EXHIBIT 10.5
CREDIT AGREEMENT
dated as of
July 1, 1999
among
The Lenders Party Hereto
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent
and
TOPS SPECIALTY HOSPITAL, LTD.,
as Borrower
TABLE OF CONTENTS
ARTICLE I.
Definitions ........................................................1
SECTION 1.01. Defined Terms ....................................1
SECTION 1.02. Classification of Loans and Borrowings ..........16
SECTION 1.03. Terms Generally .................................16
SECTION 1.04. Accounting Terms; GAAP...........................16
ARTICLE II.
The Credits........................................................17
SECTION 2.01. Commitments......................................17
SECTION 2.02. Loans ...........................................17
SECTION 2.03. Requests for Borrowings .........................18
SECTION 2.04. Intentionally Deleted ...........................19
SECTION 2.05. Intentionally Deleted ...........................19
SECTION 2.06. Intentionally Deleted ...........................19
SECTION 2.07. Funding of Loans ................................19
SECTION 2.08. Interest Elections ..............................21
SECTION 2.09. Termination of Commitments.......................22
SECTION 2.10. Repayment of Loans, Evidence of Debt.............22
SECTION 2.11. Prepayment of Loans .............................22
SECTION 2.12. Fees ............................................23
SECTION 2.13. Interest ........................................23
SECTION 2.14. Alternate Rate of Interest ......................24
SECTION 2.15. Increased Costs .................................25
SECTION 2.16. Break Funding Payments ..........................25
SECTION 2.17. Taxes ...........................................26
SECTION 2.18. Payments Generally, Pro Rata Treatment,
Sharing of Set-offs .............................27
SECTION 2.19. Mitigation Obligations, Replacement of Lenders ..28
SECTION 2.20. Mandatory Prepayments and Reductions
of Commitments ..................................29
ARTICLE III.
Representations and Warranties.....................................31
SECTION 3.01. Organization, Powers ............................31
SECTION 3.02. Authorization, Enforceability ...................31
SECTION 3.03. Governmental Approvals; No Conflicts ............31
SECTION 3.04. Financial Condition; No Material
Adverse Change ..................................31
SECTION 3.05. Properties ......................................32
SECTION 3.06. Litigation and Environmental Matters ............32
SECTION 3.07. Compliance with Laws and Agreements .............33
SECTION 3.08. Investment and Holding Company Status ...........33
SECTION 3.09. Taxes............................................33
SECTION 3.10. ERISA ...........................................33
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SECTION 3.11. Disclosure ......................................33
SECTION 3.12. Year 2000 .......................................34
SECTION 3.13. Real Property ...................................34
SECTION 3.14. Proprietary Rights ..............................34
SECTION 3.15. Subsidiaries ....................................34
ARTICLE IV.
Conditions ........................................................35
SECTION 4.01. Effective Date...................................35
SECTION 4.02. Each Credit Event................................37
ARTICLE V.
Affirmative Covenants .............................................38
SECTION 5.01. Financial Statements and Other Information ......38
SECTION 5.02. Notices of Material Events ..................... 39
SECTION 5.03. Existence, Conduct of Business ..................40
SECTION 5.04. Payment of Obligations ..........................40
SECTION 5.05. Maintenance of Properties; Insurance ............40
SECTION 5.06. Books and Records; Inspection Rights ............41
SECTION 5.07. Compliance with Laws ............................41
SECTION 5.08. Use of Proceeds .................................41
SECTION 5.09. Business Loans ..................................41
SECTION 5.10. Compliance with ERISA ...........................41
SECTION 5.11. Intentionally Deleted ...........................41
SECTION 5.12. Cooperation with Syndicator .....................41
SECTION 5.13. Fixed Charge Coverage Ratio .....................42
SECTION 5.14. Indebtedness to EBITDA Ratio ....................42
SECTION 5.15. Management Fee ..................................43
ARTICLE VI.
Negative Covenants ................................................43
SECTION 6.01. Indebtedness ....................................43
SECTION 6.02. Liens ...........................................44
SECTION 6.03. Fundamental Changes .............................44
SECTION 6.04. Investments, Loans, Advances, Guarantees
and Acquisition .................................45
SECTION 6.05. Hedging Agreements ..............................45
SECTION 6.06. Restricted Payments .............................45
SECTION 6.07. Transactions with Affiliates ....................45
SECTION 6.08. Restrictive Agreements ..........................46
SECTION 6.09. Intentionally Deleted ...........................46
SECTION 6.10. Subordinated Indebtedness .......................46
SECTION 6.12. Nature of Business ..............................46
SECTION 6.13. No Amendment ....................................46
SECTION 6.14. Capital Expenditures ............................47
SECTION 6.15. Subsidiaries ....................................47
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SECTION 6.16. Management Fee ..................................47
ARTICLE VII.
Events of Default..................................................47
ARTICLE VIII.
The Administrative Agent ..........................................49
ARTICLE IX.
Miscellaneous .....................................................51
SECTION 9.01. Notices .........................................51
SECTION 9.02. Waivers, Amendments .............................53
SECTION 9.03. Expenses, Indemnity, Damage Waiver ..............53
SECTION 9.04. Successors and Assigns ..........................55
SECTION 9.05. Survival ........................................58
SECTION 9.06. Counterparts: Integration, Effectiveness ........58
SECTION 9.07. Severability ....................................58
SECTION 9.08. Right of Setoff .................................58
SECTION 9.09. Governing Law, Jurisdiction, Consent to
Service of Process ..............................59
SECTION 9.10. WAIVER OF JURY TRIAL ............................59
SECTION 9.11. Headings ........................................60
SECTION 9.12. Confidentiality .................................60
SCHEDULES:
Schedule 2.01 Part A Term Loan Facility A Commitment
PART B Term Loan Facility B Commitment
Schedule 3.06 Disclosed Matters
Schedule 3.13 Real Property
Schedule 3.14 Proprietary Rights
Schedule 3.15 Subsidiaries
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.08 Existing Restrictions
EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Opinion of Borrower's Counsel
Exhibit C - Form of Confidentiality Agreement
Exhibit D - Form of Promissory Note
Exhibit E - Survey Requirements
Exhibit F - Form of Compliance Certificate
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of July 1, 1999, among TOPS SPECIALTY HOSPITAL,
LTD., the LENDERS party hereto, and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:
"ABR" when used in reference to any Loan, refers to whether such Loan is
bearing interest at a rate determined by reference to the Alternate Base Rate.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means Chase Bank of Texas, National Association, in
its capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"AGREEMENT" means this Credit Agreement, as the same may be amended,
restated or otherwise modified from time to time.
"ALTERNATE BASE RATE" means for any day a rate per annum equal to the
lesser of (a) the greater of (1) the Prime Rate for that day and (2) the Federal
Funds Effective Rate for that day plus 1/2% of 1% or (b) the Ceiling Rate. The
Alternate Base Rate shall be computed on the basis of the actual number of days
elapsed in a year consisting of 365 (366 for a leap year) days. If for any
reason Administrative Agent shall have determined (which determination shall be
conclusive and binding, absent manifest or demonstrated error) that it is unable
to ascertain the Federal Funds Effective Rate for any reason, including, without
limitation, the inability or failure of Administrative Agent to obtain
sufficient quotations in accordance with the terms hereof, then the Alternate
Base Rate shall, until the circumstances giving rise to such inability no longer
exists, be the lesser of (a) the Prime Rate from time to time in effect or (b)
the Ceiling Rate. Any change in the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective from
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and including the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"APPLICABLE PERCENTAGE" means, with respect to any Lender, the percentage
of the total Term Loan Facility A Commitments and Term Loan Facility B
Commitments represented by such Lender's Term Loan Facility A Commitment and
Term Loan Facility B Commitment, respectively. If the Term Loan Facility A
Commitments and Term Loan Facility B Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the unpaid principal of
the Loans, giving effect to any assignments.
"APPLICABLE RATE" means, for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the facility fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
"ABR Spread" or "Eurodollar Spread," as the case may be:
ABR Spread Eurodollar Spread
Term Loan Facility A 1.25% 2.25%
Term Loan Facility B 1.75% 2.75%
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of EXHIBIT A or any other form approved by the Administrative Agent.
"BOARD" means the Board of Governors of the Federal Reserve System of the
United States of America.
"BORROWER" means TOPS Specialty Hospital, Ltd., a Texas limited
partnership.
"BORROWING" means Loans of the same Type, made, converted or continued on
the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"BORROWING REQUEST" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other day
on which commercial banks in Dallas, Texas are authorized or required by law to
remain closed; PROVIDED that, when used in connection with a Eurodollar Loan,
the term "BUSINESS DAY" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" means, for any period, all expenditures of Borrower
and its Subsidiaries that are classified as capital expenditures in accordance
with GAAP including all such expenditures associated with Capital Lease
Obligations.
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"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CASUALTY EVENT" shall mean with respect to any Property of any Person,
any loss of or damage to, or any condemnation or other taking of, such Property
for which such Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation.
"CEILING RATE" means, on any day, the maximum nonusurious rate of interest
permitted for that day by whichever of applicable federal or Texas laws permits
the higher interest rate, stated as a rate per annum. On each day, if any, that
Chapter 1D establishes the Ceiling Rate, the Ceiling Rate shall be the
"indicated rate ceiling" (as defined in Chapter 1D) for that day. Administrative
Agent may from time to time, as to current and future balances, implement any
other ceiling under Chapter 1D by notice to Borrower, if and to the extent
permitted by Chapter 1D. Without notice to Borrower or any other Person, the
Ceiling Rate shall automatically fluctuate upward and downward as and in the
amount by which such maximum nonusurious rate of interest permitted by
applicable law fluctuates.
"CHANGE IN CONTROL" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of shares
representing more than 40% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of a general partner of Borrower (other
than any such Person or group that owns such shares on the date hereof);
(b) occupation of a majority of the seats (other than vacant seats) on the board
of directors of a general partner of Borrower by Persons who were neither
(i) nominated by the board of directors of a general partner of Borrower nor
(ii) appointed by directors so nominated; or (c) the acquisition of direct or
indirect Control of the Borrower by any Person or group (other than any Person
or group that Controls the Borrower on the date hereof).
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"CHAPTER 1D" means Chapter 1D of Title 79, Texas Revised Civil Statutes,
1925, as amended.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
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"COMPLIANCE CERTIFICATE" means the Compliance Certificate in substantially
the form attached hereto as EXHIBIT F, with such modifications and additions
thereto as shall be in accordance with this Agreement and reasonably
satisfactory to Administrative Agent.
"CONFIDENTIALITY AGREEMENT" means the Confidentiality Agreement in the
form attached hereto as EXHIBIT C.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"DEBT" shall mean, as of any applicable date of determination, all items
of Indebtedness, obligation or liability of a Person (other than, with respect
to Borrower, Subordinated Debt), whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, joint or several, that
should be classified as liabilities in accordance with GAAP relating to the
Transactions.
"DEED OF TRUST" means that certain Deed of Trust and Security Agreement to
Xxxxx X. Xxxxxx, Trustee for the benefit of Administration Agent and Lenders
executed the same date hereon covering certain real property located in Xxxxxx
County, Texas.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DEFAULT RATE" means, on any day, a rate per annum equal to two percent
(2%) plus the greater of (i) the Alternate Base Rate plus the Applicable Rate or
(ii) the Adjusted LIBO Rate plus the Applicable Rate; provided in no event shall
the Default Rate be in excess of the Ceiling Rate.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"DISPOSITION" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by
Borrower or any of its Subsidiaries to any other Person excluding any sale,
assignment, transfer or other disposition (x) of any Property sold or disposed
of in the ordinary course of business and on ordinary business terms and (y) of
any investment permitted under Section 6.04 or (z) to the Borrower or any of its
wholly-owned Subsidiaries.
"DOLLARS" or "$" refers to lawful money of the United States of America.
"EBITDA" shall mean, for any period, the amount, determined without
duplication, for Borrower and its Subsidiaries on a consolidated basis, of
earnings before (a) interest expense in such period, (b) accrued taxes in such
period, and (c) depreciation, amortization and other non-cash charges in such
period.
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"EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"EQUITY ISSUANCE" shall mean (a) any issuance or sale by Borrower of (i)
any of its capital stock (including preferred stock), (ii) any warrants or
options exercisable in respect of its capital stock (other than any warrants or
options issued to directors, officers or employees of Borrower or any of its
Subsidiaries, pursuant to employee benefit plans established in the ordinary
course of business and any capital stock of Borrower issued upon the exercise of
such warrants or options) or (iii) any other security or instrument representing
an equity interest (or the right to obtain any equity interest) in Borrower or
(b) the receipt by Borrower whether directly (or indirectly through one or more
of its Subsidiaries) after the Effective Date of any capital contribution
(whether or not evidenced by any equity security issued by Borrower).
"EQUITY RIGHTS" shall mean, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, or exchangeable for
any additional shares of capital stock of any class, or partnership or other
ownership interest of any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time:
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding
5
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence by the Borrower or any of
its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of
any liability with respect to the withdrawal or partial withdrawal from any Plan
or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"EURODOLLAR" when used in reference to any Loan, refers to whether such
Loan is bearing interest at a rate determined by reference to the Adjusted LIBO
Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in Article VII.
"EXCESS CASH FLOW" shall mean, for any period, the sum, determined without
duplication, for Borrower and its Subsidiaries on a consolidated basis, of
EBITDA for such period MINUS (a) taxes paid in such period, MINUS (b) cash
interest expense payable and paid in such period, MINUS (c) unfinanced Capital
Expenditures made and payable in such period, MINUS (d) Capital Lease
Obligations payable and paid in such period, MINUS (e) scheduled principal
payments of the Loans made in such period, MINUS (f) prepayments of the Loans in
such period made pursuant to Section 2.11 or Section 2.20(a), (b) or (d), MINUS
(g) Restricted Payments, not prohibited by this Agreement, made in such period.
"EXCLUDED TAXES" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.19(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.17(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.17(a).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next
6
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"FINANCIAL STATEMENTS" shall mean all balance sheets, income statements
and other financial data, statements and reports (whether of Borrower or any of
its Subsidiaries), which are required to, have been, or may from time to time
hereafter, be required to be furnished to Administrative Agent.
"FIXED CHARGE COVERAGE RATIO" shall mean, as of any date, for the four
most recently completed fiscal quarters, the ratio for Borrower and its
Subsidiaries on a consolidated basis, of (a) EBITDA for such period MINUS all
unfinanced Capital Expenditures incurred in such period, to (b) the sum of cash
interest expense payable and paid in such period, PLUS scheduled principal
payments on the Loans and other Indebtedness made in such period, PLUS
Restricted Payments made in such period. Provided, however, that a Restricted
Payment of up to $1,000,000 (or such lesser amount as is required to consummate
the purchase of TOPS Specialty Hospital and is accounted for in accordance with
GAAP) on or prior to the Effective Date, and a subsequent Restricted Payment of
up to $270,000 (or such lesser amount as is required to consummate the purchase
of TOPS Specialty Hospital and is accounted for in accordance with GAAP) made
within ninety (90) calendar days after the Effective Date, shall not be
considered as Restricted Payments for purposes of the preceding sentence.
"FOREIGN LENDER" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles in the United States
of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply fluids for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working
7
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; PROVIDED, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"GUARANTOR" shall mean United Surgical Partners International, Inc., a
Delaware corporation, its successors and assigns.
"GUARANTY" shall mean that certain guaranty of this Agreement executed by
Guarantor on or about of even date herewith, and referenced in Section 4.01 of
this Agreement, as the same may be amended and modified from time to time.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of Property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
Property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, to the extent of the fair market value of such
Property, (g) all Guarantees by such Person of Indebtedness of others, (h) all
Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty and (j) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
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"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the last
Business Day of each October, January, April and July and (b) with respect to
any Eurodollar Loan, the last day of the Interest Period applicable to the Loan,
and in the case of a Eurodollar Loan with an Interest Period of more than three
months' duration, each day prior to the last day of such Interest Period that
occurs at intervals of three months' duration after the first day of such
Interest Period.
"INTEREST PERIOD" means with respect to any Eurodollar Loan, the period
commencing on the date of such Loan and ending on the numerically corresponding
day in the calendar month that is one, three, six months or, with the consent of
each Lender, twelve months thereafter, as the Borrower may elect; PROVIDED, that
(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Loan only, such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Loan that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Loan initially shall be the date on which such Loan is made and thereafter
shall be the effective date of the most recent conversion or continuation of
such Loan.
"INTEREST ELECTION REQUEST" means a request by the Borrower to convert or
continue a Loan or a portion thereof in accordance with Section 2.08.
"INVESTMENT" shall mean, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including any
"short sale" or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale); (b) the making of any deposit
with, or advance, loan or other extension of credit to, any other Person
(including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person); or (c) the entering into of any guaranty of, or other contingent
obligation with respect to, Indebtedness or other liability of any other Person
and (without duplication) any amount committed to be advanced, lent, or extended
to such Person.
"LENDERS" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"LIBO RATE" means, with respect to any Eurodollar Loan for any Interest
Period, the rate appearing on the Xxxxxx Money Rates Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 am., Dallas, Texas time, three Business Days prior to the commencement of
such Interest Period, as the rate for dollar deposits with a maturity comparable
to such Interest Period. If such rate is not available at such time for any
reason,
9
then the "LIBO Rate" with respect to such Eurodollar Loan for such Interest
Period shall be the rate at which dollar deposits of an amount similar to such
Eurodollar Borrowing and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., Dallas, Texas time, three Business Days prior to the commencement of
such Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, all promissory
notes, guaranties, the Deed of Trust, all Uniform Commercial Code financing
statements, and all other documents executed in connection with this Agreement.
"LOANS" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"MANAGEMENT FEE" shall mean all management fees, consulting fees and all
other like fees and amounts due and payable, from time to time by Borrower to
Texas Outpatient Surgicare Center, Inc., pursuant to that certain Management
Agreement dated June 1, 1988, as amended, and any other agreements, arrangements
or understandings by and between Borrower, Texas Outpatient Surgicare Center,
Inc. or United Surgical Partners International, Inc., or among Borrower, Texas
Outpatient Surgicare Center, Inc. or United Surgical Partners International,
Inc. and another or others.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, prospects, or condition, financial or otherwise,
of the Borrower and the Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform any of its obligations under this Agreement or any of the
other Loan Documents or (c) the rights of or benefits available to the Lenders
under this Agreement or any of the other Loan Documents:
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Borrower and its Subsidiaries in an aggregate principal amount exceeding
$100,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
1O
"NET AVAILABLE PROCEEDS" shall mean:
(i) in the case of any Disposition, the amount of Net Cash Payments
received or to be received in connection with such Disposition; and
(ii) in the case of any Casualty Event, the aggregate amount of proceeds
of insurance, condemnation awards and other compensation (other than proceeds of
business interruption insurance) received by Borrower and its Subsidiaries in
respect of such Casualty Event net of (A) reasonable expenses incurred by
Borrower and its Subsidiaries in connection therewith and (B) contractually
required repayments of Indebtedness (other than Indebtedness hereunder) to the
extent secured by a Lien on Property affected by such Casualty Event, (C) any
Taxes payable by Borrower or any of its Subsidiaries as a result of such
Casualty Event and (D) amounts required to be paid to any Person (other than
Borrower or any of its Subsidiaries) owning a beneficial interest in the
Property subject to the Casualty Event.
"NET CASH PAYMENTS" shall mean, with respect to any Disposition, the
aggregate amount of all cash payments received by Borrower and its Subsidiaries
directly or indirectly in connection with such Disposition, whether at the time
of such Disposition or after such Disposition under deferred payment
arrangements or Investments entered into or received in connection with such
Disposition; PROVIDED that (a) Net Cash Payments shall be net of (i) the amount
of any legal, accounting, regulatory, title and recording tax expenses,
commissions and other reasonable fees and expenses paid by Borrower and its
Subsidiaries in connection with Disposition and (ii) any income or other Taxes
estimated to be payable by Borrower and its Subsidiaries or by the partners of
Borrower as a result of such Disposition (but only to the extent that such
estimated Taxes are in fact paid to the relevant Federal, state or local
governmental authority within six months of the date of such Disposition), (iii)
any amounts required to be paid to any Person (other than Borrower or any of its
Subsidiaries) owning a beneficial interest in the Property subject to the
Disposition, and (b) Net Cash Payments shall be net of any repayments by
Borrower or any of its Subsidiaries of Indebtedness to the extent that (i) such
Indebtedness is secured by a Lien on the real property that is the subject of
such Disposition and (ii) the transferee of (or holder of a Lien on) such
Property requires that such Indebtedness be repaid as a condition to such
Disposition.
"NET INCOME" shall mean the net income (or loss) of a Person for any
period determined in accordance with GAAP but excluding in any event:
(a) any gains or losses on the sale or other disposition, not in the
ordinary course of business, of Investments or fixed or capital assets,
net of any taxes on the excluded gains and any tax deductions or credits
on account on any excluded losses; and
(b) in the case of Borrower, net earnings of any Person (other than a
wholly-owned Subsidiary) in which Borrower has an ownership interest,
unless such net earnings shall have actually been received by Borrower in
the form of cash distributions.
11
"OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) landlords', carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens (i) arising in the ordinary course of business,
(ii) securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04 and (iii) (A) imposed by law or (B) if
the same (1) are usual and customary, including as to scope of collateral, and
(2) do not secure obligations for borrowed money, created by contract;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an Event
of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract from
the value of the affected Property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary; PROVIDED that the term "Permitted
Encumbrances" as used in this clause (f) shall not include any Lien securing
Indebtedness; and
(g) Liens in favor of Administrative Agent and Lenders.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;
12
(b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances, demand
deposits, and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of not
less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above.
"PERSON" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"PLAN" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated; would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PRIME RATE" means the rate of interest per annum publicly announced from
time to time by Chase Bank of Texas, National Association as its prime rate in
effect at its principal office in Houston, Texas; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"PROPERTY" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"PROPRIETARY RIGHTS" shall mean any patents, registered and common law
trademarks, service marks, trade names, copyrights, licenses and other similar
rights (including know-how, trade secrets and other confidential information)
and applications for each of the foregoing, if any.
"REDUCTION EVENT" means any Disposition provided that a Disposition in any
fiscal year of Borrower shall not constitute a Reduction Event unless, and then
only to the extent that, the fair market value of the Property that is the
subject of such Disposition is $100,000 or more (herein, the "Current
Disposition"); and provided further that no Current Disposition shall constitute
a Reduction Event if and to the extent that the Net Available Proceeds of the
Current Disposition are applied within 60 days of the consummation of such
Current Disposition to the purchase by the Borrower or a Subsidiary of
substitute assets, so long as the Borrower shall have delivered to the
Administrative Agent a certificate (a "REPLACEMENT SALES CERTIFICATE") of the
chief executive officer or the chief financial officer of the Borrower, in form
and detail satisfactory to Administrative Agent, certifying as to (x) the amount
of such Net Available Proceeds of the Current Disposition that will (on the date
of the Current Disposition) be received in cash and (y) the fact that the
Borrower or a
13
Subsidiary shall invest such Net Available Proceeds in substitute assets within
60 days after the date of consummation of such Current Disposition. The
description of any transaction as falling within the above definition does not
affect any limitation on such transaction imposed by Article VI of this
Agreement.
"REGISTER" has the meaning set forth in Section 9.04.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having Term Credit
Exposures and unused Term Loan Facility A Commitments or Term Loan Facility B
Commitments representing 66 2/3% of the sum of the total Term Credit Exposures
and unused Term Loan Facility A Commitments or Term Loan Facility B Commitments
at such time.
"RESTRICTED PAYMENT" means any distribution (whether in cash, securities
or other Property) with respect to any partnership or other equity interest of
the Borrower or any Subsidiary, or any payment (whether in cash, securities or
other Property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such partnership or other equity interest of the Borrower or any option
or other right to acquire any such partnership or other equity interest of the
Borrower, but excluding distributions to Borrower by a wholly-owned Subsidiary.
"S&P" means Standard & Poor's Ratings Group.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"SUBORDINATED DEBT" shall mean indebtedness of Borrower to third parties
that has been subordinated to the Indebtedness pursuant to a subordination
agreement in form and content satisfactory to Bank.
"SUBSIDIARY" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such
14
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, directly or indirectly owned, controlled or
held, or (b) that is, as of such date, otherwise Controlled, by the parent or
one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of the Borrower.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM CREDIT EXPOSURE" means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender's Loans at such time.
"TERM LOAN FACILITY A" means the Term Loan Facility A made pursuant to
Section 2.02 in the original principal amount of $8,000,000.
"TERM LOAN FACILITY B" means the Term Loan Facility B made pursuant to
Section 2.02 in the original principal amount of $5,096,000.
"TERM LOAN FACILITY A COMMITMENT" shall mean, for each Term Loan Lender,
the obligation of such Lender to make a Loan in the amount set forth in Schedule
2.01 Part A or, in the case of any Person that becomes a Term Loan Lender
pursuant to an assignment permitted under Section 9.04 as specified in the
respective instrument of assignment pursuant to which such assignment is
effected (in each case as the same may be reduced from time to time pursuant to
Section 9.04) pursuant to an assignment. The total original aggregate principal
amount of Term Loan Facility A Commitments shall not exceed $8,000,000.
"TERM LOAN FACILITY B COMMITMENT" shall mean, for each Term Loan Lender,
the obligation of such Lender to make a Loan in the amount set forth in Schedule
2.01 Part B or, in the case of any Person that becomes a Term Loan Lender
pursuant to an assignment permitted under Section 9.04, as specified in the
respective instrument of assignment pursuant to which such assignment is
effected (in each case as the same may be reduced from time to time pursuant to
Section. 9.04") pursuant to an assignment. The total original aggregate
principal amount of the Term Loan Facility B Commitments shall not exceed
$5,096,000.
"TERM LOAN LENDERS" shall mean (a) on the date hereof, the Lenders having
Term Loan Facility A Commitments set forth on Schedule 2.01 Part A hereof and
Term Loan Facility B Commitments set forth on Schedule 2.01 Part B and (b)
thereafter, the Lenders from time to time holding Loans after giving effect to
any assignments thereof permitted by Section 9.04.
15
"TERM LOAN NOTES" shall mean the promissory notes provided for by Section
2.02 and all promissory notes delivered in substitution or exchange therefor, in
each case as the same shall be modified and supplemented and in effect from time
to time.
"TERM LOAN FACILITY A MATURITY DATE" means June 30, 2005.
"TERM LOAN FACILITY B MATURITY DATE" means June 30, 2009.
"TRANSACTIONS" means the execution, delivery and performance by the
Borrower of this Agreement, the borrowing of Loans and the use of the proceeds
thereof.
"TYPE" when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan or on the Loans comprising such Borrowing is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
"UNUSED EXCESS CASH FLOW" for any fiscal year shall mean the Excess Cash
Flow for such fiscal year minus the amount of prepayments made from such Excess
Cash Flow pursuant to Section 2.20(c) of this Agreement.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans or Borrowings may be classified and referred to by Type (e.g. a
"EURODOLLAR LOAN" or "EURODOLLAR BORROWING").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "Property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
16
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terns of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II.
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions set forth
herein, each Lender agrees to make a Loan relating to such Lenders' Term Loan
Facility A Commitment to the Borrower in an aggregate principal amount that will
not result in such Lender's Term Credit Exposure exceeding such Lender's Term
Loan Facility A Commitment.
Subject to the terms and conditions set forth herein, each Lender agrees
to make a Loan relating to such Lenders' Term Loan Facility B Commitment to the
Borrower in an aggregate principal amount that will not result in such Lender's
Term Credit Exposure exceeding such Lender's Term Loan Facility B Commitment.
Upon the occurrence of an event that, with notice or the passage of time,
or both, would constitute an Event of Default (as defined in Article VII), and
at any time thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower suspend the Commitments (and thereupon the Commitments shall
immediately be suspended). During the period of any such suspension: (i) no
Lender shall be obligated in respect of its Commitment and (ii) any fees due to
any one or more of Administrative Agent and the Lenders (including the fees
provided for in Section 2.12) shall be calculated without regard to such
suspension. Without limiting the first sentence of this paragraph, (x) a grace
or cure period in an agreement between the Borrower (or a Subsidiary) and a
third party (i.e., a Person that is not the Administrative Agent or a Lender) is
included as a passage of time within the contemplation of such first sentence
and (y) a notice given by a third party (i.e., a Person that is not the
Administrative Agent or a Lender) to the Borrower or a Subsidiary is included as
a notice within the contemplation of such first sentence. This paragraph shall
apply notwithstanding anything to the contrary in this Agreement or any of the
other Loan Documents.
SECTION 2.02. LOANS.
(a) Each Loan shall be made by the Lenders ratably in accordance with
their respective Term Loan Facility A Commitments and Term Loan Facility B
Commitments. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its
17
obligations hereunder; PROVIDED that the Term Loan Facility A Commitments and
the Term Loan Facility B Commitments of the Lenders are several and no Lender
shall be responsible for any other Lender's failure to make Loans as required.
(b) Each Lender severally agrees, on the terms and conditions of this
Agreement, to make a term loan, in a single advance, to the Borrower in Dollars
(PROVIDED that the same shall occur no later than thirty (30) days following the
Effective Date) in an aggregate principal amount up to but not exceeding the
amount of the Term Loan Facility A Commitment of such Lender. Thereafter the
Borrower may convert Loans of one Type into Loans of another Type (as provided
in Section 2.08) or continue Loans of one Type as Loans of the same Type (as
provided in Section 2.08).
(c) Each Lender severally agrees, on the terms and conditions of this
Agreement, to make a term loan, in a single advance, to the Borrower in Dollars
(PROVIDED that the same shall occur no later than thirty (30) days following the
Effective Date) in an aggregate principal amount up to but not exceeding the
amount of the Term Loan Facility B Commitment of such Lender. Thereafter the
Borrower may convert Loans of one Type into Loans of another Type (as provided
in Section 2.08) or continue Loans of one Type as Loans of the same Type (as
provided in Section 2.08).
(d) Each Loan representing the Lender's Term Loan Facility A Commitment
made by each Lender shall be evidenced by a single promissory note of the
Borrower, substantially in the form of EXHIBIT D dated the date hereof, payable
to such Lender in a principal amount equal to the amount of its Term Loan
Facility A Commitment as originally in effect and otherwise duly completed.
(e) Each Loan representing the Lender's Term Loan Facility B Commitment
made by each Lender shall be evidenced by a single promissory note of the
Borrower, substantially in the form of EXHIBIT D dated the date hereof, payable
to such Lender in a principal amount equal to the amount of its Term Loan
Facility B Commitment as originally in effect and otherwise duly completed.
(f) Subject to Section 2.14, (i) each Loan shall be comprised entirely of
ABR Loans or Eurodollar Loans as the Borrower may request in accordance
herewith. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.
(g) At the commencement of each Interest Period for any Eurodollar Loan,
the amount of such Eurodollar Loan shall be in an aggregate principal amount
that is an integral multiple of $100,000 and not less than $500,000. At the time
each ABR Loan is made, the amount of such ABR Loan shall be in an aggregate
principal amount that is an integral multiple of $10,000 and not less than
$50,000; provided that an ABR Loan may be in an aggregate amount that is equal
to the entire unused balance of either the Term Loan Facility A Commitment or
the Term Loan Facility B Commitment, as the case may be. Loans of more than one
Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of five (5) Eurodollar Loans outstanding.
18
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request in writing (a) in
the case of a Eurodollar Borrowing, not later than 11:00 a.m., Dallas, Texas
time, three Business Days before the date of the proposed Borrowing, or (b) in
the case of an ABR Borrowing, not later than 10:00 a.m., Dallas, Texas time, the
date of the proposed Borrowing. Each such Borrowing Request shall be irrevocable
and shall be evidenced by a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such written Borrowing
Request shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing and whether the same
is for Term Loan Facility A or Term Loan Facility B, or both;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds are
to be disbursed, which shall comply with the requirements of Section
2.07.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. INTENTIONALLY DELETED.
SECTION 2.05. INTENTIONALLY DELETED.
SECTION 2.06. INTENTIONALLY DELETED.
SECTION 2.07. FUNDING OF LOANS.
(a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, Dallas, Texas time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in Dallas, Texas and designated by the
Borrower.
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(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Loan that such Lender will not make
available to the Administrative Agent such Lender's share of such Loan, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Loan available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation, but in no event in excess of the Ceiling Rate, or
(ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If
such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan.
(c) The principal of Term Loan Facility A shall be due and payable in
twenty-four (24) quarterly installments of $333,333.33 each. The first such
installment shall be due and payable on the last Business Day of October, 1999,
and a like installment shall be due and payable on the last Business Day of each
January, April, July and October thereafter until the debt evidenced by Term
Loan Facility A shall have been fully paid and satisfied; PROVIDED, that on the
Term Loan Facility A Maturity Date, the entire unpaid principal balance of the
debt evidenced by Term Loan Facility A and all accrued and unpaid interest on
the unpaid principal balance thereof shall be finally due and payable.
(d) Commencing on the last Business Day of October, 1999 and continuing
until the last Business Day of July, 2004, the principal of Term Loan Facility B
shall be due and payable in twenty (20) installments of Forty-Five Thousand and
No/100 Dollars ($45,000.00) each. The first installment shall be due and payable
on the last Business Day of October, 1999, and a like installment shall be due
and payable on the last Business Day of each January, April, July and October
thereafter. Beginning the last Business Day of October, 2004, the principal of
Term Loan Facility B shall be due and payable in four (4) installments of
Seventy Thousand and No/100 Dollars ($70,000.00) each. The first $70,000
installment shall be due and payable on the last Business Day of October, 2004,
and a like installment shall be due and payable on the last Business Day of each
January, April and July thereafter. Beginning the last Business Day of October,
2005, the principal of Term Loan Facility B shall be due and payable in four (4)
installments of One Hundred Thousand and No/100 Dollars ($100,000.00) each. The
first $100,000 installment shall be due and payable on the last Business Day of
October, 2005, and a like installment shall be due and payable on the last
Business Day of each January, April and July thereafter. Beginning the last
Business Day of October, 2006, the principal of Term Loan Facility B shall be
due and payable in four (4) installments of One Hundred Twenty-Five Thousand and
No/100 Dollars ($125,000.00) each. The first $125,000 installment shall be due
and payable on the last Business Day of October, 2006, and a like installment
shall be due and payable on the last Business Day of each January, April and
July thereafter. Beginning the last Business Day of October, 2007, the principal
of Term Loan Facility B shall be due and payable in four (4) installments of One
Hundred Seventy-Five Thousand and
20
No/100 Dollars ($175,000.00) each. The first $175,000 installment shall be due
and payable on the last Business Day of October, 2007, and a like installment
shall be due and payable on the last Business Day of each January, April and
July thereafter. Beginning the last Business Day of October, 2008, the principal
of Term Loan Facility B shall be due and payable in four (4) installments of
Five Hundred Eighty Thousand and No/100 Dollars ($580,000.00) each. The first
$580,000 installment shall be due and payable on the last Business Day of
October, 2008, and a like installment shall be due and payable on the last
Business Day of each January, April and July thereafter until the debt evidenced
by Term Loan Facility B shall have been fully paid and satisfied; PROVIDED, that
on the Term Loan Facility B Maturity Date, the entire unpaid principal balance
of the debt evidenced by Term Loan Facility B and all accrued and unpaid
interest on the unpaid principal balance thereof shall be finally due and
payable.
SECTION 2.08. INTEREST ELECTIONS.
(a) Each Loan initially shall be of the Type specified in the applicable
Interest Election Request and, in the case of a Eurodollar Loan, shall have an
initial Interest Period as specified in such. Thereafter, the Borrower may elect
to convert such Loan or an applicable amount of such Loan to a different Type or
to continue such Loan and, in the case of a Eurodollar Loan, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Loan, in
which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Loan, and the Loans comprising each such
portion shall be considered a separate Loan.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election in writing by the time that a
Borrowing Request would be required under Section 2.03 if Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such Interest Election Request shall
be irrevocable and shall be evidenced by a written Interest Election Request in
a form approved by the Administrative Agent and signed by the Borrower.
(c) Each written Interest Election Request shall specify the following
information in compliance with Section 2.02:
(i) the Loan to which such Interest Election Request applies and, if
different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Loan (in
which case the information to be specified pursuant to clauses (iii) and
(iv) below shall be specified for each resulting Loan);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Loan is to be an ABR Loan or a
Eurodollar Loan; and
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(iv) if the resulting Loan is a Eurodollar Loan, the Interest Period
to be applicable thereto after giving effect to such election, which shall
be a period contemplated by the definition of the term "Interest Period."
If any such Interest Election Request requests a Eurodollar Loan but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Loan.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Loan prior to the end of the Interest Period
applicable thereto, then, unless such Loan is repaid as provided herein, at the
end of such Interest Period such Loan shall be converted to an ABR Loan.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default
is continuing (i) no outstanding Loan may be converted to or continued as a
Eurodollar Loan and (ii) unless repaid, each Eurodollar Loan shall be converted
to an ABR Loan at the end of the Interest Period applicable thereto.
SECTION 2.09. TERMINATION OF COMMITMENTS. Unless previously terminated,
the Term Loan Facility A Commitment shall terminate thirty (30) days following
the Effective Date and the Term Loan Facility B Commitment shall terminate
thirty (30) days following the Effective Date.
SECTION 2.10. REPAYMENT OF LOANS. EVIDENCE OF DEBT.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan on the Term Loan Facility A Maturity Date and the Term Loan
Facility B Maturity Date, as the case may be.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such
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accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.
SECTION 2.11. PREPAYMENT OF LOANS.
(a) The Borrower shall have the right at any time and from time to time to
prepay the Loans in whole or in part, subject to prior notice in accordance with
paragraph (b) of this Section, without premium or penalty except as specified in
Section 2.16; PROVIDED each partial prepayment shall be in an aggregate amount
that is an integral multiple of $100,000 and shall not be less than $100,000.
(b) The Borrower shall notify the Administrative Agent by telecopy or
other written notice of prepayment not later than five (5) Business Days before
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of Term Loan Facility A or portion
thereof, or Term Loan Facility B or portion thereof, as the case may be, to be
prepaid. Promptly following receipt of any such notice relating to any Loan, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Loan shall be in an amount that would be permitted in
the case of an advance of a Loan of the same Type as provided in Section 2.02;
PROVIDED each partial prepayment of a Eurodollar Loan shall be in an aggregate
amount that is an integral multiple of $100,000 and shall not be less than
$100,000. Each prepayment of any Loan shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.13.
SECTION 2.12. FEES.
(a) The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(b) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent. Fees paid shall not be
refundable under any circumstances.
SECTION 2.13. INTEREST.
(a) The Loans comprising each ABR Loan shall bear interest at the
Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Loan shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Loan plus the
Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, then such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to the Default Rate; provided, that for the full term of the
debt evidenced hereby the interest rate produced by the aggregate of all sums
paid or agreed to be paid
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hereunder for the use, forbearance or detention of the debt evidenced hereby
(including, but not limited to, all interest contemplated by this Section 2.13)
shall not exceed the Ceiling Rate.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; PROVIDED that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted
LIBO Rate and/or LIBO Rate shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error.
(f) Notwithstanding any provision to the contrary contained in this
Agreement or any of the other Loan Documents, in no case or event shall the
aggregate of (i) all interest on the unpaid balance of any of the debt evidenced
hereby, accrued or paid from the date hereof, and (ii) the aggregate of any
other amounts accrued or paid pursuant to this Agreement or any of the other
Loan Documents, which in either case under applicable laws are or may be deemed
to constitute interest upon the debt evidenced hereby from the date hereof, ever
exceed the Ceiling Rate. In this connection, Borrower, Administrative Agent and
Lenders stipulate and agree that it is their common and overriding intent to
contract in strict compliance with applicable usury laws (including Chapter 1D).
In furtherance thereof, none of the terms of this Agreement or any of the other
Loan Documents shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a rate
in excess of the Ceiling Rate. Borrower or other parties now or hereafter
becoming liable for payment of the debt evidenced hereby shall never be liable
for interest in excess of the Ceiling Rate. If, for any reason whatever, the
interest paid or received on any debt evidenced hereby during its full term
produces a rate that exceeds the Ceiling Rate, the holder of the instrument
evidencing such debt shall credit against the principal of such debt evidenced
hereby (or, if such debt evidenced hereby shall have been paid in full, shall
refund to the payor of such interest) such portion of said interest as shall be
necessary to cause the interest paid to produce a rate equal to the Ceiling
Rate. All sums paid or agreed to be paid for the use, forbearance or detention
of the debt evidenced hereby shall, to the extent permitted by applicable law,
be amortized, prorated, allocated and spread in equal parts throughout the full
term of this Agreement, so that the interest rate is uniform throughout the full
term of this Agreement. The provisions of this paragraph shall control all
agreements, whether now or hereafter existing and whether written or oral, among
Borrower and Lenders.
SECTION 2.14. ALTERNATE RATE OF INTEREST. If prior to the commencement of
any Interest Period for a Eurodollar Loan:
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(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Loan for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, any Interest Election
Request that requests the conversion of any Loan to, or continuation of any Loan
as, a Eurodollar Loan shall be ineffective and such Loan shall be made as an ABR
Loan.
SECTION 2.15. INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such
Lender;
and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan (or of
maintaining its obligation to make any such Loan) or to reduce the amount
of any sum received or receivable by such Lender hereunder (whether of
principal, interest or otherwise), then the Borrower will pay to such
Lender such additional amount or amounts as will compensate such Lender
for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The
25
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; PROVIDED that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than two hundred seventy (270) days prior to the date
that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; PROVIDED further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the two hundred
seventy (270) day period referred to above shall be extended to include the
period of retroactive effect thereof.
SECTION 2.16. BREAK FUNDING PAYMENTS. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked (and the foregoing reference
shall not imply any rights of revocation)), (d) the assignment of any Eurodollar
Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 2.19, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate (in the case of a Eurodollar Loan) that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
SECTION 2.17. TAXES.
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; PROVIDED that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.17) the Administrative Agent or Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such
26
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each Lender,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower hereunder (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.17) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender, or by the Administrative Agent
on its own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.
SECTION 2.18. PAYMENTS GENERALLY, PRO RATA TREATMENT, SHARING OF SET-OFFS.
(a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or of amounts payable under
Section 2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, Dallas, Texas
time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 000
Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, except that payments pursuant to Sections
2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
27
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, towards payment of
interest and fees then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest and fees then due to such parties,
and (ii) second, towards payment of principal then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal then
due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; PROVIDED that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation, provided, that for the
full term of the loan the interest rate produced by the aggregate of all sums
paid or agreed to be paid hereunder for the use, forbearance or detention of the
debt evidenced hereby (including, but not limited to, all interest contemplated
by this Section 2.18) shall not exceed the Ceiling Rate.
28
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.07(b) or 2.18(d), then the Administrative Agent may, in
its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.19. MITIGATION OBLIGATIONS, REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. Such Lender's
obligations set forth in this paragraph are in all respects subject to
Borrower's agreement to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
SECTION 2.20. MANDATORY PREPAYMENTS AND REDUCTIONS OF COMMITMENTS.
(a) CASUALTY EVENTS. Upon the date ninety (90) days following the receipt
by Borrower of the proceeds of insurance, condemnation award or other
compensation in respect of any Casualty Event affecting any Property of Borrower
or any of its Subsidiaries (or upon such earlier date as Borrower or such
Subsidiary, as the case may be, shall have determined not to repair or replace
the
29
Property affected by such Casualty Event), Borrower shall, if the Net Available
Proceeds with respect to such Casualty Event shall exceed $100,000, prepay the
Loans, and the Term Loan Facility A Commitment and Term Loan Facility B
Commitment shall be subject to automatic reduction, in an aggregate amount
(rounded, downwards to the nearest $100,000), if any, equal to one hundred
percent (100%) of the Net Available Proceeds of such Casualty Event not
theretofore applied, or committed to be applied, to the repair or replacement of
such Property, such prepayment and reduction to be effected in each case in the
manner and to the extent specified in paragraph (e) of this Section 2.20.
Nothing in this paragraph (a) shall be deemed to limit any obligation of
Borrower or any of its Subsidiaries pursuant to any of the Loan Documents to
remit, pending application to the repair or replacement of such Property, to a
collateral or similar account maintained by the Administrative Agent pursuant to
any of the Loan Documents the proceeds of insurance, condemnation award or other
compensation received in respect of any Casualty Event.
(b) INCURRENCE OF INDEBTEDNESS AND EQUITY ISSUANCES. Without limiting the
obligation of Borrower to obtain the consent of the Lenders pursuant to Section
6.01 to the incurrence or existence of Indebtedness not otherwise permitted
hereunder, Borrower agrees, on or prior to the occurrence of any issuance of
debt or debt securities or any Equity Issuance of Borrower (but excluding any
Equity Issuance of a limited partnership interest in Borrower to a physician in
connection with such physician's becoming associated with Borrower) in which the
fair market value of the Property (including cash) received as proceeds is
$100,000 or more (herein, the "CURRENT FUNDING"), to deliver to the Lenders a
statement, certified by the chief executive officer or the chief financial
officer of Borrower, in form and detail satisfactory to the Administrative
Agent, of the estimated amount of the proceeds of the Current Funding, net of
reasonable issuance and/or incurrence costs, that will (on the date of the
Current Funding) be received in cash, in which event Borrower will prepay the
Loans, and the Term Loan Facility A Commitment and the Term Loan Facility B
Commitment shall be subject to automatic reduction, upon the date of the Current
Funding, in an aggregate amount equal to the sum of one hundred percent (100%)
of the Current Funding, net of such costs, and of all prior Current Fundings as
to which a prepayment has not yet been made under this paragraph (b), received
in cash on or prior to the date of the Current Funding.
(c) EXCESS CASH FLOW. On or before ten (10) Business Days after Borrower's
receipt from its independent auditors of the financial statements contemplated
by Section 5.01 (commencing with respect to the fiscal year of Borrower ending
December 31, 1999), but in any event on or before 135 calendar days after the
end of each fiscal year of Borrower, Borrower shall prepay the Loans in an
aggregate amount (rounded downwards to the nearest $100,000) equal to fifty
percent (50%) of Excess Cash Flow for such fiscal year, (or in the case of the
fiscal year ending December 31, 1999, the portion of such fiscal year after the
Effective Date), such prepayment and reduction to be effected in each case in
the manner and to the extent specified in paragraph (e) of this Section 2.20.
Notwithstanding the foregoing, Borrower shall not be required to make the
mandatory prepayment relating to Excess Cash Flow as contemplated by this
paragraph (c) after the payment of fifty percent (50%) or more of the total
original outstanding principal balance of Term Loan Facility A and Term Loan
Facility B.
(d) SALE OF ASSETS, ETC. Without limiting the obligation of Borrower to
obtain the consent of the Lenders pursuant to Section 6.03 to any Disposition
not otherwise permitted hereunder,
30
Borrower agrees on or prior to the occurrence of a Reduction Event, Borrower
shall deliver to Lenders a statement, certified by the chief executive officer
or the chief financial officer of the Borrower, in form and detail satisfactory
to Administrative Agent, of the estimated amount of the Net Available Proceeds
of the Current Disposition which constitutes a Reduction Event, in which event
Borrower will prepay the Loans, and the Term Loan Facility A Commitment and the
Term Loan Facility B Commitment shall be subject to automatic reduction, upon
the date of the Reduction Event, in an aggregate amount equal to the sum of one
hundred percent (100%) of the Net Available Proceeds of the Current Disposition
constituting the Reduction Event, and of all prior Dispositions as to which a
prepayment has not yet been made under this paragraph (d), received in cash on
or prior to the date of the Reduction Event.
Prepayment of Loans and reductions of Term Loan Facility A Commitment and
Term Loan Facility B Commitment shall be effected in each case in the manner and
to the extent specified in paragraph (e) of this Section 2.20.
(e) APPLICATION. Prepayments and reductions of Term Loan Facility A
Commitment and Term Loan Facility B Commitment described in the above paragraphs
of this Section 2.20 shall be effected in the amount of the prepayment specified
in paragraphs (a) through (d), inclusive (as applicable), and shall be applied
to the remaining installments of the Loans in inverse order of maturity.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION, POWERS. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. AUTHORIZATION, ENFORCEABILITY. The Transactions are within
the Borrower's partnership powers and have been duly authorized by all necessary
partnership action. This Agreement has been duly executed and delivered by the
Borrower and constitutes a legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions (a)
do not require any consent or approval of registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the partnership agreement, charter, by-laws
31
or other organizational documents of the Borrower or any of its Subsidiaries or
any order of any Governmental Authority, (c) will not violate or result in a
default under any indenture, agreement or other instrument binding upon the
Borrower or any of its Subsidiaries or its assets, or give rise to a right
thereunder to require any payment to be made by the Borrower or any of its
Subsidiaries, and (d) will not result in the creation or imposition of any Lien
on any asset of the Borrower or any of its Subsidiaries.
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, partners' capital and cash flows as of
and for the fiscal years ended 1998 and 1997 certified by its chief financial
officer. All such financial statements fairly present, in all material respects,
the respective financial condition of the respective entities as at the
respective dates, and the respective results, as the case may be, of operations
for the respective periods ended on said respective dates, all in accordance
with GAAP and practices applied on a consistent basis subject to normal,
recurring year-end adjustments and the omission of footnote disclosure. Borrower
and its Subsidiaries do not have on the date of this Agreement any material
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the most
recent of such balance sheets as at said respective dates.
(b) As of the Effective Date, there has been no Material Adverse Effect
since December 31, 1998.
SECTION 3.05. PROPERTIES. Each of the Borrower and its Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS.
(a) There are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any of its Subsidiaries (i) as
to which there is a reasonable possibility of an adverse determination and that,
if adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters, each of Borrower and its
Subsidiaries has obtained all environmental, health and safety permits, licenses
and other authorizations required under all Environmental Laws to carry on its
business as now being or as proposed to be conducted, except to the extent
failure to have any such permit, license or authorization would not (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect. Each of such permits, licenses and authorizations is in full
force and effect and each of Borrower and its Subsidiaries is in compliance with
the terms and conditions thereof, and is also in compliance with all other
32
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Law or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder.
In addition, except for the Disclosed Matters, no notice, notification,
demand, request for information, citation, summons or order has been issued, no
complaint has been filed, no penalty has been assessed and no investigation or
review is pending or to Borrower's knowledge, threatened by any Governmental
Authority or other Person with respect to any alleged failure by a Borrower or
any of its Subsidiaries to have any environmental, health or safety permit,
license or other authorization required under any Environmental Law in
connection with the conduct of the business of the Borrower or any of its
Subsidiaries or with respect to any generation, treatment, storage, recycling,
transportation, discharge or disposal, or any release of any Hazardous Materials
generated by Borrower or any of its Subsidiaries, except to the extent that
failure to have any such environmental, health or safety permit, license, or
other authorization could not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect. All environmental
investigations, studies, audits, tests, reviews or other analyses conducted by
or that are in the possession of Borrower or any of its Subsidiaries in relation
to facts, circumstances or conditions at or affecting any site or facility now
or previously owned, operated or leased by Borrower or any of its Subsidiaries
and that could reasonably be expected to result in a Material Adverse Effect
have been made available to the Lenders.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of a Material Adverse
Effect.
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the Borrower
and its Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its Property and all indentures,
agreements and other instruments binding upon it or its Property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS. Neither the Borrower
nor any of its Subsidiaries is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. TAXES. Each of the Borrower and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves.
33
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $250,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $250,000 the fair market value of
the assets of all such underfunded Plans.
SECTION 3.11. DISCLOSURE. The Borrower has disclosed to the Lenders all
agreements, instruments and partnership or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither the Confidentiality Agreement nor any of the
other reports, financial statements, certificates or other information furnished
by or on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 3.12. YEAR 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (i) the Borrower's and its
Subsidiaries' computer systems and (ii) equipment containing embedded microchips
(including systems and equipment supplied by others or with which Borrower's and
its Subsidiaries' systems interface) and the testing of all such systems and
equipment, as so reprogrammed, shall be completed by September 30, 1999. The
cost to the Borrower and its Subsidiaries of such reprogramming and testing and
of the reasonably foreseeable consequences of year 2000 to the Borrower
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or a Material Adverse Effect.
SECTION 3.13. REAL PROPERTY. Set forth on Schedule 3.13 is a list of all
of the real property interests of the Borrower and its Subsidiaries on the date
hereof or that (after giving effect to the transactions contemplated to occur on
or before the Closing Date) will be held by Borrower or any of its Subsidiaries
as of the Effective Date, indication in each case whether the respective
Property is owned or leased, the identity of the owner or lessee and the
location of the respective Property.
SECTION 3.14. PROPRIETARY RIGHTS. Schedule 3.14 lists all of Borrower's
and its Subsidiaries' material Proprietary Rights, including the name and xxxx
"TOPS Specialty Hospital" and all such other Proprietary Rights as have been
registered, as of the Effective Date. As of the Effective Date, each of the
Borrower and its Subsidiaries possesses all material Proprietary Rights
necessary to the conduct of their business, and the loss or expiration of any
Proprietary Right or group of Proprietary Rights, other than "TOPS Specialty
Hospital," would not have a Material Adverse Effect. As of the Effective Date,
no such loss or expiration is pending or, to Borrower's knowledge, threatened,
with respect to any Proprietary Rights, including "TOPS Specialty Hospital."
34
Except as indicated on Schedule 3.14, as of the Effective Date (a) Borrower and
the Subsidiaries own all right, title and interest in and to all of their
Proprietary Rights, (b) there have been no claims made against Borrower or any
Subsidiary thereof for the assertion of the invalidity, abuse, misuse, or
unenforceability of any of such rights, and there are no grounds for the same,
(c) neither Borrower nor any Subsidiary thereof have received a notice of
conflict with the asserted rights of others within the last five years, and (d)
the conduct of Borrower's and the Subsidiaries' business has not infringed any
Proprietary Rights of others and, Borrower and the Subsidiaries' Proprietary
Rights have not been infringed by other Persons. To the best of the Borrower's
knowledge after reasonable inquiry, its use of the name "TOPS Specialty
Hospital" would not infringe upon or otherwise adversely affect the right or
claimed right of any Person with respect to the use of such name and Borrower
and each of its Subsidiaries is not obligated or under any liability whatsoever
to make any payments by way of royalties, fees or otherwise to any owner or
licensee of, or other claimant to, the "TOPS Specialty Hospital" name with
respect to the use thereof or otherwise.
SECTION 3.15. SUBSIDIARIES. As of the date of this Agreement, all of
Borrower's Subsidiaries, including Borrower's current ownership interests in
such Subsidiaries, and, separately, all of Borrower's wholly-owned Subsidiaries,
are listed on Schedule 3.15 attached hereto.
ARTICLE IV.
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to make Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto (i) either (A) a counterpart of this Agreement and all other
Loan Documents required to be executed by the Lenders signed on behalf of such
party or (B) written evidence satisfactory to the Administrative Agent (which
may include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement and (ii) all other
Loan Documents required to be signed by Administrative Agent, including the
following:
Term Loan Facility A 1. $8,000,000.00 Term Loan Facility A Note
2. Security Agreement
3. Guaranty - United Surgical Partners
International, Inc.
4. Compliance Certificate
5. Any other documents required by Administrative
Agent
Term Loan Facility B 1. $5,096,000.00 Term Loan Facility B Note
2. Deed of Trust
3. Security Agreement
4. Compliance Certificate
5. Guaranty - United Surgical Partners
International, Inc.
6. Any other documents required by Administrative
Agent
35
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for the
Borrower, substantially in the form of EXHIBIT B, and covering such other
matters relating to the Borrower, this Agreement or the Transactions as the
Administrative Agent shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinion.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Borrower, the
authorization of the Transactions and any other legal matters relating to the
Borrower, this Agreement or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the president, a vice president or a Financial
Officer of the managing general partner of the Borrower, confirming compliance
with the conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder.
(f) The Administrative Agent shall have received, at Borrower's expense, a
mortgagee title insurance policy (herein called the "Mortgagee Title Policy")
showing Administrative Agent as the insured thereunder, in the amount of Term
Loan Facility B, in form and substance and written by the title company
satisfactory to Administrative Agent, on behalf of an underwriter satisfactory
to Administrative Agent, insuring a valid first lien upon the real property
described in the Deed of Trust by virtue of the Deed of Trust and containing no
exceptions except those specifically waived in writing by Administrative Agent.
(g) The Administrative Agent shall have received, at Borrower's expense,
an MAI appraisal of the real property covered by the Deed of Trust including all
improvements thereon by a licensed appraiser satisfactory to Administrative
Agent, such appraisal to be in the form and amount satisfactory to
Administrative Agent.
(h) The Administrative Agent shall have received evidence that the stock
purchase contemplated by the Stock Purchase Agreement (the "Stock Purchase
Agreement") by and between Columbia/HCA of Houston, Inc. and United Surgical
Partners International, Inc. dated June 30, 1999 shall have been consummated in
accordance with the terms of such Stock Purchase Agreement, including all
schedules and exhibits thereto (except for any modifications, supplements or
waivers thereof, or written consents or determinations made by any of the
parties thereto, each of which shall be satisfactory to Administrative Agent in
its reasonable discretion), and the Administrative Agent shall have received a
certificate of the chief executive officer of Borrower to such effect and to the
effect that the attached thereto are true and complete copies of the Stock
Purchase Agreement and the documents delivered in connection with the closing
thereunder. In addition, the Administrative
36
Agent shall be reasonably satisfied with the organizational structure and
capital structure of the Borrower and its Subsidiaries.
(i) The Administrative Agent shall have received a Phase I Environmental
Site Assessment prepared for the Borrower and conducted for the real property
described in the Deed of Trust acceptable in form and substance to
Administrative Agent.
(j) The Administrative Agent shall have received certificates of insurance
evidencing the existence of all insurance (other than workers' compensation)
required to be maintained by Borrower and its Subsidiaries pursuant to Section
5.05 and the designation of the Administrative Agent as the loss payee or
additional named insured, as the case may be, thereunder to the extent required
by Section 5.05, such certificates to be in such form and contain such
information as is specified in Section 5.05. In addition, Borrower shall have
delivered to the Administrative Agent a certificate of the chief executive
officer or the chief financial officer of Borrower setting forth the insurance
obtained by it in accordance with the requirements of Section 5.05 and stating
that such insurance is in full force and effect and that all premiums then due
and payable thereon have been paid.
(k) The Administrative Agent shall have received evidence that the
principal of and interest on, and all other amounts owing in respect of, the
Indebtedness (including any contingent or other amounts payable in respect of
letters of credit) indicated on Schedule 6.01 that is to be repaid on or before
the Effective Date, shall have been (or shall be simultaneously) paid in full,
that any commitments to extend credit under the agreements or instruments
relating to such Indebtedness shall have been canceled or terminated and that
all Guarantees in respect of, and all Liens securing, any such Indebtedness
shall have been released (or arrangements for such release satisfactory to the
Administrative Agent shall have been made); in addition, the Administrative
Agent shall have received from any Person holding any Lien securing any such
Indebtedness, such Uniform Commercial Code termination statements, mortgage
releases and other instruments, in each case in proper form for recording or
filing, as the Administrative Agent shall have requested to release and
terminate of record the Liens securing such Indebtedness (or arrangements for
such release and termination satisfactory to the Administrative Agent shall have
been made).
(1) The Administrative Agent shall have received, at the sole cost and
expense of Borrower, a current boundary survey (the "Survey") of the real
property described in the Deed of Trust containing the information and meeting
the requirements of the Survey Requirements attached hereto as EXHIBIT E.
(m) The Administrative Agent shall have received evidence that the
identity of the limited partners of Borrower shall have been reconstituted in a
manner in form and substance satisfactory to the Administrative Agent.
(n) The Administrative Agent shall have received a detailed accounting of
the cash transactions associated with the reconstitution of Borrower described
in Section 4.01(m) above, which accounting shall be in form and substance
satisfactory to the Administrative Agent.
37
(o) The Administrative Agent shall have received a subordination
agreement, executed by Borrower and United Surgical Partners International, Inc.
in form and content satisfactory to Administrative Agent, subordinating all
Management Fees.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., Dallas, Texas time, on July
2, 1999 (and, in the event such conditions are not so satisfied or waived, the
Term Loan Facility A Commitment and the Term Loan Facility B Commitment shall
terminate at such time).
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender to make a
Loan is subject to the satisfaction of the following conditions:
(a) The representations and warranties of the Borrower set forth in this
Agreement shall be true and correct on and as of the date of such Loan.
(b) At the time of and immediately after giving effect to such Loan, no
Default shall have occurred and be continuing.
Each Loan shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
ARTICLE V.
AFFIRMATIVE COVENANTS
Until the Term Loan Facility A Commitment and Term Loan Facility B Commitment
have expired or been terminated and the principal of and interest on each Loan
and all fees payable hereunder shall have been paid in full, the Borrower
covenants and agrees with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower
will furnish to the Administrative Agent and each Lender:
(a) within 120 days after the end of the fiscal year of the Borrower
ending December 31, 1999, and within 90 days after the end of each fiscal year
of Borrower thereafter, its audited consolidated balance sheet and related
statements of operations and cash flows as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by KPMG Peat Marwick, L.L.P. or other independent
public accountants of recognized national or regional standing and reasonably
acceptable to Administrative Agent (without a "going concern" or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
38
(b) within 45 days after the end of each fiscal quarter of each fiscal
year of the Borrower and concurrently with the financial statements to be
delivered pursuant to clause (a) above, its consolidated balance sheet and
related statements of operations and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(c) as soon as available, and in any event within forty-five (45) days
after the end of each calendar month, including the last calendar month of each
of Borrower's fiscal years, a balance sheet and statement of profit and loss and
surplus reconciliation and a statement of cash flows of Borrower for and as of
such month and for and as of that portion of the fiscal year of Borrower then
ending, in each case, certified by one of its Financial Officers as representing
fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements under clause
(a) or (b) above, a fully executed Compliance Certificate, certified by a
Financial Officer of the Borrower as representing fairly in all material
respects the information contained therein;
(e) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default;
(f) if applicable, promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by the Borrower to its partners, generally, as the case may be;
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this Agreement, as
the Administrative Agent or any Lender may reasonably request;
(h) promptly following any request thereof if the underwriter issuing the
Mortgagee Title Policy becomes insolvent or is placed in receivership or for any
other reason such Mortgagee Title Policy becomes unenforceable, furnish
Administrative Agent, at Borrower's expense, another mortgagee title insurance
policy in the amount and in substitution for the original Mortgagee Title Policy
and meeting the above requirements; and
39
(i) as soon as available and in any event on or before sixty (60) days
after the end of each fiscal year of Borrower, financial projections of Borrower
for each of the next following three (3) fiscal years of Borrower, in each case
setting forth anticipated cash flows, revenues, income, expenses and capital
expenditures.
SECTION 5.02. NOTICES OF MATERIAL EVENTS. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$50,000; and
(d) as soon as Borrower becomes aware any condition or circumstance which
makes any of the environmental representations or warranties set forth in this
Agreement incomplete, incorrect or inaccurate in any material respect as of any
date; and immediately upon receipt thereof, copies of any material
correspondence, notice, pleading, citation, indictment, complaint, order,
decree, or other document from any source asserting or alleging a violation of
any Environmental Laws by either Borrower, or any of its Subsidiaries, or of any
circumstance or condition which requires or may require, a financial
contribution by Borrower, or any of its Subsidiaries, or a clean-up, removal,
remedial action or other response by or on behalf of Borrower, or any of its
Subsidiaries, under applicable Environmental Law(s), or which seeks damages or
civil, criminal, or punitive penalties from Borrower, or any of its
Subsidiaries, or any violation or alleged violation of Environmental Law(s).
(e) any sale of assets other than in the ordinary course of business in
excess of $100,000 in the aggregate in any twelve month period;
(f) any attempt by a third party to collect or enforce accounts payable
against Borrower or any of its Subsidiaries in excess of $50,000.
(g) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. EXISTENCE, CONDUCT OF BUSINESS. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full
40
force and effect its legal existence and the rights, licenses, permits,
privileges, patents, trademarks and franchises material to the conduct of its
business; PROVIDED that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.04. PAYMENT OF OBLIGATIONS. The Borrower will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05. MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower will, and
will cause each of its Subsidiaries to, (a) keep and maintain all Property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations, provided that Borrower
will in any event maintain (with respect to itself and each of its Subsidiaries)
casualty, liability and business interruption insurance in such limits (together
with related retention and/or deductible amounts) as are then customary for
Persons engaged in the same or similar business similarly situated, and shall
designate the Administrative Agent as loss payee with respect to any such
casualty insurance.
SECTION 5.06. BOOKS AND RECORDS; INSPECTION RIGHT. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 5.07. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its Property (including, but not
limited to, the issuance or sale of any common stock or other securities),
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08. USE OF PROCEEDS. The proceeds of the Loans will be used only
for financing the acquisition and subsequent distribution of funds to partners
of Borrower related to the purchase of the TOPS Specialty Hospital, to finance
up to $1,500,000 of capital expenditures to improve the TOPS Specialty Hospital
and to refinance existing indebtedness owed by Borrower to its general partner
(as reimbursement related to such purchase) or to Columbia/HCA of Houston, Inc.
No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations U and X.
41
SECTION 5.09. BUSINESS LOANS. Borrower warrants and represents to
Administrative Agent and Lenders that all Loans are and will be for business,
commercial, Investment or other similar purpose and not primarily for personal,
family, household or agricultural use, as such terms are used in Chapter 1D.
SECTION 5.10. COMPLIANCE WITH ERISA. If Borrower or any of its
Subsidiaries maintain(s) or establish(es) a Plan subject to ERISA, (a) comply in
all material respects with all requirements imposed by ERISA as presently in
effect or hereafter promulgated, including, but not limited to, the minimum
funding requirements thereof and (b) furnish to Administrative Agent and each
Lender (or cause the plan administrator to so furnish) a copy of the annual
return (including all schedules and attachments) for each Plan covered by ERISA,
and filed with the Internal Revenue Service by Borrower, or any of its
Subsidiaries, not later than thirty (30) days after such report has been so
filed.
SECTION 5.11. INTENTIONALLY DELETED.
SECTION 5.12. COOPERATION WITH SYNDICATOR. Borrower agrees actively to
assist Chase Securities Inc. and the Administrative Agent in completing a
syndication of the credit facilities evidenced hereby in a manner satisfactory
to them. Such assistance shall include (a) the Borrower's use of commercially
reasonable efforts to ensure that the syndication efforts benefit materially
from Chase Securities Inc.'s and the Administrative Agent's existing lending
relationships, (b) direct contact between senior management and advisors of the
Borrower and its Affiliates, (including Guarantor) and the proposed Lenders, (c)
assistance in the preparation of a confidential information memorandum and other
marketing materials to be used in connection with the syndication and (d) the
hosting, with Chase Securities Inc. of one or more meetings of prospective
Lenders.
The Borrower acknowledges and agrees that Chase Securities Inc. will
manage all aspects of any syndication, including decisions as to the selection
of institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, the
allocations of the commitments among the Lenders and the amount and distribution
of fees among the Lenders. The Borrower also acknowledges and agrees that in
connection with any proposed syndication Chase Securities Inc. will have no
responsibility other than to arrange the proposed syndication, and that such
responsibility is solely to the Administrative Agent. To assist Chase Securities
Inc. in any syndication efforts, the Borrower agrees promptly to prepare and
provide to Chase Securities Inc. and the Administrative Agent all information
with respect to the Borrower and the transactions evidenced hereby, including
all financial information and projections (the "Projections"), as Chase
Securities Inc. may reasonably request in connection with any arrangement and
syndication of the credit facilities evidenced hereby. The Borrower represents
and covenants that (a) all information other than the Projections (the
"Information") that has been or will be made available to the Administrative
Agent or Chase Securities Inc. by the Borrower or any of its representatives is
or will be, when furnished, complete and correct in all material respects and
does not or will not, when furnished, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements are made and (b) the Projections that have been or will be
made available to the Administrative Agent or Chase Securities Inc. by the
Borrower
42
or any of its representatives have been or will be prepared in good faith based
upon reasonable assumptions. The Borrower acknowledges and agrees that in
arranging and syndicating the credit facilities evidenced hereby Chase
Securities Inc. may use and rely on the information and Projections without
independent verification thereof.
Any syndication shall be in accordance with Section 9.04(b).
SECTION 5.13. FIXED CHARGE COVERAGE RATIO. Borrower shall maintain a Fixed
Charge Coverage Ratio (on a consolidated basis if Borrower then has any
Subsidiaries), calculated for the four most recently completed fiscal quarters,
of not less than each of the following at all times during the applicable time
period listed:
From Effective Date through and including June 30, 2000 1.0 to 1.0
From July 1, 2000 through and including June 30, 2002 1.05 to 1.0
From July 1, 2002 through and including June 30, 2003 1.1 to 1.0
From July 1, 2003 and at all times thereafter 1.15 to 1.0
SECTION 5.14. INDEBTEDNESS TO EBITDA RATIO. Borrower shall maintain a
ratio of Indebtedness to EBITDA (with Indebtedness being determined as of the
end of the most recently completed fiscal quarter, and with EBIDTA being
determined for the four most recently completed fiscal quarters, and, if
Borrower then has any Subsidiaries, on a consolidated basis) of not more than
each of the following at all times during and at all times thereafter the
applicable time period listed:
From Effective Date through June 30, 2000 4.0 to 1.0
From July 1, 2000 through June 30, 2001 3.5 to 1.0
From July 1, 2001 through June 30, 2002 3.0 to 1.0
From July 1, 2002 and at all time thereafter 2.5 to 1.0
SECTION 5.15. MANAGEMENT FEE. Borrower agrees that, upon and during the
continuance of an Event of Default (or the occurrence of an event that, with
notice or the passage of time, or both, would become an Event of Default),
Borrower shall not pay any Management Fee. The payment of Management Fees is
also subject to SECTION 6.16.
ARTICLE VI.
NEGATIVE COVENANTS
Until the Term Loan Facility A Commitment and the Term Loan Facility B
Commitment have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full, the Borrower
covenants and agrees with the Lenders that:
SECTION 6.01. INDEBTEDNESS. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness created hereunder,
43
(b) Indebtedness existing on the date hereof and set forth in SCHEDULE
6.01 and extensions, renewals and replacements of any such Indebtedness that do
not increase the outstanding principal amount thereof;
(c) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
and all improvements, additions and accessions thereto and all identifiable
proceeds thereof prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof (except to the extent of the reasonable out-of-pocket
cost of such extension, renewal or replacement); provided that (i) such
Indebtedness is incurred prior to or within 90 days after such acquisition or
the completion of such construction or improvement and (ii) the aggregate
principal amount of Indebtedness permitted by this clause (c) shall not exceed
$300,000 at any time outstanding;
(d) Indebtedness of the Borrower or any Subsidiary incurred as Capital
Lease Obligations on or before March 31, 2000 in an amount not to exceed
$700,000.
(e) Indebtedness other than as contemplated in this Section 6.01 (a)
through (d) above not exceeding $300,000 in the aggregate outstanding at any
time.
SECTION 6.02. LIENS. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any Property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Permitted Encumbrances;
(b) (i) any Lien on any Property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided
that (A) such Lien shall not apply to any other Property or asset of the
Borrower or any Subsidiary and (B) such Lien shall secure only those obligations
which it secures on the date hereof and (ii) extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof (except to the extent of the reasonable out-of-pocket cost of such
extension, renewal or replacement);
(c) any Lien existing on any Property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary or existing on any Property or asset
of any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other
Property or assets of the Borrower or any Subsidiary and all improvements,
additions and accessions thereto and all identifiable proceeds thereof and (iii)
such Lien shall secure only those obligations which it secures on the date of
such acquisition or the date such Person becomes a Subsidiary, as the case may
be, and extensions, renewals and replacements thereof that do not increase the
outstanding principal
44
amount thereof (except to the extent of the reasonable out-of-pocket cost of
such extension, renewal or replacement);
(d) Liens on fixed or capital assets acquired, constructed or improved by
the Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness
permitted by Section 6.01, (ii) such Liens and the Indebtedness secured thereby
are incurred prior to or within 90 days after such acquisition or the completion
of such construction or improvement, (iii) the Indebtedness secured thereby does
not exceed 100% of the cost of acquiring, constructing or improving such fixed
or capital assets and (iv) such Liens shall not apply to any other Property or
assets of the Borrower or any Subsidiary and all improvements, additions and
accessions thereto and all identifiable proceeds thereof.
SECTION 6.03. FUNDAMENTAL CHANGES.
(a) The Borrower will not, and will not permit any Subsidiary to, merge
into, acquire or consolidate with any other Person, or permit any other Person
(including but not limited to any professional association) to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or any substantial part of its
assets, or all or substantially all of the stock of any of its Subsidiaries (in
each case, whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing (i) any Subsidiary may merge
into the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Subsidiary may merge into any Subsidiary in a transaction
in which the surviving entity is a Subsidiary, (iii) any Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to the Borrower or to another
Subsidiary and (iv) any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders;
provided that any such merger involving a Person that is not a wholly owned
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.04.
(b) The Borrower will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than the business conducted
by the Borrower and its Subsidiaries on the date of execution of this Agreement.
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS.
The Borrower will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
Investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except Permitted Investments.
45
SECTION 6.05. HEDGING AGREEMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities.
SECTION 6.06. RESTRICTED PAYMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except (i) as otherwise provided
for in Section 5.08 of this Agreement, (ii) partnership distributions of
Borrower in a fiscal year comprising less than fifty percent (50%) of the Net
Income of Borrower for such fiscal year, but in no event shall this clause (ii)
limit partnership distributions of Borrower under this clause (ii) to an amount
less than 40% of Borrower's net taxable income, as determined in accordance with
the Code, and (iii) at any time after the second anniversary of the Effective
Date, so long as (A) no Default has occurred and is then continuing, (B)
Borrower then provides Administrative Agent a fully executed Compliance
Certificate and (C) Borrower has made all mandatory prepayments required in
Section 2.20(c) of this Agreement, partnership distributions of Borrower in any
fiscal year up to the amount of Unused Excess Cash Flow for the preceding fiscal
year; PROVIDED, HOWEVER that the restrictions on partnership distributions set
forth in this Section 6.06 shall not apply at such time as (a) the outstanding
principal balance of Term Loan Facility A is less than $4,000,000, (b) the
outstanding principal balance of Term Loan Facility B is less than $2,548,000,
and (c) Borrower maintains a Fixed Charge Coverage Ratio greater than or equal
to 1.15 to 1.0.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and
will not permit any of its Subsidiaries to, sell, lease or otherwise transfer
any Property or assets to, or purchase, lease or otherwise acquire any Property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties or (b)
transactions between or among the Borrower and its wholly-owned Subsidiaries not
involving any other Affiliate.
SECTION 6.08. RESTRICTIVE AGREEMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its Property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by this Agreement or the
other Loan Documents, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on SCHEDULE 6.08 or any
extension, renewal, amendment or modification thereof which does not expand the
scope of any such restriction or condition (but the foregoing shall apply to any
extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary or an asset pending such sale, provided such restrictions
and conditions apply only to the Subsidiary or asset that is to be sold and such
sale
46
is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the Property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases, licenses
and other contracts restricting the assignment thereof.
SECTION 6.09. INTENTIONALLY DELETED.
SECTION 6.10. SUBORDINATED INDEBTEDNESS. The Borrower shall not
subordinate any indebtedness due to it from any Person to Indebtedness of other
creditors of such Person.
SECTION 6.11. INTENTIONALLY DELETED.
SECTION 6.12. NATURE OF BUSINESS. Borrower and its Subsidiaries presently
engaged in such business will not discontinue as their principal business
activity the ownership and operation of the TOPS Speciality Hospital (a
specialty hospital in Houston, Texas); nor will Borrower or any Subsidiaries
change the conduct of their businesses as presently being conducted or engage in
any new or different business if the result thereof would be to materially and
substantially change the business of Borrower and the Subsidiaries taken as a
whole.
SECTION 6.13. NO AMENDMENT. Borrower will not alter, modify or otherwise
amend any contract or agreement currently or hereafter in existence (including,
without limitation, the Management Agreement with respect to TOPS Specialty
Hospital), the effect of which could reasonably be expected to cause a Material
Adverse Effect.
SECTION 6.14. CAPITAL EXPENDITURES. Borrower shall not acquire or expend
for, or commit to acquire or expend for, capital assets by lease (including any
Capitalized Lease Obligations), purchase or otherwise an aggregate amount that
exceeds $300,000, in any fiscal year.
SECTION 6.15. SUBSIDIARIES. Borrower shall not, without the prior written
consent of the Administrative Agent, (a) form, create, acquire or suffer to
exist any Subsidiary or (b) purchase or otherwise acquire or become obligated
for the purchase of all or substantially all of the assets or business interest
of any Person or any shares of stock or ownership interests of any Person or in
any other manner effectuate or attempt to effectuate an expansion of its present
business.
SECTION 6.16. MANAGEMENT FEE. Borrower shall not pay any Management Fee if
an Event of Default would result (or an event would result that, with notice or
the passage of time, or both, would become an Event of Default, including,
without limitation, a breach of either or both of Sections 5.13 and 5.14). The
payment of Management Fees is also subject to SECTION 5.15.
ARTICLE VII.
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
47
(a) the Borrower shall fail to pay any principal of any Loan when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such default shall continue for a period ending on the earlier of
five (5) calendar days or three (3) Business Days thereafter;
(c) any representation or warranty made or deemed made by or on behalf of
the Borrower or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement or any of the other Loan Documents and
such Default shall continue for a period of ten (10) Business Days thereafter;
provided that such cure period shall not apply to any failure to observe or
perform the covenants set forth in Sections 5.02, 5.03, 5.08, 5.15 and Article
VI of this Agreement;
(e) the Borrower or any Subsidiary shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable subject to any
applicable grace or cure period;
(f) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (f) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer, in either case
not prohibited by this Agreement, of the Property or assets securing such
Indebtedness;
(g) any event or condition occurs resulting in a default or event of
default in respect of any Material Indebtedness in excess of $100,000, subject
to any applicable grace or cure period;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
48
(i) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in writing
its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount
in excess of $100,000 shall be rendered against the Borrower, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Borrower or any Subsidiary to enforce any such judgment;
(1) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;
(m) a Change in Control shall occur; or
(n) if any Loan Document shall be terminated, revoked (including any
revocation of the Guaranty, as to Indebtedness of Borrower incurred after the
effectiveness of such revocation), or otherwise rendered void or unenforceable,
in any case, without Lender's prior written consent;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Term Loan Facility A Commitment and the Term Loan Facility B Commitment, and
thereupon the Term Loan Facility A Commitment and the Term Loan Facility B
Commitment shall terminate immediately, and (ii) declare the loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately and in case of any event with respect to the Borrower described in
clause (h) or (i) of this Article, the Term Loan Facility A Commitment and the
Term Loan Facility B Commitment shall automatically terminate and the principal
of the Loans then outstanding, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable. Except to the extent, if any, that notice
of Default is expressly required herein or in any of the other Loan Documents,
49
Borrower and any and all co-makers, endorsers, guarantors and sureties severally
waive notice (including, but not limited to, notice of intent to accelerate and
notice of acceleration, notice of protest and notice of dishonor), demand,
presentment for payment, protest, diligence in collecting and the filing of suit
for the purpose of fixing liability and consent that the time of payment of any
and all Indebtedness evidenced by the Loan Documents may be extended and
re-extended from time to time without notice to any of them. Each such person
agrees that his, her or its liability on or with respect to this Agreement and
the other Loan Documents shall not be affected by any release of or change in
any guaranty or security at any time existing or by any failure to perfect or to
maintain perfection of any Lien against or security interest in any such
security or the partial or complete unenforceability of any guaranty or other
surety obligation, in each case in whole or in part, with or without notice and
before or after maturity.
ARTICLE VIII.
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in
50
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, with the consent (not to be unreasonably
withheld) of the Borrower, to appoint a successor. If no successor shall have
been so appointed by the Required Lenders. and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank with an
office in Dallas, Texas or an Affiliate of any such bank. Upon the acceptance of
its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative
51
Agent or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any related
agreement or any document furnished hereunder or thereunder.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower:
TOPS Specialty Hospital, Ltd.
c/o United Surgical Partners International, Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000 Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx, P.C.
Tel: 000-000-0000
Fax: 000-000-0000
(b) if to the Administrative Agent:
Chase Bank of Texas, National Association
000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Tel: 000-000-0000
Fax: 000-000-0000
and
Chase Securities Inc.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
52
Attention: Xxxx Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
and
Agency Services
Chase Bank of Texas, N.A.
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attn: Xxxxxxx Xxxxxxx
with a copy to:
Xxxxx Liddell & Xxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, P.C.
Tel: (000) 000-0000
Fax: (000) 000-0000
(c) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. WAIVERS, AMENDMENTS.
(a) No failure or delay by the Administrative Agent or any Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.
53
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Term Loan Facility A Commitment or the
Term Loan Facility B Commitment of any Lender without the written consent of
such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Term Loan Facility A Commitment
or any Term Loan Facility B Commitment, without the written consent of each
Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner that
would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, or (v) change any of the provisions of this
Section 9.02 or the definition of "Required Lenders" or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent hereunder without the prior written consent of the
Administrative Agent.
SECTION 9.03. EXPENSES, INDEMNITY, DAMAGE WAIVER.
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by the Administrative Agent or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights
under this Section, or in connection with the Loans made hereunder, including
all such out-of-pocket expenses incurred during any "workout," restructuring or
negotiations in respect of such Loans.
(b) If Administrative Agent or any of the Lenders, their successors or
assigns retains an attorney in connection with any default or to collect,
enforce or defend this Agreement or any of the Loan Documents in any lawsuit or
in any reorganization, bankruptcy or other proceeding, or if Borrower sues
Administrative Agent or any Lender in connection with this Agreement or any of
the Loan Documents and does not prevail, then Borrower agrees to pay to
Administrative Agent or any Lender, in addition to principal and interest, all
reasonable costs and expenses incurred by such Lender in trying to collect the
Indebtedness or in any such suit or proceeding, including reasonable attorneys'
fees. To the extent not prohibited by applicable law, Borrower will pay all
costs and expenses and reimburse Administrative Agent or any Lenders for any and
all expenditures of every character incurred or expended from time to time,
regardless of whether or not a default has occurred, in connection with (a) the
preparation, negotiation, documentation, closing, renewal, revision,
modification, increase, review or restructuring of this Agreement or any of the
Loan
54
Documents, including legal, accounting, auditing, architectural engineering and
inspection services and disbursements, or in connection with collecting or
attempting to enforce or collect this Agreement or any of the other Loan
Documents, (b) Administrative Agent's or Lenders' evaluating, monitoring,
administrating and protecting any collateral ("Collateral") now or hereafter
securing payment of any part of this Agreement or any of the Loan Documents and
(c) Administrative Agent's or Lenders' creating, perfecting and realizing upon
Administrative Agent's or Lenders' security interests in and Liens on any
Collateral, and all costs and expenses relating to Administrative Agent's or
Lenders' exercising any of its rights and remedies hereunder or under any other
Loan Document or at law, including, without limitation, all appraisal fees,
consulting fees, filing fees, taxes (other than Excluded Taxes), brokerage fees
and commissions, title review and abstract fees, Uniform Commercial Code search
fees, other fees and expenses incident to title searches, reports and security
interests, escrow fees, attorneys' fees, legal expenses, court costs, other fees
and expenses incurred in connection with any complete or partial liquidation of
any Collateral and all fees and expenses for any professional services relating
to the Collateral or any operations conducted in connection with it; provided,
that no right or option granted by Borrower to Administrative Agent or any
Lender or otherwise arising pursuant to any provision of this or any other
instrument shall be deemed to impose or admit a duty on Administrative Agent or
any Lender to supervise, monitor or control any aspect of the character or
condition of the Collateral or any operations conducted in connection with it
for the benefit of Borrower or any other person or entity other than
Administrative Agent or any Lender. BORROWER AGREES TO INDEMNIFY, DEFEND AND
HOLD ADMINISTRATIVE AGENT AND ANY LENDER, ITS SHAREHOLDERS, DIRECTORS, OFFICERS,
AGENTS, ATTORNEYS, ADVISORS AND EMPLOYEES (COLLECTIVELY "INDEMNIFIED PARTIES")
HARMLESS FROM AND AGAINST ANY AND ALL LOSS, LIABILITY, OBLIGATION, DAMAGE,
PENALTY, JUDGMENT, CLAIM, DEFICIENCY, EXPENSE, ACTION, SUIT, COST AND
DISBURSEMENT OF ANY KIND OR NATURE WHATSOEVER (INCLUDING INTEREST, PENALTIES,
ATTORNEYS' FEES AND AMOUNTS PAID IN SETTLEMENT), REGARDLESS OF WHETHER CAUSED IN
WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, IMPOSED
ON, INCURRED BY OR ASSERTED AGAINST THE INDEMNIFIED PARTIES GROWING OUT OF OR
RESULTING FROM THIS AGREEMENT, ANY LOAN DOCUMENTS OR ANY TRANSACTION OR EVENT
CONTEMPLATED HEREIN OR THEREIN (EXCEPT THAT SUCH INDEMNITY SHALL NOT BE PAID TO
ANY INDEMNIFIED PARTY TO THE EXTENT THAT SUCH LOSS, ETC. DIRECTLY RESULTS FROM
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNIFIED PARTY). If any
person or entity (including, without limitation, Borrower or any of its
affiliates) ever alleges gross negligence or willful misconduct by an
Indemnified Party, the full amount of indemnification provided for in this
Agreement shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement at such time--if any--as a court of competent jurisdiction enters
a final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct. Any amount to be paid under this Section by Borrower to
Administrative Agent or any Lender shall be a demand obligation owing by
Borrower to Administrative Agent or any Lender and shall bear interest from the
date of expenditure until paid at the Alternate Base Rate until demand, and
thereafter at the Default Rate.
(c) To the extent that the Borrower fails to pay any amount required to be
paid by it to the Administrative Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, as the
case may be, such Lender's Applicable Percentage
55
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent in its
capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnified Party, on any
theory of liability (including, without limitation, strict liability), for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions
or any Loan.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.04. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Term Loan Facility A Commitment or Term Loan Facility B Commitment and the Loans
at the time owing to it); provided that (i) except in the case of an assignment
to a Lender or an Affiliate of a Lender, each of the Borrower and the
Administrative Agent must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld), (ii) except in the case of
an assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Term Loan Facility A
Commitment or Term Loan Facility B Commitment, the amount of the Term Loan
Facility A Commitment or the Term Loan Facility B Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, (iv) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,000, (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire and (vi) if the Commitments
are then in an amount equal to or less than the amount of the Commitments on the
Effective Date, the Guaranty is in full force and effect and this Agreement
shall not have been amended or otherwise modified in any material respect (and
for purposes of this clause (vi) any amendment of a covenant
56
in Article VI or a provision in Article VII shall be deemed material), then not
more than three (3) Lenders at any one time shall be parties to this Agreement;
and provided further that any consent of the Borrower otherwise required under
this paragraph shall not be required if an Event of Default under clause (h) or
(i) of Article VII has occurred and is continuing. Subject to acceptance and
recording thereof pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03 and shall
continue to be bound by its obligations under Section 9.12). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this paragraph shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights end obligations in
accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in the United States a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Term Loan
Facility A Commitment or Term Loan Facility B Commitment of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time
to time (the "Register"). The entries in the Register shall be conclusive, and
the Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "PARTICIPANT") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Term Loan Facility A
Commitment or Term Loan Facility B Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower or the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any
57
amendment, modification or waiver of any provision of this Agreement; PROVIDED
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.15 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledge or assignee for such Lender as a party hereto or be
used as a device to avoid compliance with Section 9.04(b).
SECTION 9.05. SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the tune any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Term Loan Facility A Commitments and the Term Loan
Facility B Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17, 9.03 and 9.12 and Article VIII shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Term Loan Facility A Commitments and the Tern Loan Facility B
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. COUNTERPARTS: INTEGRATION, EFFECTIVENESS. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
58
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto, and thereafter shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.07. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof, and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final, but excluding deposits that such Lender knows are held in
a fiduciary capacity for the benefit of others) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although SUCH obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.09. GOVERNING LAW, JURISDICTION, CONSENT TO SERVICE OF PROCESS.
(a) VENUE: CHOICE OF LAW. This Agreement is performable in Dallas County,
Texas, which shall be a proper place of venue for suit on or in respect of this
Agreement. Borrower hereby irrevocably agrees that any legal proceeding in
respect of this Agreement shall be brought in the district courts of Dallas
County, Texas, or in the United States District Court for the Northern District
of Texas, Dallas Division (collectively, the "SPECIFIED COURTS"). Borrower
hereby irrevocably submits to the nonexclusive jurisdiction of the state and
federal courts of the State of Texas. Borrower hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any of the Loan Documents brought in any Specified
Court, and hereby further irrevocably waives any claims that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. Borrower further (1) agrees to designate and maintain an
agent for service of process in the City of Dallas in connection with any such
suit, action or proceeding and to deliver to Lenders evidence thereof and (2)
irrevocably consents to the service of process out of any of the Specified
Courts in any such suit, action or proceeding by the mailing of copies thereof
by certified mail, return receipt requested, postage prepaid, to Borrower.
Nothing herein shall affect the right of Administrative Agent or any Lender
59
to commence legal proceedings or otherwise proceed against Borrower in any
jurisdiction or to serve process in any manner permitted by applicable law.
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS, WITHOUT
REFERENCE TO ITS CHOICE OF LAW PRINCIPLES, AND THE UNITED STATES OF AMERICA FROM
TIME TO TIME IN EFFECT.
(b) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WITHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. CONFIDENTIALITY. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any Governmental Authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Borrower
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower, provided, that with respect to clauses (b) and (c)
above, that unless specifically prohibited by applicable law or court order, the
party to whom such
60
applicable request is made agrees, prior to disclosure thereof, to notify
Borrower of any request for disclosure of any such non-public information (A) by
any Governmental Authority or representative thereof (other than any such
request in connection with an examination of such party's financial condition by
such Governmental Authority) or (B) pursuant to legal process. For the purposes
of this Section, "FORMATION" means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to the Administrative Agent or any Lender on a nonconfidential
basis prior to disclosure by the Borrower; PROVIDED that, in the case of
information received from the Borrower after the date hereof, such information
is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE ss.26.02:
THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE PARTIES
SUBSTANTIALLY CONCURRENTLY HEREWITH TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT
WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TOPS SPECIALITY HOSPITAL, LTD.
By: Texas Outpatient Surgical Center, Inc.
Its Managing General Partner
By: /s/ XXXXX X. LINES
Name: Xxxxx X. Lines
Title: CFO
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
individually and as Administrative Agent
By:
Name:
Title:
61
TERM LOAN FACILITY A NOTE
$8,000,000.00 Dallas, Texas as of July 1, 1999
FOR VALUE RECEIVED, TOPS SPECIALTY HOSPITAL, LTD., a Texas limited
partnership ("Borrower"), hereby promises to pay to CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION (the "Lender"), at its principal office at 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000, the principal sum of EIGHT MILLION AND NO/100 DOLLARS
($8,000,000.00) (or such lesser amount as shall equal the aggregate unpaid
principal amount of the Loans under Term Loan Facility A made by the Lender to
Borrower under the Credit Agreement), in lawful money of the United States of
America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Loan, at such office, in like money and funds, for
the period commencing on the date of such Loan until such Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest Period (if
applicable) of each Loan made by the Lender to Borrower and each payment made on
account of the principal thereof, shall be recorded by the Lender on its books
and, prior to any transfer of this Note, endorsed by the Lender on the schedule
attached hereto or any continuation thereof, provided that the failure of the
Lender to make any such recordation or endorsement shall not affect the
obligations of Borrower to make a payment when due of any amount owing under the
Credit Agreement or hereunder in respect of the Loans made by the Lender.
This Note is the promissory note representing the Term Loan Facility A
referred to in the Credit Agreement dated as of July 1, 1999 (as modified and
supplemented and in effect from time to time, the "Credit Agreement") between
Borrower, the Lender, as Administrative Agent, and the lenders from time to time
party to the Credit Agreement, and evidences Loans made by the Lender under Term
Loan Facility A thereunder. Terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Note upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.
Regardless of any provisions contained in this Note or in any other Loan
Documents, Lender shall never be deemed to have contracted for or be entitled to
receive, collect or apply as interest on the Loans, the Term Loan Facility A
Commitment or otherwise any amount in excess of the maximum rate of interest
permitted to be charged by applicable law, and if the Lender ever receives,
collects or applies as interest any such excess, or if acceleration of the
maturity of the Loans, the Term Loan Facility A Commitment or if any prepayment
by Borrower or any guarantor results in Borrower or any guarantor having paid
any interest in excess of such maximum rate, such amount which would be
excessive interest shall be applied to the reduction of the unpaid principal
balance of this Note for which such excess was received, collected or applied,
and, if the principal balances of this Note are paid in full, any remaining
excess shall
forthwith be paid to Borrower or any guarantor. All sums paid or agreed to be
paid to the Lender for the use, forbearance or detention of the indebtedness
evidenced by this Note and/or the Credit Agreement shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that the
rate or amount of interest on account of such indebtedness does not exceed the
maximum lawful rate permitted under applicable law. In determining whether or
not the interest paid or payable under any specific contingency exceeds the
maximum rate of interest permitted by law, Lender shall, to the maximum extent
permitted under applicable law, (i) characterize any non-principal payment as an
expense, fee or premium, rather than as interest; and (ii) exclude voluntary
prepayments and the effect thereof; and (iii) compare the total amount of
interest contracted for, charged or received throughout the entire contemplated
term of this Note at the maximum lawful rate under applicable law.
Borrower and each surety, endorser, guarantor and other party ever liable
for payment of any sums of money payable on this Note, jointly and severally
waive presentment and demand for payment, notice of intention to accelerate the
maturity, notice of acceleration of the maturity, protest, notice of protest and
nonpayment, and all other notices as to this Note and as to each and all
installments hereof, and agree that their liability under this Note shall not be
affected by any renewal or extension in the time of payment hereof, or in any
indulgences, or by any release or change in any security for the payment of this
Note, and hereby consent to any and all renewals, extensions, indulgences,
releases or changes.
This Note shall be governed by, and construed in accordance with, the
applicable laws of the United States of America and the substantive laws of the
State of Texas.
THIS WRITTEN NOTE, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
EXECUTED as of the date first written above.
TOPS SPECIALTY HOSPITAL, LTD.,
a Texas limited partnership.
By: Texas Outpatient Surgicare Center, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Lines
---------------------------------------
Name: Xxxxx X. Lines
Title: CFO
TERM LOAN FACILITY B NOTE
$5,096,000.00 Dallas, Texas as of July 1, 1999
FOR VALUE RECEIVED, TOPS SPECIALTY HOSPITAL, LTD., a Texas limited
partnership ("Borrower"), hereby promises to pay to CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION (the "Lender"), at its principal office at 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000, the principal sum of FIVE MILLION NINETY-SIX THOUSAND AND
NO/l00 DOLLARS ($5,096,000.00) (or such lesser amount as shall equal the
aggregate unpaid principal amount of the Loans under Term Loan Facility B made
by the Lender to Borrower under the Credit Agreement), in lawful money of the
United States of America and in immediately available funds, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.
The date, amount, Type, interest rate and duration of Interest Period (if
applicable) of each Loan made by the Lender to Borrower and each payment made on
account of the principal thereof, shall be recorded by the Lender on its books
and, prior to any transfer of this Note, endorsed by the Lender on the schedule
attached hereto or any continuation thereof, provided that the failure of the
Lender to make any such recordation or endorsement shall not affect the
obligations of Borrower to make a payment when due of any amount owing under the
Credit Agreement or hereunder in respect of the Loans made by the Lender.
This Note is the promissory note representing the Term Loan Facility B
referred to in the Credit Agreement dated as of July 1, 1999 (as modified and
supplemented and in effect from time to time, the "Credit Agreement") between
Borrower, the Lender, as Administrative Agent, and the lenders from time to time
party to the Credit Agreement, and evidences Loans made by the Lender under Term
Loan Facility B thereunder. Terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Note upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.
Regardless of any provisions contained in this Note or in any other Loan
Documents, Lender shall never be deemed to have contracted for or be entitled to
receive, collect or apply as interest on the Loans, the Term Loan Facility B
Commitment or otherwise any amount in excess of the maximum rate of interest
permitted to be charged by applicable law, and if the Lender ever receives,
collects or applies as interest any such excess, or if acceleration of the
maturity of the Loans, the Term Loan Facility B Commitment or if any prepayment
by Borrower or any guarantor results in Borrower or any guarantor having paid
any interest in excess of such maximum rate, such amount which would be
excessive interest shall be applied to the reduction of the unpaid principal
balance of this Note for which such excess was received, collected or
applied, and, if the principal balances of this Note are paid in full, any
remaining excess shall forthwith be paid to Borrower or any guarantor. All sums
paid or agreed to be paid to the Lender for the use, forbearance or detention of
the indebtedness evidenced by this Note and/or the Credit Agreement shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until payment in full so
that the rate or amount of interest on account of such indebtedness does not
exceed the maximum lawful rate permitted under applicable law. In determining
whether or not the interest paid or payable under any specific contingency
exceeds the maximum rate of interest permitted by law, Lender shall, to the
maximum extent permitted under applicable law, (i) characterize any
non-principal payment as an expense, fee or premium, rather than as interest;
and (ii) exclude voluntary prepayments and the effect thereof, and (iii) compare
the total amount of interest contracted for, charged or received throughout the
entire contemplated term of this Note at the maximum lawful rate under
applicable law.
Borrower and each surety, endorser, guarantor and other party ever liable
for payment of any sums of money payable on this Note, jointly and severally
waive presentment and demand for payment, notice of intention to accelerate the
maturity, notice of acceleration of the maturity, protest, notice of protest and
nonpayment, and all other notices as to this Note and as to each and all
installments hereof, and agree that their liability under this Note shall not be
affected by any renewal or extension in the time of payment hereof, or in any
indulgences, or by any release or change in any security for the payment of this
Note, and hereby consent to any and all renewals, extensions, indulgences,
releases or changes.
This Note shall be governed by, and construed in accordance with, the
applicable laws of the United States of America and the substantive laws of the
State of Texas,
THIS WRITTEN NOTE, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
EXECUTED as of the date first written above.
TOPS SPECIALTY HOSPITAL, LTD.,
a Texas limited partnership
By: Texas Outpatient Surgicare Center, Inc.
its Managing General Partner
By: /s/ Xxxxx X. Lines
---------------------------------------
Name: Xxxxx X. Lines
Title: CFO
Schedule 3.06
Disclosed Matters
A. Medical Malpractice Claims
1. Alexander et al. v. TOPS Specialty Hospital, Ltd. et al.
o Case Info: Cause No. 97-51309; 000xx Xxxxxxxx Xxxxxxxx Xxxxx
xx Xxxxxx Xxxxxx, Xxxxx
o Date: September 19, 1997
o Service: February 12, 1998
o Background: Xxxx Xxxxxxxxx allegedly died as a result of a
cardiac arrest suffered during surgery to remove a cyst on his
shoulder at Columbia TOPS Surgical Specialty Hospital.
o Status: Litigation being handled through malpractice carrier,
Health Care Indemnity, Inc. (policy #HCII-10197; file #23063)
2. Threatened: During the evening of July 9, 1998, a patient admitted
to the hospital was found next to his bed with his left leg still
secured to the CPM On August 7, 1998, the patient sent the hospital
notice that a CAT scan showed a stress fracture of the left hip The
malpractice carrier has been notified of this claim.
B. Other Litigation / Investigations
1. United States of America ex rel. Xxxxx X. Xxxxxxxx v. Columbia/HCA
Healthcare Corp., Healthtrust-The Hospital Company and Quorum Health
Group, Quorum Health Resources, Inc. and All Other Hospitals owned
or managed by them since January 1, 1984, Case No.
97-2035-CIV-T-23E, in the Middle District of Florida, Tampa Division
This matter was unsealed on October 5, 1998. The Government
intervened in this action on October 1, 1998. The Complaint
was originally filed in Montana in 1993 but was later
transferred to Florida. The Complaint alleges that defendants
made false statements in annual Medicare cost reports over a
period of ten years. The Complaint further alleges that
defendants engaged in a scheme of filing improper
reimbursement claims while keeping a "secret" set of books
which were known as "reserve cost reports" and concealing
these books from Medicare auditors. The Government has not yet
served the Complaint on defendants.
2. Government Investigation: Physician Contract AID Subpoena
On or about January 9, 1998, Columbia/HCA Healthcare
Corporation received a subpoena from the U.S. Attorney for the
Middle District of Florida requesting records concerning
physician contracts, DME, pharmacy services contracts and
similar kinds of arrangements. The relevant time period for
the documents requested by the subpoena is 1/1/89 through
1/21/98.
3. Columbia/HCA Healthcare Corporation ("Columbia") and/or its
affiliates are defendants in various cases that are potentially
national or regional in scope. Please refer to the
Columbia's quarterly report filed with the Securities and Exchange
Commission on form 10K for the period ending December 31, 1998 for a
description of the cases.
Schedule 3.13
Real Property
The only real property interest of the Borrower as of the Effective Date is the
owned real property commonly referred to as 00000 Xxx Xxx, Xxxxxxx, Xxxxx.
Schedule 3.14
Proprietary Rights
TOPS Specialty Hospital, Ltd.
TOPS Surgical Specialty Hospital
Schedule 3.15
Subsidiaries
None.
Schedule 6.01
Existing Indebtedness
None.
Schedule 6.02
Existing Liens
None.
Schedule 6.08
Existing Restrictions
None.
Exhibit A
NOTICE OF ASSIGNMENT AND ACCEPTANCE
[Date]
TOPS Specialty Hospital, Ltd.
______________________________
______________________________
______________________________
Chase Bank of Texas, National Association
000 X. Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxxxxxx
Re: Credit Agreement dated as of June _, 1999 (the "Credit Agreement")
between TOPS Specialty Hospital, Ltd. a Texas limited partnership,
the Lenders referred to therein, and Chase Bank of Texas, National
Association, as Agent for the Lenders
Dear Ladies and Gentlemen:
We hereby give notice that, effective as of the date hereof, [Name of
Assignor] (the "Assignor'") has assigned its rights and obligations with respect
to ____ % (representing $_______) of the Assignor's outstanding Term Loans,
representing __% (representing $______) of the aggregate outstanding Term Loan
[Facility A] [ Facility B] Commitment and Term Loans (such interest in such
rights and obligations being hereinafter referred to as the "Assigned Interest")
under the Credit Agreement to [Name of Assignee] (the "Assignee"). The Assignee
hereby agrees (i) to become a "Lender" pursuant to Section 9.04 of the Credit
Agreement (if not already a Lender under the Credit Agreement) and (ii) agrees
to assume all the obligations of the Assignor thereunder with respect to the
Assigned Interest.
The address for notices, lending office(s) and payment instructions for the
Assignee are as follows:
Address for Notices:
______________________________
______________________________
______________________________
Attention:
Telephone:
Telecopier:
Lending Office for Term Loans:
______________________________
______________________________
______________________________
Payment Instructions:
______________________________
______________________________
______________________________
Please sign and return the enclosed copy of this letter to the undersigned
to indicate your receipt hereof, and your consent to or notice of (as
applicable) the above-mentioned assignment and assumption, and your agreement to
the release of the Assignor from its obligations under the Credit Agreement with
respect to the Assigned Interest. As a condition to the effectiveness of the
above-mentioned assignment and assumption, the Agent shall have received on the
date hereof an assignment fee of $_______________.
Very truly yours,
[NAME OF ASSIGNOR]
By:___________________________
Title:
[NAME OF ASSIGNEE]
By:___________________________
Title:
ACKNOWLEDGED OR CONSENTED TO
(AS APPLICABLE):
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
as Agent
By:___________________________
Title:
[Form of Opinion of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.]
July 1, 1999
Chase Bank of Texas,
National Association, as Agent
000 X. Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
Re: Credit Agreement dated as of June ______, 1999, among TOPS SPECIALTY
HOSPITAL, LTD., a Texas limited partnership ("Borrower"); each of
the lenders that is a signatory thereto identified under the caption
"LENDERS" on the signature pages thereto or pursuant to Section 9.04
thereof (individually, a "Lender"" and, collectively, the
"Lenders"); and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a
national banking association, as agent for the Lenders (in such
capacity, together with its successors in such capacity, the
"Agent") (the "Credit Agreement")
Ladies and Gentlemen:
We have served as counsel to the Borrowers and United Surgical Partners
International, Inc. ("Guarantor") (sometimes hereinafter being referred to
individually as an "Obligor" and collectively as "Obligors"), in connection the
transactions contemplated by (i) the referenced Credit Agreement, providing for
extensions of credit by Lenders to Borrower in an aggregate principal amount not
exceeding $14,000,000 and (ii) the various other agreements and instruments
referred to in the next following paragraph. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein as defined therein.
This opinion letter is being delivered at the request of Obligors pursuant to
Section 4.01(b) of the Credit Agreement.
In rendering the opinions expressed below, we have examined the following
agreement, instruments and other documents:
a. the Credit Agreement;
b. the Term Loan Facility A Note;
c. the Term Loan Facility B Note;
d. the Security Agreement;
e. the Subordination Agreement;
f. the Deed of Trust;
Chase Bank of Texas, National
Association, as Agent
July 1, 1999
Page 2
g. the Continuing Guaranty of United Surgical Partners International,
Inc.;
h. [other credit documents - reserve];
i. Uniform Commercial Code financing statements (collectively, the
"Financing Statements") executed by the Obligors, and to be filed in
the jurisdictions listed on Exhibit A attached hereto; and
j. such corporate records of the Obligors and such other documents as
we have deemed necessary as a basis for the opinions expressed
below.
The agreements, instruments and other documents referred to in the
foregoing lettered clauses (other than clauses (k) and (l)) are collectively
referred to as the "Loan Documents").
In our examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with authentic original documents of all documents submitted to us as copies.
When relevant facts were not independently established, we have relied upon
statements of governmental officials and upon representations made in or
pursuant to the Loan Documents and certificates of, or other information
provided by, appropriate representatives of the Obligors. We also have assumed
that all the terms and conditions of, or relating to, the transactions
contemplated by the Loan Documents are correctly and completely embodied in the
Loan Documents.
In rendering the opinions expressed below, we have assumed, with respect
to all of the documents referred to in this opinion letter, that (except, to the
extent set forth in the opinions expressed below, as to the Obligors):
(i) such documents have been duly authorized by, have been duly executed
and delivered by, and constitute legal, valid, binding and
enforceable obligations of, all of the parties to such documents;
(ii) all signatories to such documents have been duly authorized; and
(iii) all of the non-individual parties to such documents are duly
organized and validly existing and have the organizational power and
authority to execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject also to the comments
and qualifications set forth below, and having considered such questions of law
as we have deemed necessary as a basis for the opinions expressed below, we are
of the opinion that:
1. Borrower is a limited partnership duly organized and validly existing
under the laws of the State of Texas. Guarantor is a corporation duly organized,
validly existing and in
Chase Bank of Texas, National
Association, as Agent
July 1, 1999
Page 3
good standing under the laws of the State of Delaware. Each of Borrower and
Guarantor is qualified, as a foreign organization, to conduct business in all
jurisdictions where its business or activities require such qualification,
except where the same would not result in a material adverse effect on such
organization.
2. Each Obligor has all requisite corporate or partnership, as applicable,
power and authority to execute and deliver, and to perform its obligations
under, the Loan Documents to which it is a party. Borrower has all requisite
power and authority to borrow under the Credit Agreement.
3. The execution, delivery and performance by each Obligor of each Loan
Document to which it is a party has been duly authorized by all necessary action
on the part of each such Obligor.
4. Each Loan Document to which an Obligor is a party has been duly
executed and delivered by such Obligor.
5. The execution, delivery and performance by each Obligor of, and the
consummation by each Obligor of the transactions contemplated by, the Loan
Documents to which such Obligor is a party do not and will not (a) violate any
provision of the agreement or certificate of limited partnership, certificate or
articles of incorporation, as applicable, or bylaws of such Obligor, (b) violate
any provision of the law of the State of Texas, the State of Delaware laws or
the federal law of the United States of America, or (c) result in a breach of,
constitute a default under, require any consent under, or result in the
acceleration or required prepayment of any material Indebtedness pursuant to the
terms of, or result in the creation or imposition of any Lien upon any Property
of any of the Obligors (except for the Liens created pursuant to the Loan
Documents) pursuant to the terms of, any agreement or instrument to which any
Obligor is a party or to which any such Obligor or its assets is subject.
6. To the best of our knowledge, the execution, delivery and performance
by each Obligor of, and the consummation by each Obligor of the transactions
contemplated by, the Loan Documents to which it is a party do not and will not
violate any order, writ, injunction or decree of any court or governmental
authority or agency or any arbitral award applicable to any of the Obligors.
7. Each Loan Document constitutes the legal, valid and binding obligation
of each Obligor party thereto, enforceable against such Obligor in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally and except as the enforceability of the Loan
Documents is subject to the application of general principles of equity
(regardless of whether considered in a proceeding in a equity or at law),
including, without limitation, (a) the
Chase Bank of Texas, National
Association, as Agent
July 1, 1999
Page 4
possible unavailability of specific performance, injunctive relief or other
equitable remedies and (b) concepts of materiality, good faith and fair dealing.
8. No authorization, approval or consent of, and no filing or registration
with, any governmental or regulatory authority or agency of the United States of
America, the State of Texas or the State of Delaware is required on the part of
any Obligor for the execution, delivery or performance by any Obligor of any of
the Loan Documents to which it is a party (expressly including by Borrower under
the Credit Agreement), except for the filing of the Deed of Trust, Assignment of
Rents and Leases and Financing Statements in respect of the Liens created
pursuant to the Loan Documents.
9. Except as set forth in Schedule 3.06 to the Credit Agreement, we have
no knowledge of any legal or arbitral proceedings, or any proceedings by or
before any governmental or regulatory authority or agency, pending or threatened
against or affecting the Obligors or any of their respective Properties.
10. Each of the Security Agreement and the Pledge Agreement is effective
to create, in favor of the Agent for the benefit of the Agent and the Lenders, a
valid security interest under the Uniform Commercial Code as in effect in The
State of Texas (the "UCC") in all of the right, title and interest of the
Obligors in, to and under the Collateral (such term is used herein as defined in
the Security Agreement and/or the Pledge Agreement) as collateral security for
the payment of the Secured Obligations (as defined in the Security Agreement
and/or the Pledge Agreement), except that (a) such security interest will
continue in Collateral after its sale, exchange or other disposition only to the
extent provided in Sections 9.306 and 9.307 of the UCC, (b) the security
interest in Collateral in which an Obligor acquires rights after the
commencement of a case under the Bankruptcy Code in respect of such Obligor may
be limited by Section 552 of the Bankruptcy Code and (c) the creation of a
security interest in any Pledged Stock (as defined in the Security Agreement
and/or the Pledge Agreement) constituting a "security" (as defined in Section
8.102(c)(1) of the UCC) requires the transfer of said Pledged Stock to the Agent
pursuant to Section 8.313(x) of the Uniform Commercial Code, which transfer in
the case of a "certificated security" (as defined in Section 8.102(a)(1) of the
UCC) may be effected in the manner contemplated by clause (c) of paragraph 12
below.
11. The security interest referred to in paragraph 11 above in the types
of Collateral described below will be perfected, to the extent a security
interest can be perfected under the UCC, as described below:
(a) such security interest in that portion of the Collateral
consisting of (i) "accounts" (as defined in the UCC) or "general
intangibles" (as defined in the UCC), (ii) "trademarks" or (iii)
"inventory" or "equipment" (each as defined in the UCC) that is mobile and
of a type normally used in more than one jurisdiction (excluding motor
vehicles and other mobile goods covered by certificates of title
requiring, notation
Chase Bank of Texas, National
Association, as Agent
July 1, 1999
Page 5
thereon of a lien in order to perfect a security interest covering such
motor vehicles and mobile goods) and, if inventory (as so defined), leased
or held for lease to others, upon the creation of such security interest,
will be perfected by properly filing the Financing Statements in the
appropriate offices for the jurisdictions listed in Part A of Annex I
attached hereto; provided that, if a Obligor moves its chief executive
office to another jurisdiction, then the effectiveness of the Financing
Statements naming such Obligor as debtor will cease on the expiration of
four months after such change unless appropriate financing statements are
filed in the jurisdiction to which such Obligor's chief executive office
is moved prior to the expiration of such four month period;
(b) such security interest in that portion of the Collateral
consisting of "inventory" or "equipment" (each as defined in the UCC) that
is not of the type referred to in clause (a) above and that is located in
the States listed in Part B of Annex I attached hereto, upon the creation
of such security interest, will be perfected by filing the Financing
Statements in the appropriate offices for the jurisdictions listed in Part
B of said Annex 1;
(c) such security interest in that portion of the Collateral
consisting of a certificated security (including the Pledged Stock under
and as defined in the Security and/or the Pledge Agreement), an instrument
(as defined in Section 9.105(a)(9) of the UCC) or a document (as defined
in Section 9.105(a)(6) of the UCC), will, upon the creation of such
security interest, be perfected by the Agent taking possession thereof (or
any certificates representing any such certificated security) and
thereafter retaining possession;
(d) to the extent not expressly covered by paragraphs (a) or (b)
above, such security interest in that portion of the Collateral consisting
of "proceeds" (as defined in the UCC) may be perfected as and to the
extent provided in Section 9.306 of the UCC; and
(e) anything in this paragraph 12 to the contrary notwithstanding,
compliance with a statute or treaty described in Section 9.302(c) of the
UCC is required in order to perfect such security interest in any portion
of the Collateral that is subject to any such statute or treaty.
12. If the security interest referred to in paragraph 11 above in any
portion of the Collateral consisting of a certificated security (including the
Pledged Stock under and as defined in the Security Agreement and/or the Pledge
Agreement) is perfected by the Agent in the manner specified in clause (c) of
paragraph 12 above, in good faith and without notice of any adverse claim (as
defined in Section 8.302(2) of the UCC) and indorsed by an appropriate person
(as defined in Section 8.308(f)) to the Agent or, in blank, any perfected
security interest therein will have priority over all other security interests
theretofore or thereafter created under the UCC.
Chase Bank of Texas, National
Association, as Agent
July 1, 1999
Page 6
The Pledged Stock (as defined in the Security Agreement and/or the Pledge
Agreement) has been indorsed by an appropriate person (as so defined) of the
Obligor owner of such Pledged Stock.
13. No recording, filing, privilege, documentary stamp, intangibles or
other tax must be paid in connection with the execution, delivery, recordation
or enforcement of the Financing Statements in the State of Texas. Customary
recording or filing fees shall be required in connection with the filing and
recording of the Deed of Trust and the Financing Statements.
The foregoing opinions are subject to the following comments and
qualifications:
(A) We express no opinion as to the waiver of inconvenient forum set
forth in Section 9.09 of the Credit Agreement (and any similar provisions
in any of the other Loan Documents).
(B) We express no opinion as to the applicability to the obligations
of the guarantors (or the enforceability of such obligations) of Section
548 of the Bankruptcy Code or any other law relating to fraudulent
transfers.
(C) We wish to point out that the acquisition by an Obligor after
the initial extension of credit under the Credit Agreement of an interest
in Property that becomes subject to the Lien of the Security Agreement
and/or the Pledge Agreement may constitute a voidable preference under
Section 547 of the Bankruptcy Code.
(D) We express no opinion as to the existence of, or the right,
title or interest of any Obligor in, to or under, any of the Collateral
(each as defined in the Security Agreement and/or the Pledge Agreement) or
other Property.
(E) The effectiveness of the Financing Statements will lapse on the
expiration of a five year period from their date of filing, or (if later)
five years from the last date as to which such Financing Statements were
effective following the proper filing of continuation statements with
respect thereto, unless continuation statements are filed within six
months prior to the expiration of the applicable five year period, and, if
an Obligor so changes its name, identity or corporate structure that the
Financing Statement naming such Obligor as debtor becomes seriously
misleading, the Financing Statements naming such Obligor as debtor will be
ineffective to perfect a security interest in Collateral acquired by such
Obligor more than four months after such change.
(F) With respect to our opinion in paragraph 12 above, we have
assumed that the chief executive office of each Obligor is located in the
jurisdictions listed in Annex 1 to the Security Agreement and/or the
Pledge Agreement.
(G) We express no opinion as to (i) the creation of any security
interest in (or other Lien on) any Collateral to the extent that, pursuant
to Section 9.104 of the UCC,
Chase Bank of Texas, National
Association, as Agent
July 1, 1999
Page 7
Chapter 9 of the UCC does not apply thereto, (ii) the effect of
non-compliance with the Assignment of Claims Act, 3l U.S.C. ss. 3727 and
41 U.S.C. ss. 15, with respect to such of the Collateral as may be subject
thereto or (iii) such of the Collateral as may now or hereafter constitute
fixtures under the UCC.
(H) We express no opinion with respect to (i) titles to or
descriptions of the Properties described in any Loan Document or whether
there are of record any Liens, security interests, charges or encumbrances
on any of the Collateral (each as defined in the Security Agreement and/or
the Pledge Agreement) (as we understand that you are relying upon Uniform
Commercial Code searches for assurances of this nature); (ii) the validity
and perfection of the security interests granted under the Security
Agreement and/or the Pledge Agreement as they relate to (a) any goods
included in the Collateral which are installed in or affixed to, or become
part of a product or mass with, goods which are not part of the
Collateral, (b) accounts or general intangibles due or becoming due from
the United States or any State of the United States or any agency or
department of the United States or any State, and (c) goods which are the
subject of a lease from any Obligor to a third person which is intended as
security and not a true lease; and (iii) any contract, lease, instrument
or agreement with respect to which any security interest or Lien is
granted or created by any Obligor under the Loan Documents if and to the
extent that such assignment, assumption, security interest or Lien
requires consent or action by a third party arid such consent or action
has not been duly obtained or waived.
(I) The enforceability of any provision of the Loan Documents may be
limited by laws rendering unenforceable (i) indemnification contrary to
Federal or state securities or other laws and the public policy underlying
such laws and (ii) the release of a party from, or the indemnification of
a party against, liability for its own wrongful or negligent acts under
certain circumstances.
We are members of the State Bar of Texas and the foregoing opinions are
limited to the laws of the State of Texas, the laws of the State of Delaware,
and the federal laws of the United States of America. No opinions beyond those
stated herein may be implied or inferred.
In connection with opinions expressed herein as being limited "to the best
of our knowledge'", "known to us" or similar terminology, such opinions are
based on the current actual knowledge of the attorneys in the firm representing
the Obligors (including, without limitation, _______________ and _____________).
We undertake no obligation to advise you of facts that may hereafter come to our
attention or changes in the law occurring after the date of this opinion letter
which might affect the opinions expressed herein.
This opinion letter is provided to you by us in our capacity as counsel to
the Obligors and solely in connection with the transactions referred to herein.
This opinion letter may not be relied
Chase Bank of Texas, National
Association, as Agent
July 1, 1999
Page 8
upon by you for any other purpose or relied upon or furnished to any other
Person without, in each instance, our prior written consent.
Sincerely,
Chase Bank of Texas, National
Association, as Agent
July 1, 1999
Page 9
Annex I
LIST OF FILING OFFICES
PART A:
PART B:
Form of CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Credit Agreement dated as of , 1999 (the "Credit Agreement") between TOPS
SPECIALTY HOSPITAL, LTD., a Texas limited partnership (the "Borrower"),
the lenders referred to therein, and Chase Bank of Texas, National
Association, as Administrative Agent for the lenders
Dear Ladies and Gentlemen:
As a Lender party to the Credit Agreement, we have agreed with
Borrower pursuant to Section 9.12 of the Credit Agreement to use reasonable
precautions to keep confidential, except as otherwise provided therein, any
non-public information supplied to us by Borrower and identified) by Borrower as
being confidential at the time the same is delivered to us pursuant to the
Credit Agreement.
As provided in said Section 9.12, we are permitted to provide you,
as a prospective [holder of a participation in the Loans (as defined in the
Credit Agreement)] [assignee Lender], with certain of such non-public
information subject to the execution and delivery by you, prior to receiving
such non-public information, of a Confidentiality Agreement in this form. Such
information will not be made available to you until your execution and return to
us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf
of yourself and each of your subsidiaries, affiliates, directors, officers,
employees and representatives and for the benefit of us and each of Borrower or
its Subsidiaries) that (A) such information will not be used by you except in
connection with the proposed [participation][assignment] mentioned above and (B)
you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such information confidential, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any of the Lenders or the Administrative Agent, (iii)
to bank examiners, auditors or accountants, (iv) to the Administrative Agent or
any other Lender (or to Chase Securities Inc.), (v) in connection with any
litigation to which you or any one or more of the Lenders or the Agent are a
party, (vi) to a subsidiary or affiliate of yours as provided in Section 9.12 of
the Credit Agreement or (vii) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or prospective
assignee or participant) first executes and delivers to you a Confidentiality
Agreement substantially in the form hereof; provided, further, that (x) unless
specifically prohibited by applicable law or court order, you agree, prior to
disclosure thereof, to notify Borrower of any request for disclosure of any such
non-public information (A) by any governmental agency or representative thereof
(other than any such request in connection with an examination of your financial
condition by such governmental agency) or (B) pursuant to legal process and (y)
that in no event shall you be obligated to return any materials furnished to you
pursuant to this Confidentiality Agreement.
If you are a prospective assignee, your obligations under this
Confidentiality Agreement shall be superseded by Section 9.12 of the Credit
Agreement on the date upon which you become a Lender under the Credit Agreement
pursuant to Section 9.04 thereof.
Please indicate your agreement to the foregoing by signing as
provided below the enclosed copy of this Confidentiality Agreement and returning
the same to us.
Very truly yours,
[INSERT NAME OF LENDER]
By___________________________________
The foregoing is agreed to
as of the date of this letter.
[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By______________________________
TERM LOAN FACILITY A NOTE
$58,000.000.00 Dallas, Texas as of July 1, 1999
FOR VALUE RECEIVED, TOPS SPECIALTY HOSPITAL, LTD., a Texas limited
partnership ("Borrower"), hereby promises to pay to CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION (the "Lender"), at its principal office at 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000, the principal sum of EIGHT MILLION AND NO/l00 DOLLARS
($8,000,000.00) (or such lesser amount as shall equal the aggregate unpaid
principal amount of the Loans under Term Loan Facility A made by the Lender to
Borrower under the Credit Agreement), in lawful money of the United States of
America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Loan, at such office, in like money and funds, for
the period commencing on the date of such Loan until such Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest Period (if
applicable) of each Loan made by the Lender to Borrower and each payment made on
account of the principal thereof, shall be recorded by the Lender on its books
and, prior to any transfer of this Note, endorsed by the Lender on the schedule
attached hereto or any continuation thereof, provided that the failure of the
Lender to make any such recordation or endorsement shall not affect the
obligations of Borrower to make a payment when due of any amount owing under the
Credit Agreement or hereunder in respect of the Loans made by the Lender.
This Note is the promissory note representing the Term Loan Facility A
referred to in the Credit Agreement dated as of July 1, 1999 (as modified and
supplemented and in effect from time to time, the "Credit Agreement") between
Borrower, the Lender, as Administrative Agent, and the lenders from time to time
party to the Credit Agreement, and evidences Loans made by the Lender under Term
Loan Facility A thereunder. Terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Note upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.
Regardless of any provisions contained in this Note or in any other Loan
Documents, Lender shall never be deemed to have contracted for or be entitled to
receive, collect or apply as interest on the Loans, the Term Loan Facility A
Commitment or otherwise any amount in excess of the maximum rate of interest
permitted to be charged by applicable law, and if the Lender ever receives,
collects or applies as interest any such excess, or if acceleration of the
maturity of the Loans, the Term Loan Facility A Commitment or if any prepayment
by Borrower or any guarantor results in Borrower or any guarantor having paid
any interest in excess of such maximum rate, such amount which would be
excessive interest shall be applied to the reduction
of the unpaid principal balance of this Note for which such excess was received,
collected or applied, and, if the principal balances of this Note are paid in
full, any remaining excess shall forthwith be paid to Borrower or any guarantor.
All sums paid or agreed to be paid to the Lender for the use, forbearance or
detention of the indebtedness evidenced by this Note and/or the Credit Agreement
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such indebtedness until payment
in full so that the rate or amount of interest on account of such indebtedness
does not exceed the maximum lawful rate permitted under applicable law. In
determining whether or not the interest paid or payable under any specific
contingency exceeds the maximum rate of interest permitted by law, Lender shall,
to the maximum extent permitted under applicable law, (i) characterize any
non-principal payment as an expense, fee or premium, rather than as interest;
and (ii) exclude voluntary prepayments and the effect thereof; and (iii) compare
the total amount of interest contracted for, charged or received throughout the
entire contemplated term of this Note at the maximum lawful rate under
applicable law.
Borrower and each surety, endorser, guarantor and other party ever liable
for payment of any sums of money payable on this Note, jointly and severally
waive presentment and demand for payment, notice of intention to accelerate the
maturity, notice of acceleration of the maturity, protest, notice of protest and
nonpayment, and all other notices as to this Note and as to each and all
installments hereof, and agree that their liability under this Note shall not be
affected by any renewal or extension in the time of payment hereof, or in any
indulgences, or by any release or change in any security for the payment of this
Note, and hereby consent to any and all renewals, extensions, indulgences,
releases or changes.
This Note shall be governed by, and construed in accordance with, the
applicable laws of the United States of America and the substantive laws of the
State of Texas.
THIS WRITTEN NOTE, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
EXECUTED as of the date first written above.
TOPS SPECIALTY HOSPITAL, LTD.,
a Texas limited partnership
By: Texas Outpatient Surgicare Center, Inc.,
its Managing General Partner
By: ________________________________________
Name:_______________________________________
Title:______________________________________
TERM LOAN FACILITY B NOTE
$55,096,000.00 Dallas, Texas as of July 1, 1999
FOR VALUE RECEIVED, TOPS SPECIALTY HOSPITAL. LTD., a Texas limited
partnership ("Borrower"), hereby promises to pay to CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION (the "Lender"), at its principal office at 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000, the principal sum of FIVE MILLION NINETY-SIX THOUSAND AND
NO/100 DOLLARS ($5,096,000.00) (or such lesser amount as shall equal the
aggregate unpaid principal amount of the Loans under Term Loan Facility B made
by the Lender to Borrower under the Credit Agreement), in lawful money of the
United States of America and in immediately available funds, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.
The date, amount, Type, interest rate and duration of Interest Period (if
applicable) of each Loan made by the Lender to Borrower and each payment made on
account of the principal thereof, shall be recorded by the Lender on its books
and, prior to any transfer of this Note, endorsed by the Lender on the schedule
attached hereto or any continuation thereof, provided that the failure of the
Lender to make any such recordation or endorsement shall not affect the
obligations of Borrower to make a payment when due of any amount owing under the
Credit Agreement or hereunder in respect of the Loans made by the Lender.
This Note is the promissory note representing the Term Loan Facility B
referred to in the Credit Agreement dated as of July 1, 1999 (as modified and
supplemented and in effect from time to time, the "Credit Agreement") between
Borrower, the Lender, as Administrative Agent, and the lenders from time to time
party to the Credit Agreement, and evidences Loans made by the Lender under Term
Loan Facility B thereunder. Terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Note upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.
Regardless of any provisions contained in this Note or in any other Loan
Documents, Lender shall never be deemed to have contracted for or be entitled to
receive, collect or apply as interest on the Loans, the Term Loan Facility B
Commitment or otherwise any amount in excess of the maximum rate of interest
permitted to be charged by applicable law, and if the Lender ever receives,
collects or applies as interest any such excess, or if acceleration of the
maturity of the Loans, the Term Loan Facility B Commitment or if any prepayment
by Borrower or any guarantor results in Borrower or any guarantor having paid
any interest in excess of such maximum rate, such amount which would be
excessive interest shall be applied to the reduction of the unpaid principal
balance of this Note for which such excess was received, collected or
applied, and, if the principal balances of this Note are paid in full, any
remaining excess shall forthwith be paid to Borrower or any guarantor. All sums
paid or agreed to be paid to the Lender for the use, forbearance or detention of
the indebtedness evidenced by this Note and/or the Credit Agreement shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until payment in full so
that the rate or amount of interest on account of such indebtedness does not
exceed the maximum lawful rate permitted under applicable law. In determining
whether or not the interest paid or payable under any specific contingency
exceeds the maximum rate of interest permitted by law, Lender shall, to the
maximum extent permitted under applicable law, (i) characterize any
non-principal payment as an expense, fee or premium, rather than as interest;
and (ii) exclude voluntary prepayments and the effect thereof; and (iii) compare
the total amount of interest contracted for, charged or received throughout the
entire contemplated term of this Note at the maximum lawful rate under
applicable law.
Borrower and each surety, endorser, guarantor and other party ever liable
for payment of any sums of money payable on this Note, jointly and severally
waive presentment and demand for payment, notice of intention to accelerate the
maturity, notice of acceleration of the maturity, protest, notice of protest and
nonpayment, and all other notices as to this Note and as to each and all
installments hereof, and agree that their liability under this Note shall not be
affected by any renewal or extension in the time of payment hereof, or in any
indulgences, or by any release or change in any security for the payment of this
Note, and hereby consent to any and all renewals, extensions, indulgences,
releases or changes.
This Note shall be governed by, and construed in accordance with, the
applicable laws of the United States of America and the substantive laws of the
State of Texas.
THIS WRITTEN NOTE, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
EXECUTED as of the date first written above.
TOPS SPECIALTY HOSPITAL, LTD.,
a Texas limited partnership
By: Texas Outpatient Surgicare Center, Inc.,
its Managing General Partner
By: ________________________________________
Name:_______________________________________
Title:______________________________________
SURVEY INSTRUCTIONS
The Survey shall be prepared by a Registered Land Surveyor or a licensed
engineer and shall (i) reflect the actual dimensions of the entirety of the Real
property, the number of square feet contained in the Real property (such total
area to be stated to the nearest 1/1000th of an acre), (ii) show the boundary
lines, dimensions and area of the land indicated thereon, (iii) locate all
easements, setback lines or other matters referred to in the Mortgagee Title
Policy and other matters of record affecting such land by recording reference
(with instrument, book and page number indicated), (iv) show all existing
improvements, highways, streets, roads, easements, right-of-way, setback lines,
encroachments, or overlaps located on or adjacent to the Land, and the outside
boundary lines and dimensions of any improvements located thereon, (v) set forth
a metes and bound description of the Real property, (vi) set forth the scale,
the north direction, the beginning point, and point of reference from which the
Real property is measured, (vii) include the surveyor's registered number and
seal, the date of the survey and a certificate satisfactory to Purchaser, (viii)
reflect that the Real property has access to and from a publicly dedicated
street, road, or highway, and include the names of adjacent streets and roads,
(ix) reflect that the Real property is not located within any flood plain (if
any portion of the Real property lies within a flood plain, disclose (a) type of
flood zone, (b) area of Real property lying within flood plain and (c) basis for
calculation), (x) show all septic tanks and fields, including all boundaries and
areas containing all septic distribution lines, (xi) locate any graveyards
located on or adjacent to the Real property, (xii) locate all water, oil and gas
xxxxx, pits and mines, whether or not active and (xiii) be sufficient to cause
the Title Company to delete, except for "shortages in area", the printed
exception for "discrepancies, conflicts or shortages in area or boundary lines,
or encroachments, or any overlapping of improvements" in the Mortgagee Title
Policy to be delivered pursuant to Section 4(b) hereof. The certificate of the
Survey shall be specifically addressed to both Administrative Agent, as agent
and Title Company verifying the above information.
The Survey shall contain a certification, signed by the surveyor, in
substantially the following form:
"The undersigned, _______________________, hereby certifies to
________________________ that the survey plat dated ________________________
prepared by the undersigned, of _________________________ and the property
description set forth thereon are true and correct and prepared from an actual
on-the-ground survey of the real property (the "Premises") shown thereon; such
survey conforms to the requirements of a Category 1A, Condition II Survey
according to the latest promulgated standards of the Texas Surveyor's
Association and shows: (i) the location of the perimeter of the Premises by
courses and distances, (ii) all easements affecting the Premises whether
benefiting or burdening same, rights-of-way and existing utility lines whether
recorded or if disclosed by a physical inspection of the Premises, (iii) a
calculation of the acreage of the Premises, (iv) any established building lines
or restrictions of record or other restrictions that have been established by
any applicable zoning ordinances or building code or ordinance, (v) the lines of
the public streets abutting the Premises and widths thereof, (vi) encroachments
and the extent thereof in
feet onto the Premises and all encroachments by any buildings, structures, or
improvements, located on the Premises onto any easements and onto property
adjacent to the Premises, (vii) all buildings, structures, and improvements,
whether existing or to the extent constructed, and any other physical matters on
the ground which may adversely affect the Premises or title thereto and the
relationship of such buildings, structures, improvements and other physical
matters by distances to the perimeter of the Premises, established building
lines and street lines, (viii) that there exists public dedicated means of
ingress and egress to and from the Premises provided by
___________________________, the same being maintained by
_________________________, (there is no intervening strip of land or gap of any
kind on the ground between (streets) and the Premises which is not owned by the
Seller) and that the Premises do not serve any adjoining property for ingress or
any other purpose, (ix) no portion of the Premises are located within the
100-year flood plain or flood hazard area as determined by a review of a stated
and identified Flood Hazard Boundary Map or Flood Hazard Rate Map published by
the Federal Insurance Administration of the U.S. Department of Housing and Urban
Development, and (x) if the Premises are described as being on a filed map, a
legend referencing the survey to such map."
Exhibit F
[Form of Compliance Certificate]
COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement dated July 1, 1999 (as modified
and supplemented and in effect from time to time, the "Credit Agreement"),
between TOPS SPECIALTY HOSPITAL, LTD., a Texas limited partnership ("Borrower'),
and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking association,
as Administrative Agent for the lenders from time to time party to the Credit
Agreement (in such capacity, together with its successors in such capacity, the
"Administrative Agent"). Terms defined in the Credit Agreement are used herein
as defined therein.
Pursuant to Section 5.01 of the Credit Agreement, the undersigned, the
__________ of Borrower, hereby certifies that, as of the Calculation Date (as
defined) herein:
(a) the representations and warranties contained in Article III of the
Credit Agreement are true and correct in all material respects on
and as of the date hereof with the same force and effect as though
made or as of the date hereof;
(b) no change in GAAP or in the application thereof has occurred since
the date of the audited financial statements referred to in Section
3.04 except as specifically disclosed on Annex I attached hereto,
which annex also specifies the effect of such change on Borrower's
financial statements;
(c) no Default or Event of Default has occurred and is continuing (or
the details of any such Default or Event of Default and any action
taken or proposed to be taken with respect thereto are specified on
Annex 1) or is imminent and Borrower has complied with all of the
terms, covenants and conditions set forth in the Credit Agreement;
and
(d) attached hereto as Annex 1 is a true and accurate calculation
setting forth, among other information, information that
demonstrates compliance (or noncompliance) with each of the
covenants set forth in Sections 6.01 (Indebtedness), 6.04
(Investments), 2.20(c) (Excess Cash Prepayment), 5.01 (financial
statements and other information), 5.13 (Fixed Charge Coverage
Ratio) and 5.14 (Indebtedness to EBITDA Ratio) of the Credit
Agreement.
This Compliance Certificate is subject to and shall be construed in
accordance with the terms of the Credit Agreement. Borrower hereby agrees and
acknowledges that in the event of a conflict between the terms of the Credit
Agreement and this Compliance Certificate, the terms of the Credit Agreement
shall govern and control.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed as of this ____ day of _____________________.
By: _________________________________
Name: _________________________________
Title: _________________________________
COMPLIANCE CERTIFICATE
OF TOPS SPECIALTY HOSPITAL, LTD.
As of __________, _____ (the "Calculation Date")
and for the period (the "Calculation Period") ending
on the Calculation Date
Calculation of Compliance with Section 6.01 -- Indebtedness
(A) Indebtedness-Section 6.01(c)
(i) Indebtedness permitted by Section 6.01(c): $___________
(ii) Is amount in Line (A)(i) less than or
equal to $300,000? Yes__ No__
(B) Indebtedness-Section 6.01(d)
(i) Indebtedness permitted by Section 6.01(d): $___________
(ii) Is amount in Line B(i) less than or equal
to $700,000? Yes__ No__
(iii) Was the Indebtedness incurred on or prior
to March 31, 2000? Yes__ No__
(C) Indebtedness-Section 6.01(e)
(i) Additional Indebtedness of Borrower at any
one time outstanding, not including
additional Indebtedness listed in Line A
or Line B above: $___________
(ii) Is amount in Line C(i) less than or equal
to $300,000? Yes__ No__
Has Borrower created, incurred or suffered
to exist, and permitted all of its
Subsidiaries to create, incur or suffer to
exist, only Indebtedness permitted under
Section 6.01? Yes__ No__
Calculation of Compliance with Section 6.04 -- Investments
(A) Permitted Investments. Sections 6.04 and 1.01
(i) Obligations unconditionally guaranteed by
the United States (or an agency thereof): $___________
(ii) Commercial paper maturing within 270 days
from the date of acquisition: $____________
(iii) Certificates of deposit, banker's
acceptances, demand deposits and time
deposits maturing within 180 days: $___________
(iv) Fully collateralized repurchase agreements
with a term not more than 30 days: $___________
(B) Has Borrower made or permitted to remain
outstanding and permitted all of its
Subsidiaries to make or permit to remain
outstanding, only such Investments permitted
under Section 6.04? Yes__ No___
Calculation of Compliance with Section 514 -- Maximum Indebtedness to EBITDA
Ratio
(A) Indebtedness of Borrower: $___________
(B) EBITDA of Borrower for the four most recently
completed fiscal quarters:
1. The first most recently completed fiscal
quarter: $___________
2. The second most recently completed fiscal
quarter: $___________
3. The third most recently completed fiscal
quarter: $___________
4. The fourth most recently completed fiscal
quarter: $___________
5. Total (1+2+3+4): $___________
(C) Indebtedness to EBITDA Ratio (ratio of amount in
Line (A) to amount in Line (B 5): $___________
Credit Agreement presently requires that the
Indebtedness to EBITDA Ratio be not less than: ________1.0
Covenant Satisfied _____________
Covenant Not Satisfied _________
Covenant Not Tested ____________
Calculation of Excess Cash Flow Prepayment -- Sections 2.20(c) and 1.01:
(Applies with respect to fiscal years ending _______________
and thereafter)
(A) EBITDA of Borrower the four most
recently completed fiscal quarters: $___________
(B) Taxes paid in the four most
recently completed fiscal quarters: $___________
(C) Cash interest expense payable in the four most
recently completed fiscal quarters: $___________
(D) Unfinanced Capital Expenditures made
and payable in the four most recently completed
fiscal quarters: $___________
(E) Capital Lease Obligations payable and
paid in the four most recently completed fiscal quarters: $___________
(F) Scheduled principal payments of the Loans made in the
four most recently completed fiscal quarters: $___________
(G) Prepayments of the Loans in the four most recently
completed fiscal quarters (except prepayments pursuant
to Section 2.20): $___________
(H) Other prepayments (required under sections 2.20(a), (b)
or (d)):
(I) Restricted Payments (as defined and determined by
Section 1.01 of the Credit Agreement): $___________
(J) Excess Cash Flow for the four most recently completed
fiscal quarters (equals Line (A), less Lines (B), (C),
(D), (E), (F), (G), (H) and (I)): $___________
(K) 50% of Excess Cash Flow (equals Line (J) divided by2): $___________
(L) Has the Borrower prepaid the Loans in the amount of at
least Line (K)? Yes ___ No ___
(M) If the answer to Line (L) is no, is the absence of
prepayment excused pursuant to Section 2.20(c)? Yes ___ No ___
Fixed Charge Coverage Ratio - Section 5.13.
(A) EBITDA for the four most recently completed fiscal
quarters: $___________
(B) Unfinanced Capital Expenditures made and payable in the
four most recently completed fiscal quarters: $___________
(C) Cash interest expense payable and paid in the four most
recently completed fiscal quarters: $___________
(D) Total amount of scheduled principal payments on the
Loans and other Indebtedness during the four most
recently completed fiscal quarters: $___________
(E) Restricted Payments (as defined in and determined by
Section 1.01 of the Credit Agreement) (except the
permitted Restricted Payment of $________ made on or
prior to the Effective Date, and a subsequent permitted
Restricted Payment of $__________ made within 90
calendar days after the Effective Date): $___________
(F) EBITDA minus unfinanced Capital Expenditures [(A)--
(B)]: $___________
(G) Cash interest expense plus scheduled principal payments
on the Loans and other Indebtedness plus
Restricted Payments [(C) + (D) + (E)]: $___________
(H) Ratio of Line (F) to Line (G): ______ to 1.0
(I) Credit Agreement presently requires that the Fixed
Charge Coverage Ratio be not less than: ______ 1.0
Covenant Satisfied ___________________
Covenant Not Satisfied _______________
Covenant Not Tested __________________
Compliance with Section 5.01 - Financial Statements
(A) Borrower has complied with all requirements of Section
5.01 of the Agreement: Yes __ No __
Restricted Payments
(A) Borrower has made Restricted Payments of $___________ in the aggregate
during the Calculation Period. Of such amount, Borrower distributed
$____________ in cash. The date(s) of such distribution(s) were
_______________.
(B) Borrower has made cumulative year-to-date distributions of $__________,
representing _______% (which does not exceed 50%) of Borrower's
year-to-date income.
(C) Borrower has made Restricted Payments, other than as distributed in Line
(A) immediately above, of $_______ in the aggregate during the Calculation
Period comprising the permitted Restricted Payment (pursuant to Section
1.01 of the Agreement) of $_________ on or prior to the Effective Date and
a subsequent permitted Restricted Payment (pursuant to Section 1.01 of the
Agreement) of $_________ made within 90 calendar days after the Effective
Date. Of such amount, Borrower distributed $___________ in cash. The
date(s) of such distribution(s) were _____________________.
