDINGS GUARANTEE AGREEMENT" shall mean the Guarantee Agreement
between Holdings and the Agent in the form attached hereto as Exhibit C.
"INDEBTEDNESS" of any person shall mean, without duplication, (a)
all obligations of such person for borrowed money or with respect to deposits
or advances of any kind made with or to such person, (b) all obligations of
such person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such person upon which interest charges are customarily
paid,
11
(d) all obligations of such person under conditional sale or other title
retention agreements relating to property or assets purchased by such person,
(e) all obligations of such person issued or assumed as the deferred purchase
price of property or services, (f) all obligations of others secured by (or
for which the holder of such obligations has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such person of obligations of others, (h) all Capital Lease
Obligations of such person, (i) all obligations of such person in respect of
Interest Rate Protection Agreements, (j) all obligations of such person,
contingent or otherwise, as an account party in respect of letters of credit
and bankers' acceptances and (k) all obligations of such person to contribute
money or other property to any other person. The Indebtedness of any person
shall include, without duplication, the Indebtedness of any partnership in
which such person is a general partner and of any trust or other entity
formed or utilized in connection with a securitization of assets of such
person. Notwithstanding the foregoing, the Indebtedness of any person shall
exclude all trade accounts and accrued expenses payable arising in the
ordinary course of business in accordance with GAAP.
"INDEMNIFIED PARTY" shall have the meaning assigned to that term in
Section 9.05(b).
"INITIAL FINANCIAL STATEMENTS" shall have the meaning assigned to
that term in Section 3.5(a).
"INTERCOMPANY INDEBTEDNESS" shall mean Indebtedness of (a) any
Wholly Owned Subsidiary to (i) any Wholly Owned Subsidiary or (ii) the
Borrower and (b) the Borrower to any Subsidiary.
"INTERCOMPANY NOTES" shall mean the promissory notes issued as
contemplated by Sections 6.01(c) and 6.04(b), in the form attached hereto as
Exhibit D.
"INTERCREDITOR AGREEMENT" shall mean a certain intercreditor
agreement dated as of the date hereof by and between the Agent on behalf of
the Lenders and The Chase Manhattan Bank, as amended from time to time.
"INTEREST PAYMENT DATE" shall mean, with respect to any Loan, all of
the following to the extent applicable: (a) the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part, (b) if such
Loan is part of any Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day that would have been an Interest Payment
Date had successive Interest Periods of three months' duration been
applicable to such Borrowing, (c) the date of any repayment or prepayment of
the Borrowing of which such Loan is a part, and (d) any conversion of a
Borrowing to a Borrowing of a different Type.
"INTEREST PERIOD" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the
case may be, and ending on the numerically corresponding day (or, if there is
no numerically corresponding day, on the last day) in the calendar month that
12
is 1, 2, or 3 months thereafter, as the Borrower may elect, subject to the
availability thereof, as determined by the Agent and (b) as to any ABR
Borrowing, the period commencing on the date of such Borrowing or on the last
day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, (ii) the Maturity
Date; and (iii) the date such Borrowing is prepaid in accordance with Section
2.12 or 2.13; PROVIDED, THAT, if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only,
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day of an Interest Period
to, but excluding, the last day of such Interest Period.
"INTEREST RATE PROTECTION AGREEMENT" shall mean any interest rate
swap, collar, cap, foreign currency exchange agreement or other arrangement
requiring payments contingent upon interest or exchange rates.
"ISSUING BANK" shall mean Bank of America, N.A., in its capacity as
the issuer of Letters of Credit, and its successors in such capacity.
"LENDER" shall mean each financial institution listed on the
signature pages hereof, each assignee which becomes a Lender pursuant to
Section 9.04(b), and their respective successors.
"LETTER OF CREDIT" shall mean any and all letters of credit issued
pursuant to Section 2.22.
"LETTER OF CREDIT AVAILABILITY PERIOD" shall mean the period from
and including the Closing Date to but excluding the earlier of (a) the date
five Business Days prior to the Maturity Date and (b) the termination of the
Commitments of the Lenders in accordance with the terms hereof.
"LETTER OF CREDIT COMMITMENT" shall mean the commitment of the
Issuing Bank to issue Letters of Credit pursuant to Section 2.22 and of each
Lender to participate in each Letter of Credit pursuant to Section 2.22(d).
"LETTER OF CREDIT DISBURSEMENT" shall mean a payment or disbursement
made by the Issuing Bank pursuant to a Letter of Credit.
"LETTER OF CREDIT EXPOSURE" shall mean at any time an amount equal
to the sum of (a) the aggregate undrawn amount of all outstanding Letters of
Credit, plus (b) the aggregate amount of all Letter of Credit Disbursements
not yet reimbursed by the Borrower as provided in Section 2.22. The Letter of
Credit Exposure of any Lender at any time shall mean its Commitment
Percentage of the aggregate Letter of Credit Exposure at such time.
"LETTER OF CREDIT FEE" shall have the meaning assigned to that term
in Section 2.06(b)(i).
"LIBO RATE" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate (rounded upwards, if necessary, to the next
1/100 of 1%) per annum designated
13
as the British Bankers' Association settlement rate, which appears on the
display on page 3750 (under the caption "USD") of the Telerate Services,
Incorporated screen (the "Telerate Screen") (or on such other display as may
replace such page on the Telerate Screen) as of 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest Period, for a period
of time comparable to such Interest Period; PROVIDED, THAT, if no offered
quotations appear on the Telerate Screen or if quotations are not given on
the Telerate Screen for the selected period, then the LIBO Rate shall be the
rate (rounded upwards, if necessary, to the next 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
dollars at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, for a term comparable to such
Interest Period (however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of all
such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%)).
"LIBOR LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"LIEN" shall mean, with respect to any asset, any mortgage, deed of
trust, lien, pledge, easement, restriction, restrictive covenant, lease,
sublease, option, charge, security interest or encumbrance of any kind in
respect of such asset. For purposes hereof, any Consolidated Party shall be
deemed to own subject to a lien any asset which it has acquired or holds
subject to the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset.
"LOAN DOCUMENTS" shall mean this Amended Agreement, the Notes, the
Letters of Credit, the Pledge Agreement, the Guarantee Agreement, the Sponsor
Guarantee Agreements, the Holdings Guarantee Agreement, the Intercompany
Notes, the Collateral Documents, any Interest Rate Protection Agreements
entered into by the Borrower with any Lender of Affiliate thereof as
permitted hereunder, the Subsidiaries Consent and Agreement and any
Supplemental Agreements.
"LOANS" shall mean any or all of the revolving loans made by the
Lenders to the Borrower pursuant to Section 2.02(a). Each Loan shall be a
LIBOR Loan or an ABR Loan.
"MAINTENANCE CAPITAL EXPENDITURES" shall mean, for any period, all
Capital Expenditures incurred during such period for purposes of maintaining,
repairing or replacing obsolete, damaged or worn-out tangible assets in the
ordinary course of business and in a commercially reasonable manner, shown on
a consolidated statement of cash flows for the Borrower and its Consolidated
Subsidiaries during such period (including any Capital Lease Obligations);
PROVIDED HOWEVER, in the event a detailed schedule of all such capital
expenditures shall not be included in the certificate delivered pursuant to
Section 5.04(e), such capital expenditures for such period shall equal the
amount of depreciation reported in the Borrower's Required Financial
Statements in accordance with GAAP.
"MARGIN STOCK" shall have the meaning assigned to that term under
Regulation U.
14
"MATERIAL ADVERSE CHANGE" shall mean a material adverse change in
the business, assets, liabilities, condition (financial or otherwise), or
results of operations of the Consolidated Parties, taken as a whole.
"MATERIAL ADVERSE EFFECT" shall mean (a) a materially adverse effect
on the material existing agreements and relationships, business, condition
(financial or otherwise), or results of operations the Consolidated Parties,
taken as a whole, (b) a material impairment of the ability of the
Consolidated Parties, taken as a whole, to perform their material obligations
under the Loan Documents, or (c) a material impairment of the rights of or
benefits available to the Lenders under the Loan Documents, taken as whole.
In determining whether any individual event would result in a Material
Adverse Effect, notwithstanding that such event does not itself have such
effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then existing events would
result in a Material Adverse Effect.
"MATERIAL CONTRACTS" shall have the meaning assigned to that term in
Section 3.10(a).
"MATURITY DATE" shall mean December 28, 2001.
"MAXIMUM RATE" shall have the meaning assigned to that term in
Section 9.09.
"MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of
ERISA.
"NET CASH PROCEEDS" shall mean, with respect to any Prepayment
Event, an amount equal to (a) the gross cash proceeds (including insurance
proceeds and condemnation awards in the case of any casualty) actually paid
to or actually received from or in respect of such event (including cash
received as proceeds from any noncash consideration received in respect of
any such event), less (b) the sum of (i) any expenses reasonably incurred in
respect of such Prepayment Event up to an aggregate amount of 10% of the
gross proceeds thereof, including, in the case of a sale or issuance of
Capital Stock, underwriters' fees, discounts or commissions and related
transaction fees and expenses in an aggregate amount of no more than 10% of
the gross cash proceeds of any such sale or issuance of Capital Stock, (ii)
in the case of a disposition of assets or properties, amounts required to be
applied to repay Indebtedness (other than Loans) associated with the assets
or properties subject to such Prepayment Event and (iii) in the case of a
disposition of assets or properties, taxes paid or payable by the Borrower
and the Subsidiaries (as determined reasonably and in good faith by a
Financial Officer of the Borrower) in respect of such Prepayment Event.
"NEW LENDING OFFICE" shall have the meaning assigned to that term in
Section 2.20(f).
"NON-CASH CHARGES AND TRANSACTION EXPENSES" shall mean (a) one-time
charges related to transaction costs in connection with the Acquisition taken
prior to December 31, 2000, PROVIDED that add-backs for such charges pursuant
to this clause (a) shall not exceed $1,400,000 and (b) all accounts
receivable write-offs or reserves taken between October 1, 2000 and
15
December 31, 2000, PROVIDED that add-backs for such write-offs or reserves
pursuant to this clause (b) shall not exceed $3,500,000.
"NON-U.S. LENDER" shall have the meaning assigned to that term in
Section 2.20(f).
"NOTE" shall mean a promissory note of the Borrower dated December
18, 1998 evidencing Loans.
"OBLIGATIONS" shall mean (a) the Borrower's obligations in respect
of the due and punctual payment of principal of and interest (including
interest accruing after the filing of a petition initiating any proceeding
referred to in paragraph (h) or (i) of Article VII of this Amended Agreement)
on the Loans and all amounts drawn under the Letters of Credit, when and as
due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (b) all Fees, expenses, indemnities and expense
reimbursement obligations of the Borrower under this Amended Agreement, the
Original Amended and Restated Credit Agreement, the Fee Letter, or any other
Loan Document and (c) all other obligations, monetary or otherwise, of the
Borrower or any of the Subsidiaries under any Loan Document (including any
Interest Rate Protection Agreement entered into by the Borrower after the
Closing Date with any Lender or Affiliate of a Lender as permitted under this
Amended Agreement) to which it is a party, in each case, whether now owing or
hereafter existing.
"OFFICER'S CERTIFICATE" shall mean, as to any corporation, a
certificate executed on its behalf by the Chairman of the Board of Directors
(if an officer) or its President or one of its Vice Presidents and its
Treasurer, or Controller, or one of its Assistant Treasurers or Assistant
Controllers, and, as to any partnership, a certificate executed on behalf of
such partnership by its general partner in a manner which would qualify such
certificate as an Officers' Certificate of such general partner hereunder.
"ORIGINAL AMENDED AND RESTATED CREDIT AGREEMENT" shall mean the
Amended and Restated Credit Agreement dated as of December 18, 1998 among the
Borrower, the Lenders named therein and Bank of America, N.A. (formerly known
as NationsBank, N.A.), as Agent and Issuing Bank, as amended, modified or
supplemented from time to time.
"ORTHOPEDIC ASSET" means an orthopedic surgery center or other
tangible assets (whether real or personal property) related to the
musculoskeletal care business and operated as an independent financial unit,
and if the reference relates to a medical practice, such reference is to the
acquisition of the assets used in the operation of the medical practice that
can lawfully be acquired by Borrower or any Subsidiary or to the acquisition
of an interest in an entity that owns, as of the time of purchase, only those
assets that can be lawfully acquired by the Borrower or any Subsidiary.
"ORTHOPEDIC PRACTICE" means an orthopedic healthcare practice,
orthopedic services organization, or other on-going business related to the
provision of musculoskeletal care. Whenever in this Amended Agreement
"Orthopedic Practice" is used in describing an acquisition by the Borrower or
any Subsidiary, and if the reference relates to a medical practice,
16
such reference is to the acquisition of the assets used in the operation of
the medical practice that can lawfully be acquired by the Borrower or any
Subsidiary or to the acquisition of an interest in an entity that owns, as of
the time of purchase, only those assets that can be lawfully acquired by the
Borrower or any Subsidiary.
"OTHER TAXES" shall have the meaning assigned to that term in
Section 2.20(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor
thereto.
"PERFECTION CERTIFICATE" shall mean a certificate from the Borrower
and the Subsidiaries substantially in the form of Exhibit H hereto.
"PERMITTED ASSET" shall mean any Orthopedic Asset or Orthopedic
Practice that is owned by the Borrower or any Subsidiary at the Effective
Date. All Permitted Assets shall be (i) located in the United States, if a
tangible asset, or (ii) organized under the laws of the United States, any
state thereof or the District of Columbia, if such asset is Capital Stock.
Margin Stock is not a Permitted Asset irrespective of the jurisdiction of the
issuer.
"PERMITTED HOLDERS" shall mean, collectively, the Sponsor and the
Management Investors.
"PERMITTED INDEBTEDNESS" shall mean Indebtedness permitted pursuant
to Section 6.01.
A "PERSON" shall mean any natural person, corporation, business
trust, joint venture, association, company, limited liability company,
partnership, government (or any agency or political subdivision thereof) or
other entity.
"PLAN" shall mean at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which a Consolidated Party or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined
in Section 3(5) of ERISA.
"PLEDGE AGREEMENT" shall mean the Amended and Restated Pledge and
Security Agreement between the Borrower, the Subsidiaries and the Agent in
the form attached hereto as Exhibit B dated as of the date hereof, as amended
from time to time.
"PREPAYMENT EVENT" shall mean (a) any Asset Sale (including, without
limitation, the issuance or sale of any Capital Stock of any Subsidiary), (b)
the issuance of any debt or Disqualified Stock by the Borrower or any
Subsidiary (other than Indebtedness permitted pursuant to Section 6.01), (c)
the issuance of any debt or Disqualified Stock by USPI (other than
Indebtedness of USPI incurred after December 30, 2000 and prior to June 30,
2001 in an aggregate amount of no more than $15,000,000 (X) in the form of
subordinated indebtedness of the Sponsor or Xxxxxx, Xxxxxxx & Xxxxxxxx ("FFT
Partners I, L.P.")with any payments payable only in kind or with respect to
interest only payable in cash at an interest rate reasonably acceptable to
the Lenders (a market rate of interest for comparable debt shall be deemed
reasonably acceptable) which matures at least one calendar year after the
Maturity Date or (Y) in
17
the form of additional senior debt under the Chase Credit Agreement dated as
of June 29, 1999 between Chase Bank of Texas, National Association as
predecessor to The Chase Manhattan Bank as administrative agent and USPI, as
borrower (without regard to the First Amendment thereto) which may be a
revolving or term loan, shall mature at least six calendar months after the
Maturity Date, may be renewed or extended past the Maturity Date, and which
shall be fully guaranteed by Welsh, Carson, Xxxxxxxx & Xxxxx VII, L.P. under
a Guaranty Agreement in the form of the Guaranty Agreement executed by Welsh,
Carson, Xxxxxxxx & Xxxxx, VII, L.P. dated June 18, 1999 and which, in the
cases of subclauses (X) and (Y) shall be Indebtedness permitted under the
Chase Credit Agreement and shall be incurred (and 100% of which is utilized)
solely to fund acquisitions concurrently or within 30 days after the
incurrence of such Indebtedness in an aggregate amount of no more than
$30,000,000) or (d) any Equity Issuance (other than (I) common stock (or
other forms of equity, so long as until six months after the Maturity Date,
such equity (i) allows for non-cash pay dividends only, (ii) is
non-redeemable and (iii) is not convertible to any form of Indebtedness)
issued by USPI to, or any capital contribution from, the Sponsor or Xxxxxx,
Xxxxxxx & Xxxxxxxx ("FFT Partners I, L.P."), 100% of the proceeds of which
shall be used solely to fund acquisitions permitted under the Chase Credit
Agreement in an aggregate amount of no more than $30,000,000 minus the
aggregate amount of Indebtedness incurred under clause (c) or (II) common
stock issued by USPI to employees of USPI for cash in an aggregate amount of
no more than $500,000). The foregoing definition shall not be deemed to imply
that any such action or event is permitted under this Amended Agreement.
"PRIME RATE" shall mean the rate of interest per annum adopted from
time to time by the Agent as the Bank of America Prime Lending Rate as
announced and in effect at its principal office in Charlotte, North Carolina.
Each change in the Prime Rate shall be effective on the date such change is
adopted, without notice to the Borrower. The Prime Rate is a reference rate
used by the Agent in determining interest rates on certain loans and is not
intended to be the lowest rate of interest charged on any extension of credit
to any debtor.
"PROVIDER" means a person (other than USPI or any Affiliate thereof)
that performs (or the holders of such person's Capital Stock perform)
professional medical services respecting a Permitted Asset, which Permitted
Asset is either managed by Borrower or any Subsidiary or the assets of which
are owned by Borrower or any Subsidiary.
"REFERENCE PERIOD" with respect to any date shall mean the period of
four consecutive fiscal quarters of the Borrower immediately preceding such
date or, if such date is the last day of a fiscal quarter, ending on such
date.
"REGISTER" shall have the meaning assigned to that term in Section
9.04(d).
"REGULATION T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
18
"REGULATION X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the PBGC has waived
either the 30-day notice period or the penalty for failure to give notice.
"REQUIRED FINANCIAL STATEMENTS" shall mean, with respect to any
period, the financial statements of the Borrower for such period required
under Section 5.04 hereunder.
"REQUIRED LENDERS" shall mean, at any time, Lenders holding Loans,
and Letter of Credit Exposure, and having Commitments representing in the
aggregate more than 67% (the "Approval Percentage") of the sum at such time
of (a) the aggregate principal amount of the Loans outstanding, (b) the
aggregate amount of Letter of Credit Exposure and (c) the aggregate amount of
unused Commitments; PROVIDED, THAT, at any time there are more than two
Lenders holding Commitments, Loans and Letter of Credit Exposure hereunder,
the Approval Percentage shall be 66%.
"RESPONSIBLE OFFICER" of any person shall mean and include the
president, chief executive officer, chief operating officer, any financial
officer, any vice president, the general counsel or any other senior officer
of such person (or, in the case of a partnership, of a general partner
thereof).
"SECURED PARTIES" shall mean (a) the Lenders and the Issuing Bank,
(b) the Agent in its capacity as such under each Loan Document, (c) the Agent
or any Lender with which the Borrower enters into an Interest Rate Protection
Agreement pursuant to Section 5.09, in its capacity as a party to such
agreement, (d) the beneficiaries of each indemnification obligation
undertaken by any Credit Party under any Loan Document and (e) the successors
and assigns of the foregoing.
"SECURITIES PURCHASE AGREEMENT" shall mean the Securities Purchase
Agreement dated as of October 30, 1996 among the Borrower, Welsh, Carson,
Xxxxxxxx & Xxxxx VII, L.P., and other purchasers named therein and as in
effect on the Closing Date.
"SERVICE AGREEMENT" means any service or management agreement now or
hereafter entered into between a Provider or Providers and the Borrower or
any Subsidiary in connection with the management or operation of any
Permitted Asset.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan.
"SOLVENT" shall have the meaning assigned to that term in Section
3.19(a).
"SPONSOR" shall mean Welsh, Carson, Xxxxxxxx & Xxxxx VII, L.P. and
WCAS Healthcare Partners, L.P.
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"SPONSOR GUARANTEE AGREEMENT" shall mean the Amended and Restated
Guarantee Agreements in the form attached hereto as Exhibit K dated as of the
date hereof by each of the Sponsors in favor of the Agent.
"STATUTORY RESERVES" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board and any other banking authority, domestic or
foreign, to which the Agent or any Lender (including any branch, Affiliate or
other fronting office making or holding a Loan) is subject for Eurocurrency
Liabilities (as defined in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBOR
Loans shall be deemed to constitute Eurocurrency Liabilities and to be
subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets which may be available from time to time to
any Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"SUBSIDIARIES CONSENT AND AGREEMENT" shall mean the Subsidiaries
Consent and Agreement in the form attached hereto as Exhibit L dated as of
the date hereof among the Subsidiaries, the Lenders and the Agent.
The term "SUBSIDIARY" shall mean, with respect to any person
(referred to in this definition as the "parent"), any corporation,
partnership, association or other business entity (a) of which Capital Stock
representing more than 50% of the aggregate ordinary voting power or more
than 50% of the ownership interests is, at the time any determination is
being made, owned, Controlled or held, or (b) which is, at the time any
determination is made, otherwise Controlled, by (i) the parent, (ii) one or
more subsidiaries of the parent or (iii) the parent and one or more
subsidiaries of the parent.
"SUBSIDIARY" shall mean any person incorporated or organized under
the laws of the United States of America, any state thereof or the District
of Columbia which is also a Consolidated Subsidiary of the Borrower, it being
understood and agreed that there are no subsidiaries of the Borrower as of
the Effective Date other than those listed on Schedule 3.08.
"SUPPLEMENTAL AGREEMENT" shall mean an agreement between a
Subsidiary and the Agent in the form attached hereto as Exhibit I, as amended
from time to time.
"TAXES" shall have the meaning assigned to that term in Section
2.20(a).
"TOTAL CAPITALIZATION" shall mean, as of any date for the Borrower
and its Consolidated Subsidiaries, the aggregate amount on such date of (a)
Total Debt as of such date, plus (b) Consolidated Net Worth as of such date.
"TOTAL DEBT" shall mean, as of any date for the Borrower and its
Consolidated Subsidiaries, the aggregate amount of (a) all Loans and Letter
of Credit Exposure outstanding as
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of such date, (b) all Capital Lease Obligations of the Borrower and its
Consolidated Subsidiaries as of such date and (c) all other Indebtedness
(other than Interest Rate Protection Agreements permitted by Section 6.01(d))
of the Borrower and its Consolidated Subsidiaries as of such date, determined
on a consolidated basis in accordance with GAAP, which by its terms or by the
terms of any instrument or agreement relating thereto matures more than one
year from the date of the initial creation thereof (including any current
installment thereof due within one year of the date of determination);
PROVIDED, THAT, Total Debt shall include any Indebtedness which does not
otherwise come within the foregoing definition but which is directly or
indirectly renewable or extendible at the option of the debtor to a date one
year or more (including an option of the debtor under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of one year or more) from the date of the initial creation thereof.
"TOTAL VOTING POWER" with respect to any person on any date shall
mean the total number of votes which may be cast in the election of directors
of such person at any meeting of stockholders of such person if all
securities entitled to vote in the election of directors of such person (on a
fully diluted basis, assuming the exercise, conversion or exchange of all
rights, warrants, options and securities exercisable for, exchangeable for or
convertible into, such voting securities on such date or within 60 days
thereafter) were present and voted at such meeting (other than votes that may
be cast only upon the happening of a contingency).
"TRANSFEREE" shall have the meaning assigned to that term in Section
2.20(a).
"TYPE" shall have the meaning assigned to that term in Section 1.03.
"USPI" shall mean United Surgical Partners International, Inc., a
Delaware corporation.
"USPI AGREEMENT" shall mean an agreement dated as of the date hereof
among USPI, Holdings, the Borrower and the Agent on behalf of the Lenders in
form and substance satisfactory to the Agent and the Lenders, as amended from
time to time.
"USPI PLEDGE AGREEMENT" shall mean that Pledge and Security
Agreement between USPI and the Agent dated the date hereof in the form
attached hereto as Exhibit M, as amended from time to time.
"WHOLLY OWNED SUBSIDIARY" shall mean, at any time, any Subsidiary
all the Capital Stock of which is at such time directly or indirectly owned
by the Borrower.
"YEAR 2000 COMPLIANT" shall have the meaning assigned to such term
in Section 3.26.
Section 1.02. TERMS GENERALLY. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Amended Agreement unless the context shall
otherwise require. Unless otherwise expressly provided
21
herein, all terms of an accounting or financial nature used herein shall be
interpreted in accordance with GAAP; PROVIDED, THAT, for purposes of (a)
making any calculation contemplated by the provisions of Article II and (b)
determining compliance with any covenant set forth in Article VI, such terms
shall be construed in accordance with GAAP as in effect on the date of this
Amended Agreement applied on a basis consistent with the application used in
preparing the audited financial statements of the Borrower referred to in
Section 3.05.
Section 1.03. TYPES OF BORROWINGS. The term "Borrowing" refers to
the portion of the aggregate principal amount of Loans outstanding hereunder
which bears interest of a specific Type and for a specific Interest Period
pursuant to a notice of Borrowing pursuant to Section 2.04. Each Lender's
ratable share of each Borrowing is referred to herein as a separate "Loan".
Borrowings and Loans hereunder are distinguished by "Type". The "Type" of a
Loan refers to whether such Loan is an ABR Loan or a LIBOR Loan.
ARTICLE II
THE CREDITS
Section 2.01. RESTRUCTURING OF LOANS. When this Amended Agreement
becomes effective upon the satisfaction of all conditions precedent contained
in Section 4.01 hereof, without further action by any person, all outstanding
Loans and Letters of Credit under the Original Amended and Restated Credit
Agreement shall become Loans and Letters of Credit, as the case may be
hereunder, and shall be subject hereto, in an aggregate principal amount
equal to the aggregate principal amount of such outstanding Loans. All such
Loans hereunder shall be of the same Type, and shall have the same Interest
Period, as the corresponding Loans outstanding under the Original Amended and
Restated Credit Agreement. All such Letters of Credit hereunder shall be of
the same amount and for the same duration as the corresponding Letters of
Credit outstanding under the Original Amended and Restated Credit Agreement.
Section 2.02. COMMITMENT TO MAKE LOANS. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set
forth, each Lender agrees, severally and not jointly, to make Loans to the
Borrower, at any time and from time to time during the Availability Period,
in an aggregate principal amount at any one time outstanding not to exceed an
amount equal to the excess, if any, of (i) such Lender's Commitment set forth
opposite its name on Schedule 2.02 (as the same may be reduced from time to
time pursuant to Section 2.10 or changed from time to time pursuant to an
assignment in accordance with Section 9.04) over (ii) the sum of (A) such
Lender's Commitment Percentage of the aggregate outstanding and unpaid Loans
at such time, and (B) such Lender's Letter of Credit Exposure at such time.
It is understood and agreed that the total amount of outstanding Loans plus
the total aggregate Letter of Credit Exposure at any time shall not exceed,
at any time, the aggregate Commitments of all Lenders then in effect at such
time.
(b) The Borrower may borrow, pay or prepay and reborrow
Loans during the Availability Period, within the limits set forth in Section
2.02(a) and upon the other terms and subject to the other conditions and
limitations set forth herein.
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Section 2.03. LOANS. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments based on their Commitment Percentage; PROVIDED,
THAT, the failure of any Lender to make any Loan shall not in itself relieve
any other Lender of its obligation to lend hereunder (it being understood,
however, that no Lender shall be responsible for the failure of any other
Lender to make any Loan required to be made by such other Lender). The Loans
comprising any Borrowing shall be in an aggregate principal amount which is
(i) an integral multiple of $100,000 and not less than $500,000 in the case
of LIBOR Loans and (ii) an integral multiple of $100,000 in the case of ABR
Loans.
(b) A particular Borrowing shall consist solely of ABR
Loans or LIBOR Loans as the Borrower may request pursuant to Section 2.04;
PROVIDED, THAT, if an Event of Default or Default shall have occurred and be
continuing (i) the Borrower shall not be entitled to request any LIBOR Loans
unless approved by the Agent and the Required Lenders and (ii) no Loans of
any Type shall be made unless such Event of Default or Default shall have
been waived in accordance with Section 9.08(b). Each Lender may at its option
fulfill its Commitment with respect to any LIBOR Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Loan; PROVIDED,
THAT, any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Amended
Agreement and the applicable Note. Borrowings of more than one Type and LIBOR
Loans bearing interest for more than one specific Interest Period may be
outstanding at the same time; PROVIDED, THAT, the Borrower shall not be
entitled to request any Borrowing or any continuation or conversion thereof
which, if made, would result in an aggregate of more than six separate LIBOR
Loans of any Lender being outstanding hereunder at any one time. For purposes
of the foregoing, Loans having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate Loans.
(c) Subject to Section 2.03(g) and Section 2.17, each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to the Agent in
Charlotte, North Carolina, not later than 1:00 p.m., Charlotte time, and the
Agent shall by 3:00 p.m., Charlotte time, credit or wire transfer the amounts
so received to an account in the name of the Borrower maintained with the
Agent or, if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the respective Lenders. If any Lender fails to make such payment,
the Agent shall be entitled to recover such corresponding amount on demand
from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent promptly shall notify
Borrower, and Borrower shall pay such corresponding amount to the Agent. The
Agent also shall be entitled to recover from such Lender interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to
the daily Federal Funds Rate. Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its Commitment or to prejudice any
rights which the Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
23
(d) If the Agent has not received from the Borrower the
payment required by Section 2.22(g) by 12:30 p.m., Charlotte time, one
Business Day after receipt by the Borrower of notice from the Issuing Bank
that payment of a draft presented under any Letter of Credit has been or will
be made, as provided in Section 2.22(g), the Agent will promptly notify the
Issuing Bank and each Lender of the Letter of Credit Disbursement and, in the
case of each Lender, its pro rata portion of such Letter of Credit
Disbursement. Not later than 10:00 a.m., Charlotte time, on the next Business
Day, each Lender shall make available its pro rata share (based on such
Lender's Commitment Percentage) of such Letter of Credit Disbursement, in
Federal or other funds immediately available in Charlotte, North Carolina, to
the Agent at its address set forth in Section 9.01, and the Agent will
promptly make such funds available to the Issuing Bank. The Agent will
promptly remit to each Lender that shall have made such funds available its
pro rata portion (based on such Lender's Commitment Percentage) of any
amounts subsequently received by the Agent from the Borrower in respect of
such Letter of Credit Disbursement.
(e) Unless the Agent shall have received notice from a
Lender prior to the date of any Borrowing, or prior to the time of any
required payment by any Lender in respect of a Letter of Credit Disbursement,
that such Lender will not make available to the Agent such Lender's portion
of such Borrowing or payment, the Agent may assume that such Lender has made
such portion available to the Agent on the date of such Borrowing or payment
in accordance with Section 2.03(a), and the Agent may, in reliance upon such
assumption, make available to the Borrower or the Issuing Bank, as the case
may be, on such date a corresponding amount. If and to the extent that such
Lender shall not have made such portion available to the Agent, such Lender
and the Borrower severally agree 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 the Borrower or the Issuing Bank
(or, if the Agent and the Issuing Bank are the same person, from the date of
such payment in respect of a Letter of Credit Disbursement), as applicable,
until the date such amount is repaid to the Agent at, (i) in the case of the
Borrower, the interest rate applicable thereto pursuant to Section 2.07 or
2.22(g), as applicable, and (ii) in the case of such Lender, the Federal
Funds Effective Rate. If such Lender shall repay to the Agent such
corresponding amount in respect of a Borrowing, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Amended
Agreement.
(f) Notwithstanding any other provision of this Amended
Agreement, the Borrower shall not be entitled to request any Eurodollar
Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date. Any Borrowing which cannot be refinanced as a
Eurodollar Borrowing by reason of the preceding sentence shall be
automatically converted at the end of the Interest Period in effect for such
Borrowing into an ABR Borrowing.
(g) The Borrower may refinance all or any part of any
Borrowing with a Borrowing of the same or a different Type, upon the terms
and subject to the conditions and limitations set forth in this Amended
Agreement. Any Borrowing or part thereof so refinanced shall be deemed for
all purposes to be simultaneously repaid or prepaid in accordance with
Section 2.05 or 2.13, as applicable, with the proceeds of a new Borrowing and
the proceeds of
24
such new Borrowing (to the extent they do not exceed the principal amount of
the Borrowing being refinanced) shall not be paid by the Lenders to the Agent
or by the Agent to the Borrower pursuant to Section 2.03(c).
Section 2.04. NOTICE OF BORROWINGS. In order to request a Borrowing,
the Borrower shall give the Agent written or telecopy notice (or telephone
notice promptly confirmed in writing or by telecopy) (a) in the case of a
Eurodollar Borrowing, not later than 10:00 a.m., Charlotte time, three
Business Days before a proposed Borrowing and (b) in the case of an ABR
Borrowing, not later than 11:00 a.m., Charlotte time, on the Business Day of
a proposed Borrowing. Any such notice of Borrowing shall be irrevocable,
shall be substantially in the form of Exhibit J hereto, and shall in each
case refer to this Amended Agreement and specify (i) whether the Borrowing
then being requested is to be a Eurodollar Borrowing or an ABR Borrowing;
(ii) the date of such Borrowing (which shall be a Business Day) and the
amount thereof; and (iii) if such Borrowing is to be a Eurodollar Borrowing,
the Interest Period with respect thereto. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall
be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. If the Borrower
shall not have given notice in accordance with this Section 2.04 of its
election to refinance a Borrowing prior to the end of the Interest Period in
effect for such Borrowing, then the Borrower shall (unless such Borrowing is
repaid at the end of such Interest Period) be deemed to have given notice of
an election to refinance such Borrowing with an ABR Borrowing. The Agent
shall promptly advise the applicable Lenders of any notice given pursuant to
this Section 2.04 and of each Lender's portion of the requested Borrowing,
which, in the case of a Eurodollar Borrowing, the Agent shall use reasonable
efforts to give the Lenders at least two days prior notice thereof.
Section 2.05. NOTES; REPAYMENT OF LOANS. The Loans made by each
Lender shall be evidenced by a Note, which was duly executed and delivered on
behalf of the Borrower on December 18, 1998 and was dated December 18, 1998,
payable to the order of such Lender in a principal amount equal to such
Lender's Commitment. The outstanding principal balance of each Loan, as
evidenced by each applicable Note, shall be payable on the last day of the
Interest Period applicable to such Loan and on the Maturity Date, and shall
bear interest from the date of the first Borrowing hereunder on the
outstanding principal balance thereof as set forth in Section 2.07. Each
Lender shall, and is hereby authorized by the Borrower to, endorse on the
schedule attached to each Note delivered to such Lender (or on a continuation
of such schedule attached to such Note and made a part thereof), or otherwise
to record in such Lender's internal records, an appropriate notation
evidencing the date and amount of each applicable Loan from such Lender, each
payment and prepayment of principal of any such Loan, each payment of
interest on any such Loan and the other information provided for on such
schedule; PROVIDED, THAT, the failure of any Lender to make such a notation
or any error therein shall not affect the obligation of the Borrower to repay
the Loans made by such Lender in accordance with the terms of this Amended
Agreement and the applicable Note.
Section 2.06. FEES. (a) The Borrower shall pay to the Agent for the
account of each Lender, on the last day of March, June, September and
December in each year and on the
25
date on which the Commitment of such Lender shall expire or be terminated as
provided herein, a commitment fee (a "COMMITMENT FEE") equal to the
Applicable Percentage for Commitment Fees, in effect from time to time for
the preceding fiscal quarter (or shorter period commencing with the Effective
Date or ending with the date on which the Commitment of such Lender shall be
terminated, as the case may be) multiplied by the average daily unused amount
of the Commitment of such Lender for such quarter (or such shorter period, as
the case may be). All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. The Commitment Fees due
to each Lender shall commence to accrue on the Effective Date and cease to
accrue on the date on which the Commitment of such Lender shall be terminated
as provided herein.
(b) The Borrower shall pay to the Agent (i) for the account
of each Lender, on the last day of March, June, September and December of
each year and on the date on which the Commitment of such Lender shall expire
or be terminated as provided herein, a letter of credit fee (a "LETTER OF
CREDIT FEE") equal to (A) such Lender's Commitment Percentage of the average
daily aggregate Letter of Credit Exposure (excluding the portion thereof
attributable to unreimbursed Letter of Credit Disbursements) during the
preceding fiscal quarter (or shorter period commencing with the Closing Date
and ending with the date on which all Letters of Credit have been canceled or
have expired and the Commitments of all Lenders shall have been terminated)
multiplied by (B) the Applicable Percentage for Letter of Credit Fees in
effect during such period, and (ii) for the account of the Issuing Bank, on
the last day of March, June, September and December of each year, a fronting
fee (a "FRONTING FEE") of 0.125% per annum on the average daily aggregate
Letter of Credit Exposure (excluding the portion thereof attributable to
unreimbursed Letter of Credit Disbursements) during the preceding quarter (or
shorter period commencing with the date hereof or ending with the Maturity
Date) and, with respect to each Letter of Credit, any other customary fees of
the Issuing Bank agreed upon by the Borrower and Issuing Bank in connection
with the issuance, amendment or transfer of any Letter of Credit or any
Letter of Credit Disbursement. All Letter of Credit Fees and Fronting Fees
shall be computed on the basis of the actual number of days elapsed in a year
of 360 days.
(c) [Intentionally Omitted].
(d) The Borrower agrees to pay to the Agent, for its own
account, the fees set forth in the Fee Letter dated January 24, 2001 among
the Agent and the Borrower among such parties (the "FEE LETTER") in the
amounts and on the dates provided in the Fee Letter. Such fees shall be in
addition to reimbursement of the Agent's reasonable out-of-pocket expenses.
(e) All Fees shall be paid on the dates due, in immediately
available funds. Once paid, none of the Fees shall be refundable under any
circumstances (absent manifest error).
Section 2.07. INTEREST ON LOANS. (a) Subject to the provisions of
Section 2.08, each Loan comprising an ABR Borrowing shall bear interest for
each day from the date such Loan is made until it becomes due (computed on
the basis of the actual number of days elapsed over a year of 365 or 366
days), at a rate per annum equal to the Alternate Base Rate, plus the
Applicable Percentage for ABR Loans in effect from time to time for such
Loan. So long as any
26
ABR Borrowing is outstanding, the Agent shall promptly notify the Borrower of
any change in the Alternate Base Rate.
(b) Subject to the provisions of Section 2.08, each Loan
comprising a Eurodollar Borrowing shall bear interest for each day from the
date such Loan is made until it becomes due (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum
equal to the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing, plus the Applicable Percentage for LIBOR Loans in effect from time
to time for such Loan.
(c) Any change in the Applicable Percentage for ABR Loans
and Applicable Percentage for LIBOR Loans required hereunder shall become
effective five days after the date the Borrower delivers its financial
statements required by Section 5.04(b) or (c), as the case may be, and the
certificate required by Section 5.04(d); PROVIDED, THAT, if the Borrower
fails to deliver such financial statements and certificate on or before the
date such statements and certificate are required to be delivered pursuant to
Section 5.04(b) or (c), as the case may be, and Section 5.04(d), the
Applicable Percentage for ABR Loans and Applicable Percentage for LIBOR Loans
for the period beginning one (1) Business Day after such required date until
the date such statements and certificate are actually delivered shall be
calculated as if a Pricing Level V were in effect, and after the date such
statements and certificate are actually delivered the Applicable Percentage
for ABR Loans and Applicable Percentage for LIBOR Loans shall be determined
as otherwise provided for herein; and PROVIDED, FURTHER, that any calculation
pursuant to the preceding proviso shall not excuse or limit the remedies
available for any Default or Event of Default as a result of the failure to
deliver such statements.
(d) Interest on each Loan shall be payable on the Interest
Payment Dates applicable to such Loan, except as otherwise provided in this
Amended Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate
for each Interest Period or day within an Interest Period, as the case may
be, shall be determined by the Agent in good faith, and such determination
shall be conclusive absent manifest error.
Section 2.08. DEFAULT INTEREST. If and for so long as any Event of
Default shall have occurred and be continuing, interest shall accrue, to the
extent permitted by applicable law, on the outstanding amount of all
Obligations during the period from (and including) the date of such Event of
Default to (but not including) the date of actual payment (after as well as
before judgment) at the rate per annum (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be,
when determined by reference to the Prime Rate and over a year of 360 days at
all other times) applicable to such Loan during such period pursuant to
Section 2.07, plus 2.00%. The Borrower shall pay all such accrued but unpaid
interest from time to time upon demand.
Section 2.09. ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Agent shall have reasonably
determined that dollar deposits in the principal amounts of the Loans
comprising such Borrowing are not generally available in the applicable
27
interbank market, or that the rates at which such dollar deposits are being
offered will not adequately and fairly reflect the cost to the Lenders of
making or maintaining LIBOR Loans during such Interest Period, or that
reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the
Agent shall, as soon as practicable thereafter, give written or telecopy
notice of such determination to the Borrower and the Lenders. In the event of
any such determination, any request by the Borrower for a Eurodollar
Borrowing pursuant to Section 2.04 or 2.11 shall, until the Agent shall have
advised the Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist, be deemed to be a request for an ABR Borrowing.
Each determination by the Agent hereunder shall be conclusive absent manifest
error.
Section 2.10. TERMINATION AND REDUCTION OF COMMITMENTS. (a) The
Commitments shall be automatically terminated at 5:00 p.m., Charlotte, North
Carolina time, on the Maturity Date.
(b) Upon at least five Business Days' prior irrevocable
written or telecopy notice to the Agent, the Borrower may at any time in
whole permanently terminate, or in part permanently reduce, the Commitments;
PROVIDED, THAT, (i) each partial reduction of the Commitments shall be in a
minimum aggregate principal amount which is an integral multiple of $500,000
and not less than $1,000,000, and (ii) the aggregate of the Commitments shall
not be reduced to an amount that is less than the aggregate Letter of Credit
Exposure at that time.
(c) On the date of each mandatory payment or prepayment of
Loans (or provision of cash collateral in respect of Letters of Credit) in
accordance with Sections 2.12(b) or (c), the Commitments shall be permanently
reduced by an aggregate amount equal to the amount of such required payment
of prepayment (or provision of cash collateral).
(d) Each reduction in the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments. The
Borrower shall pay to the Agent for the account of the Lenders, on the date
of each termination or reduction of the Commitments, the Commitment Fees on
the amount of the Commitments so terminated or reduced accrued to the date of
such termination or reduction.
Section 2.11. CONVERSION AND CONTINUATION OPTIONS. The Borrower
shall have the right at any time upon prior irrevocable notice to the Agent
(a) not later than 11:00 a.m., Charlotte, North Carolina time, on the day of
conversion, to convert any Eurodollar Borrowing into an ABR Borrowing, (b)
not later than 10:00 a.m., Charlotte, North Carolina time, three Business
Days prior to conversion or continuation, to convert any ABR Borrowing into a
Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar
Borrowing for an additional Interest Period and (c) not later than 10:00
a.m., Charlotte, North Carolina time, three Business Days prior to
conversion, to convert the Interest Period with respect to any Eurodollar
Borrowing to another permissible Interest Period, subject in each case to the
following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal
amounts of the Loans comprising the converted or continued
Borrowing;
28
(ii) the aggregate principal amount of such Borrowing
converted into or continued as (A) a Eurodollar Borrowing,
shall be an integral multiple of $100,000 and not less than
$500,000 or (B) an ABR Borrowing, shall be the lesser
of (I) the remaining outstanding principal amount of such
Borrowing and (II) an integral multiple of $100,000;
(iii) each conversion or continuation shall be effected by
each Lender by applying the proceeds of the new Loan of such
Lender resulting from such conversion or continuation to the
Loan (or portion thereof) of such Lender being converted or
continued;
(iv) accrued interest on a LIBOR Loan (or portion thereof)
being converted or continued shall be paid by the Borrower at
the time of conversion;
(v) if any Eurodollar Borrowing is converted or continued at a
time other than the end of the Interest Period applicable
thereto, the Borrower shall pay, upon demand, any amounts due
to the Lenders pursuant to Section 2.16;
(vi) any portion of a Borrowing maturing or required
to be repaid in less than one month may not be converted into
or continued as a Eurodollar Borrowing; and
(vii)any portion of a Eurodollar Borrowing which
cannot be converted into or continued as a Eurodollar
Borrowing by reason of clause (vi) above shall be
automatically converted at the end of the Interest Period in
effect for such Borrowing into an ABR Borrowing.
Each notice of conversion or continuation pursuant to this Section
2.11 shall be irrevocable, shall be substantially in the form of Exhibit J
hereto and shall refer to this Amended Agreement and specify (I) the
principal amount, the Type and, in the case of a Eurodollar Borrowing, the
Interest Period of the Borrowing that the Borrower requests be converted or
continued, (II) whether such Borrowing is to be converted to or continued as
a Eurodollar Borrowing or an ABR Borrowing, (III) if such notice requests a
conversion, the date of such conversion (which shall be a Business Day) and
(IV) if such Borrowing is to be converted to or continued as a Eurodollar
Borrowing, the Interest Period with respect thereto. If no Interest Period is
specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have
selected an Interest Period of one month's duration. The Agent shall advise
the other Lenders of any notice given pursuant to this Section 2.11 and of
each Lender's portion of any converted or continued Borrowing. If the
Borrower shall not have given notice in accordance with this Section 2.11 to
continue any Borrowing into a subsequent Interest Period (and shall not
otherwise have given notice in accordance with this Section 2.11 to convert
such Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into a new Interest Period as an ABR Borrowing.
29
Section 2.12. MANDATORY REPAYMENTS AND PREPAYMENTS. (a) On the
Maturity Date, all Borrowings shall be due and payable to the extent not
previously paid and all Letter of Credit Exposure (if any) shall be
terminated, cash collateralized or supported by one or more letters of credit
from acceptable financial institutions in a manner satisfactory to the Agent.
(b) In the event and on each occasion that a Prepayment
Event occurs, the Borrower shall give to the Agent written or telecopy notice
of such event, the amount of Net Cash Proceeds expected to be received
therefrom and the expected schedule for receiving such proceeds. On the date
of receipt by the Borrower or any Subsidiary of Net Cash Proceeds from such
Prepayment Event, the Borrower shall prepay Loans in an aggregate principal
amount equal to 100% of such Net Cash Proceeds received; PROVIDED, THAT in
the case of an Asset Sale, no such prepayment shall be required unless and
until the aggregate amount of Net Cash Proceeds received from such Asset Sale
and all other Asset Sales that have occurred since the Effective Date or the
date of the last prepayment made on account of one or more Asset Sales, as
the case may be, exceeds $500,000; PROVIDED, FURTHER in the case of any
issuance of Capital Stock by USPI or the issuance of any debt or Disqualified
Stock by USPI, the Borrower shall prepay 87.5% of the Net Cash Proceeds
therefrom.
(c) In the event and on each occasion that the sum of (i)
the aggregate outstanding principal amount of Loans and (ii) the aggregate
Letter of Credit Exposure exceeds the aggregate amount of the available
Commitments at such time (as determined pursuant to Section 2.02), the
Borrower shall immediately prepay Loans and/or reduce Letter of Credit
Exposure as contemplated by Section 2.12(d) such that the aggregate amount of
(i) the aggregate outstanding principal amount of Loans and (ii) the
aggregate Letter of Credit Exposure is equal to or less than such aggregate
available Commitments.
(d) All mandatory prepayments under Section 2.12(b) or (c)
shall be applied (to the extent applicable) (I) FIRST, to reduce the
outstanding principal amount of the Loans and (ii) SECOND, to the extent that
the remaining amount of such prepayment is greater than the aggregate
principal amount of outstanding Loans, to provide cash collateral in respect
of the Letters of Credit (and thereupon such cash shall be deemed to reduce
the Letter of Credit Exposure for purposes of this Section 2.12(d)). Subject
to the foregoing provisions, any mandatory prepayment of Loans pursuant to
Section 2.12(b) or (c) shall be applied to prepay all ABR Loans before any
LIBOR Loans are prepaid.
(e) Each payment of Borrowings pursuant to this Section
2.12 (except partial prepayments of ABR Borrowings) shall be accompanied by
accrued interest on the principal amount paid to but excluding the date of
payment. All payments under this Section 2.12 shall be subject to Section
2.16, but otherwise shall be without premium or penalty.
Section 2.13. OPTIONAL PREPAYMENTS. (a) The Borrower shall have the
right at any time and from time to time to prepay any Eurodollar Borrowing,
in whole or in part, upon giving prior written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the
Agent at least three Business Days prior to the date of prepayment; PROVIDED,
THAT, each partial prepayment of LIBOR Loans shall be in an amount which is
an
30
integral multiple of $500,000 and not less than $1,000,000 and a partial
prepayment of a Eurodollar Borrowing under this Section 2.13(a) shall not be
made that would result in the remaining aggregate outstanding principal
amount thereof being less than $500,000. Each notice of prepayment shall
specify the prepayment date, the Interest Period of the Eurodollar Borrowing
to be prepaid and the principal amount thereof to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Eurodollar Borrowing
by the amount stated therein on the date stated therein.
(b) All prepayments under this Section 2.13 shall be
subject to Section 2.16 but otherwise shall be without premium or penalty.
All prepayments under this Section 2.13 shall be accompanied by accrued
interest on the principal amount being prepaid to, but excluding, the date of
payment.
Section 2.14. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES. (a)
Notwithstanding any other provision of this Amended Agreement, if after the
date of this Amended Agreement any change in applicable law or regulation or
in the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof (whether or not
having the force of law) shall change the basis of taxation of payments to
any Lender or the Issuing Bank of the principal of or interest on any LIBOR
Loan made by such Lender or any Fees or other amounts payable hereunder
(other than changes in respect of taxes imposed on the overall net income of
such Lender or the Issuing Bank by the jurisdiction in which such Lender or
the Issuing Bank has its principal office or by any political subdivision or
taxing authority therein), or shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of or credit extended by any Lender or the Issuing
Bank (except any such reserve requirement that is reflected in the Adjusted
LIBO Rate) or shall impose on such Lender or the Issuing Bank or the
applicable interbank market any other condition affecting this Amended
Agreement or LIBOR Loans made by such Lender or any Letter of Credit or
participation therein, and the result of any of the foregoing shall be to
increase the cost to such Lender or the Issuing Bank of making or maintaining
any LIBOR Loan or increase the cost to any Lender of issuing or maintaining
any Letter of Credit or purchasing or maintaining a participation therein or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender or the Issuing Bank to be material, then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be,
upon demand such additional amount or amounts as will compensate such Lender
or the Issuing Bank, as the case may be, for such additional costs incurred
or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined
that the adoption after the date hereof of any law, rule, regulation,
agreement or guideline regarding capital adequacy, or any change after the
date hereof in any such law, rule, regulation, agreement or guideline or in
the interpretation or administration thereof by any Governmental Authority
(including the National Association of Insurance Commissioners) charged with
the interpretation or administration thereof, or compliance by any Lender (or
any lending office of such Lender) or the Issuing Bank or any Lender's or the
Issuing Bank's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of any
31
Governmental Authority has or would have the effect of reducing the rate of
return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Amended Agreement or the Loans made or participations in Letters of
Credit purchased by such Lender pursuant hereto or the Letters of Credit
issued by the Issuing Bank pursuant hereto to a level below that which such
Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company could have achieved but for such applicability, adoption, change or
compliance (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of such Lender's or the Issuing Bank's holding
company with respect to capital adequacy) by an amount deemed by such Lender
or the Issuing Bank to be material, then, from time to time the Borrower
shall pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Bank or such Lender's or the Issuing Bank's holding company for any such
reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting
forth the circumstances requiring the payment of compensation, the
calculations with respect thereto, and the amount or amounts necessary to
compensate such Lender or the Issuing Bank or its holding company, as
applicable, as specified in paragraph (a) or (b) above shall be delivered to
the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender or the Issuing Bank the amount shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or the
Issuing Bank to demand compensation for any increased costs or reduction in
amounts received or receivable or reduction in return on capital shall not
constitute a waiver of such Lender's or the Issuing Bank's right to demand
such compensation. The protection of this Section 2.14 shall be available to
each Lender and the Issuing Bank regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, agreement,
guideline or other change or condition that shall have occurred or been
imposed.
Section 2.15. CHANGE IN LEGALITY. (a) Notwithstanding any other
provision of this Amended Agreement, if after the date hereof, any change in
any law or regulation or in the interpretation thereof by any Governmental
Authority charged with the administration or interpretation thereof shall
make it unlawful for any Lender to make or maintain any LIBOR Loan or to give
effect to its obligations as contemplated hereby with respect to any LIBOR
Loan, then, by written notice to the Borrower and to the Agent, such Lender
may:
(i) declare that LIBOR Loans will not thereafter
(for the duration of such unlawfulness) be made
by such Lender hereunder (or be continued for
additional Interest Periods and ABR Loans will not
thereafter (for such duration) be converted into
LIBOR Loans), whereupon any request for a Eurodollar
Borrowing (or to convert an ABR Borrowing to a
Eurodollar Borrowing or to continue a Eurodollar
Borrowing for an additional Interest Period) shall,
as to such Lender only, be deemed a request for an
ABR Loan (or a request to continue an ABR Loan as
such for an additional Interest Period or to convert
a LIBOR
32
Loan into an ABR Loan, as the case may be), unless such
declaration shall be subsequently withdrawn; and
(ii) require that all outstanding LIBOR Loans made
by it be converted to ABR Loans, in which event all such
LIBOR Loans shall be automatically converted
to ABR Loans as of the effective date of such notice
as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above,
all payments and prepayments of principal that would otherwise have been
applied to repay the LIBOR Loans that would have been made by such Lender or
the converted LIBOR Loans of such Lender shall instead be applied to repay
the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such LIBOR Loans.
(b) For purposes of this Section 2.15, a notice to the
Borrower by any Lender shall be effective as to each LIBOR Loan made by such
Lender, if lawful, on the last day of the Interest Period currently
applicable to such LIBOR Loan and in all other cases such notice shall be
effective on the date of receipt by the Borrower.
Section 2.16. INDEMNITY. The Borrower shall indemnify each Lender
against any loss, expense, liability, claim, or damages (including, without
limitation, reasonable attorneys' fees and settlement costs) that such Lender
may sustain or incur as a consequence of (a) any event, other than a default
by the Agent or such Lender in the performance of its obligations hereunder,
which results in (i) such Lender receiving or being deemed to receive any
amount on account of the principal of any LIBOR Loan prior to the end of the
Interest Period in effect therefor, (ii) the conversion of any LIBOR Loan to
a Loan of another Type, or the conversion of the Interest Period with respect
to any LIBOR Loan, in each case other than on the last day of the Interest
Period in effect therefor, (iii) any LIBOR Loan to be made by such Lender
(including any LIBOR Loan to be made pursuant to a conversion or continuation
under Section 2.11) not being made after notice of such Loan shall have been
given by the Borrower hereunder (any of the events referred to in this clause
(a) being called a "BREAKAGE EVENT"), (b) any default by the Borrower in the
making of any payment or prepayment required to be made hereunder and (c) the
Borrower's use of Loan proceeds. In the case of any Breakage Event, such loss
shall include an amount equal to the excess, as reasonably determined by such
Lender, of (y) its cost of obtaining funds for the LIBOR Loan that is the
subject of such Breakage Event for the period from the date of such Breakage
Event to the last day of the Interest Period in effect (or that would have
been in effect) for such Loan over (z) the amount of interest likely to be
realized by such Lender in redeploying the funds released or not utilized by
reason of such Breakage Event for such period. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.16 shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay each Lender the
amount shown as due on any such certificate delivered by it within 10 days
after its receipt of the same. This indemnification will survive and continue
for the benefit of the Lenders at all times after the Borrowers acceptance of
the Lender's commitments for the Facility.
33
Section 2.17. PRO RATA TREATMENT. Except as required under Section
2.15, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the
Commitment Fees, each reduction of the Commitments and each refinancing of
any Borrowing with, conversion of any Borrowing to, or continuation of any
Borrowing as, a Borrowing of any Type shall be allocated pro rata among the
Lenders in accordance with their respective applicable Commitments (or, if
such Commitments shall have expired or been terminated, in accordance with
the sum of (a) the respective principal amounts of their applicable
outstanding Loans and (b) the respective amounts of their Letter of Credit
Exposure).
Section 2.18. SHARING OF SETOFFS. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loan or Loans as a result of which the unpaid principal
portion of its Loans shall be proportionately less than the unpaid principal
portion of such Loans of any other Lender, it shall be deemed simultaneously
to have purchased from such other Lender at face value, and shall promptly
pay to such other Lender the purchase price for, a participation in such
Loans of such other Lender, so that the aggregate unpaid principal amount of
the Loans and participations in Loans held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of all Loans then
outstanding as the principal amount of its Loans prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal
amount of such Loans outstanding prior to such exercise of banker's lien,
setoff or counterclaim or other event; PROVIDED, THAT, if any such purchase
or purchases or adjustments shall be made pursuant to this Section 2.18 and
the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. For
purposes of this Section 2.18, the Loans of any Lender shall include such
Lender's Letter of Credit Exposure. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in
a Loan deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys
owing by the Borrower to such Lender by reason thereof as fully as if such
Lender had made a Loan directly to the Borrower in the amount of such
interest.
Section 2.19. PAYMENTS. (a) Unless expressly provided otherwise
herein, the Borrower shall make each payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder or under
any other Loan Document without setoff, defense or counterclaim not later
than 10:00 a.m., Charlotte, North Carolina time, on the date when due in
dollars to the Agent at its offices in Charlotte, North Carolina, in
immediately available funds. Any such payment received after such time on any
date shall be deemed made on the next Business Day.
(b) Whenever any payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder or under
any other Loan Document shall
34
become due, or otherwise would occur, on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
(c) If the Borrower fails to make such payment, each Lender
shall forthwith on demand repay to the Agent the amount of such assumed
payment made available to such Lender, together with interest thereon in
respect of each day from and including the date such amount was made
available by the Agent to such Lender to the date such amount is repaid to
the Agent at the Federal Funds Rate.
Section 2.20. TAXES. (a) Any and all payments by or on behalf of the
Borrower or any Subsidiary hereunder and under any other Loan Document shall
be made, in accordance with Section 2.19, free and clear of and without
deduction for any and all current or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, EXCLUDING (i) income taxes or branch profit taxes imposed on the net
income of the Agent, any Lender or the Issuing Bank (or any transferee or
assignee thereof, including a participation holder (any such entity a
"TRANSFEREE")) and (ii) franchise taxes imposed on the net income of the
Agent, any Lender or the Issuing Bank (or Transferee), in each case by the
jurisdiction under the laws of which the Agent, such Lender or the Issuing
Bank (or Transferee) is organized or any political subdivision thereof or the
jurisdiction in which such Lender or Transferee has its applicable lending
office (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities, collectively or individually, being called
"TAXES" and all such excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being called "EXCLUDED TAXES"). Subject to the
provisions of Section 2.20(f) if the Borrower or any Subsidiary shall be
required to deduct any Taxes from or in respect of any sum payable hereunder
or under any other Loan Document to any Lender or the Issuing Bank (or any
Transferee) or the Agent, (A) the sum payable shall be increased by the
amount (an "ADDITIONAL AMOUNT") necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.20 but excluding Excluded Taxes) such Lender or the Issuing
Bank (or Transferee) or Agent, as the case may be, shall receive an amount
equal to the sum it would have received had no such deductions been made, (B)
the Borrower or such Subsidiary shall make such deductions and (C) the
Borrower or such Subsidiary shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay to the relevant
Governmental Authority in accordance with applicable law, any current or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies (including mortgage recording taxes and similar
fees) that arise from any payment made hereunder or under any other Loan
Document or from the execution, delivery or registration of, or otherwise
with respect to, this Amended Agreement or any other Loan Document ("OTHER
TAXES").
(c) The Borrower will indemnify each Lender (or
Transferee), the Agent and the Issuing Bank (or Transferee) for the full
amount of Taxes and Other Taxes paid by such Lender (or Transferee) or Agent
or the Issuing Bank, as the case may be, and any liability (excluding
Excluded Taxes, but including penalties, interest and expenses (including
reasonable
35
attorneys' fees and expenses)) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted
by the relevant Governmental Authority. A certificate as to the amount of
such payment or liability and the method of computation thereof prepared by
the Agent, a Lender or the Issuing Bank (or Transferee) or the Agent on its
behalf, absent manifest error, shall be final, conclusive and binding for all
purposes. Such indemnification shall be made within 30 days after the date
the Agent, any Lender or the Issuing Bank (or Transferee), as the case may
be, makes written demand therefor and provides the Borrower with the
certificate described above.
(d) If any Lender (or Transferee) or Agent shall become
aware that it is entitled to claim a refund in respect of Taxes or Other
Taxes as to which it has been indemnified by the Borrower, or with respect to
which the Borrower has paid additional amounts, pursuant to this Section
2.20, it shall promptly notify the Borrower of the availability of such
refund claim and shall, within 30 days after receipt of a request by the
Borrower, make a claim to such Governmental Authority for such refund at the
Borrower's expense. If any Lender (or Transferee) or Agent receives a refund
(including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower, or with respect to which the Borrower has paid
additional amounts, pursuant to this Section 2.20, it shall within 30 days
from the date of such receipt, so long as no Event of Default has occurred
and is continuing, pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section 2.20 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of such Lender
(or Transferee) or Agent and without interest (other than interest paid by
the relevant Governmental Authority with respect to such refund); PROVIDED,
HOWEVER, that the Borrower, upon the request of such Lender (or Transferee)
or Agent, agrees to repay the amount paid over to the Borrower (plus
penalties, interest or other charges) to such Lender (or Transferee) or Agent
in the event such Lender (or Transferee) or Agent is required to repay such
refund to such Governmental Authority.
(e) As soon as practicable after the date of any payment of
Taxes or Other Taxes by the Borrower or any Subsidiary to the relevant
Governmental Authority, the Borrower or such Subsidiary will deliver to the
Agent, at its address referred to in Section 9.01, the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
payment thereof.
(f) Each Lender (or Transferee) that is organized under the
laws of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "NON-U.S. LENDER") shall deliver to the Borrower and
the Agent two copies of (i) either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming
exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such Non-U.S.
Lender delivers a Form W-8, a certificate representing that such Non-U.S.
Lender is not a bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of the Borrower and is not a controlled foreign corporation related to
the Borrower (within the meaning
36
of Section 864(d)(4) of the Code)), properly completed and duly executed by
such Non-U.S. Lender claiming complete exemption from, or reduced rate of,
U.S. Federal withholding tax on payments by the Borrower under this Amended
Agreement and the other Loan Documents and (ii) an Internal Revenue Service
Form W-8 or W-9 entitling such Non-U.S. Lender to receive a complete
exemption from United States backup withholding tax. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Amended Agreement (or, in the case of a Transferee that is a
participation holder, on or before the date such participation holder becomes
a Transferee hereunder) and on or before the date, if any, such Non-U.S.
Lender changes its applicable lending office by designating a different
lending office (a "NEW LENDING OFFICE"). In addition, each Non-U.S. Lender
shall deliver such forms promptly upon the obsolescence or invalidity of any
form previously delivered by such Non-U.S. Lender. If a Non-U.S. Lender who
has delivered the forms referred to above on the date it becomes a party to
this Amended Agreement (or, in the case of a Transferee, on the date that it
becomes a Transferee hereunder) determines that it is unable subsequently to
submit to the Borrower any such form, or that it is required to withdraw or
cancel any such form, such Non-U.S. Lender shall promptly notify the Borrower
of such fact. Notwithstanding any other provision of this Section 2.20(f), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.20(f) that such Non-U.S. Lender is not legally able to deliver.
(g) The Borrower shall not be required to indemnify any
Non-U.S. Lender, or to pay any additional amounts to any Non-U.S. Lender, in
respect of United States Federal withholding tax pursuant to paragraph (a) or
(c) above to the extent that (i) the obligation to withhold amounts with
respect to United States Federal withholding tax existed on the date such
Non-U.S. Lender become a party to this Amended Agreement (or, in the case of
a Transferee that is a participation holder, on the date such participation
holder became a Transferee hereunder) or, with respect to payments to a New
Lending Office, the date such Non-U.S. Lender designated such New Lending
Office with respect to a Loan; PROVIDED, HOWEVER, that this clause (ii) shall
not apply (A) to any Transferee or New Lending Office that becomes a
Transferee or New Lending Office as a result of an assignment, participation,
transfer or designation made at the request of the Borrower and (B) to the
extent the indemnity payment or additional amounts any Transferee, or any
Lender (or Transferee) acting through a New Lending Office, would be entitled
to receive (without regard to this clause (ii)) do not exceed the indemnity
payment or additional amounts that the person making the assignment,
participation or transfer to such Transferee, or Lender (or Transferee)
making the designation of such New Lending Office, would have been entitled
to receive in the absence of such assignment, participation, transfer or
designation or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (f) above.
(h) Nothing contained in this Section 2.20 shall require
any Lender or the Issuing Bank (or Transferee) or the Agent to make available
any of its tax returns (or any other information that it deems to be
confidential or proprietary).
(i) The provisions of this Section 2.20 shall remain
operative and in full force and effect regardless of the expiration of the
term of this Amended Agreement, the
37
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the invalidity or unenforceability of any term or provision of
this Amended Agreement or any other Loan Document, or any investigation made
by or on behalf of the Agent or any Lender.
Section 2.21. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES;
DUTY TO MITIGATE. (a) In the event (i) any Lender, or the Issuing Bank or any
participant of any Lender delivers a certificate requesting compensation
pursuant to Section 2.14, (ii) any Lender, the Issuing Bank or any
participant of any Lender delivers a notice described in Section 2.15, or
(iii) the Borrower is required to pay any additional amount to any Lender,
the Issuing Bank, any participant of any Lender or any Governmental Authority
on account of any Lender, the Issuing Bank or any participant of any Lender
pursuant to Section 2.20, the Borrower may, at its sole expense and effort
(including with respect to the processing and recordation fee referred to in
Section 9.04(b)), upon notice to such Lender, the Issuing Bank or any
participant of any Lender and the Agent, as the case may be, require such
Lender, the Issuing Bank or any participant of any Lender, as applicable, to
transfer and assign, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all of its interests, rights and
obligations under this Amended Agreement to an assignee or participant
reasonably acceptable to the Agent that shall assume or accept such assigned
or participated, as the case may be, obligations (which assignee or
participant may be another Lender, if a Lender accepts such assignment),
PROVIDED, THAT, (A) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority having
jurisdiction over such assignment or participation, the parties thereto, the
Loan Documents or the transactions evidenced hereby or thereby, (B) the
Borrower shall have received the prior written consent of the Agent and the
Issuing Bank, which consent shall not unreasonably be withheld, (C) no Event
of Default shall have occurred and be continuing and (D) the Borrower or such
assignee or participant shall have paid to the affected Lender or the Issuing
Bank in immediately available funds an amount equal to the sum of 100% of the
principal of and interest accrued to the date of such payment on the
outstanding Loans or Letter of Credit Disbursements of such Lender, the
Issuing Bank or such assigning participant, respectively, plus (to the extent
not already paid to the Agent for the account of such Lender) all Fees and
other amounts accrued for the account of such Lender, the Issuing Bank or
such assigning participant hereunder (including any amounts under Section
2.14 and Section 2.16); PROVIDED, FURTHER, that if prior to any such
assignment the circumstances or event that resulted in such Lender's notice
or certificate under Section 2.14 or 2.15 or demand for additional amounts
under Section 2.20, as the case may be, shall cease to exist or become
inapplicable for any reason or if such Lender or participant shall waive its
rights in respect of such circumstances or event under Section 2.14, 2.15 or
2.20, as the case may be, then such Lender or participant shall not
thereafter be required to make any such assignment hereunder.
(b) If (i) any Lender or the Issuing Bank shall request
compensation under Section 2.14, (ii) any Lender or the Issuing Bank delivers
a notice described in Section 2.15 or (iii) the Borrower is required to pay
any additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank, pursuant to Section
2.20, then such Lender or the Issuing Bank shall use reasonable efforts
(which shall not require such Lender or the Issuing Bank to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any
action inconsistent with its internal policies or legal or regulatory
38
restrictions or suffer any disadvantage or burden deemed by it to be
significant) (A) to file any certificate or document reasonably requested in
writing by the Borrower or (B) to assign its rights and delegate and transfer
its obligations hereunder to another of its offices, branches or affiliates,
if such filing or assignment would reduce its claims for compensation under
Section 2.14 or enable it to withdraw its notice pursuant to Section 2.15 or
would reduce amounts payable pursuant to Section 2.20, as the case may be, in
the future. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender or the Issuing Bank in connection with any
such filing or assignment, delegation and transfer.
Section 2.22. LETTERS OF CREDIT. (a) The Borrower may request the
issuance of Letters of Credit, in a form and substance reasonably acceptable
to the Agent and the Issuing Bank, for the account of the Borrower or any
Subsidiary, at any time and from time to time during the Letter of Credit
Availability Period; PROVIDED, THAT, any Letter of Credit shall be issued
only if, and each request by the Borrower for the issuance of any Letter of
Credit shall be deemed a representation and warranty of the Borrower that,
immediately following the issuance of such Letter of Credit, the sum of the
aggregate Letter of Credit Exposure and the aggregate principal amount of
outstanding Loans shall not exceed the aggregate amount of the available
Commitments at such time as determined pursuant to Section 2.02. For purposes
hereof, the "issuance" of a Letter of Credit includes the amendment, renewal
or extension of a Letter of Credit.
(b) Each Letter of Credit shall expire no later than the
earlier of (i) one year after the date of issuance of such Letter of Credit,
subject to extension (including pursuant to an automatic renewal provision in
customary form) and (ii) the fifth Business Day prior to the Maturity Date.
Each Letter of Credit shall provide for payments of drawings in dollars.
(c) Each issuance of any Letter of Credit shall be made on
at least three Business Days' prior irrevocable written or telecopy notice
(such notice to be delivered by 10:00 a.m., Charlotte, North Carolina time)
from the Borrower (or such shorter notice as shall be acceptable to the
Issuing Bank) to the Agent and the Issuing Bank specifying the date of
issuance, the date on which such Letter of Credit is to expire, the amount of
such Letter of Credit (which shall be not less than $25,000 or such lesser
amount as is acceptable to the Agent), the name and address of the
beneficiary of such Letter of Credit, and such other information as may be
necessary or desirable to complete such Letter of Credit. The Issuing Bank
will give the Agent prompt notice of the issuance and amount of such Letter
of Credit and the expiration date of such Letter of Credit (and the Agent
shall give prompt notice thereof to each Lender). During the Letter of Credit
Availability Period, the Issuing Bank also will give the Agent (i) daily
notice of the amount available to be drawn under each outstanding Letter of
Credit and (ii) a quarterly summary indicating, on a daily basis during such
quarter, the issuance of any Letter of Credit and the amount thereof, the
expiration of any Letter of Credit and the amount thereof and the payment on
any draft presented under any Letter of Credit. Each Letter of Credit issued
hereunder will be subject to the Uniform Customs and Practices for
Documentary Credits, as in effect from time to time.
39
(d) By the issuance of a Letter of Credit and without any
further action on the part of the Issuing Bank, the Agent or the Lenders in
respect thereof, the Issuing Bank hereby grants to each Lender, and each
Lender hereby acquires from the Issuing Bank, a participation in such Letter
of Credit equal to such Lender's Commitment Percentage of the aggregate
amount available to be drawn under such Letter of Credit, effective upon the
issuance of such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Agent, on behalf of the Issuing Bank, in accordance with Section 2.03(c),
such Lender's Commitment Percentage of each Letter of Credit Disbursement
made by the Issuing Bank and not reimbursed by the Borrower when due in
accordance with Section 2.22(g). If any Lender fails to make such payment,
the Agent shall be entitled to recover such corresponding amount on demand
from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent promptly shall notify
Borrower, and Borrower shall pay such corresponding amount to the Agent. The
Agent also shall be entitled to recover from such Lender interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to
the daily Federal Funds Rate. Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its Commitment or to prejudice any
rights which the Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
(e) Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to Section 2.22(d) in respect of Letters
of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a
Default or Event of Default, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(f) The Borrower shall pay to the Agent, for the account of
the Lenders and the Issuing Bank, as applicable, a nonrefundable Letter of
Credit Fee and Fronting Fee in accordance with Section 2.06(b). In addition
to the foregoing fees and commissions, the Borrower shall pay or reimburse
the Issuing Bank for such normal and customary costs and expenses, including,
without limitation, administrative, issuance, amendment, payment and
negotiation charges, as are incurred or charged by the Issuing Bank in
issuing, effecting payment under, amending or otherwise administering any
Letter of Credit (including any Letter of Credit issued for the account of a
Subsidiary).
(g) The Borrower hereby agrees to reimburse the Issuing
Bank for any payment disbursement made by the Issuing Bank under any Letter
of Credit (including any Letter of Credit issued for the account of a
Subsidiary) by making payment in immediately available funds to the Agent on
the same Business Day after receipt of notice of such payment or
disbursement, in an amount equal to the amount of such payment or
disbursement, PLUS interest on the amount so paid or disbursed by the Issuing
Bank at a rate per annum equal to the rate applicable to ABR Loans pursuant
to Section 2.07; PROVIDED, THAT, if such amount is not reimbursed prior to
2:00 p.m., Charlotte, North Carolina time, on the same Business Day after
receipt by the Borrower of the notice of such payment or disbursement,
interest shall thereafter
40
accrue on such unreimbursed amount at a rate per annum equal to the rate
applicable to ABR Loans during such period pursuant to Section 2.07, plus
2.00%. The Agent shall promptly pay any such amounts received by it to the
Issuing Bank. If the Borrower fails to make such payment, each Lender shall
forthwith on demand repay to the Agent the amount of such assumed payment
made available to such Lender, together with interest thereon in respect of
each day from and including the date such amount was made available by the
Agent to such Lender to the date such amount is repaid to the Agent at the
Federal Funds Rate.
(h) The Borrower's obligation to reimburse Letter of Credit
Disbursements as provided in Section 2.22(g) shall be absolute, unconditional
and irrevocable and shall be performed strictly in accordance with the terms
of this Amended Agreement under any and all circumstances whatsoever, and
irrespective of:
(i) any lack of validity or enforceability of any
Letter of Credit or any other Loan Document or any
term or provision therein;
(ii) the existence of any claim, setoff, defense or
other right which the Borrower, any Subsidiary or any
other person may at any time have against the
beneficiary under any Letter of Credit, the
Issuing Bank, the Agent, any Lender or any other
person, whether in connection with this Amended
Agreement, any other Loan Document or any other
related or unrelated agreement or transaction;
(iii) any draft or other document presented under a
Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or
failing to comply with the Uniform Customs and
Practices for Documentary Credits, as in effect from
time to time, or any statement therein being untrue
or inaccurate in any respect;
(iv) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other
document which does not comply with the terms of such
Letter of Credit;
(v) any amendment, waiver or consent in respect of
this Amended Agreement or any other Loan Document;
and
(vi) any other act or omission or delay of any kind
or any other circumstance or event whatsoever,
whether or not similar to any of the foregoing and
whether or not foreseeable, that might, but for the
provisions of this Section 2.22(h), constitute a
legal or equitable discharge of the Borrower's
obligations hereunder.
(i) Without limiting the generality of the provisions of
the foregoing paragraph (h), it is expressly understood and agreed that the
absolute and unconditional obligation of the Borrower hereunder to reimburse
Letter of Credit Disbursements will not be excused by the gross negligence of
the Issuing Bank. However, the preceding sentence and the
41
provisions of Section 2.22(h) shall not be construed to excuse the Issuing
Bank from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's gross negligence in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. It is understood that the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the Issuing Bank's exclusive reliance in good faith on the
documents presented to it under such Letter of Credit as to any and all
matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, if such document on its face appears
to be in order, and whether or not any other statement or any other document
presented pursuant to such Letter of Credit proves to be forged or invalid or
any statement therein proves to be inaccurate or untrue in any respect
whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall,
in each case, be deemed not to constitute bad faith, gross negligence or
willful misconduct of the Issuing Bank.
(j) The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit. The Issuing Bank shall as promptly as possible give
telephonic notification, confirmed by telex or telecopy, to the Agent and the
Borrower of such demand for payment and whether the Issuing Bank has made or
will make a Letter of Credit Disbursement thereunder; PROVIDED, THAT, the
failure to give such notice shall not relieve the Borrower of its obligation
to reimburse any such Letter of Credit Disbursement in accordance with this
Section 2.22. The Agent shall promptly give each Lender notice thereof.
(k) In the event that the Borrower is required pursuant to
the terms of this Amended Agreement or any other Loan Document to provide
cash collateral in respect of the Letter of Credit Exposure, the Borrower
shall deposit in an account with the Agent, for the benefit of each Lender,
an amount in cash equal to the Letter of Credit Exposure (or such lesser
amount as shall be required hereunder or thereunder). Such deposit shall be
held by the Agent as collateral for the payment and performance of the
Obligations to Lenders. The Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than
any interest earned on the investment of such deposits in Cash Equivalents,
which investments shall be made as directed by the Borrower (unless such
investments shall be contrary to applicable law or regulation or a Default or
Event of Default shall have occurred and be continuing, in which case the
Agent shall determine in its discretion whether to make investments and, if
so, shall determine in its discretion the Cash Equivalents to be selected),
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall
automatically be applied by the Agent to reimburse the Issuing Bank for
Letter of Credit Disbursements and, if the maturity of the Loans has been
accelerated, to satisfy the Obligations to Lenders. If the Borrower is
required to
42
provide an amount of cash collateral hereunder as a result of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower within three Business Days after all Events of
Default have been cured or waived. If the Borrower is required to provide an
amount of cash collateral hereunder pursuant to Section 2.12(d), such amount
(to the extent not applied as aforesaid) shall be returned to the Borrower
upon demand; PROVIDED, THAT, after giving effect to such return, (i) the sum
of the aggregate Letter of Credit Exposure plus the aggregate outstanding
principal amount of Loans would not exceed the aggregate available
Commitments as determined pursuant to Section 2.02 and (ii) no Default or
Event of Default shall have occurred and be continuing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower and Holdings hereby represent and warrant, jointly and
severally, to the Agent and each of the Lenders that:
Section 3.01. ORGANIZATION; POWERS. The Borrower is a corporation,
is duly organized, validly existing and in good standing under the laws of
the State of Delaware and each other Consolidated Party is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Further, each Consolidated Party (a) has
all requisite power and authority to own its property and assets and to carry
on its business as now conducted and as proposed to be conducted, (b) is
qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a
Material Adverse Effect, and (c) has the requisite power and authority to
execute, deliver and perform its obligations under each of the Loan
Documents, the Material Contracts, the Acquisition Documents and each other
agreement or instrument contemplated hereunder to which it is a party and, in
the case of the Borrower, to obtain extensions of credit hereunder.
Section 3.02. AUTHORIZATION. The execution, delivery and performance
by each of the Consolidated Parties of each of the Loan Documents, the
Material Contracts, the Acquisition Documents and each other agreement or
instrument contemplated hereunder to which it is a party (including the
exercise of remedies thereunder) and, in the case of the Borrower, the
borrowing of funds and extensions of credit hereunder (a) have been duly
authorized by all requisite corporate and, if required, stockholder action
and (b) will not (i) violate (A) in any material respect, any material
provision of law, statute, rule or regulation, (B) any provision of the
certificate of incorporation, partnership agreement, operating agreement or
other constitutive documents or by-laws of such person, (C) in any material
respect, any material order of any Governmental Authority issued to or
binding upon such person or any of its or their assets, (D) in any material
respect, any material provision of any Material Contract or any Acquisition
Document or (E) in any respect any provision of any Indebtedness or other
material contract or agreement of USPI or its Affiliates, (ii) (A) result in
a material breach of or constitute (alone or with notice or lapse of time or
both) a material default or give rise to increased, additional, accelerated
or guaranteed rights of any person under any Material Contract or (B) result
in a breach or constitute (alone or with notice or lapse of time or both) a
default or give rise to increased, additional, accelerated or guaranteed
rights of any person under such agreement under any Indebtedness or other
material contract or agreement of USPI or its
43
Affiliates, or (iii) except for the Lien of the Collateral Documents, result
in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired.
Section 3.03. ENFORCEABILITY. This Amended Agreement has been duly
executed and delivered by the Borrower and Holdings and constitutes, and each
other Loan Document, each Material Contract and the Acquisition Documents
when executed and delivered by the Borrower or any other Consolidated Party
which is a party thereto will constitute, a valid and binding obligation of
such party enforceable against such party in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance, fraudulent transfer, voidable preference
or similar laws and the application of equitable principles generally.
Section 3.04. CONSENTS AND GOVERNMENTAL APPROVALS. No action,
consent or approval of, registration or filing with or any other action by
(a) any Governmental Authority, (b) any creditor or shareholder of the
Borrower or any creditor, shareholder, partner or member of any of the
Consolidated Parties, USPI or any Affiliate thereof, or any Provider or
association of Providers, (c) any counterparty to a Material Contract, (d)
any party to an Acquisition Document, or (e) except where failure to take or
obtain such action, consent or approval of, registration or filing with or
such other action could not reasonably be expected to have a Material Adverse
Effect, any other person, is or will be required in connection with the
Facility or the performance by the Borrower or any other Credit Party of the
Loan Documents or any Acquisition Document to which it is or will be a party,
in each case except such as have been made or obtained and are in full force
and effect, except, in the case of clauses (a), (b) and (c), for actions,
consents, approvals, registrations or filings which are routine or
administrative and not of a material nature.
Section 3.05. EXISTING PRACTICE REPORTS; UNDISCLOSED LIABILITIES.
(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income and cash flows for (i) its 1997 Fiscal
Year ended on December 31, 1997, (ii) its 1998 Fiscal Year ended on December
31, 1998, (iii) its 1999 Fiscal Year ended on December 31, 1999 and (iv) its
2000 Fiscal Year up to and including its fiscal quarter ended September 30,
2000 (the "Initial Financial Statements"), all certified by a Financial
Officer of the Borrower as being true and correct in all material respects.
The Initial Financial Statements present fairly the financial condition of
the Borrower and each Permitted Asset as of such dates and for such periods.
The Initial Financial Statements (and notes thereto) (1) disclose all
material liabilities, direct, contingent or otherwise, of the Borrower as of
September 30, 2000 and (2) were prepared in material compliance with GAAP
consistently applied.
(b) The Borrower and the Subsidiaries do not have any
liabilities or obligations, contingent or otherwise, required by GAAP to be
set forth on a consolidated balance sheet of the Borrower, except (i) for
items set forth in Schedule 3.05, and (ii) for liabilities and obligations
incurred in the ordinary course of business consistent with past practice.
44
(c) All financial projections heretofore furnished by or on
behalf of the Borrower to the Agent or any Lender have been prepared in good
faith based on reasonable assumptions.
Section 3.06. NO MATERIAL ADVERSE CHANGE. Since September 30, 2000,
there has not been any Material Adverse Change.
Section 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES. (a) Each
Consolidated Party has good and marketable title to, or valid leasehold
interests in, all its properties and assets except where the failure to do so
could be reasonably expected to have a Material Adverse Effect. All such
properties and assets are free and clear of Liens, other than Liens permitted
by Section 6.02.
(b) Each of the Borrower and the Subsidiaries has complied
with all material obligations under all Service Agreements to which it is a
party and all such Service Agreements are in full force and effect.
(c) To the knowledge of the Borrower, neither the Borrower
nor any other Consolidated Party is infringing, or has infringed, the
intellectual property rights of a third party.
Section 3.08. OWNERSHIP. (a) The authorized Capital Stock of the
Borrower consists of 1,000 shares of common stock, $.01 par value of which
1,000 shares are issued and outstanding on the Effective Date after giving
effect to the transactions contemplated in the Acquisition Documents and no
other Capital Stock is authorized. All of the outstanding shares of common
stock of the Borrower have been duly and validly authorized and issued, are
fully paid and non-assessable, and were not issued in violation of any
preemptive rights of any stockholder. Holdings owns good, valid and
marketable title to all the outstanding common stock of the Borrower, free
and clear of all Liens of every kind, whether absolute, matured, contingent
or otherwise, other than those arising under the Collateral Documents. The
Borrower has no outstanding securities convertible into or exchangeable for
its Capital Stock, no outstanding rights to subscribe for or purchase its
Capital Stock, no outstanding options for the purchase of its Capital Stock,
no agreements providing for the issuance (contingent or otherwise) of its
Capital Stock, no incentive units, phantom stock or similar arrangements and
no calls, commitments or claims of any character relating to its Capital
Stock. There are no shareholder's agreements or other agreements pertaining
to Holdings' beneficial ownership of the common stock of the Borrower,
including any agreement that would restrict Holdings right to dispose of such
common stock and/or its right to vote such common stock.
(b) The authorized Capital Stock of Holdings consists of
1,000 shares of common stock, $.01 par value of which 1,000 shares are issued
and outstanding on the Effective Date after giving effect to the transactions
contemplated by the Acquisition Documents and no other Capital Stock is
authorized. All of the outstanding shares of common stock of Holdings have
been duly and validly authorized and issued, are fully paid and
non-assessable and were not issued in violation of any preemptive rights of
any stockholder. USPI owns good, valid and marketable title to all common
stock of Holdings, free and clear of all Liens of every kind,
45
whether absolute, matured, contingent or otherwise. Holdings has no
outstanding securities convertible into or exchangeable for its Capital
Stock, no outstanding rights to subscribe for or purchase its Capital Stock,
no outstanding options for the purchase of its Capital Stock, no agreements
providing for the issuance (contingent or otherwise) of its Capital Stock, no
incentive units, phantom stock or similar arrangements and no calls,
commitments or claims or any character relating to its Capital Stock. There
are no shareholder's agreements or other agreements pertaining to USPI's
beneficial ownership of the common stock of Holdings, including any agreement
that would restrict USPI's right to dispose of such common stock and/or its
right to vote such stock.
(c) Schedule 3.08 sets forth a list of all of the
Subsidiaries, the respective jurisdictions of organization thereof and the
percentage ownership interest, direct or indirect, of the Borrower therein.
As of the Effective Date, the Borrower has no Subsidiaries other than those
set forth on Schedule 3.08 hereto.
Section 3.09. LITIGATION; COMPLIANCE WITH LAWS. (a) As of the
Effective Date, Schedule 3.09 sets forth a list of all pending or, to the
knowledge of any Credit Party, threatened litigation, arbitrations or other
proceedings against any Consolidated Party involving a claim for more than
$100,000.00. Except as noted on Schedule 3.09, none of such lawsuits, claims,
arbitrations or other proceedings as to which there is a reasonable
possibility of adverse determination would have, if so determined, a Material
Adverse Effect. Except as set forth in Schedule 3.09, neither the Borrower
nor any other Consolidated Party is a party or subject to or in default under
any material judgment, order, injunction or decree of any Governmental
Authority or arbitration tribunal. Except as set forth in Schedule 3.09,
there are no actions, suits, investigations or proceedings at law or in
equity or by or before any arbitrator or Governmental Authority now pending
or, to the knowledge of any Credit Party, threatened against or affecting the
Borrower, any other Consolidated Party or any business, property or rights of
the Borrower or any other Consolidated Party (i) which involve any Loan
Document, any Material Contract, the Acquisition Documents or the USPI
Agreement or (ii) as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, could, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth in Schedule 3.09, each Consolidated
Party is in compliance in all material respects with all applicable statutes,
laws, ordinances, rules, orders and regulations of any Governmental Authority
("APPLICABLE LAWS") including, without limitation, Fraud and Abuse Laws,
those relating to the environment, taxes and occupational health and safety,
except for instances of noncompliance that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. Except as set forth
in Schedule 3.09, neither the Borrower nor any Consolidated Party has
received any written communication during the past year from a Governmental
Authority that alleges that the Borrower or such Consolidated Party is not in
compliance in any material respect with any Applicable Laws. Except as set
forth in Schedule 3.09, there is no pending or, to the knowledge of any
Credit Party, threatened investigation of any Consolidated Party by any
Governmental Authority.
46
Section 3.10. AGREEMENTS (a) Each indenture or other agreement or
instrument evidencing Indebtedness and each other material agreement,
contract, lease, license, commitment or other instrument, including any
Service Agreements to which any Consolidated Party is or will be a party or
by which it or any of its properties or assets are or may be bound as of the
Effective Date is listed on Schedule 3.10 hereto (the "MATERIAL CONTRACTS").
(b) Each Material Contract is in all material respects
valid, binding and in full force and effect and enforceable by the
Consolidated Party thereto in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, arrangement, moratorium,
fraudulent conveyance, fraudulent transfer, voidable preference or similar
laws and the application of equitable principles generally. The Consolidated
Parties have performed all material obligations required to be performed by
them to date under the Material Contracts and they are not in breach or
default in any material respect thereunder and, to the knowledge of any
Credit Party, no other party to any of the Material Contracts is in breach or
default in any material respect thereunder. None of the Consolidated Parties,
nor, to the knowledge of any Credit Party, any other party to any Material
Contract has given notice of termination of, or taken any action inconsistent
with the continuation of, any Material Contract. None of such other parties
has any presently exercisable right to terminate any Material Contract nor
will any such other party have any right to terminate any Material Contract
on account of the execution, delivery or performance of the Loan Documents.
Section 3.11. FEDERAL RESERVE REGULATIONS. (a) Neither the Borrower
nor any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan and no Letter of
Credit will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose which entails a violation of, or
which is inconsistent with, the provisions of the regulations of the Board,
including Regulation T, U or X.
Section 3.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. No Consolidated Party is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935 or (c) subject to regulation as a "public
utility" or a "public service corporation" under any Federal or state law.
Section 3.13. USE OF PROCEEDS. The proceeds of all Loans will be
used solely for the general corporate and working capital purposes of the
Borrower, its Subsidiaries and, the Permitted Assets. The Letters of Credit
will be issued solely to support various financial and other performance
obligations of the Borrower and the Subsidiaries incurred in the ordinary
course of business and for the general corporate purposes of the Borrower and
its Subsidiaries.
47
Section 3.14. TAX RETURNS. Each of the Consolidated Parties has
filed or caused to be filed all Federal, state and local tax returns required
to have been filed by it and has paid or caused to be paid all taxes shown to
be due and payable on such returns or on any assessments received by it,
except taxes that are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves in accordance
with GAAP have been set aside on its financial statements.
Section 3.15. NO MATERIAL MISSTATEMENTS. No information, report,
financial statement, exhibit or schedule furnished by or on behalf of any
Consolidated Party to the Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material misstatement of fact
or omitted, omits or will omit to state any material fact necessary to make
the statements therein not misleading. The foregoing representation does not
apply to financial projections, which are covered in Section 3.05(c).
Section 3.16. EMPLOYEE BENEFIT PLANS. (a) Each of the Consolidated
Parties and the Commonly Controlled Entities is in compliance in all material
respects with the applicable provisions of ERISA and the regulations and
published interpretations thereunder. Neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the
Code or Section 302 of ERISA) has occurred within the last five years with
respect to any Plan, and each Plan has complied in all material respects with
the applicable provisions of ERISA and the Code. No termination of a Single
Employer Plan has occurred and no Lien in favor of the PBGC or a Plan has
arisen during the five years prior to the Effective Date.
(b) The present value of all accrued benefits under each
Single Employer Plan in which any Consolidated Party or any Commonly
Controlled Entity is a participant (based on those assumptions used to fund
the Plans) did not, as of the last annual valuation date, exceed the value of
the assets of such Plan allocable to such accrued benefits.
(c) Neither any Consolidated Party nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither any Consolidated Party nor any Commonly
Controlled Entity would become subject to any liability under ERISA if any
Consolidated Party nor any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the last valuation date.
(d) Neither any Consolidated Party nor any Commonly
Controlled Entity has any liability for post retirement benefits to be
provided to its current and former employees.
(e) No prohibited transaction under ERISA or the Code has
occurred with respect to any Multiemployer Plan or Single Employer Plan which
could have a Material Adverse Effect.
Section 3.17. ENVIRONMENTAL AND SAFETY MATTERS. Each of the
Consolidated Parties has complied in all material respects with all
applicable Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to protection of the
48
environment or to employee health or safety. No Consolidated Party has
received written notice of any material failure so to comply. The facilities
of the Consolidated Parties do not contain any hazardous wastes, hazardous
substances, hazardous materials, toxic substances, toxic pollutants or
similarly denominated substances, as those terms or similar terms are used in
the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law relating to protection of the
environment, human health or to employee health and safety (collectively,
"HAZARDOUS MATERIALS"), in violation in any material respect of any such law
or any regulations promulgated pursuant thereto. There are no events,
conditions or circumstances involving environmental pollution, regulation or
control or employee health or safety that are reasonably likely to result in
any material liabilities being incurred by any Consolidated Party.
Section 3.18. SECURITY INTERESTS. (a) The Agent for the benefit of
the Secured Parties will at all times, until the irrevocable payment,
repayment or termination in full of the Obligations and the irrevocable
termination of the Commitments, have the Liens provided for in the Collateral
Documents and, subject to the filing by the Agent of continuation statements
to the extent required by the Uniform Commercial Code, the Collateral
Documents will at all times constitute a valid and continuing lien of record
and first priority perfected security interest in all the Collateral referred
to therein, to the extent a security interest in such Collateral can be
perfected by filing a financing statement under the UCC or possession of such
Collateral. No filings or recordings are required in order to perfect the
security interests created under the Collateral Documents, except for filings
or recordings listed on Schedule 3.18. All such listed filings and recordings
will have been made on or prior to the Effective Date or, with respect to
Collateral that is the subject of an update to Schedule 3.18 as permitted by
Section 4.02(b), a date that is on prior to such update.
(b) All of the shares of common stock of each Subsidiary
have been duly and validly authorized and issued, are fully paid and
nonassessable, and were not issued in violation of the preemptive rights of
any stockholder. The Borrower owns, directly or indirectly, good, valid and
marketable title to 100% of the Capital Stock of each Subsidiary, free and
clear of all Liens, other than the Liens of the Collateral Documents, of
every kind, whether absolute, matured, contingent or otherwise. There are no
existing options, warrants, calls or commitments relating to, or any
securities or rights convertible into, exercisable for or exchangeable for,
any Capital Stock of the Subsidiaries.
Section 3.19. SOLVENCY. After the making of each Loan made on the
Effective Date and the consummation of the transactions contemplated by this
Amended Agreement, including the transactions contemplated by the Acquisition
Documents, and the uses of proceeds hereunder, each of the Credit Parties
will be Solvent on the Effective Date. "SOLVENT" means, with respect to any
person, that (i) the fair value of the assets of such person, at a fair
valuation, will exceed the debts and liabilities, subordinated, contingent or
otherwise, of such person; (ii) the present fair saleable value of the
property of such person will be greater than the amount that will be required
to pay the liabilities of such person on its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) such person will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and
49
matured; and (iv) such person will not have an unreasonably small amount of
capital with which to conduct the businesses in which it is engaged as such
businesses are now conducted and are proposed to be conducted. With respect
to any contingent liabilities, such liabilities shall be computed at the
amount which, in light of all the facts and circumstances existing at the
time, represents the amount which can reasonably be expected to become an
actual or matured liability.
Section 3.20. TRANSACTIONS WITH AFFILIATES AND SHAREHOLDERS. Except
for the Service Agreements (which shall not include any with USPI), the USPI
Agreement, the Acquisition Documents, the agreements and arrangements
contemplated by the Securities Purchase Agreement and the Acquisition
Documents and agreements and arrangements among the Borrower and Subsidiaries
or among Subsidiaries, neither the Borrower nor any of the Subsidiaries,
immediately after giving effect to the transactions contemplated by the
Acquisition Documents on the Effective Date, is or will be a party to, and
none of the properties and assets of the Borrower or any of the Subsidiaries
is subject to or bound by, any agreement or arrangement with, (a) any
Affiliate of any Consolidated Party, (b) any Shareholder, (c) the seller
under the Acquisition Documents or any Affiliate thereof, (d) USPI or any
Affiliate thereof or (e) the Sponsor or its Affiliates.
Section 3.21. INSURANCE. The Consolidated Parties maintain policies
of fire and casualty, liability, business interruption, and other forms of
insurance in such amounts, with such deductibles and against such risks and
losses as are customary in the Consolidated Parties industry and reasonably
necessary to insure fully the business and assets of the Consolidated Parties
on terms that are reasonably consistent with other companies in the same
industry as the Consolidated Parties. All such policies are in full force and
effect, all premiums due and payable thereon have been paid, and no notice of
cancellation or termination has been received with respect to any such
policy. The activities and operations of the Consolidated Parties have been
conducted in a manner so as to conform in all material respects to all
applicable provisions of such insurance policies.
Section 3.22. LABOR MATTERS. (a) (i) There is no labor strike, work
stoppage or lockout pending or, to the knowledge of any Credit Party,
threatened against any Consolidated Party; (ii) to the knowledge of any
Credit Party, no union organizational campaign is in progress with respect to
the employees of any Consolidated Party; (iii) there is no unfair labor
practice charge or complaint against any Consolidated Party pending or, to
the knowledge of any Credit Party, threatened before the National Labor
Relations Board; (iv) there are no pending or, to the knowledge of any Credit
Party, threatened union grievances against the Borrower or a Subsidiary; (v)
there are no pending, or, to the knowledge of any Credit Party, threatened,
charges against any Consolidated Party or any current or former employee of
any Consolidated Party before the Equal Employment Opportunity Commission or
any state or local agency responsible for the prevention of unlawful
employment practices; and (vi) none of the Consolidated Parties has received
written notice during the past three years of the intent of any Governmental
Authority responsible for the enforcement of labor or employment laws to
conduct an investigation of such Consolidated Parties and, to the knowledge
of the Borrower, no
50
such investigation is in progress, except, in the case of matters described
in clauses (i) through (vi) above, such matters as could not be reasonably
expected, individually or in the aggregate, to result in a Material Adverse
Effect.
(b) All material employees and agents of the Consolidated
Parties have signed confidentiality and non-compete agreements and no
employee or agent of the Consolidated Parties that has not signed a
confidentiality and non-compete agreement is privy to any information that,
if disseminated to an unrelated third party, could reasonably be expected to
have a Material Adverse Effect.
Section 3.23. [Intentionally Omitted].
Section 3.24. SECURITIES PURCHASE AGREEMENT. All of the Borrower's
representations and warranties set forth in Sections 2.08, 2.11, 2.14, 2.16,
2.17, 2.18, 2.21, 2.22, 2.23 and 2.24 of Article II of the Securities
Purchase Agreement are true and correct in all material respects.
Section 3.25. [Intentionally Omitted]
Section 3.26. YEAR 2000 COMPLIANCE . The Borrower and Holdings have
(a) initiated a review and assessment of all material areas within its and
each of its Subsidiaries' business and operations that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower, Holdings or any of its Subsidiaries may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to, including and any date after December 31, 1999), (b)
developed a plan and timeline for addressing the Year 2000 Problem on a
timely basis, and (c) to date, implemented that plan in accordance with that
timetable. The Borrower and Holdings reasonably believe that all computer
applications that are material to their or any of their respective
Subsidiaries' business and operations will on a timely basis be able to
perform properly date-sensitive functions for all dates before, including and
after January 1, 2000 (that is, be "YEAR 2000 COMPLIANT"), except to the
extent that a failure to do so could not reasonably be expected to have
Material Adverse Effect.
Section 3.27. EURO. The Borrower acknowledges that the current Euro
market conventions are under review by the financial institutions that
participate in the London Interbank Market. The Borrower agrees that the
Eurodollar Borrowing provisions in this Agreement shall be modified in
accordance with the conventions and customs adopted by such financial
institutions in connection with the conversion and introduction of various
currencies into the Euro.
Section 3.28. REPRESENTATIONS AND WARRANTIES FOR OTHER AGREEMENTS.
(a) Each of the representations and warranties made in the Acquisition
Documents by the parties thereto is true and correct in all material
respects, except where the failure of such representation or warranty to be
so true and correct does not have a material adverse effect on the business,
results of operations or financial condition of the party and its
subsidiaries taken as a whole.
51
(b) Each of the representations and warranties made in the
USPI Agreement by the parties thereto is true and correct in all material
respects.
Section 3.29. CERTAIN TRANSACTIONS. On the Effective Date, (i) the
Acquisition Documents shall not have been amended or modified, nor any
condition thereof waived by Holdings, USPI or the Borrower without the prior
written consent of the Agent, which consent shall not be unreasonably
withheld and (ii) the transactions contemplated by the Acquisition Documents
will be consummated in accordance with the Acquisition Documents and all
Applicable Laws.
ARTICLE IV
CONDITIONS OF LENDING
Section 4.01. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE. This
Amended Agreement shall become effective on the first date (the "EFFECTIVE
DATE") when all of the following conditions precedent set forth in this
Section 4.01 have been satisfied:
(a) The Agent shall have received all in form and substance
reasonably satisfactory to the Agent and the Lenders (i) counterparts hereof
signed by each of the parties (or, in the case of any Lender as to which an
executed counterpart shall not have been received, telecopy or other written
confirmation from such party in form satisfactory to the Agent of the
execution of a counterpart hereof by such Lender), (ii) counterparts of the
Pledge Agreement and the USPI Pledge Agreement signed by each of the parties
thereto (or, in the case of any Lender as to which an executed counterpart
shall not have been received, telecopy or other written confirmation from
such party in form satisfactory to the Agent of the execution of the
counterpart thereof by such Lender), (iii) counterparts of the Subsidiaries
Consent and Agreement signed by each of the parties thereto (or, in the case
of any Lender as to which an executed counterpart shall not have been
received, telecopy or other written confirmation from such party in form
satisfactory to the Agent of the execution of the counterpart thereof by such
Lender), (iv) counterparts of the Sponsor Guarantee Agreement signed by each
of the parties thereto (or, in the case of any Lender as to which an executed
counterpart shall not have been received, telecopy or other written
confirmation from such party in form satisfactory to the Agent of the
execution of the counterpart thereof by such Lender) (v) counterparts of the
Holdings Guarantee Agreement signed by each of the parties thereto, (vi)
counterparts of the Intercreditor Agreement signed by each of the parties
thereto, (vii) counterparts of the USPI Agreement signed by each of the
parties thereto, (viii) an Intercompany Note executed by each Subsidiary and
made for the benefit of the Borrower, (ix) executed copies of the amendment
to the Chase Credit Agreement and (x) all other Loan Documents, each in form
and substance reasonably acceptable to the Agent.
(b) [Intentionally Omitted].
52
(c) The Agent on behalf of the Secured Parties shall have a
security interest in the Collateral of the type and priority described in the
Collateral Documents, perfected to the extent contemplated by Section 3.18
and the Agent shall have received:
(i) confirmation by the Borrower that the Agent has
(A) previously received certificates representing all Pledged
Securities of the Subsidiaries (as defined in the Pledge
Agreement), accompanied by stock powers endorsed in blank, (B)
contemporaneously received herewith certificates representing
all Pledged Securities (as defined in the Pledge Agreement) of
the Borrower, accompanied by stock powers endorsed in blank
and (C) contemporaneously received herewith certificates
representing all Pledged Securities (as defined in the USPI
Pledge Agreement), accompanied by stock powers endorsed in
blank;
(ii) duly executed financing statements (Form UCC-1)
for each appropriate jurisdiction as is necessary, in the
Agent's reasonable discretion, to perfect the Agent's security
interest in the Collateral;
(iii) confirmation by the Borrower that no additional
filing, registration or recordation of any document (including
any Uniform Commercial Code financing statement) is required
to be filed, registered or recorded in order to create in
favor of the Agent for the benefit of the Secured Parties a
valid, legal and perfected security interest in or Lien on the
Collateral;
(iv) a duly completed and executed Perfection
Certificate from the Borrower and each Subsidiary of the
Borrower;
(v) in the case of any Permitted Assets, the Borrower
shall deliver or cause to be delivered, a first priority
security interest in all the Capital, Stock related to such
Permitted Asset owned by the Borrower or its Subsidiary, and
shall or shall cause to be executed any documents (including a
Supplemental Agreement, financing statements, stock transfer
or assignment powers endorsed in blank) and take all action
(including filing financing statements and obtaining and
providing consents and legal opinions) that may be required or
in the opinion of the Agent necessary in order to grant,
preserve, protect and perfect such security interest.
(d) The Agent shall have received an opinion of Xxxxxx & Bird
LLP and Xxxxxxxxxx Xxxx & XxXxxxxx PLLC, counsel to the Borrower, its
Subsidiaries, Holdings and USPI, as applicable, substantially in the
form of Exhibit F hereto, addressed to the Agent and the Lenders.
(e) The Agent shall have received:
(i) an Officer's Certificate, dated the Effective
Date and signed by a Responsible Officer of the Borrower
substantially confirming compliance with
53
the conditions precedent set forth in subparagraphs (f), (g),
(h), (i) and (j) of this Section 4.01 and in subparagraphs
(b), (c) and (d) of Section 4.02;
(ii) an Officer's Certificate, dated the Effective
Date and signed by a Responsible Officer of each of the
Borrower and the Subsidiaries certifying that the copies of
the long form certificates of incorporation and other
constitutive documents, including all amendments thereto, of
each of the Borrower and the Subsidiaries delivered pursuant
to the execution of the Original Amended and Restated Credit
Agreement or in connection with any Supplemental Agreement
executed prior to the Effective Date, have not been modified
or amended in any respect and remain in full force and effect
in accordance with their terms;
(iii) a copy of the long form certificate of
incorporation or other constitutive documents, including all
amendments thereto, of Holdings, certified as of a recent date
by the Secretary of State (or other domestic or foreign
authority) of the jurisdiction of organization;
(iv) a certificate as to the good standing of each
Credit Party certified as of a recent date, from such
Secretary of State (or other domestic or foreign authority);
(v) a certificate of the Secretary or Assistant
Secretary of each of the Credit Parties, dated the Effective
Date and certifying (A) that (x) in the case of the Borrower
and the Subsidiaries, as the case may be, the by-laws or
comparable governing instruments of such party delivered
pursuant to the execution of the Original Amended and Restated
Credit Agreement or in connection with any Supplemental
Agreement executed prior to the Effective Date, have not been
modified or amended in any respect and remain in full force
and effect in accordance with their terms, or (y) in the case
of Holdings, attached thereto is a true and complete copy of
the by-laws or comparable governing instruments of such party
as in effect on the Effective Date and at all times since a
date prior to the date of the resolutions described in clause
(B) below, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the Board of Directors or
comparable governing body of such party (or, in the case of
any partnership, of the general partner of such party)
authorizing the execution, delivery and performance of this
Amended Agreement, and, in the case of the Borrower, the
extensions of credit hereunder, and that such resolutions have
not been modified, rescinded or amended and are in full force
and effect, (C) that the certificate of incorporation or other
constitutive documents of such party have not been amended
since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (iv)
above, and (D) as to the incumbency and specimen signature of
each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of such party; and
54
(vi) such other documents, opinions, certificates and
agreements in connection with the Facility, in form and
substance satisfactory to the Agent, as it shall reasonably
request.
(f) The Borrower shall have paid all Fees and other amounts
due and payable to the Agent or any Lender on or prior to the Effective Date,
including, without limitation, all fees and other amounts accrued to the
Effective Date to the Agent for the account of each Lender pursuant to
Sections 2.05 and 2.15 of the Original Amended and Restated Credit Agreement.
(g) No Material Adverse Change shall have occurred since
September 30, 2000.
(h) The Agent shall have received satisfactory evidence
that the Credit Parties have obtained all governmental (whether domestic or
foreign), shareholder and third party consents and approvals, including
without limitation, the requisite consents and agreements of holders of
Indebtedness of USPI or any of its Affiliates, and expiration of all
applicable waiting or appeal periods necessary or, in the reasonable opinion
of the Agent, appropriate in connection with the transactions contemplated in
this Amended Agreement, the Facility and the pledge of the Collateral for the
Facility without any action being taken that is reasonably likely to
restrain, prevent or impose any material adverse condition on the Borrower or
the transactions contemplated hereby or that is reasonably likely to seek or
threaten any of the foregoing in any material respect, and no law or
regulation or condition shall be applicable which in the reasonable judgment
of the Agent is reasonably likely to have such effect.
(i) There shall not exist any action, suit, investigation
or proceeding pending or threatened in any court or before any arbitrator or
Governmental Authority that could reasonably be expected to have a Material
Adverse Effect on the Borrower or the ability of the Borrower to perform its
obligations under the documents to be executed in connection with the
Facility.
(j) The Borrower and its Subsidiaries shall not be in
violation of any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority, where
such violation or default could reasonably be expected to result in a
Material Adverse Effect.
(k) The Agent shall have received information reasonably
satisfactory to it regarding all Permitted Assets and any litigation, tax,
tax sharing arrangements, management arrangements, accounting, labor,
insurance, pension liabilities (actual or contingent), employee benefits
(including post-retirement benefits), real estate leases, Material Contracts
in effect as of the Effective Date, debt agreements, intercompany agreements,
property ownership, transactions with affiliates and contingent liabilities
of each of the Credit Parties.
(l) The Agent shall have received, and in each case
approved, the Initial Financial Statements, consolidated financial statements
of each of the founding physician practice groups for the most recent three
Fiscal Years, including balance sheets and statements of
55
operation and cash flows, audited by independent public accountants of
recognized national standing and prepared in conformity with GAAP, interim
unaudited financial statements, a pro forma balance sheet giving effect to
the transactions contemplated hereby, prepared and certified by a Financial
Officer of the Borrower.
(m) After giving effect to the transactions contemplated by
the Amended Agreement and the Acquisition Documents, the Agent shall be
reasonably satisfied in all respects with all Material Contracts between the
Borrower and any of its Subsidiaries, on the one hand, and any of its
Affiliates and Shareholders, on the other hand, and with all other Material
Contracts of each of the Credit Parties.
(n) After giving effect to the transactions contemplated by
the Amended Agreement and the Acquisition Documents, the Agent shall be
reasonably satisfied with the ownership, capital, corporate and
organizational structure, the shareholders' agreements, asset base, corporate
debt, management and legal structure and capitalization of each Credit Party.
(o) On or prior to the Effective Date, there shall have
been delivered to the Agent true and correct copies of the Acquisition
Documents, and all terms and conditions of the Acquisition Documents shall be
in form and substance reasonably satisfactory to the Agent. The Acquisition,
including all of the terms and conditions thereof, shall have been duly
approved by the board of directors and (if required) the shareholders of the
Consolidated Parties thereto and all third parties and governmental entities,
including, without limitation, the consent and agreements of holders of
Indebtedness of USPI or any of its Affiliates and shall be in full force and
effect. Each of the conditions precedent to consummate the Acquisition shall
have been satisfied to the reasonable satisfaction of the Agent. No
additional Indebtedness shall have been incurred by any Consolidated Party in
connection with the Acquisition, except transaction fees and expenses in an
aggregate amount of no more than $1,400,000 incurred in connection with the
Acquisition.
Section 4.02. ALL CREDIT EVENTS. The obligations of the Lenders to
make Loans hereunder, and the obligation of the Issuing Bank to issue Letters
of Credit hereunder, are subject to the satisfaction of the conditions that
on the date of each Borrowing and on the date of issuance of each Letter of
Credit:
(a) The Agent shall have received a notice of such
Borrowing as required by Section 2.04, or a notice requesting the issuance of
such Letter of Credit as required by Section 2.22(c), as applicable.
(b) The representations and warranties set forth in Article
III and the representations and warranties of the Consolidated Parties set
forth in the other Loan Documents shall be true and correct in all material
56
respects on and as of the date of such Borrowing or the date of the issuance
of such Letter of Credit with the same effect as though made on and as of
such date, except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
shall be true and correct in all material respects on and as of such earlier
date). The Borrower may update Schedules 3.08, 3.10 and 3.18 from time to
time by written notice to the Agent.
(c) At the time of and immediately after such Borrowing or
the issuance of such Letter of Credit, the aggregate outstanding principal
amount of the Loans and the Letter of Credit Exposure shall not exceed the
limitations set forth in Section 2.02.
(d) At the time of and immediately after such Borrowing or
the issuance of such Letter of Credit, no Default or Event of Default shall
have occurred and be continuing.
Each Borrowing hereunder and each issuance of a Letter of Credit hereunder
shall be deemed to constitute a representation and warranty by the Borrower
and Holdings on the date of such Borrowing or issuance of such Letter of
Credit as to the matters specified in paragraphs (b), (c) and (d) of this
Section 4.02.
ARTICLE V
AFFIRMATIVE COVENANTS
Each of the Borrower and Holdings covenants and agrees with each
Lender that so long as this Amended Agreement shall remain in effect and
until the Commitments have been terminated and the Loans, together with
interest, Fees and all other Obligations have been paid in full, all Letters
of Credit have been canceled or have expired, and all amounts drawn
thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing:
Section 5.01. EXISTENCE; BUSINESSES AND PROPERTIES. (a) Each of the
Consolidated Parties will do all things necessary to preserve, renew and keep
in full force and effect its legal existence, except as otherwise expressly
permitted under Section 6.05(a).
(b) Each of the Consolidated Parties will do all things
necessary to obtain, preserve, renew, extend and keep in full force and
effect the rights, leases, privileges, licenses, permits, franchises,
authorizations, patents, copyrights, trademarks, trade names and all other
intellectual property material to the conduct of its business; maintain and
operate such business in substantially the manner in which it is presently
conducted and operated; comply in all material respects with all Applicable
Laws (including, but not limited to, medical licensure, certification and
Fraud and Abuse Laws) and all judgments, writs, injunctions, decrees and
orders of any Governmental Authority, whether now in effect or hereafter
enacted; and at all times maintain and preserve in all material respects all
property material to the conduct of such business and keep such property in
materially good repair, working order and condition (subject to ordinary wear
and tear) and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may
be properly conducted in all material respects at all times.
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(c) Each of the Consolidated Parties shall use commercially
reasonable efforts to assure the material compliance by all Providers with
all Applicable Laws, including, but not limited to, medical licensure,
certification and Fraud and Abuse Laws relating to their providing of
professional services. Each of the Consolidated Parties will preserve, renew
and keep in full force and effect all material contracts, leases,
governmental licenses, authorizations, consents and approvals, rights,
privileges and franchises necessary in the normal course of business,
including without limitation maintaining in full force and effect Medicare
certification for all Permitted Assets.
Section 5.02. INSURANCE. (a) Each of the Consolidated Parties will
keep its insurable properties fully insured at all times by financially sound
and reputable insurers on such terms as are reasonably consistent with other
companies in the same industry as the Consolidated Parties; such insurance to
include fire and other risks insured against by extended coverage, public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by it and business interruption
insurance, medical malpractice insurance, and maintain such other insurance
as may be required by law.
(b) Each of the Borrower and Holdings will cause all
policies of Holdings and its Subsidiaries (other than workers' compensation
and employee health policies) to be endorsed or otherwise amended to include
a "standard" or "New York" lender's loss payable endorsement, in form and
substance reasonably satisfactory to the Agent, which endorsement shall
provide that, from and after the Effective Date, if the insurance carrier
shall have received written notice from the Agent of the occurrence of an
Event of Default, the insurance carrier shall pay all proceeds otherwise
payable to Holdings or the Subsidiaries under such policies directly to the
Agent; cause all such policies to provide that none of Holdings, any
Subsidiary, the Agent or any other party shall be a coinsurer thereunder and
to contain a "Replacement Cost Endorsement", without any deduction for
depreciation; deliver original or certified copies of all such policies to
the Agent; cause each such policy to provide that it shall not be canceled,
modified or not renewed (i) by reason of nonpayment of premium upon not less
than 30 days' prior written notice thereof by the insurer to the Agent
(giving the Agent the right to cure defaults in the payment of premiums) or
(ii) for any other reason upon not less than 30 days' prior written notice
thereof by the insurer to the Agent; deliver to the Agent, prior to the
cancellation, modification or nonrenewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Agent) together with evidence satisfactory
to the Agent of payment of the premium therefor.
(c) The Borrower will notify the Agent promptly whenever
any separate insurance concurrent in form or contributing in the event of
loss with that required to be maintained under this Section 5.02 is taken out
by any Consolidated Party; and promptly deliver to the Agent a duplicate
original copy of such policy or policies.
(d) In connection with the covenants set forth in this
Section 5.02, it is understood and agreed that:
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(i) none of the Agent, the Lenders, the Issuing Bank
or their respective agents or employees shall be liable for
any loss or damage insured by the insurance policies required
to be maintained under this Section 5.02, it being understood
that (A) the Consolidated Parties shall look solely to their
insurance companies or any other parties other than the
aforesaid parties for the recovery of such loss or damage and
(B) such insurance companies shall have no rights of
subrogation against the Agent, the Lenders, the Issuing Bank
or their agents or employees. If, however, the insurance
policies do not provide waiver of subrogation rights against
such parties, as required above, then each of the Consolidated
Parties hereby agrees, to the extent permitted by law, to
waive its right of recovery, if any, against the Agent, the
Lenders, the Issuing Bank and their agents and employees;
(ii) the Consolidated Parties will permit an
insurance consultant retained by the Agent, (if no Event of
Default exists, at the expense of the Lenders, and otherwise,
at the expense of the Borrower), to review the insurance
policies maintained by the Consolidated Parties, but no more
frequently than annually; and
(iii) the designation of any form, type or amount of
insurance coverage by the Agent or the Required Lenders under
this Section 5.02 shall in no event be deemed a
representation, warranty or advice by the Agent or the Lenders
that such insurance is adequate for the purposes of the
business of the Consolidated Parties or the protection of
their properties and the Agent and the Required Lenders shall
have the right from time to time to require the Consolidated
Parties to keep other insurance in such form and amount as the
Agent or the Required Lenders may reasonably request;
PROVIDED, THAT, such insurance shall be obtainable on
commercially reasonable terms.
Section 5.03. OBLIGATIONS AND TAXES. Each of the Consolidated
Parties will pay all of its Indebtedness and other obligations promptly and
in accordance with their terms and pay and discharge promptly when due all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise which, if unpaid, might give rise to a
Lien upon such properties or any part thereof; PROVIDED, THAT, such payment
and discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings diligently pursued and as
to which adequate reserves have been established in accordance with GAAP and
such contest operates to suspend collection of the contested obligation, tax,
assessment or charge and enforcement of a Lien.
Section 5.04. FINANCIAL STATEMENTS, REPORTS, ETC. The Borrower will
furnish, or cause to be furnished, to the Agent and each Lender:
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(a) as soon as available, and in any event within 30 days
after the end of each fiscal month-end, (i) financial statements, including
monthly Borrower prepared consolidated and consolidating balance sheets,
profit and loss statements and statements of cash flow, for the Borrower and
each Permitted Asset on a practice-by-practice or unit-by-unit basis (ii) a
summary of accounts receivable aging for the Borrower and its Subsidiaries
and (iii) a certificate of a Financial Officer of the Borrower setting forth
computations in reasonable detail satisfactory to the Agent demonstrating
compliance with the covenant contained in Section 6.13(d);
(b) as soon as available, and in any event within 90 days
after the end of each Fiscal Year, financial statements including (i) its
consolidated and consolidating balance sheet and related consolidated and
consolidating statements of operations and cash flows, showing the
consolidated and consolidating financial position of the Borrower and its
Consolidated Subsidiaries as of the close of such Fiscal Year and the
consolidated and consolidating results of their operations and cash flows
during such year, in each case setting forth in comparative form the figures
for the preceding Fiscal Year, all audited by a nationally recognized
independent public accounting firm and accompanied by an opinion of such
accountants (which shall not be qualified in any material respect) to the
effect that such financial statements fairly present the consolidated
financial position and consolidated results of operations and cash flows of
the Borrower, its Consolidated Subsidiaries in accordance with GAAP
consistently applied, and (ii) annual Borrower prepared statements of cash
flow for each Permitted Asset on a practice-by-practice or unit-by-unit
basis, certified by the Chief Financial Officer of the Borrower;
(c) as soon as available, and in any event within 45 days
after the end of each of the first three fiscal quarters of each Fiscal Year,
financial statements including (i) Borrower prepared consolidated and
consolidating balance sheets and related consolidated and consolidating
statements of operations and cash flows, showing the consolidated and
consolidating financial position of the Borrower and its Consolidated
Subsidiaries, the consolidated and consolidating results of operations and
cash flows during such fiscal quarter and the then elapsed portion of such
Fiscal Year and the consolidated and consolidating cash flows for the then
elapsed portion of such Fiscal Year and (ii) quarterly statements of cash
flow for each Permitted Asset on a practice-by-practice basis or unit by unit
basis, as of the close of such fiscal quarter, all certified by one of its
Financial Officers as fairly presenting the consolidated financial position
and consolidated results of operations and cash flows of the Borrower, its
Consolidated Subsidiaries and in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
(d) concurrently with any delivery of financial statements
under paragraph (a), (b) or (c) above, an Officer's Certificate of the
Borrower certifying that no Default or Event of Default has occurred or, if
such a Default or Event of Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken with
respect thereto;
(e) concurrently with any delivery of financial statements
under paragraph (b) or (c) above, a certificate of a Financial Officer of the
Borrower, substantially in the form of Exhibit G hereto, (i) setting forth
computations in reasonable detail satisfactory to the Agent demonstrating
compliance with the covenants contained in Sections 6.13 and 6.14, (ii)
stating
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whether, since the date of the most recent Required Financial Statements
previously delivered, there has been any material change in the generally
accepted accounting principles applied in the preparation of the Borrower's
financial statements and, if so, describing such change, and (iii) a
comparison of the actual results during the period covered by such financial
statements to those originally budgeted by the Borrower prior to the
beginning of the applicable Fiscal Year, along with management's discussion
and analysis of variances (including variances between actual results for
such period and actual results for the same period in the previous Fiscal
Year);
(f) promptly upon completion, but in any event not later
than 30 days prior to the commencement of each Fiscal Year, a copy of
projections by the Borrower of its consolidated balance sheet and related
consolidated statements of operations and cash flows for such Fiscal Year
(including all material assumptions to such projections) and its statement of
cash flows for each Permitted Asset on a practice-by-practice or unit-by-unit
basis, and a budget for such Fiscal Year, all in form customarily prepared by
the Borrower's management, such projected financial statements to be
accompanied by a certificate of a Financial Officer to the effect that such
projected financial statements have been prepared in good faith, based on
assumptions that the Borrower believes to be reasonable and based on the best
information available to the Borrower and that such Financial Officer has no
reason to believe they are misleading in any material respect in light of the
circumstances existing at the time of preparation thereof; PROVIDED, THAT,
notwithstanding anything to the contrary contained herein or in any other
Loan Document, the Borrower's provision of projections in accordance with
this Amended Agreement or any other Loan Document shall not for any reason be
deemed to be or constitute a representation by the Borrower or any of its
Subsidiaries as to such information except to the extent expressly provided
above in this subsection (f);
(g) [Intentionally Omitted];
(h) as soon as available, and in any event within 15 days
of receipt, any final management letter issued or provided by the auditors of
the Borrower or any Subsidiary;
(i) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of the
Holdings or any of its Subsidiaries, any Permitted Asset, or compliance with
the terms of any Loan Document, as the Agent or any Lender may reasonably
request;
(j) promptly, from time to time, but not more frequently
than once per calendar year absent an Event of Default, request in writing
the opinion of in-house counsel or, at the Borrower's option, outside
healthcare counsel as to the absence, except as disclosed in the opinion, of
such counsel's actual knowledge of any actual, threatened or asserted
violation of any Fraud and Abuse Law on the part of the Borrower, Holdings,
any Subsidiary and/or the Providers. Absent the existence of an Event of
Default, such opinions shall require no special diligence on the part of the
opining attorney(s), but shall only require a report of matters then actually
known to such attorneys, unless the Agent specifically requests investigation
be made by the opining attorneys; PROVIDED, THAT, the Agent may only request
that such an investigation be made if the Agent has actual knowledge of an
actual or reasonably likely violation of a Fraud
61
and Abuse Law by the Borrower, Holdings, any Subsidiary or the Providers, or
if the Agent has a reasonable basis to believe any such violation has
occurred or will occur. Such opinions shall be in form and substance
reasonably acceptable to the Agent, shall be delivered to the Agent at
Borrower's expense within 30 days of the date of request and shall address
specifically any facts inquired of in the Agent's request. In any opinion
delivered under this subsection (j), the opining attorney(s), provided they
have made due inquiry pursuant to requests of the Agent as permitted above,
may conclusively rely on an Officer's Certificate; and
(k) promptly, from time to time, such information and
financial statements, reports, public information and notices (including of
default) regarding the operations, business affairs and financial conditions
of USPI and its Subsidiaries, or compliance with the terms of any
Indebtedness of USPI and its Subsidiaries, as USPI and its Subsidiaries are
required to (whether or not the requirement is waived by the lenders under
the Chase Credit Agreement) or delivers under the Chase Credit Agreement
dated June 29, 1999 not including any amendments or modifications thereto
(including, without limitation, the deliveries required pursuant to Sections
5.01 and 5.02 thereof), and as the Agent or the Lenders may otherwise
reasonably request.
Section 5.05. OTHER INFORMATION(a) . (a) The Borrower will furnish
to the Agent prompt written notice of the following:
(i) any Default or Event of Default, specifying the
nature and extent thereof and the corrective action (if any)
proposed to be taken with respect thereto;
(ii) the filing or commencement of, or any written
notice of intention of any person to file or commence, any
action, suit or proceeding, whether at law or in equity or by
or before any Governmental Authority, including environmental
proceedings, against or affecting any Consolidated Party (A)
which, if adversely determined, could individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect or (B) which involves a claim or series of related
claims against any Consolidated Party in excess of $500,000;
(iii) all matters materially affecting the value,
enforceability or collectibility of any material portion of
its Material Contracts, the Acquisition Documents, the USPI
Agreement and other assets, including changes to significant
contracts, schedules of equipment, and changes of significant
equipment or real property, which matters could be reasonably
expected to have a Material Adverse Effect;
(iv) any material adverse change in the relationship
between any of the Consolidated Parties, on the one hand, and
any of its respective suppliers, licensors or customers or any
Provider or USPI or its Affiliates, on the other hand, which
could reasonably be expected to have a Material Adverse
Effect;
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(v) all amendments to any Service Agreement or any
agreement to which any Consolidated Party or USPI or its
subsidiaries is a party relating to (a) Indebtedness of an
aggregate principal amount of $5,000,000 or more or (b)
Indebtednesss guaranteed by any Consolidated Party or USPI
(which notice shall be delivered, along with executed copies
of any such amendments, no later than three (3) Business Days
after the date thereof) or its subsidiaries (which notice
shall be delivered, along with executed copies of any such
amendment, no later than ten (10) Business Days after the date
thereof); and
(vi) any development that individually or in the
aggregate has resulted in, or could reasonably be expected to
have, a Material Adverse Effect.
(b) Immediately upon receipt by the Borrower, the Borrower
shall provide, or cause to be provided to, the Agent and the Lenders with
copies of all notices (including notices of default), statements and
financial information received from any other creditor or lessor with respect
to any item of Indebtedness which (i) relates to an actual or reasonably
likely default by any Consolidated Party under the documentation evidencing,
creating or securing such Indebtedness and (ii) would give rise to an event
of default under the documentation evidencing, creating or securing such
Indebtedness or the repossession of material property if such default is not
cured or waived.
(c) Any notification required by this Section 5.05 shall be
accompanied by a certificate of a Financial Officer of the Borrower setting
forth the details of the specified events and the action which the Borrower
proposes to take with respect thereto.
Section 5.06. ERISA. (a) Each Consolidated Party will, comply in all
material respects with the applicable provisions of ERISA and the Code.
(b) The Borrower will promptly give notice to the Agent and
each Lender of the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, any filing
by any Consolidated Party with the PBGC of a notice of intent to terminate a
Plan, any receipt by any Consolidated Party of notice from the PBGC of the
intention of the PBGC to terminate a Plan or appoint a trustee to administer
a Plan, any Lien in favor of the PBGC or a Plan, or any withdrawal from, or
the termination, reorganization or insolvency (within the meaning of such
terms as used in ERISA) of, any Multiemployer Plan; or (ii) the institution
of proceedings or the taking of any other action by the PBGC or any
Consolidated Party or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the termination, reorganization
or insolvency (within the meaning of such terms as used in ERISA) of, any
Single Employer Plan or Multiemployer Plan.
Section 5.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS. Each Consolidated Party will keep proper books of record and
account in which full, true and correct entries in conformity with GAAP and
all requirements of law are made of all dealings and
63
transactions in relation to its business and activities. Each Consolidated
Party will permit any representatives designated by the Agent or any Lender
to visit and inspect the financial records and the properties of such
Consolidated Party at reasonable times and as often as reasonably requested
(but not to exceed twice in any calendar quarter), and to make extracts from
and copies of such financial records, and permit any representatives
designated by the Agent or any Lender to discuss the affairs, finances and
condition of any Consolidated Party with the officers thereof and independent
accountants therefor (with representatives of the Borrower present unless an
Event of Default or Default has occurred and is continuing).
Section 5.08. USE OF PROCEEDS. The Borrower will use the proceeds of
the Loans and request the issuance of Letters of Credit only for the purposes
set forth in Section 3.13.
Section 5.09. INTEREST RATE PROTECTION AGREEMENTS. After the Closing
Date in the event the Borrower elects to enter into and thereafter maintain
in full force and effect Interest Rate Protection Agreements, then such
Interest Rate Protection Agreements shall be entered into with a Lender.
Borrower will promptly deliver evidence of the execution and delivery of such
Interest Rate Protection Agreements to the Agent. The Borrower will not enter
into any Interest Rate Protection Agreements with any person other than a
Lender as provided in this Section 5.09.
Section 5.10. FISCAL YEAR. Each Consolidated Party will cause its
Fiscal Year to end on December 31 in each year.
Section 5.11. COMPLIANCE WITH ENVIRONMENTAL LAWS; PREPARATION OF
ENVIRONMENTAL REPORTS. Each Consolidated Party will comply, and use its best
efforts to cause all lessees and other persons occupying the properties owned
or leased by such Consolidated Party, (a) to comply, in all material respects
with all environmental laws and environmental permits applicable to its
operations and properties except to the extent that the failure to comply
therewith could not reasonably be expected to result in liability in excess
of $500,000, (b) obtain and renew all material environmental permits
necessary for its operations and properties and (c) conduct any remedial
action required under, and in accordance with, environmental laws, except to
the extent that the necessity of any such remedial action is being contested
in good faith by appropriate proceedings timely instituted and diligently
pursued and in the manner provided by applicable law.
Section 5.12. SUBSIDIARIES. The Borrower shall cause each Subsidiary
organized or acquired subsequent to the date thereof, to execute and deliver
an Intercompany Note and a Supplemental Agreement immediately upon and
contemporaneously with their organization or acquisition. Nothing in this
Section 5.12 shall be deemed to imply that any such acquisition or
organization of a Subsidiary is permitted under this Amended Agreement.
Section 5.13. FURTHER ASSURANCES. Each of the Borrower and Holdings
will, and will cause each Subsidiary to, execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements that may be required under applicable law, or that the
64
Required Lenders or the Agent may reasonably request), in order to effectuate
the transactions contemplated by the Loan Documents and in order to grant,
maintain, preserve, protect and perfect the validity and first priority of
the security interests created or intended to be created by the Collateral
Documents, including, without limitation, with respect to Permitted Assets.
Such security interests and Liens will be created under the Collateral
Documents and other security agreements, instruments and documents in form
and substance reasonably satisfactory to the Agent, and each of the Borrower
and Holdings shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions and lien searches) as the
Agent shall reasonably request to evidence compliance with this Section 5.14.
The Borrower and Holdings each agrees to provide such evidence as the Agent
shall reasonably request as to the perfection and priority status of each
such security interest and Lien.
Section 5.14. YEAR 2000 COMPLIANCE. The Borrower will promptly
notify the Agent in the event the Borrower discovers or determines that any
computer application that is material to its or any of the Consolidated
Parties' business and operations will not be Year 2000 Compliant on a timely
basis, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
ARTICLE VI
NEGATIVE COVENANTS
Holdings and the Borrower hereby covenant and agree jointly and
severally with each Lender that so long as this Amended Agreement shall
remain in effect and until the Commitments have been terminated and the
Loans, together with interest, Fees and all other Obligations have been paid
in full, all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing:
Section 6.01. INDEBTEDNESS. None of the Consolidated Parties will
incur, create, issue, assume, guarantee or permit to exist any Indebtedness
or Disqualified Stock (including the redemption, repurchase and/or prepayment
of Indebtedness), except:
(a) Indebtedness existing on the Effective Date that is set
forth in Schedule 6.01 (including any extension, renewal or refinancing
thereof (and the reasonable fees and expenses incurred in connection with any
renewal or refinancing) so long as the principal amounts owing thereunder are
not increased in any way);
(b) Indebtedness created and evidenced by the Loan
Documents;
(c) Intercompany Indebtedness arising after the Effective
Date; PROVIDED, THAT, all such Indebtedness is evidenced by Intercompany
Notes pledged to the Agent pursuant to the Pledge Agreement and is permitted
pursuant to Section 6.04(b);
65
(d) Interest Rate Protection Agreements entered into in
accordance with, Section 5.09;
(e) Indebtedness incurred in the ordinary course of
business for the deferred purchase price of property or services that does
not exceed $50,000 in the aggregate at any time outstanding;
(f) Capital Lease Obligations incurred in the ordinary
course of business that do not exceed $2,000,000 in the aggregate at any time
outstanding;
(g) [Intentionally Omitted];
(h) [Intentionally Omitted]; and
(i) (A) Guarantees of Indebtedness for borrowed money
listed on Schedule 6.01 and Guarantees of Indebtedness for borrowed money
incurred by (w) one or more Wholly Owned Subsidiaries of the Borrower that
own Orthopedic Assets or (x) joint ventures that own Orthopedic Assets and in
which the Borrower has less than a 100% ownership interest; PROVIDED, THAT
(I) the aggregate amount of such guarantees in sub-clause (B) issued and
outstanding at any time shall not exceed the lesser of (y) $3,500,000 or (z)
an amount which, at the time of incurrence, would cause the Guarantee Ratio
to equal or exceed 1.00 to 1.00 as of the fiscal quarter most recently ended
and (II) to the extent the Borrower holds less than a 100% interest in a
joint venture owning Orthopedic Assets, guarantees of Indebtedness with
respect to such joint venture shall be limited such that the amount of
Indebtedness guaranteed by the Borrower does not exceed an amount equal to
the total Indebtedness incurred by such joint venture multiplied by the sum
of (y) the Borrower's pro rata interest in such joint venture, and (z) the
pro rata interest in such joint venture held by Providers.
Section 6.02. NEGATIVE PLEDGE. None of the Consolidated Parties will
create, incur, assume or permit to exist any Lien on any property or assets
(including Capital Stock or other securities of any Subsidiary or other
person) now owned or hereafter acquired by it or on any income or revenues or
rights in respect of any thereof, except:
(a) Liens existing on the Effective Date that are set forth
on Schedule 6.02, provided that such Liens secure only those obligations
which they secure on the Effective Date (including any extension, renewal or
refinancing thereof (and the reasonable fees and expenses incurred in
connection with any such renewal or refinancing);
(b) Liens in favor of the Agent on behalf of the Secured
Parties created by the Collateral Documents;
(c) Liens for taxes not yet due or which are being
contested in compliance with Section 5.03;
66
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
and securing obligations that are not due or which are being contested in
compliance with Section 5.03; and
(e) pledges and deposits made in the ordinary course of
business in compliance with worker's compensation, unemployment insurance and
other social security laws or regulations;
(f) easements, rights of way and other encumbrances on
title to real property that do not render title to the real property
encumbered thereby unmarketable or materially adversely affect the value of
such property or the use of such property for its present purposes;
(g) [Intentionally Omitted]; and
(h) purchase money Liens encumbering assets (other than
Capital Stock and accounts receivable) hereafter acquired by the Borrower or
any Subsidiary; provided, that, (i) such Liens secure Indebtedness permitted
by Section 6.01(f), (ii) such Liens are incurred and the Indebtedness secured
thereby is created substantially contemporaneously with the applicable
Capital Lease Obligations, (iii) the Indebtedness secured thereby does not
exceed 100% of the lesser of the cost or the fair market value of such
property at the time of incurrence of the Capital Lease Obligations and (iv)
such Liens do not apply to any other property or asset of the Borrower or any
Subsidiary.
Section 6.03. SALE AND LEASE-BACK TRANSACTIONS. The Consolidated
Parties will not enter into any arrangement, directly or indirectly, with any
person whereby it shall sell or transfer any property, real or personal, used
or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which it intends to
use for substantially the same purpose or purposes as the property being sold
or transferred; provided, that, the Consolidated Parties may enter into such
transactions as long as the aggregate fair market value of the property which
is the subject of such transactions does not exceed $3,000,000 at any time.
Section 6.04. INVESTMENTS, LOANS AND ADVANCES. None of the
Consolidated Parties will purchase, hold or acquire any Capital Stock,
evidences of indebtedness or other securities of, make or permit to exist any
loans, extensions of credit or advances to, make guarantees in favor of, or
make or permit to exist any other investment, capital contribution or other
interest in, any other person, except:
(a) equity investments existing on the Effective Date by
the Borrower in Subsidiaries that are listed on Schedule 6.04;
(b) loans and advances made after the Effective Date by the
Borrower or any Wholly Owned Subsidiary to Wholly Owned Subsidiaries or by
any Subsidiary to the Borrower; PROVIDED, THAT, any such loan or advance (i)
is evidenced by an Intercompany Note pledged and delivered to the Agent on
behalf of the Secured Parties pursuant to the Pledge Agreement, (ii) in
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the case of loans and advances to a Wholly Owned Subsidiary, shall be
permitted only so long as such person remains a Wholly Owned Subsidiary and
(iii) is otherwise permitted pursuant to Section 6.01(c);
(c) trade accounts receivable (and related notes and
instruments) arising in the ordinary course of business consistent with
industry practices;
(d) loans and advances made after the Closing Date by the
Borrower to (i) Providers that are natural persons and Providers that are
corporations, partnerships, professional associations or other entities (a
"Corporate Provider") that do not exceed $2,000,000 in the aggregate at any
one time; PROVIDED, that, (A) any such loans or advances shall be evidenced
by fully recourse promissory notes from the applicable Provider, (B) any
promissory note to a Corporate Provider must be fully guaranteed by all
Providers who are natural persons and that directly or indirectly are
shareholders, partners, or members of such Corporate Provider, (C) no such
loans or advances to a single Provider that is a natural person shall exceed
$100,000 at any one time, and (D) no such loans or advances to a single
Corporate Provider shall exceed $1,000,000 at any one time, and (ii)
officers, employees or directors of the Borrower made in the ordinary course
of business that, in the aggregate, do not exceed $250,000 at any one time;
PROVIDED, THAT, (A) no such loans or advances to any one officer, employee or
director of the Borrower or any Subsidiary shall exceed $50,000 at any one
time and (B) any such loans or advances in excess of $10,000 shall be
evidenced by fully recourse promissory notes from the applicable officer,
employee or director; or
(e) Cash and Cash Equivalents;
(f) [Intentionally Omitted];
(g) [Intentionally Omitted]; and
(h) [Intentionally Omitted].
Section 6.05. MERGERS, CONSOLIDATIONS, DISPOSITIONS AND
ACQUISITIONS. None of the Consolidated Parties will (i) merge into or
consolidate with any other person, (ii) permit any other person to merge into
or consolidate with it, (iii) sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or any substantial
part of its assets (whether now owned or hereafter acquired), (iv) issue,
sell, transfer, lease or otherwise dispose of any Capital Stock of any
Subsidiary to, or permit any Subsidiary to accept any capital contribution
from, any person or (v) purchase, lease or acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any
other person, except that:
(a) any Subsidiary may be merged or consolidated with or
into any other Subsidiary that is a Wholly Owned Subsidiary or the Borrower
if, immediately after giving effect to such transaction, no condition or
event shall exist which constitutes a Default or Event of Default;
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(b) the Borrower and any of the Subsidiaries may sell and
purchase inventory in the ordinary course of business for fair value and on
an arm's-length basis;
(c) the Borrower and any of the Subsidiaries may sell
damaged, worn out or obsolete tangible assets in the ordinary course of
business and in a commercially reasonable manner;
(d) the foregoing shall not be deemed violated by any
casualty or condemnation affecting assets of the Borrower or any Subsidiary,
so long as (i) the Borrower or its applicable Subsidiary reinvests the Net
Cash Proceeds of any such casualty of condemnation within 180 days of the
date of such casualty or condemnation in assets of a like kind and character
to those that were destroyed or taken or (ii) if the Borrower or its
applicable Subsidiary does not reinvest the Net Cash Proceeds of any such
casualty or condemnation as provided in the preceding clause (i) within 180
days, the Net Cash Proceeds thereof are immediately applied as required by
Section 2.12(b);
(e) the Borrower and any of the Subsidiaries may sell,
lease, transfer, assign or otherwise dispose of assets to any other person or
persons to the extent that the aggregate Net Cash Proceeds from any such
sale, lease, transfer, assignment or other disposition do not exceed $250,000
for any single transaction or series of related transactions, so long as (I)
the Net Cash Proceeds from all property disposed of pursuant to this clause
(e) does not exceed $1,000,000 in the aggregate in any Annual Period and (II)
the Net Cash Proceeds of any such dispositions in excess of $500,000 are
applied as required by Section 2.12(b); and
(f) the Borrower and any Subsidiaries may sell or otherwise
dispose of the assets set forth in Section 6.15(a)(ii)(C).
Section 6.06. DIVIDENDS, DISTRIBUTIONS AND OTHER RESTRICTED
PAYMENTS. None of the Consolidated Parties will (a) declare or pay, directly
or indirectly, any dividend or make any other distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, with respect to any Capital Stock of any Consolidated Party, (b)
directly or indirectly redeem, purchase, retire or otherwise acquire for
value, any Capital Stock of any Consolidated Party, whether such acquisition
is made at the option of such Consolidated Party or at the option of the
holder of such Capital Stock and whether or not such acquisition is required
under the terms and conditions applicable to such Capital Stock or set aside
any amount for any such purpose, (c) release, cancel, compromise or forgive
in whole or in part any Indebtedness evidenced by the Intercompany Notes, (d)
directly or indirectly redeem, purchase, prepay, retire, defease or otherwise
acquire for value any Indebtedness (other than Obligations), whether such
acquisition is made at the option of any Consolidated Party or at the option
of the holder of such Indebtedness and whether or not such acquisition is
required under the terms and conditions applicable to such Indebtedness, or
set aside any amount for any such purpose, except for repayments of principal
of any such Indebtedness in accordance with the scheduled amortization
thereof; PROVIDED, THAT, any Subsidiary may declare and pay dividends or make
other distributions to the Borrower or any Wholly Owned Subsidiary or from
any Consolidated Subsidiary's (which is a surgery center or owns Orthopedic
Assets) Consolidated Net Income so
69
long as no Default or Event of Default shall have occurred and be continuing
or shall result from such dividends or distributions or (e) directly or
indirectly make any loan advance, tax sharing payment or indemnification
payment to, or other investment in, USPI, Holdings or any of their respective
Affiliates (other than as permitted in this Amended Agreement with respect to
the Borrower and its Subsidiaries and pursuant to a Tax Sharing Agreement
dated as of the date hereof between the Borrower, Holdings and USPI but only
to the extent of the amount that the Borrower and Holdings would have been
required to pay for federal, state, local or other taxes on income if it were
deemed to be a common parent or affiliated group (with the meaning of Section
1504 of the Code) of which only it and its Subsidiaries were members (and
assuming for such purpose that such group had the benefit of any losses of
Holdings, the Borrower and its Subsidiaries previously used by USPI).
Section 6.07. IMPAIRMENT OF SECURITY INTERESTS. None of the
Consolidated Parties will take or omit to take any action, which action or
omission might or would have the result of materially impairing the security
interests in favor of the Agent on behalf of the Secured Parties with respect
to the Collateral, and none of the Consolidated Parties will grant to any
person (other than the Agent on behalf of the Secured Parties pursuant to the
Loan Documents) any interest whatsoever in the Collateral except for Liens
permitted by Section 6.02.
Section 6.08. LIMITATION ON RESTRICTED ACTIONS. None of the
Consolidated Parties will, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or
restriction or any restriction in its articles of incorporation, by-laws or
comparable governing instruments on the ability of any such person to (a) pay
dividends or make any other distributions on or in respect of its Capital
Stock, (b) pay any Indebtedness owed to any Credit Party, (b) make loans or
advances to any Credit Party or (c) transfer any of its properties or assets
to any Credit Party, except for such encumbrances or restrictions (x)
existing under or by reason of (i) with respect to clause (c) only, customary
non-assignment provisions in any lease governing a leasehold interest or (ii)
this Amended Agreement and the Collateral Documents or (y) with respect to
clause (c) only, as permitted by Section 6.02.
Section 6.09. NO OTHER NEGATIVE PLEDGES. None of the Consolidated
Parties will enter into or prohibiting the creation or assumption of any Lien
upon its properties or assets, whether now owned or hereafter acquired, or
requiring an obligation to be secured if some other obligation is secured,
except for this Amended Agreement.
Section 6.10. TRANSACTIONS WITH AFFILIATES. None of the Consolidated
Parties will engage in any transaction or series of transactions with (a) any
officer, director, holder of Capital Stock, Subsidiary or Affiliate of any
Consolidated Party, (b) any Affiliate of any such officer, director, holder
of Capital Stock, Subsidiary or Affiliate, (c) USPI or any officer, director,
holder of Capital Stock, Subsidiary or Affiliate of USPI or (d) the Sponsor
or any officer, director, holder of Capital Stock, Subsidiary or affiliate of
the Sponsor, other than the Service Agreements and the agreements and
arrangements contemplated by the Securities Purchase Agreement and the
Acquisition Agreement, except that so long as no Default or Event of Default
shall have occurred and be continuing, the Borrower or any Subsidiary may
enter into any of the foregoing transactions in the ordinary course of
business at prices and on terms and conditions that are (i)
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set forth in writing and (ii) as favorable to the Borrower or such Subsidiary
as would be obtainable at the time in a comparable transaction on an
arm's-length basis with an unrelated party; PROVIDED, HOWEVER, that the
Sponsor or its Affiliates or USPI or its Affiliates shall not be entitled to
enter into, pay or otherwise collect, from the Borrower or any Subsidiary,
any professional, consulting, management or similar fees or allocate general
corporate overhead to the Borrower or its Subsidiaries. The provisions of
this Section 6.10 shall not prohibit (A) any payment expressly permitted
under Section 6.04 or 6.06 between the Borrower and any Subsidiary or Wholly
Owned Subsidiary, (B) any transaction entered into and maintained among the
Borrower and any Wholly Owned Subsidiaries or among Wholly Owned
Subsidiaries, or (C) payment of compensation to officers, employees and
directors of the Borrower or any Subsidiary of the Borrower in the ordinary
course of business.
Section 6.11. BUSINESS OF BORROWER AND SUBSIDIARIES. The Borrower
will not, and will not cause or permit any of the Subsidiaries to, engage at
any time in any business or business activity other than that associated with
any Permitted Asset and business activities reasonably incidental thereto.
Section 6.12. CERTAIN AMENDMENTS. None of the Consolidated Parties
will enter into any amendment, modification or waiver of the Certificate of
Incorporation or by-laws or comparable governing instruments of a
Consolidated Party as in effect on the Effective Date or the Acquisition
Documents as in effect on the Effective Date, other than amendments,
modifications and waivers which are not, individually or in the aggregate, in
the reasonable judgment of the Agent and the Required Lenders, adverse in any
material respect to the rights or interests of the Lenders.
Section 6.13. FINANCIAL COVENANTS.
(a) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. The Borrower
will not permit the Consolidated Fixed Charge Coverage Ratio to be less than
1.50 to 1.00.
(b) CONSOLIDATED LEVERAGE RATIO. The Borrower will not
permit the Consolidated Leverage Ratio as of the last day of any quarterly
period occurring between the periods set forth below to exceed the ratio set
forth below opposite such period:
FROM AND INCLUDING TO AND INCLUDING RATIO
------------------ ---------------- -----
Effective Date Maturity Date 3.75 to 1.00
(c) MINIMUM CONSOLIDATED NET WORTH. The Borrower will not
permit its Consolidated Net Worth as of the last day of any fiscal quarter of
the Borrower to be less than the Minimum Compliance Level at any time during
the term of this Amended Agreement. The "Minimum Compliance Level" shall be
$41,000,000 on the Effective Date, and shall be increased as of the last day
of each fiscal quarter of the Borrower ending after the Effective Date by an
amount equal to the sum of (a) 90% of Consolidated Net Income (if positive)
for such fiscal quarter and (b) 100% of the Net Cash Proceeds of the issuance
of any Capital Stock of the
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Borrower or any Subsidiary; PROVIDED, THAT, nothing in this paragraph shall
be construed to permit the issuance of any such Capital Stock. The foregoing
increases in the Minimum Compliance Level shall be fully cumulative and no
reduction in the Minimum Compliance Level shall be made to reflect negative
Consolidated Net Income for any period.
(d) MINIMUM CONSOLIDATED EBITDA. The Borrower will not
permit (i) Consolidated EBITDA as of the end of each calendar month set forth
below to be less than the amount set forth below opposite each month or (ii)
Consolidated EBITDA ending on the date set forth below to be less than the
amount set forth below opposite such date:
MONTH ENDED AMOUNT
----------- ------
January, February or March $800,000
April, May or June $900,000
July, August or September $975,000
October, November or December $975,000
FISCAL QUARTERS ENDED AMOUNT
--------------------- ------
March 31, 2001 $2,600,000
June 30, 2001 $2,750,000
September 30, 2001 $3,000,000
(e) TOTAL DEBT/TOTAL CAPITALIZATION RATIO. The Borrower will not permit the
ratio of Total Debt to Total Capitalization as of the last day of any
quarterly period occurring between the periods set forth below to be more
than the ratio set forth below opposite such period:
FROM AND INCLUDING TO AND INCLUDING RATIO
------------------ ---------------- -----
Effective Date Maturity Date .55 to 1.00
(f) GUARANTEE RATIO. The Borrower will not permit the
Guarantee Ratio as of the last day of any fiscal quarter of the Borrower
during the term of this Amended Agreement to exceed 1.00 to 1.00.
Section 6.14. CAPITAL EXPENDITURES. The Borrower will not make
Capital Expenditures other than Maintenance Capital Expenditures permitted by
this Section 6.14. The Borrower will not permit the aggregate amount of
Maintenance Capital Expenditures made by the Borrower and its Subsidiaries
taken as a whole in any Fiscal Year to exceed the sum of $2,000,000.
Section 6.15. OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON HOLDINGS AND
BORROWER.
(a) Holdings and the Borrower will not (i) permit any
person (other than the Borrower or any Wholly Owned Subsidiary of the
Borrower) to own any Capital Stock of any
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Subsidiary of the Borrower, (ii) permit any Subsidiary of the Borrower to
issue Capital Stock to any Person, except (A) the Borrower or any Wholly
Owned Subsidiary of the Borrower, (B) to qualify directors where required by
applicable law or to satisfy other requirements of applicable law with
respect to the ownership of Capital Stock of foreign Subsidiaries or (C) the
sale or syndication of any interest in East West Surgery Center, L.P.,
Roswell Surgery Center, LLC, Lawrenceville Surgery Center, LLC, and Parkwest
Surgery Center, L.P. which for purposes of this Amended Agreement shall be
deemed Permitted Assets and the sale or syndication of Orthopedic Assets
currently held by the Borrower or any Subsidiary (the later sales of which
shall not exceed $250,000 in the aggregate) or (iii) permit the Borrower or
any Subsidiary of the Borrower to issue any shares of Preferred Stock.
(b) Holdings shall not (i) hold any assets other than the
Capital Stock of the Borrower, (ii) have any material liabilities other than
(A) liabilities under the Loan Documents and (B) tax liabilities in the
ordinary course of business or (iii) engage in any business or activity other
than (A) owning the common stock of the Borrower (including purchasing
additional shares of common stock after the Effective Date) and activities
incidental or related thereto or to the maintenance of the corporate
existence of Holdings or compliance with applicable law, (B) acting as a
Guarantor under the Holdings Guarantee Agreement and pledging its assets to
the Agent, for the benefit of the Lenders, pursuant to the Collateral
Documents to which it is a party and (C) issuing its own Capital Stock (other
than Disqualified Stock) to the extent that 100% of the proceeds therefrom is
contributed to the Borrower.
(c) Holdings and the Borrower (i) will not permit any
person other than Holdings to hold any common stock of the Borrower (or any
warrants, securities, options or other rights exercisable for, convertible
into or exchangeable for common stock), (ii) will not permit Holdings to hold
any Capital Stock of the Borrower (other than outstanding shares of common
stock) and (iii) will not permit any other person to hold any other Capital
Stock of the Borrower.
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events (each an
"EVENT OF DEFAULT" and collectively the "EVENTS OF DEFAULT"):
(a) default shall be made in the payment of any principal of any
Loan or any reimbursement obligation in respect of a Letter of Credit when
and as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise;
(b) default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in paragraph
(a) above) due under any Loan Document, when and as the same shall become due
and payable, and such default shall continue unremedied for a period of three
Business Days;
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(c) default shall be made in the due observance or performance by
any Credit Party of any covenant, condition or agreement contained in Section
5.01(a), 5.05, 5.08, 5.09, 5.10, 5.12, 5.14 or in Article VI;
(d) default shall be made in the due observance or performance by
any Credit Party of any covenant, condition or agreement contained herein and
in any other Loan Document (other than those specified in paragraph (a), (b)
or (c) above) and such default shall continue unremedied for a period of 30
days after such default becomes known to a Responsible Officer of such Credit
Party;
(e) any representation or warranty made in connection with any Loan
Document or the extensions of credit hereunder, or any representation,
warranty, statement or information contained in the Securities Purchase
Agreement or any report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made or
furnished;
(f) any default or event of default shall occur under or with
respect to the USPI/Chase Credit Facility (as defined in this clause)
(without regard to any forebearance by the lender or lenders thereunder).
USPI/Chase Credit Facility means the credit relationship established pursuant
to the Chase Credit Agreement and the documents related thereto, including
any amendments or refinanings thereof;
(g) any Consolidated Party or USPI, as applicable, shall (i) fail to
pay any principal or interest, regardless of amount, due in respect of (A)
any Indebtedness ( other than that of USPI or its Subsidiaries (excluding for
such purposes any Consolidated Party)) in a principal amount in excess of
$500,000 or (B) any Indebtedness of USPI (other than the Indebtedness covered
in clause (f) of this Article VII) or its Subsidiaries (excluding for such
purposes any Consolidated Party) in a principal amount in excess of
$1,000,000, when and as the same shall become due and payable, or (ii) fail
to observe or perform any other term, covenant, condition or agreement
contained in any agreement or instrument evidencing or governing any such
Indebtedness (other than the Indebtedness covered in clause (f) of this
Article VII) if the effect of any failure referred to in this clause (ii) is
to cause, or to permit the holder or holders of such Indebtedness or a
trustee on its or their behalf to cause, with or without the giving of notice
or the lapse of time or both, such Indebtedness to become due prior to its
stated maturity;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of any Consolidated Party or USPI, or of a substantial part
of its property or assets, under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Consolidated Party or USPI, or for a substantial part of its property
or assets, or (iii) the winding-up or liquidation of any Consolidated Party
or USPI; and such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall
be entered;
74
(i) any Consolidated Party or USPI shall (i) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar
law, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
paragraph (g) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for such party or for a substantial part of its property or assets, (iv) file
an answer admitting the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for
the purpose of effecting any of the foregoing;
(j) one or more judgments or orders for the payment of money in (A)
an aggregate amount in excess of $500,000 shall be rendered against one or
more Consolidated Parties or (B) in an aggregate amount in excess of
$5,000,000 shall be rendered against USPI and in the case of subclause (A) or
(B) the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon assets or properties of
such Consolidated Party to enforce any such judgment;
(k) (i) any person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan, or any
Lien shall arise on the assets of any Consolidated Party or any Commonly
Controlled Entity in favor of the PBGC or a Plan, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a trustee
appointed (or a trustee shall be appointed) to administer, or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) any Consolidated Party or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required Lenders
is likely to, incur any liability in connection with a withdrawal from, or
the termination, reorganization or insolvency of (within the meaning of such
terms as used in ERISA), a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and, in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could reasonably be expected to
result in liability of the Consolidated Parties in an aggregate amount
exceeding $50,000 or require payments by the Consolidated Parties exceeding
$10,000 in any year;
(l) any Lien purported to be created by any Collateral Document
shall cease to be, or shall for any reason be asserted by any Consolidated
Party not to be, a valid, perfected, first priority Lien on the securities,
properties or assets covered thereby, except as priority may be affected by
Liens permitted under Section 6.02 and except for releases of Collateral in
accordance with all applicable provisions of this Amended Agreement and the
Collateral Documents;
75
(m) any Loan Document or any material provision of any Loan Document
shall be declared by any Governmental Authority to be invalid or
unenforceable in whole or in part or shall for any reason not be, or shall be
asserted by any Consolidated Party, the Sponsor or USPI not to be, in full
force and effect and enforceable in accordance with its terms; PROVIDED,
THAT, in the event a Subsidiary's obligations under the Guarantee Agreement
or the Pledge Agreement are declared to be, or become, invalid or
unenforceable as a result of a declaration by a Governmental Authority or for
any other reason (other than the Borrower's or any Subsidiaries assertion to
that effect), then the same shall not constitute a default hereunder if such
invalidity or unenforceability does not, in the reasonable opinion of the
Agent, materially impair the ability of the Borrower and the remaining
Subsidiaries to repay the Obligations or to otherwise perform their covenants
and agreements hereunder and under the other Loan Documents;
(n) any adverse change in one or more of the Material Contracts
shall occur and such event or condition, together with all other such events
or conditions, if any, could, in light of all the then existing
circumstances, reasonably be expected to have a Material Adverse Effect;
(o) either (i) any Consolidated Party shall be liable, whether
directly, indirectly through required indemnification of any person or
otherwise, for the costs of investigation and/or remediation of any Hazardous
Material originating from or affecting property or properties, whether or not
owned, leased or operated by any Consolidated Party, which liability,
together with all other such liabilities, could reasonably be expected to
have a Material Adverse Effect or (ii) any Federal, state, regional, local or
other environmental regulatory agency or authority shall take any action that
could reasonably be expected to be determined adversely to such Consolidated
Party and, on the basis of such a determination, to have a Material Adverse
Effect;
(p) there shall occur any Change in Control;
(q) Borrower or any Subsidiary, or any Permitted Asset, shall
receive a notice from a Governmental Authority that it (i) intends to
disallow requested reimbursements, demand adjustment or repayment of past
reimbursements in excess of five percent of the gross revenues of Borrower
and its Subsidiaries, or the applicable Permitted Asset, for the previous
four fiscal quarters in the aggregate respecting amounts submitted for
reimbursement or collected by Borrower, any Subsidiary or applicable
Permitted Asset, or (ii) intends to impose civil money penalties,
individually or in the aggregate, in excess of $250,000 or to seek to exclude
more than 10% of the Providers that have entered into Service Agreements with
the Borrower from material participation in the Medicare or Medicaid programs
due to a failure to comply with Fraud and Abuse Laws;
(r) there shall occur a Change in Management;
(s) the Acquisition Agreement, any Acquisition Document, the USPI
Agreement or the Intercreditor Agreement or any material provision thereof
(i) shall be declared
76
by any Governmental Authority to be invalid or unenforceable in whole or in
part or (ii) shall for any reason not be, in full force and effect and
enforceable in accordance with its terms; or
(t) the Borrower, Holdings or USPI shall fail to observe or perform any
term, covenant, condition or agreement contained in the USPI Agreement,
then, and in every such event, and at any time thereafter during the continuance
of such event, the Agent may, and at the request of the Required Lenders shall,
take one or more of the following actions, at the same or different times: (i)
by notice to the Borrower terminate the Commitments and they shall immediately
terminate; (ii) by notice to the Borrower declare the Loans then outstanding to
be forthwith due and payable (in whole or, in the sole discretion of the
Required Lenders, from time to time in part, provided that any such partial
acceleration shall be made pro rata based on the outstanding principal amount of
Loans), whereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder or under any other Loan Document,
shall thereupon become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrower, anything contained herein or in any other Loan Document
to the contrary notwithstanding; (iii) require cash collateral as contemplated
by Section 2.22(k) in an amount not exceeding the Letter of Credit Exposure;
(iv) exercise any remedies available under the Guarantee Agreement, the
Collateral Documents or otherwise; or (v) any combination of the foregoing;
PROVIDED, THAT, in the case of any of the Events of Default with respect to the
Borrower described in paragraph (h) or (i) above, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder or under any other Loan Document,
shall automatically become due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding.
ARTICLE VIII
THE AGENT AND ISSUING BANK
Section 8.01. APPOINTMENT AND AUTHORIZATION. (a) Each of the
Lenders, and each subsequent holder of any Note by its acceptance thereof,
hereby irrevocably appoints and authorizes the Agent and the Issuing Bank to
take such actions as agent on behalf of such Lender or holder and to exercise
such powers as are specifically delegated to the Agent or the Issuing Bank,
as the case may be, by the terms and provisions hereof and of the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
(b) The Agent is hereby expressly authorized by the
Lenders, without hereby limiting any implied authority, and hereby agrees (in
the case of clause (ii) below, at the direction of the Required Lenders), (i)
to receive on behalf of the Lenders all payments of principal of and interest
on the Loans and all other amounts due to the Lenders hereunder, and
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promptly to distribute to each Lender its proper share of each payment so
received; (ii) to give notice on behalf of each of the Lenders to the
Borrower of any Event of Default specified in this Amended Agreement of which
the Agent has actual knowledge acquired in connection with its agency
hereunder; (iii) to give notice to the Lenders of any Event of Default
specified in this Amended Agreement of which the Agent has actual knowledge
acquired in connection with its agency hereunder; and (iv) to distribute to
each Lender copies of all notices, financial statements and other materials
delivered by the Borrower pursuant to this Agreement as received by the Agent.
Section 8.02. LIABILITY OF AGENT. Neither the Agent, the Issuing
Bank, nor any of their respective directors, officers, employees or agents,
shall be liable as such for any action taken or omitted to be taken by any of
them, except for such party's own gross negligence or willful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by
any Credit Party of any of the terms, conditions, covenants or agreements
contained in any Loan Document. Neither the Agent nor the Issuing Bank shall
be responsible to the Lenders or the holders of the Notes for the due
execution, genuineness, validity, enforceability or effectiveness of this
Amended Agreement, the Notes or any other Loan Documents or other instruments
or agreements. Each of the Agent and the Issuing Bank may deem and treat the
payee of any Note as the owner thereof for all purposes hereof until it shall
have received from the payee of such Note notice, given as provided herein,
of the transfer thereof in compliance with Section 9.04. The Agent and the
Issuing Bank shall in all cases be fully protected in acting, or refraining
from acting, in accordance with written instructions signed by the Required
Lenders and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on
all the Lenders and each subsequent holder of any Note. The Agent, the
Issuing Bank and the Required Lenders shall, in the absence of knowledge to
the contrary, be entitled to rely on any instrument or document believed by
it in good faith to be genuine and correct and to have been signed or sent by
the proper person or persons. Neither the Agent, the Issuing Bank nor any of
their respective directors, officers, employees or agents, shall have any
responsibility to any Credit Party on account of the failure of or delay in
performance or breach by any Lender of any of its obligations hereunder or to
any Lender on account of the failure of or delay in performance or breach by
any other Lender or any Credit Party of any of their respective obligations
hereunder or under any other Loan Document or in connection herewith or
therewith. The Agent and the Issuing Bank may execute any and all duties
hereunder by or through agents or employees, shall be entitled to consult
with legal counsel, independent public accountants and other experts selected
by it with respect to all matters arising hereunder and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts.
Section 8.03. ACTION BY AGENT. The Lenders hereby acknowledge that
neither the Agent nor the Issuing Bank shall be under any duty to take any
discretionary action permitted to be taken by it pursuant to the provisions
of this Amended Agreement unless it shall be requested in writing to do so by
the Required Lenders. The obligations of the Agent and the Issuing Bank under
the Loan Documents are only those expressly set forth herein and therein.
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Without limiting the generality of the foregoing, the Agent shall not be
required to take any action with respect to any Default or Event of Default,
except as expressly required pursuant to Article VII.
Section 8.04. SUCCESSOR AGENTS. Subject to the appointment and
acceptance of a successor Agent, the Agent and the Issuing Bank (except, in
the case of the Issuing Bank, in respect of Letters of Credit issued by it)
may resign at any time by notifying the Lenders and the Borrower. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor subject to approval by the Borrower (which shall not be
unreasonably withheld). If no successor shall have been so appointed by the
Required Lenders, and shall have accepted such appointment within 30 days
after the retiring Agent or Issuing Bank, as the case may be, gives notice of
its resignation, then the retiring Agent or Issuing Bank, as the case may be,
on behalf of the Lenders, shall appoint a successor Agent or Issuing Bank, as
applicable, which shall be a commercial bank organized or licensed under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000 or an Affiliate of any
such bank. Upon the acceptance of any appointment as an Agent or Issuing
Bank, as the case may be, hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent or Issuing Bank and the retiring Agent or
Issuing Bank shall be discharged from its duties and obligations hereunder.
After the resignation of an Agent or the Issuing Bank, as the case may be,
hereunder, the provisions of this Article and Section 9.05 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 an Agent or Issuing Bank.
Section 8.05. AGENT AND AFFILIATE. With respect to the Loans made by
it hereunder, the Letters of Credit issued by it hereunder and the Notes
issued to it, the Agent and the Issuing Bank, each in its individual capacity
and not as an Agent or the Issuing Bank, as the case may be, shall have the
same rights and powers as any other Lender and may exercise the same as
though it were not an Agent or the Issuing Bank. The Agent and the Issuing
Bank (and its Affiliates) may accept deposits from, lend money to and
generally engage in any kind of business and transactions with any Credit
Party or other Affiliate thereof as if it were not an Agent or the Issuing
Bank (or such Affiliate thereof).
Section 8.06. INDEMNIFICATION. Each Lender agrees (a) to reimburse
the Agent and the Issuing Bank, on demand, in the amount of its pro rata
share (as determined under Section 2.17) of any expenses incurred for the
benefit of the Lenders by the Agent or the Issuing Bank, as the case may be,
including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, which shall not have been
reimbursed by the Borrower and (b) to indemnify and hold harmless the Agent,
the Issuing Bank and any of their respective directors, officers, employees
or agents, on demand, in the amount of such pro rata share, from and against
any and all liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against it
in its capacity as the Agent or the Issuing Bank, as the case may be, or any
of them in any way relating to or arising out of this Amended Agreement or
any other Loan Document or any action taken or omitted by it or any of them
under this Amended Agreement or any other such Loan Document, to the extent
the same
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shall not have been reimbursed by the Borrower; PROVIDED, THAT, no Lender
shall be liable to the Agent or the Issuing Bank for any portion of such
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 any of their
respective directors, officers, employees or agents.
Section 8.07. CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Issuing Bank or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Amended Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agent, the Issuing Bank or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Amended Agreement or any other Loan Document,
any related agreement or any document furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
Section 9.01. NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy
as follows:
(a) if to the Borrower or Holdings,
United Surgical Partners International, Inc. 00000
Xxxxxxx Xxxx, Xxxxx 000 Xxxxx Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxx Xxxxxx Telecopy No.: (972)
713-3550
with a copy to:
Xxxxxxxxxx Xxxx & XxXxxxxx, PLLC
700 Two American Center
0000 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xx. Xxxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
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(b) if to the Agent or the Issuing Bank:
Bank of America, N.A.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy No. (000) 000-0000
with a copy to:
Bank of America, N.A.
Bank of America Corporate Center
NC1-007-17-11
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy No. (000) 000-0000 and (000) 000-0000
All Notices of Borrowing/Conversion to the Lender at the following
address:
Bank of America, N.A.
Independence Center, 15th Floor
NC1-001-15-11
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Credit Services
Telephone: (000) 000-0000
Telecopy No. (000) 000-0000
(c) if to a Lender, to it at its address (or telecopy
number) set forth in Schedule 2.02, or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in
accordance with the provisions of this Amended Agreement shall be deemed to
have been given on the date of receipt if delivered by hand or overnight
courier service or sent by telecopy or on the date three Business Days after
dispatch by certified or registered mail if mailed, in each case delivered,
sent or mailed (properly addressed) to such party as provided in this Section
9.01 or in accordance with the latest unrevoked direction from such party
given in accordance with this Section 9.01. In all events, notice shall be
deemed effective immediately upon refusal of delivery thereof irrespective of
the method of such delivery.
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Section 9.02. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Borrower and Holdings herein and
in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Amended Agreement or any other Loan Document shall
be considered to have been relied upon by the Lenders, the Agent and the
Issuing Bank and shall survive the making by the Lenders of the Loans, the
execution and delivery to the Lenders of the Notes evidencing such Loans, and
the issuance of the Letters of Credit, regardless of any investigation made
by the Lenders, the Agent or the Issuing Bank or on their behalf, and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Loan, any Fee, any Letter of Credit Disbursement or any other
amount payable under this Amended Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not been terminated. The provisions of Section 2.14,
2.16, 2.20 and 9.05 shall remain operative and in full force and effect
regardless of the expiration of the term of this Amended Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Amended Agreement or any other Loan Document or any investigation made by or
on behalf of the Agent, the Issuing Bank or any Lender.
Section 9.03. BINDING EFFECT. This Amended Agreement shall become
effective on the Effective Date.
Section 9.04. SUCCESSORS AND ASSIGNS. (a) All covenants, promises
and agreements by or on behalf of the Borrower, the Agent, the Issuing Bank
or the Lenders that are contained in this Amended Agreement shall be binding
upon and inure to the benefit of their respective permitted successors and
assigns.
(b) Each Lender may assign to one or more assignees all or
a portion of its interests, rights and obligations under this Amended
Agreement (including all or a portion of its Commitments, the Loans at the
time owing to it, the Notes held by it and the participations in Letters of
Credit held by it) to other financial institutions; PROVIDED, THAT, the
Borrower (unless an Event of Default shall have occurred and be continuing),
the Agent and the Issuing Bank must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld). No Lender
shall assign to any financial institution other than an existing Lender, a
Commitment in an amount less than $5,000,000 in principal amount. The parties
to each such assignment (including, but not limited to, an assignment by a
Lender to another Lender) shall execute and deliver to the Agent an
Assignment and Acceptance substantially in the form of Exhibit E hereto,
together with the Note subject to such assignment and a processing and
recordation fee of $3,500 and the assignee, if it shall not be a Lender or an
Affiliate thereof, shall deliver to the Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to Section 9.04(e),
from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days after
the execution thereof (unless the Agent shall otherwise agree), (A) the
assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Amended Agreement and (B) the assigning
Lender thereunder
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shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Amended Agreement
(and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Amended Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.14, 2.16, 2.20 and
9.05, as well as to any Fees accrued for its account to the effective date of
the Assignment and not yet paid).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee thereunder shall
be deemed to confirm to and agree with each other and the other parties
hereto as follows: (i) such assigning Lender warrants that it is the legal
and beneficial owner of the interest being assigned thereby free and clear of
any adverse claim arising in respect of any action by the assigning Lender;
(ii) except as set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Amended Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Amended Agreement,
any other Loan Document or any other instrument or document furnished
pursuant hereto, or the financial condition of any Credit Party or the
performance or observance by any Credit Party or the performance or
observance by the Borrower or any Subsidiary of any of its obligations under
this Amended Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto; (iii) such assignee represents and
warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Amended Agreement and the other Loan Documents, together with copies of the
most recent Required Financial Statements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will
independently, and without reliance upon the Agent, the Issuing Bank, such
assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Amended
Agreement; (vi) such assignee appoints and authorizes the Agent and the
Issuing Bank to exercise such powers under this Amended Agreement as are
delegated to such party by the terms hereof, together with such powers as are
reasonably incidental hereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms
of this Amended Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain at one of its offices in
Charlotte, North Carolina, a copy of each Assignment and Acceptance delivered
to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amount of the Loans owing to,
each Lender pursuant to the terms hereof from time to time (the "REGISTER").
The entries in the Register shall be conclusive in the absence of manifest
error and the Borrower, the Agent and the Lenders may treat each person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Amended Agreement. The Register shall be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
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(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee together with the
Note subject to such assignment, an Administrative Questionnaire completed in
respect of the assignee (unless the assignee shall already be a Lender
hereunder or shall be an Affiliate of a Lender), the processing and
recordation fee referred to in Section 9.04(b) and, if required, the written
consent of the Borrower, the Agent and the Issuing Bank to such assignment,
the Agent shall (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Issuing Bank, the Lenders and the Borrower. Within five
Business Days after receipt of notice, the Borrower, at its own expense,
shall execute and deliver to the Agent, in exchange for the surrendered Note,
a new Note payable to the order of such assignee in a principal amount equal
to the applicable portion thereof (and the corresponding Commitment, if any)
assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained any portion of such Note (and such Commitment,
if any), a new Note payable to the order of such assigning Lender in a
principal amount equal to the applicable portion of such Note (and such
Commitment, if any) retained by it. Such new Note shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note; such new Note shall be dated the date of the surrendered Note which it
replaces and shall otherwise be in substantially the form of Exhibit A
hereto, as applicable. Canceled Notes shall be returned to the Borrower.
(f) Each Lender may, without the consent of the Agent or
the Issuing Bank, sell participations in all or a portion of its rights and
obligations under this Amended Agreement (including all or a portion of its
Commitment, the Loans owing to it, the Note held by it and the participations
in Letters of Credit held by it) to one or more participants; PROVIDED, THAT,
(i) such Lender's obligations under this Amended Agreement shall remain
unchanged, (ii) the sum of (A) the principal amount of the outstanding Loans
subject to such participation and (B) the unused amount of the Commitments of
the Lender subject to such participation shall be not less than the lesser of
(I) $5,000,000 principal amount and (II) the entire remaining amount of the
outstanding Loans and unused Commitments of such Lender, (iii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iv) the participating banks or other
entities shall be entitled to the benefit of the cost protection and
indemnity provisions contained in Sections 2.14, 2.16 and 2.20 to the same
extent as if they were Lenders (except that no participant shall be entitled
to claim any amount greater than its pro rata share of the amount that could
have been claimed by the Lender from which it acquired its participation and
no claim by a participant shall be duplicative of a participating Lender's
claim), (v) the Borrower, the Agent, the Issuing Bank and the other Lenders
shall continue to deal solely and directly with the Lender from which the
participant acquired its interest in connection with such Lender's rights and
obligations under this Amended Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrower relating to the Loans
and to approve any amendment, modification or waiver of any provision of this
Amended Agreement (other than amendments, modifications or waivers decreasing
any fees payable hereunder or the amount of principal of or the rate at which
interest is payable on the Loans, extending any scheduled principal payment
date or date fixed for the payment of interest on the Loans or increasing or
extending the Commitments), (vi) no Lender shall grant a participation to any
participating bank or other entity in respect of any amount less than
$5,000,000 in principal
84
amount, (vii) no participation hereunder shall be made by any person or
financial institution other than a Lender and (viii) each participation
hereunder shall require the prior written consent of the Borrower, such
consent not to be unreasonably withheld (without limiting the foregoing, it
is understood that it is reasonable for Borrower to withhold consent based on
reasonable concerns regarding potential exposure of the Borrower under the
cost protection and indemnity provisions contained in Sections 2.14, 2.16 and
2.20 as a result of such participation).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant
to this Section 9.04, disclose to the assignee or participant or proposed
assignee or participant any Confidential Information or other information
relating to any Credit Party or any of its Subsidiaries or Affiliates
furnished to such Lender by or on behalf of the Sponsor, USPI or any Credit
Party; PROVIDED, THAT, prior to any such disclosure of Confidential
Information (i) notice shall be given to the Borrower of such disclosure,
whereupon the Borrower may require that such disclosure not be made, except
that a Lender or participant may disclose Confidential Information
notwithstanding the Borrower's requirement that such disclosure not be made
and irrespective of the requirements of clause (ii) below, if such disclosure
(x) is or may be required pursuant to (A) a response to any order of any
court or other Governmental Authority or as otherwise required by any law,
rule, regulation, judicial process or fiduciary obligation, or (B) a request
or requirement of any state, federal or foreign authority or examiner
regulating banks or banking, as long as such disclosure made pursuant to
clauses (A) or (B) is made consistent with the provisions of Section 9.15 and
(y) is made pursuant to an agreement containing customary exceptions that is
satisfactory to the Agent and the disclosing Lender, assignee or participant,
and designed to preserve the confidentiality of such Confidential Information
to the extent possible, and (ii) if the Borrower permits such disclosure to
be made, each such assignee or participant or proposed assignee or
participant shall execute an agreement whereby such assignee or participant
shall agree, on terms and conditions reasonably satisfactory to the Borrower
and the Agent, Lender or participant, as the case may be, to preserve the
confidentiality of such Confidential Information.
(h) Any Lender may at any time assign all or any portion of
its rights under this Amended Agreement and the Note issued to it to a
Federal Reserve Bank to secure extensions of credit by such Federal Reserve
Bank to such Lender; PROVIDED, THAT, no such assignment shall release a
Lender from any of its obligations hereunder or substitute any such Federal
Reserve Bank for such Lender as a party hereto.
(i) The Borrower and Holdings shall not assign or delegate
any of their respective rights or duties hereunder or any interest herein
(whether voluntarily, by operation of law or otherwise). Any purported
assignment or delegation in violation of the foregoing shall be void.
Section 9.05. EXPENSES; INDEMNITY. (a) The Borrower agrees to pay
all reasonable out-of-pocket expenses incurred by the Agent or the Issuing
Bank in connection with the preparation, execution and administration of this
Amended Agreement and the other Loan Documents, the syndication or closing of
the Facility, the administration of the Facility or any amendment,
modification or waiver of the provisions hereof or thereof and the Borrower
agrees
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to pay all reasonable out-of-pocket expenses incurred by the Agent, the
Issuing Bank or any Lender in connection with the enforcement or protection
of the rights of the Agent, the Issuing Bank and the Lenders under this
Amended Agreement and the other Loan Documents or in connection with the
Loans made, the Notes issued hereunder or the Letters of Credit issued
hereunder, including the reasonable fees, charges and disbursements of (i)
McGuireWoods LLP, counsel for the Agent, (ii) any third party consultants
retained, with the consent of the Borrower, to assist the Agent in analyzing
any healthcare, environmental, insurance, solvency-related and other due
diligence issues and (iii) in connection with any such enforcement or
protection (including any workout or restructuring or any negotiations
relating thereto), any one counsel for the Agent, the Issuing Bank and the
Lenders. Borrower agrees to pay all of the above fees and expenses regardless
of whether or not the Facility is closed.
(b) The Borrower agrees to indemnify the Agent, the Issuing
Bank, the Affiliates of the Agent, the Issuing Bank, the Lenders, and their
respective directors, officers, employees, agents and Controlling persons
(each, an "INDEMNIFIED PARTY") from and against any and all losses, claims
(whether valid or not), damages and liabilities, joint or several, to which
such Indemnified Party may become subject, related to or arising out of (i)
the Facility, (ii) the execution or delivery of this Amended Agreement or any
other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder and the other transactions contemplated
hereby and thereby, (iii) the use of the Letters of Credit or the proceeds of
the Loans or (iv) any claim, litigation, investigation or proceeding relating
to any of the foregoing, whether or not any Indemnified Party is a party
thereto. The Borrower further agrees to reimburse each Indemnified Party for
all expenses (including reasonable attorneys' fees and expenses) as they are
incurred in connection with the investigation of, preparation for or defense
of any pending or threatened claim or any action or proceeding arising
therefrom. Notwithstanding the foregoing, the obligation to indemnify any
Indemnified Party under this Section 9.05(b) shall not apply in respect of
any loss, claim, damage or liability to the extent that a court of competent
jurisdiction shall have determined by final and nonappealable judgment that
such loss, claim, damage or liability resulted from such Indemnified Party's
gross negligence or willful misconduct.
(c) The Borrower agrees to indemnify each of the Agent, the
Issuing Bank, the Lenders and the other Indemnified Parties from and against
any and all losses, claims (whether valid or not), damages and liabilities,
joint or several, to which such Indemnified Party may become subject, related
to or arising out of (i) any Federal, state, local or other statute,
ordinance, order, judgment, ruling or regulation relating to environmental
pollution, regulation or control affecting any Consolidated Party or its
properties or assets, (ii) any Hazardous Materials managed by any
Consolidated Party, (iii) any event, condition or circumstance involving
environmental protection, pollution, regulation or control affecting any
Consolidated Party or its properties or assets or (iv) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not
any Indemnified Party is a party thereto. The Borrower further agrees to
reimburse each Indemnified Party for all expenses (including reasonable
consultants' and attorneys' fees and expenses) as they are incurred in
connection with the investigation of, preparation for or defense of any
pending or threatened claim or any action or proceeding arising
86
therefrom. Notwithstanding the foregoing, the obligation to indemnify any
Indemnified Party under this Section 9.05(c) shall not apply in respect of
any loss, claim, damage or liability to the extent that a court of competent
jurisdiction shall have determined by final and nonappealable judgment that
such loss, claim, damage or liability resulted from such Indemnified Party's
gross negligence or willful misconduct.
(d) In the event that the foregoing indemnity is
unavailable or insufficient to hold an Indemnified Party harmless, then the
Borrower will contribute to amounts paid or payable by such Indemnified Party
in respect of such Indemnified Party's losses, claims, damages or liabilities
in such proportions as appropriately reflect the relative benefits received
by and fault of the Borrower and such Indemnified Party in connection with
the matters as to which such losses, claims, damages or liabilities relate
and other equitable considerations.
(e) If any action, proceeding or investigation is
commenced, as to which any Indemnified Party proposes to demand such
indemnification, it shall notify the Borrower with reasonable promptness;
PROVIDED, THAT, any failure by such Indemnified Party to notify the Borrower
shall not relieve the Borrower from its obligations hereunder except to the
extent the Borrower is prejudiced thereby. The Borrower shall be entitled to
assume the defense of any such action, proceeding or investigation, including
the employment of counsel and the payment of all fees and expenses. Each
Indemnified Party shall have the right to employ separate counsel in
connection with any such action, proceeding or investigation and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be paid by such Indemnified Party, unless (i) the Borrower has failed
to assume the defense and employ counsel as provided herein, (ii) the
Borrower has agreed in writing to pay such fees and expenses of separate
counsel or (iii) an action, proceeding or investigation has been commenced
against such Indemnified Party and the Borrower and representation of both
the Borrower and such Indemnified Party by the same counsel would be
inappropriate because of actual or potential conflicts of interest between
the parties (in the case of the Agent or Lender, the existence of any such
actual or potential conflict of interest to be determined by such party,
taking into account, among other things, any relevant regulatory concerns).
In the case of any circumstance described in clause (i), (ii), or (iii) of
the immediately preceding sentence, the Borrower shall be responsible for the
reasonable fees and expenses of such separate counsel; PROVIDED, THAT, the
Borrower shall not in any event be required to pay the fees and expenses of
more than one separate counsel (plus appropriate local counsel under the
direction of such separate counsel) for all Indemnified Parties, unless
representation of all Indemnified Parties by the same counsel would be
inappropriate due to actual or potential conflicting interests between such
Indemnified Parties, in which case, the Borrower shall be required to pay the
fees and expenses of such additional counsel as are necessary to prevent such
conflicting interests. The Borrower shall be liable only for settlement of
any claim against an Indemnified Party made with the Borrower's written
consent.
(f) The provisions of this Section 9.05 shall remain
operative and in full force and effect regardless of the expiration of the
term of this Amended Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Amended Agreement or any
other
87
Loan Document, or any investigation made by or on behalf of any Agent or
Lender. All amounts due under this Section 9.05 shall be payable on written
demand therefor.
Section 9.06. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional
or final except deposits for the payment of payroll taxes) at any time held
and other indebtedness at any time owing by such Lender to or for the credit
or the account of any Credit Party against any of and all the obligations of
such person now or hereafter existing under this Amended Agreement and the
other Loan Documents held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Amended Agreement or such other
Loan Document and although such obligations may be unmatured. The rights of
each Lender under this Section 9.06 are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
Section 9.07. APPLICABLE LAW. THIS AMENDED AGREEMENT AND THE OTHER
LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
Section 9.08. WAIVERS; AMENDMENT. (a) No failure or delay of the
Agent, the Issuing Bank or any Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or power. The rights and
remedies of the Agent, the Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights
or remedies which they would otherwise have. No waiver of any provision of
this Amended Agreement or any other Loan Document or consent to any departure
by the Borrower or any other Credit Party therefrom shall in any event be
effective unless the same shall be permitted by Section 9.08(b), and then
such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice or demand on the Borrower or any
Credit Party in any case shall entitle the Borrower or such Credit Party to
any other or further notice or demand in similar or other circumstances.
(b) None of this Amended Agreement, the other Loan
Documents and any provision hereof or thereof may be waived, amended or
modified (and no consent to the departure by the Borrower or any other Credit
Party therefrom may be effective), except pursuant to an agreement or
agreements in writing entered into by the Borrower, Holdings and the Required
Lenders; PROVIDED, THAT, no such agreement shall (i) decrease the principal
amount of or extend the maturity of or date for the payment of any interest
on any Loan or any date for reimbursement of a Letter of Credit Disbursement,
or waive or excuse any such payment or any part thereof, or decrease the rate
of interest on any Loan or a Letter of Credit Disbursement, without the prior
written consent of each Lender affected thereby, (ii) change or extend the
Commitments or decrease the Fees of any Lender without the prior written
consent of such Lender, (iii) increase the aggregate Commitments of the
Lenders without the prior written
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consent of each Lender, (iv) amend or modify the provisions of Section 2.17,
the provisions of this Section, the definition of the term "Required
Lenders," release at one time or serially in the aggregate all or
substantially all the Guarantors or all or substantially all the Collateral,
without the prior written consent of each Lender, (v) change any provision
relating to any prepayment of the Loans under the Facility without the
consent of the Required Lenders, and (vi) waive the conditions to funding any
Loan or issuance of a Letter of Credit without the consent of the Required
Lenders; PROVIDED, FURTHER, that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Agent or the Issuing Bank
hereunder or under any other Loan Document without the prior written consent
of the Agent or the Issuing Bank, as applicable. Each Lender and each holder
of a Note shall be bound by any waiver, amendment or modification authorized
by this Section 9.08 regardless of whether its Note shall have been marked to
make reference thereto, and any consent by any Lender or holder of a Note
pursuant to this Section 9.08 shall bind any person subsequently acquiring a
Note from it, whether or not such Note shall have been so marked.
Section 9.09. INTEREST RATE LIMITATION. Notwithstanding anything
herein or in the Notes to the contrary, if at any time the applicable
interest rate, together with all fees and charges which are treated as
interest under applicable law (collectively the "CHARGES"), as provided for
herein or in any other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by any Lender, shall
exceed the maximum rate permitted by applicable law (the "MAXIMUM RATE")
which may be contracted for, charged, taken, received or reserved by such
Lender in accordance with applicable law, the rate of interest payable under
the affected Note held by such Lender, together with all Charges payable to
such Lender, shall be limited to the Maximum Rate.
Section 9.10. ENTIRE AGREEMENT. (a) This Amended Agreement, the
other Loan Documents and the Fee Letter constitute the entire contract among
the parties relative to the subject matter hereof and thereof. Any previous
agreement among the parties with respect to the subject matter hereof and
thereof is superseded by this Amended Agreement, the other Loan Documents and
the Fee Letter. Nothing in this Amended Agreement, the other Loan Documents
or the Fee Letter, expressed or implied, is intended to confer upon any party
(other than the parties hereto and the other Secured Parties) any rights,
remedies, obligations or liabilities under or by reason of this Amended
Agreement, the other Loan Documents or the Fee Letter.
(b) THIS WRITTEN AMENDED AGREEMENT, THE NOTES, THE OTHER
LOAN DOCUMENTS, THE FEE LETTER AND THE DOCUMENTS EXECUTED IN CONNECTION
HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
Section 9.11. SEVERABILITY. In the event any one or more of the
provisions contained in this Amended Agreement or in any other Loan Document
should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby.
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The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
Section 9.12. COUNTERPARTS. This Amended Agreement may be executed
by the parties hereto in several counterparts and each such counterpart shall
be deemed to be an original, admissible into evidence, but all such
counterparts shall together constitute but one and the same Amended
Agreement, and shall become effective as provided in Section 9.03. Delivery
of an executed counterpart of this Amended Agreement by facsimile shall be
equally as effective as delivery of a manually executed counterpart of this
Amended Agreement. Any party delivering an executed counterpart of this
Amended Agreement by facsimile shall also deliver a manually executed
counterpart of this Amended Agreement, but the failure to deliver a manually
executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amended Agreement.
Section 9.13. HEADINGS. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part
of this Amended Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Amended Agreement.
Section 9.14. REMEDIES. In case any one or more of the covenants
and/or agreements set forth in this Amended Agreement shall have been
breached by the Borrower or Holdings, then the Agent may, on behalf of the
Lenders, proceed to protect and enforce the Lenders' rights either by suit in
equity and/or by action at law, including, but not limited to, an action for
damages as a result of any such breach and/or an action for specific
performance of any such covenant or agreement contained in this Amended
Agreement. Without limitation of the foregoing, the Borrower and Holdings
each agrees that failure to comply with any of the covenants contained herein
will cause irreparable harm and that specific performance shall be available
in the event of any breach thereof. The Agent acting pursuant to this Section
9.14, shall be indemnified against all liability, loss or damage, together
with all reasonable costs and expenses related thereto (including reasonable
legal and accounting fees and expenses) in accordance with Section 9.05.
Section 9.15. CONFIDENTIALITY. Neither the Agent nor any Lender
shall disclose any Confidential Information to any other person without the
consent of the Borrower, other than (a) to the Agent's or such Lender's
Affiliates and their officers, directors, agents, attorneys, affiliates and
employees and, as contemplated by and subject to Section 9.04, actual and
prospective assignees and participants, and then only on a confidential
basis, (b) to the Agent's or any Lender's or any assignee's or participant's
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with
the terms of this Section 9.15; (c) in response to any order of any court or
other Governmental Authority or as otherwise required by any law, rule,
regulation, judicial process or fiduciary obligation (PROVIDED that (x) the
Agent, such Lender or participant, as the case may be, shall give prior
notice thereof to the Borrower and (y) in the event the Agent, any Lender or
participant is required to disclose any Confidential Information pursuant to
subsection (c), the
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Agent, such Lender or participant, as the case may be, shall use reasonable
efforts to disclose only that portion of such Confidential Information as it
is legally required, in the opinion of its counsel, to disclose) and (d) as
requested or required by any state, federal or foreign authority or examiner
regulating banks or banking.
Section 9.16. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) Each
of the Credit Parties hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any North
Carolina State court or Federal court of the United States of America sitting
in Charlotte, North Carolina, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Amended Agreement
or the other Loan Documents, or for recognition or enforcement of any
judgment, and hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in
such North Carolina State or, to the extent permitted by law, in such Federal
court. Each of the Credit Parties agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Amended Agreement shall affect any right that the Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Amended Agreement or the other Loan Documents
against any Credit Party or its properties in the courts of any jurisdiction.
(b) Each of the Credit Parties hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this
Amended Agreement or the other Loan Documents in any North Carolina State
court or Federal court of the United States of America sitting in Charlotte,
North Carolina. Each of the Credit Parties hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each Credit Party to this Amended Agreement irrevocably
consents to service of process in the manner provided for notices in Section
9.01. Such Credit Party hereby irrevocably appoints CT Corporation System,
with an address on the date hereof at 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx
Xxxxxxxx 00000 (the "NORTH CAROLINA PROCESS AGENT"), as process agent in its
name, place and stead to receive and forward service of any and all writs,
summonses and other legal process in any suit, action or processing brought
in the State of North Carolina, agrees that such service in any such suit,
action or proceeding may be made upon the North Carolina Process Agent and
agrees to take all such action as may be necessary to continue said
appointment in full force and effect or to appoint another agent so that such
Credit Party will at all times have an agent in the State of North Carolina
for service of process for the above purposes. Nothing in this Amended
Agreement will affect the right of any party to this Amended Agreement to
serve process in any other manner permitted by law.
(d) TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE
BORROWER AND HOLDINGS WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
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OF, UNDER OR IN CONNECTION WITH THIS AMENDED AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, the Borrower, Holdings, the Agent, the Issuing
Bank and the Lenders have caused this Amended Agreement to be duly executed
by their respective authorized officers as of the day and year first above
written.
ORTHOLINK PHYSICIANS CORPORATION,
as Borrower
/s/ G. XXXXXX XXXXXXXXX
------------------------------------------
Name: G. Xxxxxx Xxxxxxxxx
Title: Senior Vice President and CFO
OPC FINANCIAL CORPORATION,
as Parent
/s/ XXXX X. XXXXXX
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
BANK OF AMERICA, N.A.,
as Agent, as Issuing Bank and as a Lender
/s/ XXXXX X. XXXXXX
------------------------------------------
Xxxxx X. Xxxxxx
Principal
AMSOUTH BANK OF TENNESSEE,
as a Lender
/s/ XXXXX X. WIND
------------------------------------------
Name: Xxxxx X. Wind
Title: Vice President
00
XXXXXXXX XXXX XXXX XX XXXXXXXX,
as a Lender
/s/ XXXXXX X. XXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title:
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