EXHIBIT 10.44
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PHYSICIANS RESOURCE GROUP, INC.
Borrower
_______________________________________
FIRST AMENDED AND RESTATED
LOAN AGREEMENT
$20,000,000 REVOLVING CREDIT LOAN
Dated as of November 28, 1997
________________________________________
NATIONSBANK OF TENNESSEE, N.A., AGENT
NATIONSBANK OF TENNESSEE, N.A.
AND ANY OTHER BANKS PARTY HERETO
Lenders
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TABLE OF CONTENTS
RECITALS................................................................. 1
I. DEFINITIONS....................................................... 1
1.1 Terms Defined in This Agreement....................... 1
1.2 Terms Generally.......................................14
II. LOANS AND LETTERS OF CREDIT.......................................14
2.1 Amount of Revolving Credit Loan.......................15
2.2 Use of Proceeds of Revolving Credit Loan..............15
2.3 Revolving Credit Loan Notes...........................15
2.4 Separate Commitments of Lender........................15
2.5 Advances of Loans.....................................15
2.6 Interest..............................................18
2.7 Alternate Rate of Interest if LIBOR Unavailable.......19
2.8 Change in Circumstances...............................20
2.9 Change in Legality of LIBOR Loans.....................22
2.10 Principal Repayment...................................22
2.11 Prepayment of LIBOR Loans.............................22
2.12 Prepayment of Base Rate Loans.........................23
2.13 Reduction of Commitment...............................24
2.14 Periodic Commitment Fee Based on Use of Facilities....24
2.15 Letters of Credit.....................................24
2.16 Up-Front Fee..........................................31
2.17 Additional Closing....................................31
III. CONDITIONS PRECEDENT..............................................32
3.1 Conditions to Initial Advance and Issuance............32
3.2 Conditions to Subsequent Loans and Issuances..........34
3.3 Conditions to the Additional Closing..................34
IV. REPRESENTATIONS AND WARRANTIES....................................35
4.1 Capacity..............................................35
4.2 Authorization.........................................35
4.3 Binding Obligations...................................36
4.4 No Conflicting Law or Agreement.......................36
4.5 No Consent Required...................................36
4.6 Financial Statements..................................36
4.7 Fiscal Year...........................................36
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4.8 Litigation............................................36
4.9 Taxes; Governmental Charges...........................37
4.10 Title to Properties...................................37
4.11 No Default............................................37
4.12 Casualties; Taking of Properties......................37
4.13 Compliance with Laws..................................37
4.14 Compliance with Fraud and Abuse Laws..................38
4.15 ERISA.................................................38
4.16 Full Disclosure of Material Facts.....................38
4.17 Accuracy of Projections...............................38
4.18 Investment Company Act................................38
4.19 Personal Holding Company..............................38
4.20 Solvency..............................................38
4.21 Chief Executive Office................................38
4.22 Subsidiaries..........................................38
4.23 Ownership of Patents, Licenses, Etc...................38
4.24 Environmental Compliance..............................39
4.25 Labor Matters.........................................39
4.26 OSHA Compliance.......................................39
4.27 Regulation U..........................................39
4.28 Affiliate Transactions................................39
4.29 Subordinated Debentures...............................39
V. AFFIRMATIVE COVENANTS.............................................40
5.1 Payment of Obligations................................40
5.2 Maintenance of Existence and Business.................40
5.3 Financial Statements and Reports......................40
5.4 Taxes and Other Encumbrances..........................43
5.5 Payment of Funded Debt................................43
5.6 Compliance with Laws..................................43
5.7 Maintenance of Property...............................43
5.8 Compliance with Contractual Obligations...............44
5.9 Further Assurances....................................44
5.10 Security Interest; Setoff.............................44
5.11 Insurance.............................................44
5.12 Accounts and Records..................................45
5.13 Official Records......................................45
5.14 Banking Relationships.................................45
5.15 Right of Inspection...................................45
5.16 ERISA Information and Compliance......................46
5.17 Indemnity; Expenses...................................46
5.18 Assistance in Litigation..............................47
5.19 Name Changes..........................................47
5.20 Estoppel Letters......................................47
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5.21 Environmental Matters.................................47
5.22 Opinions of Counsel...................................48
5.23 Borrower Entities.....................................49
5.24 Diagnostic Examination................................49
VI. NEGATIVE COVENANTS................................................49
6.1 Debts, Guaranties, and Other Obligations..............49
6.2 Change of Management..................................50
6.3 Change of Ownership...................................51
6.4 Encumbrances..........................................51
6.5 Investments...........................................51
6.6 Prepayments...........................................51
6.7 Sales and Leasebacks..................................51
6.8 Change of Control.....................................52
6.9 Nature of Business....................................52
6.10 Further Acquisitions, Mergers, Etc....................52
6.11 Advances..............................................52
6.12 Disposition of Assets.................................52
6.13 Inconsistent Agreements...............................52
6.14 Fictitious Names......................................52
6.15 Subsidiaries and Affiliates...........................52
6.16 Place of Business.....................................53
6.17 Adverse Action With Respect to Plans..................53
6.18 Transactions With Affiliates..........................53
6.19 Constituent Document Amendments.......................53
6.20 Adverse Transactions..................................53
6.21 Use of Lenders' Name..................................53
6.22 Margin Securities.....................................53
6.23 Accounting Changes....................................53
6.24 Distributions.........................................54
6.25 Action Outside Ordinary Course........................54
6.26 Modification of Subordinated Debenture Documents......54
6.27 Non-Scheduled Payment of Subordinated Debentures......54
VII. FINANCIAL COVENANTS...............................................54
VIII. EVENTS OF DEFAULT.................................................54
8.1 Events of Default.....................................54
8.2 Remedies..............................................57
IX. AGENT.............................................................58
9.1 Appointment of Agent..................................58
9.2 Powers and Duties of Agent............................58
9.3 Indemnification of Agent..............................59
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9.4 No Representations by Agent...........................60
9.5 Independent Investigations by Lenders.................60
9.6 Notice of Default.....................................60
9.7 Funding of Advances Pursuant to Borrowing Notices.....61
9.8 Agent in its Individual Capacity......................61
9.9 Holders...............................................61
9.10 Successor Agent.......................................61
9.11 Sharing of Payments, etc..............................62
9.12 Separate Liens on Collateral..........................62
9.13 Payments Between Agent and Lenders....................62
9.14 Assignments and Participations........................63
9.15 Bankruptcy Provisions.................................63
9.16 Foreclosure of Collateral.............................63
9.17 Procedures for Notices and Approvals..................64
9.18 Other Relationships With Borrower.....................64
X. GENERAL PROVISIONS................................................65
10.1 Notices...............................................65
10.2 Renewal, Extension, or Rearrangement..................66
10.3 Application of Payments...............................66
10.4 Counterparts..........................................66
10.5 Negotiated Document...................................67
10.6 Consent to Jurisdiction; Exclusive Venue..............67
10.7 Not Partners; No Third Party Beneficiaries............67
10.8 No Reliance on Lenders' Analysis......................67
10.9 No Marshaling of Assets...............................67
10.10 Impairment of Collateral..............................67
10.11 Business Days.........................................67
10.12 Standard of Care; Limitation of Damages...............67
10.13 Incorporation of Schedules............................68
10.14 Indulgence Not Waiver.................................68
10.15 Cumulative Remedies...................................68
10.16 Amendment and Waiver in Writing.......................68
10.17 Assignment............................................68
10.18 Entire Agreement......................................68
10.19 Severability..........................................69
10.20 Time of Essence.......................................69
10.21 Applicable Law........................................69
10.22 Captions Not Controlling..............................69
10.23 Amendment and Restatement.............................69
10.24 Facsimile Signatures..................................69
10.25 Arbitration...........................................69
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EXHIBITS
2.3 Form of Revolving Credit Note
2.5.1(b) Form of Borrowing Notice
SCHEDULES
1.1 Initial Borrower Entities
4.8 Litigation
4.28 Affiliate Transactions
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FIRST AMENDED AND RESTATED LOAN AGREEMENT
This First Amended and Restated Loan Agreement is entered into as of
the 28th day of November, 1997, by and among PHYSICIANS RESOURCE GROUP, INC.
("Borrower"), a Delaware corporation; the bank that has executed this Agreement
below and such other lenders as may hereafter become parties hereto
(collectively "Lenders"); and NATIONSBANK OF TENNESSEE, N.A., in its capacity as
Agent for Lenders ("Agent").
RECITALS
WHEREAS, Agent, NationsBank of Tennessee, N.A., AmSouth Bank of
Tennessee and Bank One Texas have previously entered into that Loan Agreement
dated as of March 14, 1997, providing for the extension of a revolving credit
facility to Borrower on certain terms and conditions (such Loan Agreement, as
previously amended, is referred to as the "Prior Loan Agreement"); and
WHEREAS, concurrently with the execution of this Agreement,
NationsBank of Tennessee, N.A., has purchased the Revolving Credit Notes held by
AmSouth Bank of Tennessee and Bank One Texas under the Prior Loan Agreement,
such that NationsBank of Tennessee, N.A. has become the only Lender thereunder;
and
WHEREAS, Borrower, Agent and NationsBank of Tennessee, N.A. wish to
amend and restate the Prior Loan Agreement to provide for a reduced credit
facility on certain revised terms, while preserving the mechanisms by which
other lenders may in the future join as Lenders under the Revolving Credit Loan;
NOW, THEREFORE, as an inducement to cause NationsBank of Tennessee,
N.A. to purchase the Revolving Credit Notes held by AmSouth Bank of Tennessee
and Bank One Texas under the Prior Loan Agreement, and for other valuable
consideration, the receipt and sufficiency of which are acknowledged, it is
agreed as follows:
I. DEFINITIONS
1.1 Terms Defined in This Agreement. As used below in this
Agreement, the following capitalized terms shall have the following meanings,
unless the context expressly requires otherwise:
"ACQUIRED DEBT" means Debt that is outstanding as of the date of
determination and which was previously a loan obligation or a Capital Lease of
an Acquired Practice at the time the Practice was acquired by a Borrower Entity;
provided, however, if any portion of such Debt is subject to the unqualified and
noncontingent written obligation of a Provider to repay the Debt, with interest,
in accordance with its terms, then "Acquired Debt" shall only include the
portion of such Debt that is not subject to the Provider's obligation of
repayment.
"ACQUIRED PRACTICE" means a Practice that is either (i) owned by a
Borrower Entity as of the date hereof or (ii) acquired by a Borrower Entity
after the date hereof through a Permitted Acquisition.
"ADDITIONAL CLOSING" has the meaning assigned in Section 2.17 hereof.
"AFFILIATE" means, with respect to any Person, another Person that,
directly or indirectly, (i) has an equity interest in that Person in an amount
of more than twenty percent (20%) of such Person, (ii) has common ownership with
that Person, where the common owner owns more than twenty percent (20%) of each
Person so affiliated, (iii) Controls that Person, or (iv) shares common Control
with that Person.
"AGENT" means NationsBank of Tennessee, N.A., in its capacity as
described in Article IX of this Agreement, its lawful corporate successors and
any successor agent appointed pursuant to Article IX hereof.
"AGREEMENT" means this Loan Agreement (including all schedules and
exhibits hereto), as the same may be amended from time to time.
"ALTERNATE BASE RATE" means the greater of (i) the Federal Funds Rate
plus one-half percent ( 1/2%), and (ii) the rate announced by Agent as its
"prime rate" (which rate is not necessarily the lowest rate offered on any
particular type of loan), in each case as it may change from time to time.
"APPLICABLE COMMITMENT FEE" means three-eights percent (.375%).
"APPLICABLE LIBO RATE MARGIN" means two and one-half percent (2.5%).
"APPLICABLE BASE RATE MARGIN" means one-half percent (.5%)
"BANKING DAY" means a Business Day, subject to the following
additional convention. As to notices or payments received on a Business Day at
or before 11:00 a.m. Charlotte, North Carolina time, the Banking Day shall
correspond to the Business Day of receipt. As to notices or payments received
on a Business Day after 11:00 a.m. Charlotte, North Carolina time, the Banking
Day of receipt shall be deemed to be the next following Business Day.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as it may
be amended from time to time.
"BASE RATE LOAN" means a Loan for which Borrower has elected the
application of an interest rate based upon the Alternate Base Rate.
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"BORROWER" means Physicians Resource Group, Inc., a Delaware
corporation, and its successors and assigns. This definition does not abrogate
the requirement set forth below restricting Borrower's ability to assign any
rights under this Agreement.
"BORROWER ENTITIES" means Borrower and all Subsidiaries in existence
from time to time.
"BORROWING NOTICE" has the meaning assigned in Section 2.5.1(b)
hereof.
"BUSINESS DAY" means any day on which Agent and national banks located
in Charlotte, North Carolina are open for the conduct of ordinary business;
provided however, that when used in connection with determining the LIBO Rate,
the term "Business Day" shall exclude any day on which banks are not open for
dealings in U.S. Dollar deposits in the London Interbank Market.
"CAPITAL EXPENDITURES" means expenditures, determined according to
GAAP on a consolidated basis, that would be capitalized and depreciated over
more than one annual accounting period.
"CAPITAL LEASE" means a lease that would be characterized as a
financed sale or purchase under GAAP.
"CHANGE OF CONTROL" means the occurrence, after the date of this
Agreement, of (i) any Person or two or more Persons acting in concert acquiring
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of Borrower (or other securities
convertible into such securities) representing 30% or more of the combined
voting power of all securities thereof entitled to vote in the election of
directors; or (ii) during any period of up to 24 consecutive months, individuals
who at the beginning of such 24-month period were directors of Borrower ceasing
for any reason to constitute a majority of the Board of Directors thereof unless
the Persons replacing such individuals were nominated by the Board of Directors
of Borrower; or (iii) any Person or two or more Persons acting in concert
acquiring by contract or otherwise, or entering into a contract or arrangement
which upon consummation will result in its acquisition of, or control over,
securities of Borrower (or other securities convertible into such securities)
representing 30% or more of the combined voting power of all securities of
Borrower entitled to vote in the election of directors.
"CLOSING DATE" means the date of this Agreement.
"COLLATERAL" means all Property now or hereafter securing the
Obligations.
"COMMITMENT" means the amount of each Lender's commitment to fund the
Revolving Credit Loan. Each Lender's several Commitment for the Revolving
Credit Loan shall initially be as set forth below beside their signatures to
this Agreement.
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"CONSOLIDATED EBITDA" means EBITDA as calculated on a consolidated
basis according to GAAP, (i) reduced by the Non-Owned Portion of any EBITDA
arising from a Partially-Owned Subsidiary, and (ii) reduced by any positive
EBITDA arising from Permitted Unpledged Investments and Subsidiaries.
Additionally, EBITDA arising from the operations of Partially-Owned Subsidiaries
shall not exceed 20% of the total Consolidated EBITDA and EBITDA from Permitted
Minority Interest Investment Entities shall not exceed 3% of the total
Consolidated EBITDA.
"CONTROL" or "CONTROLLED" means that a Person has the direct or
indirect power to conduct or govern the policies of another Person, whether this
power exists as a matter of right or through economic compulsion.
"DEBT" means, with respect to any Person, all obligations, contingent
or otherwise, that would be classified under GAAP as a liability of that Person
including, but not limited to, any nonrecourse obligations secured by Property
of that Person.
"DEFAULT RATE" means the lesser of (i) two percent (2%) over the
otherwise applicable rate or, if no other rate is specified, two percent (2%)
over the Alternate Base Rate in effect from time to time, or (ii) the Maximum
Lawful Amount.
"EBITDA" means the sum of net income (before extraordinary gains but
adjusted to reflect extraordinary losses) plus Interest Expense plus expenses
for taxes, depreciation and amortization, determined according to GAAP.
"ENCUMBRANCE" means any interest in Property in favor of one not the
owner thereof, whether voluntary or involuntary, including, but not limited to,
(i) the lien or security interest arising from a deed of trust, mortgage,
pledge, security agreement, conditional sale, Capital Lease, consignment, or
bailment for security purposes, and (ii) reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases, and other such title encumbrances.
"ENVIRONMENTAL LAWS" means the Environmental Protection Act, the
Resource Conservation and Recovery Act of 1976, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Hazardous Materials
Transportation Act and any other federal, state or municipal law, rule or
regulation relating to air emissions, water discharge, noise emissions, solid or
liquid waste disposal, hazardous or toxic waste or materials, or other
environmental or health matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"ERISA AFFILIATE" means any Person who for purposes of Title IV of
ERISA is a member of Borrower's controlled group, or under common control with
Borrower, within
4
the meaning of Section 414 of the IRC, the regulations promulgated pursuant
thereto and the published revenue rulings issued thereunder.
"ERISA EVENT" means (i) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, unless the 30-day notice requirement with
respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of
operations at a facility in the circumstances described in Section 4068(f) of
ERISA; (iv) the withdrawal by Borrower or an ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer, as
defined in 4001(a)(2) of ERISA; (v) the failure by Borrower or any ERISA
Affiliate to make a material payment to a Plan required under Section 302(f)(1)
of ERISA; (vi) the adoption of an amendment to a Plan requiring the provision of
initial or additional security to such Plan, pursuant to Section 307 of ERISA;
or (vii) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, a Plan.
"EVENT OF DEFAULT" means the occurrence of any of the events specified
in Section 8.1 hereof, as to which any requirement for notice or lapse of time
has been satisfied.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519) or any successor publication,
published by the Federal Reserve Board (including any such successor,
"H.15(519)") for such day opposite the caption "Federal Funds (Effective)." If
on any relevant day such rate is not yet published in H.15(519), the rate for
such day will be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m. Quotations") for such
day under the caption "Federal Funds Effective Rate." If on any relevant day the
appropriate rate for such day is not yet published in either H.15(519) or the
Composite 3:30 p.m. Quotations, the rate for such day shall be the arithmetic
mean of the rates for the last transaction in overnight federal funds arranged
prior to 9:00 a.m., New York City time, on that day by each of three leading
brokers of federal funds transactions in New York City, selected by Agent.
"FINANCIAL STATEMENTS" means the audited consolidated balance sheet,
income statement, and statement of cash flows for Borrower dated December 31,
1996 and the unaudited consolidated financial statements dated September 30,
1997 delivered by Borrower to Agent, and all notes thereto.
"FRAUD AND ABUSE LAWS" means 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 1877, as from time to time amended; any successor statute(s)
thereto; all rules and regulations
5
promulgated thereunder; and any other Law relating to the ownership of medical
facilities by providers of medical services or the referral of patients to
medical facilities owned by providers of medical services.
"FUNDED DEBT" means all Debt for borrowed money evidenced by a
promissory note, debenture or similar instrument including, without limitation,
Capital Leases and the Subordinated Debentures and specifically excluding,
without limitation, trade payables, accrued liabilities, income taxes and
deferred income taxes, determined on a consolidated basis.
"GAAP" means generally accepted accounting principles pronounced by
the Financial Accounting Standards Board or any successor thereto, as in effect
from time to time.
"GOVERNMENTAL AUTHORITY" means any governmental or quasi-governmental
entity, court or tribunal including, without limitation, any department,
commission, board, bureau, agency, administration, service or other
instrumentality of any foreign or domestic governmental entity.
"GUARANTORS" means Xxxxxx X. Xxxxx III and Xxxxx Xxxxx M.D.
"HAZARDOUS SUBSTANCES" means those substances included from time to
time within the definition of hazardous substances, hazardous materials, toxic
substances, or solid waste under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended, 42 U.S.C. (S) 9601 et seq.;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. (S) 6901 et seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. (S) 1801 et seq.; the
Clean Water Act, 33 U.S.C. Section 1251 et. seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et. seq., and in the regulations promulgated
pursuant to such acts and laws; and such other substances that are or become
regulated under any applicable local, state, or federal law or regulation
addressing environmental hazards.
"INITIAL BORROWER ENTITIES" means Borrower and all Subsidiaries of
Borrower that own, as of the Closing Date, assets and/or engage in business
transactions (other than entering into asset purchase agreements or merger
agreements that have not been closed), except for those Subsidiaries that have
been created or acquired by Borrower within the thirty (30) days preceding the
Closing Date or that have only entered into the foregoing asset purchase
agreements or merger agreements. A list of all Initial Borrower Entities is
attached hereto as Schedule 1.1 hereto.
"INTANGIBLE ASSETS" means goodwill, patents, copyrights, franchises,
trademarks, research and development costs, organizational costs and other
intangible assets under GAAP.
"INTEREST EXPENSE" means expenses for all interest (including current
charges on Capital Leases) and letter of credit fees.
6
"INTEREST PAYMENT DATE" means, (i) as to Base Rate Loans, the first
day of each calendar quarter and the Maturity Date and (ii) as to any LIBOR
Loan, the last day of the Interest Period applicable to such Loan.
"INTEREST PERIOD" means, as to any LIBOR Loan, the period commencing
on (and including) the date of such LIBOR Loan and ending on (but excluding) the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is one (1) month thereafter, as
Borrower may elect; provided, however, that (x) if any Interest Period would end
on a day that is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, with respect to LIBOR Loans, 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 and (y) no
Interest Period with respect to any Loan shall end later than the Maturity Date.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time.
"ISSUING BANK" means NationsBank of Tennessee, N.A., its lawful
corporate successors, and any successor appointed pursuant to this Agreement in
the event of its resignation.
"LAW" or "LAWS" means all applicable constitutional provisions,
statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions,
rules, regulations, and requirements of all Governmental Authorities.
"LENDERS" means the bank or banks that are signatory hereto as Lenders
and their respective successors and assigns.
"LETTER OF CREDIT DOCUMENTS" has the meaning assigned in Section
2.15.6 of this Agreement.
"LETTER OF CREDIT LIABILITIES" has the meaning assigned in Section
2.15 of this Agreement.
"LETTERS OF CREDIT" has the meaning assigned in Section 2.15 of this
Agreement.
7
"LIBO RATE" means, for any given Interest Period with respect to a
given LIBOR Loan, the rate per annum appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars
(rounded upwards, if necessary, to the next higher 1/100 of 1%) at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for any
reason such rate is not available, the term LIBO Rate shall mean, for any given
Interest Period with respect to a given LIBOR Loan, the rate per annum appearing
on Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
"LIBO RATE RESERVE PERCENTAGE" means the reserve percentage applicable
during any Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for Lenders with respect to liabilities or assets
consisting of or including LIBOR Liabilities having a term equal to such
Interest Period.
"LIBOR LIABILITIES" means deposit liabilities which are deemed to be
eurocurrency liabilities as such term is defined under the regulations of the
Board of Governors of the Federal Reserve Bank.
"LIBOR LOAN" means a Loan for which Borrower has elected application
of an interest rate based on the LIBO Rate.
"LOAN" means a loan advanced under the Revolving Credit Loan.
"LOAN DOCUMENTS" means, collectively, each writing delivered at any
time by any Borrower Entity to Lenders or Agent relating to the Revolving Credit
Loan or relating to any Letters of Credit.
"MATERIAL ADVERSE CHANGE" means any material and adverse change in the
business, Properties, financial condition, prospects or operations of the
Borrower Entities in the aggregate. Without limiting the foregoing, the
commencement of a litigation or arbitration proceeding against Borrower may
cause a Material Adverse Change if the damages sought in such a proceeding
exceed One Million and No/100 Dollars ($1,000,000.00).
"MATERIAL ADVERSE EFFECT" means any event or condition which, singly
or in the aggregate with other events or conditions, materially and adversely
affects the business, Properties, financial condition or operations of the
Borrower Entities, in the aggregate.
8
"MATURITY DATE" means May 1, 1999. The Maturity Date may be extended
from time to time by the written agreement of all Lenders, Agent and Borrower.
"MAXIMUM LAWFUL AMOUNT" means the maximum lawful amount of interest,
loan charges, commitment fees or other charges that may be assessed under
Tennessee law or, if higher, under applicable federal law.
"MOODY'S" means Xxxxx'x Investors Service, Inc. or its successor.
"NATIONSBANK" means NationsBank of Tennessee, N.A., a national banking
association, its successors and assigns.
"NET PROCEEDS" means gross proceeds of a transaction less reasonable
and customary underwriter and brokerage fees and commissions, the fees and
expenses of trustees and attorneys, and other reasonable and customary closing
fees and expenses.
"NON-OWNED PORTION" means the percentage of equity interest of a
Partially-Owned Subsidiary that is not owned by one or more Borrower Entities.
"NOTE" means any of the Revolving Credit Notes referred to in Section
2.3 hereof.
"OBLIGATIONS" means the obligations of Borrower to Lenders to repay
the Revolving Credit Loan, the Reimbursement Obligations and all other
obligations of Borrower and the other Borrower Entities to Lenders and to Agent
under this Agreement and the other Loan Documents.
"OPERATING LEASES" means leases that are not Capital Leases.
"PARTIALLY-OWNED SUBSIDIARY" means a Subsidiary that is not entirely
owned by one or more Borrower Entities.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ACQUISITION" means acquisitions that were Permitted
Acquisitions under the Prior Loan Agreement and which were completed on or
before November 19, 1997. Permitted Acquisitions does not describe any
transaction occurring after November 19, 1997, as acquisitions after that date
are not permitted.
9
"PERMITTED ENCUMBRANCES" means all of the following:
(a) Encumbrances securing the payment of any of the Obligations.
(b) Encumbrances securing taxes, assessments, or other
governmental charges not yet due or which are being
contested in good faith by appropriate action promptly
initiated and diligently conducted, if Borrower has made
reserve therefor as required by GAAP.
(c) Mechanics', repairmen's, materialmen's, warehousemen's,
landlords' and other like liens arising by operation of law
securing accounts that are not delinquent.
(d) Consensual landlords' or real estate lessors' liens on real
or personal Property securing amounts not past due under
leases entered into by a Borrower Entity prior to November
19, 1997.
(e) Encumbrances on real property used by a Borrower Entity not
securing monetary obligations, provided that the
Encumbrances are of a type customarily placed on real
property and do not materially impair the value of the
affected property.
(f) Pledges or deposits in the ordinary course of business to
secure nondelinquent obligations under xxxxxxx'x
compensation or unemployment laws or similar legislation or
to secure the performance of leases or contracts entered
into in the ordinary course of business.
(g) Encumbrances securing Acquired Debt and Purchase Money
Security Interests, to the extent permitted under Section
6.1.7 hereof.
(h) Rights for the use of Property provided for under Service
Agreements entered into in full compliance with this
Agreement.
(i) In addition to any Encumbrance otherwise permitted by this
definition, consensual Encumbrances on assets of Acquired
Practices for thirty (30) days in each case after the
closing of the acquisition thereof by a Borrower Entity.
(j) Encumbrances securing Seller Debt existing as of March 14,
1997.
10
"PERMITTED MINORITY INTEREST INVESTMENT ENTITIES" means Persons in
which one or more Borrower Entities own an equity interest and which are not
Subsidiaries, as to which Borrower has delivered or caused to be delivered to
Agent for the benefit of Lenders, within thirty (30) days after the later of (i)
a Borrower Entity's acquisition of an interest in such Person, or (ii) the
Person's first transaction of business (other than the entering into of asset
purchase agreements or merger agreements that have not been closed), a security
agreement granting to Agent to secure the Obligations a first priority perfected
security interest in the Borrower Entities' interest(s) in such Person pursuant
to documentation in form and substance acceptable to Agent, with the validity
and perfection of the security interest and other matters as Agent may
reasonably require confirmed to Agent and Lenders by an opinion of Borrower's
outside counsel satisfactory to Agent and Lenders in all respects, and with all
expenses related to such documentation (including, but not limited to, filing
fees and taxes and the reasonable fees and expenses of Agent's attorneys) to be
paid by Borrower.
"PERMITTED SUBSIDIARY" means a Subsidiary as to which Borrower has
delivered or caused to be delivered to Agent for the benefit of Lenders, within
thirty (30) days after the later of (i) a Borrower Entity's acquisition of an
interest in the Subsidiary, or (ii) the Subsidiary's first transaction of
business (other than the entering into of asset purchase agreements or merger
agreements that have not been closed), (x) if the Subsidiary is a Wholly-Owned
Subsidiary, a guaranty from such Subsidiary securing the Obligations, and (y) in
all circumstances, a security agreement granting to Agent to secure the
Obligations a first priority perfected security interest in the Borrower
Entities' interest(s) in the Subsidiary pursuant to documentation in form and
substance acceptable to Agent, with the validity of the guaranty (if
applicable), the perfection of the security interest and other matters as Agent
may reasonably require confirmed to Agent and Lenders by an opinion of
Borrower's outside counsel satisfactory to Agent and Lenders in all respects,
and with all expenses related to such documentation (including, but not limited
to, filing fees and taxes and the reasonable fees and expenses of Agent's
attorneys) to be paid by Borrower.
"PERMITTED UNPLEDGED INVESTMENTS AND SUBSIDIARIES" means equity
interests owned by Borrower Entities, which interests would qualify as either
Permitted Subsidiaries or Permitted Minority Interest Investment Entities except
that the equity interests owned by Borrower Entities are not encumbered to
secure the Obligations as required by those definitions or, if so encumbered,
the encumbrances are subject to material question as to the ability of Agent to
effect freely a transfer of the encumbered equity interest by exercise of
remedies pursuant to its security interest therein, provided that (i) the equity
interests at issue must be subject to limitations on their transferability or
assignability only pursuant to restrictions included in the constituent
documents of the investment entity that were in effect before the acquisition of
an interest therein by a Borrower Entity, and (ii) the EBITDA resulting from all
such entities shall not exceed the amount equal to 1% of Consolidated EBITDA.
11
"PERSON" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization, government, governmental agency or political
subdivision thereof, or any other form of entity.
"PLAN" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by Borrower or any
Subsidiary and covered by Title IV of ERISA or to which Section 412 of the IRC
applies.
"PRACTICE" means a medical or optometric practice, optical practice,
ambulatory surgery center related practice or management service center at a
single location or various locations if owned by a single Seller or related
Sellers prior to acquisition by a Borrower Entity. Whenever in this Agreement
"Practice" is used in describing an acquisition by a Borrower Entity, such
reference is to the acquisition of the assets used in the operation of the
Practice that can lawfully be acquired by such Borrower Entity or to the
acquisition of the stock of a corporation or equity interest of another Person
that owns, as of the time of purchase, only those assets that can be lawfully
acquired by such Borrower Entity.
"PRO RATA" OR "PRO RATA SHARE" refer to the apportionment among
Lenders according to their respective total Commitments at the time of
determination; provided, however, if at a time of determination there are
principal amounts outstanding under the Revolving Credit Loan, and if any Lender
has failed to fund in violation of this Agreement any unrepaid Loan that was
funded by any other Lender or Lenders, this apportionment shall be determined
according to the respective total principal amounts of the Revolving Credit Loan
held by the respective Lenders rather than by their Commitments.
"PROPERTY" or "PROPERTIES" means any interest in any kind of property,
whether real, personal, or mixed, or tangible or intangible.
"PROVIDER" means a physician or optometrist who performs professional
services respecting a Practice that is either managed by a Borrower or the
assets of which are owned by a Borrower.
"PURCHASE MONEY SECURITY INTEREST" means an Encumbrance on specific
equipment (including the Encumbrance arising under a Capital Lease), provided
that (i) the Debt secured by any such Encumbrance is not an Acquired Debt, shall
have arisen at the time of the acquisition thereof and shall not exceed 100% of
the cost of the equipment to the entity acquiring the same, and (ii) each such
Encumbrance shall attach only to the equipment so acquired with the proceeds of
the Debt secured thereby.
"REIMBURSEMENT OBLIGATIONS" has the meaning assigned in Section 2.15.2
of this Agreement.
"REQUIRED LENDERS" means Lenders holding more than sixty-six and two-
thirds percent (66 2/3%) of the total Commitments for the Revolving Credit Loan;
provided,
12
however, if at a time of determination there are principal amounts outstanding
under the Revolving Credit Loan, and if any Lender has failed to fund in
violation of this Agreement any unrepaid Loan that was funded by any other
Lender or Lenders, this determination shall be made according to Lenders holding
the required percentage of principal amounts of the Revolving Credit Loan rather
than by the outstanding Commitments.
"REVOLVING CREDIT LOAN" means the revolving credit loan described in
Article II hereof.
"S & P" means Standard & Poor's Corporation or its successor.
"SELLER" means the owner or owners of a Practice that is acquired by a
Borrower Entity or that has entered into a firm and binding commitment letter,
asset purchase agreement, or merger agreement with a Borrower Entity.
"SELLER DEBT" means Debt incurred in favor of one or more Sellers
representing part of the purchase price of an Acquired Practice, including, but
not limited to, amounts due Sellers for the excess of accounts receivable
acquired over the amount of liabilities assumed in the acquisition.
"SENIOR FUNDED DEBT" means Funded Debt other than the Subordinated
Debentures.
"SERVICE AGREEMENT" means one of those Service Agreements now in
effect or hereafter entered into by a Borrower Entity and a Provider setting
forth the terms and conditions under which a Borrower Entity manages the
administration of the Provider's Practice.
"SOLVENT" shall mean, as to any Person, that as of any date of
determination, (i) the then fair value of the assets of such Person is (a)
greater than the then total amount of liabilities (including subordinated
liabilities) of such Person and (b) greater than the amount that will be
required to pay such Person's probable liability on such Person's then existing
debts as they become absolute and matured, (ii) such Person's capital is not
unreasonably small in relation to its business, and (iii) such Person has not
incurred and does not intend to incur, or believe or reasonably should believe
that it will incur, debts beyond its ability to pay such debts as they become
due.
"SUBORDINATED DEBENTURES" has the meaning assigned in Section 6.1.11
hereof.
"SUBSIDIARY" means any present or future corporation or other entity
at least a majority of whose outstanding voting stock or other voting securities
shall at the time be owned directly or indirectly by one or more Borrower
Entities or which is owned to a lesser degree but which is sufficiently
controlled by the Borrower Entities that the owned entity is required to be
reported with the other Borrower Entities on a consolidated basis under GAAP.
13
"TAXES" means all taxes and assessments, whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, which at any time may be
assessed, levied, confirmed or imposed on the Borrower Entities or on any of
their properties or assets or any part thereof or in respect of any of their
franchises, businesses, income or profits.
"UCC" means the Uniform Commercial Code as adopted in Tennessee, as it
may be amended from time to time.
"UNMATURED DEFAULT" means any event or condition that, but for the
giving of any required notice by Agent and/or the passing of time, would be an
Event of Default hereunder.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary that is entirely owned by
one or more Borrower Entities.
1.2 Terms Generally.
1.2.1 Computations; Accounting Principles. Where the character
or amount of any asset or liability or item of income or expense is
required to be determined, or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement,
such determination or calculation, to the extent applicable and except
as otherwise specified in this Agreement, shall be made in accordance
with GAAP. If a change in GAAP after the date of this Agreement would
require a change affecting the calculation of any requirement under
this Agreement, then the Required Lenders and Borrower shall negotiate
in good faith for the amendment of the affected requirements;
provided, however, until and unless such an amendment is agreed upon,
the requirements of this Agreement shall remain as written and
compliance therewith shall be determined according to GAAP as in
effect prior to the change.
1.2.2 Gender and Number. Words used herein indicating gender or
number shall be read as context may require.
1.2.3 References Include Successors. References herein to
specific Laws, regulatory bodies, parties or agreements also refer to
any successor Laws, regulatory bodies, and parties, and to all
modifications, extensions, renewals and restatements of agreements.
1.2.4 References to This Agreement. "Herein," "hereof" and
words of similar import refer to this Agreement as a whole and not to
any particular provision hereof, unless otherwise expressly stated.
14
II. LOANS AND LETTERS OF CREDIT
Concurrently with the execution of this Agreement, Lenders agree on a
several basis, and not on a joint basis, in accordance with their respective
Commitments, to make the Revolving Credit Loan to Borrower, under the following
terms and conditions:
2.1 Amount of Revolving Credit Loan. The principal indebtedness of
Borrower to Lenders under the Revolving Credit Loan shall not exceed Twenty
Million and No/100 Dollars ($20,000,000.00); provided, however, that until the
completion of the Additional Closing, the principal indebtedness of Borrower to
Lenders under the Revolving Credit Loan shall not exceed Fourteen Million and
No/100 Dollars ($14,000,000.00)
2.2 Use of Proceeds of Revolving Credit Loan. The proceeds of the
Revolving Credit Loan drawn prior to the date hereof shall be used for purposes
permitted by the Prior Loan Agreement. Proceeds of the Revolving Credit Loan
drawn on or after the date hereof shall be used by Borrower for (i) general
corporate and working capital purposes, (ii) repayment of Letters of Credit
issued in accordance with this Agreement for working capital purposes, and (iii)
to repay interest under the Subordinated Debentures and to repay the principal
and interest of Seller Debt, in each case as the same become due in the absence
of an acceleration.
2.3 Revolving Credit Loan Notes. Borrower's obligations under the
Revolving Credit Loan shall be evidenced by Revolving Credit Notes (or
amendments or restatements thereof) in favor of the respective Lenders in the
form included as Exhibit 2.3 hereto (or with conforming changes to reflect an
amendment or restatement thereof) payable to each Lender in the maximum amount
of its Commitment.
2.4 Separate Commitments of Lenders. Borrower acknowledges that each
Lender's commitment to fund its portion of the Revolving Credit Loan is made by
each Lender severally, and neither Agent nor any Lender shall be liable for the
failure of another Lender to timely perform under this Agreement.
2.5 Advances of Loans. Subject to the terms and conditions of this
Agreement, Borrower may borrow, repay and reborrow Loans under the Revolving
Credit Loan, provided that the outstanding principal balance of the Revolving
Credit Loan shall not at any time exceed the amount permitted under Section 2.1
above. Loans shall be disbursed as follows:
2.5.1 Loans Advanced Pursuant to Borrowing Notices.
2.5(a) Applicability. Loans under the Revolving Credit
Loan may be LIBOR Loans, Base Rate Loans, or a combination
thereof, and the funding thereof shall be subject to this Section
2.5.1.
15
2.5.1(b) Borrowing Notices. As long as Borrower meets
the conditions for funding stated in this Agreement, Borrower may
submit requests for Loans ("Borrowing Notices") to Agent. All
requests shall be made by telephone, subject to such security
procedures as Agent may require from time to time (provided that
all such telephonic notices shall be confirmed by written
Borrowing Notices within one (1) Business Day) and shall specify
the proposed disbursement date for the requested Loan; the amount
of the Loan; the purpose of the Loan (characterized in accordance
with Section 2.2 above); and the type of Loan, i.e., LIBOR Loan
or Base Rate Loan. Each Borrowing Notice shall irrevocably
obligate Borrower to accept the Loan requested thereby. Borrowing
Notices shall be in the form of Exhibit 2.5.1(b) hereto or such
other form as Agent may from time to time reasonably require.
2.5.1(c) Funding of Loans. Lenders shall fund their
respective portions of requested Loans on the next following
Banking Day after the Banking Day (determined with a cutoff of
11:00 a.m. Charlotte, North Carolina time, as provided in the
definition thereof) of Agent's receipt of the Borrowing Notice,
in the case of Base Rate Loans, and on the third (3rd) Banking
Day following the Banking Day of Agent's receipt of the Borrowing
Notice, in the case of LIBOR Loans. All funds shall be disbursed
directly into an account maintained by Borrower with Agent.
Borrower agrees that if any Lender elects to fund any requested
Loan(s) sooner after requested than is required hereunder, the
Lender may nevertheless use the entire response period allowed
hereunder upon receipt of any subsequent request, at the Lender's
sole option.
2.5.1(d) Base Rate Loan Limitations. Individual Base
Rate Loans shall be in the minimum amount of Five Hundred
Thousand and No/100 Dollars ($500,000.00) each and in multiples
of Five Hundred Thousand and No/100 Dollars ($500,000.00).
2.5.1(e) LIBOR Loan Limitations. Individual LIBOR Loans
shall be in the minimum amount of One Million and No/100 Dollars
($1,000,000.00) each and shall be requested in increments of Five
Hundred Thousand and No/100 Dollars ($500,000.00). No more than
three (3) LIBOR Loans may be outstanding under the Revolving
Credit Loan.
2.5.1(f) Additional Limitation on LIBOR Interest
Periods. Notwithstanding anything to the contrary in this
Agreement, if an Unmatured Default or an Event of Default shall
have occurred and be
16
continuing, no additional LIBOR Loans may be created or continued
and no Base Rate Loan may be converted into a LIBOR Loan.
2.5.2 Conversion of Loans. Borrower shall have the right, on
prior notice to Agent made by telephone, subject to such security
procedures as Agent may require from time to time (provided that all
such telephonic notices shall be confirmed by written Borrowing
Notices within one (1) Business Day), which notice shall be given
three (3) Banking Days (determined with a cutoff of 11:00 a.m.
Charlotte, North Carolina time, as provided in the definition thereof)
prior to the date of any requested conversion, to convert any Base
Rate Loan or LIBOR Loan into a Loan of another type, or to continue
any LIBOR Loan for another Interest Period, subject in each case to
the following:
2.5.2(a) Application of Loans. Each conversion shall be
effected by applying the proceeds of the new LIBOR Loan and/or
Base Rate Loan, as the case may be, to the Loan (or portion
thereof) being converted.
2.5.2(b) Notices of Conversions. Each notice pursuant to
this 2.5.2(b) shall be irrevocable and shall refer to this
Agreement and specify the identity and principal amount of the
particular Loan that Borrower requests be converted or continued;
if such notice requests conversion, the date of such conversion
(which shall be a Business Day); and if a Loan is to be converted
to a LIBOR Loan or a LIBOR Loan is to be continued, the Interest
Period with respect thereto. No LIBOR Loan shall be converted at
any time other than at the end of the Interest Period applicable
thereto, except in accordance with Section 2.11 hereof.
Conversion notices shall be in the form attached as Exhibit
2.5.1(b) hereto.
2.5.3 Absence of Election. In the event that Borrower shall not
give notice to continue any LIBOR Loan for a subsequent period, such
LIBOR Loan (unless repaid) shall automatically be converted into a
Base Rate Loan. If Borrower fails to specify in any Borrowing Notice
the type of borrowing or, in the case of a LIBOR Loan, the applicable
Interest Period, Borrower will be deemed to have requested a Base Rate
Loan. If Agent reasonably believes that any failure by Borrower to
specify the type of borrowing or the applicable Interest Period shall
have resulted from failure of communications equipment or clerical
error, then prior to funding any such borrowing Agent shall use
reasonable efforts to obtain confirmation from Borrower of the
contents of such Borrowing Notice; provided, however, in the absence
of prompt confirmation by Borrower which specifies the type of
borrowing and/or the applicable Interest Period, Borrower will be
deemed to have requested a Base Rate Loan. Notwithstanding anything to
the contrary contained above, if an Event of
17
Default shall have occurred and be continuing, no LIBOR Loan may be
continued and no Base Rate Loan may be converted into a LIBOR Loan.
2.5.4 Implied Representations Upon Request for Loan. Upon
making any request for any Loan, Borrower shall be deemed to have
warranted to Agent and Lenders that all conditions to funding set
forth in Article III hereof are satisfied and that all warranties made
herein are true and shall be true as of the funding of the requested
Loan, subject to exception for warranties that speak to a specific
date or for which the underlying facts have changed pursuant to
transactions permitted under this Agreement, as provided in Exhibit
2.5.1(b) hereto.
2.5.5 Advance Not Waiver. Any Lender's making of any Loan that
it is not obligated to make under any provision of Article III hereof
or any other provision hereof shall not be construed as a waiver of
such Lender's right to withhold future Loans, declare an Event of
Default, or otherwise demand strict compliance with this Agreement,
acting through Agent as permitted by the terms hereof.
2.5.6 Draws by Debit Memorandum. Agent may cause Lenders to
draw amounts that may be available under the Revolving Credit Loan to
pay any Obligation that is not otherwise timely paid.
2.6 Interest. Interest shall accrue on each Loan as follows:
2.6.1 Base Rate Loans. Interest shall accrue on each Base Rate
Loan at an annual rate equal to the Alternate Base Rate plus the
Applicable Base Rate Margin, said rate to change contemporaneously
with any change in the Alternate Base Rate.
2.6.2 LIBOR Loans. Interest shall accrue on each LIBOR Loan at
a rate equal to the LIBO Rate for the selected Interest Period plus
the Applicable LIBO Rate Margin.
2.6.3 Additional Interest on LIBOR Loans. In addition to the
interest described above, Borrower shall pay to any Lender, if and so
long as such Lender shall be required under regulations of the Board
of Governors of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or including LIBOR
Liabilities, additional interest on the unpaid principal amount of
each LIBOR Loan, from the date of such advance until said principal
amount is paid in full, at an interest rate per annum equal at all
times to the remainder obtained by subtracting (i) the LIBO Rate for
the Interest Period from (ii) the rate obtained by dividing the LIBO
Rate by a percentage equal to 100% minus the LIBO Rate Reserve
Percentage for such Interest
18
Period. This additional interest shall be payable on each date on
which interest is payable and shall be effective only after the
affected Lender (or Agent on behalf of all Lenders) gives written
notice thereof to Borrower. The amount of additional interest shall be
determined by each Lender, who shall notify Borrower and Agent thereof
and whose determination shall be conclusive, absent manifest error.
2.6.4 Calculation of Interest. Interest for both Base Rate
Loans and LIBOR Loans shall be computed on the basis of a 360-day year
counting the actual number of days elapsed. Interest shall accrue on
the Business Day a Loan is extended and shall accrue through the
Business Day of payment if payment is received before 11:00 a.m.
Charlotte, North Carolina time and through the next following Business
Day if received after that time.
2.6.5 Default Rate. Notwithstanding the foregoing, upon the
occurrence of an Event of Default and during the continuation of such
Event of Default, interest shall be charged at the Default Rate,
regardless of whether Lenders have elected to exercise any other
remedies available to Lenders, including, without limitation,
acceleration of the maturity of the outstanding principal of the
Revolving Credit Loan.
2.6.6 Payment of Interest. Interest for Base Rate Loans and
LIBOR Loans shall be due and payable in arrears, without notice, on
each Interest Payment Date.
2.6.7 Usury Savings Provision. It is the intention of the
parties that all charges under or in connection with this Agreement
and the Obligations, however denominated, and including (without
limitation) all interest, commitment fees, late charges and loan
charges, shall be limited to the Maximum Lawful Amount. Such charges
hereunder shall be characterized and all provisions of the Loan
Documents shall be construed as to uphold the validity of charges
provided for therein to the fullest possible extent. Additionally, all
charges hereunder shall be spread over the full permitted term of the
Obligations for the purpose of determining the effective rate thereof
to the fullest possible extent, without regard to prepayment of or the
right to prepay the Obligations. If for any reason whatsoever,
however, any charges paid or contracted to be paid in respect of the
Obligations shall exceed the Maximum Lawful Amount, then, without any
specific action by Lenders, Agent or Borrower, the obligation to pay
such interest and/or other charges shall be reduced to the Maximum
Lawful Amount in effect from time to time, and any amounts collected
by Lenders that exceed the Maximum Lawful Amount shall be applied to
the reduction of the principal balance of the Obligations and/or
refunded to Borrower so that at no time shall the interest or loan
charges paid or payable in respect of the Obligations exceed the
Maximum Lawful Amount.
19
This provision shall control every other provision herein and in any
and all other agreements and instruments now existing or hereafter
arising between Borrower and Lenders with respect to the Obligations.
2.7 Alternate Rate of Interest if LIBOR Unavailable. In the event,
and on each occasion, that on the date of commencement of any Interest Period
for a LIBOR Loan, a Lender shall have determined (i) that dollar deposits in the
amount of the requested principal amount of such LIBOR Loan are not generally
available in the London Interbank Market; (ii) that the rate at which such
dollar deposits are being offered will not adequately and fairly reflect the
cost to the Lender of making or maintaining such LIBOR Loan during such Interest
Period; or (iii) that reasonable means do not exist for ascertaining the LIBO
Rate, the Lender shall, as soon as practicable thereafter, give written or
telephonic notice of such determination to Borrower and Agent. In the event of
any such determination, any request by Borrower for a LIBOR Loan under this
Agreement shall, until the circumstances giving rise to such notice no longer
exist, be deemed to be a request for a Base Rate Loan. Each determination by a
Lender hereunder shall be conclusive absent manifest error.
2.8 Change in Circumstances.
2.8.1 Imposition of Requirements. Notwithstanding any other
provision herein, if after the date of this Agreement any change in
applicable Laws 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 a Lender under any LIBOR
Loan made by the Lender or any other fees or amounts payable hereunder
(other than taxes imposed on the overall net income, gross receipts or
added value of a Lender by the country in which the Lender is located,
or by the jurisdiction in which a Lender has its principal office, or
by any political subdivision or taxing authority therein), or shall
impose, modify or deem applicable any reserve requirement, special
deposit, insurance charge (including FDIC insurance on LIBOR
Liabilities) or similar requirement against assets of, deposits with
or for the account of, or credit extended by, a Lender or shall impose
on a Lender or the London Interbank Market any other condition
affecting this Agreement or LIBOR Loans made by a Lender, and the
result of any of the foregoing shall be to increase the cost to the
Lender of making or maintaining its LIBOR Loan or to reduce the amount
of any sum received or receivable by a Lender hereunder (whether of
principal, interest or otherwise) in respect thereof by an amount
deemed by the affected Lender to be material, then Borrower will pay
to such Lender such additional amount or amounts as will compensate
the Lender for such additional costs of reduction.
20
2.8.2 Other Changes. If either (i) the introduction of, or any
change in, or in the interpretation of, any United States or foreign
Law; or (ii) compliance with any directive, guidelines or request from
any central bank or other United States or foreign Governmental
Authority (whether or not having the force of law) promulgated or made
after March 14, 1997, affects or would affect the amount of capital
required or expected to be maintained by a Lender (or any lending
office of a Lender) or any corporation directly or indirectly owning
or controlling a Lender (or any lending office of a Lender) based upon
the existence of this Agreement, and the Lender shall have determined
that such introduction, change or compliance has or would have the
effect of reducing the rate of return on the Lender's capital or on
the capital of such owning or controlling corporation as a consequence
of its obligations hereunder (including its commitment) to a level
below that which the Lender or such owning or controlling corporation
could have achieved but for such introduction, change or compliance
(after taking into account that Lender's policies or the policies of
such owning or controlling corporation, as the case may be, regarding
capital adequacy) by an amount deemed by the Lender (in its sole
discretion) to be material, then, from time to time, Borrower shall
pay to the Lender such additional amount or amounts as will compensate
the Lender for such reduction attributable to making, funding and
maintaining its commitment and Loans hereunder.
2.8.3 Computation of Amounts. A certificate of a Lender setting
forth the basis and method of computation of such amount or amounts
specified in Sections 2.8.1 and 2.8.2 hereof as shall be necessary to
compensate the Lender (or its participating banks) as specified above,
as the case may be, shall be delivered to Borrower and shall be
conclusive absent manifest error; provided however, that Borrower
shall be responsible for compliance herewith and the payment of
increased costs only to the extent that (i) any change in Laws giving
rise to increased costs occurs after the date of this Agreement; (ii)
such increased costs are imposed by the Lender on all other Borrowers
similarly situated with Borrower; and (iii) the Lender gives notice of
the change giving rise to increased costs within ninety (90) Business
Days after the Lender has, or with reasonable diligence should have
had, knowledge of the change, or else Lender can only collect costs
from and after the date of the notice. Subject to the foregoing,
Borrower shall pay the affected Lender the amount shown as due on any
such certificate within ten (10) Business Days after its receipt of
such certificate.
2.8.4 No Duty to Contest. The protection of this Section 2.8
shall be available to a Lender regardless of any possible contention
of invalidity or inapplicability of the Law or condition that shall
have been imposed. Should a Lender assess any charge to Borrower
under this Section 2.8, and provided that Borrower pays the assessment
to the Lender, Borrower may within ninety (90)
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days after receiving notice of such assessment undertake, at
Borrower's own expense, any contest of the matters giving rise to the
charge that may, in the opinion of Borrower's independent counsel
issued to the affected Lender, and concurred in by counsel to the
Lender, have a reasonable chance of success, provided further that the
contest would not require the assertion of any position contrary to a
position taken by the Lender generally with taxing authorities or any
other involved parties and that there does not exist any other
circumstance that would disadvantage the Lender in the event of such
contest, as the affected Lender may determine in its discretion. The
affected Lender shall offer reasonable participation to Borrower for
the purpose of enabling Borrower to pursue the contest of such issue,
with all expenses, including fees and expenses of the affected
Lender's counsel, to be paid by Borrower.
2.8.5 Replacement of Lenders Under Certain Circumstances. If
any specific additional charge is assessed under Sections 2.6.3, 2.7
or 2.8 hereof by less than a majority in number of the Lenders,
Borrower shall be entitled to request of Agent that the Lender(s)
assessing such additional charge be replaced as Lenders hereunder by
other financial institutions proposed by Borrower who do not then
assess such additional charge. Agent shall arrange the appointment of
such replacement Lender(s), who must be acceptable to both Agent and
Borrower in their reasonable discretion. The appointment of such new
Lender(s) shall be accomplished in accordance with the other
provisions of this Agreement and Borrower shall pay the applicable fee
to Agent for the transfer of the interest of the replaced Lender(s).
2.9 Change in Legality of LIBOR Loans. Notwithstanding anything to
the contrary herein contained, if any change in any Law or in interpretation
thereof by any Governmental Authority charged with the administration or
interpretation thereof shall make it unlawful for a Lender to make or maintain
any LIBOR Loan or to give effect to its obligations as contemplated hereby,
then, by written notice to Borrower, the Lender may (i) declare that LIBOR Loans
will not thereafter be made by the Lender hereunder, whereupon Borrower shall be
prohibited from requesting LIBOR Loans from the Lender hereunder unless such
declaration is subsequently withdrawn; and (ii) require that all outstanding
LIBOR Loans made by it be converted to Base Rate Loans, in which event (a) all
such LIBOR Loans shall be automatically converted to Base Rate Loans (but
without imposition of any additional charge that would normally become due under
Section 2.11 hereof) as of the effective date of such notice, and (b) all
payments and prepayments of principal that would otherwise have been applied to
repay the converted LIBOR Loans shall instead be applied to repay the Base Rate
Loans resulting from the conversion of such LIBOR Loans. Under such
circumstances, a borrowing request for a LIBOR Loan shall be regarded, as to the
Lender who has given notice under this Section 2.9, a request for a Base Rate
Loan, and as to all other Lenders, it shall be regarded as a request for a LIBOR
Loan. For purposes of this Section 2.9, a notice to Borrower by the Lender
pursuant to (a) above shall be effective, if lawful, on the last day of
22
the then current Interest Period; in all other cases, such notice shall be
effective on the date of receipt by Borrower.
2.10 Principal Repayment. All remaining principal outstanding under
the Revolving Credit Loan shall become due on the Maturity Date or the earlier
acceleration of the Revolving Credit Loan in accordance with the terms of this
Agreement.
2.11 Prepayment of LIBOR Loans.
2.11.1 Notice of LIBOR Loan Prepayment. Borrower may, upon
three (3) Banking Days' prior written notice to Agent (with a Banking
Day cutoff of 11:00 a.m. Charlotte, North Carolina time, as provided
in the definition thereof), and upon payment of all applicable
premiums set forth in Section 2.11.3 hereof, prepay any outstanding
LIBOR Loans prior to any Interest Payment Date for such LIBOR Loans,
in whole or in part. Each notice of prepayment of any LIBOR Loan shall
specify the date and amount of such prepayment and shall be
irrevocable.
2.11.2 Amount of LIBOR Loan Prepayment. Each partial
prepayment of any LIBOR Loan shall be in an aggregate principal amount
which is the lesser of (i) the then outstanding principal balance of
the one or more LIBOR Loans to be prepaid, or (ii) One Million and
No/100 Dollars ($1,000,000.00) or a larger integral multiple of Five
Hundred Thousand and No/100 Dollars ($500,000.00). Interest on the
amount prepaid accrued to the prepayment date shall be paid on such
date.
2.11.3 LIBOR Loan Breakage Costs. Borrower shall indemnify,
defend and hold harmless each Lender against any loss or expense that
a Lender may incur in connection with the prepayment of a LIBOR Loan,
the Borrower's failure to borrow or to pay when it stated it would do
so, including, but not limited to, the fees or charges customarily
included in "breakage costs" that may result to a Lender from the
early repayment of a LIBOR Liability, which costs may be calculated by
a Lender as though Borrower's prepayment had been match-funded with a
corresponding LIBOR Liability, whether or not the Lender manages its
LIBOR Liabilities on a loan-by-loan basis. Additionally, upon
prepayment of any LIBOR Loan on a date other than the relevant
Interest Payment Date for such borrowing, Borrower shall pay to
Lenders, in addition to all other payments then due and owing Lenders,
premiums which shall be equal to an amount, if any, reasonably
determined by Agent to be the difference between the rate of interest
then applicable to the relevant LIBOR Loan and the yield Lenders would
receive upon reinvestment of so much of the relevant LIBOR Loans as is
prepaid for the remainder of the term of the relevant LIBOR Loan or
Loans. Anything in this Section 2.11.3 to the contrary
notwithstanding, the premiums payable upon any
23
such prepayment shall not exceed the amount, if any, determined by
Agent to be the difference between the rate of interest then
applicable to the relevant LIBOR Loan and the yield that Lenders could
receive upon reinvestment in the "Floor Reinvestment" of so much of
the relevant LIBOR Loan as is prepaid for the remainder of the term of
the relevant LIBOR Loan. For purposes hereof, "Floor Reinvestment"
shall mean an investment for the time period from the date of such
prepayment to the end of the relevant Interest Period applicable to
such LIBOR Loan at an interest rate per annum equal to the Federal
Funds Rate on the date of such prepayment. All determinations,
estimates, assumptions, allocations and the like required for the
determination of such premiums shall be made by Agent in good faith
and shall be presumed correct absent manifest error.
2.12 Prepayment of Base Rate Loans. Borrower may at any time prepay
any outstanding Base Rate Loans prior to the Maturity Date in whole or in part
without premium or penalty upon at least one Business Day's prior notice to
Agent. All such prepayments shall be made in minimum amounts of One Million and
No/100 Dollars ($1,000,000.00) and in increments of Five Hundred Thousand and
No/100 Dollars ($500,000.00) each.
2.13 Reduction of Commitment. Borrower may prospectively and
permanently reduce the Commitment by giving Agent written notice of a reduction
to be effective on a date certain no earlier than ten (10) Business Days after
the notice is received by Agent. The principal balance of the Revolving Credit
Loan shall be reduced, if necessary, on the effective date of the reduction in
accordance with the notice. Reductions shall be shared by Lenders Pro Rata. If
it is necessary to prepay any LIBOR Loan to accommodate the requested reduction,
Borrower shall be liable for all costs provided for elsewhere in this Agreement.
All reductions shall be in amounts of at least One Million and No/100 Dollars
($1,000,000.00) and shall be made in increments of Five Hundred Thousand and
No/100 Dollars ($500,000.00).
2.14 Periodic Commitment Fee Based on Use of Facilities. Borrower
shall pay to Agent for distribution to Lenders Pro Rata an additional commitment
fee for the unused portion of the Revolving Credit Loan. This fee shall be
determined by applying the Applicable Commitment Fee (applied on the basis of a
360-day year) to the average daily unused balance of the Revolving Credit Loan
(based upon availability of $14,000,000.00 or such greater amount as may
hereafter become available). The commitment fee shall be paid in arrears on
each Interest Payment Date applicable to Base Rate Loans, except that all such
fees accrued under the Prior Loan Agreement shall be paid on the Closing Date.
This commitment fee is not refundable. As provided in Section 2.15.2 hereof,
all outstanding Letter of Credit Liabilities shall be treated as outstanding
Loans for the purpose of determining the nonuse fee.
2.15 Letters of Credit. Subject to the terms and conditions of this
Agreement, Lenders' respective Commitments for the Revolving Credit Loan may be
utilized, upon the request of Borrower, for the issuance by the Issuing Bank of
standby or commercial letters of credit (the "Letters of Credit") for the
account of Borrower for uses that would be permitted
24
for the Revolving Credit Loan; provided that in no event shall (i) the aggregate
amount of all stated and undrawn amounts under Letters of Credit (the "Letter of
Credit Liabilities"), together with the aggregate principal amount of the Loans
advanced under the Revolving Credit Loan, exceed the amount stated in Section
2.1 hereof, (ii) the outstanding aggregate amount of all Letter of Credit
Liabilities exceed Five Million and No/100 Dollars ($5,000,000.00), or (iii) the
expiration date of any Letter of Credit extend beyond the Maturity Date
applicable to the Revolving Credit Loan. The following additional provisions
shall apply to Letters of Credit:
2.15.1 Procedure for Issuance. Borrower shall give Agent at
least three (3) Business Days' irrevocable prior notice (effective
upon receipt) specifying the Business Day (which shall be no later
than thirty (30) days preceding the Maturity Date) each Letter of
Credit is to be issued and describing in reasonable detail the
proposed terms of such Letter of Credit (including its beneficiary)
and the nature of the transactions or obligations proposed to be
supported. Borrower shall be the account party for each Letter of
Credit, including Letters of Credit issuable to a beneficiary having a
claim or potential claim against a Subsidiary of Borrower.
2.15.2 Participation Among Lenders. On each day during the
period commencing with the issuance by the Issuing Bank of any Letter
of Credit and until such Letter of Credit shall have expired or been
terminated or, if drawn upon, until the resulting obligations of
reimbursement (the "Reimbursement Obligations") have been satisfied in
full by Borrower (whether by a borrowing under this Agreement or
otherwise), the Commitment of each Lender shall be deemed to be
utilized for all purposes of this Agreement (including, but not
limited to, the calculation of availability and of the nonuse fee) in
an amount equal to such Lender's Pro Rata Share of the Letter of
Credit Liabilities associated with such Letter of Credit. Each Lender
(other than the Issuing Bank) agrees that, upon the issuance of any
Letter of Credit, it shall automatically be deemed to have acquired a
participation in the Issuing Bank's liability under such Letter of
Credit in an amount equal to such Lender's Pro Rata Share of such
liability, and each Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably assume, as primary obligor
and not as surety, and shall be unconditionally obligated to the
Issuing Bank to pay and discharge when due, its Pro Rata Share of the
Issuing Bank's liability under such Letter of Credit.
2.15.3 Reimbursement Obligation. Upon receipt from the
beneficiary of any Letter of Credit of any demand for payment under
such Letter of Credit, the Issuing Bank shall promptly notify Borrower
of the amount to be paid by the Issuing Bank as a result of such
demand and the date on which payment is to be made by the Issuing Bank
to such beneficiary in respect of such demand. Borrower hereby
unconditionally agrees to pay and reimburse Agent for the
25
account of the Issuing Bank and the other Lenders Pro Rata with
respect to the amount of each demand for payment under such Letter of
Credit at or prior to the date on which payment is to be made by the
Issuing Bank to the beneficiary under such Letter of Credit, without
presentment, demand, protest or other formalities of any kind. Any
amounts not so paid or borrowed as set forth in Section 2.15.4 below
shall bear interest at the Default Rate applicable to Base Rate Loans.
2.15.4 Means of Reimbursement. Forthwith upon its receipt of a
notice referred to in Section 2.15.3 hereof, Borrower shall advise
Agent whether or not Borrower intends to obtain a Loan to finance its
obligation to reimburse the Issuing Bank for the amount of the related
demand for payment and, if it does, submit a notice of such borrowing
as provided in this Agreement. In the event that Borrower fails to so
advise Agent, and if Borrower fails to reimburse the Issuing Bank for
a demand for payment under a Letter of Credit by the date of such
payment, Agent shall give each Lender prompt notice of the amount of
the demand for payment, specifying such Lender's Pro Rata Share of the
amount of the related demand for payment, and Borrower shall be deemed
in default hereunder for breaching Section 2.15.3 above.
2.15.5 Payments by Lenders. Each Lender (other than the Issuing
Bank) shall pay to Agent for the account of the Issuing Bank in
Dollars and in immediately available funds, such Lender's Pro Rata
Share of any payment under a Letter of Credit upon notice by Agent to
such Lender requesting such payment and specifying such amount as
provided in Section 2.15.4. Each such Lender's obligation to make
such payments to Agent for the account of the Issuing Bank under this
Section 2.15.5, and the Issuing Bank's right to receive the same,
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the failure of any other Lender to
make its payment under this Section 2.15.5, the financial condition of
Borrower, the existence of any Unmatured Default or Event of Default
or the termination of the Commitments. Each such payment to the
Issuing Bank shall be made without any offset, abatement, withholding
or reduction whatsoever, EVEN IN THE PRESENCE OF ORDINARY NEGLIGENCE
ON THE PART OF THE ISSUING BANK; provided, nothing contained in the
foregoing shall limit the Issuing Bank's liability for its gross
negligence or willful misconduct in improperly honoring a draft drawn
under a Letter of Credit.
2.15.6 Settlement Among Lenders. Upon the making of each
payment by a Lender to the Issuing Bank pursuant to Section 2.15.5
above in respect of any Letter of Credit, such Lender shall,
automatically and without any further action on the part of Agent, the
Issuing Bank or such Lender, acquire (i) a participation in an amount
equal to such payment in the Reimbursement
26
Obligation owing to the Issuing Bank by Borrower under this Agreement
and under the Letter of Credit Documents relating to such Letter of
Credit and (ii) a participation in a percentage equal to such Lender's
Pro Rata Share in any interest or other amounts payable by Borrower
under such Letter of Credit Documents and the other Loan Documents in
respect of such Reimbursement Obligation. Upon receipt by the Issuing
Bank from or for the account of Borrower of any payment in respect of
any Reimbursement Obligation or any such interest or other amount
(including by way of set-off or application of proceeds of any
collateral security) the Issuing Bank shall promptly pay to Agent for
the account of each Lender who shall have previously assumed a
participation in such payment under clause (ii) above, such Lender's
Pro Rata Share of such payment, each such payment by the Issuing Bank
to be made in the same money and funds in which received by the
Issuing Bank. In the event any payment received by the Issuing Bank
and so paid to Lenders is rescinded or must otherwise be returned by
the Issuing Bank, each Lender shall, upon the request of the Issuing
Bank (through Agent), repay to the Issuing Bank (through Agent) the
amount of such payment paid to such Lender, with interest at the rate
specified in Section 2.15.10.
2.15.7 Letter of Credit Fee. Borrower shall pay to Agent for
the account of each Lender Pro Rata a letter of credit fee in respect
of each Letter of Credit on the daily average undrawn face amount of
such Letter of Credit for the period from and including the date of
issuance of such Letter of Credit to and including the date such
Letter of Credit is drawn in full, expires or is terminated (such fee
to be non-refundable, to be paid in arrears on the first day of each
calendar quarter and on the Maturity Date applicable to the Revolving
Credit Loan and to be calculated, for any day, after giving effect to
any payments made under such Letter of Credit on such day) in an
amount equal to the Applicable LIBO Rate Margin(s) in effect during
the relevant period (or such margin plus two percentage points (2%),
upon and during the continuation of an Event of Default hereunder).
All calculations of Letter of Credit fees shall be based on a 360 day
year counting the actual number of elapsed days. The Issuing Bank
shall also receive a facing fee of one-eighth of one percent (1/8%) of
the face amount of any Letter of Credit upon the issuance thereof.
2.15.8 Letter of Credit Information. Upon the request of any
Lender from time to time, the Issuing Bank shall deliver any
information reasonably requested by such Lender with respect to each
Letter of Credit then outstanding.
2.15.9 Conditions Relating to Letters of Credit. The issuance
by the Issuing Bank of each Letter of Credit shall be subject, in
addition to the conditions precedent set forth in Article III hereof,
to the conditions precedent that (i) such Letter of Credit shall be in
such form, contain such terms and support such transactions as shall
be satisfactory to the Issuing Bank consistent
27
with its then current practices and procedures with respect to letters
of credit of the same type and (ii) Borrower shall have executed and
delivered such applications, agreements and other instruments relating
to such Letter of Credit as the Issuing Bank shall have reasonably
requested consistent with its then current practices and procedures
with respect to letters of credit of the same type; provided that in
the event of any conflict between any such application, agreement or
other instrument and the provisions of this Agreement, the provisions
of this Agreement shall control. Without limiting the foregoing, it is
agreed that (i) an "Event of Default" under any reimbursement
agreement respecting a Letter of Credit shall be deemed to mean an
Event of Default under this Agreement, and (ii) no Borrower Entity
shall be required to provide any collateral to secure its obligations
regarding any Letter of Credit except as required herein.
2.15.10 Payments Among Lenders. In the event that any Lender
fails to pay any amount required to be paid pursuant to this Section
2.15 when due, such Lender shall pay interest to the Issuing Bank
(through Agent) on such amount from and including such due date to but
excluding the date such payment is made (i) during the period from and
including such due date to but excluding the date three Business Days
thereafter, at a rate per annum equal to the Federal Funds Rate (as in
effect from time to time) and (ii) thereafter, at a rate per annum
equal to the Alternate Base Rate plus 2.0%.
2.15.11 Modifications. The issuance by the Issuing Bank of any
modification or supplement to any Letter of Credit shall be subject to
the same conditions applicable under this Section 2.15 to the issuance
of new Letters of Credit, and no such modification or supplement shall
be issued unless either (x) the respective Letter of Credit as
affected by such action would have complied with such conditions had
it originally been issued in such modified or supplemented form or (y)
each Lender or the Required Lenders, as may be required under Article
IX hereof, shall have consented to such modification or supplement.
2.15.12 Absolute Obligations of Borrower. The obligations of
Borrower under this Section 2.15 shall be unconditional and absolute
and shall not be affected, modified or impaired, upon the happening at
any time or from time to time of any event, including any of the
following, whether or not with notice to or the consent of Borrower:
2.15.12(a) the compromise, settlement, release,
modification, amendment (whether material or otherwise) or
termination of any or all of the obligations, conditions
covenants or agreements of any Person in respect of any of the
Loan Documents;
28
2.15.12(b) the occurrence, or the failure by Agent, any
Lender or any other Person to give notice to Borrower of the
occurrence, of any Event of Default or any default under any of
the other Loan Documents;
2.15.12(c) the waiver of the payment, performance or
observance of any of the obligations, conditions, covenants or
agreements of any Person contained in any of the Loan Documents;
2.15.12(d) the extension of the time for performance of
any other obligations, covenants or agreements of any Person
under or arising out of any of the Loan Documents;
2.15.12(e) the taking or the omission of any of the
actions referred to in any of the Loan Documents;
2.15.12(f) any failure, omission or delay on the part
of Agent, any Lender, Borrower or the beneficiary of any Letter
of Credit to enforce, assert or exercise any right, remedy, power
or privilege conferred by this Agreement or any of the Loan
Documents, or any other act or acts on the part of Agent, any
Lender, Borrower or the beneficiary of any Letter of Credit;
2.15.12(g) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially
all the assets of, the marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition with
creditors or readjustment of, or other similar proceedings which
affect, Borrower or any other party to any of the Loan
Documents;
2.15.12(h) any lack of validity or enforceability of this
Agreement, any Letter of Credit or any other Loan Document, or
any allegation of invalidity or unenforceability or any contest
of such validity or enforceability;
2.15.12(i) the existence of any claim, set-off, defense
or other right which Borrower may have at any time against Agent,
any Lender or any beneficiary or any transferee of any Letter of
Credit (or any persons or entities for whom the Lender or any
such beneficiary or transferee may be acting), or any other
Person, whether in connection with this Agreement or any of the
other Loan Documents or any of the transactions contemplated by
any Loan Document or any unrelated transaction;
29
2.15.12(j) any statement in any certificate or any
other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any
such statement being untrue or inaccurate in any respect
whatsoever;
2.15.12(k) payment by the Issuing Bank under any Letter
of Credit against presentation of a demand or certificate which
does not comply with the terms of such Letter of Credit;
2.15.12(l) the release or discharge by operation of law
of Borrower form the performance or observance of any obligation,
covenant or agreement contained in any of the Loan Documents; or
2.15.12(m) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing.
2.15.13 Indemnity. Without affecting Borrower's liability
under any other provision of this Agreement, Borrower agrees to
indemnify the Issuing Bank, Agent and each of the Lenders and their
respective affiliates, directors, officers, employees, attorneys and
agents from, and hold each of them harmless against, any and all
losses, liabilities, damages or expenses incurred by any of them in
connection with or by reason of any actual or threatened
investigation, litigation or other proceeding relating to (a) the
execution and delivery of any Letter of Credit; (b) the use of the
proceeds of any drawing under any Letter of Credit; or (c) the
transfer or substitution of, or payment or failure to pay under, any
Letter of Credit, including the reasonable fees and disbursements of
counsel incurred in connection with any such investigation, litigation
or other proceeding, AND EVEN IN THE PRESENCE OF ORDINARY NEGLIGENCE
BY THE INDEMNIFIED PARTY, but excluding damages, losses, liabilities
or expenses to the extent, but only to the extent, incurred by reason
of the willful misconduct or gross negligence of the Issuing Bank in
determining whether a document presented under any Letter of Credit
complies with the terms of such Letter of Credit. It shall not be a
condition to any such indemnification that the Issuing Bank, Agent or
any Lender shall be a party to any such investigations, litigation or
other proceeding. Nothing in this Paragraph 2.15 is intended to limit
Borrower's payment obligations under this Agreement.
2.15.14 Assumption of Risk. Borrower assumes all risks of the
acts or omissions of any beneficiary of any Letter of Credit with
respect to the use of the Letter of Credit. None of Agent, any Lender
nor any of their respective affiliates, officers, directors,
employees, attorneys or agents shall be liable or responsible for: (a)
the use which may be made of the Letter of Credit or for any acts or
omissions of any beneficiary of any Letter of Credit in connection
with such Letter of Credit; (b) the validity, sufficiency or
genuineness of
30
documents presented to the Issuing Bank, or of any endorsement on such
documents, even if such documents should in fact prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (c) payment
by the Issuing Bank against presentation of documents which do not
comply with the terms of any Letter of Credit, including failure of
any documents to bear any reference or adequate reference to such
Letter of Credit; (d) any delay and/or loss in transit of any
messages, letters or documents or delay, mutilation or other errors
arising in the transmission of any telecommunication; or (e) any other
circumstances whatsoever in making or failing to make payment under
any Letter of Credit, EVEN IN THE PRESENCE OF ORDINARY NEGLIGENCE BY
THE ISSUING BANK; provided that Borrower shall have a claim against
the Issuing Bank to the extent, but only to the extent, of any direct,
as opposed to consequential, damages suffered by Borrower which
Borrower proves were caused by the Issuing Bank's willful misconduct
or gross negligence in determining whether a document presented under
any Letter of Credit complied with the terms of such Letter of Credit.
In furtherance and not in limitation of the foregoing, 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.
2.15.15 Resignation of Issuing Bank. The Issuing Bank may resign
from its service as such upon at least fifteen (15) Business Days written notice
to Lenders, Agent and Borrower, upon which Borrower and the Required Lenders
shall appoint a replacement Issuing Bank from among the Lenders. The notice of
resignation shall state the material reason(s) that caused the Issuing Bank to
wish to resign from that capacity. Even after such resignation, the Issuing Bank
shall remain subject to the obligations and entitled to the benefits of the
status of Issuing Bank with respect to Letters of Credit that remain
outstanding.
2.16 Up-Front Fee. On January 5, 1998, Borrower shall pay an
amendment and up-front fee to the Lenders in the amount of One Hundred Fifty
Thousand and No/100 Dollars ($150,000.00). This fee shall be secured by a
pledge of cash to Agent in that amount.
2.17 Additional Closing. Borrower acknowledges that it has requested
that Lenders extend the Revolving Credit Loan under this Agreement on an
expedited basis without the opportunity to determine the appropriate financial
covenants that Lenders would require to engage in a continuing credit
relationship with Borrower. Lenders will need additional financial information
to assess the issue of financial covenants and other underwriting issues that
would affect the desirability of a continuing credit relationship with Borrower.
It is in the furtherance of this effort to assess future covenants that Borrower
has undertaken to deliver projections to Agent (Section 5.3.13) to assist in an
evaluation of Borrower's systems (Section 5.24). In order to assist Lenders in
finalizing the financial covenants, Borrower shall advise Lenders of the final
adjustments to Borrower's "due from affiliates" as approved by Xxxxxx Xxxxxxxx
for the fiscal year ending December 31, 1997 no later than January 15, 1998.
Borrower covenants and agrees that if Lenders and Borrower cannot reach an
agreement on
31
appropriate financial covenants and other terms and conditions going forward on
or before January 31, 1998, Lenders may declare the Revolving Credit Loan to be
due and payable upon at least thirty (30) days prior written notice. Lenders'
assessment and proposal of these financial covenants shall be subject to
Lenders' sole discretion and shall take into account the financial condition of
Borrower as it then exists and all other relevant underwriting matters,
including, but not limited to, the possibility of taking additional security
interests in assets of the Borrower Entities to secure the obligations. In
assessing the financial covenants that Lenders will require of Borrower going
forward, Lenders will propose triggers to permit the curtailment or reduction of
the liability of one or both of the Guarantors.
III. CONDITIONS PRECEDENT
3.1 Conditions to Initial Advance and Issuance. Lenders shall not be
obligated to make their initial Loan pursuant to this Agreement, and the Issuing
Bank shall not be obligated to issue any Letters of Credit, unless and until
Borrower satisfies the following conditions:
3.1.1 Loan Documents. Borrower shall have delivered to Agent
the following documents, fully executed and in form and substance
acceptable to Agent and Lenders:
3.1.1(a) Prior Loan Agreement Documents. All documents
required under the terms and conditions of the Prior Loan
Agreement.
3.1.1(b) Loan Agreement. This Loan Agreement.
3.1.1(c) Revolving Credit Loan Note. The First
Consolidated, Amended and Restated Revolving Credit Note issued
by Borrower payable to the order of NationsBank of Tennessee,
N.A. in the maximum principal amount of $20,000,000.00.
3.1.1(d) Charter. Certified Copy of the charter of
Borrower.
3.1.1(e) Certificates of Good Standing and Authorization.
Certificate of Good Standing issued as to Borrower by the
Secretary of State for the State of Delaware and Certificates of
Authority and Existence issued by the Secretary of State of
Texas.
3.1.1(f) Resolutions. Secretary Certifications including
certified copies of resolutions authorizing the execution of all
applicable Loan Documents on behalf of Borrower.
32
3.1.1(g) Opinions of Borrower's Counsel. Opinions of
Texas counsel to Borrower addressed to Agent and Lenders
addressing such matters as Agent may require.
3.1.1(h) Closing Statement and Funding of Expenses. Loan
Closing Statement describing expenses due in connection with the
closing of the Revolving Credit Loan and payment thereof in
immediately available funds.
3.1.1(i) Compliance Certificate. A Compliance
Certificate executed by Xxxx X'Xxxxx, Borrower's general counsel,
Xxxxx Real, Borrower's chief financial officer, and Xxxxx Xxxxx
M.D., a director of Borrower, confirming appropriate matters to
the best of their knowledge, information and belief.
3.1.1(j) Guaranties. Borrower shall provide the joint and
several Unconditional Limited Guaranties of the Guarantors and
current financial statements for the Guarantors.
3.1.1(k) Collateral Assignment of Account. A Collateral
Assignment of Account granting to NationsBank a first priority
perfected security interest in cash to secure the payment of the
fee due January 5, 1998.
3.1.1(l) Closing Statement. A Closing Statement setting
forth the borrowings and disbursements made on the Closing Date.
3.1.1(m) Amendments to Unconditional Joint and Several
Guaranty. Eighth, Ninth, Tenth and Eleventh Amendments to the
Unconditional Joint and Several Guaranty dated as of March 14,
1997 executed by Subsidiaries of Borrower.
3.1.1(n) First Amendment to Stock Pledge and Security
Agreement. First Amendment to the Stock Pledge Agreement dated as
of March 14, 1997 executed by Borrower and certain of its
Subsidiaries.
3.1.1(o) Other Documents. Such other documents as
Lenders or Agent may reasonably require.
3.1.2 Additional Conditions. Borrower shall have satisfied the
following additional conditions:
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3.12(a) Warranties. All warranties made in the Loan
Documents must be true in all material respects and shall be true
in all material respects taking into account the funding of the
requested Loan.
3.12(b) Covenants. All covenants made in the Loan
Documents must have been complied with in all material respects
and shall have been complied with, taking into account the
funding of the requested Loan.
3.12(c) Absence of Unmatured Default. No Event of
Default or Unmatured Default shall exist under this Agreement.
3.12(d) No Adverse Change. There must be no Material
Adverse Change since September 30, 1997 except as has been
disclosed to Agent as of the Closing Date.
3.12(3) Absence of Litigation. There must be no action,
suit, proceeding or investigation against any Borrower Entity
before or through any Governmental Authority which, if adversely
determined, would likely have a Material Adverse Effect.
3.2 Conditions to Subsequent Loans and Issuances. Lenders shall not
be obligated to make any Loan following the initial advance, and the Issuing
Bank shall not be obligated to issue any Letters of Credit, unless all of the
following conditions are satisfied as of the time of the request and of funding
or issuance:
3.2.1 Conditions to Initial Advance. All of the conditions in
Section 3.1 hereof must have been satisfied as of the date of the
initial advance hereunder.
3.2.2 Permitted Subsidiaries. All of the documents required in
Section 3.1 for Initial Subsidiaries shall have been received by Agent
as to any additional Permitted Subsidiaries, within the time required
in this Agreement.
3.2.3 Warranties. All warranties made in the Loan Documents
must be true in all material respects and shall be true in all
material respects taking into account the funding of the requested
Loan.
3.2.4 Covenants. All covenants made in the Loan Documents must
have been complied with in all material respects and shall have been
complied with in all material respects taking into account the funding
of the requested Loan.
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3.2.5 Absence of Unmatured Default. No Event of Default or
Unmatured Default shall exist under this Agreement.
3.2.6 Material Adverse Change. There shall not have occurred a
Material Adverse Change.
3.3 Conditions to the Additional Closing. If Lenders and Borrower
reach an agreement as to the terms going forward for the Additional Closing, the
following conditions shall apply thereto:
3.3.1 Conditions to Initial Advance. All of the conditions in
Section 3.1 hereof must have been satisfied.
3.3.2 Permitted Subsidiaries. All of the documents required in
Section 3.1 for Initial Subsidiaries shall have been received by Agent
as to any additional Permitted Subsidiaries, within the time required
in this Agreement.
3.3.3 Warranties. All warranties then made in the Loan
Documents must be true in all material respects.
3.3.4 Covenants. All covenants then undertaken in the Loan
Documents must have been complied with in all material respects and
shall have been complied with in all material respects.
3.3.5 Absence of Unmatured Default. No Event of Default or
Unmatured Default shall exist under this Agreement.
3.3.6 Material Adverse Change. There shall not have occurred a
Material Adverse Change.
3.3.7 Documentary Requirements. Borrower shall cause to be
executed and delivered to Lenders and Agent such amendments,
certificates, opinions of counsel, resolutions and other documents
with respect to Borrower, the Borrower Entities and their assets as
Lenders or Agent may require, in their discretion.
IV. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders and Agent that as of the
Closing Date:
4.1 Capacity. Each Borrower Entity is a corporation or other entity
as set forth in Schedule 1.1 hereof, and is duly organized, validly existing and
in good standing
35
under the laws of the state of its domicile as set forth in Schedule 1.1. Each
Borrower Entity is qualified or authorized to do business in all jurisdictions
in which its ownership of property or conduct of business requires such
qualification or authorization or where the failure to be so qualified or
authorized would not have a Material Adverse Effect. Each Borrower Entity has
the power and authority to own its Properties and to carry on its business as
now being conducted and as proposed to be conducted after the execution hereof,
to execute and deliver this Agreement and the other Loan Documents, and to
perform its obligations hereunder and under the other Loan Documents.
4.2 Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents by each Borrower Entity executing such
documents has been duly authorized by all requisite action.
4.3 Binding Obligations. This Agreement is and the other Loan
Documents, when executed and delivered to Agent and Lenders, will be, legal,
valid and binding upon each Borrower Entity who is a party thereto, enforceable
in accordance with its respective terms, subject only to principles of equity
and laws applicable to creditors generally, including bankruptcy laws.
4.4 No Conflicting Law or Agreement. The execution, delivery and
performance of this Agreement and the other Loan Documents by each Borrower
Entity does not constitute a breach of or default under, and will not violate or
conflict with, any provisions of the corporate charter or other constituent
documents of a Borrower Entity; any contract, financing agreement, lease, or
other agreement to which a Borrower Entity is a party or by which its Properties
may be affected, the violation of which would have a Material Adverse Effect; or
any Law to which a Borrower Entity is subject or by which its Properties may be
affected, the violation of which would have a Material Adverse Effect; nor will
the same result in the creation or imposition of any Encumbrance upon any
Property of any Borrower Entity, other than those contemplated by the Loan
Documents.
4.5 No Consent Required. The execution, delivery, and performance of
this Agreement and the other Loan Documents by the Borrower Entities do not
require the consent or approval of or the giving of notice to any Person except
for those consents which have been duly obtained and are in full force and
effect on the date hereof and others, if any, which by their omission would not
result in a Material Adverse Effect.
4.6 Financial Statements. The Financial Statements are complete and
correct, have been prepared in accordance with GAAP, and present fairly the
financial condition and results of operations of the Borrower Entities as of the
date and for the period stated therein, subject to year-end adjustments. No
Material Adverse Change has occurred since the date of the Financial Statements.
Borrower acknowledges that Lenders have advanced (or shall advance) the
Revolving Credit Loan in reliance upon the Financial Statements.
36
4.7 Fiscal Year. Borrower's fiscal year ends on December 31 of each
year.
4.8 Litigation. Except as disclosed on Schedule 4.8 hereto, (i)
there is no litigation, arbitration, legal or administrative proceeding, tax
audit, investigation, or other action or proceeding of any nature pending
against any Borrower Entity or any of its Properties which, if adversely
determined, would likely have a Material Adverse Effect, and (ii) there is no
litigation, arbitration, legal or administrative proceeding, tax audit,
investigation, or other action or proceeding of any nature threatened in writing
against a Borrower Entity which, if adversely determined, would have a Material
Adverse Effect. No Borrower Entity is subject to any outstanding court,
arbitral or administrative order, writ or injunction. To the best of Borrower's
knowledge, information and belief, no facts exist under which third parties have
unasserted claims against any Borrower Entity which, if adversely determined,
would have a Material Adverse Effect.
4.9 Taxes; Governmental Charges. Each Borrower Entity has filed or
caused to be filed or has lawfully extended the deadline for filing all tax
returns and reports required to be filed, other than those which, if not filed,
would not have a Material Adverse Effect. Each Borrower Entity has paid, or
made adequate provision for the payment of, all Taxes that have or may have
become due pursuant to such returns or otherwise, or pursuant to any assessment
received by it, except such Taxes, if any, as are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided.
To the best of Borrower's knowledge, there is no proposed material tax
assessment against any Borrower Entity. No extension of time for the assessment
of federal, state or local taxes of any Borrower Entity is in effect or has been
requested. Each Borrower Entity has timely made all required remittances of
withholding deposits and other assessments against payroll expenditures except
for matters that would not have a Material Adverse Effect.
4.10 Title to Properties. Each Borrower Entity has good and
marketable title to its Properties, free and clear of all Encumbrances except
for Permitted Encumbrances except for matters that would not have a Material
Adverse Effect.
4.11 No Default. No Borrower Entity is in default in any respect
that affects its business, Properties, operations, or condition, financial or
otherwise, under any indenture, mortgage, deed of trust, obligation to equity
holders, credit agreement, note, agreement, lease, sale agreement or other
instrument to which any Borrower Entity is a party or by which its Properties
are bound, which default would have a Material Adverse Effect. To the best of
Borrower's knowledge, information and belief, no other party to any contract
with any Borrower Entity under which a default would have a Material Adverse
Effect is in default or breach thereof and no circumstances exist which, with
the giving of notice and/or the passing of time would constitute such default or
breach. No Event of Default or Unmatured Default exists under this Agreement.
4.12 Casualties; Taking of Properties. Neither the business nor the
Property of any Borrower Entity is presently impaired as a result of any fire,
explosion, earthquake,
37
flood, drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of property, cancellation of contracts, permits,
concessions by any domestic or foreign government or any agency thereof, riot,
activities of armed forces or acts of God or of any public enemy, in any case as
would have a Material Adverse Effect.
4.13 Compliance with Laws. No Borrower Entity is in violation of any
Law to which it, its business or any of its Properties are subject, the
violation of which would likely have a Material Adverse Effect, and there are no
outstanding citations, notices or orders of noncompliance issued to any Borrower
Entity under any such Law, the violation of which would likely have a Material
Adverse Effect. Each Borrower Entity has obtained all licenses, permits,
franchises, or other governmental authorizations necessary to the ownership of
its Properties or to the conduct of its business, except for those which, if not
obtained, would not have a Material Adverse Effect.
4.14 Compliance with Fraud and Abuse Laws. Without limiting any other
provision of this Agreement, no Borrower Entity and no Provider is in violation
of any Fraud and Abuse Law, the violation of which would have a Material Adverse
Effect.
4.15 ERISA. No ERISA Event has occurred with respect to any Plan or
is reasonably expected to occur with respect to any Plan, except for those
which, if not obtained, would not have a Material Adverse Effect.
4.16 Full Disclosure of Material Facts. Borrower has fully advised
Agent of all matters involving the financial condition, business, operations and
Properties of the Borrower Entities that would be reasonably expected to have a
Material Adverse Effect. No information, exhibit, or report furnished or to be
furnished by Borrower to Lenders in connection with this Agreement contains, as
of the date thereof, any misrepresentation of fact or failed or will fail to
state any material fact, the omission of which would render the statements
therein materially false or misleading.
4.17 Accuracy of Projections. With respect to all business plans and
other forecasts and projections furnished by or on behalf of Borrower and made
available to Agent relating to the financial condition, business, operations or
Properties of the Borrower Entities, all facts stated as such therein were true
and complete in all material respects as of the time made and all estimates and
assumptions were made in good faith and believed to be reasonable at the time
made. As of the Closing Date, nothing had come to the attention of Borrower
that has changed its assessment of any such matters, except for changes that
would not have a Material Adverse Effect and those which have been disclosed to
Agent.
4.18 Investment Company Act. No Borrower Entity is an "investment
company" under the Investment Company Act of 1940, as amended.
4.19 Personal Holding Company. No Borrower Entity is a "personal
holding company" as defined in Section 542 of the IRC.
38
4.20 Solvency. Each Borrower Entity is Solvent as of the date hereof
and will remain Solvent upon the consummation of the transactions contemplated
hereby.
4.21 Chief Executive Office. The address designated herein to which
notices are to be sent under this Agreement is Borrower's chief executive office
within the meaning of Tennessee Code Annotated Section 47-9-103(3)(d).
4.22 Subsidiaries. Borrower has no Subsidiaries, except for those
included in the Initial Borrower Entities as disclosed in Schedule 1.1 hereto.
4.23 Ownership of Patents, Licenses, Etc. The Borrower Entities own
all licenses, permits, franchises, registrations, patents, copyrights,
trademarks, trade names or service marks, or the rights to use the foregoing,
that are necessary for the continued operation of their business except for such
licenses, etc., which, if not held or owned, would not have a Material Adverse
Effect.
4.24 Environmental Compliance. Each Borrower Entity has duly
complied with, and their Properties are owned and operated in compliance with,
all Environmental Laws, the violation of which would have a Material Adverse
Effect. There have been no citations, notices or orders of non-compliance issued
to any Borrower Entity or, to the best of Borrower's knowledge, relating to
their business or Properties pursuant to any Environmental Law, except for those
which would not have a Material Adverse Effect. Each Borrower Entity has
obtained all required federal, state and local licenses, certificates or permits
relating to them and their Properties as required by applicable Environmental
Laws, except for those which, if not obtained, would not have a Material Adverse
Effect.
4.25 Labor Matters. No Borrower Entity is subject to any collective
bargaining agreements or any decrees or orders requiring them to recognize, deal
with or employ any Person. No demand for collective bargaining has been
asserted against any Borrower Entity by any union or organization. No Borrower
Entity has experienced any strike, labor dispute, slowdown or work stoppage due
to labor dispute and, to the best knowledge of Borrower, there is no such
strike, dispute, slowdown or work stoppage threatened against any Borrower
Entity. All Borrower Entities are in compliance in all material respects with
the Fair Labor Standards Act of 1938, as amended, except for those matters which
would not have a Material Adverse Effect.
4.26 OSHA Compliance. All Borrower Entities are in compliance in all
material respects with the Federal Occupational Safety and Health Act, as
amended, and all regulations under the foregoing, except for those matters which
would not have a Material Adverse Effect.
4.27 Regulation U. No Borrower Entity is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System). No proceeds
39
of any Loan will be used to purchase or carry any margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal Reserve
System) in violation of applicable law, including, without limitation,
Regulation U issued by the Board of Governors of the Federal Reserve System.
4.28 Affiliate Transactions. No Borrower Entity is a party to any
transaction, contract or agreement with any Affiliate, except for Service
Agreements, lease agreements and other agreements among Borrower and its
Subsidiaries and those other agreements described in Schedule 4.28 hereof.
4.29 Subordinated Debentures. The Obligations constitute "Senior
Indebtedness" for the purpose of the subordination provisions of the Indenture
pursuant to which the Subordinated Debentures have been issued.
V. AFFIRMATIVE COVENANTS
Borrower covenants that, during the term of this Agreement (and
thereafter where expressly stated herein):
5.1 Payment of Obligations. Borrower shall pay all amounts owed
under the Obligations when due without setoff, counterclaim or withholdings of
any kind; provided, however, if Borrower is required by law to withhold any
taxes (other than taxes based upon the income of the Lender imposed by the
jurisdiction in which the Lender is organized or from which its interest herein
has been generated) from any payments on the Obligations to any Lender(s),
Borrower shall make additional payments to such Lender(s) along with the regular
payments as they become due so that the end result is that such Lender(s)
receives the amount that the Lender(s) would have received if no such
withholdings were made.
5.2 Maintenance of Existence and Business. Except for transactions
among Borrower Entities and other transactions permitted under this Agreement,
each Borrower Entity shall maintain its fundamental existence, name, rights, and
franchises, and shall maintain its qualification and good standing in all states
in which such qualification is necessary (except to the extent that failure to
so qualify would not have a Material Adverse Effect), and shall continue to
operate in the same type of business as such Borrower Entity engages in as of
the date hereof.
5.3 Financial Statements and Reports. Borrower shall furnish to
Agent and Lenders or cause Agent and Lenders to receive all of the following,
all of which must be in number sufficient for all Lenders and otherwise in form
and substance satisfactory to Agent and Lenders:
5.3.1 Monthly Financial Reports. As soon as available, and in
any event by the last Business Day of each month, Borrower shall
deliver a balance sheet and income statement of Borrower for and as of
the end of the preceding
40
month, all prepared by Borrower on a consolidated basis and certified
by Borrower's president or chief financial officer to be complete and
correct and to present fairly, in accordance with GAAP (excluding
year-end adjustments and required footnote disclosures), the financial
condition of Borrower and its consolidated affiliates as of the date
of such statements and the results of their operations for such
period. The monthly financial information shall further include
calculations of all financial ratios, the certification of Borrower's
president or chief financial officer as to the absence of any Event of
Default or Unmatured Default. The reports delivered under this Section
shall include consolidating financial statements if Agent so requires.
5.3.2 Quarterly Financial Reports. As soon as available, and in
any event by the forty-fifth (45th) day of each calendar quarter,
Borrower shall deliver a balance sheet, income statement and statement
of cash flows of Borrower for and as of the end of the preceding
fiscal quarter, all prepared by Borrower on a consolidated basis and
certified by Borrower's president or chief financial officer to be
complete and correct and to present fairly, in accordance with GAAP
(excluding year-end adjustments and required footnote disclosures),
the financial condition of Borrower and its consolidated affiliates as
of the date of such statements and the results of their operations for
such period. The quarterly financial information shall further include
calculations of all financial ratios, the certification of Borrower's
president or chief financial officer as to the absence of any Event of
Default or Unmatured Default. The reports delivered under this Section
shall include consolidating financial statements if Agent so requires.
5.3.3 Annual Financial Reports. As soon as available, and in
any event within ninety (90) days after the end of each fiscal year,
Borrower shall deliver audited balance sheets of Borrower as of the
end of such year and the related audited statements of income,
retained earnings and cash flows for such year, together with
supporting schedules, all such statements prepared in accordance with
GAAP on a consolidated basis and accompanied by an unqualified audit
report prepared by an independent "big six" certified public
accountant acceptable to Agent showing the financial condition of
Borrower and its consolidated affiliates at the close of such year and
the results of its operations during such year. The annual financial
information shall include calculations of all financial ratios as
determined based upon the audited financial statements and the
certification of Borrower's president or chief financial officer as to
the absence of any Event of Default or Unmatured Default. The reports
delivered under this Section shall include consolidating financial
statements if Agent so requires.
41
5.3.4 Budgets. As soon as available, and in any event within
sixty (60) days after the beginning of each fiscal year, Borrower
shall deliver its Capital Expenditures budget and its operating budget
for the current year, including a pro forma balance sheet and income
statement and including information on a consolidating basis if Agent
so requests.
5.3.5 Accountant Reports. Promptly upon the receipt thereof,
Borrower shall deliver a copy of each management letter submitted to
Borrower or its consolidated affiliates by their accountants in
connection with any annual, interim or special audit made by them.
5.3.6 Owner Mailings. Promptly upon the sending thereof,
Borrower shall deliver a copy of each material statement, report or
notice sent to its shareholders.
5.3.7 SEC Filings. Promptly upon the filing thereof, should
such filings become applicable, Borrower shall deliver copies of all
regular, periodic and special reports that any Borrower Entity files
with the United States Securities and Exchange Commission or any
successor thereto, or any national securities exchanges or the
National Association of Securities Dealers.
5.3.8 Change in Accounting Policies. Borrower shall promptly
give written notice of any material change in accounting policies or
financial reporting practices on the part of any Borrower Entity.
5.3.9 Notice Upon Perceived Breach. Borrower agrees to give
prompt written notice of any action or inaction by or on behalf of
Agent or any Lender in connection with this Agreement or the
Obligations that Borrower believes may be actionable against such
party or a defense to payment of any or all of the Obligations for any
reason, including, but not limited to, commission of a tort or
violation of any contractual duty or duty implied by law.
5.3.10 Changes in Constituent Documents. Borrower shall give
prompt written notice of any material change in the corporate charter
or bylaws of Borrower or any Subsidiary following the encumbrance of
the stock thereof in favor of Agent as required under this Agreement,
and shall provide Agent with a copy of such change (Borrower Entities
are restricted in the adoption of such amendments as provided
elsewhere in the Loan Documents, and nothing contained in this Section
shall be deemed a waiver of such restrictions).
5.3.11 Notice of Litigation. Borrower shall give prompt written
notice of any litigation, arbitration, tax audit, administrative
proceeding or investigation that may hereafter be instituted or
threatened in writing in which Borrower would be a party or which
otherwise may affect any Borrower Entity
42
or any of their business, operations or Properties, except for (i)
actions seeking only monetary damages in an amount of less than Five
Hundred Thousand and No/100 Dollars ($500,000.00), and (ii) matters
arising from premises or vehicular liability seeking only monetary
damages and which are fully covered by insurance, subject only to any
applicable deductible.
5.3.12 Defaults and Changes. Borrower shall give prompt written
notice if Borrower learns of the occurrence of (i) any event that
constitutes an Event of Default or an Unmatured Default, together with
a detailed statement of the steps being taken as a result thereof, or
(ii) any Material Adverse Change.
5.3.13 Financial Projections. On or before December 31, 1997,
Borrower shall provide Agent with financial projections prepared on a
quarterly basis and covering the period from the date hereof through
December 31, 1999. These projections shall be prepared in sufficient
detail to allow Lender to evaluate them in its consideration of
financial covenants with respect to the Additional Closing and shall
include a pro forma balance sheet, income statement and statement of
cash flow, and shall further include information on a consolidating
basis should Agent so request.
5.3.14 Other Information. Borrower shall provide such other
information respecting the condition or operations, financial or
otherwise, of the Borrower Entities as Agent or any Lender may from
time to time reasonably request.
5.4 Taxes and Other Encumbrances. Each Borrower Entity shall make
due and timely payment or deposit of all federal, state and local taxes,
assessments or contributions required of it by law, and execute and deliver to
Agent, on demand, appropriate certificates attesting to the payment or deposit
thereof; provided, however, that the Borrower Entities shall not be required to
pay or discharge any such tax, assessment, charge or claim for as long as it is
being diligently contested in good faith by proper proceedings and for which
appropriate reserves are being maintained.
5.5 Payment of Funded Debt. Each Borrower Entity shall pay all of
its Funded Debt as and when the same becomes due in accordance with its terms
(unless such payment is not made due to its subordination to the Revolving
Credit Loan), unless the failure to pay would not have a Material Adverse Effect
or is being contested in good faith and appropriate reserves have been made for
payment thereof in accordance with GAAP.
5.6 Compliance with Laws. Each Borrower Entity shall observe and
comply with all Laws (including, but not limited to, Fraud and Abuse Laws), and
shall maintain all certificates, franchises, permits, licenses, and
authorizations necessary to the conduct of its business or the operation of its
Properties, except for such Laws, certificates, etc., which, if violated or not
obtained and full penalties were imposed for such violation, would not cause a
43
Material Adverse Effect. Each Borrower Entity shall further use its best
efforts to assure the compliance by all Providers with all applicable Laws,
including, but not limited to, medical licensure and Fraud and Abuse Laws,
relating to their providing of professional services, except for those which, if
violated and full penalties were imposed for such violation, would not cause a
Material Adverse Effect.
5.7 Maintenance of Property. All Borrower Entities shall maintain
their Property (and any Property leased by or consigned or held under title
retention or conditional sales contracts) in good and workable condition at all
times, subject to ordinary wear and tear, normal discards and replacements due
to functional and useful-life obsolescence, and shall make all repairs,
replacements, additions, and improvements to their Property reasonably necessary
and proper to ensure that the business carried on in connection with their
Property may be conducted properly and efficiently at all times.
5.8 Compliance with Contractual Obligations. Each Borrower Entity
will perform all of its obligations in respect of all material contracts to
which it is a party and will use its best efforts to keep, and to take all
action to keep, such contracts in full force and effect and not allow any such
contract to lapse or be terminated or any rights to renew such to be forfeited
or canceled, if such lapse, etc. would have a Material Adverse Effect; provided,
however, that any such contract may lapse or be terminated or such renewal
rights may be forfeited or canceled if in the reasonable business judgment of
the Borrower Entities it is in their best interests to allow or cause such
lapse, termination, forfeiture or cancellation.
5.9 Further Assurances. The Borrower Entities shall promptly cure
any defects in the creation, issuance, or delivery of the Loan Documents. The
Borrower Entities at their expense will execute (or cause to be executed) and
deliver to Agent upon request all such other and further documents, agreements,
and instruments in compliance with or accomplishment of the covenants and
agreements applicable to them in the Loan Documents, or to evidence further and
to describe more fully any Collateral intended as security for the Obligations,
or to correct any omissions in the Loan Documents, or to state more fully the
Obligations and agreements set out in any of the Loan Documents, or to perfect,
protect, or preserve any Encumbrances created pursuant to any of the Loan
Documents, or to make any recordings, to file any notices, or to obtain any
consents, all as may be reasonably necessary or appropriate in connection
therewith. Borrower appoints Agent as Borrower's attorney-in-fact to execute
any financing statements or other instruments of perfection with respect to the
Collateral.
5.10 Security Interest; Setoff. In order to further secure the
payment of the Obligations, Borrower hereby grants to Agent and to each Lender a
security interest and right of setoff against all of Borrower's presently owned
or hereafter acquired monies, items, credits, deposits and instruments
(including certificates of deposit) presently or hereafter in the possession of
any Lender or Agent. By maintaining any such accounts or other property with a
Lender or Agent, Borrower acknowledges that Borrower voluntarily subjects the
property to the security interest arising hereunder. Subject to the provisions
in Article IX hereof, a Lender
44
may exercise its rights under this Section without prior notice (but with prompt
notice following the setoff) following an Event of Default. Borrower agrees that
neither Lenders nor Agent shall be liable for the dishonor of any instrument
after notice of setoff shall have been duly given resulting from a Lender's
exercise of its rights under this Section.
5.11 Insurance.
5.11.1 General Insurance Requirements. In addition to the other
specific requirements set forth in this Agreement and as may be
required by other Loan Documents, the Borrower Entities shall maintain
insurance (i) on all insurable Properties now or hereafter owned by
them under coverage that insures against the risks included in fire
and extended coverage insurance and against such other risks as are
customarily insured in their industry, in an amount equal to not less
than the actual cash value thereof and with a deductible of no more
than One Thousand and No/100 Dollars ($1,000.00), (ii) against public
liability in the amount of at least One Million and No/100 Dollars
($1,000,000.00) per occurrence, and (iii) with respect to worker's
compensation liabilities in the amount required by law or, if higher,
the amount customary in the industry. All policies of insurance shall
be issued by insurance companies acceptable to Agent and shall be in
form and substance acceptable to Agent.
5.11.2 Practice-Related Insurance Requirements. The Borrower
Entities shall maintain insurance for claims, however characterized,
against them in connection with the provision of medical services by
Providers and/or ancillary services provided by them at Practices
covered by Service Agreements, in an amount of at least One Million
and No/100 Dollars ($1,000,000.00) per occurrence with respect to
Practices whose Providers are physicians and Three Hundred Thousand
and No/100 Dollars ($300,000.00) per occurrence with respect to
Practices whose Providers who are not physicians. The Borrower
Entities shall further cause each Provider to maintain medical
malpractice insurance of at least One Million and No/100 Dollars
($1,000,000.00) per occurrence. All required insurance shall be in
form and substance acceptable to Agent.
5.12 Accounts and Records. The Borrower Entities shall maintain
current books of record and account, in which full, true, and correct entries
will be made of all transactions.
5.13 Official Records. The Borrower Entities shall maintain current
corporate and official records, minute books and stock ledgers.
5.14 Banking Relationships. The Borrower Entities shall maintain
their deposit accounts with Lenders or with other FDIC-insured depository
institutions.
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5.15 Right of Inspection. The Borrower Entities shall permit any
officer, employee, or agent of a Lender or Agent to visit and inspect during
ordinary business hours any of their Property, to examine their books of record
and accounts and corporate records, to take copies and extracts from such books
of record and accounts, and to discuss the affairs, finances, and accounts of
the Borrower Entities with their respective officers, accountants, and auditors,
all at such reasonable times and as often as Agent or a Lender may reasonably
desire and upon reasonable advance notice absent an Event of Default. Without
limiting Agent's right to obtain equitable relief as to any other appropriate
right in this Agreement or in other Loan Documents, Borrower agrees that the
rights in this Section may be enforced by affirmative injunction and, to the
extent the right to review records may be denied, the right may be enforced by a
restraining order prohibiting the interference by Borrower with the exercise of
rights to review of the records pursuant to this Section. Absent an Event of
Default, all expenses of such inspections, etc. shall be paid by the respective
Lenders, and in the presence of an Event of Default, all reasonable expenses
thereof shall be paid by Borrower.
5.16 ERISA Information and Compliance. The Borrower Entities shall
comply with ERISA and all other applicable laws governing any pension or profit
sharing plan or arrangement to which they are a party, except for matters which
would not have a Material Adverse Effect. The Borrower Entities shall (i) upon
request, provide Agent with copies of any annual report required to be filed
pursuant to ERISA with respect to any Plan or any other employee benefit plan;
(ii) notify Agent upon the occurrence of any ERISA Event or of any additional
act or condition arising in connection with any Plan which they believe might
constitute grounds for termination thereof by the PBGC or for the appointment of
a trustee to administer the Plan; and (iii) furnish to Agent, promptly upon
request, such additional information concerning any Plan or any other employee
benefit plan as Agent may request.
5.16 Indemnity; Expenses. Borrower agrees to indemnify, defend (with
counsel reasonably satisfactory to the indemnified party or parties) and hold
harmless Lenders and Agent against any loss, liability, claim or expense,
including reasonable attorneys' fees, that they may incur in connection with the
Loan Documents or the Obligations, INCLUDING THOSE EXPENSES, ETC. THAT MAY
RESULT FROM THEIR ORDINARY NEGLIGENCE, except those losses, etc. that may result
from a Lender's or Agent's gross negligence or willful misconduct. Without
limiting the foregoing, upon demand by Agent, Borrower will reimburse Lenders
and/or Agent for the following reasonable expenses if not paid by Borrower
promptly after written demand by Agent:
5.17.1 Taxes. All taxes that Lenders or Agent may be required to
pay because of the Obligations or because of Lenders' or Agent's
interest in any property securing the payment of the Obligations,
excepting taxes based upon the net income of a Lender or Agent.
5.17.2 Administration. All reasonable costs of the preparation
of this Agreement and any other related documents and the
administration of the Obligations (except for Lenders' and Agent's
usual overhead incurred in the
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acceptance and processing of payments, the routine review of financial
statements, certifications and reports, routine communications with
Borrower, and other ordinary activities that are not occasioned by an
Unmatured Default, Event of Default or by a request of Borrower to
waive or vary the terms of this Agreement).
5.17.3 Protection of Collateral. All costs of preserving,
insuring, preparing for sale (whether by improvement, repair or
otherwise) or selling any Collateral.
5.17.4 Costs of Collection. All court costs and other costs of
collecting any debt, overdraft or other obligation included in the
Obligations.
5.17.5 Litigation. All reasonable costs arising from any
litigation, investigation, or administrative proceeding (whether or
not Agent or a Lender is a party thereto) that Agent or a Lender may
incur as a result of the Obligations or as a result of their
association with any of the Borrower Entities, including, but not
limited to, expenses incurred by Agent or a Lender in connection with
a case or proceeding involving any Borrower Entity under any chapter
of the Bankruptcy Code or any successor statute thereto.
5.17.6 Attorneys' Fees. Reasonable attorneys' fees incurred in
connection with any of the foregoing (except that Borrower shall only
be responsible for the fees and expenses of Agent's attorneys in
connection with the original negotiation and execution of this
Agreement).
If a Lender or Agent pays any of the foregoing expenses, they shall become a
part of the Obligations and shall bear interest at the Default Rate applicable
to Base Rate Loans. This Section shall remain in full effect regardless of the
full payment of the Obligations, the purported termination of this Agreement,
the delivery of the executed original of this Agreement to Borrower, or the
content or accuracy of any representation made by Borrower to Lenders or Agent;
provided, however, Agent or any Lender may terminate this Section as to itself
by executing and delivering to Borrower a written instrument of termination
specifically referring to this Section.
5.18 Assistance in Litigation. Borrower covenants to, upon request,
cooperatively participate in any proceeding in which Borrower is not an adverse
party to Lenders or Agent and which concerns Lenders' or Agent's rights
regarding the Obligations or any Collateral.
5.19 Name Changes. Borrower shall give Agent notice no more than
thirty (30) days after any Borrower Entity changes its name or begins doing
business under any trade name.
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5.20 Estoppel Letters. Borrower covenants to provide Agent, within
ten (10) days after request, an estoppel letter stating (i) the balance of the
Obligations, (ii) whether Borrower has any defenses to payment of the
Obligations, and (iii) the nature of any defenses to payment of the Obligations.
Such balance as presented for confirmation and the nonexistence of defenses
shall be presumed if Borrower fails to respond to such a request within the
required period.
5.21 Environmental Matters.
5.21.1 Compliance With Environmental Laws. All Borrower Entities
will (i) employ in connection with their operations, appropriate
technology and compliance procedures to maintain compliance with any
applicable Environmental Laws, the violation of which would reasonably
be expected to have a Material Adverse Effect, (ii) obtain and
maintain any and all materials permits or other permits required by
applicable Environmental Laws in connection with its operations,
excepting only such permits, etc. which would not by their absence
cause a Material Adverse Effect, and (iii) dispose of any and all
Hazardous Substances only at facilities and with carriers reasonably
believed to possess valid permits under any applicable state and local
Environmental Laws. All Borrower Entities shall use their best efforts
to obtain all certificates required by law to be obtained by them from
all contractors employed by them in connection with the transport or
disposal of any Hazardous Substances.
5.21.2 Remedial Work. If any investigation, site monitoring,
containment, clean-up, removal, restoration or other remedial work of
any kind or nature with respect to any Borrower Entity's Properties is
required to be performed by them under any applicable local, state or
federal law or regulation, any judicial order, or by any governmental
or non-governmental entity or Person because of, or in connection
with, the current or future presence, suspected presence, release or
suspected release of a Hazardous Substance in or into the air, soil,
groundwater, surface water or soil vapor at, on, about, under, or
within any of a Borrower Entity's Property (or any portion thereof),
Borrower shall within 30 days after written demand for performance
thereof (or such shorter period of time as may be required under
applicable law, regulation, order or agreement), commence and
thereafter diligently prosecute to completion, all such remedial work.
5.21.3 Indemnification of Lenders and Agent. Borrower agrees to
indemnify, defend (with counsel reasonably satisfactory to the
indemnified party or parties) and hold harmless Lenders and Agent
against any loss, liability claim or expense, including attorneys'
fees, that a Lender or Agent may incur as a result of the violation or
alleged violation of any Environmental Law by a Borrower Entity or
with respect to any other violation of Environmental Laws
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with respect to any Borrower Entity's Properties. This covenant shall
survive the repayment of the Revolving Credit Loan.
5.22 Opinions of Counsel. Borrower agrees that Agent may from time to
time, but not more frequently than once per calendar year absent an Unmatured
Default or an Event of Default, request in writing the opinion of in-house
counsel and/or outside healthcare counsel to the Borrower Entities as to the
absence, except as disclosed in the opinion, of such counsel's knowledge of any
actual, threatened or asserted violation of any Fraud and Abuse Law on the part
of any Borrower Entity and/or the Providers, and the sufficiency of
documentation then in use for the operation of Practices as complying with Fraud
and Abuse Laws. Absent the existence of an Unmatured Default or and Event of
Default, such opinions shall require no special diligence on the part of the
opining attorney(s), but only requiring a report of matters then known to such
attorneys, unless Agent specifically inquires about facts that Agent reasonably
believes may raise a Fraud and Abuse Law issue. Such opinions shall be in form
and substance acceptable to Agent, shall be delivered to Agent at Borrower's
expense within fifteen (15) days of the date of request and shall address
specifically any facts inquired of in Agent's request.
5.23 Borrower Entities. All Borrower Entities shall at all times be
guarantors of the Obligations, excepting only Subsidiaries that are not required
to be guarantors under the definition of Permitted Subsidiaries in this
Agreement.
5.24 Diagnostic Examination. Borrower will assist Agent in the
performance of a diagnostic examination of Borrower's systems, procedures, trade
payables, receivables, treasury systems and other such matters as Lenders may
require. The examination shall be conducted by Agent's own personnel and shall
be satisfactory to Agent as to scope and conclusions. Borrower shall pay all
costs of the examination, including charges for time spent by Agent's personnel
and all travel and related expenses; provided, however, Borrower's financial
responsibility for the examination shall not exceed $____________. The
examination will be completed by December 31, 1997.
VI. NEGATIVE COVENANTS
Borrower covenants and agrees that, without Agent's prior written
confirmation of approval by the Required Lenders:
6.1 Debts, Guaranties, and Other Obligations. No Borrower Entity
shall incur, create, assume, or in any manner become or be liable with respect
to any Debt, except the following:
6.1.1 Obligations to Lenders. The Obligations, as defined in
this Agreement.
49
6.1.2 Existing Liabilities. Liabilities, direct or contingent,
of Borrower Entities existing on the date of this Agreement that are
reflected in the Financial Statements, subject to additional specific
limitations set forth below.
6.1.3 Endorsements. Endorsements of negotiable or similar
instruments for collection or deposit in the ordinary course of
business.
6.1.4 Trade Debt. Trade payables and accruals from time to time
incurred in the ordinary course of business.
6.1.5 Taxes. Taxes, assessments, or other governmental charges
that are not delinquent or are being contested in good faith by
appropriate action promptly initiated and diligently conducted, if
Borrower has made the reserve therefor required by GAAP.
6.1.6 Seller Debt. Seller Debt, which must be unsecured Debt;
provided, however, the Borrower Entities may have as of September 30,
1997, no more than Sixteen Million Three Hundred Ninety-Nine Thousand
Three Hundred Five and No/100 Dollars ($16,399,305.00) in principal
amount of Seller Debt that is secured by assets of the Borrower
Entities.
6.1.7 Acquired Debt and Purchase Money Security Interests.
Acquired Debt and Debt secured by Purchase Money Security Interests
that are obligations of a Borrower Entity as of November 19, 1997
(which obligations are represented not to presently exceed Twenty
Million and No/100 Dollars ($20,000,000.00) in the aggregate);
provided, however, Borrower Entities may incur up to Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00) in additional principal
obligations secured by Purchase Money Security Interests.
6.1.8 Accounting Accruals. Liabilities arising from reserves
and accruals required by GAAP that do not reflect liquidated and
mature obligations to third parties, including, but not limited to,
current deferred income taxes.
6.1.9 Debt Among Borrower Entities. Debt incurred to other
Borrower Entities incurred in the ordinary course of business.
6.1.10 Certain Subordinated Debt. Subordinated Debentures in the
amount not exceeding One Hundred Twenty-Five Million and No/100
Dollars ($125,000,000.00) issued pursuant to that certain Indenture
dated as of December 11, 1996, between Borrower and U.S. Trust Company
of New York, N.A. (the "Subordinated Debentures").
6.2 Change of Management. Borrower shall not allow or suffer any
change of management whereby Xxxxx Real would cease serving as Chief Financial
Officer, Rich
50
X'Xxxxx would cease serving as General Counsel, or Xxx Xxxxxxxx would cease
serving as Senior Vice President of Operations. Borrower shall not fill the
positions of Chief Executive Officer, President or Chief Operating Officer
without the prior written approval of the Required Lenders. If a position vacant
as of the Closing Date is later filled with the approval of the Required
Lenders, the appointment shall not change without the approval of the Required
Lenders. Notwithstanding the foregoing, should the managers in any of the named
positions cease active participation in Borrower's management due to their death
or disability, Lenders shall allow Borrower a period of thirty (30) days
thereafter in which a management succession plan may be presented so that the
Required Lenders may, in their discretion, elect to accept new management in
lieu of prior management, subject to such revisions of this Agreement as they
may require. Borrower shall give Agent written notice at any time that Borrower
learns that any of the persons filling the above offices is planning to
terminate employment.
6.3 Change of Ownership. Borrower shall not cause or suffer to exist
a change of ownership or suffer the issuance of new stock or other event that
would result in the ownership of more than 30% of the stock of Borrower by any
Person not presently a shareholder thereof.
6.4 Encumbrances. No Borrower Entity shall create, incur, assume, or
permit to exist any Encumbrance on any of its Property (now owned or hereafter
acquired) except for Permitted Encumbrances, and shall not undertake a
commitment of any kind in favor of any Person (other than Lender) (i) requiring
that any or all of such Borrower Entity's Property be or remain unencumbered, or
(ii) requiring that a Borrower Entity grant an Encumbrance (other than a
Permitted Encumbrance) in favor of any Person (other than Lenders or Agent for
the benefit of Lenders) on a Borrower Entity's Property under any circumstances
whatsoever. No Borrower Entity shall sign or file under the Uniform Commercial
Code a financing statement that names such Borrower Entity as debtor or the
equivalent or sign any security agreement authorizing any secured party
thereunder to file any such financing statement, except to secure Permitted
Encumbrances.
6.5 Investments. No Borrower Entity shall make investments (including
but not limited to acquisitions or purchases of the obligations or stock of, or
any other or additional interest) in any person, firm, partnership, joint
venture or corporation except: (a) those specific investments in existence as of
Xxxxx 00, 0000, (x) general obligations of, or obligations unconditionally
guaranteed as to principal and interest by, the United States of America
maturing within fifteen (15) months of the date of purchase, (c) commercial
paper having a rating of not less than "A2" or "P2" from Moody's or S & P,
respectively, (d) Permitted Acquisitions, (e) certificates of deposit and
bankers acceptances with maturities of less than one (1) year issued by a Lender
or another banking institution with a minimum net worth of Five Hundred Million
and No/100 Dollars ($500,000,000.00) and having a letter of credit rating of not
less than "A" from Moody's or S & P, respectively, (f) municipal bonds rated "A"
or better by Moody's or S & P, (g) Permitted Minority Investment Entities
acquired
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before November 19, 1997, (h) Permitted Unpledged Investments and Subsidiaries,
and (i) such other investments as Agent may approve, in its reasonable
discretion.
6.6 Prepayments. No Borrower Entity shall prepay the Subordinated
Debentures or any Seller Debt or amend the terms of any Seller Debt to
accelerate the maturity of any payments thereunder. Lenders acknowledge that
Borrower has previously agreed to make certain payments of Fifty Thousand and
No/100 Dollars ($50,000.00) quarterly to one Xx. Xxxxx as special payments on
his Seller Debt, and these payments are permitted.
6.7 Sales and Leasebacks. No Borrower Entity shall enter into any
arrangement, directly or indirectly, with any Person other than another Borrower
Entity by which such Borrower Entity shall sell or transfer any of its Property,
whether now owned or hereafter acquired, and by which a Borrower Entity shall
then or thereafter rent or lease as lessee such Property or any part thereof or
other Property that it intends to use for substantially the same purpose or
purposes as the Property sold or transferred.
6.8 Change of Control. Borrower shall not suffer or permit the
occurrence of a Change of Control.
6.9 Nature of Business. No Borrower Entity shall suffer or permit
any material changes to be made in the character of its business as carried on
at the Closing Date.
6.10 Further Acquisitions, Mergers, Etc. Except for transactions
involving only Borrower Entities, no Borrower Entity shall enter into any
agreement to merge, consolidate, or otherwise reorganize or recapitalize, or
sell, assign, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of their Property (whether now
owned or hereafter acquired), except for the "unwinding" of Practice
acquisitions and other dispositions in the ordinary course of business which, in
the aggregate with asset dispositions addressed by Section 6.12 hereof, do not
exceed in value the amount of One Million and No/100 Dollars ($1,000,000.00) in
any fiscal year.
6.11 Advances. No Borrower Entity shall extend any loans to any other
Persons, except for loans to other Borrower Entities in the ordinary course of
business and advances to Providers made in the ordinary course of business
arising from (i) expenses advanced by Borrower Entities, which expenses are
reimbursable to the Borrower Entities under the terms of the applicable Service
Agreements, and (ii) amounts due from Providers due to the difference between
the calculation of fees due under certain Service Agreements on an accrual basis
and the duty of remittance of those fees by Providers on a cash basis, provided
that the amount outstanding under this subsection (ii) shall be reviewed
annually by Agent and may be subject to limitations in amount, as Agent may
reasonably require, based upon such reviews.
6.12 Disposition of Assets. No Borrower Entity shall dispose of any
of its assets other than in the "unwinding" of Practice acquisitions and
otherwise in the ordinary
52
course of their present business upon terms standard in the industry, and in any
event, in no fiscal year shall the Borrower Entities collectively dispose of
assets which, in the aggregate with transactions addressed by Section 6.10
hereof, exceed in value the amount of One Million and No/100 Dollars
($1,000,000.00).
6.13 Inconsistent Agreements. No Borrower Entity shall enter into any
agreement containing any provision which would be violated or breached by the
performance by Borrower of the Obligations.
6.14 Fictitious Names. Borrower shall not use any name other than the
name used in executing this Agreement or any assumed or fictitious name.
6.15 Subsidiaries and Affiliates. No Borrower Entity shall create or
acquire any direct or indirect Subsidiary or Affiliate or divest itself of any
material assets by transferring them to any existing Subsidiary or Affiliate
other than Permitted Subsidiaries; nor shall Borrower enter into any
partnership, joint venture, or similar arrangement, or otherwise make any
material change in its corporate structure, except that Borrower may acquire and
create Permitted Subsidiaries from time to time in the ordinary course of
business and may own Permitted Unpledged Investments and Subsidiaries.
6.16 Place of Business. Borrower shall not transfer its executive
offices, or maintain records with respect to accounts at any locations other
than at the address for notices specified herein and at the locations of
Practices affiliated with Borrower, except as Agent may approve, in its
reasonable discretion.
6.17 Adverse Action With Respect to Plans. No Borrower Entity shall
take any action to terminate any Plan which would reasonably result in a
material liability of a Borrower Entity to any Person.
6.18 Transactions With Affiliates. No Borrower Entity shall enter
into any transaction with any Affiliate except in the ordinary course of
business and on fair and reasonable terms no less favorable to the Borrower
Entity than they would obtain in a comparable arms length transaction with a
Person not an Affiliate.
6.19 Constituent Document Amendments. No Borrower Entity shall amend
its corporate charter or bylaws in any material respect, except as necessary to
accomplish corporate transactions that do not require Agent's specific approval
or transactions for which such approval is necessary and has been granted.
6.20 Adverse Transactions. No Borrower Entity shall enter into any
transaction that materially and adversely affects or, to the best of its
knowledge, is likely to materially and adversely affect the Collateral or
Borrower's ability to repay the Obligations.
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6.21 Use of Lenders' Name. No Borrower Entity shall, without the
prior written consent of the applicable Lender, use the name of a Lender or the
name of any Affiliates of a Lender in connection with any of their business or
activities, except in connection with internal business matters, as required in
making required securities law disclosures, in dealings with Providers in the
ordinary course of business, in dealings with governmental agencies and
financial institutions and to trade creditors of the Borrower Entities solely
for credit reference purposes.
6.22 Margin Securities. No Borrower Entity shall own, purchase or
acquire (or enter into any contract to purchase or acquire) any "margin
security" as defined by any regulation of the Federal Reserve Board as now in
effect or as the same may hereafter be in effect.
6.23 Accounting Changes. Borrower shall not change its fiscal year
or make any other significant change in consolidated or consolidating accounting
treatment and reporting practices, except as required or permitted by GAAP. Any
change in fiscal year shall be subject to Agent's prior written approval.
6.24 Distributions. Except in favor of other Borrower Entities, no
Borrower Entity shall declare or pay any dividends or other distributions of
cash or other property (except for dividends paid in its own stock) or redeem
any of its own outstanding stock or the stock of any other Borrower Entity.
6.25 Action Outside Ordinary Course. No Borrower Entity shall take
any other action outside the ordinary course of their business.
6.26 Modification of Subordinated Debenture Documents. Borrower
shall not cause or permit the Subordinated Debentures or the related Indenture
to be modified, directly or indirectly, in any manner that (a) would accelerate
the stated maturity of any principal or interest due thereunder or (b) might
terminate or impair the subordination of the Subordinated Debentures to the
Obligations.
6.27 Non-Scheduled Payment of Subordinated Debentures. Borrower will
not (a) give any notice of election to redeem any or all of the Subordinated
Debentures; (b) take any action to defease the Subordinated Debentures; or (c)
otherwise make or permit to be made any payment (other than regularly scheduled
payments of interest made in accordance with the terms of the Subordinated
Debentures as they exist as of the date hereof or as they may hereafter be
amended with the prior written approval of the Required Lenders) with respect to
the Subordinated Debentures, if an Event of Default then exists or if the taking
of such action (including any borrowing of funds to enable Borrower to take such
an action) would result in the occurrence of an Event of Default under this
Agreement.
VII. FINANCIAL COVENANTS
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Financial covenants shall be as determined in connection with the
Additional Closing.
VIII. EVENTS OF DEFAULT
8.1 Events of Default. Any of the following events shall be
considered an Event of Default under this Agreement:
8.1.1 Payments. Borrower's failure to make payment of any
installment of principal or any payment of interest or expenses
included in the Obligations when due.
8.1.2 Representations and Warranties. The making of any
representation or warranty by Borrower or any other party in any Loan
Document that was incorrect in any material respect as of the date
thereof.
8.1.3 Negative Covenants. The failure of any Borrower Entity to
comply with any of the requirements of Article VI hereof.
8.1.4 Financial Covenants. The failure of any Borrower Entity
to comply with any of the requirements of Article VII hereof.
8.1.5 Reporting Requirements. The failure of any Borrower
Entity or any other party to timely perform any covenant in the Loan
Documents requiring the furnishing of notices, financial reports or
other information to Agent or Lenders within five (5) days of when
due.
8.1.6 Other Covenants. The failure of any Borrower Entity to
observe or perform any covenant contained in any Loan Document, which
covenant is not subject to any specific provision in this Article
VIII; provided, however, as to any such breach that is reasonably
susceptible to being cured, the occurrence of such breach shall not
constitute an Event of Default hereunder if such breach is fully cured
within thirty (30) days (or ten (10) days, if such breach may be cured
by the payment of a specific sum of money) after the earlier of the
Borrower Entity's knowledge of the facts giving rise thereto or
Agent's written notice thereof to Borrower given in accordance with
the provisions hereof.
8.1.7 Involuntary Bankruptcy or Receivership Proceedings. The
appointment of a receiver, custodian, liquidator, or trustee for any
Borrower Entity, or for any of their Property, by the order or decree
of any court or agency or supervisory authority having jurisdiction;
or any Borrower Entity's adjudication as being bankrupt or insolvent;
or the sequestering of any of the
55
Property of any Borrower Entity by court order or the filing of a
petition against any Borrower Entity under any state or federal
bankruptcy, reorganization, debt arrangement, insolvency, readjustment
of debt, dissolution, liquidation, or receivership law of any
jurisdiction, whether now or hereafter in effect, unless dismissed (in
the case of involuntary proceedings only) within sixty (60) days.
8.1.8 Voluntary Petitions. Any Borrower Entity's filing of a
petition in voluntary bankruptcy or to seek relief under any provision
of any bankruptcy, reorganization, debt arrangement, insolvency,
receivership, readjustment of debt, assignment of assets or general
arrangement for the benefit of creditors, dissolution, or liquidation
law of any jurisdiction, whether now or hereafter in effect, or their
consent to the filing of any petition against them under any such law.
8.1.9 Discontinuance of Business. Any Borrower Entity's
discontinuance of its usual business or its dissolution, except
pursuant to transactions permitted under this Agreement.
8.1.10 Default on Other Funded Debt. Any Borrower Entity's
failure to make any payment on any Funded Debt when due or, if later,
within any period of grace or cure permitted by the applicable
documents.
8.1.11 Undischarged Judgments. Existence of a final judgment or
judgments for the payment of money in excess of Five Hundred Thousand
and No/100 Dollars ($500,000.00) for the previous fiscal year by any
court or other Governmental Authority or any arbitrator against any
Borrower Entity, which is not paid, discharged or bonded within thirty
(30) days after entry.
8.1.12 Insolvency. Borrower shall no longer be Solvent on a
consolidated basis.
8.1.13 Attachment. The issuance of an attachment or other
process or otherwise) within twenty (20) days, unless the issuance
thereof would not have a Material Adverse Effect.
8.1.14 Insurance. Any Borrower Entity's failure to maintain any
insurance required herein or in any other Loan Document.
8.1.15 Contest. Any Borrower Entity's challenge or contest of
the validity or enforceability of this Agreement or any other Loan
Document or the validity, priority or perfection of any security
interest created hereunder or under any other Loan Document in any
action, suit or proceeding, or should they cease to be in full force
and effect.
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8.1.16 Fraud and Abuse Laws. Receipt by a Borrower Entity of 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 Hundred Thousand and No/100 Dollars
($500,000.00), or (ii) intends to impose civil money penalties or to
seek to exclude any Borrower Entity or a Provider from participation
in the Medicare or Medicaid programs due to a failure to comply with
Fraud and Abuse Laws, if the consolidated gross revenues to the
Borrower Entities arising from the affected Borrower Entity or
Provider exceed Five Hundred Thousand and No/100 Dollars
($500,000.00).
8.1.17 Subordinated Debentures. The occurrence of an Event of
Default under the Subordinated Debentures.
8.1.18 Guarantors. The failure of a Guarantor to maintain the
liquidity requirements established by Lenders in written agreements
with the Guarantors; the occurrence of any of the events listed above
as items 8.1.17, 8.1.18 or 8.1.12 with respect to a Guarantor; the
falseness in any material respect of any representation or warranty
made by a Guarantor with respect to his serving as a guarantor for the
Obligations; or the failure of a Guarantor to perform any of his
obligations under his Unconditional Guaranty securing the Obligations.
8.2 Remedies. Upon the happening of any Event of Default:
8.2.1 Default Rate. The Required Lenders may instruct Agent to
declare that the Obligations thereafter bear interest at the Default
Rate.
8.2.2 Termination of Commitments. As provided in Article III
hereof, Lenders shall not be obligated to advance any additional Loans
and the Issuing Bank will not be obligated to issue any Letters of
Credit, and additionally, the Required Lenders may terminate the
obligation of Lenders to advance any additional Loans and the
obligation of the Issuing Bank to issue Letters of Credit by causing
Agent to give written notice thereof to Borrower, which formal
termination shall remain in effect notwithstanding any subsequent cure
of the Event of Default and whether or not the Revolving Credit Loan
is accelerated unless the Revolving Credit Loan is reinstated in
writing by the Required Lenders.
8.2.3 Acceleration. The Required Lenders may declare the entire
principal amount of all Obligations then outstanding, including
interest accrued thereon, to be immediately due and payable without
presentment, demand, protest, notice of protest, or dishonor or other
notice of default of any kind, all of which are hereby expressly
waived.
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8.2.4 Setoff. Subject to Section 9.11 hereof, any Lender may
exercise its lien upon and right of setoff against any monies, items,
credits, deposits or instruments that such Lender may have in its
possession and which belong to Borrower or to any other person or
entity liable for the payment of any or all of the Obligations.
8.2.5 Cash Security for Letters of Credit. Agent shall, at the
direction of the Required Lenders, demand that Borrower immediately
deposit cash to a deposit account maintained with Agent and pledged to
Agent for the benefit of Lenders to secure the Obligations in the
amount of all Letter of Credit Liabilities.
8.2.6 Other Remedies. Agent shall, at the direction of the
Required Lenders, exercise any right that Lenders have under any other
document evidencing or securing the Obligations or otherwise available
to Lenders or Agent at law or equity.
8.2.7 Attorney-in-Fact. Borrower hereby irrevocably appoints
Agent as Borrower's attorney-in-fact to take any action to facilitate
Agent's exercise of remedies hereunder.
IX. AGENT
9.1 Appointment of Agent. Lenders hereby appoint Agent to act as
specified in this Article IX.
9.2 Powers and Duties of Agent.
9.2.1 Powers and Duties of Agent; Standard of Care. Agent shall
perform all duties expressly imposed upon Agent in this Agreement and
those other duties reasonably incidental thereto, subject to the
approval of the Required Lenders as provided in this Agreement.
Agent's duties hereunder are administrative and ministerial in nature,
and Agent's capacity is that of an independent contractor for Lenders.
Agent is not a trustee or other fiduciary for Lenders, and Agent has
no duties whatsoever to Lenders except as expressly set forth in this
Agreement. Agent shall have no liability to Lenders for any action or
inaction relating to this Agreement or the other Loan Documents, EVEN
FOR MATTERS ARISING FROM ITS ORDINARY NEGLIGENCE, except for actual
losses caused by its gross negligence or reckless or willful
misconduct.
9.2.2 Matters Reserved to all Lenders. Absent the prior
approval of all Lenders, Agent shall not increase any Lender's
Commitment; forgive or reduce any principal, interest or fees due a
Lender or Agent (unless the affected
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party so agrees); extend scheduled maturities or payment dates;
release Collateral release the guarantor Subsidiaries, except for the
release of stock of (and other equity interests in) and guaranties
executed by Subsidiaries in the course of transactions undertaken by
Borrower Entities for which the consent of the Required Lenders is not
required under the other provisions of this Agreement (including, but
not limited to, transactions for the "unwinding" of Practice
acquisitions to the extent expressly permitted under Sections 6.10 and
6.12 of this Agreement, respecting which Agent may issue releases
without obtaining the approval of any Lenders).
9.2.3 Limitations on Agent's Duties. Agent shall not be
obligated to take any action hereunder or under any other Loan
Document (i) if such action would, in the opinion of Agent, be
contrary to applicable law, this Agreement or the other Loan
Documents, (ii) if it shall not first be specifically indemnified to
its satisfaction pursuant to Section 9.3 hereof against any and all
liability and expense that may be incurred by it by reason of taking
or continuing to take any such action, (iii) if it would likely
subject Agent to a tax in any jurisdiction where it is not then
subject to a tax, (iv) if it would likely require Agent to qualify to
do business in any jurisdiction where it is not then so qualified,
unless Agent receives security or indemnity satisfactory to it against
any tax or other liability in connection with such qualification or
resulting from the taking of such action in connection therewith, or
(v) if it would likely subject Agent to in personam jurisdiction in
any location where it is not then so subject.
9.2.4 Agent's Right to Require Instructions in Performance of
Duties. If Agent, in its sole and absolute discretion, requests
instructions from the Required Lenders with respect to any act or
action (including the failure to act) in connection with this
Agreement or any other Loan Document for which the approval of the
Required Lenders or all Lenders is not otherwise required, Agent shall
be entitled, at its option, to refrain from such action, or to
continue such inaction, unless and until Agent shall have received
such instructions, and Agent shall incur no liability by reason of so
acting or refraining from action. No Lender shall have any right of
action whatsoever against Agent as a result of Agent's acting or
refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of the Required Lenders in such a
case.
9.2.5 Agent's Reliance on Others in Performance of Duties.
Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement,
consent, certificate, telex, teletype or facsimile message, order or
other documentary, teletransmission or telephone message believed by
it in good faith to be genuine and correct and to have been signed,
sent or made by the proper Person. Agent may consult with legal
counsel (including counsel for Borrower), accountants and other
experts selected
59
by it with respect to all matters pertaining to this Agreement and the
other Loan Documents and its duties hereunder and thereunder and shall
not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel (including
counsel for Borrower), accountants or experts.
9.2.6 Sharing of Information. Except as otherwise expressly
provided in this Agreement, Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information concerning the
business, prospects, operations, properties, financial or other
condition or creditworthiness of the Borrower Entities or any other
Person that may come into its possession, whether before the Closing
Date or at any time or times thereafter. All notices to be given to
Borrower by a Lender hereunder shall be concurrently given to Agent.
9.3 Indemnification of Agent. To the extent Agent is not reimbursed
by or on behalf of Borrower, and without limiting the obligation of Borrower to
do so, Lenders will Pro Rata reimburse and indemnify Agent, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees and expenses) or
disbursements of any kind or nature whatsoever that may at any time (including
at any time following the indefeasible repayment in full of the Revolving Credit
Loan) be imposed on, incurred by or asserted against Agent in any way relating
to or arising out of this Agreement or any other Loan Document or the
transactions contemplated thereby or any action taken or omitted by Agent under
or in connection with any of the foregoing, and in particular will reimburse
Agent for out-of-pocket expenses promptly upon demand by Agent therefor, EVEN IF
INCURRED DUE TO THE ORDINARY NEGLIGENCE OF AGENT; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
finally determined by a court of competent jurisdiction and not subject to any
appeal or pursuant to arbitration to have resulted from Agent's gross negligence
or reckless or willful misconduct. Agent may offset any amounts due Agent by
any Lender against obligations of Agent to that Lender.
9.4 No Representations by Agent. Each Lender acknowledges that
neither Agent nor any of its officers, directors, employees, attorneys,
accountants or agents has made any representation or warranty to it regarding
the Borrower Entities, the Revolving Credit Loan, the Collateral or otherwise
relating to this Agreement. Agent shall not be responsible to any Lender for
any recitals, statements, information, representations or warranties herein or
in any other Loan Document or in any document, instrument, certificate or other
writing delivered in connection herewith or therewith or for the execution,
effectiveness, genuineness, validity, enforceability, perfection, priority or
sufficiency of this Agreement or any other Loan Document or the financial
condition of the Borrower Entities or any other Person, or be required to make
any inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Loan Document, or the
financial condition of the Borrower Entities or any other Person or the
existence or possible existence of any Unmatured Default or Event of Default.
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9.5 Independent Investigations by Lenders. Each Lender acknowledges
based on such documents and information as it has deemed and may deem
appropriate, (i) it has made its own appraisal of and investigation into the
business, prospects, operations, properties, financial and other condition and
creditworthiness of the Borrower Entities in connection with its decision to
enter into this Agreement and extend credit to Borrower hereunder, and (ii) it
will continue to make its own credit analysis, appraisals and decisions in
taking or not taking action hereunder.
9.6 Notice of Default. Agent shall not be deemed to have knowledge
or notice of the occurrence of any Unmatured Default or Event of Default, other
than any Unmatured Default or Event of Default arising out of the failure to pay
any principal, interest, fees or other amounts payable to Agent for the account
of the Lenders, unless Agent has received written notice from Borrower or a
Lender describing such Unmatured Default or Event of Default and stating that
such notice is a "notice of default." In the event that Agent receives such a
notice, Agent shall promptly give notice thereof to the Lenders; provided,
however, that if any such notice has also been furnished to the Lenders, Agent
shall have no obligation to notify the Lenders with respect thereto. Each
Lender shall promptly give Agent such a notice upon its actual knowledge of an
Unmatured Default or an Event of Default; provided, however, that the failure of
any Lender to deliver such notice in the absence of gross negligence or reckless
or willful misconduct shall not affect its rights hereunder or under the other
Loan Documents.
9.7 Funding of Advances Pursuant to Borrowing Notices. Promptly
following receipt of notice from Agent that a Borrowing Notice has been
submitted, and provided that all conditions to funding are believed to have been
satisfied, each Lender shall, provided that it received timely notice of the new
Loan, transfer to a designated account with Agent that Lender's Pro Rata Share
of the requested funding. The transfer of funds shall occur within the time
required for funding under this Agreement. Should any Lender fail to timely
fund its Pro Rata Share of a requested Loan, Agent may, but shall be under no
obligation whatsoever to, advance to Borrower the defaulted Lender's Pro Rata
Share of the requested Loan. If such an advance is made, it shall be deemed an
advance by Agent for the account of the defaulting Lender and shall bear
interest at the rate applicable to the Loan, payable upon demand.
9.8 Agent in its Individual Capacity. With respect to its
Commitments, and the Loans made by it, Agent shall have the same rights and
powers under the Loan Documents as any other Lender or holder of a Note and may
exercise the same as though it were not performing the duties specified herein;
and the terms "Lenders," "Required Lenders," and any similar terms shall, unless
the context clearly otherwise indicates, include Agent in its individual
capacity as a Lender. Agent may accept deposits from, lend money to and
generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower Entities or any of their respective Affiliates as if
it were not performing the servicing duties specified herein, and may accept
fees and other consideration from Borrower for services in
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connection with this Agreement and otherwise without having to disclose or
account for the same to Lenders.
9.9 Holders. Agent may deem and treat the payee of any Note as the
holder thereof and Lender hereunder for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof purportedly
executed by the payee, as the case may be, shall have been filed with Agent.
Any request, authority or consent of any Person that, at the time of making such
request or giving such authority or consent, is the holder of any Note according
to Agent's information, shall be conclusive and binding on any subsequent
holder, transferee, assignee or endorsee, as the case may be, of such Note or of
any Note or Notes issued in exchange therefor.
9.10 Successor Agent. Agent may resign at any time upon sixty (60)
days' prior written notice to Borrower and the Lenders. Agent may be removed
upon Agent's insolvency, liquidation or the appointment of a receiver for Agent,
by action of the Required Lenders, at any time upon sixty (60) days' prior
written notice to Borrower and Agent. Such resignation or removal, as the case
may be, shall take effect upon the appointment of a successor Agent as provided
herein. The Required Lenders will, with Borrower's approval (which shall not be
unreasonably withheld), appoint from among the Lenders a successor Agent. If no
successor Agent shall have been appointed within such sixty (60) day period, (i)
if no Unmatured Default or Unmatured Default then exists, Borrower may appoint a
successor Agent from among the Lenders, and (ii) otherwise, Agent may appoint,
after consulting with the Lenders and Borrower, a successor agent from among the
Lenders, which Agent, however selected, shall serve as Agent until such time, if
any, as the Required Lenders and Borrower shall have appointed a successor Agent
as provided hereinabove. Upon the written acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any retiring
Agent's resignation as Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent.
9.11 Sharing of Payments, etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to the Obligations which results in its
receiving more than its Pro Rata Share of the aggregate payments with respect to
all of the Obligations, then (a) such Lender shall be deemed to have
simultaneously purchased from the other Lenders a share in the Obligations so
that the amount of the Obligations held by each of the Lenders shall continue to
equal their respective Pro Rata Shares, and (b) such other adjustments shall be
made from time to time as shall be equitable to insure that the Lenders share
such payments ratably. If any Lender remits payments to other Lenders under
this Section 9.11 and later is required to refund the same as a preferential
payment or otherwise, the other Lenders who shared in the payment shall
similarly arrange their interests in the Obligations to reverse the distribution
to them as to allow the originally remitting Lender to refund such payment. No
Lender shall exercise its banker's
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lien, set-off or other right to accomplish such payment absent Agent's prior
confirmation that the exercise of such right would be consistent with the
instructions of the Required Lenders then in effect regarding the outstanding
Event of Default.
9.12 Separate Liens on Collateral. Each Lender agrees with the other
Lenders that, with the exception of security interests in deposit accounts and
like property in the possession of a Lender as expressly provided for in this
Agreement, it will not take or permit to exist any Encumbrance in its favor on
any of the Collateral or other property of any of Borrowers other than
Encumbrances securing the Obligations due to all Lenders pursuant to the Loan
Documents.
9.13 Payments Between Agent and Lenders. All payments by Agent to
any Lender, and all payments by any Lender to Agent, under the terms of this
Agreement shall be made by wire transfer in immediately available funds to the
receiving party's address specified for notices in this Agreement. If any of
the Lenders fail to pay when due any sum payable to Agent, then, except as
otherwise provided in Section 9.7 hereof, such sum shall bear interest until
paid at the interest rate per annum for overnight borrowing by the payee from
the Federal Reserve Bank for the period commencing on the date such payment was
due and ending on, but excluding, the date such payment is made.
9.14 Assignments and Participations. Any Lender may assign all of
its interest in the Revolving Credit Loan or any portion(s) thereof in the
minimum amount of Ten Million and No/100 Dollars ($10,000,000.00) and in
increments of One Million and No/100 Dollars ($1,000,000.00) each, subject to
the prior written approval of Agent (and of Borrower, provided that no Event of
Default then exists), which approval shall not be unreasonably withheld. The
assignment shall be evidenced by documents in form and substance acceptable to
Agent, and the acquiring Lender shall expressly assume full responsibility as a
Lender hereunder, including, but not limited to, assumption of the applicable
portion of the Commitment. Upon consummation of such assignment, the assigning
Lender shall be deemed released from its obligations under the Loan Documents to
the extent of such assignment. An assignment fee of Three Thousand and No/100
Dollars ($3,000.00) shall be paid to Agent as a condition to any assignment of
an interest in the Revolving Credit Loan (including assignments, if any, among
banks that are already Lenders). Lenders may sell participation interests in
their interests in the Revolving Credit Loan as long as the terms of such
participations establish that no participant will be regarded as a Lender under
this Agreement and permit the participants to vote in determining the vote of
the Lender which sold the applicable participation only with respect to matters
for which the unanimous vote of all Lenders is required under this Agreement.
Lenders may disclose financial information in their possession to prospective
purchasers of interests in the Revolving Credit Loan and to prospective
participants.
9.15 Bankruptcy Provisions. Should any of the Borrower Entities
become a party to a case under the Bankruptcy Code, each Lender shall be
entitled to file its own claim, to the extent such a filing may be necessary.
Agent shall review each claim before being filed
63
by a Lender to assure that the claim is filed on a basis consistent with Agent's
records and Agent's legal positions taken pursuant to this Agreement. Should any
of the Borrower Entities become a party to a reorganization proceeding under the
Bankruptcy Code, each Lender shall be recognized as the holder of a separate
claim for the purpose of the approval or rejection of a plan under 11 U.S.C. (S)
1126, may freely vote such claim, and the provisions of that Section shall
control the other provisions of this Agreement that otherwise require the
consent of the Required Lenders or all Lenders in certain circumstances. Agent
shall continue to administer the Revolving Credit Loan on behalf of Lenders, as
they may be amended by any adopted Plan of Reorganization.
9.16 Foreclosure of Collateral. In the event of a foreclosure of any
Collateral, Agent may issue a credit bid for the account of all Lenders, up to
the amount of the then outstanding Obligations. Any Property acquired at such a
foreclosure (or acquired by Agent through a conveyance in lieu of foreclosure)
shall be held and administered by Agent for the benefit of all Lenders pursuant
to the terms of this Article IX.
9.17 Procedures for Notices and Approvals. All notices given among
Lenders and Agent with respect to this Agreement or the other Loan Documents
shall be given in the manner provided in this Agreement.
9.18 Other Relationships With Borrower. Each Lender is free to
engage in deposit relationships and other business relationships with the
Borrower Entities, provided that such relationship does not violate any
restriction set forth in this Agreement.
9.19 Foreign Tax Matters. Each Lender which is a foreign person
(i.e., a Person other than a United States Person for United States Federal
income tax purposes) hereby agrees that:
9.19.1 Delivery of Forms. Such Lender shall, no later than the
Closing Date (or, in the case of a Lender which becomes a party hereto
after the Closing Date, the date upon which such Lender becomes a
party hereto) deliver to the Agent and Borrower:
9.19.1(a) two accurate and complete signed originals of
Form 4224, or
9.19.1(b) two accurate and complete signed originals of
Form 1001,
in each case indicating that such Lender is on the date of
delivery thereof entitled to receive payments of principal,
interest and fees for the account of such lending office or
offices under this Loan Agreement free from withholding of
United States Federal income tax.
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9.19.2 Change of Office. At any time such a Lender changes its
lending office or offices or selects an additional lending office, it
shall, at the same time or reasonably promptly thereafter, deliver to
Agent and Borrower in replacement for, or in addition to, the forms
previously delivered by it hereunder;
9.19.2(a) if such changed or additional lending office is
located in the United States, two accurate and complete signed
originals of Form 4224, or
9.19.2(b) otherwise, two accurate and complete signed
originals of Form 1001,
in each case indicating that such Lender is on the date of
delivery thereof entitled to receive payments of principal,
interest and fees for the account of such changed or additional
lending office under this Loan Agreement free from withholding of
United States federal income tax.
9.19.3 Additional Documentation. Each such Lender shall,
promptly upon Agent's or Borrower's reasonable request to that effect,
deliver to the Agent and Borrower such other forms or similar
documentation as may be required from time to time by any applicable
law, treaty, rule or regulation in order to establish such Lender's
tax status for withholding purposes.
9.20 Responses to Requests. With respect to any consent or approval
requested by Borrower or Agent under a provision of this Agreement, Lenders
shall endeavor to provide to Agent written notice of their approval or
disapproval within seven (7) Business Days of receipt of the request; provided,
however, if any Lender fails to give such notice within seven (7) Business Days,
the request shall be regarded as disapproved by such Lender.
X. GENERAL PROVISIONS
10.1 Notices. All communications relating to this Agreement or any
of the other Loan Documents shall be in writing and shall effective when be
delivered by mail, overnight courier, special courier, telecopier or otherwise
to the following addresses:
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if to Borrower:
Physicians Resource Group, Inc.
Attn: President or CFO
0000 XXX, Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
With a Copy To:
Physicians Resource Group, Inc.
Attn: General Counsel
0000 XXX, Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
And With a Copy To:
Xxxxxxx Xxxxxx L.L.P.
Attn: Xxx Xxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
If to Agent:
NationsBank of Tennessee, N.A., Agent
Attn: Xxxxxxxxx Xxxx
0 XxxxxxxXxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
With a Copy To:
Boult, Cummings, Xxxxxxx & Xxxxx
Attn: Xxxx X. Xxxxxxx III, Esq.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
If to any Lender:
As set forth beside such Lender's signature hereto.
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Any party may change its address for receipt of notice by written
direction to the other parties hereto.
10.2 Renewal, Extension, or Rearrangement. All provisions of this
Agreement relating to Obligations shall apply with equal force and effect to
each and all promissory notes executed hereafter which in whole or in part
represent a renewal, extension for any period, increase, or rearrangement of any
part of the Obligations originally represented by any part of such other
Obligations.
10.3 Application of Payments. Amounts received with respect to the
Obligations, except for payments or prepayments expressly provided for elsewhere
in this Agreement, shall be applied (i) first, to any expenses due Lenders or
Agent, (ii) second, to any fee due Agent, (iii) third, to accrued and unpaid
interest under any of the Obligations, (iv) fourth, to any commitment fees due
Lenders, and (iii) fifth, to reduce the unpaid principal portion of the
Obligations, in such manner as determined by Agent.
10.4 Counterparts. This Agreement may be executed in counterparts
with all signatures or by counterpart signature pages, and it shall not be
necessary that the signatures of all parties be contained on any one
counterpart. Each counterpart shall be deemed an original, but all of them
together shall constitute one and the same instrument.
10.5 Negotiated Document. This Agreement and the other Loan
Documents have been negotiated by the parties with full benefit of counsel and
should not be construed against any party as author.
10.6 Consent to Jurisdiction; Exclusive Venue. Each party hereto
hereby irrevocably consents to the jurisdiction of the United States District
Court for the Middle District of Tennessee and of all Tennessee state courts
sitting in Davidson County, Tennessee, for the purpose of any litigation to
which Borrower, Lenders or Agent may be a party and which concerns this
Agreement or the Obligations. It is further agreed that venue for any such
action shall lie exclusively with courts sitting in Davidson County, Tennessee,
unless Lenders and Agent agree to the contrary in writing. This provision
applies to those matters for which litigation is permitted under the provision
below providing for mandatory arbitration and does not abrogate that provision.
10.7 Not Partners; No Third Party Beneficiaries. The relationship
of Lenders and Borrower is that of lenders and borrower only, and neither is a
fiduciary, partner or joint venturer of the other for any purpose. This
Agreement has been executed for the sole benefit of Lenders, and no third party
is authorized to rely upon Lenders' rights or duties hereunder.
10.8 No Reliance on Lenders' Analysis. Borrower acknowledges and
represents that, in connection with the Obligations, Borrower has not relied
upon any financial projection, budget, assessment or other analysis by Lenders
or Agent upon any representation
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by Lenders as to the risks, benefits or prospects of Borrower's business
activities or present or future capital needs incidental thereto, all such
considerations having been examined fully and independently by Borrower.
10.9 No Marshaling of Assets. Lenders and Agent may proceed against
collateral securing the Obligations and against parties liable therefor in such
order as they may elect, and neither Borrower nor any surety or guarantor for
Borrower nor any creditor of Borrower shall be entitled to require Lenders or
Agent to marshal assets. The benefit of any rule of law or equity to the
contrary is hereby expressly waived.
10.10 Impairment of Collateral. Lenders or Agent (acting as permitted
under this Agreement) may release any Collateral securing the Obligations or
release any party liable therefor. The defenses of impairment of collateral and
impairment of recourse and any requirement of diligence in collecting the
Obligations are hereby waived.
10.11 Business Days. If any payment date under the Obligations falls
on a day that is not a Business Day, or if the last day of any notice period
falls on such a day, the payment shall be due and the notice period shall end on
the next following Business Day.
10.12 Standard of Care; Limitation of Damages. Lenders and Agent
shall be liable to Borrower only for matters arising from this Agreement or
otherwise related to the Obligations resulting from such Lender's or Agent's
gross negligence or willful misconduct, AND NOT FOR MATTERS ARISING FROM THEIR
ORDINARY NEGLIGENCE, and liability for all other matters is hereby waived.
Lenders and Agent shall not in any event be liable to Borrower for special or
consequential damages arising from this Agreement or otherwise related to the
Obligations.
10.13 Incorporation of Schedules. All Schedules and Exhibits referred
to in this Agreement are incorporated herein by this reference.
10.14 Indulgence Not Waiver. Lenders' or Agent's indulgence in the
existence of a default hereunder or any other departure from the terms of this
Agreement shall not prejudice Lenders' or Agent's rights to declare a default or
otherwise demand strict compliance with this Agreement.
10.15 Cumulative Remedies. The remedies provided Lenders and Agent in
this Agreement are not exclusive of any other remedies that may be available to
Lenders and Agent under any other document or at law or equity.
10.16 Amendment and Waiver in Writing. No provision of this Agreement
can be amended or waived, except by a statement in writing signed by the party
or parties against whom enforcement of the amendment or waiver is sought.
Provisions of this Agreement may be amended or waived by the agreement of
Borrower and the Required Lenders (which consent of the Required Lenders may be
evidenced by the confirmation thereof issued by Agent to
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Borrower), except that (i) no amendment or waiver regarding matters expressly
requiring the unanimous consent of Lenders under Section 9.2.2 of this Agreement
may be entered into absent the written consent of all Lenders, (ii) the
amendment of Section 9.2.2 hereof, this subsection (ii), the definition of Pro
Rata or Pro Rata Share and the definition of Required Lenders under this
Agreement shall require the written consent of all Lenders, and (iii) no
amendment or waiver may affect the rights or duties of the Agent or the Issuing
Bank without their written consent.
10.17 Assignment. This Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of Borrower and Lenders,
except that Borrower shall not assign any rights or delegate any obligations
arising hereunder without the prior written consent of Lenders. Any attempted
assignment or delegation by Borrower without the required prior consent shall be
void.
10.18 Entire Agreement. This Agreement and the other written
agreements among Borrower, Lenders and Agent represent the entire agreement
between the parties concerning the subject matter hereof, and all oral
discussions and prior agreements are merged herein. Provided, if there is a
conflict between this Agreement and any other document executed
contemporaneously herewith with respect to the Obligations, the provision in
this Agreement shall control.
10.19 Severability. Should any provision of this Agreement be
declared invalid or unenforceable for any reason, the remaining provisions
hereof shall remain in full effect.
10.20 Time of Essence. Time is of the essence of this Agreement, and
all dates and time periods specified herein shall be strictly observed.
10.21 APPLICABLE LAW. THE VALIDITY, CONSTRUCTION AND ENFORCEMENT OF
THIS AGREEMENT AND ALL OTHER DOCUMENTS EXECUTED WITH RESPECT TO THE OBLIGATIONS
SHALL BE DETERMINED ACCORDING TO THE LAWS OF TENNESSEE APPLICABLE TO CONTRACTS
EXECUTED AND PERFORMED ENTIRELY WITHIN THAT STATE.
10.22 Captions Not Controlling. Captions and headings have been
included in this Agreement for the convenience of the parties, and shall not be
construed as affecting the content of the respective Sections.
10.23 Amendment and Restatement. This Agreement represents an
amendment and restatement of the Prior Loan Agreement and does not evidence a
novation thereof. All security for the Obligations arising under the Prior Loan
Agreement continues to secure the Obligations as evidenced hereby, with no
interruption of perfection or priority.
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10.24 Facsimile Signatures. This Agreement may be executed by
facsimile signatures, and shall be effective when Agent has received telecopy
transmissions of the signature pages executed by all parties hereto; provided,
however, that all parties shall deliver original executed documents to Agent
promptly following the execution hereof.
10.25 Arbitration. Any controversy or claim between or among the
parties hereto including but not limited to those arising out of or relating to
this instrument, agreement or document or any related instruments, agreements or
documents, including any claim based on or arising from an alleged tort, shall
be determined by binding arbitration in accordance with the Federal Arbitration
Act (or if not applicable, the applicable state law), the Rules of Practice and
Procedure for the Arbitration of Commercial Disputes of J.A.M.S./Endispute or
any successor thereof ("J.A.M.S."), and the "Special Rules" set forth below. In
the event of any inconsistency, the Special Rules shall control. Judgment upon
any arbitration award may be entered in any court having jurisdiction. Any
party to this Agreement may bring an action, including a summary or expedited
proceeding, to compel arbitration of any controversy or claim to which this
Agreement applies in any court having jurisdiction over such action.
10.25.1 Special Rules. The arbitration shall be conducted in
the city of Borrower's domicile at time of the execution of this
instrument, agreement or document and administered by J.A.M.S who will
appoint an arbitrator; if J.A.M.S. is unable or legally precluded from
administering the arbitration, then the American Arbitration
Association will serve. All arbitration hearings will be commenced
within 90 days of the demand for arbitration; further, the arbitrator
shall only, upon a showing of cause, be permitted to extend the
commencement of such hearing for up to an additional 60 days.
10.25.2 Reservation of Rights. Nothing in this arbitration
provision shall be deemed to (i) limit the applicability of any
otherwise applicable statutes of limitation or repose and any waivers
contained in this arbitration provision; or (ii) be a waiver by Lender
of the protection afforded to it by 12 U.S.C. Sec. 91 or any
substantially equivalent state law; or (iii) limit the right of Lender
(a) to exercise self help remedies such as (but not limited to)
setoff, or (b) to foreclose against any real or personal property
collateral, or (c) to obtain from a court provisional or ancillary
remedies such as (but not limited to) injunctive relief, writ of
possession or the appointment of a receiver. Lender may exercise such
self help rights, foreclose upon such property, or obtain such
provisional or ancillary remedies before, during or after the pendency
of any arbitration proceeding brought pursuant to this instrument,
agreement or document. Neither this exercise of self help remedies
nor the institution or maintenance of an action for foreclosure or
provisional or ancillary remedies shall constitute a waiver of the
right of any party, including the claimant in such action, to
70
arbitrate the merits of the controversy or claim occasioning resort to
such remedies.
Executed as of the date first written above.
PHYSICIANS RESOURCE GROUP, INC.
By:
-------------------------------------
Title:
-----------------------------------
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NATIONSBANK OF TENNESSEE, N.A.,
a national banking association, as Agent
By:
-------------------------------------
Xxxxxxxxx X. Xxxx
Senior Vice President
NATIONSBANK OF TENNESSEE, N.A.,
a national banking association, as a
Lender
Commitment in Dollars: $20,000,000.00
Commitment as Percentage of Total: 100%
By:
-------------------------------------
Xxxxxxxxx X. Xxxx
Senior Vice President
Address: 0 XxxxxxxXxxx Xxxxx
Xxxxxxxxx, XX 00000
Fax number: 615/000-0000
Voice number: 615/749-3918
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EXHIBIT 2.5.1(b)
AGENCY SERVICES CLOSING INSTRUCTIONS
MUST BE ACCOMPANIED BY A "REQUEST FOR BORROWING"
FROM THE CUSTOMER
SOURCES OF FUNDS AT CLOSING:
Borrowings under the Credit Agreement
-------------------------
Debit from Borrower's Account
-------------------------
Funds wired into NationsBank
-------------------------
TOTAL
-------------------------
DISBURSEMENTS (LIST ALL NECESSARY WIRE INSTRUCTIONS):
--------------------------------------- -------------------------
--------------------------------------- -------------------------
--------------------------------------- -------------------------
--------------------------------------- -------------------------
TOTAL -------------------------
OTHER INSTRUCTIONS:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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EXHIBIT 2.5.1(b)-CONT'D
BORROWING/CONVERSION NOTICE
TO: NationsBank of Tennessee, N.A., Agent
LENDERS: Parties to the Loan Agreement
Date: __________, 199_
BORROWER: Physicians Resource Group, Inc.
This notice is delivered under that First Amended and Restated Loan
Agreement (as renewed, extended and amended, the "Loan Agreement") dated as of
November 28, 1997, among Agent, Borrower and Lenders. Terms defined in the Loan
Agreement have the same meanings when used -- unless otherwise defined -- in
this request.
Borrower requests a Loan under the Loan Agreement as follows:
The requested draw is from the Revolving Credit Loan.
Borrowing Date/1/ ___________, 199_
Amount of Borrowing $_________________
Type of Borrowing/2/ __________________
For LIBOR Loans, the Interest Period/3/ 1 month
Select one:
___ The proceeds of the requested Loan shall be disbursed to
Borrower as provided in the Loan Agreement. The purpose of the
requested Loan is (select one for this Loan):
___ New advance for working capital
___ New advance for the permitted repayment of indebtedness
___ The proceeds of the requested LIBOR Loan shall be applied to
the payment of Borrower's existing Base Rate Loan, this new
Loan being a conversion of a Base Rate Loan to a LIBOR Loan
___ The proceeds of the requested LIBOR Loan shall be applied to
the payment of the following LIBOR Loan, subject to all
requirements of the Loan Agreement, this new Loan being a
conversion of a LIBOR Loan to a different LIBOR Loan:
_________________________
/1/Next Banking Day for Base Rate Loans, third following Banking Day for
LIBOR Loans
/2/LIBOR or Base Rate Loan.
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Date:
--------------------------
Amount:
------------------------
Interest Period:
---------------
___ The proceeds of the requested Base Rate Loan shall be applied to
the payment of the following LIBOR Loan, subject to all
requirements of the Loan Agreement, this new Loan being a
conversion of a LIBOR Loan to a Base Rate Loan:
Date:
--------------------------
Amount:
------------------------
Interest Period:
---------------
Date:
--------------------------
Amount:
------------------------
Interest Period:
---------------
Borrower certifies that on the date hereof and on the date of the
above Borrowing Date -- after giving effect to the requested Loan -- (a) all of
the representations and warranties in the Loan Documents will be true and
correct in all material respects -- unless they speak to a specific date or the
facts on which they are based have been changed by transactions contemplated or
permitted by the Loan Agreement, (b) no Event of Default or Unmatured Default
will exist, and (c) all conditions to Borrower's right to receive the requested
Loan under the Loan Agreement have been satisfied.
PHYSICIANS RESOURCE GROUP, INC., Borrower
By:
-----------------------------------------
(Name)
--------------------------------------
(Title)
-------------------------------------
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