1
EXECUTION COPY
CREDIT AGREEMENT
Dated _______ __, 1997
among
AMERICAN PHYSICIAN PARTNERS, INC.,
as Borrower,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
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TABLE OF CONTENTS
PAGE
----
1. AMOUNT AND TERMS OF CREDIT .......................................... 1
1.1 Revolving Credit Facility .................................. 1
1.2 Letters of Credit .......................................... 4
1.3 Prepayments and Commitment Reductions ...................... 4
1.4 Use of Proceeds ............................................ 7
1.5 Interest and Applicable Margins ............................ 7
1.6 Fees ....................................................... 10
1.7 Receipt of Payments ........................................ 10
1.8 Application and Allocation of Payments ..................... 10
1.9 Loan Account and Accounting ................................ 11
1.10 Indemnity .................................................. 11
1.11 Access ..................................................... 12
1.12 Taxes ...................................................... 12
1.13 Capital Adequacy; Increased Costs; Illegality .............. 14
1.14 Single Loan ................................................ 16
2. CONDITIONS PRECEDENT ................................................ 16
2.1 Conditions to the Initial Loans ............................ 16
2.2 Further Conditions to Each Loan ............................ 17
3. REPRESENTATIONS AND WARRANTIES ...................................... 18
3.1 Existence; Compliance with Law ............................. 18
3.2 Executive Offices; FEIN .................................... 19
3.3 Corporate or Partnership Power,
Authorization, Enforceable
Obligations ............................................... 19
3.4 Financial Statements and Projections ....................... 20
3.5 Material Adverse Effect .................................... 20
3.6 Ownership of Property; Liens ............................... 21
3.7 Labor Matters .............................................. 21
3.8 Ventures, Subsidiaries and Affiliates;
Outstanding Stock and Indebtedness ........................ 22
3.9 Government Regulation ...................................... 22
3.10 Margin Regulations ......................................... 22
3.11 Taxes ...................................................... 22
3.12 ERISA ...................................................... 23
3.13 No Litigation .............................................. 24
3.14 Brokers .................................................... 24
3.15 Intellectual Property ...................................... 25
3.16 Full Disclosure ............................................ 25
3.17 Environmental Matters ...................................... 25
3.18 Insurance .................................................. 26
3.19 Intentionally Omitted ...................................... 26
3.20 Intentionally Omitted ...................................... 26
3.21 Intentionally Omitted ...................................... 26
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3.22 Agreements and Other Documents ............................. 26
3.23 Solvency ................................................... 26
3.24 Acquisition Agreement ...................................... 26
3.25 Intentionally Omitted ...................................... 27
3.26 Third Party Reimbursement .................................. 27
4. FINANCIAL STATEMENTS AND INFORMATION ................................ 27
4.1 Reports and Notices ........................................ 27
4.2 Communication with Accountants ............................. 27
5. AFFIRMATIVE COVENANTS ............................................... 28
5.1 Maintenance of Existence and Conduct of
Business................................................... 28
5.2 Payment of Obligations ..................................... 28
5.3 Books and Records .......................................... 29
5.4 Insurance .................................................. 29
5.5 Compliance with Laws ....................................... 29
5.6 Supplemental Disclosure .................................... 29
5.7 Intellectual Property ...................................... 30
5.8 Environmental Matters ...................................... 30
5.9 Landlords' Agreements, Mortgagee
Agreements and Bailee Letters.............................. 30
5.10 Intentionally Omitted ...................................... 30
5.11 Further Assurances ......................................... 30
5.12 Accreditation and Licensing ................................ 30
6. NEGATIVE COVENANTS .................................................. 31
6.1 Mergers, Subsidiaries, Etc.; Unrestricted
Subsidiaries............................................... 31
6.2 Investments; Loans and Advances ............................ 35
6.3 Indebtedness ............................................... 37
6.4 Employee Loans and Affiliate Transactions .................. 40
6.5 Business ................................................... 41
6.6 Intentionally Omitted ...................................... 41
6.7 Liens ...................................................... 41
6.8 Sale of Stock and Assets ................................... 41
6.9 ERISA ...................................................... 42
6.10 Financial Covenants ........................................ 42
6.11 Hazardous Materials ........................................ 42
6.12 Intentionally Omitted ...................................... 42
6.13 Intentionally Omitted ...................................... 42
6.14 Restricted Payments ........................................ 42
6.15 Change of Corporate Name or Location ....................... 43
6.16 No Impairment of Intercompany Transfers .................... 43
6.17 Intentionally Omitted ...................................... 43
6.18 Changes Relating to Subordinated Debt ...................... 43
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7. TERM ................................................................ 44
7.1 Termination ................................................ 44
7.2 Survival of Obligations Upon Termination
of Financing Arrangements ................................. 44
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES .............................. 44
8.1 Events of Default .......................................... 44
8.2 Remedies ................................................... 47
8.3 Waivers by Credit Parties .................................. 47
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT ................. 48
9.1 Assignment and Participations .............................. 48
9.2 Appointment of Agent ....................................... 50
9.3 Agent's Reliance, Etc ...................................... 50
9.4 GE Capital and Affiliates .................................. 51
9.5 Lender Credit Decision ..................................... 51
9.6 Indemnification ............................................ 51
9.7 Successor Agent ............................................ 52
9.8 Setoff and Sharing of Payments ............................. 52
9.9 Advances; Payments; Non-Funding Lenders;
Information ............................................... 53
10. SUCCESSORS AND ASSIGNS ............................................... 55
10.1 Successors and Assigns ..................................... 55
11. MISCELLANEOUS ........................................................ 56
11.1 Complete Agreement; Modification of Agreement .............. 56
11.2 Amendments and Waivers ..................................... 56
11.3 Fees and Expenses .......................................... 57
11.4 No Waiver .................................................. 58
11.5 Remedies ................................................... 59
11.6 Severability ............................................... 59
11.7 Conflict of Terms .......................................... 59
11.8 Confidentiality ............................................ 59
11.9 GOVERNING LAW .............................................. 60
11.10 Notices .................................................... 61
11.11 Section Titles ............................................. 61
11.12 Counterparts ............................................... 61
11.13 WAIVER OF JURY TRIAL ....................................... 61
11.14 Press Releases ............................................. 62
11.15 Reinstatement .............................................. 62
11.16 Advice of Counsel .......................................... 62
11.17 No Strict Construction ..................................... 62
11.18 No Third-Party Beneficiary ................................. 62
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INDEX OF APPENDICES
Exhibit 1.1(a) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(b) - Form of Revolving Note
Exhibit 1.1(c)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Responsible Individual
Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Schedule 3.2 - Executive Offices; FEIN
Schedule 3.4(A) - Financial Statements
Schedule 3.4(B) - Pro Forma
Schedule 3.4(C) - Projections
Schedule 3.6 - Real Estate and Leases
Schedule 3.7 - Labor Matters
Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding
Stock
Schedule 3.11 - Tax Matters
Schedule 3.12 - ERISA Plans
Schedule 3.13 - Litigation
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Hazardous Materials
Schedule 3.22 - Material Agreements
Schedule 5.1 - Trade Names
Schedule 5.4 - Insurance
Schedule 6.1(b) - Existing Permitted Joint Ventures
Schedule 6.3 - Indebtedness
Schedule 6.7 - Existing Liens
Schedule A-1 - List of Founding Radiology Practices and
Acquisition Agreements
Schedule A-19 - Prior Lender Obligations
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 2.1(a)) - Schedule of Additional Closing Documents
Annex D (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex E (Section 6.10) - Financial Covenants
Annex F (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex G (Section 11.10) - Notice Addresses
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CREDIT AGREEMENT, dated ________ __, 1997 among AMERICAN PHYSICIAN
PARTNERS, INC., a Delaware corporation ("Borrower"), and GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation (in its individual capacity, "GE
Capital"), for itself, as Lender, and as Agent for Lenders, and the other
Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Borrower desires that Lenders extend revolving credit
facilities to Borrower of up to One Hundred Fifteen Million Dollars
($115,000,000.00) in the aggregate for the purpose of refinancing certain
indebtedness of Borrower and the seven (7) radiology practices to be acquired
by the Borrower on the date hereof and to provide working capital financing for
Borrower and funds for other general corporate purposes of Borrower; and for
these purposes, Lenders are willing to make certain loans and other extensions
of credit to Borrower of up to such amount upon the terms and conditions set
forth herein; and
WHEREAS, Borrower desires to secure all of its obligations under the
Loan Documents by pledging to Agent, for the benefit of Agent and Lenders, all
of the issued and outstanding capital stock of Borrower's Subsidiaries and all
the Borrower's or any Subsidiary's right, title and interest in the equity of
any partnership, joint venture or other business organization and all
intercompany notes, and granting to Agent for the benefit of Agent and Lenders
a security interest in all Service Agreements; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A. All Annexes, Disclosure Schedules,
Exhibits and other attachments (collectively, "Appendices") hereto, or
expressly identified to this Agreement, are incorporated herein by reference,
and taken together, shall constitute but a single agreement. These Recitals
shall be construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 REVOLVING CREDIT FACILITY. (a) Subject to the terms and conditions
hereof, each Lender agrees to make available from time to time until the
Commitment Termination Date its Pro Rata Share of advances (each, a "Revolving
Credit Advance"). The Pro Rata Share of the Revolving Loan of any Lender shall
not at any time exceed its separate Revolving Loan Commitment. The obligations
of each Lender hereunder shall be several and not joint. The aggregate amount
of Revolving Credit Advances outstanding shall not exceed at any time the
lesser of (A) the Maximum Amount and (B) the Revolving Credit Availability, in
each case less the sum of the Letter of Credit Obligations and the Swing Line
Loan outstanding at such time ("Borrowing
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Availability"). Until the Availability Termination Date, Borrower may from time
to time borrow, repay and reborrow under this Section 1.1. Each Revolving
Credit Advance shall be made on notice by Borrower to the representative of
Agent identified on Schedule 1.1 at the address specified thereon. Those
notices must be given no later than (1) 2:00 p.m. (New York time) on the
Business Day prior to the date of the proposed Revolving Credit Advance, in the
case of an Index Rate Loan, or (2) 1:00 p.m. (New York time) on the date which
is three (3) Business Days prior to the proposed Revolving Credit Advance, in
the case of a LIBOR Loan. Each such notice (a "Notice of Revolving Credit
Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a), and shall include the information
required in such Exhibit and such other information as may be required by
Agent. If Borrower desires to have the Revolving Credit Advances bear interest
by reference to a LIBOR Rate, it must comply with Section 1.5(e).
(b) Borrower shall execute and deliver to each Lender a note to
evidence the Revolving Loan Commitment of that Lender. Each note shall be in
the principal amount of the Revolving Loan Commitment of the applicable Lender,
dated the Closing Date and substantially in the form of Exhibit 1.1(b) (each a
"Revolving Note" and, collectively, the "Revolving Notes"). Each Revolving Note
shall represent the obligation of Borrower to pay the amount of each Lender's
Revolving Loan Commitment or, if less, the applicable Lender's Pro Rata Share
of the aggregate unpaid principal amount of all Revolving Credit Advances to
Borrower together with interest thereon as prescribed in Section 1.5. The
entire unpaid balance of the Revolving Loan and all other noncontingent
Obligations shall be immediately due and payable in full in immediately
available funds on the Commitment Termination Date.
(c) SWING LINE FACILITY. (i) Agent shall notify the Swing Line Lender
upon Agent's receipt of any Notice of Revolving Credit Advance. Subject to the
terms and conditions hereof, the Swing Line Lender shall make available from
time to time until the Availability Termination Date advances (each, a "Swing
Line Advance") in accordance with any such notice to the extent that such
notice requests the Borrower to make such Advance as a Swing Line Advance. The
aggregate amount of Swing Line Advances outstanding shall not exceed the lesser
of (A) the Swing Line Commitment and (B) the Revolving Credit Availability less
the outstanding balance of the Revolving Loan and the Letter of Credit
Obligations at such time ("Swing Line Availability"). Until the Availability
Termination Date, Borrower may from time to time borrow, repay and reborrow
under this Section 1.1(c). Each Swing Line Advance shall be made pursuant to a
Notice of Revolving Credit Advance delivered by Borrower to Agent in accordance
with Section 1.1(a) which requests a Swing Line Advance. Those notices must be
given no later than 12:00 noon (New York time) on the Business Day of the
proposed Swing Line Advance. Notwithstanding any other provision of this
Agreement or the other Loan Documents, the Swing Line Loan shall constitute an
Index Rate Loan. Borrower shall repay the aggregate outstanding principal
amount of the Swing Line Loan (i) in the absence of the occurrence and
continuance of an Event of Default, within one Business Day following the Swing
Line Lender's demand therefor, and (ii) during the occurrence and continuance
of an Event of Default, upon demand therefor by the Swing Line Lender.
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(ii) Borrower shall execute and deliver to the Swing Line Lender a
promissory note to evidence the Swing Line Commitment. Such note shall be in
the principal amount of the Swing Line Commitment of the Swing Line Lender,
dated the Closing Date and substantially in the form of Exhibit 1.1(c)(ii) (the
"Swing Line Note"). The Swing Line Note shall represent the obligation of
Borrower to pay the amount of the Swing Line Commitment or, if less, the
aggregate unpaid principal amount of all Swing Line Advances made to Borrower
together with interest thereon as prescribed in Section 1.5. The entire unpaid
balance of the Swing Line Loan and all other non-contingent Obligations shall
be immediately due and payable in full in immediately available funds on the
Commitment Termination Date if not sooner paid in full.
(iii) REFUNDING OF SWING LINE LOANS. The Swing Line Lender, at any
time and from time to time in its sole and absolute discretion, may on behalf
of Borrower (and Borrower hereby irrevocably authorizes the Swing Line Lender
to so act on its behalf) request each Revolving Lender (including the Swing
Line Lender) to make a Revolving Credit Advance to Borrower (which shall be an
Index Rate Loan) in an amount equal to such Revolving Lender's Pro Rata Share
of the principal amount of the Swing Line Loan (the "Refunded Swing Line Loan")
outstanding on the date such notice is given. Unless any of the events
described in Sections 8.1(h) or 8.1(i) shall have occurred (in which event the
procedures of Section 1.1(c)(iv) shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of a Revolving
Credit Advance are then satisfied, each Revolving Lender shall disburse
directly to Agent, its Pro Rata Share of a Revolving Credit Advance on behalf
of the Swing Line Lender, prior to 3:00 p.m. (New York time), in immediately
available funds on the Business Day next succeeding the date such notice is
given. The proceeds of such Revolving Credit Advances shall be immediately paid
to the Swing Line Lender and applied to repay the Refunded Swing Line Loan.
(iv) PARTICIPATION IN SWING LINE LOANS. If, prior to refunding a Swing
Line Loan with a Revolving Credit Advance pursuant to Section 1.1(c)(iii), one
of the events described in Sections 8.1(h) or 8.1(i) shall have occurred, then,
subject to the provisions of Section 1.1(c)(v) below, each Revolving Lender
will, on the date such Revolving Credit Advance was to have been made for the
benefit of Borrower, purchase from the Swing Line Lender an undivided
participation interest in the Swing Line Loan in an amount equal to its Pro
Rata Share of such Swing Line Loan. Upon request, each Revolving Lender will
promptly transfer to the Swing Line Lender, in immediately available funds, the
amount of its participation and upon receipt thereof the Swing Line Lender will
deliver to such Revolving Lender a Swing Line Loan Participation Certificate,
substantially the form of Exhibit 1.1(c)(iv), dated the date of receipt of such
funds and in such amount.
(v) REVOLVING LENDERS' OBLIGATIONS UNCONDITIONAL. Each Revolving
Lender's obligation to make Revolving Credit Advances in accordance with
Section 1.1(c)(iii) and to purchase participating interests in accordance with
Section 1.1(c)(iv) shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which such Revolving Lender
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may have against the Swing Line Lender, Borrower or any other Person for any
reason whatsoever; (B) the occurrence or continuance of any Default or Event of
Default; (C) any inability of Borrower to satisfy the conditions precedent to
borrowing set forth in this Agreement on the date upon which such participating
interest is to be purchased or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any Revolving
Lender does not make available to Agent or the Swing Line Lender, as
applicable, the amount required pursuant to Section 1.1(c)(iii) or 1.1(c)(iv),
as the case may be, the Swing Line Lender shall be entitled to recover such
amount on demand from such Revolving Lender, together with interest thereon for
each day from the date of non-payment until such amount is paid in full at the
Federal Funds Rate for the first two Business Days and at the Index Rate
thereafter.
1.2 LETTERS OF CREDIT. Subject to and in accordance with the terms and
conditions contained herein and in Annex B, Borrower shall have the right to
request, and Lenders agree to incur, or purchase participations in, Letter of
Credit Obligations in respect of Borrower.
1.3 PREPAYMENTS AND COMMITMENT REDUCTIONS.
(a) VOLUNTARY COMMITMENT REDUCTIONS. Borrower may at any time on at
least fifteen (15) Business Days' prior written notice to Agent voluntarily and
permanently reduce or terminate the Revolving Loan Commitment; provided that
(A) any such partial reduction shall be in a minimum amount of $5,000,000 and
integral multiples of $250,000 in excess of such amount and (B) the Revolving
Loan Commitment shall not be reduced to an amount less than the L/C Sublimit
plus the Swing Line Commitment. Upon the effective date of any such termination
all Advances and other Obligations shall be immediately due and payable in
full. Any such voluntary reduction or termination of the Revolving Loan
Commitment must be accompanied by the payment, if any, required by Section
1.3(b)(i) below, plus any LIBOR funding breakage costs resulting therefrom in
accordance with Section 1.10(b). Each notice of partial reduction shall
designate whether such reduction shall apply to reduce the L/C Sublimit or the
Swing Line Commitment. Upon any such reduction or termination of the Revolving
Loan Commitment, Borrower's right to request Revolving Credit Advances, or
request that Letter of Credit Obligations be incurred on its behalf, or request
Swing Line Advances, shall simultaneously be permanently reduced or terminated,
as the case may be. Any voluntary prepayment made after the Availability
Termination Date shall be deemed a voluntary commitment reduction pursuant to
this Section and such reduction shall be applied against installments due under
Section 1.3(b)(iv) pro rata.
(b) Mandatory Prepayments and Commitment Reductions. (i) If at any
time the outstanding balance of the Revolving Loan exceeds the lesser of (A)
the Maximum Amount and (B) the Revolving Credit Availability, less, in each
case, the outstanding Swing Line Loan at such time, Borrower shall
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immediately repay the outstanding Revolving Credit Advances to the extent
required to eliminate such excess. If any such excess remains after repayment
in full of the aggregate outstanding Revolving Credit Advances, Borrower shall
provide cash collateral for the Letter of Credit Obligations in the manner set
forth in Annex B to the extent required to eliminate such excess.
(ii) (A) Immediately upon receipt by any Credit Party of proceeds of
any asset disposition (including condemnation proceeds, but excluding proceeds
of asset dispositions permitted by Section 6.8(a) or (b)), Borrower shall
prepay the Loans in an amount equal to the amount by which all such proceeds,
net of (1) commissions and other reasonable and customary transaction costs,
fees and expenses properly attributable to such transaction and payable by
Borrower in connection therewith (in each case, paid to non- Affiliates), (2)
transfer taxes, (3) amounts payable to holders of senior Liens (to the extent
such Liens constitute Permitted Encumbrances hereunder), if any, and (4) an
appropriate reserve for income taxes in accordance with GAAP in connection
therewith, exceeds one million five hundred thousand dollars ($1,500,000) in
any Fiscal Year; provided that such prepayments shall be made in increments of
$100,000 only (any amount not paid as a result of this requirement shall be
accumulated and paid when the aggregate amount of such accumulation shall meet
the required prepayment increment). For the purposes of this Section
1.3(b)(ii)(A) the Credit Parties shall not be deemed to have received proceeds
of any disposition permitted pursuant to Section 6.8(c) or (d) to the extent
that such proceeds are redeployed to replace the asset disposed of in the
manner and within the time period provided in such sections. To the extent that
such proceeds are not so redeployed within such time period, such proceeds
shall be deemed received by the Credit Parties upon the expiration of such
period. Any such prepayment shall be applied in accordance with clause (c)
below.
(B) Immediately upon receipt by any Credit Party of proceeds of any
sale of Stock or of all or substantially all of the assets of any Subsidiary or
Permitted Joint Venture in accordance with Section 6.8(e), the Borrower shall
prepay the Loans in an amount equal to all such proceeds, net of: (i)
commissions and other reasonable and customary transaction costs, fees and
expenses properly attributable to such transaction and payable by Borrower in
connection therewith (in each case, paid to non-Affiliates), (ii) transfer
taxes, (iii) amounts payable to holders of senior Liens (to the extent such
Liens constitute Permitted Encumbrances hereunder), if any, and (iv) an
appropriate reserve for income taxes in accordance with GAAP in connection
therewith.
(iii) If Borrower issues Stock or any Indebtedness, other than Stock
or Indebtedness issued as a part of the consideration for a Permitted
Acquisition and other than Indebtedness permitted pursuant to Section 6.3, then
no later than the Business Day following the date of receipt of the proceeds
thereof, Borrower shall prepay the Revolving Loan in an amount equal to all
such proceeds, net of underwriting discounts and commissions and other
reasonable costs paid to non-Affiliates in connection therewith. Any such
prepayment shall be applied in accordance with clause (c) below.
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(iv) Commencing on September 30, 2000 (the "Amortization Commencement
Date") and on the last business day of each Fiscal Quarter thereafter until the
Commitment Termination Date, the Borrower shall repay the Revolving Loan
outstanding in quarterly installments equal to the lesser of: (x) the
percentage of the aggregate principal amount of the Revolving Loan outstanding
on the Amortization Commencement Date set forth opposite the period in which
such fiscal quarter ends below and (y) the amount of Revolving Loan outstanding
concurrent on the date of such installment:
Period Percentage
------ ----------
September 30, 2000 7.50%
through
September 29, 2002
September 30, 2002 10.0%
and thereafter
(v) Notwithstanding anything else in this Agreement to the contrary,
all Obligations shall be due and payable, and all Letters of Credit (or standby
guarantees therefor) shall be cancelled or returned or cash collateralized in
accordance with Annex B, on the Commitment Termination Date.
(c) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS. Any prepayments made
by Borrower pursuant to clause (b)(ii) or (b)(iii) above shall be applied as
follows: first, to Fees and reimbursable expenses of Agent then due and payable
pursuant to any of the Loan Documents; second, to interest then due and payable
on the Swing Line Loan; third, to the principal balance of the Swing Line Loan
until the same shall have been repaid in full; fourth, to interest then due and
payable on the Revolving Credit Advances; fifth, to the outstanding principal
balance of Revolving Credit Advances until the same shall have been paid in
full; and sixth, to any Letter of Credit Obligations or to provide cash
collateral therefor in the manner set forth in Annex B, until all such Letter
of Credit Obligations have been fully cash collateralized or secured in the
manner set forth in Annex B.
(d) COMMITMENT REDUCTIONS. The Revolving Loan Commitment shall be
permanently reduced (i) to the amount of the aggregate outstanding principal
amount of the Revolving Loan on the Availability Termination Date, and (ii) by
the amount of any payment or prepayment pursuant to Sections 1.3(b)(ii), (iii)
or (iv) made subsequent to the Availability Termination Date. Any prepayments
described in clause (ii) of this subsection (d) that permanently reduce the
Revolving Loan Commitment shall be applied against installments due pursuant to
Section 1.3(b)(iv) in inverse order of the occurrence thereof. The Swing Line
Commitment shall terminate on the Availability Termination Date.
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(e) Nothing in this Section 1.3 shall be construed to constitute
Agent's or any Lender's consent to any transaction referred to in clauses
(b)(ii) or (b)(iii) above which is not permitted by other provisions of this
Agreement or the other Loan Documents.
1.4 USE OF PROCEEDS. Borrower shall utilize the proceeds of the
Revolving Loan and the Swing Line Loan solely for funding Permitted
Acquisitions, the Refinancing (and to pay any related transaction expenses),
and for the financing of Borrower's ordinary working capital, Capital
Expenditures and for other lawful purposes. Disclosure Schedule (1.4) contains
a description of Borrower's sources and uses of funds as of the Closing Date,
including Revolving Credit Advances and Letter of Credit Obligations to be made
or incurred on that date, and a funds flow memorandum detailing how funds from
each source are to be transferred to particular uses.
1.5 INTEREST AND APPLICABLE MARGINS. (a) Borrower shall pay interest
to Agent, (i) for the ratable benefit of Lenders in accordance with the
Revolving Credit Advances being made by each Lender, in arrears on each
applicable Interest Payment Date, at the Index Rate plus the Applicable
Revolver Index Margin per annum or, at the election of Borrower, the applicable
LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum, on the
aggregate Revolving Credit Advances outstanding from time to time, (ii) for the
benefit of the Swing Line Lender with respect to the Swing Line Loan, at the
Index Rate plus the Applicable Revolver Index Margin per annum, (A) in the
absence of the occurrence and continuance of an Event of Default, within one
Business Day following the Swing Line Lender's demand therefor, and (B) during
the occurrence and continuance of an Event of Default, upon demand therefor by
the Swing Line Lender.
The Applicable Revolver Index Margin, Applicable Revolver LIBOR Margin
and the Applicable L/C Margin will be 0.375%, 1.375% and 1.375% per annum,
respectively, as of the Closing Date. Commencing with the date that the
Borrower delivers consolidated quarterly Financial Statements for the first
Fiscal Quarter that ends at least six (6) months after the Closing Date, the
Applicable Margins will be adjusted (up or down) prospectively on a quarterly
basis based upon Borrower and its Restricted Subsidiaries' Senior Debt Leverage
Ratio for the applicable test period ended on the last day of such Fiscal
Quarter. Adjustments in Applicable Margins will be determined by reference to
the following grids:
If Senior Debt Level of
Leverage Ratio is Applicable Margins:
----------------- ------------------
Less Than 1.0 Level I
Greater Than
or Equal To 1.0,
but Less Than 2.0 Level II
Greater Than
or Equal To 2.0, Level III
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Applicable Margins
------------------
Level I Level II Level III
------- -------- ---------
Applicable Revolver 0.00% 0.375% 0.75%
Index Margin
Applicable Revolver 1.00% 1.375% 1.75%
LIBOR Margin
Applicable L/C 1.00% 1.375% 1.75%
Margin
All adjustments in the Applicable Margins based on the foregoing ratio
will be implemented quarterly on a prospective basis, for each calendar month
commencing at least five (5) days after the date of delivery to Lenders of the
quarterly unaudited or annual audited (as applicable) Financial Statements of
Borrower evidencing the need for an adjustment. Concurrently with the delivery
of those Financial Statements, Borrower shall deliver to Agent and Lenders a
certificate, signed by its chief financial officer, setting forth in reasonable
detail the basis for the continuance of, or any change in, the Applicable
Margins. If an Event of Default shall have occurred and be continuing, at the
election of the Agent (or upon the written request of the Requisite Lenders),
the Applicable Margins shall immediately increase to the highest level set
forth on the foregoing grid effective as of the initial date of such Event of
Default until the date on which such Event of Default is waived or cured.
(b) If any payment on any Obligation becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable
at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent on the basis of a three hundred and sixty (360)
day year, in each case for the actual number of days occurring in the period
for which such interest and Fees are payable. The Index Rate shall be
determined each day based upon the Index Rate as in effect each day. Each
determination by Agent of an interest rate hereunder shall be conclusive,
absent manifest error.
(d) So long as an Event of Default described in Section 8.1(a)
resulting from the failure to pay principal, interest or letter of credit fees
shall have occurred and be continuing (a "Payment Default"), and at the
election of Agent (or upon the written request of Requisite Lenders) confirmed
by written notice from Agent to Borrower, the interest rates applicable to the
Obligations and the Letter of Credit Fees shall be increased by two percentage
points (2%) per annum above the rates of interest or the rate of such Fees
("Default Rate"), and all outstanding Obligations shall bear interest at the
Default Rate applicable to such Obligations. Interest and Letter of Credit Fees
at the Default Rate shall accrue from the initial date of such Event of Default
until the date on which such Event of Default is cured or waived and shall be
payable upon demand.
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(e) So long as no Default or Event of Default shall have occurred and
be continuing, and subject to the additional conditions precedent set forth in
Section 2.2, Borrower shall have the option to: (i) request that any Revolving
Credit Advances be made as a LIBOR Loan, (ii) convert at any time all or any
part of outstanding Revolving Credit Advances from Index Rate Loans to LIBOR
Loans, (iii) convert any LIBOR Loan to an Index Rate Loan, subject to payment
of LIBOR breakage costs in accordance with Section 1.10(b) if such conversion
is made prior to the expiration of the LIBOR Period applicable thereto, or (iv)
continue all or any portion of any Revolving Credit Advances as a LIBOR Loan
upon the expiration of the applicable LIBOR Period and the succeeding LIBOR
Period of that continued LIBOR Loan shall commence on the last day of the LIBOR
Period of the Loan to be continued. The aggregate amount of Revolving Credit
Advances to be made or continued as, or converted into, a LIBOR Loan must be in
a minimum amount of $1,000,000 and integral multiples of $250,000 in excess of
such amount. Any such election must be made by 1:00 p.m. (New York time) on the
third (3rd) Business Day prior to (1) the date of any proposed Advance which is
to be made as part of a LIBOR Loan, (2) the end of each LIBOR Period with
respect to any LIBOR Loans to be continued as such, or (3) the date on which
Borrower wishes to convert any Index Rate Loan to a LIBOR Loan. If no election
is received with respect to a LIBOR Loan by 1:00 p.m. (New York time) on the
third (3rd) Business Day prior to the end of the LIBOR Period with respect
thereto (or if a Default or an Event of Default shall have occurred and be
continuing or the additional conditions precedent set forth in Section 2.2
shall not have been satisfied), that LIBOR Loan shall be converted to an Index
Rate Loan at the end of its LIBOR Period. Borrower must make such election by
notice to Agent in writing, by telecopy or overnight courier. In the case of
any conversion or continuation, such election must be made pursuant to a
written notice (a "Notice of Conversion/Continuation") in the form of Exhibit
1.5(e).
(f) Notwithstanding anything to the contrary set forth in this Section
1.5, if a court of competent jurisdiction determines in a final order that the
rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; PROVIDED, HOWEVER, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest which would have been received had
the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in
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Sections 1.5(a) through (e) above, unless and until the rate of interest again
exceeds the Maximum Lawful Rate, and at that time this paragraph shall again
apply. In no event shall the total interest received by any Lender pursuant to
the terms hereof exceed the amount which such Lender could lawfully have
received had the interest due hereunder been calculated for the full term
hereof at the Maximum Lawful Rate. If the Maximum Lawful Rate is calculated
pursuant to this paragraph, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made. If, notwithstanding the provisions of this
Section 1.5(f), a court of competent jurisdiction shall finally determine that
a Lender has received interest hereunder in excess of the Maximum Lawful Rate,
Agent shall, to the extent permitted by applicable law, promptly apply such
excess in the order specified in Section 1.8 and thereafter shall refund any
excess to Borrower or as a court of competent jurisdiction may otherwise order.
1.6 FEES. (a) Borrower shall pay to GE Capital, individually, the Fees
specified in that certain fee letter dated June 16, 1997, between Borrower and
GE Capital (the "GE Capital Fee Letter"), at the times specified for payment
therein.
(b) As additional compensation for the Lenders, Borrower agrees to pay
to Agent, for the ratable benefit of such Lenders, in arrears, on the first
Business Day of each Fiscal Quarter that occurs following the Closing Date and
prior to the Availability Termination Date and on the Availability Termination
Date, for each day from and including the Execution Date, to but excluding the
Availability Termination Date, a fee for the Lenders making available the
Revolving Credit Commitment in an amount equal to one quarter of one percent
(.25%) per annum (calculated on the basis of a 360 day year for actual days
elapsed) of the difference between (x) the Maximum Amount (as in effect from
time to time) and (y) the average for the period of the daily closing principal
balance of the Revolving Loan outstanding during the period for which such fee
is due.
1.7 RECEIPT OF PAYMENTS. Borrower shall make each payment under this
Agreement not later than 12:00 noon (New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing interest and Fees and determining Borrowing Availability or Net
Borrowing Availability as of any date, all payments shall be deemed received on
the day of receipt of immediately available funds therefor in the Collection
Account prior to 12:00 noon New York time. Payments received after 12:00 noon
New York time on any Business Day shall be deemed to have been received on the
following Business Day.
1.8 APPLICATION AND ALLOCATION OF PAYMENTS. So long as no Event of
Default shall have occurred and be continuing, (i) payments matching specific
scheduled payments then due shall be applied to those scheduled payments; (ii)
voluntary prepayments shall be applied as determined by Borrower, subject to
the last sentence of Section 1.3(a); and (iii) mandatory prepayments shall be
applied as set forth in Section 1.3. As to each other payment, and as to all
payments made when an Event of Default shall have
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occurred and be continuing or following the Commitment Termination Date,
Borrower hereby irrevocably waives the right to direct the application of any
and all payments received from or on behalf of Borrower, and Borrower hereby
irrevocably agrees that Agent shall have the continuing exclusive right to
apply any and all such payments against the Obligations as Agent may deem
advisable notwithstanding any previous entry by Agent in the Loan Account or
any other books and records. In the absence of a specific determination by
Agent with respect thereto, and except as provided above, payments shall be
applied to amounts then due and payable in the following order: (1) to Fees and
Agent's expenses reimbursable hereunder; (2) to interest on the Swing Line
Loan; (3) to principal payments on the Swing Line Loan; (4) to interest on the
Revolving Credit Advances and Letter of Credit Fees; (5) to principal payments
on the Revolving Credit Advances and to provide cash collateral for Letter of
Credit Obligations in the manner described in Annex B, ratably to the
aggregate, combined principal balance of the Advances and outstanding Letter of
Credit Obligations; and (6) to all other Obligations including expenses of
Lenders to the extent reimbursable under Section 11.3.
1.9 LOAN ACCOUNT AND ACCOUNTING. Agent shall maintain a loan account
(the "Loan Account") on its books to record: (a) all Advances and Letter of
Credit Obligations, (b) all payments made by Borrower, and (c) all other debits
and credits as provided in this Agreement with respect to the Loans or any
other Obligations. All entries in the Loan Account shall be made in accordance
with Agent's customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded on Agent's most recent printout or
other written statement, shall be presumptive evidence of the amounts due and
owing to Agent and Lenders by Borrower; provided that any failure to so record
or any error in so recording shall not limit or otherwise affect Borrower's
duty to pay the Obligations. Agent shall render to Borrower a monthly
accounting of transactions with respect to the Revolving Loan setting forth the
balance of the Loan Account. Unless Borrower notifies Agent in writing of any
objection to any such accounting (specifically describing the basis for such
objection), within thirty (30) days after the Borrower's receipt thereof, each
and every such accounting shall (absent manifest error) be deemed final,
binding and conclusive upon Borrower in all respects as to all matters
reflected therein. Only those items expressly objected to in such notice shall
be deemed to be disputed by Borrower.
1.10 INDEMNITY. (a) Whether or not any Advance is ever made or Letter
of Credit ever issued hereunder, Borrower shall indemnify and hold harmless
each of Agent, the L/C Issuers, Lenders and their respective Affiliates, and
each such Person's respective officers, directors, employees, attorneys, agents
and representatives (each, an "Indemnified Person"), from and against any and
all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses (including attorneys' fees and disbursements and other costs of
investigation or defense, including those incurred upon any appeal) which may
be instituted or asserted against or incurred by any such Indemnified Person as
the result of credit having been extended, suspended or terminated under this
Agreement and the other Loan Documents or the administration of such credit, or
the execution, delivery or performance of the Loan Documents, or otherwise in
connection with or arising out of the transactions contemplated hereunder
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and thereunder (including, without limitation, the IPO, any Acquisition or
Permitted Acquisition) and any actions or failures to act in connection
therewith, including any and all Environmental Liabilities and legal costs and
expenses arising out of or incurred in connection with disputes between or
among any parties to any of the Loan Documents (collectively, "Indemnified
Liabilities"); provided, that Borrower shall not be liable for any
indemnification to an Indemnified Person to the extent that any such suit,
action, proceeding, claim, damage, loss, liability or expense results from that
Indemnified Person's gross negligence or willful misconduct, as finally
determined by a court of competent jurisdiction. NO INDEMNIFIED PERSON SHALL BE
RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR,
ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON
ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A
RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to
the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or is
the result of acceleration, by operation of law or otherwise); (ii) Borrower
shall default in payment when due of the principal amount of or interest on any
LIBOR Loan; (iii) Borrower shall default in making any borrowing of, conversion
into or continuation of LIBOR Loans after Borrower has given notice requesting
the same in accordance herewith; or (iv) Borrower shall fail to make any
prepayment of a LIBOR Loan after Borrower has given a notice thereof in
accordance herewith, then Borrower shall indemnify and hold harmless each
Lender from and against all losses, costs and expenses resulting from or
arising from any of the foregoing. Such indemnification shall include any loss
(including loss of margin) or expense arising from the reemployment of funds
obtained by it or from fees payable to terminate deposits from which such funds
were obtained. For the purpose of calculating amounts payable to a Lender under
this subsection, each Lender shall be deemed to have actually funded its
relevant LIBOR Loan through the purchase of a deposit bearing interest at the
LIBOR Rate in an amount equal to the amount of that LIBOR Loan and having a
maturity comparable to the relevant Interest Period; provided, however, that
each Lender may fund each of its LIBOR Loans in any manner it sees fit, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this subsection. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder. As promptly as practicable under the circumstances, each Lender
shall provide Borrower with its written calculation of all amounts payable
pursuant to this Section 1.10(b), and such calculation shall be binding on the
parties hereto unless Borrower shall object in writing within ten (10) Business
Days of receipt thereof, specifying the basis for such objection in detail.
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1.11 ACCESS. Borrower and each of its Subsidiaries shall, during
normal business hours, from time to time upon five (5) Business Days' prior
notice as frequently as Agent reasonably determines to be appropriate: (a)
provide Agent and any of its officers, employees and agents access to its
properties, facilities, advisors and employees (including officers) and (b)
permit Agent, and any of its officers, employees and agents, to inspect, audit
and make extracts from its books and records. If an Event of Default shall have
occurred and be continuing, each of the Borrower and its Subsidiaries shall
provide such access to Agent at all times and without advance notice.
1.12 TAXES. (a) Any and all payments by Borrower hereunder or under
the Notes shall be made, in accordance with this Section 1.12, free and clear
of and without deduction for any and all present or future Taxes. If Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under the Notes, (i) the sum payable shall be increased as
much as shall be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
1.12) Agent, the L/C Issuers or Lenders, as applicable, receive an amount equal
to the sum they would have received had no such deductions been made, (ii)
Borrower shall make such deductions, and (iii) Borrower shall pay the full
amount deducted to the relevant taxing or other authority in accordance with
applicable law. Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Agent the original or a certified copy of a receipt
evidencing payment thereof.
(b) Borrower shall indemnify and, within ten (10) days of demand
therefor, pay Agent, each L/C Issuer and each Lender for the full amount of
Taxes (including any Taxes imposed by any jurisdiction on amounts payable under
this Section 1.12) paid by Agent, such L/C Issuer or such Lender, as
appropriate, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction outside the
United States (a "Foreign Lender") as to which payments to be made under this
Agreement or under the Notes are exempt from United States withholding tax
under an applicable statute or tax treaty shall provide to Borrower and Agent a
properly completed and executed IRS Form 4224 or Form 1001 or other applicable
form, certificate or document prescribed by the IRS or the United States
certifying as to such Foreign Lender's entitlement to such exemption (a
"Certificate of Exemption"). Any foreign Person that seeks to become a Lender
under this Agreement shall provide a Certificate of Exemption to Borrower and
Agent prior to becoming a Lender hereunder. No foreign Person may become a
Lender hereunder if such Person is unable to deliver a Certificate of
Exemption.
(d) Each Lender also agrees to deliver to Borrower and the Agent such
other supplemental forms as may at any time be required as a result of the
passage of time or changes in applicable law or regulation in order to confirm
or maintain in effect its entitlement to exemption from U.S. withholding tax on
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any payments hereunder, provided, that the circumstances of the Lender at the
relevant time and applicable laws permit it to do so. If a Lender determines,
as a result of any change in either (1) applicable law, regulation or treaty,
or in any official application thereof or (2) its circumstances, that it is
unable to submit any form or certificate that it is obligated to submit
pursuant to this Section 1.12(d), or that it is required to withdraw or cancel
any such form or certificate previously submitted, it shall promptly notify the
Lender and the Agent of such fact. If a Lender is organized under the laws of a
jurisdiction outside the United States, and Borrower and the Agent have not
received forms, certificates or other instruments indicating to their
satisfaction that all payments to be made to such Lender hereunder are not
subject to U.S. withholding tax, Borrower shall withhold taxes from such
payments at the applicable statutory rate. Each Lender shall indemnify and hold
Borrower and the Agent harmless from any United States taxes, penalties,
interest and other expenses, costs and losses incurred or payable by them as a
result of either (A) such Lender's failure to submit any form or certificate
that it is required to provide pursuant to this Section 1.12(d) or (B) reliance
by Borrower or the Agent on any such form or certificate which such Lender has
provided to them pursuant to this Section 1.12(d), but in the case of (B), only
to the extent accrued or incurred with respect to payments made prior to such
certificate being withdrawn.
1.13 CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY. (a) If the Agent,
any L/C Issuer or any Lender shall have determined that the adoption after the
date hereof of any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy, reserve requirements
or similar requirements or compliance by the Agent, any L/C Issuer or any
Lender after the date hereof with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law) from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital,
reserves or other funds required to be maintained by the Agent, such L/C Issuer
or such Lender and thereby reducing the rate of return on such Person's capital
as a consequence of its obligations hereunder, then Borrower shall from time to
time upon demand by such Person (with a copy of such demand to Agent) pay to
Agent, for the account of such Person, additional amounts sufficient to
compensate such Person for such reduction but only to the extent that such
Person reasonably determines such increase in capital to be allocable to the
existence of such Person's Commitment, Loans or interest in Letter of Credit
Obligations hereunder and similar amounts are being charged generally to other
companies with similar commitments from such Person. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Person to Borrower and to Agent shall, absent manifest error,
be final, conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in any law
or regulation (or any change in the interpretation thereof) after the date
hereof or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law)
after the date hereof, there shall be any increase in the cost to any Lender or
L/C Issuer of agreeing to make or making, funding or maintaining any Advance
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or of agreeing to issue or purchase a participation interest in or in issuing
or purchasing a participation interest in any Letter of Credit or Letter of
Credit Obligation, then Borrower shall from time to time, upon demand by such
Lender or L/C Issuer (with a copy of such demand to Agent), pay to Agent for
the account of such Lender or L/C Issuer additional amounts sufficient to
compensate such Lender or L/C Issuer for such increased cost. A certificate as
to the amount of such increased cost, submitted to Borrower and to Agent by
such Lender or L/C Issuer, shall be conclusive and binding on Borrower for all
purposes, absent manifest error. Each Lender or L/C Issuer agrees that, as
promptly as practicable after it becomes aware of any circumstances referred to
above which would result in any such increased cost, the affected Lender or L/C
Issuer shall, to the extent not inconsistent with such Lender's or L/C Issuer's
internal policies of general application, use reasonable commercial efforts to
minimize costs and expenses incurred by it and payable to it by Borrower
pursuant to this Section 1.13(b).
(c) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change after the date hereof in any law or regulation
(or any change after the date hereof in the interpretation thereof) shall make
it unlawful, or any central bank or other Governmental Authority shall assert
that it is unlawful, for any Lender to agree to make or to make or to continue
to fund or maintain any LIBOR Loan, then, unless that Lender is able to make or
to continue to fund or to maintain such LIBOR Loan at another branch or office
of that Lender without, in that Lender's sole good faith determination,
adversely affecting it or its Loans or the income obtained therefrom, on notice
thereof and demand therefor by such Lender to Borrower through Agent, (i) the
obligation of such Lender to agree to make or to make or to continue to fund or
maintain LIBOR Loans shall terminate and (ii) Borrower shall forthwith prepay
in full all outstanding LIBOR Loans owing to such Lender, together with
interest accrued thereon, unless Borrower, within five (5) Business Days after
the delivery of such notice and demand, converts all such Loans into Advances
bearing interest based on the Index Rate.
(d) REPLACEMENT OF LENDER IN RESPECT OF INCREASED COSTS. Within
fifteen (15) days after receipt by Borrower of written notice and demand from
any Lender (an "Affected Lender") for payment of additional amounts or
increased costs as provided in Section 1.12(a), 1.12(b), 1.13(a) or 1.13(b),
Borrower may, at its option, notify Agent and such Affected Lender of its
intention to replace the Affected Lender. So long as no Default or Event of
Default shall have occurred and be continuing, Borrower, with the consent of
Agent, may obtain, at Borrower's expense, a replacement Lender ("Replacement
Lender") for the Affected Lender, which Replacement Lender must be satisfactory
to Agent. If Borrower obtains a Replacement Lender within ninety (90) days
following notice of its intention to do so, the Affected Lender must sell and
assign its Advances, its interest in the Letter of Credit Obligations and
Commitments to such Replacement Lender for an amount equal to the principal
balance of the Revolving Loan held by the Affected Lender and all accrued
interest and Fees with respect thereto through the date of such sale, provided
that Borrower shall have reimbursed such Affected Lender for the additional
amounts or increased costs that it is entitled to receive under this Agreement
through the date of such sale and assignment.
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Notwithstanding the foregoing, Borrower shall not have the right to obtain a
Replacement Lender if the Affected Lender rescinds its demand for increased
costs or additional amounts within fifteen (15) days following its receipt of
Borrower's notice of intention to replace such Affected Lender. Furthermore, if
Borrower gives a notice of intention to replace and does not so replace such
Affected Lender within ninety (90) days thereafter, Borrower's rights under
this Section 1.13(d) shall terminate.
(e) Each Lender will notify Borrower of any event occurring after the
date of this Agreement which will entitle such Lender to compensation pursuant
to this Section 1.13 as promptly as practicable, and in any event within ninety
(90) days, after such Lender obtains knowledge of the occurrence of such event.
In no event will Borrower be obligated to compensate any Lender pursuant to
this Section 1.13 for any amounts described in clauses (a) or (b) above that
accrued more than ninety (90) days prior to the date that delivery of such
notice was required.
1.14 SINGLE LOAN. All Advances to Borrower, all Letter of Credit
Obligations and all of the other Obligations of Borrower arising under this
Agreement and the other Loan Documents shall constitute one general obligation
of Borrower secured, until the Termination Date, by all of its Collateral.
2. CONDITIONS PRECEDENT
2.1 CONDITIONS TO THE INITIAL LOANS.
No Lender shall be obligated to make any Loan and none of the Lenders,
the Agent or any L/C Issuer shall be required to incur any Letter of Credit
Obligations on the Closing Date, or to take, fulfill, or perform any other
action hereunder, until the following conditions have been satisfied or
provided for in a manner satisfactory to Agent, or waived in writing by Agent
and the Lenders:
(a) CREDIT AGREEMENT; LOAN DOCUMENTS. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, Borrower, Agent and
Lenders; and Agent shall have received such documents, instruments, agreements
and legal opinions as Agent shall request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, including all
those listed in the Closing Checklist attached hereto as Annex C, each in form
and substance satisfactory to Agent.
(b) Repayment of Prior Lender Obligations; Satisfaction of Outstanding
L/Cs. (i) Agent shall have received a fully executed original of a pay-off
letter satisfactory to Agent confirming that, except as contemplated on
Schedule 6.3, all of the Prior Lender Obligations will be repaid in full from
the proceeds of the initial Revolving Credit Advance and all Liens upon any of
the property of Borrower or any of its Subsidiaries in favor of Prior Lender
shall be terminated by Prior Lender immediately upon such payment; and (ii) all
letters of credit issued or guaranteed by Prior Lender shall have been
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cash collateralized, supported by a guaranty of Agent or supported by a Letter
of Credit issued pursuant to Annex B, as mutually agreed upon by Agent,
Borrower and Prior Lender.
(c) APPROVALS. Agent shall have received (i) satisfactory evidence
that the Credit Parties have obtained all required consents and approvals of
all Persons including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Loan Documents and the
consummation of the Related Transactions or (ii) an officer's certificate in
form and substance satisfactory to Agent affirming that no such consents or
approvals are required.
(d) PAYMENT OF FEES. Borrower shall have paid the Fees required to be
paid on the Closing Date in the respective amounts specified in Section 1.6
(including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Agent for all reasonable fees, costs and expenses of closing
presented as of the Closing Date.
(e) CAPITAL STRUCTURE: OTHER INDEBTEDNESS. The capital structure of
Borrower and each of its Subsidiaries and the terms and conditions of all
Indebtedness of such Credit Party shall be consistent with the Borrower's prior
written disclosures to the Agent, or otherwise acceptable to Agent in its sole
discretion.
(f) CONSUMMATION OF RELATED TRANSACTIONS. Agent shall have received
fully executed copies of the Acquisition Agreements and each of the other
Related Transactions Documents, each of which shall be in form and substance
satisfactory to Agent and its counsel. The Acquisition and the other Related
Transactions shall have been consummated in accordance with the terms of each
Acquisition Agreement and the other Related Transactions Documents and the
Borrower shall have received on the Closing Date at least $60,000,000 of net
cash proceeds from the sale of its common stock in an initial registered
offering of its common stock (the "IPO") and shall have paid the Founder's
Closing Date Payment.
2.2 FURTHER CONDITIONS TO EACH LOAN. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Advance, convert or
continue any Advance as a LIBOR Loan or incur any Letter of Credit Obligation,
and no L/C Issuer shall be required to issue any Letter of Credit if, as of the
date thereof:
(a) Any representation or warranty by any Credit Party contained
herein or in any of the other Loan Documents shall be untrue or incorrect as of
such date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly permitted
or expressly contemplated by this Agreement; or
(b) Any event or circumstance having a Material Adverse Effect shall
have occurred since the date hereof; or
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(c) (i) Any Event of Default shall have occurred and be continuing or
would result after giving effect to any Advance or the incurrence of any Letter
of Credit Obligation, or (ii) a Default shall have occurred and be continuing
or would result after giving effect to any Advance, and Requisite Lenders shall
have determined not to make any Advance or incur any Letter of Credit
Obligation so long as that Default is continuing; or
(d) After giving effect to any Advance or the incurrence of any Letter
of Credit Obligation, the outstanding principal amount of the Revolving Loan
would exceed the lesser of the Revolving Credit Availability and the Maximum
Amount, less, in each case, the then outstanding principal amount of the Swing
Line Loan; or
(e) After giving effect to any Swing Line Advance, the outstanding
principal amount of the Swing Line Loan would exceed the Swing Line
Availability.
The request and acceptance by Borrower of the proceeds of any Advance, the
incurrence, or request for the incurrence of any Letter of Credit Obligations
or the conversion or continuation of any Loan into, or as, a LIBOR Loan or any
request therefor, as the case may be, shall be deemed to constitute, as of the
date of such request or acceptance, (i) a representation and warranty by
Borrower that the conditions in this Section 2.2 have been satisfied and (ii) a
reaffirmation by Borrower of the granting and continuance of Agent's Liens, on
behalf of itself and Lenders, pursuant to the Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to induce the Lenders and the
L/C Issuers to incur Letter of Credit Obligations, the Borrower makes the
following representations and warranties to Agent, the L/C Issuers and each
Lender, each and all of which shall survive the execution and delivery of this
Agreement.
3.1 EXISTENCE; COMPLIANCE WITH LAW. (a) Each Credit Party (i) is a
corporation or partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation; (ii) is duly
qualified to conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification except where the failure to be so
qualified or to be in good standing, individually or when aggregated with all
such failures, has not had and could not reasonably be expected to have or
result in a Material Adverse Effect; (iii) has the requisite corporate or
partnership power and authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the property it
operates under lease and to conduct its business as now, heretofore and
proposed to be conducted; (iv) has all licenses, permits, consents or approvals
from or by, and has made all filings with, and has given all notices to, all
Governmental Authorities having
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jurisdiction, to the extent required for such ownership, operation and conduct,
except, in each case, to the extent that the failure to have such licenses,
permits, consents or approvals or to make such filings or give such notices,
individually or in the aggregate, has not had and could not reasonably be
expected to have or result in a Material Adverse Effect; (v) is in compliance
with its charter and by-laws; and (vi) subject to specific representations set
forth herein regarding ERISA, Environmental Laws, tax and other laws, is in
compliance with all applicable provisions of law, except where the failure to
comply, individually or in the aggregate, has not had and could not reasonably
be expected to have or result in a Material Adverse Effect.
(b) To the Borrower's knowledge, each Managed Practice has all
licenses, permits, consents or approvals from or by, and has made all filings
with, and has given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for the ownership of its property and the
operation and conduct of its business (including, as applicable,
accreditations, licenses and certifications as a provider of health care
services including those necessary for it to be eligible to receive payment and
compensation and to participate under Medicare, Medicaid, CHAMPUS or CHAMPVA or
any Blue Cross/Blue Shield or equivalent program) and is in compliance with all
of the foregoing and all applicable laws relating to its business, except, in
each case, to the extent that the failure to have such licenses, permits,
consents or approvals or to make such filings or give such notices or to be in
such compliance, individually or in the aggregate, has not had and could not
reasonably be expected to have or result in a Material Adverse Effect.
3.2 EXECUTIVE OFFICES; FEIN. As of the Closing Date, the current
location of each Credit Party's chief executive office and principal place of
business is set forth in Disclosure Schedule (3.2) and none of such locations
have changed within the twelve (12) months preceding the Closing Date. In
addition, Disclosure Schedule (3.2) lists the federal employer identification
number of each Credit Party.
3.3 CORPORATE OR PARTNERSHIP POWER, AUTHORIZATION, ENFORCEABLE
OBLIGATIONS. (a) The execution, delivery and performance by each Credit Party
of the Related Transaction Documents to which it is a party and the creation of
all Liens provided for therein: (i) are within such Person's corporate or
partnership power; (ii) have been duly authorized by all necessary or proper
corporate and shareholder action or partnership action; (iii) do not contravene
any provision of such Person's charter or bylaws or other organizational
documents; (iv) do not violate any law or regulation, or any order or decree of
any court or Governmental Authority; (v) do not conflict with or result in the
breach or termination of, constitute a default under or accelerate or permit
the acceleration of any performance required by, any indenture, mortgage, deed
of trust, lease, agreement or other instrument to which such Person is a party
or by which such Person or any of its property is bound; (vi) do not result in
the creation or imposition of any Lien upon any of the property of such Person
other than those in favor of Agent, on behalf of itself and Lenders, pursuant
to the Loan Documents; and (vii) do not require the consent or approval of any
Governmental Authority or any other Person, except those referred to in Section
2.1(c),
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all of which will have been duly obtained, made or complied with prior to the
Closing Date. On or prior to the Execution Date the Credit Agreement and on or
prior to the Closing Date each of the other Loan Documents, shall have been
duly executed and delivered by each Credit Party thereto and each such Loan
Document shall then constitute a legal, valid and binding obligation of such
Person enforceable against it in accordance with its terms.
(b) Each Service Agreement, and each of the transactions contemplated
thereunder does not violate any applicable rule or regulation: (i) relating to
the eligibility of a Managed Practice to receive payment and to participate as
an accredited and certified provider of health care services under Medicare,
Medicaid, CHAMPUS, CHAMPVA or any Blue Cross/Blue Shield or equivalent program,
(ii) applicable to such Person as a result of its participation in such
programs, (iii) relating to the licenses and permits required therein in
connection therewith, or (iv) relating to the practice of medicine or the
sharing of fees generated in connection therewith; except in each case ((i),
(ii), (iii) and (iv)), for such violations, as individually or in the aggregate
with all such events, have not had and could not reasonably be expected to have
or result in a Material Adverse Effect.
3.4 FINANCIAL STATEMENTS AND PROJECTIONS. Except for the Projections,
all Financial Statements concerning Borrower and its Subsidiaries or any
Founding Radiology Practice which are referenced below have been prepared in
accordance with GAAP consistently applied throughout the periods covered
(except as disclosed therein and except, with respect to unaudited Financial
Statements, for the absence of footnotes and normal year-end audit adjustments)
and present fairly in all material respects the financial position of the
Persons covered thereby as at the dates thereof and the results of their
operations and cash flows for the periods then ended.
(a) The Financial Statements listed on Disclosure Schedule (3.4(A))
have been delivered on the date hereof.
(b) PRO FORMA. The Pro Forma delivered on the date hereof and
described on Disclosure Schedule (3.4(B)) was prepared by Borrower giving pro
forma effect to the Related Transactions, was based on the unaudited
consolidated and consolidating balance sheets described on such Disclosure
Schedule 3.4(B) was prepared in accordance with GAAP, with only such
adjustments thereto as would be required in accordance with GAAP.
(c) PROJECTIONS. The Projections delivered on the date hereof and
described on Disclosure Schedule (3.4(C)) have been prepared by Borrower in
light of the past operations of its businesses and the businesses of the
Founding Radiology Practices, but including future payments of known contingent
liabilities and reflect projections for the five (5) year period beginning on
January 1, 1997, on an annual basis. The Projections are based upon estimates
and assumptions stated therein, all of which Borrower believes to be reasonable
and fair in light of current conditions and current facts known to Borrower
and, as of the Closing Date, reflect Borrower's good faith and reasonable
estimates of the future financial performance of Borrower and of the other
information projected therein for the period set forth therein.
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3.5 MATERIAL ADVERSE EFFECT. Between December 31, 1996 and the Closing
Date, (a) neither the Borrower nor any of its Subsidiaries has incurred any
obligations, contingent or non-contingent liabilities, liabilities for Charges,
long-term leases or unusual forward or long-term commitments which are not
reflected in the Pro Forma and which, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (b) no contract,
lease or other agreement or instrument has been entered into by the Borrower or
any of its Subsidiaries or has become binding upon any such Person's assets and
no law or regulation applicable to the Borrower or any of its Subsidiaries has
been adopted which has had or could reasonably be expected to have a Material
Adverse Effect, and (c) neither the Borrower nor any of its Subsidiaries is in
default and to the best of Borrower's knowledge no third party is in default
under any material contract, lease or other agreement or instrument, which
alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. None of the Borrower, any of its Subsidiaries, any Permitted
Joint Venture or (to the knowledge of Borrower) any Managed Practice has
received notification from any Governmental Authority that any such
Governmental Authority has taken or intends to take action to revoke, terminate
or adversely amend any license, certificate, certification or permit of such
Person to engage in the practice of medicine, to operate a healthcare facility
or to participate under Medicare, Medicaid, CHAMPUS or CHAMPVA, which
revocation, termination or amendment, singly or in the aggregate, with all
other such events, could reasonably be expected to have or result in a Material
Adverse Effect. Since December 31, 1996 no event has occurred, which alone or
together with other events, has had, or could reasonably be expected to have or
result in a Material Adverse Effect.
3.6 OWNERSHIP OF PROPERTY; LIENS. As of the Closing Date, the real
estate ("Real Estate") listed on Disclosure Schedule (3.6) constitutes all of
the real property owned, leased, subleased, or used by any Credit Party. Each
Credit Party owns good and indefeasible fee simple title to all of its owned
real estate, and valid and subsisting leasehold interests in all of its leased
Real Estate, all as described on Disclosure Schedule (3.6). Disclosure Schedule
(3.6) further describes any Real Estate with respect to which any Credit Party
is a lessor, sublessor or assignor as of the Closing Date. Each Credit Party
also has good and indefeasible title to, or valid leasehold interests in, all
of its personal properties and assets. As of the Closing Date, none of the
properties and assets of any Credit Party is subject to any Liens other than
Permitted Encumbrances, and there are no facts, circumstances or conditions
known to the Borrower that may result in any Liens (including Liens arising
under Environmental Laws) other than Permitted Encumbrances.
3.7 LABOR MATTERS. As of the Closing Date (a) no strikes or other
material labor disputes against any Credit Party or, to the Borrower's
knowledge, any Founding Radiology Practice are pending or, to the Borrower's
knowledge, threatened; (b) hours worked by and payment made to employees of
each Credit Party and, to the Borrower's knowledge, the Founding Radiology
Practices comply with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matter, except for such non
compliances as, singly or in the aggregate, have not had and could not
reasonably be expected to have or result in a Material Adverse Effect; (c) all
payments due from any Credit Party or, to
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the Borrower's knowledge, any Founding Radiology Practice for employee health
and welfare insurance have been paid or accrued as a liability on the books of
such Person, except for such non- payments or non-accruals as, individually or
in the aggregate, have not had and could not reasonably be expected to have or
result in a Material Adverse Effect; (d) except as set forth in Disclosure
Schedule (3.7), no Credit Party or, to the Borrower's knowledge, any Founding
Radiology Practice is a party to or bound by any collective bargaining
agreement, management agreement, consulting agreement or any material
employment agreement (and true and complete copies of any agreements described
on Disclosure Schedule (3.7) have been delivered to Agent); (e) there is no
organizing activity involving any Credit Party or, to the Borrower's knowledge,
the Founding Radiology Practices pending or, to Borrower's knowledge,
threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to the Borrower's knowledge, threatened
with the National Labor Relations Board, and no labor organization or group of
employees of any such Person has made a pending demand for recognition; and (g)
except as set forth in Disclosure Schedule (3.7), there are no complaints or
charges against any Credit Party or, to the Borrower's knowledge, any Founding
Radiology Practice pending or, to the knowledge of the Borrower, threatened to
be filed with any Governmental Authority or arbitrator based on, arising out
of, in connection with, or otherwise relating to the employment or termination
of employment by any such Person of any individual.
3.8 VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK AND
INDEBTEDNESS. Except as set forth in Disclosure Schedule (3.8), as of the
Closing Date: (a) the Borrower has no Subsidiaries, (b) no Credit Party is
engaged in any joint venture or partnership with any other Person or is an
Affiliate of any other Person, (c) each of Borrower's Restricted Subsidiaries
and each Permitted Joint Venture Holding Company is a wholly-owned Subsidiary
of Borrower and (d) there are no outstanding rights to purchase, options,
warrants or similar rights or agreements pursuant to which any Credit Party may
be required to issue, sell, repurchase or redeem any of its Stock or any Stock
of its Subsidiaries. All outstanding Indebtedness of the Borrower and its
Subsidiaries as of the Closing Date is described in Section 6.3 (including
Disclosure Schedule (6.3)).
3.9 GOVERNMENT REGULATION. No Credit Party is an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act
of 1940 as amended. No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any other
federal or state statute that restricts or limits its ability to incur
Indebtedness or to perform its obligations hereunder. The making of the
Advances by Lenders to Borrower, the incurrence of the Letter of Credit
Obligations on behalf of Borrower, the application of the proceeds thereof and
repayment thereof and the consummation of the Related Transactions will not
violate any provision of any such statute or any rule, regulation or order
issued by the Securities and Exchange Commission.
3.10 MARGIN REGULATIONS. No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or
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"carrying" any "margin security" as such terms are defined in Regulation U or G
of the Federal Reserve Board as now and from time to time hereafter in effect
(such securities being referred to herein as "Margin Stock"). No Credit Party
owns any Margin Stock (except for investments permitted pursuant to Section
6.2(a)(v)), and none of the proceeds of the Loans or other extensions of credit
under this Agreement will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock, for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
any Margin Stock or for any other purpose which might cause any of the Loans or
other extensions of credit under this Agreement to be considered a "purpose
credit" within the meaning of Regulation G, T, U or X of the Federal Reserve
Board. No Credit Party will take or permit to be taken any action which might
cause any Loan Document to violate any regulation of the Federal Reserve Board.
3.11 TAXES. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate Governmental Authority and
all Charges have been paid prior to the date on which any fine, penalty,
interest or late charge may be added thereto for nonpayment thereof (or any
such fine, penalty, interest, late charge or loss has been paid), excluding
Charges or other amounts being contested in accordance with Section 5.2(b),
except for such filings or payments, the non-payment of which, individually or
in the aggregate, have not had and could not reasonably be expected to have or
result in a Material Adverse Effect. Proper and accurate amounts have been
withheld by each Credit Party from its respective employees for all periods in
full and complete compliance with all applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
Governmental Authorities except for such withholdings and payments, the failure
to make which, individually or in the aggregate, have not had and could not
reasonably be expected to have or result in a Material Adverse Effect.
Disclosure Schedule (3.11) sets forth as of the Closing Date those taxable
years for which any Credit Party's tax returns are currently being audited by
the IRS or any other applicable Governmental Authority and any assessments or
threatened assessments in connection with such audit, or otherwise currently
outstanding. Except as described on Disclosure Schedule (3.11), no Credit Party
has executed or filed with the IRS or any other Governmental Authority any
agreement or other document extending, or having the effect of extending, the
period for assessment or collection of any Charges. No Credit Party or, to the
Borrower's knowledge, their respective predecessors are liable for any Charges:
(a) under any agreement (including any tax sharing agreements) or (b) to
Borrower's knowledge, as a transferee.
3.12 ERISA. (a) As of the Closing Date, Disclosure Schedule (3.12)
lists and separately identifies all Title IV Plans, Multiemployer Plans, ESOPs
and Retiree Welfare Plans. Copies of all such listed Plans, together with a
copy of the latest form 5500 for each such Plan, have been delivered to Agent.
Each Qualified Plan has been determined by the IRS to qualify under Section 401
of the IRC, and the trusts created thereunder have been determined to be exempt
from tax under the provisions of Section 501 of the IRC, and nothing has
occurred which would cause the loss of such qualification or tax-exempt status.
Each Plan is in material compliance with the applicable provisions of ERISA and
the IRC,
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including the filing of reports required under the IRC or ERISA. Neither the
Borrower nor any ERISA Affiliate has failed to make any contribution or pay any
amount due as required by either Section 412 of the IRC or Section 302 of ERISA
or the terms of any such Plan. Neither the Borrower nor any ERISA Affiliate has
engaged in a prohibited transaction, as defined in Section 4975 of the IRC, in
connection with any Plan, which would subject any of the Borrower's or its
Subsidiaries to a material tax on prohibited transactions imposed by Section
4975 of the IRC.
(b) Except as set forth in Disclosure Schedule (3.12): (i) no Title IV
Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event described
in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or
is reasonably expected to occur, which individually or in the aggregate, has
had or could reasonably be expected to have or result in a Material Adverse
Effect; (iii) there are no pending, or to the knowledge of Borrower, threatened
claims (other than claims for benefits in the normal course), sanctions,
actions or lawsuits, asserted or instituted against any Plan or any Person as
fiduciary or sponsor of any Plan, which have a reasonable risk of being
determined adversely and which, if so determined, individually or in the
aggregate, could have a Material Adverse Effect; (iv) neither the Borrower nor
any ERISA Affiliate has incurred or reasonably expects to incur any liability
as a result of a complete or partial withdrawal from a Multiemployer Plan; (v)
within the last five years no Title IV Plan with Unfunded Pension Liabilities
has been transferred outside of the "controlled group" (within the meaning of
Section 4001(a)(14) of ERISA) of the Borrower or any ERISA Affiliate; and (vi)
no liability under any Title IV Plan has been satisfied with the purchase of a
contract from an insurance company that is not rated AAA by the Standard &
Poor's Corporation or the equivalent by another nationally recognized rating
agency.
3.13 NO LITIGATION. No action, claim, lawsuit, demand, investigation
or proceeding is now pending or, to the knowledge of Borrower, threatened
against any of the Borrower, any of its Subsidiaries or, to the knowledge of
the Borrower, any Managed Practice, before any Governmental Authority or before
any arbitrator or panel of arbitrators (collectively, "Litigation"), (a) which
challenges any Credit Party's or any Managed Practice's right or power to enter
into or perform any of its obligations under the Related Transaction Documents
to which it is a party, or the validity or enforceability of any Related
Transaction Document or any action taken thereunder, or (b) which has a
reasonable risk of being determined adversely to any of the Borrower, any of
its Subsidiaries or, to the knowledge of the Borrower, any Managed Practice and
which, if so determined, could have a Material Adverse Effect. Except as set
forth on Disclosure Schedule (3.13), as of the Closing Date there is no
Litigation pending or threatened which seeks damages in excess of $500,000 in
excess of acknowledged insurance coverage from a recognized carrier or
injunctive relief or alleges criminal misconduct of any of the Borrower, any of
its Subsidiaries or, to the knowledge of the Borrower, any Founding Radiology
Practice. There is no pending investigation of any of the Borrower, any of its
Subsidiaries, any Permitted Joint Venture or, to the knowledge of the Borrower,
any Managed Practice by HCFA or any other Governmental Authority, which
investigation is not otherwise conducted in the ordinary course of business and
no criminal, civil or administrative action, audit, or investigation by a
fiscal intermediary or by or
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on behalf of any Governmental Authority exists or, to the best knowledge of the
Borrower, is threatened with respect to any of the Borrower, any of its
Subsidiaries or, to the knowledge of the Borrower, any Managed Practice, which
has had or could reasonably be expected to have or result in a Material Adverse
Effect (including by way of an adverse effect on such Person's right to receive
Medicare, Medicaid, CHAMPUS or CHAMPVA reimbursement to which such Person would
otherwise be entitled, or right to participate in the Medicare, Medicaid,
CHAMPUS or CHAMPVA programs or on the ability of such Person to engage in the
practice of medicine or to fulfill its obligations as contemplated under the
Loan Documents or any Service Agreement), and, to the best knowledge of the
Borrower, no such Person is subject to any pending but unassessed Medicare,
Medicaid, CHAMPUS or CHAMPVA claim payment adjustments, except to the extent
that such Person is contesting such assessment in good faith by appropriate
proceedings diligently pursued and has established and will maintain adequate
reserves for such adjustments in accordance with GAAP, except to the extent
that any such payment adjustment, individually or in the aggregate, has not had
and could not reasonably be expected to have or result in a Material Adverse
Effect.
3.14 BROKERS. No broker or finder acting on behalf of any Credit Party
brought about the obtaining, making or closing of the Loans or the Related
Transactions, and no Credit Party has any obligation to any Person in respect
of any finder's or brokerage fees in connection therewith.
3.15 INTELLECTUAL PROPERTY. As of the Closing Date, each Credit Party
owns or has rights to use all Intellectual Property necessary to continue to
conduct its business as now or heretofore conducted by it or proposed to be
conducted by it, and each Patent, Trademark, Copyright and License is listed,
together with application or registration numbers, as applicable, in Disclosure
Schedule (3.15) hereto. Each Credit Party conducts its business and affairs
without infringement of or interference with any Intellectual Property of any
other Person in any manner that, individually or in the aggregate, has had or
could reasonably be expected to have or result in a Material Adverse Effect.
3.16 FULL DISCLOSURE. No information contained in this Agreement, any
of the other Loan Documents, any Projections, the Disclosure Documents or
Financial Statements or other reports from time to time delivered hereunder or
any written statement furnished by Borrower or on its behalf or on behalf of
any of its Subsidiaries or Permitted Joint Venture or, to the knowledge of the
Borrower, any Managed Practice to Agent or any Lender pursuant to the terms of
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made. The Liens granted to Agent, on behalf of itself and
Lenders, pursuant to the Collateral Documents will at all times be fully
perfected first priority Liens in and to the Collateral described therein,
subject, as to priority, only to Permitted Encumbrances (other than those
Permitted Encumbrances described in clause (j) of the definition thereof).
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3.17 ENVIRONMENTAL MATTERS. (a) Except as set forth in Disclosure
Schedule (3.17), as of the Closing Date: the Credit Parties and, to the
knowledge of the Borrower, the Founding Radiology Practices (i) are and have
been in compliance with all Environmental Laws; (ii) have obtained, and are in
compliance with, all Environmental Permits required by Environmental Laws for
the operations of their respective businesses as presently conducted or as
proposed to be conducted and all such Environmental Permits are valid,
uncontested and in good standing; (iii) are not involved in operations that are
likely to create, and know of no facts, circumstances or conditions that are
likely to result in, any Environmental Liabilities of such Person, and have not
permitted any current or former tenant or occupant of the Real Estate to engage
in any such operations; (iv) are aware of no Litigation arising under or
related to any Environmental Laws, Environmental Permits or Hazardous Material;
(v) have not been notified that they may be a "potentially responsible party"
or received a request for information under CERCLA or analogous state statutes;
(vi) are aware of no facts, circumstances or conditions that may result in any
one of them being identified as a "potentially responsible party" under CERCLA
or analogous state statutes; and (vii) have provided to Agent copies of all
existing environmental reports, reviews and audits and all written information
pertaining to actual or potential Environmental Liabilities, in each case
relating to any such Person; except for any of the foregoing as individually or
in the aggregate with all such events, have not had and could not reasonably be
expected to have or result in a Material Adverse Effect.
3.18 INSURANCE. Disclosure Schedule (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each
such policy and a description of the malpractice insurance required to be
maintained by each Managed Practice.
3.19 INTENTIONALLY OMITTED.
3.20 INTENTIONALLY OMITTED.
3.21 INTENTIONALLY OMITTED.
3.22 AGREEMENTS AND OTHER DOCUMENTS. As of the Closing Date, each
Credit Party has provided to Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following agreements
or documents to which it or, to its knowledge, any Founding Radiology Practice,
is subject and each of which are listed on Disclosure Schedule (3.22): (a)
provider agreements not terminable by such Person or any Managed Practice
within sixty (60) days following written notice issued by such Person and
involving transactions in excess of $10,000,000 per annum; (b) any lease of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of $500,000 per annum; (c) licenses and
permits held by any of the Credit Parties, the absence of which could be
reasonably likely to have a Material Adverse Effect; (d) instruments or
documents evidencing Indebtedness of any Credit Party and any security interest
granted by any Credit Party with respect thereto; (e) all Service Agreements to
which it is or is to become a party; and (f) instruments and agreements
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evidencing the issuance of any equity securities, warrants, rights or options
to purchase equity securities of any Credit Party.
3.23 SOLVENCY. Both before and after giving effect to (a) the Loans
and Letter of Credit Obligations to be made or extended on the Closing Date or
such other date as Loans and Letter of Credit Obligations requested hereunder
are made or extended, (b) the disbursement of the proceeds of such Loans
pursuant to the instructions of Borrower, (c) the Acquisition, the Refinancing
and the consummation of the other Related Transactions and (d) the payment and
accrual of all transaction costs in connection with the foregoing, each Credit
Party is Solvent.
3.24 ACQUISITION AGREEMENT. As of the Closing Date, Borrower has
delivered to Agent a complete and correct copy of each Acquisition Agreement
(including all schedules, exhibits, amendments, supplements, modifications,
assignments and all other documents delivered pursuant thereto or in connection
therewith). No Credit Party and (to Borrower's knowledge) no other Person party
thereto is in default in the performance or compliance with any provisions
thereof. As of the Closing Date each Acquisition Agreement and each Service
Agreement complies with, and the Acquisition has been consummated in accordance
with, all applicable laws. Each Acquisition Agreement and each Service
Agreement is in full force and effect as of the Closing Date and has not been
terminated, rescinded or withdrawn. All requisite approvals by Governmental
Authorities having jurisdiction over any Credit Party or, to the knowledge of
Borrower, any Managed Practice or any other Persons referenced therein, with
respect to the transactions contemplated by the Acquisition Agreements and the
Service Agreements, have been obtained, and no such approvals impose any
conditions to the consummation of the transactions contemplated by the
Acquisition Agreements or to the conduct by any Credit Party or, to the
knowledge of Borrower, any Managed Practice of its business thereafter as
contemplated by the Service Agreements. To Borrower's knowledge, none of the
Founding Radiology Practices' representations or warranties in the Acquisition
Agreements contains any untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading. Each of the
representations and warranties given by each of the Borrower, its Subsidiaries
or (to Borrower's knowledge) any Founding Radiology Practice in the Acquisition
Agreements is true and correct in all material respects. Notwithstanding
anything contained in the Acquisition Agreements to the contrary, such
representations and warranties of the Credit Parties are incorporated into this
Agreement by this Section 3.24 and shall, solely for purposes of this Agreement
and the benefit of Agent and Lenders, survive the consummation of such
Acquisitions.
3.25 INTENTIONALLY OMITTED.
3.26 THIRD PARTY REIMBURSEMENT. If the Borrower, any Subsidiary, any
Permitted Joint Venture or any Managed Practice is or has been audited by
Medicare, Medicaid, CHAMPUS, CHAMPVA or similar governmental Third Party
Payors, to the Borrower's knowledge, (a) none of such audits provides for
adjustments in reimbursable costs or asserts claims for reimbursement or
repayment by such Person of costs and/or payments theretofore made by such
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governmental Third Party Payor that, if adversely determined, individually or
in the aggregate, could reasonably be expected to have or result in a Material
Adverse Effect and (b) no Managed Practice has had requests or assertions of
claims for reimbursement or repayment by it of costs and/or payments heretofore
made by any other Third Party Payor that, if adversely determined, individually
or in the aggregate, could reasonably be expected to have or result in a
Material Adverse Effect.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 REPORTS AND NOTICES. The Borrower hereby agrees that from and
after the Closing Date and until the Termination Date, it shall deliver to
Agent and/or Lenders, as required, the Financial Statements, notices,
Projections and other information at the times, to the Persons and in the
manner set forth in Annex D.
4.2 COMMUNICATION WITH ACCOUNTANTS. The Borrower authorizes Agent and,
so long as an Event of Default shall have occurred and be continuing, each
Lender, to communicate directly with its and its Subsidiaries' independent
certified public accountants, and authorizes and shall instruct those
accountants to disclose and make available to Agent and each Lender any and all
Financial Statements and other supporting financial documents, schedules and
information relating to any Credit Party or other Subsidiary (including copies
of any issued management letters) with respect to the business, financial
condition and other affairs of any Credit Party or other Subsidiary.
5. AFFIRMATIVE COVENANTS
The Borrower agrees that from and after the date hereof and until the
Termination Date:
5.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Each Credit
Party shall: (a) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate or partnership existence and its
rights and franchises, except for such rights and franchises, the failure to
preserve which individually or in the aggregate, has not had and could not
reasonably be expected to have or result in a Material Adverse Effect; (b)
continue to conduct its business substantially as now conducted or as otherwise
permitted hereunder; (c) at all times maintain, preserve and protect all of its
assets and properties used or useful in the conduct of its business, and keep
the same in good repair, working order and condition (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices, except for such failures to maintain,
preserve, protect, repair, replace or improve as individually or in the
aggregate, has not had and could not reasonably be expected to have or result
in a Material Adverse Effect; and (d) transact business only in such corporate
and trade names as are set forth in Disclosure Schedule 5.1 or of which the
Agent has otherwise received prior written notice.
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5.2 PAYMENT OF OBLIGATIONS. (a) Subject to Section 5.2(b), each Credit
Party shall pay and discharge or cause to be paid and discharged promptly all
Charges payable by it, including (A) Charges imposed upon it, its income and
profits, or any of its property (real, personal or mixed) and all Charges with
respect to tax, social security and unemployment withholding with respect to
its employees, and (B) lawful claims for labor, materials, supplies and
services or otherwise, before any thereof shall become past due; except for
such Charges and claims, the failure to pay which individually or in the
aggregate, has not had and could not reasonably be expected to have or result
in a Material Adverse Effect.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges or claims described in
Section 5.2(a); provided, that (i) adequate reserves with respect to such
contest are maintained on the books of the Borrower, in accordance with GAAP,
(ii) such contest is maintained and prosecuted continuously and with diligence
and operates to suspend collection or enforcement of such Charges or claims or
any Lien in respect thereof, (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest, (iv) no Lien shall be imposed
to secure payment of such Charges or claims other than Permitted Encumbrances,
(v) such Credit Party shall promptly pay or discharge such contested Charges or
claims and all additional charges, interest, penalties and expenses, if any,
and shall deliver to Agent evidence acceptable to Agent of such compliance,
payment or discharge, if such contest is terminated or discontinued adversely
to such Credit Party or the conditions set forth in this Section 5.2(b) are no
longer met, and (vi) Agent has not advised Borrower in writing that Agent
reasonably believes that nonpayment or nondischarge thereof could have or
result in a Material Adverse Effect.
5.3 BOOKS AND RECORDS. Each Credit Party shall keep adequate books and
records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on
a basis consistent with the Financial Statements attached as Disclosure
Schedule (3.4(A)).
5.4 INSURANCE. (a) Each Credit Party shall, at its sole cost and
expense, maintain the policies of insurance described on Disclosure Schedule
(3.18) in form and with insurers reasonably acceptable to Agent.
(b) Agent reserves the right at any time upon any change in Credit
Party's risk profile (including any change in any laws affecting the potential
liability of such Person) to require additional forms and limits of insurance
to, in Agent's reasonable opinion, ensure that each such Person is protected by
insurance in amounts and with coverage customary for its industry. If requested
by Agent, each Credit Party shall, and shall cause each other appropriate
Person to, deliver to Agent from time to time a report of a reputable insurance
broker, satisfactory to Agent, with respect to the insurance policies required
hereunder.
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(c) The Borrower will deliver to the Agent, a certificate from the
Borrower's insurance broker dated the Closing Date and thereafter periodically
as the Agent shall reasonably require, certifying the Borrower's compliance
with this Section.
5.5 COMPLIANCE WITH LAWS. (a) The Borrower and each of its
Subsidiaries shall comply with all federal, state, local and foreign laws and
regulations applicable to it, including those relating to licensing, ERISA and
labor matters, Healthcare Laws and Environmental Laws and Environmental
Permits, except to the extent that the failure to comply, individually or in
the aggregate, has not had and could not reasonably be expected to have or
result in a Material Adverse Effect.
(b) Borrower shall cause each Managed Practice to comply with all
applicable federal, state and local laws, rules, regulations and restrictions
in the conduct of such Managed Practice's business, including without
limitation all laws applicable to the operation of such Managed Practice in the
generation, transportation, treatment, storage, disposal or other handling of
radioactive, medical, biological or hazardous materials or wastes; except where
the failure to comply, individually or in the aggregate, has not had and could
not reasonably be expected to have or result in a Material Adverse Effect.
5.6 SUPPLEMENTAL DISCLOSURE. From time to time as may be requested by
Agent (which request will not be made more frequently than once each year
absent the occurrence and continuance of a Default or an Event of Default),
each Credit Party shall supplement each Disclosure Schedule hereto, or any
representation herein or in any other Loan Document, with respect to any matter
hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or which is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall be or
be deemed a waiver of any Default or Event of Default resulting from the
matters disclosed therein, except as consented to by Agent and Requisite
Lenders in writing; and (b) no supplement shall be required as to
representations and warranties that relate solely to the Closing Date.
5.7 INTELLECTUAL PROPERTY. Each Credit Party shall conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person.
5.8 ENVIRONMENTAL MATTERS. Each Credit Party shall: (a) conduct its
operations and keep and maintain its Real Estate in compliance with all
Environmental Laws and Environmental Permits other than noncompliance which
could not reasonably be expected to have a Material Adverse Effect; and (b)
notify Agent promptly after Borrower becomes aware of any violation of
Environmental Laws or Environmental Permits or any Release by the Borrower or
any of
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its Restricted Subsidiaries or on or affecting the property of such Person
which could reasonably be expected to have or result in a Material Adverse
Effect.
5.9 LEASE OBLIGATIONS. Each Credit Party shall timely and fully pay
and perform such Person's obligations under all leases and other agreements
with respect to each leased location of such Person.
5.10 COMPLIANCE WITH SERVICE AGREEMENTS. Each Credit Party shall use
its reasonable best efforts to cause, each Managed Practice to comply with the
terms of the applicable Service Agreement in all material respects.
5.11 FURTHER ASSURANCES. Each Credit Party shall, at the Borrower's
expense and upon request of Agent, duly execute and deliver, or cause to be
duly executed and delivered, to Agent such further instruments and do and cause
to be done such further acts as may be necessary or proper in the reasonable
opinion of Agent to carry out more effectually the provisions and purposes of
this Agreement or any other Loan Document.
5.12 ACCREDITATION AND LICENSING. (a) The Borrower and each of its
Subsidiaries and each Permitted Joint Venture shall keep itself fully licensed
with all licenses required to operate such Person's business under applicable
law, maintain such Person's qualification to practice medicine in the manner
contemplated under the applicable Service Agreement and for participation in,
and payment under, Medicare, Medicaid, CHAMPUS, CHAMPVA and any other federal,
state or local governmental program or private program providing for payment or
reimbursement for services rendered by such Person, except to the extent that
the loss or relinquishment of such qualification would not or could not
reasonably be expected to have or result in a Material Adverse Effect. The
Borrower will promptly furnish or cause to be furnished to the Agent copies of
all reports and correspondence it or any Subsidiary sends or receives relating
to any loss or revocation (or threatened loss or revocation) of any
qualification described in this Section.
(b) Borrower shall cause each Managed Practice to: (i) provide
professional services to its patients in compliance with ethical standards,
laws, rules and regulations applicable to the operations of such Managed
Practice; (ii) assure that each physician employee of such Managed Practice has
all required licenses, credentials, approvals and other certifications to
perform his or her duties and services for such Managed Practice; and (iii)
maintain all licenses required to operate such Managed Practices' business
under applicable law; except to the extent, with respect to each of clauses
(i), (ii), and (iii) above, where the failure to comply, individually or in the
aggregate, has not had and could not reasonably be expected to have or result
in a Material Adverse Effect.
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6. NEGATIVE COVENANTS
The Borrower agrees that, without the prior written consent of the
Requisite Lenders, from and after the date hereof until the Termination Date:
6.1 MERGERS, SUBSIDIARIES, ETC.; UNRESTRICTED SUBSIDIARIES. (a) No
Credit Party shall directly or indirectly, by operation of law or otherwise,
(x) own, form or acquire any Subsidiary (except for a Subsidiary: (i) that is
wholly owned by a Credit Party or that constitutes a Permitted Joint Venture,
(ii) that becomes party to the Subsidiary Guaranty and the Subsidiary Pledge
and Security Agreement or that constitutes a Permitted Joint Venture, (iii)
whose Stock, and any Stock that it owns of any other Person have been delivered
to the Agent in pledge as security for the Obligations, except in the case of
an Existing Permitted Joint Venture or Acquired Permitted Joint Venture to the
extent that the organizational documents of such Existing Permitted Joint
Venture or Acquired Permitted Joint Venture in effect at the time of the
acquisition thereof prohibit the pledge of its Stock, and (iv) the investment
in which complies with Section 6.2), or (y) merge with, consolidate with,
acquire all or substantially all of the assets or capital stock of, or
otherwise combine with or acquire, any Person. Notwithstanding the foregoing
clause (y) of this Section 6.1(a), (1) any Restricted Subsidiary may merge or
consolidate with any other Restricted Subsidiary, (2) any Credit Party or any
Permitted Joint Venture Holding Company may acquire Stock in any Permitted
Joint Venture, subject to the requirements of Section 6.1(b), and (3) any
Credit Party may acquire all or substantially all of the assets or 100% of the
Stock of any radiology practice or practice group or imaging center or other
business providing similar services, including services ancillary to such
practice or practice group (provided that the requirement to acquire all or
substantially all of the assets of any practice or practice group shall not be
deemed to require the acquisition of assets customarily retained by a Managed
Practice following such an acquisition) or of a Person (a "PPM") that owns,
operates or manages such groups or businesses (the "Acquisition Target") that
meets each of the following conditions (each, a "Permitted Acquisition"):
(i) Agent shall receive at least fifteen (15) days' prior written
notice of such proposed Permitted Acquisition, which notice shall include
a reasonably detailed description of the Acquisition Target and the terms
of such proposed Permitted Acquisition;
(ii) such Permitted Acquisition shall involve an Acquisition Target
operating solely within one or more of the 50 states of the United States
of America or the District of Columbia, shall be consensual, shall have
been approved by the Acquisition Target board of directors or other
governing authority or its authorized legal representative and shall not,
in the case where the Acquisition Target is a PPM, involve an aggregate
consideration (including, without limitation, cash paid, stock issued or
debt issued or assumed) in an amount that exceeds $25,000,000;
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(iii) the Agent shall have received on or within 10 days following
the closing date of any such Permitted Acquisition: (A)(1) with respect to
a Practice Acquisition, copies of each of the Service Agreements,
acquisition or merger agreements, professional employment and
non-competition agreements and all other agreements executed in connection
with such acquisition, the terms and conditions of which agreements shall
be substantially similar to the terms and conditions of the Service
Agreements, Acquisition Agreements and other Related Transaction Documents
executed in connection with the Related Transactions (which terms and
conditions shall include, without limitation, the duration of the Service
and Employment Agreements, the termination and practice repurchase
provisions, practice governance provisions and provisions regarding the
assignability as security to the Agent and which terms and conditions the
Borrower shall use its reasonable best efforts to cause to include
limitations on Managed Practice liabilities), and (2) with respect to
other acquisitions, copies of the acquisition or merger agreements and all
other agreements executed in connection with such acquisition, and (B)
such opinions, certificates, lien search results and other documents as
may be reasonably requested by Agent;
(iv) at least five (5) Business Days prior to the closing date of any
such proposed Permitted Acquisition for which the aggregate consideration
to be paid (whether by cash, stock, assumption of debt or otherwise) by
the Borrower and its Restricted Subsidiaries equals or exceeds $3,500,000,
Borrower shall have delivered to Agent, in form and substance satisfactory
to Agent, a certificate of the chief financial officer of Borrower in the
form of Schedule 6.1(b) to the effect that: (A) at the time of such
Permitted Acquisition and after giving effect thereto, no Default or Event
of Default will have occurred and be continuing; and (B) on a pro forma
basis Borrower would have been in compliance with the financial covenants
set forth in Annex E as of the most recent test period for which such
covenants were tested, which covenants shall be calculated (in addition to
the assumptions specified in Annex E) as if: (x) such acquisition and all
other acquisitions closed or to be closed following such test period and
prior to the proposed closing date of the proposed Permitted Acquisition
had occurred at the beginning of such test period and Borrower had
received income attributable to such Acquisition Target and such other
acquired entities based on the actual performance of such Acquisition
Target and such other acquired entities over such period (adjusted to
reflect the pro forma effect of Borrower's physician compensation model as
appropriate) and had incurred the Indebtedness and expenses incurred to
purchase such Acquisition Target and such other acquired entity at the
beginning of such period and repaid, retired, disposed of or refinanced
any Indebtedness repaid, retired, disposed of or refinanced or to be
repaid, retired, disposed of or refinanced in such acquisition at the
beginning of such period, and (y) any disposition of Stock or of all or
substantially all of the assets of any Subsidiary or Permitted Joint
Venture by Borrower or any of its Subsidiaries and any termination of a
Service Agreement (which Service Agreement is not contemporaneously
replaced by a Service Agreement with the same Managed Practice that
provides substantially the same EBITDA to Borrower and its
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Subsidiaries as the terminated Service Agreement) that have occurred or
are to occur following such test period and prior to the proposed closing
date of the proposed Permitted Acquisition had occurred at the beginning
of such test period and the Borrower had not received any EBITDA
attributable to such entity disposed of or to such terminated Service
Agreement over such period and had incurred any Indebtedness or expense
incurred in connection with such disposition or termination at the
beginning of such period and had repaid, retired, disposed of or
refinanced any Indebtedness that was or is to be repaid, retired or
disposed of or refinanced in connection with such disposition or
termination (to the extent that the Borrower and its Subsidiaries have
been, or are to be, released from all liability with respect thereto) at
the beginning of such period; and
(v) on or prior to the date of such Permitted Acquisition, Agent
shall have received, in form and substance satisfactory to Agent, such
documents and instruments as it shall require to evidence the joinder of
any new Subsidiary, other than a Permitted Joint Venture, to the
Subsidiary Guaranty and Subsidiary Pledge and Security Agreement and the
perfection of all liens created thereunder (subject, in the case of an
Acquired Permitted Joint Venture, to the provisions of Subsection
6.1(b)(iv)).
(b) (i) The Borrower shall not and shall not permit any of its
Subsidiaries to, create, own or acquire any Stock in any Person other than: (A)
Stock in itself to the extent permitted elsewhere in this Agreement, (B) Stock
in a Subsidiary created, owned or acquired in accordance with Section 6.1(a),
(C) Stock that constitutes a permitted investment by virtue of clauses (A)
through (H) of subsection (v) of Section 6.2(a), or (D) Stock in a Permitted
Joint Venture in compliance with this Section 6.1(b).
(ii) Any Existing Permitted Joint Venture is listed on Disclosure
Schedule 6.1(b), along with a description of its ownership and organizational
structure and Indebtedness, and each is designated as either a Levered
Permitted Joint Venture or an Unlevered Permitted Joint Venture..
(iii) (A) Neither the Borrower nor any of its Subsidiaries shall
create or acquire any Stock in any Permitted Joint Venture after the Closing
Date unless it shall notify the Agent thereof within five (5) days following
such creation or acquisition. Such notice shall include a description of the
ownership, organizational structure and Indebtedness of such Permitted Joint
Venture and shall designate such Permitted Joint Venture as either a Levered
Permitted Joint Venture or an Unlevered Permitted Joint Venture. If such
Permitted Joint Venture is an Acquired Permitted Joint Venture, such notice
shall also describe the circumstances of such acquisition except to the extent
that such description is already being provided pursuant to Section 6.1(a). No
Credit Party may hold Stock in any Permitted Joint Venture that is not a
corporation except through a Permitted Joint Venture Holding Company.
(B) If the aggregate consideration paid or invested upon the creation
or acquisition of Stock in any Permitted Joint Venture (other than an Acquired
Permitted Joint
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Venture) shall exceed $3,500,000, the Borrower shall also comply with the
provisions of paragraphs (i) and (iv) of clause (3) of the second sentence of
Section 6.1(a) with respect to such creation or acquisition.
(iv) At the Closing Date, in the case of Existing Permitted Joint
Ventures, and otherwise at the time of the acquisition or creation of any Stock
therein, the Borrower shall deliver and/or shall cause the applicable
Subsidiary to deliver to the Agent in pledge as security for the Obligations,
all Stock that the Borrower or any of its Subsidiaries holds in such Permitted
Joint Venture, PROVIDED that the pledge of the Stock in the Permitted Joint
Venture shall not be required if such Permitted Joint Venture is an Existing
Permitted Joint Venture or an Acquired Permitted Joint Venture to the extent
that, at the time of the acquisition thereof, the organizational documents
thereof prohibit such pledge.
(v) If at the time any Permitted Joint Venture is acquired or created
it shall have outstanding Indebtedness or liabilities in excess of $5,000,000,
then the Borrower shall submit to the Agent evidence satisfactory to the Agent
in its good faith discretion that none of the Indebtedness or liabilities of
such Permitted Joint Venture are, or could reasonably be expected to become,
Indebtedness or liabilities of the Borrower or any other Subsidiary other than
the Permitted Joint Venture Holding Company that owns the Stock in such
Permitted Joint Venture, except that this paragraph (v) shall not apply to the
extent that any such Indebtedness constitutes Permitted Recourse Debt.
(vi) No Restricted Subsidiary may become an Unrestricted Subsidiary,
no Unrestricted Subsidiary may become a Restricted Subsidiary, no Levered
Permitted Joint Venture may become an Unlevered Permitted Joint Venture and no
Unlevered Permitted Joint Venture may become a Levered Permitted Joint Venture;
provided that, so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, Borrower may upon prior written
notice to the Agent redesignate an Levered Permitted Joint Venture that
otherwise meets the requirements of an Unlevered Permitted Joint Venture to be
an Unlevered Permitted Joint Venture. Upon any such redesignation, the Borrower
may reclassify amounts invested in such Permitted Joint Venture during the
Fiscal Year in which such redesignation occurs and prior to such redesignation
from investments in Levered Permitted Joint Ventures to investments in
Unlevered Permitted Joint Ventures for the purpose of Section 6.2(a)(iii)(A).
6.2 INVESTMENTS; LOANS AND ADVANCES. (a) Except as otherwise expressly
permitted by this Section 6.2, no Credit Party shall make or permit to exist
any investment in, or make, accrue or permit to exist loans or advances of
money to, any Person, through the direct or indirect lending of money, holding
of securities or otherwise, except that:
(i) any Credit Party may make loans or advances to employees for
reimbursable expenses in the ordinary course of business and as permitted
in Section 6.4(b);
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(ii) the Borrower may make and maintain equity investments in its
Restricted Subsidiaries and may make and maintain loans or advances to its
Restricted Subsidiaries and the Restricted Subsidiaries may make and
maintain loans and advances to the Borrower, provided that such loans or
advances are evidenced by notes and all such equity investments and loans
or advances are pledged to the Agent as security for the Obligations;
(iii) any Credit Party may make and maintain equity investments in,
and make loans and advances to, Permitted Joint Ventures and Permitted
Joint Venture Holding Companies and subject to the following limitations:
(A) the aggregate amount that may be invested in Permitted Joint
Ventures by the Borrower and its Subsidiaries, taken as a whole,
shall not exceed $20,000,000 in any Fiscal Year, and, of that amount,
the aggregate amount that may be invested in Levered Permitted Joint
Ventures shall not exceed $10,000,000 in any Fiscal Year, provided,
that for the purposes of this Section 6.2(a)(iii)(A), there shall be
excluded from the amount invested in Permitted Joint Ventures the
amount invested in any (x) Existing Permitted Joint Venture on the
Closing Date and (y) Acquired Permitted Joint Venture in connection
with the initial acquisition thereof except to the extent that the
EBITDA of such Acquired Permitted Joint Venture exceeds 25% of the
total EBITDA of the Acquisition Target the purchase of which resulted
in the acquisition of such Acquired Permitted Joint Venture (the
"Excess EBITDA;" in such case the amount deemed invested in such
Acquired Permitted Joint Venture for the purpose of this Section
6.2(a)(iii)(A) shall equal the aggregate consideration paid for such
Acquisition Target, multiplied by a fraction, the numerator of which
is the amount of such Excess EBITDA, and the denominator of which is
the total EBITDA of such Acquisition Target),
(B) if such investment constitutes an equity investment, such
investment shall be pledged to the Agent as security for the
Obligations to the extent provided in Section 6.1(b)(iv),
(C) all investments constituting loans or advances shall be
evidenced by a note and pledged to the Agent as additional security
for the Obligations,
(D) if the aggregate amount invested in any one Permitted Joint
Venture in any period of three months shall equal or exceed
$3,500,000, the Borrower shall deliver at the time that such
investment first equals or exceeds such amount, a compliance
certificate in the form required by clause (iv) of the second
sentence of Section 6.1(a), and
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(E) for the purpose of this Section 6.2.(a)(iii), investments,
loans and advances to Permitted Joint Venture Holding Companies shall
be permitted to the extent the proceeds thereto are immediately
reinvested by the Permitted Joint Venture Holding Company into the
Permitted Joint Venture in which such Permitted Joint Venture Holding
Company owns Stock;
(iv) Borrower and its Restricted Subsidiaries may make Managed
Practice Advances to Managed Practices, provided that the aggregate unpaid
amount of such advances does not exceed $5,000,000 at any time
outstanding; and
(v) so long as no Event of Default shall have occurred and be
continuing, Borrower may make investments in the aggregate, in:
(A) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof,
(B) commercial paper maturing no more than one year from the
date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc.,
(C) certificates of deposit, maturing no more than one year
from the date of creation thereof, issued by commercial banks
incorporated under the laws of the United States of America, each
having combined capital, surplus and undivided profits of not less
than $300,000,000 and having a senior secured rating of "A" or better
by a nationally recognized rating agency (an "A Rated Bank"),
(D) time deposits, maturing no more than 180 days from the date
of creation thereof with A Rated Banks,
(E) marketable direct obligations issued by a state of the
United States or a political subdivision thereof that is rated A (or
the then equivalent grade) or better by Xxxxx'x Investor Service,
Inc. or Standard & Poor's Corporation and maturing within one (1)
year from the date of acquisition thereof,
(F) funds or similar vehicles which invest exclusively in
obligations of the type described in clauses (A) through (E) above,
(G) secured repurchase agreements relating to investments of
the types described in clauses (A) or (E) above, provided that for
any such repurchase agreement the counterparty thereto is a
government securities dealer designated by the Federal Reserve Bank
of New York as a "reporting dealer" and whose financial statements
indicate capital of at least $50,000,000, and
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(H) other investments not exceeding $2,000,000 in the aggregate
at any time outstanding.
(b) No Permitted Joint Venture Holding Company and no Permitted Joint
Venture shall make or permit to exist any investment in, or make, accrue or
permit to exist loans or advances of money to, any Person, through the direct
or indirect lending of money, holding of securities or otherwise, except that
(i) a Permitted Joint Venture Holding Company may make investments, loans or
advances and may hold the securities of the Permitted Joint Venture in which it
holds Stock, provided that such investment meets the other requirements of this
Section 6.2, (ii) a Permitted Joint Venture may make investments permitted
pursuant to clauses (A) through (G) of subsection (v) of Section 6.2(a) for
cash management purposes and may make other investments, loans or advances for
strategic purposes in an entity that does not constitute a Subsidiary or a
Permitted Joint Venture, provided that such investment, loan or advance (when
aggregated with all other investments, loans or advances by the Borrower, its
Subsidiaries and all other Permitted Joint Ventures made pursuant to Section
6.2(a)(v)(H)) shall not exceed the limit set forth in Section 6.2(a)(v)(H), and
(iii) a Permitted Joint Venture may make other investments with the prior
written consent of the Agent and the Requisite Lenders upon such terms and
conditions as the Agent and the Requisite Lenders shall require in their good
faith discretion (the Agent and the Lenders agree to respond promptly to any
request by the Borrower for such consent).
(c) No additional loans, advances or investments shall be made by the
Borrower or its Subsidiaries to or in any Permitted Joint Venture from and
after the time that such Permitted Joint Venture qualifies as such solely by
virtue of clause (vi) of the definition thereof; provided that this prohibition
shall be lifted if and so long as such Permitted Joint Venture again satisfies
all of the requirements of clauses (i) through (v) of such definition.
6.3 INDEBTEDNESS. (a) No Credit Party shall, create, incur, assume or
permit to exist any Indebtedness, except (without duplication):
(i) the Revolving Loan and the other Obligations,
(ii) existing Indebtedness described in Disclosure Schedule 6.3 and
refinancings thereof or amendments or modifications thereof which do not
have the effect of increasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and which are
otherwise on terms and conditions no less favorable to any of the
Borrower, any Restricted Subsidiary, Agent or any Lender, as determined by
Agent, than the terms of the Indebtedness being refinanced, amended or
modified,
(iii) Indebtedness of the Borrower consisting of subordinated notes,
convertible preferred stock or mandatorily redeemable stock in an
aggregate principal amount not to exceed $100,000,000 issued in offerings
registered under the Securities Act of 1933 or exempt from registration
pursuant to Rule 144 thereof or otherwise, and which meets the following
criteria:
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A. the notes do not amortize and/or the stock is not redeemable
or repurchasable prior to the date that is 366 days following the
Termination Date,
B. the notes and all redemption or repurchase rights respecting
the stock, and all claims and obligations in respect of any of the
foregoing are subordinated to the prior payment in full in cash or
cash equivalents of the Obligations (and any refunding, extension
refinancing or modification thereof) upon terms and conditions
satisfactory to the Agent and the Requisite Lenders in their good
faith discretion (which shall include, without limitation, such
payment blockage, payover, standstill, bankruptcy voting rights,
notice and other provisions as the Agent or the Requisite Lenders
shall request),
C. the notes, and all redemption, repurchase or other payment
rights in respect of the stock or the notes shall be unsecured,
D. the covenants and default provisions in respect thereof shall
be satisfactory to the Agent and the Requisite Lenders in their good
faith discretion, and
E. no Default or Event of Default shall have occurred and be
continuing or will exist as a result of the issuance or use of the
proceeds thereof,
(iv) Indebtedness of the Borrower of the type described in clause (f)
of the definition of Indebtedness, but only to the extent incurred to
hedge the interest rate on Indebtedness permitted hereunder,
(v) Indebtedness of the Borrower to the seller of an Acquisition
Target incurred in connection with a Permitted Acquisition, but only to
the extent that such Indebtedness, in the good faith judgment of the
Agent, meets all the requirements described in clauses A through E of
subsection 6.3(a)(iii),
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(vi) Indebtedness consisting of intercompany loans and advances made
by Borrower to any of its Restricted Subsidiaries or by any wholly owned
Restricted Subsidiary to Borrower,
(vii) Indebtedness that constitutes a primary obligation of any
Permitted Joint Venture that also constitutes a contingent obligation of
the Borrower, in an amount not to exceed at any time outstanding
$10,000,000 (such debt, "Permitted Recourse Debt"),
(viii) Guaranteed Indebtedness consisting of endorsements of
negotiable instruments for deposit or collection in the ordinary course of
business, and
(ix) Other Indebtedness in an amount not to exceed at any time
outstanding $15,000,000.
The Agent and the Lenders agree to respond as promptly as practicable to any
request to approve the terms of any Indebtedness issued in compliance with
clauses (iii) and (v) of this Section 6.3(a).
(b) No Credit Party shall directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations and (ii) Indebtedness permitted pursuant to clauses (ii), (iv),
(vi), (viii) or (ix) of subparagraph (a) of this Section 6.3.
(c) No Unlevered Permitted Joint Venture shall, create, incur, assume
or permit to exist any Indebtedness, except, at any time, Indebtedness, the
aggregate principal amount of which does not exceed 0.5 multiplied by the
EBITDA of such Unlevered Permitted Joint Venture for the 12 month period most
recently ended at the time of determination and for which financial statements
are then available.
(d) No Levered Permitted Joint Venture shall create, incur, assume or
permit to exist any single issue of Indebtedness in excess $5,000,000 unless
prior to the incurrence thereof, it shall have delivered to the Agent, in form
and substance satisfactory to the Agent in its sole good faith discretion,
evidence that such Indebtedness will not become Indebtedness of the Borrower or
any Restricted Subsidiary, except to the extent that such Indebtedness
constitutes Permitted Recourse Debt.
6.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS. (a) Except as provided
in this Section 6.4, Section 6.2 with respect to advances to employees, or
Section 6.14 with respect to the repurchase of stock from Affiliates, no Credit
Party shall enter into or be a party to any transaction with any Affiliate
except in the ordinary course of business and pursuant to the reasonable
requirements of such Credit Party's business and upon fair and
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reasonable terms that are no less favorable to such Credit Party than would be
obtained in a comparable arm's length transaction with a Person not an
Affiliate.
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of the Borrower or a Subsidiary, except loans to
their respective employees in the ordinary course of business in an amount
outstanding at any time, that when added to amounts spent pursuant to Section
6.14(d) over the term of this Agreement does not exceed $2,000,000.
6.5 BUSINESS. No Credit Party shall engage in any business other than
the businesses currently engaged in by it or businesses reasonably related
thereto.
6.6 INTENTIONALLY OMITTED.
6.7 LIENS. (a) No Credit Party shall create, incur, assume or permit
to exist any Lien on or with respect to its properties or assets (whether now
owned or hereafter acquired) except for (i) Permitted Encumbrances; (ii) Liens
in existence on the date hereof and summarized on Disclosure Schedule 6.7; and
(iii) other Liens securing obligations not exceeding $15,000,000 in the
aggregate at any time outstanding. In addition, no Credit Party shall become a
party to any agreement, note, indenture or instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of Agent, on behalf of itself and Lenders, as collateral
for the Obligations, except operating leases, Capital Leases or Licenses which
prohibit Liens upon the assets that are subject thereto.
(b) No Unlevered Permitted Joint Venture shall create, incur, assume
or permit to exist any Lien on or with respect to its properties or assets
(whether now owned or hereafter acquired) except for Permitted Encumbrances.
6.8 SALE OF STOCK AND ASSETS. No Credit Party shall sell, transfer,
convey, assign or otherwise dispose of any of its properties or other assets,
including the Stock of any of such Person's Subsidiaries, other than (a) the
sale of Inventory in the ordinary course of business, (b) transfers of assets
constituting investments permitted pursuant to Section 6.2(a)(v), (c) the sale,
transfer, lease or conveyance of equipment or other fixed assets for fair value
(other than a sale of substantially all of the assets of a Subsidiary described
in clause (e) below which shall be governed by such clause (e)), provided that
the proceeds of such sale, transfer, lease or conveyance are used to replace
the assets disposed of with substantially similar assets within 180 days of
such sale, transfer, lease or conveyance; (d) dispositions resulting from
casualty losses, provided that the proceeds thereof are used to purchase assets
substantially similar to the assets disposed of within 180 days of such
disposition; (e) the sale of the Stock or assets of a Subsidiary or Permitted
Joint Venture for fair value provided that: (i) in the case of a sale of the
Stock or assets of any Restricted Subsidiary or Permitted Joint Venture Holding
Company such sale constitutes a sale of 100% of the Stock or substantially all
of the assets of such Person, (ii) in any Fiscal Year (the "Test Year") the
EBITDA during the prior Fiscal Year that was attributable to all of the
Restricted Subsidiaries whose stock or assets were sold during the Test Year,
did not exceed 5% of the EBITDA of the Borrower and its Restricted Subsidiaries
during such prior Fiscal Year,
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(iii) prior to any such sale, the Borrower must deliver to the Agent a
certificate demonstrating its compliance with the financial covenants for the
four fiscal quarters most recently ended on a pro forma basis which excludes
any EBITDA attributable to the Subsidiary or Permitted Joint Venture whose
Stock or assets are being sold and any Indebtedness of the Borrower and/or such
Subsidiary or Permitted Joint Venture that is being retired or reduced in such
transaction (to the extent reduced or retired); and (f) (i) the sale, transfer,
conveyance or other disposition by the Borrower or such Restricted Subsidiary
of equipment, fixtures or real estate that are obsolete or no longer used or
useful in such Person's business, and (ii) sales, transfers, conveyances or
other dispositions that, but for the failure to redeploy the proceeds in the
time required would be permitted under clauses (c) and (d) above, which in the
aggregate ((i) and (ii)) do not have a value that exceeds $3,000,000 in any
Fiscal Year.
6.9 ERISA. Neither the Borrower nor any of its Subsidiaries shall, or
shall cause or permit any ERISA Affiliate to, cause or permit to occur an event
which could result in the imposition of a Lien under the IRC or ERISA.
6.10 FINANCIAL COVENANTS. Borrower shall not breach or fail to comply
with any of the Financial Covenants (the "Financial Covenants") set forth in
Annex E.
6.11 HAZARDOUS MATERIALS. Neither the Borrower nor any of its
Subsidiaries shall cause or permit a Release of any Hazardous Material on, at,
in, under, above, to, from or about any of its real property where such Release
would violate in any respect, or form the basis for any Environmental
Liabilities under, any Environmental Laws or Environmental Permits other than
such violations which could not reasonably be expected to have or result in a
Material Adverse Effect.
6.12 INTENTIONALLY OMITTED.
6.13 INTENTIONALLY OMITTED.
6.14 RESTRICTED PAYMENTS. Neither the Borrower nor any of its
Restricted Subsidiaries nor any Permitted Joint Venture Holding Company shall,
make any Restricted Payment, except (a) intercompany loans and advances between
Borrower and Subsidiaries to the extent permitted by Section 6.3 above, (b)
dividends and distributions by Subsidiaries of Borrower paid to Borrower, (c)
employee loans permitted under Section 6.4(b) above, (d) repurchases of Stock
of the Borrower from employees and board members and their estates or members
of their immediate families upon the resignation, termination or death of such
employee or board member, provided that the aggregate amount of all such
purchases pursuant to this clause (d) over the term of this Agreement does not
exceed $2,000,000 less the outstanding amount of loans to employees pursuant to
Section 6.4(b) at the time of repurchase and at the
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time of such repurchase, no Default or Event of Default shall have occurred and
be continuing, (e) prior to the Availability Termination Date, repurchases of
Stock of the Borrower pursuant to the Repurchase Program, provided that: (i) no
such purchase may be made prior to the first anniversary of the Closing Date or
after the Availability Termination Date, (ii) the aggregate amount of all such
purchases pursuant to this clause (e) over the term of this Agreement shall not
exceed 10% of the consolidated net income of the Borrower and its Restricted
Subsidiaries that, on a cumulative basis, has accrued since the Closing Date
(provided that, for the purposes of this provision, there shall be added back
to consolidated net income any amounts deducted therefrom with respect to
extraordinary non-cash losses associated with the write-off of goodwill), (iii)
both before and after giving effect to any such repurchase, no Default or Event
of Default shall have occurred and be continuing, and (iv) the Borrower shall
deliver to the Agent at least 3 Business Days prior to the commencement of any
such purchasing cycle a certificate demonstrating that, after giving effect to
such repurchase on a pro forma basis, the Borrower would be in compliance with
all financial covenants contained herein, (f) the Founders' Closing Date
Payment, and (g) scheduled payments of interest with respect to the
Subordinated Debt, provided that no Default or Event of Default shall have
occurred and be continuing or would result after giving effect to any payment
pursuant to this clause (g).
6.15 CHANGE OF CORPORATE NAME OR LOCATION. Neither the Borrower nor
any Restricted Subsidiary shall (a) change its corporate name, (b) change its
corporate structure, or (c) change its chief executive office, principal place
of business, corporate offices or the location of its records, in any case
without at least thirty (30) days prior written notice to Agent and provided
that any such new location shall be in the continental United States.
6.16 NO IMPAIRMENT OF INTERCOMPANY TRANSFERS. Neither the Borrower nor
any of its Restricted Subsidiaries shall directly or indirectly enter into or
become bound by any agreement, instrument, indenture or other obligation (other
than this Agreement and the other Loan Documents) which could directly or
indirectly restrict, prohibit or require the consent of any Person with respect
to the payment of dividends or distributions or the making or repayment of
intercompany loans by a Restricted Subsidiary of Borrower to Borrower.
6.17 INTENTIONALLY OMITTED.
6.18 CHANGES RELATING TO SUBORDINATED DEBT. Neither the Borrower nor
any of its Restricted Subsidiaries shall change or amend the terms of any
Subordinated Debt (or any indenture or agreement in connection therewith) if
the effect of such amendment is to: (a) increase the interest rate on such
Subordinated Debt; (b) change the dates upon which payments of principal or
interest are due on such Subordinated Debt other than to extend such dates; (c)
change any default or event of default or covenant other than to delete or make
less restrictive any default or covenant provision therein, or add any covenant
with respect to such Subordinated Debt; (d) change the redemption or prepayment
provisions of such Subordinated Debt other than to extend the dates therefor or
to reduce the premiums payable in connection therewith; (e) grant any security,
collateral or guaranty to secure payment of such
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Subordinated Debt; or (f) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights to the holder of such Subordinated Debt in a manner
adverse to the Borrower, any Restricted Subsidiary, the Agent or any Lender.
7. TERM
7.1 TERMINATION. The financing arrangements contemplated hereby shall
be in effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
7.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING
ARRANGEMENTS. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair
the obligations, duties and liabilities of the Borrower and its Subsidiaries or
the rights of Agent and Lenders relating to any unpaid portion of the Loans or
any other Obligations, due or not due, liquidated, contingent or unliquidated
or any transaction or event occurring prior to such termination, or any
transaction or event, the performance of which is required after the Commitment
Termination Date. Except as otherwise expressly provided herein or in any other
Loan Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Borrower and its Subsidiaries, and all
rights of Agent and each Lender, all as contained in the Loan Documents, shall
not terminate or expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until the Termination
Date; provided however, that in all events the provisions of Section 11, the
payment obligations under Sections 1.12 and 1.13, and the indemnities contained
in the Loan Documents shall survive the Termination Date.
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
8.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder:
(a) Borrower (i) fails to make any payment of principal of the Loans
or the Letter of Credit Obligations when and as due and payable, or (ii) fails
to make any payment of interest or letter of credit fees when and as due and
payable and such failure shall continue for three days or (iii) fails to make
any payment on any of the other Obligations within ten (10) days following
Agent's demand for such payment.
(b) Borrower or any of its Subsidiaries shall fail or neglect to
perform, keep or observe any of the provisions of Sections 1.4, or 6, or any of
the provisions set forth in Annex E.
(c) Borrower or any of its Subsidiaries shall (i) fail or neglect to
perform, keep or observe any of the provisions of clauses (e), (f), (g), (i) or
(j) of Annex D or, (ii) shall fail or neglect to perform, keep or observe any
other provision of Section 4 or any other provision set forth in Annex D, which
failure described in this clause (ii) of this subparagraph (c) shall remain
unremedied for five (5) days or more after notice from the Agent.
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(d) Borrower or any of its Subsidiaries shall fail or neglect to
perform, keep or observe any other provision of this Agreement or of any of the
other Loan Documents (other than any provision embodied in or covered by any
other clause of this Section 8.1) and the same shall remain unremedied for
thirty (30) days or more following the date that the Borrower shall have
obtained knowledge or received notice thereof.
(e) A default or breach shall occur under any other agreement,
document or instrument to which any Credit Party is a party which is not cured
within any applicable grace period, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness (other than
the Obligations) of such Person in excess of $2,000,000 in the aggregate, or
(ii) causes, or permits any holder of such Indebtedness or a trustee to cause,
Indebtedness or a portion thereof in excess of $2,000,000 in the aggregate to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, regardless of whether such right is exercised, by such holder
or trustee.
(f) Any representation or warranty herein or in any Loan Document or
in any written statement, report, financial statement or certificate made or
delivered to Agent or any Lender by Borrower or any of its Subsidiaries is
untrue or incorrect in any material respect as of the date when made or deemed
made.
(g) Assets of any Credit Party with a fair market value of $2,000,000
or more shall be attached, seized, levied upon or subjected to a writ or
distress warrant, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors of any Credit Party and such
condition continues for thirty (30) days or more.
(h) A case or proceeding shall have been commenced against any Credit
Party or any Material Unrestricted Subsidiary (provided, that, in the case of a
Material Unrestricted Subsidiary, the Requisite Lenders shall have voted to
declare such event to be an Event of Default) seeking a decree or order in
respect of such Person (i) under Title 11 of the United States Code, as now
constituted or hereafter amended or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for such
Person or of any substantial part of any such Person's assets, or (iii)
ordering the winding-up or liquidation of the affairs of any such Person, and
such case or proceeding shall remain undismissed or unstayed for sixty (60)
days or more or such court shall enter a decree or order granting the relief
sought in such case or proceeding.
(i) Any Credit Party or any Material Unrestricted Subsidiary
(provided, that, in the case of a Material Unrestricted Subsidiary, the
Requisite Lenders shall have voted to declare such event to be an Event of
Default) (i) shall file a petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other applicable
federal, state or foreign bankruptcy or other
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similar law, (ii) shall fail to contest in a timely and appropriate manner or
shall consent to the institution of proceedings thereunder or to the filing of
any such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
of such Person or of any substantial part of any such Person's assets, (iii)
shall make an assignment for the benefit of creditors, (iv) shall take any
corporate action in furtherance of any of the foregoing, or (v) shall admit in
writing its inability to, or shall be generally unable to, pay its debts as
such debts become due.
(j) A final judgment or judgments for the payment of money in excess
of $2,000,000 in the aggregate at any time outstanding shall be rendered
against any Credit Party and the same shall not, within thirty (30) days after
the entry thereof, have been discharged or execution thereof stayed or bonded
pending appeal, or shall not have been discharged prior to the expiration of
any such stay.
(k) Any material provision of any Loan Document shall for any reason
cease to be valid, binding and enforceable in accordance with its terms (or any
Credit Party shall challenge the enforceability of any Loan Document or shall
assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any security interest created under any Loan Document shall cease to be a
valid and perfected first priority security interest or Lien (except as
otherwise permitted herein or therein) in any of the Collateral purported to be
covered thereby other than as a result of the failure of the Agent to timely
file any continuation statement or maintain possession of any collateral under
its control.
(l) Any Change of Control shall occur.
(m) The termination of, or the receipt by any Credit Party of notice
of the termination of, or the occurrence of any event or condition which would,
with the passage of time or the giving of notice or both, constitute an event
of default under or permit the termination of, any one or more Service
Agreements with respect to any Material Managed Practice.
(n) Any Credit Party or any Managed Practice shall be prohibited or
otherwise restrained from conducting the business theretofor conducted by it in
any manner that has or could reasonably be expected to have or result in a
Material Adverse Effect by virtue of any determination, ruling, decision,
decree or order of any court or Governmental Authority of competent
jurisdiction.
(o) The introduction of, or any change in, any law or regulation
governing or affecting a physician practice management company or any practice
or practice group managed thereby, including without limitation any Healthcare
Laws, which could reasonably be expected to have a Material Adverse Effect.
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(p) A default or breach shall occur under any other agreement,
document or instrument to which any Material Managed Practice is a party which
is not cured within any applicable grace period, and such default or breach,
individually or when aggregated with all such defaults or breaches, could
reasonably be expected to have or result in a Material Adverse Effect.
8.2 REMEDIES. (a) If any Event of Default shall have occurred and be
continuing, or if a Default shall have occurred and be continuing and Agent or
Requisite Lenders shall have determined not to make any Advances or incur any
Letter of Credit Obligations so long as that specific Default is continuing,
Agent may (and at the written request of the Requisite Lenders shall), without
notice, suspend this facility with respect to further Advances and/or the
incurrence of further Letter of Credit Obligations whereupon any further
Advances and Letter of Credit Obligations shall be made or extended in Agent's
sole discretion (or in the sole discretion of the Requisite Lenders, if such
suspension occurred at their direction) so long as such Default or Event of
Default is continuing. If any Payment Default shall have occurred and be
continuing, Agent may (and at the written request of Requisite Lenders shall),
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Loans and the Letter of Credit Fees to the
Default Rate.
(b) If any Event of Default shall have occurred and be continuing,
Agent may (and at the written request of the Requisite Lenders shall), without
notice, (i) terminate this facility with respect to further Advances or the
incurrence of further Letter of Credit Obligations; (ii) declare all or any
portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized as provided in Annex B, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrower and each other Credit Party; and (iii) exercise any rights and
remedies provided to Agent under the Loan Documents and/or at law or equity,
including all remedies provided under the Code; provided, however, that upon
the occurrence of an Event of Default specified in Sections 8.1(h) or (i), all
of the Obligations, including the Revolving Loan, shall become immediately due
and payable without declaration, notice or demand by any Person.
8.3 WAIVERS BY CREDIT PARTIES. Except as otherwise provided for in
this Agreement or by applicable law, each of Borrower and its Subsidiaries
waives: (a) presentment, demand and protest and notice of presentment,
dishonor, notice of intent to accelerate, notice of acceleration, protest,
default, nonpayment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by Agent on which
any Credit Party may in any way be liable, and hereby ratifies and confirms
whatever Agent may do in this regard, (b) all rights to notice and a hearing
prior to Agent's taking possession or control of, or to Agent's replevy,
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attachment or levy upon, the Collateral or any bond or security which might be
required by any court prior to allowing Agent to exercise any of its remedies,
and (c) the benefit of all valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 ASSIGNMENT AND PARTICIPATIONS. Subject to the provisions of
paragraphs (a) and (b) below, the Borrower hereby consents to any Lender's
assignment of, and/or sale of participations in, at any time or times, the Loan
Documents, Loans, Letter of Credit Obligations and any Commitment or of any
portion thereof or interest therein, including any Lender's rights, title,
interests, remedies, powers or duties thereunder, whether evidenced by a
writing or not.
(a) Any assignment by a Lender shall (i) require the consent of Agent
and, absent the occurrence and continuance of an Event of Default, Borrower
(which consent, in each case, shall not be unreasonably withheld or delayed)
and the execution of an assignment agreement (an "Assignment Agreement"
substantially in the form attached hereto as Exhibit 9.1(a) and otherwise in
form and substance satisfactory to, and acknowledged by, Agent); (ii) be
conditioned on such assignee Lender representing to the assigning Lender and
Agent that it is purchasing the applicable Loans to be assigned to it for its
own account, for investment purposes and not with a view to the distribution
thereof; (iii) if a partial assignment, be in an amount at least equal to
$5,000,000 and, after giving effect to any such partial assignment, the
assigning Lender shall have retained Commitments in an amount at least equal to
$5,000,000; (iv) include a payment to Agent of an assignment fee of $3,500; and
(v) absent the occurrence and continuance of an Event of Default, be only to an
Eligible Assignee. In the case of an assignment by a Lender under this Section
9.1, the assignee shall have, to the extent of such assignment, the same
rights, benefits and obligations as it would if it were a Lender hereunder. The
assigning Lender shall be relieved of its obligations hereunder with respect to
its Commitments or assigned portion thereof from and after the date of such
assignment. Borrower hereby acknowledges and agrees that any assignment will
give rise to a direct obligation of Borrower to the assignee and that the
assignee shall be considered to be a "Lender". In all instances, each Lender's
liability to make Loans hereunder shall be several and not joint and shall be
limited to such Lender's Pro Rata Share of the applicable Commitment. In the
event Agent or any Lender assigns or otherwise transfers all or any part of a
Note, Agent or any such Lender shall so notify Borrower and Borrower shall,
upon the request of Agent or such Lender, execute new Notes in exchange for the
Notes being assigned. Notwithstanding the foregoing provisions of this Section
9.1(a), any Lender may at any time pledge or assign all or any portion of such
Lender's rights under this Agreement and the other Loan Documents to a Federal
Reserve Bank; provided, however, that no such pledge or assignment shall
release such Lender from such Lender's obligations hereunder or under any other
Loan Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be in an amount at least equal to $5,000,000, and with the
understanding that all amounts payable by Borrower hereunder shall be
determined as if that Lender had not sold such participation, and that the
holder of any such participation shall not be entitled
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to require such Lender to take or omit to take any action hereunder except
actions directly affecting (i) any reduction in the principal amount of, or
interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of Sections 1.10,
1.12, 1.13 and 9.8, Borrower acknowledges and agrees that a participation shall
give rise to a direct obligation of Borrower to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence neither Borrower nor any other Credit Party shall have any
obligation or duty to any participant. Neither Agent nor any Lender (other than
the Lender selling a participation) shall have any duty to any participant and
may continue to deal solely with the Lender selling a participation as if no
such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no Lender shall,
as between Borrower and that Lender, or Agent and that Lender, be relieved of
any of its obligations hereunder as a result of any sale, assignment, transfer
or negotiation of, or granting of participation in, all or any part of the
Loans, the Notes or other Obligations owed to such Lender.
(d) Borrower and each of its Subsidiaries shall assist any Lender
permitted to sell assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect any
such assignment or participation, including the execution and delivery of any
and all agreements, notes and other documents and instruments as shall be
requested and the delivery of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Borrower and each of its Subsidiaries shall certify the
correctness, completeness and accuracy of all descriptions of such Credit Party
and their affairs contained in any selling materials provided by it and all
other information provided by it and included in such materials, except that
any Projections delivered by Borrower shall only be certified by Borrower as
having been prepared by Borrower in compliance with the representations
contained in Section 3.4(c).
(e) A Lender may furnish any information concerning Borrower in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants). Each Lender shall obtain
from assignees or participants confidentiality covenants substantially
equivalent to those contained in Section 11.8.
(f) So long as no Event of Default shall have occurred and be
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant, if, as of the date
of the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under Section 1.13(a),
increased costs under Section 13(b), an inability to fund LIBOR Loans under
Section 1.13(c), or withholding taxes in accordance with Section 1.13(d).
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9.2 APPOINTMENT OF AGENT. GE Capital is hereby appointed to act on
behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of
Agent and Lenders and no Credit Party nor any other Person shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement and the other Loan
Documents, Agent shall act solely as an agent of Lenders and does not assume
and shall not be deemed to have assumed any obligation toward or relationship
of agency or trust with or for any Credit Party or any other Person. Agent
shall have no duties or responsibilities except for those expressly set forth
in this Agreement and the other Loan Documents. The duties of Agent shall be
mechanical and administrative in nature and Agent shall not have, or be deemed
to have, by reason of this Agreement, any other Loan Document or otherwise a
fiduciary relationship in respect of any Lender. Neither Agent nor any of its
Affiliates nor any of their respective officers, directors, employees, agents
or representatives shall be liable to any Lender for any action taken or
omitted to be taken by it hereunder or under any other Loan Document, or in
connection herewith or therewith, except for damages caused by its or their own
gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders or all
affected Lenders with respect to any act or action (including failure to act)
in connection with this Agreement or any other Loan Document, then Agent shall
be entitled to refrain from such act or taking such action unless and until
Agent shall have received instructions from Requisite Lenders or all affected
Lenders, as the case may be, and Agent shall not incur liability to any Person
by reason of so refraining. Agent shall be fully justified in failing or
refusing to take any action hereunder or under any other Loan Document (a) if
such action would, in the opinion of Agent, be contrary to law or the terms of
this Agreement or any other Loan Document, (b) if such action would, in the
opinion of Agent, expose Agent to Environmental Liabilities or (c) if Agent
shall not first be indemnified to its satisfaction against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting or refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of Requisite Lenders or all affected Lenders,
as applicable.
9.3 AGENT'S RELIANCE, ETC. Neither Agent nor any of its Affiliates nor
any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, Agent: (a) may treat the payee
of any Note as the holder thereof until Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
Agent; (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements,
warranties or representations made in or in connection with this Agreement or
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the other Loan Documents; (d) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of any
Credit Party or to inspect the Collateral (including the books and records) of
any Credit Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (f) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting
upon any notice, consent, certificate or other instrument or writing (which may
be by telecopy, telegram, cable or telex) believed by it to be genuine and
signed or sent by the proper party or parties.
9.4 GE CAPITAL AND AFFILIATES. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this
Agreement and the other Loan Documents as any other Lender and may exercise the
same as though it were not Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include GE Capital in its individual
capacity. GE Capital and its Affiliates may lend money to, invest in, and
generally engage in any kind of business with, any Credit Party, any of their
Affiliates and any Person who may do business with or own securities of any
Credit Party or any such Affiliate, all as if GE Capital were not Agent and
without any duty to account therefor to Lenders. GE Capital and its Affiliates
may accept fees and other consideration from any Credit Party for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders. Each Lender acknowledges the potential conflict of interest
between GE Capital as a Lender holding disproportionate interests in the Loans
and GE Capital as Agent.
9.5 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as
a result of Lenders holding disproportionate interests in the Loans, and
expressly consents to, and waives any claim based upon, such conflict of
interest.
9.6 INDEMNIFICATION. Lenders agree to indemnify Agent (to the extent
not reimbursed by Borrower and without limiting the obligations of Borrower
hereunder), ratably according to their respective Pro Rata Shares, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent in connection therewith;
PROVIDED, HOWEVER, that no Lender shall be liable for any portion of such
liabilities,
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obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Agent's gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees to reimburse
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
and each other Loan Document, to the extent that Agent is not reimbursed for
such expenses by Borrower and its Subsidiaries.
9.7 Successor Agent. Agent may resign at any time by giving not less
than thirty (30) days' prior written notice thereof to Lenders and Borrower.
Upon any such resignation, the Requisite Lenders shall have the right to
appoint a successor Agent, which successor, absent the occurrence and
continuance of any Event of Default, shall be consented to by the Borrower
(such consent not to be unreasonably withheld or delayed). If no successor
Agent shall have been so appointed by the Requisite Lenders and shall have
accepted such appointment within 30 days after the resigning Agent's giving
notice of resignation, then the resigning Agent may, on behalf of Lenders,
appoint a successor Agent, which shall be a Lender, if a Lender is willing to
accept such appointment, or otherwise shall be a commercial bank or financial
institution or a subsidiary of a commercial bank or financial institution if
such commercial bank or financial institution is organized under the laws of
the United States of America or of any State thereof and has a combined capital
and surplus of at least $300,000,000. If no successor Agent has been appointed
pursuant to the foregoing, by the 30th day after the date such notice of
resignation was given by the resigning Agent, such resignation shall become
effective and the Requisite Lenders shall thereafter perform all the duties of
Agent hereunder until such time, if any, as the Requisite Lenders appoint a
successor Agent as provided above. Any successor Agent appointed by Requisite
Lenders hereunder shall be subject to the approval of Borrower, such approval
not to be unreasonably withheld or delayed; provided that such approval shall
not be required if a Default or an Event of Default shall have occurred and be
continuing. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent. Upon the
earlier of the acceptance of any appointment as Agent hereunder by a successor
Agent or the effective date of the resigning Agent's resignation, the resigning
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents, except that any indemnity rights or other rights
in favor of such resigning Agent shall continue. After any resigning Agent's
resignation hereunder, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents. Agent may be removed at the
written direction of the holders (other than Agent) of two-thirds or more of
the Commitments (excluding Agent's Commitment); provided that in so doing, such
Lenders shall be deemed to have waived and released any and all claims they may
have against Agent.
9.8 SETOFF AND SHARING OF PAYMENTS. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation
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of any such rights, upon the occurrence and during the continuance of any Event
of Default, each Lender and each holder of any Note is hereby authorized at any
time or from time to time, without notice to Borrower or any of its
Subsidiaries or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all balances held by
it at any of its offices for the account of Borrower or any of its Subsidiaries
(regardless of whether such balances are then due to Borrower) and any other
properties or assets any time held or owing by that Lender or that holder to or
for the credit or for the account of Borrower or any of its Subsidiaries
against and on account of any of the Obligations which are not paid when due.
Any Lender or holder of any Note exercising a right to set off or otherwise
receiving any payment on account of the Obligations in excess of its Pro Rata
Share thereof shall purchase for cash (and the other Lenders or holders shall
sell) such participations in each such other Lender's or holder's Pro Rata
Share of the Obligations as would be necessary to cause such Lender to share
the amount so set off or otherwise received with each other Lender or holder in
accordance with their respective Pro Rata Shares. Borrower and each of its
Subsidiaries agree, to the fullest extent permitted by law, that (a) any Lender
or holder may exercise its right to set off with respect to amounts in excess
of its Pro Rata Share of the Obligations and may sell participations in such
amount so set off to other Lenders and holders and (b) any Lender or holders so
purchasing a participation in the Loans made or other Obligations held by other
Lenders or holders may exercise all rights of set-off, bankers' lien,
counterclaim or similar rights with respect to such participation as fully as
if such Lender or holder were a direct holder of the Loans and the other
Obligations in the amount of such participation. Notwithstanding the foregoing,
if all or any portion of the set-off amount or payment otherwise received is
thereafter recovered from the Lender that has exercised the right of set-off,
the purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.
9.9 ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION; ACTIONS IN
CONCERT.
(a) ADVANCES; PAYMENTS. (i) Revolving Lenders shall refund or
participate in the Swing Line Loan in accordance with clauses (iii) and (iv) of
Section 1.1(c). If the Swing Line Lender declines to make a Swing Line Loan or
if Swing Line Availability is zero, the Agent shall promptly upon receipt of
any Notice of Revolving Credit Advance or L/C Request, forward a copy of such
request to each of the Lenders. Each Lender shall make the amount of such
Lender's Pro Rata Share of each Advance available to Agent in same day funds by
wire transfer to Agent's account as set forth in Annex F not later than 12:00
noon (New York time) on the requested funding date. After receipt of such wire
transfers (or, in the Agent's sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Agent shall make the requested Advance
to Borrower. All payments by each Lender shall be made without setoff,
counterclaim or deduction of any kind.
(ii) Upon the receipt of any payment from the Borrower with respect to
any Obligation (other than the Swing Line Loan), Agent will advise each Lender
by telephone, or telecopy of the amount of such Lender's Pro Rata Share of
principal, interest and Fees paid for the benefit of Lenders with respect to
each
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applicable Loan. Provided that such Lender has made all payments required to be
made by it under this Agreement and the other Loan Documents as of such
Settlement Date, Agent will pay to each Lender such Lender's Pro Rata Share of
principal, interest and Fees paid by Borrower since the previous Settlement
Date for the benefit of that Lender on the Loans held by it. Such payments
shall be made by wire transfer to such Lender's account (as specified by such
Lender in Annex F or the applicable Assignment Agreement) not later than 3:00
p.m. (New York time) on the Business Day of such receipt.
(b) AVAILABILITY OF LENDER'S PRO RATA SHARE. Agent may assume that
each Lender will make its Pro Rata Share of each Revolving Credit Advance
available to Agent on each funding date. If such Pro Rata Share is not, in
fact, paid to Agent by such Lender when due, Agent will be entitled to recover
such amount on demand from such Lender without set-off, counterclaim or
deduction of any kind. If any Lender fails to pay the amount of its Pro Rata
Share forthwith upon Agent's demand, Agent shall promptly notify Borrower and
Borrower shall immediately repay such amount to Agent. Nothing in this Section
9.9(b) or elsewhere in this Agreement or the other Loan Documents shall be
deemed to require Agent to advance funds on behalf of any Lender or to relieve
any Lender from its obligation to fulfill its Commitments hereunder or to
prejudice any rights that Borrower may have against any Lender as a result of
any default by such Lender hereunder. To the extent that Agent advances funds
to Borrower on behalf of any Lender and is not reimbursed therefor on the same
Business Day as such Advance is made, Agent shall be entitled to retain for its
account all interest accrued on such Advance until reimbursed by the applicable
Lender.
(c) RETURN OF PAYMENTS. (i) If Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has been or
will be received by Agent from Borrower and such related payment is not
received by Agent, then Agent will be entitled to recover such amount from such
Lender on demand without set-off, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by Agent
under this Agreement must be returned to Borrower or paid to any other
Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Loan Document,
Agent will not be required to distribute any portion thereof to any Lender.
In addition, each Lender will repay to Agent on demand any portion of such
amount that Agent has distributed to such Lender, together with interest at
such rate, if any, as Agent is required to pay to Borrower or such other
Person, without set-off, counterclaim or deduction of any kind.
(d) NON-FUNDING LENDERS. The failure of any Lender (such Lender, a
"Non-Funding Lender") to make any Revolving Credit Advance or to purchase any
participation in any Swing Line Loan to be made or purchased by it on the date
specified therefor shall not relieve any other Lender (each such other Lender,
an "Other Lender") of its obligations to make such Advance, but neither any
Other Lender nor Agent shall be responsible for the failure of any Non-Funding
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Lender to make an Advance to be made by such Non-Funding Lender, and no
Non-Funding Lender shall have any obligation to Agent or any Other Lender for
the failure by such Non-Funding Lender. Notwithstanding anything set forth
herein to the contrary, a Non- Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
"Lender" or a "Lender" (or be included in the calculation of "Requisite
Lenders" hereunder) for any voting or consent rights under or with respect to
any Loan Document.
(e) DISSEMINATION OF INFORMATION. Agent will use reasonable efforts to
provide Lenders with any notice of Default or Event of Default received by
Agent from, or delivered by Agent to, any Credit Party, with notice of any
Event of Default of which Agent has actually become aware and with notice of
any action taken by Agent following any Event of Default; provided, however,
that Agent shall not be liable to any Lender for any failure to do so, except
to the extent that such failure is attributable to Agent's gross negligence or
willful misconduct. Lenders acknowledge that Borrower is required to provide
Financial Statements to Lenders in accordance with Annex D hereto and agree
that Agent shall have no duty to provide the same to Lenders.
(f) ACTIONS IN CONCERT. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no
Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of set-off)
without first obtaining the prior written consent of Agent or Requisite
Lenders, it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and the Notes shall be taken in concert and
at the direction or with the consent of Agent.
10. SUCCESSORS AND ASSIGNS
10.1 SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of Borrower, its
Subsidiaries, Agent, Lenders and their respective successors and assigns
(including, in the case of any Credit Party, a debtor-in-possession on behalf
of such Credit Party), except as otherwise provided herein or therein. Neither
the Borrower nor any of its Subsidiaries may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and the Lenders. Any such purported assignment, transfer, hypothecation
or other conveyance by any Credit Party without the prior express written
consent of Agent and the Lenders shall be void. The terms and provisions of
this Agreement are for the purpose of defining the relative rights and
obligations of Borrower, Agent and Lenders with respect to the transactions
contemplated hereby and no Person shall be a third party beneficiary of any of
the terms and provisions of this Agreement or any of the other Loan Documents.
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11. MISCELLANEOUS
11.1 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2 below. Any letter of interest, commitment letter, fee
letter (other than the GE Capital Fee Letter) or confidentiality agreement
between any Credit Party and Agent or any Lender or any of their respective
affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2 AMENDMENTS AND WAIVERS. (a) Except for actions expressly
permitted to be taken by Agent, no amendment, modification, termination or
waiver of any provision of this Agreement or any of the Notes or any other Loan
Documents, or any consent to any departure by any Credit Party therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Borrower and by Requisite Lenders, Supermajority Lenders or all Lenders, as
applicable. Except as set forth in clauses (b) and (c) below, all such
amendments, modifications, terminations or waivers requiring the consent of any
Lenders shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement which waives compliance with
the provisions of Section 6.10, or modifies any of the definitions of the terms
used in such Sections shall be effective unless the same shall be in writing
and signed by the Supermajority Lenders and Borrower.
(c) No amendment, modification, termination or waiver shall, unless in
writing and signed by each Lender, do any of the following: (i) increase the
principal amount of any Lender's Commitment or subject the Lenders to any
additional monetary obligation; (ii) reduce the principal of, rate of interest
on or Fees payable with respect to any Loan or Letter of Credit Obligations;
(iii) extend any scheduled payment date or final maturity date of the principal
amount of any Loan; (iv) waive, forgive, defer, extend or postpone any payment
of interest or Fees; (v) release any Guaranty or all or substantially all of
the Collateral; (vi) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or waive
this Section 11.2 or the definitions of the term "Requisite Lenders" or
"Supermajority Lenders" insofar as such definitions affect the substance of
this Section 11.2. Furthermore, no amendment, modification, termination or
waiver affecting the rights or duties of Agent or any L/C Issuer under this
Agreement or any other Loan Document shall be effective unless in writing and
signed by Agent or such L/C Issuer, as applicable, in addition to Lenders
required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent
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to take additional Collateral pursuant to any Loan Document. No amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the holder of that Note. No notice
to or demand on any Credit Party in any case shall entitle such Credit Party or
any other Credit Party to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or
consent effected in accordance with this Section 11.2 shall be binding upon
each holder of the Notes at the time outstanding and each future holder of the
Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change") requiring the consent of all
Lenders or the Supermajority Lenders, the consent of Requisite Lenders is
obtained, but the consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not obtained being referred to as a
"Non-Consenting Lender") then, so long as Agent is not a Non-Consenting Lender,
at Borrower's request Agent, or a Person acceptable to Agent, shall have the
right with Agent's consent and in Agent's sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent's request, sell and
assign to Agent or such Person, all of the Commitments of such Non-Consenting
Lender for an amount equal to the principal balance of all Loans held by the
Non-Consenting Lender and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.
(e) Upon indefeasible payment in full in cash and performance of all
of the Obligations (other than indemnification Obligations under Section 1.10),
termination of the Commitments and a release of all claims against Agent and
Lenders, and so long as no suits, actions proceedings, or claims are pending or
threatened against any Indemnified Person asserting any damages, losses or
liabilities that are Indemnified Liabilities, Agent shall deliver to Borrower
termination statements, mortgage releases and other documents necessary or
appropriate to evidence the termination of the Liens securing payment of the
Obligations.
11.3 FEES AND EXPENSES. Borrower shall reimburse Agent for all
out-of-pocket expenses incurred in connection with the preparation of the Loan
Documents (including the reasonable fees and expenses of all of its special
loan counsel, advisors, consultants and auditors retained in connection with
the Loan Documents and the Related Transactions and advice in connection
therewith). Borrower shall reimburse Agent (and, with respect to clauses (c)
and (d) below, all Lenders) for all fees, costs and expenses, including the
fees, costs and expenses of counsel or other advisors (including environmental
and management consultants and appraisers) for advice, assistance, or other
representation in connection with:
(a) the forwarding to Borrower or any other Person on behalf of
Borrower by Agent of the proceeds of the Loans;
(b) any amendment, modification or waiver of, or consent with respect
to, any of the Loan Documents or Related Transactions Documents or advice in
connection with the administration of the Loans made pursuant hereto or its
rights hereunder or thereunder;
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(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, Borrower or any other Person) in any
way relating to the Collateral, any of the Loan Documents or any other
agreement to be executed or delivered in connection therewith or herewith,
whether as party, witness, or otherwise, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against Borrower or any other Person
that may be obligated to Agent by virtue of the Loan Documents; including any
such litigation, contest, dispute, suit, proceeding or action arising in
connection with any work-out or restructuring of the Loans during the pendency
of one or more Events of Default; provided that in the case of reimbursement of
counsel for Lenders other than Agent, such reimbursement shall be limited to
one counsel for all such Lenders;
(d) any attempt to enforce any remedies of Agent or any Lender against
any or all of the Credit Parties or any other Person that may be obligated to
Agent or any Lender by virtue of any of the Loan Documents; including any such
attempt to enforce any such remedies in the course of any work-out or
restructuring of the Loans during the pendency of one or more Events of
Default; provided that in the case of reimbursement of counsel for Lenders
other than Agent, such reimbursement shall be limited to one counsel for all
such Lenders;
(e) any work-out or restructuring of the Loans during the pendency of
one or more Events of Default;
(f) efforts to verify, protect, evaluate and assess and (following the
occurrence of any Event of Default) to appraise, collect, sell, liquidate or
otherwise dispose of any of the Collateral; including all attorneys' and other
professional and service providers' fees arising from such services, including
those in connection with any appellate proceedings; and all expenses, costs,
charges and other fees incurred by such counsel and others in any way or
respect arising in connection with or relating to any of the events or actions
described in this Section 11.3 shall be payable, on demand, by Borrower to
Agent. Without limiting the generality of the foregoing, such expenses, costs,
charges and fees may include: fees, costs and expenses of accountants,
environmental advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or telecopy charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.
11.4 NO WAIVER. Agent's or any Lender's failure, at any time or times,
to require strict performance by the Credit Parties of any provision of this
Agreement and any of the other Loan Documents shall not waive, affect or
diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a
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different type. Subject to the provisions of Section 11.2, none of the
undertakings, agreements, warranties, covenants and representations of any
Credit Party contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by any Credit Party shall be deemed to have been
suspended or waived by Agent or any Lender, unless such waiver or suspension is
by an instrument in writing signed by an officer of or other authorized
employee of Agent and the applicable required Lenders and directed to Borrower
specifying such suspension or waiver.
11.5 REMEDIES. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
which Agent or any Lender may have under any other agreement, including the
other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
11.6 SEVERABILITY. Wherever possible, each provision of this Agreement
and the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
11.7 CONFLICT OF TERMS. Except as otherwise provided in this Agreement
or any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement is
in conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
11.8 CONFIDENTIALITY. Agent and each Lender agree to use commercially
reasonable efforts (equivalent to the efforts Agent or such Lender applies to
maintain the confidentiality of its own confidential information) to maintain
as confidential all confidential information provided to them by the Credit
Parties and designated as confidential for a period of two (2) years following
receipt thereof, and further agree not to use such confidential information
except in connection with the evaluation and administration of the credit
relationship governed by this Agreement; except that Agent and each Lender may
disclose such information (a) to Persons employed or engaged by Agent or such
Lender in evaluating, approving, structuring or administering the Loans and the
Commitments who agree to be bound by the terms of this Section; (b) to any bona
fide assignee or participant or potential assignee or participant that has
agreed to comply with the covenant contained in this Section 11.8 (and any such
bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described
in clause (a) above); (c) as required or requested by any Governmental
Authority or reasonably believed by Agent or such Lender to be compelled by any
court decree, subpoena or legal or administrative order or process; (d) as, in
the opinion of Agent's or such Lender's counsel, required by law; (e) in
connection with the exercise of any right or remedy under the Loan Documents or
in connection with any Litigation to which
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Agent or such Lender is a party; or (f) which ceases to be confidential through
no fault of Agent or such Lender. The Agent and the Lenders acknowledge that
the confidential information may from time to time include material non-public
information relating to the Borrower or its Subsidiaries, including information
regarding potential Permitted Acquisitions.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE) AND
ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. BORROWER HEREBY CONSENTS
AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN
IN THE CITY AND STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER, AGENT AND LENDERS PERTAINING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
PROVIDED, THAT AGENT, LENDERS AND BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THE BOROUGH OF
MANHATTAN IN THE CITY AND STATE OF NEW YORK AND, PROVIDED, FURTHER NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT
OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF AGENT. BORROWER EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH SUCH CREDIT PARTY MAY
HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. BORROWER HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION
OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE
ADDRESS SET FORTH IN ANNEX G OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL
BE DEEMED COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF OR
THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAIL, PROPER POSTAGE PREPAID.
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11.10 NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other parties, or whenever any of the parties desires to
give or serve upon any other parties any communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be deemed to have been
validly served, given or delivered (a) upon the earlier of actual receipt and
three (3) Business Days after deposit in the United States Mail, registered or
certified mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
11.10), (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number indicated on Annex G or to such other
address (or facsimile number) as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Failure or delay in delivering
copies of any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than Borrower or Agent) designated on Annex
G to receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
11.11 SECTION TITLES. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement. To the extent executed in counterparts, this
Agreement shall become effective when the Agent shall have notified the
Borrower that the Borrower's signature pages have been accepted by the Agent in
New York, New York.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR
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XXXXXXXXX, XXXXX XXXXX, XXXXXXX AND BORROWER ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
11.14 PRESS RELEASES. The Borrower agrees that neither it nor its
Affiliates will in the future issue any press releases or other public
disclosure using the name of GE Capital or its affiliates or referring to this
Agreement, the other Loan Documents or the Related Transactions Documents
without at least two (2) Business Days' prior notice to GE Capital and without
the prior written consent of GE Capital unless (and only to the extent that)
Borrower or its Affiliate is required to do so under law and then, in any
event, Borrower or its Affiliate will consult with GE Capital before issuing
such press release or other public disclosure. The Borrower consents to the
publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
11.15 REINSTATEMENT. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Borrower for liquidation or reorganization, should Borrower become insolvent or
make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of Borrower's
assets, and shall continue to be effective or to be reinstated, as the case may
be, if at any time payment and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a "voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
11.16 ADVICE OF COUNSEL. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 11.9 and 11.13, with its counsel.
11.17 NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
11.18 NO THIRD-PARTY BENEFICIARY. Borrower's covenants in Article 5,
to cause, or to use its reasonable best efforts to cause, the Managed Practices
to take certain actions, are not intended to: (i) imply that Borrower, or any
of its Subsidiaries, has the power and authority to control a Managed Practice;
(ii) constitute an assumption by Borrower of any obligations of a Managed
Practice to any Person; or (iii) waive or release any claim or cause of action
that Borrower or a Subsidiary may have against a Managed Practice for failing
to comply with any of such Managed Practice's obligations under a Service
Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
AMERICAN PHYSICIAN PARTNERS, INC.
By:
--------------------------------------
Title:
-----------------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender
Revolving Loan Commitment
(including a Swing Line Commitment
of $5,000,000):
$40,000,000 By:
--------------------------------------
Title:
-----------------------------------
BANK ONE, TEXAS, N.A.,
as Lender
Revolving Loan Commitment: By:
$16,500,000 --------------------------------------
Title:
-----------------------------------
BANQUE PARIBAS,
as Lender
By:
--------------------------------------
Title:
-----------------------------------
Revolving Loan Commitment: By:
$14,500,000 --------------------------------------
Title:
-----------------------------------
69
CREDIT LYONNAIS NEW YORK BRANCH,
as Lender
Revolving Loan Commitment: By:
$14,500,000 --------------------------------------
Title:
-----------------------------------
TORONTO DOMINION (TEXAS), INC.,
as Lender
Revolving Loan Commitment: By:
$14,500,000 --------------------------------------
Title:
-----------------------------------
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Lender
Revolving Loan Commitment: By:
$7,500,000 --------------------------------------
Title:
-----------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN -
BOERENLEENBANK B.A.
"Rabobank Nederland," NEW YORK BRANCH,
as Lender
By:
--------------------------------------
Title:
-----------------------------------
Revolving Loan Commitment: By:
$7,500,000 --------------------------------------
Title:
-----------------------------------
70
ANNEX A (Recitals)
to
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings and all section references in the following definitions shall refer to
Sections of the Agreement:
"Acquired Permitted Joint Venture" shall mean any Permitted Joint
Venture acquired by the Borrower or one of its Subsidiaries in an acquisition
permitted pursuant to Section 6.1(a).
"Acquisition" shall mean, collectively, the acquisition at or prior to
the Closing Date by one or more Subsidiaries of the Borrower of all or
substantially all of the assets of the radiology practices or practice groups
or clinics or imaging centers providing ancillary services to such practices or
practice groups, or the acquisition by one or more Subsidiaries of the Borrower
of all of the outstanding capital stock of any radiology practice or practice
group or clinic or imaging center providing ancillary services to such practice
or practice group, which are described on Disclosure Schedule A-1 to the Credit
Agreement, in accordance with the agreements described on such Schedule and the
entry of the Borrower and one or more of its Subsidiaries into one or more
Service Agreements with such practice, practice group, clinic or imaging center
or successor thereto which agreements are in substantially the form of the
agreements described on such Schedule.
"Acquisition Agreement" shall mean, collectively, each Agreement and
Plan of Reorganization and Merger or Exchange Agreement for the Acquisition of
each Founding Radiology Practice and the other Acquisitions on the Closing Date
and each Service Agreement to be executed in connection therewith.
"Acquisition Target" shall have the meaning assigned to it in Section
6.1(a).
"Adjusted EBITDA" shall mean EBITDA of Borrower and its Subsidiaries
plus any amount deducted from earnings with respect to corporate overhead in
determining such consolidated net income.
"Advance" shall mean any Revolving Credit Advance or Swing Line
Advance, as the context may require.
"Affiliate" shall mean, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, five percent (5%) or more of the Stock
having ordinary voting power in the election of directors of such Persons, (b)
each Person that controls, is controlled by or is under common
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control with such Person, and (c) each of such Person's officers, directors,
joint venturers and partners. For the purposes of this definition, "control" of
a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through
the ownership of voting securities, by contract or otherwise; provided,
however, that the term "Affiliate" shall specifically exclude Agent and each
Lender.
"Agent" shall mean GE Capital or its successor appointed pursuant to
Section 9.7.
"Agreement" shall mean the Credit Agreement by and among Borrower, GE
Capital, as Agent and Lender and the other Lenders signatory from time to time
to the Agreement.
"Appendices" shall have the meaning assigned to it in the recitals to
the Agreement.
"Applicable L/C Margin" shall mean the per annum fee, from time to
time in effect, payable with respect to outstanding Letter of Credit
Obligations as determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable L/C Margin, the
Applicable Revolver Index Margin and the Applicable Revolver LIBOR Margin.
"Applicable Revolver Index Margin" shall mean the per annum interest
rate margin from time to time in effect and payable in addition to the Index
Rate applicable to the Revolving Loan, as determined by reference to Section
1.5(a) of the Agreement.
"Applicable Revolver LIBOR Margin" shall mean the per annum interest
rate margin from time to time in effect and payable in addition to the LIBOR
Rate applicable to the Revolving Loan, as determined by reference to Section
1.5(a) of the Agreement.
"Assignment Agreement" shall have the meaning assigned to it in
Section 9.1(a).
"Availability Termination Date" shall mean the earlier of: (i) the
third anniversary of the Closing Date, and (ii) the Commitment Termination
Date.
"Blue Cross/Blue Shield" shall mean any and all contracts or
agreements in force between any of the Borrower, any Subsidiary or any Managed
Practice and any Blue Cross/Blue Shield plan.
"Borrower" shall have the meaning assigned to it in the recitals to
the Agreement.
"Borrower Pledge and Security Agreement" shall mean the Pledge and
Security Agreement of even date herewith executed by Borrower in favor of
Agent, on behalf of itself and Lenders, pledging all Stock of its Subsidiaries
and all Intercompany Notes owing to or held by it, if any, and granting a
security interest in any Service Agreements to which it is a party.
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72
"Borrowing Availability" shall have the meaning assigned to it in
Section 1.1(a).
"Business Day" shall mean any day that is not a Saturday, a Sunday or
a day on which banks are required or permitted to be closed in the State of New
York and in reference to LIBOR Loans shall mean any such day that is also a
LIBOR Business Day.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto, that have a useful life
of more than one year and that are required to be capitalized under GAAP.
"Capital Lease" shall mean, with respect to any Person, any lease of
any property (whether real, personal or mixed) by such Person as lessee that,
in accordance with GAAP, would be required to be classified and accounted for
as a capital lease on a balance sheet of such Person.
"Capital Lease Obligation" shall mean, with respect to any Capital
Lease of any Person, the amount of the obligation of the lessee thereunder
that, in accordance with GAAP, would appear on a balance sheet of such lessee
in respect of such Capital Lease.
"CHAMPUS" shall mean, collectively, the Civilian Health and Medical
Program of the Uniformed Service, a program of medical benefits covering former
and active members of the uniformed services and certain of their dependents,
financed and administered by the United States Departments of Defense, Health
and Human Services and Transportation, and all laws, rules, regulations,
manuals, orders, guidelines or requirements pertaining to such program
including (a) all federal statutes (whether set forth in 10 U.S.C. Sections
1071-1106 or elsewhere) affecting such program; and (b) all rules, regulations
(including 32 C.F.R. Section 199), manuals, orders and administrative,
reimbursement and other guidelines of all governmental authorities promulgated
in connection with such program (whether or not having the force of law), in
each case as the same may be amended, supplemented or otherwise modified from
time to time.
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73
"CHAMPVA" shall mean, collectively, the Civilian Health and Medical
Program of the Department of Veteran Affairs, a program of medical benefits
covering retirees and dependents of former members of the armed services
administered by the United States Department of Veteran Affairs, and all laws,
rules, regulations, manuals, orders, guidelines or requirements pertaining to
such program including (a) all federal statutes (whether set forth in 38 U.S.C.
Section 1713 or elsewhere) affecting such program or, to the extent applicable
to CHAMPVA; and (b) all rules, regulations (including 38 C.F.R. Section 17.54),
manuals, orders and administrative, reimbursement and other guidelines of all
governmental authorities promulgated in connection with such program (whether
or not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934, as
amended), other than Xxxx XxxxxXxxx and/or Xxxxxx X. Xxxxxxxx, M.D., shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended) of 25% or 30% (if such acquisition shall result from the
issuance of Stock to Physicians in a Permitted Acquisition) or more of the
issued and outstanding shares of Stock of Borrower having the right to vote for
the election of directors of Borrower under ordinary circumstances; (b) at any
time, individuals who at the Closing Date, or if later, the date two years
prior to the date of determination (the Closing Date or such later date, the
"Baseline Date"), constituted 50% or more of the board of directors of Borrower
(together with any new directors whose election by the board of directors of
Borrower or whose nomination for election by the stockholders of Borrower was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors on the Baseline Date or whose elections or nomination
for election was previously so approved) cease for any reason other than death
or disability to constitute a majority of the directors then in office; or (c)
Borrower sells, transfers, conveys, assigns or otherwise disposes of all or
substantially all of its assets.
"Charges" shall mean all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including taxes owed to the PBGC at
the time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of the Borrower, any of its
Subsidiaries or any Managed Practice, (d) any such Person's ownership or use of
any properties or other assets, or (e) any other aspect of any such Person's
business.
"Closing Date" shall mean the date of the initial funding of the
Loans.
"Closing Checklist" shall mean the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex C.
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"Code" shall mean the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of New York; provided,
however, in the event that, by reason of mandatory provisions of law, any or
all of the attachment, perfection or priority of Agent's or any Lender's
security interest in any Collateral is governed by the Uniform Commercial Code
as enacted and in effect in a jurisdiction other than the State of New York,
the term "Code" shall mean the Uniform Commercial Code as enacted and in effect
in such other jurisdiction solely for purposes of the provisions hereof
relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
"Collateral" shall mean the property covered by the Borrower Pledge
Agreement and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Agent, on behalf of itself and Lenders, to secure the Obligations.
"Collateral Documents" shall mean the Pledge Agreements, the
Guaranties, and all similar agreements entered into guaranteeing payment of, or
granting a Lien upon property as security for payment of, the Obligations.
"Collection Account" shall mean the following account of Agent:
GECC/CAF Depository
Account #:00-000-000
Bankers Trust Company
0 Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA #: 000-000-000
Attention: Xxxx Xxxxxxxxx
Reference: CFA 4622, American Physician Partners, Inc.
"Commitments" shall mean (a) as to any Lender, such Lender's Revolving
Loan Commitment (including without duplication the Swing Line Lender's Swing
Line Commitment) as set forth on the signature page to the Agreement or in the
most recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, all Lenders' Revolving Loan Commitments (including without duplication
the Swing Line Lender's Swing Line Commitment) which aggregate commitment shall
be One Hundred Fifteen Million Dollars ($115,000,000.00) on the Closing Date,
as such amount may be adjusted, if at all, from time to time in accordance with
the Agreement.
"Commitment Termination Date" shall mean the earliest of (a) the sixth
anniversary of the Closing Date, (b) the date of termination of Lenders'
obligations to make Advances and/or incur Letter of Credit Obligations or
permit existing Loans to remain outstanding pursuant to Section 8.2(b), (c) the
earlier of: (i) November 30, 1997 and (ii) the date that the Borrower shall
have failed in or abandoned its efforts to consummate the IPO, if the Closing
Date shall not have occurred by such date, and (d) the
A-5
75
date of indefeasible prepayment in full by Borrower of the Loans and the
cancellation and return of all Letters of Credit or the cash collateralization
(or stand-by guarantee) of all Letter of Credit Obligations pursuant to Annex B
and the permanent reduction of the Revolving Loan Commitment and the Swing Line
Commitment to zero dollars ($0), in accordance with the provisions of Section
1.3(a).
"Compliance Certificate" shall have the meaning assigned to it in
Annex D.
"Copyright License" shall mean any and all rights now owned or
hereafter acquired by any Credit Party under any written agreement granting any
right to use any Copyright or Copyright registration.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by any Credit Party: (a) all copyrights and general intangibles of
like nature (whether registered or unregistered), now owned or existing or
hereafter adopted or acquired, all registrations and recordings thereof, and
all applications in connection therewith, including all registrations,
recordings and applications in the United States Copyright Office or in any
similar office or agency of the United States, any state or territory thereof,
or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"Credit Parties" shall mean Borrower and each of Borrower's Restricted
Subsidiaries.
"Default" shall mean any event which, with the passage of time or
notice or both, would, unless cured or waived, become an Event of Default.
"Default Rate" shall have the meaning assigned to it in Section
1.5(d).
"Disclosure Documents" shall mean the Registration Statement on Form
S-1 filed by the Borrower in connection with the IPO and all amendments,
modifications and supplements thereto.
"Disclosure Schedules" shall mean the Schedules prepared by Borrower
and denominated as such in the Agreement.
"Dollars" or "$" shall mean lawful currency of the United States of
America.
"EBITDA" shall mean, with respect to any Person for any fiscal period,
an amount equal to (a) consolidated net income of such Person for such period,
minus (b) the sum of (i) income tax credits, (ii) interest income, (iii) gain
from extraordinary items for such period, and (iv) any aggregate net gain
during such period arising from the sale, exchange or other disposition of
capital assets by such Person (including any fixed assets,
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76
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities), in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication, minus (c) any cash
payments made in respect of any item of extraordinary loss accrued during a
prior period and added back to EBITDA in such prior period pursuant to clause
(d)(v) below, plus (d) the sum of (i) any provision for income taxes, (ii)
Interest Expense, (iii) the amount of depreciation and amortization for such
period, (iv) the amount of any deduction to consolidated net income as the
result of any stock option expense, (v) the amount of any item of extraordinary
loss not paid in cash in such period, and (vi) the absolute value of any
aggregate net loss during such period arising from the sale, exchange or other
disposition of capital assets by such Person (including any fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities), in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication. For purposes of this
definition, the following items shall be excluded in determining consolidated
net income of a Person: (1) the undistributed earnings of any Subsidiary of
such Person to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation or requirement of law applicable to such
Subsidiary; or (2) any restoration to income of any extraordinary contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period. For the purposes of calculating the EBITDA
of the Borrower and its consolidated Subsidiaries (but not when calculating the
EBITDA for the Borrower and its Restricted Subsidiaries and not when
calculating Adjusted EBITDA), deductions from consolidated net income for
minority interests in Levered Permitted Joint Ventures shall not be made except
to the extent such amounts represent actual cash payments to such minority
interests.
"Eligible Assignee" means (i) a commercial bank organized under the
laws of the United States, or any state thereof, having a combined capital and
surplus of at least $100,000,000; (ii) a savings and loan association or
savings bank organized under the laws of the United States or any state
thereof, and having a combined capital and surplus of at least $100,000,000;
(iii) a commercial bank organized under the laws of any other country which is
a member of the OECD, or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000, provided, that,
such bank is acting through a branch, agency or Affiliate located in the United
States or managed and controlled by a branch, agency or affiliate located in
the United States; (iv) any affiliate of any Lender if such Affiliate has total
assets in excess of $100,0000,000; (v) any insurance company organized under
the laws of the United States or any state thereof, and having total assets in
excess of $100,000,000, (vi) any other commercial financial entity having total
assets in excess of $100,000,000; and (vii) any other Person mutually agreed to
in writing by the Borrower and the Agent.
"Environmental Laws" shall mean all applicable federal, state, local
and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, and
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any applicable judicial or administrative interpretation thereof, including any
applicable judicial or administrative order, consent decree, order or judgment,
imposing liability or standards of conduct for or relating to the regulation
and protection of human health, safety, the environment and natural resources
(including ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, wildlife, aquatic species and vegetation). Environmental
Laws include the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.) ("CERCLA"); the
Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C.
Sections 5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. Sections 136 et seq.); the Solid Waste Disposal Act (42 U.S.C.
Sections 6901 et seq.); the Toxic Substance Control Act (15 U.S.C. Sections
2601 et seq.); the Clean Air Act (42 U.S.C. Sections 7401 et seq.); the Federal
Water Pollution Control Act (33 U.S.C. Sections 1251 et seq.); the Occupational
Safety and Health Act (29 U.S.C. Sections 651 et seq.); and the Safe Drinking
Water Act (42 U.S.C. Sections 300(f) et seq.), each as from time to time
amended, and any and all regulations promulgated thereunder, and all analogous
state, local and foreign counterparts or equivalents and any transfer of
ownership notification or approval statutes.
"Environmental Liabilities" shall mean, with respect to any Person,
all liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of
or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute or common law, including any
arising under or related to any Environmental Laws, Environmental Permits, or
in connection with any Release or threatened Release or presence of a Hazardous
Material whether on, at, in, under, from or about or in the vicinity of any
real or personal property.
"Environmental Permits" shall mean all permits, licenses,
authorizations, certificates, approvals, registrations or other written
documents required by any Governmental Authority under any Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974
(or any successor legislation thereto), as amended from time to time, and any
regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to any of the Borrower and
its Subsidiaries, any trade or business (whether or not incorporated) which,
together with such Person, are treated as a single employer within the meaning
of Sections 414(b), (c), (m) or (o) of the IRC.
"ERISA Event" shall mean, with respect to any Credit Party or any
ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2)
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of ERISA; (c) the complete or partial withdrawal of any Credit Party or any
ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice of
intent to terminate a Title IV Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (e) the institution of proceedings to
terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by
any Credit Party or ERISA Affiliate to make when due required contributions to
a Multiemployer Plan or Title IV Plan unless such failure is cured within 30
days; (g) any other event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h)
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 of
ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt
status.
"ESOP" shall mean a Plan which is intended to satisfy the requirements
of Section 4975(e)(7) of the IRC.
"Event of Default" shall have the meaning assigned to it in Section
8.1.
"Execution Date" shall mean the date as of which this Agreement is
dated.
"Existing Permitted Joint Venture" shall mean any Permitted Joint
Venture acquired as part of the Acquisition and listed on Schedule 6.1(b).
"Federal Funds Rate" shall mean, for any day, a floating rate equal to
the weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fees" shall mean any and all fees payable to Agent, any L/C Issuer or
any Lender pursuant to the Agreement or any of the other Loan Documents.
"Financial Statements" shall mean the consolidated income statements,
statements of cash flows and balance sheets of Borrower delivered in accordance
with Section 3.4 of the Agreement and Annex D to the Agreement.
"Fiscal Month" shall mean any of the monthly accounting periods of
Borrower.
"Fiscal Quarter" shall mean any of the quarterly accounting periods of
Borrower, ending on March 31, June 30, September 30 and December 31 of each
year.
"Fiscal Year" shall mean any of the annual accounting periods of
Borrower ending on December 31 of each year.
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"Fixed Charges" shall mean, with respect to any Person for any fiscal
period, the aggregate of all Interest Expense paid or accrued during such
period, plus scheduled payments of principal with respect to Indebtedness
during such period; provided, however, that there shall be excluded in
calculating Fixed Charges for both the Borrower and its Restricted Subsidiaries
and the Borrower and its Consolidated Subsidiaries for any period through the
Availability Termination Date, scheduled payments of principal of any
Indebtedness.
"Fixed Charge Coverage Ratio" shall mean, with respect to any Person
for any fiscal period, the ratio of (a) (i) EBITDA, minus (ii) cash payments of
income taxes (other than up to $10,000,000 payable in respect of Fiscal Year
1997 for income taxes arising from the conversion of the Founding Radiology
Practices from cash-basis taxpayers to accrual-basis taxpayers) minus (iii)
Capital Expenditures to (b) Fixed Charges. For any covenant calculation
required to be made prior to the Availability Termination Date, Capital
Expenditures for any period, for the purposes of this definition, will be
defined as the amount shown on the consolidated income statement of such
Persons for such corresponding period as depreciation expense.
"Fixtures" shall mean any "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party.
"Founder's Closing Date Payment" shall mean an amount not to exceed
the net cash proceeds received by the Borrower in the IPO, after deducting all
expenses (including underwriters' discounts and commissions) incurred in
connection therewith.
"Founding Radiology Practices" shall mean Advanced Imaging of Orange
County, P.C., Central Imaging Associates, P.C., Xxxxxxx Imaging Associates,
Diagnostic Imaging Associates, P.A., Drs. Thomas, Wallop, Xxx & Xxxxx, P.A.,
Drs. Xxxxxxxx, Xxxxx & Shackman, P.A., Drs. Decarlo, Lyon, Xxxxx & Xxxxxxxx,
P.A., Harbor Radiologists, P.A., Perilla, Xxxxxxx & Associates, P.A., The IDE
Group, P.C., M&S X-Ray Associates, P.A., Mid Rockland Imaging Associates, P.C.,
Nyack Magnetic Resonance Imaging, P.C., Pelham Imaging Associates, P.C.,
Pacific Imaging Consultants, A Medical Group, Inc., Radiology and Nuclear
Medicine, a Professional Association, Valley Radiologists Medical Group, Inc.,
Women's Imaging Consultants, P.C., Lexington MR, Ltd., San Antonio MRI
Partnership No. 2 Ltd., Madison Square Joint Venture, South Texas MR, Inc. and
South Texas No. 2 MRI Limited Partnership.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the Closing Date, consistently
applied. Unless otherwise specifically provided herein, any accounting term
used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be
computed in accordance with GAAP consistently applied.
"GE Capital Fee Letter" shall have the meaning assigned to it in
Section 1.6(a).
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"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranteed Indebtedness" shall mean, as to any Person, any obligation
of such Person guaranteeing any indebtedness, lease, dividend, or other
obligation ("primary obligations") of any other Person (the "primary obligor")
in any manner, including any obligation or arrangement of such Person (a) to
purchase or repurchase any such primary obligation, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, or (d) to
indemnify the owner of such primary obligation against loss in respect thereof.
The amount of any Guaranteed Indebtedness at any time shall be deemed to be an
amount equal to the lesser at such time of (x) the stated or determinable
amount of the primary obligation in respect of which such Guaranteed
Indebtedness is made and (y) the maximum amount for which such Person may be
liable pursuant to the terms of the instrument embodying such Guaranteed
Indebtedness; or, if not stated or determinable, the maximum reasonably
anticipated liability (assuming full performance) in respect thereof.
"Guaranties" shall mean, collectively, each Subsidiary Guaranty and
any other guaranty executed by any Guarantor in favor of Agent and Lenders in
respect of the Obligations.
"Guarantors" shall mean each Subsidiary of Borrower, and each other
Person, if any, which executes a guarantee or other similar agreement in favor
of Agent in connection with the transactions contemplated by the Agreement and
the other Loan Documents.
"HCFA" shall mean the Health Care Financing Administration, an agency
of HHS, and any successor thereto.
"Hazardous Material" shall mean any substance, material or waste which
is regulated by or forms the basis of liability now or hereafter under, any
Environmental Laws.
"Healthcare Law" shall mean, collectively, any and all federal, state
or local laws, rules, regulations, manuals, orders, guidelines and requirements
pertaining to the delivery of services by the Managed Practices or to the
practice of medicine thereby, including without limitation all laws, rules,
regulations, manuals, orders, guidelines and requirements pertaining to
CHAMPUS, CHAMPVA, Medicaid or Medicare.
"Indebtedness" of any Person shall mean without duplication (a) all
obligations of such Person for borrowed money or for the deferred purchase
price of property or services, but excluding trade accounts payable incurred
and paid in the
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ordinary course of business that are not deferred or overdue by more than six
(6) months unless being contested in good faith, (b) all reimbursement and
other obligations with respect to letters of credit, bankers' acceptances and
surety bonds, whether or not contingent on matured, (c) all obligations
evidenced by notes, bonds, debentures or similar instruments, (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations, (f) all obligations of such Person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter
the risks of that Person arising from fluctuations in currency values or
interest rates, in each case whether contingent or matured, (g) all equity
securities of such Person subject to repurchase or redemption other than at the
sole option of such Person, (h) all obligations of such Person to purchase
securities (or other property) which arise out of or in connection with the
sale of the same or substantially similar securities (or property), (i) any of
the foregoing referred to above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (j) Guaranteed Indebtedness.
"Indemnified Liabilities" shall have the meaning assigned to it in
Section 1.10.
"Index Rate" shall mean, for any day, a floating rate equal to the
higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if The Wall Street Journal ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent), and (ii) the Federal Funds Rate plus fifty (50) basis points per
annum. Each change in any interest rate provided for in the Agreement based
upon the Index Rate shall take effect at the time of such change in the Index
Rate.
"Index Rate Loan" shall mean a Revolving Credit Advance or portion
thereof bearing interest by reference to the Index Rate.
"Intellectual Property" shall mean any and all Licenses, Patents,
Copyrights, Trademarks and trade secrets.
"Intercompany Notes" shall have the meaning assigned to it in Section
6.3.
"Interest Expense" shall mean, with respect to any Person for any
fiscal period, interest expense (whether cash or non-cash) of such Person
determined in accordance with GAAP for such period, including, in any event,
interest expense with respect to any Indebtedness of such Person.
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"Interest Payment Date" means (a) as to any Index Rate Loan, the first
Business Day of each Fiscal Quarter to occur while such Loan is outstanding,
(b) as to any LIBOR Loan, the last day of the applicable LIBOR Period; provided
that, in addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date shall be deemed to be an "Interest Payment
Date" with respect to any interest which is then accrued under the Agreement.
"IPO" shall have the meaning assigned to it in Section 2.1.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and
any successor thereto.
"IRS" shall mean the Internal Revenue Service, or any successor
thereto.
"L/C Issuer" shall have the meaning assigned to it in Annex B.
"L/C Request" shall have the meaning assigned to it in Annex B
"L/C Sublimit" shall have the meaning assigned to it in Annex B.
"Lenders" shall mean GE Capital, the other Lenders named on the
signature page of the Agreement, and, if any such Lender shall decide to assign
all or any portion of the Obligations, such term shall include such Lender's
assignee.
"Letter of Credit Fee" has the meaning assigned to it in Annex B.
"Letter of Credit Obligations" shall mean all outstanding obligations
incurred by Agent and Lenders at the request of Borrower, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of a reimbursement agreement or guaranty by Agent with respect to any
Letter of Credit. The amount of such Letter of Credit Obligations shall equal
the maximum amount which may be payable by Agent or Lenders thereupon or
pursuant thereto.
"Letters of Credit" shall mean commercial or standby letters of credit
issued for the account of Borrower by any L/C Issuer, and bankers' acceptances
issued by Borrower, for which Agent and Lenders have incurred Letter of Credit
Obligations.
"Levered Permitted Joint Venture" shall mean any Permitted Joint
Venture designated by the Borrower as such at the time of the acquisition or
creation thereof in accordance with Section 6.1(b).
"LIBOR Business Day" shall mean a Business Day on which banks in the
city of London are generally open for interbank or foreign exchange
transactions.
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"LIBOR Loan" shall mean an aggregation of Advances, having the same
Interest Period that bear interest by reference to the LIBOR Rate.
"LIBOR Period" shall mean, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two or three months thereafter, as selected by
Borrower's irrevocable notice to Agent as set forth in Section 1.5(e); provided
that the foregoing provision relating to LIBOR Periods is subject to the
following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end two (2) LIBOR Business Days prior to
such date;
(c) any LIBOR Period pertaining to a LIBOR Loan that begins on the
last LIBOR Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of
such LIBOR Period) shall end on the last LIBOR Business Day of a calendar
month; and
(d) Borrower shall select LIBOR Periods so that there shall be no
more than seven (7) separate LIBOR Loans in existence at any one time.
"LIBOR Rate" shall mean for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period which appears on Dow Xxxxx Markets Page 3750 as of
11:00 a.m., London time, on the second full LIBOR Business Day next
preceding the first day of each LIBOR Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be
used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of the
Board of Governors of the Federal Reserve system or other governmental
authority having jurisdiction with respect thereto, as now and from time
to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of such Board) which are
required to be maintained by a member bank of the Federal Reserve System
(such rate to be adjusted to the nearest one sixteenth of one percent
(1/16th of 1%) or, if there is not a nearest one sixteenth of one percent
(1/16th of 1%), to the next highest one sixteenth of one percent (1/16th
of 1%).
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If such interest rates shall cease to be available from Dow Xxxxx
Markets, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to Agent and
Borrower.
"License" shall mean any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security
interest under the Code or comparable law of any jurisdiction).
"Litigation" shall have the meaning assigned to it in Section 3.13.
"Loan" shall mean either or both of the Revolving Loan and the Swing
Line Loan.
"Loan Account" shall have the meaning assigned to it in Section 1.9.
"Loan Documents" shall mean the Agreement, the Notes, the Collateral
Documents, any agreement among the Borrower or the Borrower and the Credit
Parties and one or more Lenders that governs an obligation described in clause
(f) of the definition of Indebtedness which obligation is permitted pursuant to
Section 6.3(a)(iv), and all other agreements, instruments, documents and
certificates identified in the Closing Checklist executed and delivered to, or
in favor of, Agent and/or Lenders and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, and all other written
matter whether heretofore, now or hereafter executed by or on behalf of any
Credit Party, or any employee of any Credit Party, and delivered to Agent or
any Lender in connection with the Agreement or the transactions contemplated
hereby. Any reference in the Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto, and all
amendments, restatements, supplements or other modifications thereto, and shall
refer to such Agreement as the same may be in effect at any and all times such
reference becomes operative.
"Managed Practice" shall mean any radiologist, professional
corporation, professional association, partnership or similar Person that, (i)
pursuant to a Service Agreement, provides radiology or other related
professional medical services at a medical office, clinic or other facility
operated by the Borrower or any of Borrower's Subsidiaries, or at a hospital or
hospital department with which the Borrower or any Subsidiary (or any Permitted
Joint Venture) has a service contract, and (ii) satisfies one or more of the
following criteria: (A) such Person is a Founding Radiology Practice; or (B)
such Person entered into
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such transaction pursuant to or in connection with a Practice Acquisition.
"Managed Practice Advance" shall mean, with respect to any Managed
Practice, on any day, the cumulative excess on such day of (i) amounts paid to
or for the benefit of such Managed Practice (other than amounts paid as part of
the initial acquisition consideration with respect to the assets of such
Managed Practice and amounts paid with respect to practice expenses which are
deducted from the net revenues of the Managed Practice prior to calculating
amounts payable in respect of practice compensation or management fees) over
(ii) accrued net revenues of such Managed Practice.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets, operations, prospects or financial or other condition of
the Borrower and its Restricted Subsidiaries taken as a whole or the industry
in which such Persons operate, (b) the business, assets, operations, prospects
or financial or other condition of the Borrower and its Subsidiaries taken as a
whole, or the industry in which they operate, (c) Borrower's ability to pay any
of the Loans or any of the other Obligations in accordance with the terms of
the Agreement, (d) the Collateral or Agent's Liens, on behalf of itself and
Lenders, on the Collateral or the priority of such Liens, or (e) Agent's or any
Lender's rights and remedies under the Agreement and the other Loan Documents.
"Material Managed Practice" shall mean any Managed Practice that
generates 10% or more of the revenues or the Adjusted EBITDA of the Borrower
and its Subsidiaries on a consolidated basis.
"Material Unrestricted Subsidiary" shall mean any Subsidiary that is
not a Restricted Subsidiary and that generates 5% or more of the revenue or
that holds 5% or more of the assets of the Borrower and its Subsidiaries on a
consolidated basis.
"Maximum Amount" shall mean, at any particular time, an amount equal
to the Revolving Loan Commitment of all Lenders.
"Medicaid" shall mean, collectively, the health care assistance
program established by Title XIX of the Social Security Act (42 U.S.C. Sections
1396 et seq.) and any statutes succeeding thereto, and all laws, rules,
regulations, manuals, orders, guidelines or requirements pertaining to such
program including (a) all federal statutes (whether set forth in Title XIX of
the Social Security Act or elsewhere) affecting such program; (b) all state
statutes and plans for medical assistance enacted in connection with such
program and federal rules and regulations promulgated in connection with such
program; and (c) all applicable provisions of all rules, regulations, manuals,
orders and administrative, reimbursement, guidelines and requirements of all
government authorities promulgated in connection with such program (whether or
not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.
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"Medicaid Certification" shall mean certification of a facility by
HCFA or a state agency or entity under contract with HCFA that such healthcare
facility fully complies with all the conditions of Medicaid.
"Medicaid Provider Agreement" shall mean an agreement entered into
between a state agency or other entity administering Medicaid in such state and
a health care facility or physician under which the health care facility or
physician agrees to provide services or merchandise for Medicaid patients.
"Medicare" shall mean, collectively, the health insurance program for
the aged and disabled established by Title XVIII of the Social Security Act (42
U.S.C. Sections 1395 et seq.) and any statutes succeeding thereto, and all
laws, rules, regulations, manuals, orders or guidelines pertaining to such
program including (a) all federal statutes (whether set forth in Title XVIII of
the Social Security Act or elsewhere) affecting such program; and (b) all
applicable provisions of all rules, regulations, manuals, orders and
administrative, reimbursement, guidelines and requirements of all governmental
authorities promulgated in connected with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.
"Medicare Certification" shall mean certification of a facility by
HCFA or a state agency or entity under contract with HCFA that such healthcare
facility fully complies with all conditions for such facility's participation
in Medicare.
"Medicare Provider Agreement" shall mean an agreement entered into
between a state agency or other entity administering Medicare in such state and
a health care facility or physician under which the health care facility or
physician agrees to provide services or merchandise for Medicare patients.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate
is making, is obligated to make, has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of
them.
"Net Borrowing Availability" shall mean as of any date of
determination, the lesser of (i) the Maximum Amount and (ii) the Revolving
Credit Availability, in each case less the sum of the Revolving Loan, the
Letter of Credit Obligations and the Swing Line Loan then outstanding.
"Notes" shall mean the Revolving Notes and the Swing Line Note.
"Notice of Conversion/Continuation" shall have the meaning assigned to
it in Section 1.5(e).
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"Notice of Revolving Credit Advance" shall have the meaning assigned
to it in Section 1.1(a).
"Obligations" shall mean all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment
of monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest which accrues after the commencement of any case or proceeding in
bankruptcy after the insolvency of, or for the reorganization of any Credit
Party, whether or not allowed in such proceeding), Fees, Charges, expenses,
attorneys' fees and any other sum chargeable to any Credit Party under the
Agreement or any of the other Loan Documents.
"Patent License" shall mean rights under any written agreement now
owned or hereafter acquired by any Person granting any right with respect to
any invention on which a Patent is in existence.
"Patents" shall mean all of the following in which any Person now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State or Territory thereof, or any other country, and (b) all
reissues, continuations, continuations-in-part or extensions thereof.
"Payment Default" shall have the meaning assigned to such term in
Section 1.5(d).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Acquisition" shall have the meaning assigned to it in
Section 6.1.
"Permitted Encumbrances" shall mean the following encumbrances: (a)
Liens for taxes or assessments or other governmental Charges not yet due and
payable; (b) pledges or deposits of money securing obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation; (c) pledges or deposits of money securing bids,
tenders, contracts (other than contracts for the payment of money) or leases to
which any Credit Party is a party as lessee made in the ordinary course of
business; (d) deposits of money securing statutory obligations of any Credit
Party; (e) inchoate and unperfected workers', mechanics', landlords', or
similar liens arising in the ordinary course of business, so long as such Liens
attach only to Equipment, Fixtures and/or Real Estate; (f) deposits securing,
or in lieu
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of, surety, appeal or customs bonds in proceedings to which any Credit Party is
a party; (g) any attachment or judgment lien not constituting an Event of
Default under Section 8.1(j), so long as such Lien attaches only to Real
Estate; (h) zoning restrictions, easements, licenses, or other restrictions on
the use of any Real Estate or other minor irregularities in title (including
leasehold title) thereto, so long as the same do not materially impair the use,
value, or marketability of such Real Estate; (i) presently existing or
hereinafter created Liens in favor of Agent, on behalf of Lenders; and (j)
Liens expressly permitted under clauses (a)(ii) and (iii) of Section 6.7 of the
Agreement.
"Permitted Joint Venture" shall mean a Person: (i) the Stock of which
is held by the Borrower or its Subsidiaries and a hospital or other health care
organization not owned by the Borrower or one of its Subsidiaries, (ii) over
which the Borrower or one of its Subsidiaries has management control, either as
general partner, managing partner, by contract or as holder of the controlling
interest, provided that this clause (ii) shall not apply to MRI of Kansas, L.P.
or MRI of Kansas, Inc., (iii) the sole activity of which is to own, lease or
operate a radiological diagnostic, treatment or imaging center, device, or
department and/or facilities providing services ancillary to such center,
device or department, (iv) is subject to no provision in its organizational
documents or any contract to which it is a party that restricts the payment of
dividends from such entity to the Borrower or any Subsidiary thereof that owns
the Stock of such Permitted Joint Venture, provided that this restriction shall
not prohibit provisions contained in debt documents of Levered Permitted Joint
Ventures that restrict the payment of dividends to payments made with funds
remaining after the payment of all debt service on the debt, and (v) which
satisfies the requirements of Section 6.1(b), or (vi) in which the Borrower or
one of its Subsidiaries holds Stock, and which at the time of the creation or
the initial acquisition of the Stock thereof and at the time of each subsequent
investment, loan or advance thereto, in each case by the Borrower and/or one of
its Subsidiaries, complied with all of the requirements of clauses (i) through
(v) of this definition, but which subsequently fails to meet one or more of the
requirements of clauses (i) through (iv) of this definition, provided that (A)
the aggregate amount of the EBITDA (adjusted to reflect the pro forma effect of
certain events in the manner provided in clause (B) of paragraph (iv) of the
second sentence of Section 6.1(a)) of the Borrower and its consolidated
Subsidiaries for the four Fiscal Quarters most recently ended for which
financial statements are required to be delivered pursuant to Annex D, that is
attributable to such Person and all other Persons to which this clause (vi)
applies shall not exceed ten percent (10%) of the total EBITDA of the Borrower
and its Consolidated Subsidiaries for such period, or (B) the Requisite Lenders
shall not have notified Borrower, in the exercise of their sole discretion,
that such Person no longer constitutes a Permitted Joint Venture.
"Permitted Joint Venture Holding Company" shall mean a wholly-owned
Subsidiary of the Borrower or any Restricted Subsidiary that has no assets
other than (i) minute books, its corporate name and licenses, and other assets
of insignificant value arising incidentally to its existence and (ii) its Stock
and other permitted investments in a single Permitted Joint Venture and has no
Indebtedness or liabilities except (x) contingent liabilities in respect of
Indebtedness and liabilities of the Permitted Joint Venture in which it holds
Stock and (y)
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Indebtedness and liabilities to the Borrower and its Restricted Subsidiaries.
"Permitted Recourse Debt" shall have the meaning assigned to it in
Section 6.3(a).
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other
entity or government (whether federal, state, county, city, municipal, local,
foreign, or otherwise, including any instrumentality, division, agency, body or
department thereof).
"Plan" shall mean, at any time, an employee benefit plan, as defined
in Section 3(3) of ERISA, which any Credit Party maintains, contributes to or
has an obligation to contribute to on behalf of participants who are or were
employed by any Credit Party.
"Pledge Agreements" shall mean the Borrower Pledge Agreement, the
Subsidiary Pledge Agreement and any other pledge agreement entered into after
the Closing Date by any Subsidiary (as required by the Agreement or any other
Loan Document).
"Practice Acquisition" shall mean a Permitted Acquisition that results
in the acquisition by the Borrower or any Restricted Subsidiary, of all or
substantially all of the non-medical assets of a physician or physician group
providing radiology or other professional services.
"Prior Lender" shall mean the lenders listed on Schedule A-19 hereto.
"Prior Lender Obligations" shall mean all obligations of any Credit
Party or any Founding Radiology Practice to be repaid on the Closing Date.
"Proceeds" shall mean "proceeds," as such term is defined in the Code
and, in any event, shall include (a) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to any Credit Party from time to time
with respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable to any Credit Party from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of governmental authority), (c) any claim of
Borrower or any of its Subsidiaries against third parties (i) for past, present
or future infringement of any Patent or Patent License, or (ii) for past,
present or future infringement or dilution of any Copyright, Copyright License,
Trademark or Trademark License, or for injury to the goodwill associated with
any Trademark or Trademark License, (d) any recoveries by any Credit Party
against third parties with respect to any litigation or dispute concerning any
of the Collateral, and (e) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral, upon disposition or
otherwise.
"Pro Forma" means the unaudited consolidated and consolidating balance
sheet of Borrower and its Subsidiaries as of _________, 1997 after giving pro
forma effect to the Related Transactions.
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"Projections" means Borrower's forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and (d)
capitalization statements, all consistent with the historical Financial
Statements of Borrower, together with appropriate supporting details and a
statement of underlying assumptions.
"Pro Rata Share" shall mean with respect to all matters relating to
any Lender the percentage obtained by dividing (i) the Revolving Loan
Commitment of that Lender by (ii) the aggregate Revolving Loan Commitments of
all Lenders as any percentage may be adjusted by assignments permitted pursuant
to Section 9.1.
"Qualified Plan" shall mean a Plan which is intended to be
tax-qualified under Section 401(a) of the IRC.
"Real Estate" shall have the meaning assigned to it in Section 3.6.
"Refinancing" shall mean the repayment in full by Borrower of the
Prior Lender Obligations on the Closing Date except as set forth on Schedule
6.3.
"Refunded Swing Line Loan" shall have the meaning assigned to it in
Section 1.1(c)(iii).
"Related Transactions" means each borrowing under the Revolving Loan
Commitments on the Closing Date, the Acquisition, the Refinancing, the IPO, the
payment of all fees, costs and expenses associated with all of the foregoing
and the execution and delivery of all of the Related Transactions Documents.
"Related Transactions Documents" shall mean the Loan Documents, the
Disclosure Documents, any agreement executed with any underwriter for the
purchase or sale of securities in connection with the IPO, and the Acquisition
Agreements.
"Release" shall mean any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Repurchase Program" shall mean purchases by the Borrower of shares of
its common stock in the public market through one or more broker-dealers
pursuant to a stock repurchase program, executed in purchasing cycles not to
exceed three weeks each.
"Requisite Lenders" shall mean (a) Lenders having more than fifty-one
percent (51%) of the Commitments of all Lenders, or (b) if the Commitments have
been terminated, more than fifty-one percent (51%) of the aggregate outstanding
amount of the Loans (with the Swing Line Loan being attributed to the Lender
making such loan) and Letter of Credit Obligations.
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"Restricted Payment" shall mean (a) the declaration or payment of any
dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets (other than in stock of the
same class as the Stock with respect to which such dividend or distribution is
being made) in respect of a Person's Stock, (b) any payment on account of the
purchase, redemption, defeasance, sinking fund or other retirement of a
Person's Stock or any other payment or distribution made in respect thereof,
either directly or indirectly, (c) any payment or prepayment of principal of,
premium, if any, or interest, fees or other charges on or with respect to, and
any redemption, purchase, retirement, defeasance, sinking fund or similar
payment and any claim for rescission with respect to, any Subordinated Debt;
(d) any payment made to redeem, purchase, repurchase or retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to acquire
Stock of such Person now or hereafter outstanding; (e) any payment of a claim
for the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of, any shares of such Person's Stock or of a claim
for reimbursement, indemnification or contribution arising out of or related to
any such claim for damages or rescission, except to the extent covered by
insurance; and (f) any payment, loan, contribution, or other transfer of funds
or other property to any Stockholder of such Person in its capacity as a
Stockholder.
"Restricted Subsidiary" shall mean any Subsidiary of the Borrower
other than an Unrestricted Subsidiary.
"Retiree Welfare Plan" shall mean, at any time, a Plan that is a
"welfare plan" as defined in Section 3(2) of ERISA, that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
"Revolving Credit Advance" shall have the meaning assigned to it in
Section 1.1(a).
"Revolving Credit Availability" shall mean an amount equal to three
(3) times EBITDA of the Borrower and its Subsidiaries as calculated for the
most recently ended twelve (12) month period for which financial statements are
required to be delivered pursuant to paragraph (a)(i) of Annex D, provided that
EBITDA for purposes of determining the Revolving Credit Availability will be
computed to include, on a pro forma basis, the EBITDA of the Borrower and its
Subsidiaries attributable to any entity the stock or assets of which were
acquired by the Borrower or any Subsidiary of the Borrower, or which came under
the management of the Borrower or any Subsidiary of the Borrower, subsequent to
the first day of such twelve (12) month period or are to be acquired with the
proceeds of a Revolving Credit Advance, as if such entity had been owned and/or
managed by the Borrower or such Subsidiary during such period which computation
shall be made for such period as provided in paragraph (d)(i) of Annex E, and,
provided further that EBITDA for purposes of determining the Revolving Credit
Availability will be computed to exclude the EBITDA of the Borrower and its
Subsidiaries attributable to any entity 100% of the stock or substantially all
of the assets of which were disposed of by the Borrower or any
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Subsidiary of the Borrower or attributable to any Managed Practice the Service
Agreement with respect to which was terminated and not replaced with a Service
Agreement with the same entity generating substantially the same EBITDA,
subsequent to the first day of such twelve (12) month period.
"Revolving Loan" shall mean, at any time, the sum of (i) the aggregate
amount of Revolving Credit Advances outstanding to Borrower plus (ii) the
aggregate Letter of Credit Obligations incurred on behalf of Borrower.
"Revolving Loan Commitment" shall mean (a) as to any Lender, the
commitment of such Lender to make Revolving Credit Advances (including without
duplication Swing Line Advances) and/or incur Letter of Credit Obligations as
set forth in the signature page to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate commitment of all Lenders to make Revolving Credit Advances
(including without duplication Swing Line Advances) and/or incur Letter of
Credit Obligations, which aggregate commitment shall be One Hundred Fifteen
Million Dollars ($115,000,000.00) on the Closing Date, as such amount may be
adjusted, if at all, from time to time in accordance with the Agreement.
"Revolving Note" shall have the meaning assigned to it in Section
1.1(b).
"Senior Debt" shall mean the Obligations and, (i) in the case of the
Borrower and its Restricted Subsidiaries, all other Indebtedness of the
Borrower and its Restricted Subsidiaries other than the Subordinated Debt, and,
(ii) in the case of the Borrower and its consolidated Subsidiaries, all other
Indebtedness of the Borrower and its consolidated Subsidiaries other than the
Subordinated Debt.
"Senior Debt Leverage Ratio" shall mean, with respect to any test
period, (a) in the case of the Borrower and its Restricted Subsidiaries, the
ratio of: (i) the amount of Senior Debt of the Borrower and its Restricted
Subsidiaries outstanding on the last day of such period, to (ii) EBITDA of the
Borrower and its Restricted Subsidiaries for four (4) Fiscal Quarters then
ended, and (b) in the case of the Borrower and its consolidated Subsidiaries,
the ratio of: (i) the amount of Senior Debt of the Borrower and its
consolidated Subsidiaries outstanding on the last day of such period, to (ii)
EBITDA of the Borrower and its consolidated Subsidiaries for four (4) Fiscal
Quarters then ended.
"Service Agreement" shall mean an agreement between the Borrower or
one or more of Borrower's Subsidiaries and one or more Managed Practices (or a
radiologist, professional corporation, professional association, partnership,
or similar Person that would constitute a "Managed Practice," but for its
failure to satisfy one of the two criteria described in clause (ii) of the
definition of "Managed Practice") pursuant to which the Borrower or such
Subsidiaries agree to provide or arrange for comprehensive management,
administrative and other non-medical support services to such Managed
Practice(s) or other Person(s) in exchange for the payment by the Managed
Practice or such other Person to the Borrower or such Subsidiary of a service
fee.
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"Solvent" shall mean, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured; (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (d) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities (such as litigation, guarantees and pension plan
liabilities) at any time shall be computed as the amount which, in light of all
the facts and circumstances existing at the time, represents the amount which
can be reasonably be expected to become an actual or matured liability.
"Stock" shall mean all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership or equivalent entity
whether voting or nonvoting, including common stock, preferred stock or any
other "equity security" (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended).
"Subordinated Debt" shall mean any Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Requisite Lenders in their good faith discretion, as to right and time of
payment and as to any other rights and remedies thereunder.
"Subsidiary" shall mean, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time,
directly or indirectly, owned legally or beneficially by such Person and/or one
or more Subsidiaries of such Person, or with respect to which any such Person
has the right to vote or designate the vote of fifty percent (50%) or more of
such Stock whether by proxy, agreement, operation of law or otherwise, and (b)
any partnership or limited liability company in which such Person and/or one or
more Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%).
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"Subsidiary Guaranty" shall mean the Subsidiary Guaranty of even date
herewith executed by each Subsidiary of Borrower, other than a Permitted Joint
Venture, in favor of Agent, on behalf of itself and Lenders.
"Subsidiary Pledge and Security Agreement" shall mean the Pledge and
Security Agreement of even date herewith executed by each Subsidiary of
Borrower, other than a Permitted Joint Venture, in favor of Agent, on behalf of
itself and Lenders, pledging all Stock of its Subsidiaries, if any, and all
Intercompany Notes owing to or held by it and granting a security interest in
all the Service Agreements to which it is a party.
"Supermajority Lenders" shall mean (a) Lenders having more than
sixty-six and two-thirds percent (66 2/3%) of the Commitments of all Lenders,
or (b) if the Commitments have been terminated, more than sixty-six and
two-thirds percent (66 2/3%) of the aggregate outstanding amount of the Loans
(with the Swing Line Loan being attributed to the Lender making such loan) and
Letter of Credit Obligations.
"Swing Line Advance" has the meaning assigned to it in Section
1.1(c)(i).
"Swing Line Availability" has the meaning assigned to it in Section
1.1(c)(i).
"Swing Line Commitment" shall mean, as to the Swing Line Lender, the
commitment of the Swing Line Lender to make Swing Line Loans as set forth on
the signature page to the Agreement, which commitment constitutes a subfacility
of the Revolving Loan Commitment of the Swing Line Lender.
"Swing Line Lender" shall mean GE Capital.
"Swing Line Loan" shall mean at any time, the aggregate amount of
Swing Line Advances outstanding to Borrower.
"Swing Line Loan Participation Certificate" shall mean a certificate
delivered pursuant to Section 1.1(c)(iv).
"Swing Line Note" has the meaning assigned to it in Section
1.1(c)(ii).
"Taxes" shall mean taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income or revenue of Agent or a Lender by the
jurisdictions under the laws of which Agent and Lenders are organized or
maintain their principal office, or any political subdivision thereof.
"Termination Date" shall mean the date on which the Loans have been
indefeasibly repaid in full and all other Obligations under the Agreement and
the other Loan Documents have been completely discharged and Letter of Credit
Obligations have been cash collateralized, canceled or backed by stand-by
letters of credit in accordance with Annex B, and Borrower shall not have any
further right to borrow any monies under the Agreement.
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"Third Party Payor" shall mean any governmental entity, insurance
company, health maintenance organization, professional provider organization or
similar entity that is obligated to make payments on behalf of any Account
Debtor of any Person.
"Title IV Plan" shall mean an employee pension benefit plan, as
defined in Section 3 (2) of ERISA (other than a Multiemployer Plan), which is
covered by Title IV of ERISA, and which any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"Total Debt Leverage Ratio" shall mean, with respect to any test
period, (a) in the case of the Borrower and its Restricted Subsidiaries, the
ratio of: (i) the amount of Indebtedness of Borrower and its Restricted
Subsidiaries outstanding on the last day of such period to (ii) EBITDA of
Borrower and its Restricted Subsidiaries for the four (4) Fiscal Quarters then
ended, and (b) in the case of the Borrower and its consolidated Subsidiaries,
the ratio of: (i) the amount of Indebtedness of Borrower and its consolidated
Subsidiaries outstanding on the last day of such period to (ii) EBITDA of
Borrower and its consolidated Subsidiaries for the four (4) Fiscal Quarters
then ended.
"Trademark License" shall mean rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademarks" shall mean all of the following now owned or hereafter
acquired by any Person: (a) all trademarks, trade names, corporate names,
business names, trade styles, service marks, logos, other source or business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, designs and general intangibles of like nature (whether registered or
unregistered), now owned or existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof; (b) all reissues, extensions or renewals
thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.
"Unfunded Pension Liability" shall mean, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with
Title IV of ERISA, all determined as of the most recent valuation date for each
such Title IV Plan using the actuarial assumptions for funding purposes in
effect under such Title IV Plan, and (b) for a period of five (5) years
following a transaction which might reasonably be expected to be covered by
Section 4069 of ERISA, the liabilities (whether or not accrued) that could be
avoided by any Credit Party or any ERISA Affiliate as a result of such
transaction.
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"Unrestricted Subsidiary" shall mean any Permitted Joint Venture and
any Permitted Joint Venture Holding Company.
All other undefined terms contained in any of the Loan Documents
shall, unless the context indicates otherwise, have the meanings provided for
by the Code as in effect in the State of New York to the extent the same are
used or defined therein. Unless otherwise specified, references in the
Agreement or any of the Appendices to a Section, subsection or clause refer to
such Section, subsection or clause as contained in the Agreement. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the
same may from time to time be amended, restated, modified or supplemented, and
not to any particular section, subsection or clause contained in the Agreement
or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to Persons include their respective successors and assigns (to the
extent and only to the extent permitted by the Loan Documents) or, in the case
of governmental Persons, Persons, if any, succeeding to the relevant functions
of such Persons; and all references to statutes and related regulations shall
include any amendments of the same and any successor statutes and regulations.
Whenever any provision in any Loan Document refers to the knowledge (or an
analogous phrase) of any Credit Party, such words are intended to signify that
such Credit Party has actual knowledge or awareness of a particular fact or
circumstance.
X-00
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XXXXX X (Section 1.2)
to
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) ISSUANCE. Subject to the terms and conditions of the Agreement,
Agent and Lenders agree to incur, from time to time prior to the Commitment
Termination Date, upon the request of Borrower and for Borrower's account,
Letter of Credit Obligations by causing Letters of Credit to be issued (by a
bank or other legally authorized Person selected by or acceptable to Agent in
its sole discretion (each, an "L/C Issuer")) for Borrower's account and
guaranteed by Agent; provided, however, that if the L/C Issuer is a Lender,
then such Letters of Credit shall not be guaranteed by Agent but rather each
Lender shall, subject to the terms and conditions hereinafter set forth,
purchase (or be deemed to have purchased) risk participations in all such
Letters of Credit issued with the written consent of Agent, as more fully
described in paragraph (b)(ii) below. The aggregate amount of all such Letter
of Credit Obligations shall not at any time exceed the least of (i) Ten Million
Dollars ($10,000,000.00) (the "L/C Sublimit"), (ii) the Maximum Amount less the
aggregate outstanding principal balance of the Revolving Credit Advances and
the Swing Line Loan, and (iii) the Revolving Credit Availability less the
aggregate outstanding principal balance of the Revolving Credit Advances and
the Swing Line Loan. No such Letter of Credit shall have an expiry date which
is more than one year following the date of issuance thereof, and neither Agent
nor Lenders shall be under any obligation to incur Letter of Credit Obligations
in respect of, or purchase risk participations in, any Letter of Credit having
an expiry date which is later than the Commitment Termination Date.
(b) (i) ADVANCES AUTOMATIC; PARTICIPATIONS. In the event that Agent or
any Lender shall make any payment on or pursuant to any Letter of Credit
Obligation, such payment shall then be deemed automatically to constitute a
Revolving Credit Advance under Section 1.1(a) of the Agreement regardless of
whether a Default or Event of Default shall have occurred and be continuing and
notwithstanding Borrower's failure to satisfy the conditions precedent set
forth in Section 2, and each Lender shall be obligated to pay its Pro Rata
Share thereof in accordance with the Agreement. The failure of any Lender to
make available to Agent for Agent's own account its Pro Rata Share of any such
Revolving Credit Advance or payment by Agent under or in respect of a Letter of
Credit shall not relieve any other Lender of its obligation hereunder to make
available to Agent its Pro Rata Share thereof, but no Lender shall be
responsible for the failure of any other Lender to make available such other
Lender's Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for Borrower to incur
Revolving Credit Advances as contemplated by paragraph (b)(i) above
because of an Event of Default described in Section 8.1(h) or (i) or
otherwise or if it shall be illegal or unlawful for any Lender to be
deemed to have assumed a ratable share of the reimbursement obligations
owed to an L/C Issuer, or if the L/C Issuer is a Lender, then (i)
immediately and without further action whatsoever, each Lender shall be
deemed to have irrevocably
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98
and unconditionally purchased from Agent (or such L/C Issuer, as the case
may be) an undivided interest and participation equal to such Lender's Pro
Rata Share (based on the Revolving Loan Commitments) of the Letter of
Credit Obligations in respect of all Letters of Credit then outstanding
and (ii) thereafter, immediately upon issuance of any Letter of Credit,
each Lender shall be deemed to have irrevocably and unconditionally
purchased from Agent (or such L/C Issuer, as the case may be) an undivided
interest and participation in such Lender's Pro Rata Share (based on the
Revolving Loan Commitments) of the Letter of Credit Obligations with
respect to such Letter of Credit on the date of such issuance. Each Lender
shall fund its participation in all payments or disbursements made under
the Letters of Credit in the same manner as provided in the Agreement with
respect to Revolving Credit Advances.
(c) CASH COLLATERAL. If Borrower is required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement prior
to the Commitment Termination Date, Borrower will pay to Agent for the benefit
of Lenders cash or cash equivalents acceptable to Agent ("Cash Equivalents") in
an amount equal to 105% of the maximum amount then available to be drawn under
each applicable Letter of Credit outstanding. Such funds or Cash Equivalents
shall be held by Agent in a cash collateral account (the "Cash Collateral
Account") maintained at a bank or financial institution acceptable to Agent.
The Cash Collateral Account shall be in the name of Borrower and shall be
pledged to, and subject to the control of, Agent, for the benefit of Agent and
Lenders, in a manner satisfactory to Agent. Borrower hereby pledges and grants
to Agent, on behalf of Lenders, a security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not then
due. The Agreement, including this Annex B, shall constitute a security
agreement under applicable law.
If any Letter of Credit Obligations, whether or not then due and
payable, shall for any reason be outstanding on the Commitment Termination
Date, Borrower shall either (i) provide cash collateral therefor in the manner
described above, or (ii) cause all such Letters of Credit and guaranties
thereof to be canceled and returned, or (iii) deliver a stand-by letter (or
letters) of credit in guarantee of such Letter of Credit Obligations, which
stand-by letter (or letters) of credit shall be of like tenor and duration as,
and in an amount equal to 105% of the aggregate maximum amount then available
to be drawn under, the Letters of Credit to which such outstanding Letter of
Credit Obligations relate and shall be issued by a Person, and shall be subject
to such terms and conditions, as are be satisfactory to Agent in its sole
discretion.
From time to time after funds are deposited in the Cash Collateral
Account by Borrower, whether before or after the Commitment Termination Date,
Agent may apply such funds or Cash Equivalents then held in the Cash Collateral
Account to the payment of any amounts, in such order as Agent may elect, as
shall be or shall become due and payable by Borrower to Lenders with respect to
such Letter of Credit Obligations of Borrower and, upon the satisfaction in
full of all Letter of Credit
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Obligations of Borrower, to any other Obligations then due and payable.
Neither Borrower nor any Person claiming on behalf of or through
Borrower shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by Borrower
to Lenders in respect thereof, any funds remaining in the Cash Collateral
Account shall be applied to other Obligations when due and owing and upon
payment in full of such Obligations, any remaining amount shall be paid to
Borrower or as otherwise required by law; provided that, prior to the
Commitment Termination Date and absent the occurrence and continuation of an
Event of Default, any amounts remaining in the Cash Collateral account upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrower to Lenders in respect thereof shall be returned to the
Borrower upon the Borrower's request therefor.
(d) FEES AND EXPENSES. Borrower agrees to pay to Agent for the benefit
of Lenders, as compensation to such Lenders for Letter of Credit Obligations
incurred hereunder, (x) all costs and expenses incurred by Agent or any Lender
on account of such Letter of Credit Obligations, and (y) for each month during
which any Letter of Credit Obligation shall remain outstanding, a fee (the
"Letter of Credit Fee") in an amount equal to the Applicable L/C Margin from
time to time in effect multiplied by the daily average the amount undrawn under
the Letter of Credit for such month. The Letter of Credit Fee shall be paid to
Agent for the benefit of the Lenders in arrears, on the first day of each
month. In addition, Borrower shall pay to any L/C Issuer, on demand, such fees
(including all per annum fees), charges and expenses of such L/C Issuer in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.
(e) REQUEST FOR INCURRENCE OF LETTER OF CREDIT OBLIGATIONS. Borrower
shall give Agent at least five (5) Business Days prior written notice (the "L/C
Request") requesting the incurrence of any Letter of Credit Obligation,
specifying the date such Letter of Credit Obligation is to be incurred,
identifying the beneficiary to which such Letter of Credit Obligation relates
and describing the nature of the transactions proposed to be supported thereby.
The notice shall be accompanied by the form of the Letter of Credit (which
shall be acceptable to the L/C Issuer) to be guarantied. Notwithstanding
anything contained herein to the contrary, Letter of Credit applications by
Borrower and approvals by Agent may be made and transmitted pursuant to
electronic codes and security measures mutually agreed upon and established by
and among Borrower, Agent and the L/C Issuer.
(f) OBLIGATION ABSOLUTE. The obligation of Borrower to reimburse Agent
and Lenders for payments made with respect to any Letter of Credit Obligation
shall be absolute, unconditional and irrevocable, without necessity of
presentment, demand, protest or other formalities, and the obligations of each
Lender to make payments to Agent with respect to Letters of Credit shall be
unconditional and irrevocable. Such obligations of Borrower
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and Lenders shall be paid strictly in accordance with the terms hereof under
all circumstances including the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit or
the Agreement or the other Loan Documents or any other agreement;
(ii) the existence of any claim, set-off, defense or other right
which Borrower or any of its Affiliates or any Lender may at any time have
against a beneficiary or any transferee of any Letter of Credit (or any
Persons or entities for whom any such transferee may be acting), Agent,
any Lender, or any other Person, whether in connection with the Agreement,
the Letter of Credit, the transactions contemplated herein or therein or
any unrelated transaction (including any underlying transaction between
Borrower or any of its Affiliates and the beneficiary for which the Letter
of Credit was procured);
(iii) any draft, demand, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit
or guaranty thereof against presentation of a demand, draft or certificate
or other document which does not comply with the terms of such Letter of
Credit or such guaranty;
(v) any other circumstance or happening whatsoever, which is similar
to any of the foregoing; or
(vi) the fact that a Default or an Event of Default shall have
occurred and be continuing.
(g) Indemnification; Nature of Lenders' Duties. (i) In addition to
amounts payable as elsewhere provided in the Agreement, Borrower hereby agrees
to pay and to protect, indemnify, and save harmless Agent and each Lender from
and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including attorneys' fees and allocated costs of internal
counsel) which Agent or any Lender may incur or be subject to as a consequence,
direct or indirect, of (A) the issuance of any Letter of Credit or guaranty
thereof, or (B) the failure of Agent or any Lender seeking indemnification or
of any L/C Issuer to honor a demand for payment under any Letter of Credit or
guaranty thereof as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent resulting from
the gross negligence or willful misconduct of Agent or such Lender (as finally
determined by a court of competent jurisdiction).
(ii) As between Agent and any Lender and Borrower, Borrower assumes
all risks of the acts and omissions of, or misuse of any Letter of Credit
by beneficiaries of any Letter of Credit. In furtherance and not in
limitation of the foregoing, to the fullest extent permitted by law
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neither Agent nor any Lender shall be responsible: (A) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document issued by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (B) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason other
than, only in the case of a purported transfer of the entire Letter of
Credit and not a right to draw or receive payment thereunder, the fact
that the instrument purports to transfer a Letter of Credit which states
on its face that it is non-transferable; (C) for failure of the
beneficiary of any Letter of Credit to comply fully with conditions
required in order to demand payment under such Letter of Credit; provided
that, in the case of any payment by Agent or L/C Issuer under any Letter
of Credit or guaranty thereof, Agent or such L/C Issuer, as the case may
be, shall be liable to the extent such payment was made as a result of its
gross negligence or willful misconduct (as finally determined by a court
of competent jurisdiction) in determining that the demand for payment
under such Letter of Credit or guaranty thereof complies on its face with
any applicable requirements for a demand for payment under such Letter of
Credit or guaranty thereof; (D) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (E) for
errors in interpretation of technical terms; (F) for any loss or delay in
the transmission or otherwise of any document required in order to make a
payment under any Letter of Credit or guaranty thereof or of the proceeds
thereof; (G) for the credit of the proceeds of any drawing under any
Letter of Credit or guaranty thereof; and (H) for any consequences arising
from causes beyond the control of Agent or any Lender. None of the above
shall affect, impair, or prevent the vesting of any of Agent's or any
Lender's rights or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to expand
any waivers, covenants or indemnities made by Borrower in favor of any L/C
Issuer in any letter of credit application, reimbursement agreement or
similar document, instrument or agreement between Borrower and such L/C
Issuer.
(iv) Nothing contained herein shall waive, release or limit the
Borrower's rights, claims and remedies as against any beneficiary of a
Letter of Credit.
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ANNEX C (Section 2.1(a))
to
CREDIT AGREEMENT
SCHEDULE OF ADDITIONAL CLOSING DOCUMENTS
In addition to, and not in limitation of, the conditions described in Section
2.1 of the Agreement, pursuant to Section 2.1(a), the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to
the Closing Date (each capitalized term used but not otherwise defined herein
shall have the meaning ascribed thereto in Annex A to the Agreement):
A. APPENDICES. All Appendices to the Agreement, in form and substance
satisfactory to Agent.
B. REVOLVING NOTES AND SWING LINE NOTE. Duly executed originals of the
Revolving Notes and Swing Line Note for each applicable Lender, dated the
Closing Date.
C. INSURANCE. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or
endorsements, as requested by Agent, in favor of Agent, on behalf of Lenders.
D. SECURITY INTERESTS AND CODE FILINGS. Evidence satisfactory to Agent
that Agent (for the benefit of itself and Lenders) has a valid and perfected
first priority security interest in the Collateral, including (i) such
documents duly executed by each Credit Party (including financing statements
under the Code and other applicable documents under the laws of any
jurisdiction with respect to the perfection of Liens) as Agent may request in
order to perfect its security interests in the Collateral and (ii) copies of
Code search reports listing all effective financing statements that name any
Borrower or any Subsidiary as debtor, together with copies of such financing
statements, none of which shall cover the Collateral, except for those relating
to the Prior Lender Obligations (all of which shall be terminated on the
Closing Date).
E. PAYOFF LETTER; TERMINATION STATEMENTS. Copies of a duly executed
payoff letter, in form and substance satisfactory to Agent, by and between all
parties to the Prior Lender loan documents evidencing repayment in full of all
Prior Lender Obligations, together with (a) UCC-3 or other appropriate
termination statements, in form and substance satisfactory to Agent, manually
signed by the Prior Lender releasing all liens of Prior Lender upon any of the
personal property of each Credit Party or, in lieu thereof, a description of
all financing statements for which termination statements are required,
together with the commitment of the Prior Lender to execute and deliver to
Agent all necessary termination statements, promptly after receiving the
required payment specified in such Prior Lender's executed payoff letter, and
(b)
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termination of all blocked account agreements, bank agency agreements or other
similar agreements or arrangements or arrangements in favor of Prior Lender or
relating to the Prior Lender Obligations.
F. SUBSIDIARY GUARANTIES. Guaranties executed by and each direct and
indirect Subsidiary of Borrower, other than a Permitted Joint Venture, in favor
of Agent, for the benefit of Lenders.
G. INITIAL NOTICE OF REVOLVING CREDIT ADVANCE. Duly executed originals
of a Notice of Revolving Credit Advance, dated the Closing Date, with respect
to the initial Revolving Credit Advance to be requested by Borrower on the
Closing Date.
H. LETTER OF DIRECTION. Duly executed originals of a letter of
direction from Borrower addressed to Agent, on behalf of itself and Lenders,
with respect to the disbursement on the Closing Date of the proceeds of the
initial Revolving Credit Advance.
I. CHARTER AND GOOD STANDING. For Borrower and each of its
Subsidiaries, such Person's (a) charter and all amendments thereto, (b) good
standing certificates (including verification of tax status) in its state of
incorporation and (c) good standing certificates (including verification of tax
status) and certificates of qualification to conduct business in each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, each dated a recent date prior to the
Closing Date and certified by the applicable Secretary of State or other
authorized Governmental Authority.
J. BYLAWS AND RESOLUTIONS. For Borrower and each of its Subsidiaries,
(a) such Person's bylaws, together with all amendments thereto and (b)
resolutions of such Person's Board of Directors (or other governing body),
approving and authorizing the execution, delivery and performance of the Loan
Documents to which such Person is a party and the transactions to be
consummated in connection therewith, each certified as of the Closing Date by
such Person's corporate secretary or an assistant secretary as being in full
force and effect without any modification or amendment.
K. INCUMBENCY CERTIFICATES. For Borrower and each of its Subsidiaries,
signature and incumbency certificates of the officers of each such Person
executing any of the Loan Documents, certified as of the Closing Date by such
Person's corporate secretary or an assistant secretary as being true, accurate,
correct and complete.
L. Opinions of Counsel. Duly executed originals of opinions of
XxXxxxxxx, Will & Emery, Brobeck, Phleger & Xxxxxxxx LLP, and/or Xxxxxx and
Xxxxx, L.L.P. counsel for Borrower and its Subsidiaries, together with any
local counsel opinions requested by Agent, each in form and substance
satisfactory to the Lenders, dated the Closing Date, and each accompanied by a
letter addressed to such counsel from such Credit Parties, authorizing and
directing such counsel to address its opinion to Agent, on behalf of Lenders,
and to include in such opinion or in a letter accompanying such opinion an
express statement to the effect that Agent and Lenders are authorized to rely
on such opinion.
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M. PLEDGE AGREEMENTS. Duly executed originals of each of the Pledge
Agreements accompanied by (as applicable) (a) share certificates representing
all of the outstanding Stock being pledged pursuant to such Pledge Agreement
and stock powers for such share certificates executed in blank and (b) the
original Intercompany Notes and other instruments evidencing Indebtedness being
pledged pursuant to such Pledge Agreement, duly endorsed in blank.
N. ACCOUNTANTS' LETTER. A letter authorizing the independent certified
public accountants of Borrower and its Subsidiaries to communicate with Agent
and Lenders in accordance with Section 4.2.
O. FEE LETTER. Duly executed originals of the GE Capital Fee Letter.
P. OFFICER'S CERTIFICATE. Agent shall have received duly executed
originals of a certificate of the Chief Executive Officer and Chief Financial
Officer of Borrower, dated the Closing Date, stating that, since __________,
19__ (a) no event or condition has occurred or is existing which could
reasonably be expected to have a Material Adverse Effect; (b) there has been no
material adverse change in the industry in which Borrower operates; (c) no
Litigation has been commenced which, if successful, would have a Material
Adverse Effect or could challenge any of the transactions contemplated by the
Agreement and the other Loan Documents; (d) there have been no Restricted
Payments made by Borrower or any of its Subsidiaries; and (e) there has been no
material increase in liabilities, liquidated or contingent, and no material
decrease in assets of Borrower or any of its Subsidiaries.
Q. AUDITED FINANCIALS; FINANCIAL CONDITION. Agent shall have received
Borrower's final Consolidated Financial Statements for its Fiscal Year ended
December 31, 1996, audited by Xxxxxx Xxxxxxxx. Borrower shall have provided
Agent with its current operating statements, a consolidated balance sheet and
statement of cash flows, the Pro Forma and Projections, in each case in form
and substance satisfactory to Agent, and Agent shall be satisfied, in its sole
discretion, with all of the foregoing. Agent shall have further received a
certificate of the Chief Executive Officer and/or the Chief Financial Officer
of Borrower, based on such Pro Forma and Projections, to the effect that (a)
Borrower will be Solvent upon the consummation of the Related Transactions and
the transactions contemplated herein; (b) the Pro Forma fairly presents the
financial condition of Borrower as of the date thereof after giving effect to
the transactions contemplated by the Loan Documents and the Related
Transactions; (c) the Projections are based upon estimates and assumptions
stated therein, all of which Borrower believes to be reasonable and fair in
light of current conditions and current facts known to Borrower and, as of the
Closing Date, reflect Borrower's good faith and reasonable estimates of its
future financial performance and of the other information projected therein for
the period set forth therein; and (d) containing such other statements with
respect to the solvency of Borrower and matters related thereto as Agent shall
request.
R. OTHER DOCUMENTS. Such other certificates, documents and agreements
respecting any Credit Party as Agent may, in its sole discretion, request.
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ANNEX D (Section 4.1(a))
to
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrower shall deliver or cause to be delivered to Agent or to Agent
and Lenders, as indicated, the following:
(a) (i) MONTHLY FINANCIALS. To Agent, within thirty (30) days after
the end of each Fiscal Month commencing with the first full Fiscal Month
elapsed following the Closing Date (but in the case of such month including the
results since the Closing Date), (A) financial information regarding Borrower
and its Subsidiaries, certified by the Chief Financial Officer of Borrower,
consisting of: (1) unaudited consolidated balance sheets as of the close of
such Fiscal Month and the related consolidated statements of income for that
portion of the Fiscal Year ending as of the close of such Fiscal Month; and (2)
unaudited consolidated statements of income for such Fiscal Month, and (B)
regarding each Subsidiary, unaudited statements of income for such Managed
Practice for such Fiscal Month. Such financial information shall be accompanied
by the certification of the Chief Financial Officer of Borrower (a "Monthly
Compliance Certificate") that any information presented is true, correct and
complete in all material respects and that there was no Default or Event of
Default in existence as of such time or, if a Default or Event of Default shall
have occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default;
(ii) QUARTERLY FINANCIALS. To Agent, within forty-five (45) days after
the end of each Fiscal Quarter, financial information regarding Borrower and
its Subsidiaries, certified by the Chief Financial Officer of Borrower,
consisting of (1) unaudited consolidated balance sheets as of the close of such
Fiscal Quarter and the related consolidated statements of income and cash flows
for that portion of the Fiscal Year ending as of the close of such Fiscal
Month; and (2) unaudited consolidated statements of income and cash flows for
such Fiscal Quarter, all prepared in accordance with GAAP (subject to normal
year-end adjustments). To the extent that the foregoing information is set
forth in any periodic filing with the Securities and Exchange Commission,
delivery of a copy of such filing shall meet the requirement of the preceding
sentence. Such financial information shall be accompanied by (A) a statement in
reasonable detail (each, a "Quarterly Compliance Certificate") showing the
calculations used in determining compliance with each financial covenant set
forth on Annex E which is tested on a quarterly basis, the calculations used in
determining the applicable margins pursuant to Section 1.5 (a), and the
calculations to show compliance with Sections 6.2(a)(iii)(A), 6.2(a)(iv), 6.3
(a)(vii), 6.3(a)(ix), 6.4(b) and 6.14(d) and (B) the certification of the Chief
Financial Officer of Borrower that (i) such financial information presents
fairly in accordance with GAAP (subject to normal year-end adjustments) the
financial position and results of operations of Borrower and
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its Subsidiaries, on a consolidated basis, in each case as at the end of such
quarter and for the period then ended and (ii) any other information presented
is true, correct and complete in all material respects and that there was no
Default or Event of Default in existence as of such time or, if a Default or
Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default;
(b) BUDGET. To Agent, as soon as available, but not later than thirty
(30) days after the end of each Fiscal Year, an annual operating plan for
Borrower, approved by the Board of Directors of Borrower, for the following
year, which will include a statement of all of the material assumptions on
which such plan is based, will include quarterly balance sheets and a quarterly
budget for the following year and will integrate sales, operating expenses,
operating profit, EBITDA and cash flow projections all prepared on the same
basis and in similar detail as that on which operating results are reported
(and in the case of cash flow projections, representing management's good faith
estimates of future financial performance based on historical performance), and
including plans for Capital Expenditures and acquisitions;
(c) ANNUAL FINANCIALS. To Agent, within ninety (90) days after the end
of each Fiscal Year, audited Financial Statements for Borrower and its
Subsidiaries on a consolidated basis, consisting of balance sheets and
statements of income and retained earnings and cash flows, setting forth (in
the case of Financial Statements delivered for Fiscal Year 1998 and thereafter,
it being understood that Fiscal Year 1998 Financial Statements will require
comparisons only for the last quarter of 1997) in comparative form in each case
the figures for the previous Fiscal Year and the figures contained in the
Projections for such Fiscal Year, which Financial Statements shall be prepared
in accordance with GAAP, certified without qualification, by an independent
certified public accounting firm of national standing or otherwise acceptable
to Agent (other than the Projections which are not required to be certified or
audited). Such Financial Statements shall be accompanied by (i) a statement
prepared in reasonable detail showing the calculations used in determining
compliance with each of the financial covenants set forth on Annex E and the
other items described in clause (A) of the third sentence of Section (a)(ii) of
this Annex D, (ii) a report from such accounting firm to the effect that, in
connection with their audit examination, nothing has come to their attention to
cause them to believe that a Default or Event of Default has occurred (or
specifying those Defaults and Events of Default that they became aware of), it
being understood that such audit examination extended only to accounting
matters and that no special investigation was made with respect to the
existence of Defaults or Events of Default, and (iii) the certification of the
Chief Executive Officer or Chief Financial Officer of Borrower that all such
Financial Statements present fairly in accordance with GAAP the financial
position, results of operations and statements of cash flows of Borrower and
its Subsidiaries on a consolidated basis, as at the end of such year and for
the period then ended, and that there was no Default or Event of Default in
existence as of such time or, if a Default or Event of Default shall have
occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default;
X-0
000
(x) MANAGEMENT LETTERS. To Agent, within five (5) Business Days after
receipt thereof by Borrower or any of its Subsidiaries, copies of all
management letters, exception reports or similar letters or reports received by
such Credit Party from its independent certified public accountants;
(e) DEFAULT AND OTHER NOTICES. To Agent, as soon as practicable, and
in any event within five (5) Business Days after an executive officer of
Borrower has actual knowledge of the existence of any Default, Event of
Default, any change with respect to a Permitted Joint Venture that would cause
it to fail to meet the requirements of clauses (i) through (iv) of the
definition thereof, any event respecting a Material Unrestricted Subsidiary
described in Section 8.1(h) or (i), any event respecting a Managed Practice
described in Section 8.1(m), (n), (o) or (p), or other event which has had, or
could reasonably be expected to have, a Material Adverse Effect, telephonic or
telecopied notice specifying the nature of such Default or Event of Default or
other event, including the anticipated effect thereof, which notice, if given
telephonically, shall be promptly confirmed in writing on the next Business
Day;
(f) SEC FILINGS AND PRESS RELEASES. To Agent, promptly upon their
becoming available, copies of: (i) all Financial Statements, reports, notices
and proxy statements made publicly available by Borrower or any of its
Subsidiaries to its security holders; (ii) all regular and periodic reports and
all registration statements and prospectuses, if any, filed by such Credit
Party with any securities exchange or with the Securities and Exchange
Commission or any governmental or private regulatory authority; and (iii) all
press releases and other statements made available by such Credit Party to the
public concerning material adverse changes or developments in the business of
any such Person;
(g) SUBORDINATED DEBT AND EQUITY NOTICES. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt or Stock of such Person,
and, within two (2) Business Days after any Credit Party obtains knowledge of
any matured or unmatured event of default with respect to any Subordinated
Debt, notice of such event of default;
(h) SUPPLEMENTAL SCHEDULES. To Agent, supplemental disclosures, if
any, required by Section 5.6 of the Agreement;
(i) LITIGATION. To Agent in writing, promptly upon learning thereof,
notice of any Litigation commenced or threatened against any Credit Party or
Managed Practice that (i) seeks damages in excess of $500,000, (ii) seeks
injunctive relief, (iii) is asserted or instituted against any Plan, its
fiduciaries or its assets or against any Credit Party or ERISA Affiliate in
connection with any Plan, (iv) alleges criminal misconduct by any Credit Party,
or (v) alleges the violation of any law regarding, or seeks remedies in
connection with, any Environmental Liabilities;
(j) INSURANCE NOTICES. To Agent, disclosure of losses or casualties
required by Section 5.4 of the Agreement;
(k) OTHER DOCUMENTS. To Agent and Lenders, such other financial and
other information respecting the Borrower's or any of its Subsidiaries'
business or financial condition as Agent or
any Lender shall, from time to time, request, provided that such right to
request other information shall not include a right to require additional
periodic reports unless an Event of Default shall have occurred and be
continuing at the time of such request.
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E-PAGE 3
ANNEX E (Section 6.10)
to
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP:
(a) MINIMUM FIXED CHARGE COVERAGE RATIO. Each of (i) the Borrower and
its Restricted Subsidiaries and (ii) the Borrower and its Subsidiaries, shall
have on a consolidated basis at the end of each Fiscal Quarter set forth below,
a Fixed Charge Coverage Ratio for the number of Fiscal Quarters ended since the
Closing Date, or, if the number of Fiscal Quarters ended since the Closing Date
exceeds 4 quarters, then for the four (4) Fiscal Quarters then ended, of not
less than the following for each of the following periods:
Period Ratio
------ -----
Fiscal Quarter ending September 30, 1997
through the Fiscal Quarter ending June 30, 2000; 2.65 to 1.00
Fiscal Quarter ending September 30, 2000; and 1.35 to 1.00
each Fiscal Quarter ended thereafter 1.10 to 1.00
(b) MAXIMUM LEVERAGE RATIO. Each of (i) the Borrower and its
Restricted Subsidiaries and (ii) the Borrower and its Subsidiaries, on a
consolidated basis shall have, at the end of each Fiscal Quarter a Total Debt
Leverage Ratio not in excess of 4.0 to 1.0.
(c) MAXIMUM SENIOR DEBT LEVERAGE RATIO. Each of (i) the Borrower and
its Restricted Subsidiaries and (ii) the Borrower and its Subsidiaries, on a
consolidated basis shall have at the end of each Fiscal Quarter a Senior Debt
Leverage Ratio not in excess of 3.0 to 1.0.
(d) PRO FORMA ADJUSTMENTS. In calculating quarterly compliance with
the covenants specified in paragraphs (a), (b) and (c) above, the following
adjustments shall be made to reflect the effect of acquisitions, dispositions
and terminations of Service Agreements (which are not contemporaneously
replaced by Service Agreements with the same Managed Practices and which new
agreements provide substantially the same EBITDA to the Borrower and its
Subsidiaries as the terminated Service Agreements) occurring after the Closing
Date and during the relevant test period:
(i) For the purposes of paragraphs (a), (b) and (c) the EBITDA
attributable to such acquisition, based on the actual EBITDA of such
acquired entity for such period, shall be included as if such entity had
been acquired on the first day of such period but shall be adjusted to
reflect the APPI Physician compensation model, and shall be adjusted to
eliminate, as of the first day of such period, any Indebtedness repaid,
retired, disposed of or refinanced in
E-1
109
such acquisition and to include any Indebtedness incurred in connection
with such acquisition (including any portion thereof used to fund the
aforementioned refinancing);
(ii) For the purposes of paragraph (a), Fixed Charges shall include,
as of the first day of such period and for the entire period, any Fixed
Charges associated with any acquired entity, including, any interest
attributable to any Indebtedness incurred in connection with such
acquisition, but excluding any interest or other Fixed Charges
attributable to any Indebtedness repaid, retired, disposed of or
refinanced in such acquisition (including any portion thereof used to fund
the aforementioned refinancing);
(iii) For the purposes of paragraph (a), for any test period which
occurs prior to the date when four (4) Fiscal Quarters have ended since
the Closing Date, and that requires adjustments pursuant to clauses (i)
and (ii) above, the Fixed Charge Coverage Ratio shall be calculated by
annualizing the results for the Company and its Subsidiaries before making
the adjustments referred to in such clauses and then making the adjustment
described in such clauses based on the actual results of the newly
acquired entities for the four (4) quarters ended as of the end of the
relevant test period; and
(iv) For the purposes of paragraphs (b) and (c), Indebtedness and
Senior Debt of the Borrower and its Subsidiaries shall be adjusted (A)
upward to reflect any Indebtedness or Senior Debt incurred or assumed in
connection with such acquisition or disposition and (B) downward to
reflect any Indebtedness or Senior Debt repaid, retired or disposed of in
connection with such acquisition, disposition or Service Agreement
termination to the extent that the Borrower and/or its Subsidiaries have
been released from all liability therefor.
(v) For the purposes of paragraphs (a), (b) and (c), the EBITDA
attributable to any entity all or substantially all of whose Stock or
assets were disposed of or to any terminated Service Agreement shall be
excluded as if such entity had been disposed of, or such Service Agreement
terminated, on the first day of such period and shall be adjusted to
eliminate, as of the first day of such period, any Indebtedness repaid,
retired or disposed of in connection with such disposition or termination
to the extent that the Borrower and/or the remaining Subsidiaries have
been released from all liability therefor.
(vi) For the purposes of paragraph (a), Fixed Charges shall exclude,
as of the first day of such period and for the entire period, any Fixed
Charges associated with any entity disposed of or with any terminated
Service Agreement, including, any interest or other Fixed Charges
attributable to any Indebtedness repaid, retired or disposed of in such
disposition or termination, to the extent that the Borrower and/or the
remaining Subsidiaries have been released from all liability therefor.
(e) CERTAIN OTHER ADJUSTMENTS. In calculating the covenants for the
Borrower and its Restricted Subsidiaries above: (i) EBITDA shall be calculated
so as to exclude all items
E-2
110
included in EBITDA with respect to any Permitted Joint Venture or any
Unrestricted Subsidiary; (ii) Fixed Charges shall be calculated to exclude any
such amounts attributable to any Permitted Joint Venture or any Unrestricted
Subsidiary; and (iii) Senior Debt and Indebtedness of the Borrower and its
Restricted Subsidiaries shall not include any Indebtedness of any Unrestricted
Subsidiary or that constitutes Permitted Recourse Debt.
X-0
000
XXXXX F (Section 1.1(d))
to
CREDIT AGREEMENT
LENDERS' WIRE TRANSFER INFORMATION
General Electric Capital Corporation:
------------------------------------
GECC/CAF Depository
Account #: 00-000-000
Bankers Trust Company
0 Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA #: 000-000-000
Attention: Xxxx Xxxxxxxxx
Reference: CFA 4622, American Physician Partners,Inc.
Bank One, Texas, N.A.:
----------------------
Bank One, Texas, N.A.
Dallas, Texas
Credit Account #: 0109904045
ABA #: 000000000
Attention: Xxxx Nile
Reference: Loan
Banque Paribas:
---------------
Bankers Trust Company New York
For Account #: 00000000 Banque Paribas New York
For Further Credit to A/C #: 2144-001545 Banque Paribas Houston Agency
ABA #: 000000000
Reference: APPI
F-1
112
Credit Lyonnais:
----------------
Credit Lyonnais New York
Account #: 00-00000-0000
ABA #: 0000-0000-0
Attention: Loan Servicing
Reference: American Physician Partners, Inc.
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
-----------------------------------------------------
"Rabobank Nederland" New York Branch:
-------------------------------------
Bank of New York
A/C Rabobank New York
A/C #: 000 0000000
ABA #: 000000000
Reference: American Physician
Toronto Dominion (Texas), Inc.:
-------------------------------
Bank of America NTSA
FAVOR: TD Houston Agency
Account #: 0000-0-00000
XXX #: 000000000
Reference: American Physician Partners, Inc.
Manufacturers & Trust Company:
------------------------------
M & T Bank
Xxx X & X Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Beneficiary Name: Open Items General Ledger Account
For the Benefit of: cost center 353
Account #: 00000000
Contact Person: Xxxx Xxxxxxxx
Contact Phone Number: (000) 000-0000
Reference: APPI
F-1
113
ANNEX G (Section 11.10)
to
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Xxxxxxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, III, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to Borrower, at
American Physician Partners, Inc.
0000 XxxxxxxXxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
114
With copies to:
------------------------------
------------------------------
Attention:
-------------------
Telecopier No.:
---------------
Telephone No.: ---------------
(C) If to any Lender, to such Lender at its address specified below:
Bank One, Texas, N.A.
0000 Xxxx Xxxxxx
Third Floor, Health Care Group
Xxxxxx, Xxxxx 00000
Attn: X.X. Xxxxxx, III
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Banque Paribas
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxx-Xxxxxx
Operations Officer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Credit Lyonnais
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland"
New York Branch
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Services Department
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
115
With copies to:
Rabobank Nederland
0000 Xxxx Xxxx
Xxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx
Toronto Dominion (Texas), Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:
Xxxxxx Xxxxxxx / Xxxxxx Xxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000 / (000) 000-0000
Manufacturers and Traders Trust Company
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
116
SCHEDULE 1.1
Responsible Individual
Xxxx Xxxxxxxxx
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
117
SCHEDULE 1.4
SOURCES AND USES OF FUNDS
SOURCES USES
------- ----
Net IPO Proceeds $66,300,000 Founders' Group $54,583,000
Credit Agreement $21,865,562 Distribution
----------- Repay Existing $26,582,562
Indebtedness 5,000,000
Total Sources $88,165,562 Cash on Opening Balance $ 5,000,000
Sheet Transaction Fees $ 2,000,000
-----------
Total Uses $88,165,562
SEE PAY PROCEEDS LETTER FOR DETAILED FUNDS FLOW.