EXHIBIT 10.28
CONFIDENTIAL TREATMENT
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SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of October 23, 2001
by and among
NOVAMED EYECARE, INC.
as the Borrower,
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
and
NATIONAL CITY BANK OF MICHIGAN/ILLINOIS,
as the Agent for the Lenders
* Confidential portion omitted and filed separately with the Commission.
TABLE OF CONTENTS
Page
ARTICLE I...................................................................................1
SECTION 1.1 Defined Terms................................................................1
SECTION 1.2 Use of Defined Terms........................................................23
SECTION 1.3 Cross-References............................................................23
SECTION 1.4 Accounting Principles.......................................................24
ARTICLE II REVOLVING COMMITMENTS, BORROWING PROCEDURES AND NOTES...........................24
SECTION 2.1 Revolving Commitments.......................................................24
SECTION 2.1.1 Revolving Commitment of Each Lender....................................24
SECTION 2.1.2 Lenders Not Permitted or Required To Make Loans........................24
SECTION 2.2 Reduction of Revolving Commitment Amount....................................24
SECTION 2.2.1 Optional...............................................................24
SECTION 2.2.2 Mandatory Reductions and Prepayments...................................25
SECTION 2.3 Borrowing Procedure.........................................................26
SECTION 2.4 Continuation and Conversion Elections.......................................26
SECTION 2.5 Funding.....................................................................26
SECTION 2.6 Notes.......................................................................27
SECTION 2.7 Letters of Credit...........................................................27
SECTION 2.7.1 Issuance of Letters of Credit..........................................27
SECTION 2.7.2 Participating Interests................................................27
SECTION 2.7.3 Reimbursement Upon Drawing.............................................27
SECTION 2.7.4 Request for Letter of Credit...........................................29
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES.....................................29
SECTION 3.1 Repayments and Prepayments..................................................29
SECTION 3.1.1 Prior to the Revolving Commitment Termination Date.....................29
SECTION 3.1.2 On the Maturity Date..................................................29
SECTION 3.1.3 Extension of Maturity Date.............................................29
SECTION 3.2 Interest Provisions.........................................................30
SECTION 3.2.1 Rates..................................................................30
SECTION 3.2.2 Post-Maturity Rates....................................................32
SECTION 3.2.3 Payment Dates..........................................................32
SECTION 3.3 Fees........................................................................33
SECTION 3.3.1 Revolving Commitment Fee...............................................33
SECTION 3.3.2 Letter of Credit Fees..................................................33
SECTION 3.3.3 Agency Fees............................................................33
ARTICLE IV LIBO RATE AND OTHER PROVISIONS..................................................34
SECTION 4.1 LIBO Rate Lending Unlawful..................................................34
SECTION 4.2 Deposits Unavailable........................................................34
SECTION 4.3 Increased LIBO Rate Loan Costs, etc.........................................34
SECTION 4.4 Funding Losses..............................................................35
SECTION 4.5 Increased Capital Costs.....................................................35
SECTION 4.6 Taxes.......................................................................36
SECTION 4.7 Payments, Computations, etc.................................................37
SECTION 4.8 Sharing of Payments.........................................................37
SECTION 4.9 Setoff......................................................................38
SECTION 4.10 Use of Proceeds............................................................38
SECTION 4.11 Changes to Other Branches; Equal Treatment of Borrower.....................38
SECTION 4.12 Replacement of Lenders.....................................................39
ARTICLE V CONDITIONS TO BORROWING..........................................................39
SECTION 5.1 Initial Borrowing...........................................................39
SECTION 5.1.1 Resolutions, etc.......................................................40
SECTION 5.1.2 Delivery of Notes......................................................40
SECTION 5.1.3 Applicable Margin......................................................40
SECTION 5.1.4 Guaranty...............................................................40
SECTION 5.1.5 Pledge Agreements......................................................40
SECTION 5.1.6 Security Agreements....................................................40
SECTION 5.1.7 Intellectual Property Assignment.......................................41
SECTION 5.1.8 Opinions of Counsel....................................................41
SECTION 5.1.9 Agreements.............................................................41
SECTION 5.1.10 Closing Fees, Expenses, etc...........................................41
SECTION 5.2 All Borrowings and Letters of Credit........................................41
SECTION 5.2.1 Compliance with Warranties, No Default, etc............................42
SECTION 5.2.2 Borrowing Request; LC Notice...........................................42
SECTION 5.2.3 Satisfactory Legal Form................................................42
SECTION 5.3 . Conditions to Second Amendment and Restatement Effective Date............43
SECTION 5.3.1 Executed Signature Pages to Agreement..................................43
SECTION 5.3.2 Executed Reaffirmation of Collateral Documents.........................43
SECTION 5.3.3 Payment of Fees and Expenses...........................................43
SECTION 5.3.4 Resolutions, etc......................................................43
SECTION 5.3.5 Certificate...........................................................43
SECTION 5.3.6 Updated Disclosure Schedules..........................................44
SECTION 5.3.7 Other Documents.......................................................44
ARTICLE VI REPRESENTATIONS AND WARRANTIES..................................................45
SECTION 6.1 Organization, etc...........................................................45
SECTION 6.2 Due Authorization, Non-Contravention, etc...................................45
SECTION 6.3 Government Approval, Regulation, etc........................................46
SECTION 6.4 Validity, etc...............................................................46
SECTION 6.5 Financial Information.......................................................46
SECTION 6.6 No Material Adverse Change..................................................46
SECTION 6.7 Litigation, Labor Controversies, etc........................................47
SECTION 6.8 Subsidiaries................................................................47
SECTION 6.9 Ownership of Properties.....................................................47
SECTION 6.10 Taxes......................................................................47
SECTION 6.11 Pension and Welfare Plans..................................................47
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SECTION 6.12 Environmental Warranties...................................................48
SECTION 6.13 Regulations T, U and X.....................................................49
SECTION 6.14 Accuracy of Information....................................................49
SECTION 6.15 Solvency...................................................................49
SECTION 6.16 Collateral Documents.......................................................49
SECTION 6.17 Indebtedness...............................................................50
SECTION 6.18 Service Agreements; Employment Agreements..................................50
SECTION 6.19 Other Agreements/Program Eligibility.......................................51
SECTION 6.20 Reimbursement from Third Party Payors......................................51
SECTION 6.21 Legal Compliance...........................................................51
SECTION 6.22 Licensing and Accreditation................................................51
SECTION 6.23 Subordination Provisions...................................................52
SECTION 6.24 RICO.......................................................................52
ARTICLE VII COVENANTS......................................................................52
SECTION 7.1 Affirmative Covenants.......................................................52
SECTION 7.1.1 Financial Information, Reports, Notices, etc...........................52
SECTION 7.1.2 Compliance with Laws, etc..............................................55
SECTION 7.1.3 Maintenance of Properties..............................................56
SECTION 7.1.4 Insurance..............................................................56
SECTION 7.1.5 Books and Records......................................................56
SECTION 7.1.6 Environmental Covenant.................................................57
SECTION 7.1.7 Changes to Certain Agreements..........................................58
SECTION 7.1.8 Governmental Licenses..................................................58
SECTION 7.1.9 Covenants Extending to Other Persons...................................58
SECTION 7.1.10 Solvency..............................................................58
SECTION 7.1.11 Further Assurances....................................................58
SECTION 7.1.12 New Subsidiaries......................................................59
SECTION 7.2 Negative Covenants..........................................................60
SECTION 7.2.1 Business Activities....................................................60
SECTION 7.2.2 Indebtedness...........................................................61
SECTION 7.2.3 Liens..................................................................62
SECTION 7.2.4 Financial Condition....................................................64
SECTION 7.2.5 Investments............................................................64
SECTION 7.2.6 Restricted Payments, etc...............................................66
SECTION 7.2.7 Intentionally Omitted..................................................67
SECTION 7.2.8 Consolidation, Merger, etc.............................................67
SECTION 7.2.9 Asset and Capital Stock Dispositions, etc.(............................68
SECTION 7.2.10 Modification of Certain Agreements....................................70
SECTION 7.2.11 Transactions with Affiliates..........................................70
SECTION 7.2.12 Negative Pledges, Restrictive Agreements, etc.........................70
ARTICLE VIII EVENTS OF DEFAULT.............................................................71
SECTION 8.1 Listing of Events of Default................................................71
SECTION 8.1.1 Non-Payment of Obligations.............................................71
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SECTION 8.1.2 Breach of Warranty.....................................................71
SECTION 8.1.3 Non-Performance of Certain Covenants and Obligations...................71
SECTION 8.1.4 Non-Performance of Other Covenants and Obligations.....................71
SECTION 8.1.5 Default on Other Indebtedness..........................................71
SECTION 8.1.6 Judgments..............................................................71
SECTION 8.1.7 Pension Plans..........................................................72
SECTION 8.1.8 Change of Control......................................................72
SECTION 8.1.9 Bankruptcy, Insolvency, etc............................................72
SECTION 8.1.10 Impairment of Security, etc...........................................73
SECTION 8.1.11 Fraud and Abuse Laws..................................................73
SECTION 8.1.12 Certifications........................................................73
SECTION 8.1.13 Service Agreements....................................................74
SECTION 8.2 Action if Bankruptcy........................................................74
SECTION 8.3 Action if Other Event of Default............................................74
SECTION 8.4 Letters of Credit...........................................................74
ARTICLE IX.................................................................................75
SECTION 9.1 Actions.....................................................................75
SECTION 9.2 Funding Reliance, etc.......................................................75
SECTION 9.3 Exculpation.................................................................76
SECTION 9.4 Successor...................................................................76
SECTION 9.5 Loans by National City......................................................77
SECTION 9.6 Credit Decisions............................................................77
SECTION 9.7 Copies, etc.................................................................77
ARTICLE X..................................................................................77
SECTION 10.1 Waivers, Amendments, etc...................................................77
SECTION 10.2 Notices....................................................................78
SECTION 10.3 Payment of Costs and Expenses..............................................79
SECTION 10.4 Indemnification............................................................79
SECTION 10.5 Survival...................................................................80
SECTION 10.6 Severability...............................................................80
SECTION 10.7 Headings...................................................................80
SECTION 10.8 Execution in Counterparts, Effectiveness, etc..............................81
SECTION 10.9 Governing Law; Entire Agreement............................................81
SECTION 10.10 Successors and Assigns....................................................81
SECTION 10.11 Sale and Transfer of Loans and Note; Participations in Loans and Note.....81
SECTION 10.11.1 Assignments..........................................................81
SECTION 10.11.2 Participations.......................................................83
SECTION 10.12 Confidentiality...........................................................83
SECTION 10.13 Other Transactions........................................................84
SECTION 10.14 Forum Selection and Consent to Jurisdiction...............................84
SECTION 10.15 Waiver of Jury Trial......................................................85
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SCHEDULE 1-- Original Closing Date Stockholders
SCHEDULE 2-- Agreed EBITDA Formula
SCHEDULE 6.3 -- Approvals
SCHEDULE 6.8 -- Subsidiaries
SCHEDULE 6.10 -- Tax Matters
SCHEDULE 6.17 -- Existing Indebtedness
SCHEDULE 6.18 -- Service Agreements; Employment Agreements
SCHEDULE 6.22 -- Required Certificates
SCHEDULE 7.1.4 -- Insurance
SCHEDULE 7.2.3 -- Existing Liens
SCHEDULE 7.2.5 -- Existing Investments
SCHEDULE 10.1 Commitment Percentages
SCHEDULE 10.2 -- Notice Information
EXHIBIT A Form of Note
EXHIBIT B Form of Borrowing Request
EXHIBIT C Form of Continuation/Conversion Notice
EXHIBIT D Form of Lender Assignment Agreement
EXHIBIT E Form of Guaranty
EXHIBIT F-1 Form of Borrower Pledge Agreement
EXHIBIT F-2 Form of Guarantor Pledge Agreement
EXHIBIT G-1 Form of Borrower Security Agreement
EXHIBIT G-2 Form of Guarantor Security Agreement
EXHIBIT H Form of Opinion of Counsel to the Borrower
EXHIBIT I Form of Reaffirmation of Collateral Documents
EXHIBIT J Form of Adjusted Equity ownership EBITDA Certificate
EXHIBIT K Permitted Asset Dispositions
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EXECUTION DRAFT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October
23, 2001 by and among NOVAMED EYECARE, INC., a Delaware corporation (the
"Borrower"), the various financial institutions from time to time party hereto
(collectively, the "Lenders"), and NATIONAL CITY BANK OF MICHIGAN/ILLINOIS, as
agent (the "Agent") for the Lenders;
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent entered into that
certain Credit Agreement dated as of June 28, 2000 whereby the Lenders agreed to
provide Revolving Commitments prior to the Revolving Commitment Termination Date
to the Borrower in a maximum aggregate principal amount at any one time
outstanding not to exceed $50,000,000 (the "Original Credit Agreement"); and
WHEREAS, the Borrower, the Lenders and the Agent entered into that
certain Amended and Restated Credit Agreement dated as of August 29, 2001
whereby the Lenders agreed to provide Revolving Commitments prior to the
Revolving Commitment Termination Date to the Borrower in a maximum aggregate
principal amount at any one time outstanding not to exceed $50,000,000 (the
"August Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders and the Agent
amend and restate the August Credit Agreement; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to amend and restate the
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August Credit Agreement; and
WHEREAS, the proceeds of such Loans will be used for general corporate
purposes and working capital purposes of the Borrower and its Subsidiaries and
to finance Permitted Acquisitions by the Borrower.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Defined Terms. The following terms (whether or not
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underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof).
"Affected Lender" is defined in Section 4.12.
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"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of
directors or managing general partners; or
(b) to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise.
"Agent" means National City Bank of Michigan/Illinois.
"Agreed EBITDA FORM" is defined in Schedule 2.
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"Agreement" means, on any date, this Second Amended and Restated Credit
Agreement as originally in effect on the Second Amendment and Restatement
Effective Date and as thereafter from time to time amended, supplemented,
amended and restated, or otherwise modified and in effect on such date.
"ASC Practice" means a Practice primarily engaged in business as an
ambulatory surgery center or laser vision correction center.
"ASC Subsidiary" means a Subsidiary of the Borrower primarily engaged
in an ASC Practice.
"ASC Subsidiary Capital Event" means the purchase by the Borrower or a
Wholly-Owned Subsidiary of the Borrower of all or a portion of the minority
interests in a Non-Wholly-Owned ASC Subsidiary or the redemption by a
Non-Wholly-Owned ASC Subsidiary of the Borrower of all or a portion of the
minority interests in such Non-Wholly-Owned ASC Subsidiary.
"ASP Business" means an application services provider business through
which the Borrower will provide information technology-based services and other
services designed to assist health care providers in the growth and development
of their business, which services, will include, without limitation:
installation, maintenance, hosting and support of information technology
systems; installation, maintenance and support of excimer lasers and other
equipment used to perform vision correction surgery; sales and marketing
products and services designed to assist health care professionals in the growth
of their businesses; financial and operations
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management services; patient financing and credit card services; and other
electronic services and related electronic commerce capabilities.
"Asset Disposition" means any sale, transfer or other disposition of
any property of the Borrower or any Subsidiary in a single transaction or in a
series of related transactions (other than the sale of inventory and of
equipment that is obsolete, worn-out or no longer useable by the Borrower or any
of its Subsidiaries, in each case in the ordinary course of business and
Permitted Equity Ownership Sales).
"Assignee Lender" is defined in Section 10.11.1.
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"August Credit Agreement" has the meaning specified in the Recitals
hereto.
"Authorized Officer" means, relative to any Credit Party, those of its
officers whose signatures and incumbency shall have been certified to the Agent
and the Lenders pursuant to Section 5.1.1.
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"Base Rate" means, on any date and with respect to all Base Rate Loans,
a fluctuating rate of interest per annum equal to the higher of (i) the rate of
interest most recently announced by the Agent as its prime rate of interest or
(ii) 0.50% per annum above the Federal Funds Effective Rate. The Base Rate is
not necessarily intended to be the lowest rate of interest determined by the
Agent in connection with extensions of credit. Changes in the rate of interest
on that portion of any Loans maintained as Base Rate Loans will take effect
simultaneously with each change in the Base Rate. The Agent will give notice
promptly to the Borrower and the Lenders of changes in the Base Rate.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Base Rate.
"Borrower" is defined in the preamble.
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"Borrower Pledge Agreement" means the Pledge Agreement executed and
delivered by the Borrower pursuant to Section 5.1.5, substantially in the form
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of Exhibit F-1 hereto, as amended, supplemented, restated or otherwise modified
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from time to time.
"Borrower Security Agreement" means the Security Agreement executed and
delivered pursuant to Section 5.1.6, substantially in the form of Exhibit G-1
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hereto, as amended, supplemented, restated or otherwise modified from time to
time.
"Borrowing" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
Section 2.1.
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"Borrowing Request" means a loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit B
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hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a
legal holiday on which banks are authorized or required to be closed
in Chicago, Illinois; and
(b) relative to the making, continuing, prepaying or
repaying of any LIBO Rate Loans, any day on which dealings in Dollars
are carried on in the London interbank market.
"Capital Expenditures" means, for any period, the aggregate amount of
all expenditures of the Borrower and its Subsidiaries for fixed or capital
assets made during such period which, in accordance with GAAP, would be
classified as capital expenditures.
"Capitalized Lease Liabilities" means all monetary obligations of any
Credit Party under any leasing or similar arrangement which, in accordance with
GAAP, would be classified as capitalized leases, and, for purposes of this
Agreement and each other Loan Document, the amount of such obligations shall be
the capitalized amount thereof, determined in accordance with GAAP, and the
stated maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more than
eighteen months after such time, issued or guaranteed by the United
States Government;
(b) commercial paper, maturing not more than nine months from
the date of issue, which is issued by:
(i) a corporation (other than an Affiliate of any
Credit Party) organized under the laws of any state of the
United States or of the District of Columbia and rated A-l by
Standard & Poor's Corporation or P-l by Xxxxx'x Investors
Service, Inc., or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers acceptance, maturing
not more than one year after such time, which is issued by either:
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(i) a commercial banking institution that is a member
of the Federal Reserve System and has a combined capital and
surplus and undivided profits of not less than $500,000,000,
or
(ii) any Lender; or
(d) any repurchase agreement entered into with any Lender (or
other commercial banking institution of the stature referred to in
clause (c)(i)) which:
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(i) is secured by a fully perfected security
interest in any obligation of the type described in any of
clauses (a) through (c); and
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(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such Lender (or other commercial
banking institution) thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change of Control" means (a) any Person or any two or more Persons
acting in concert (in any such case, excluding the Original Closing Date
Stockholders and their Affiliates) acquiring beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act), directly or indirectly, of capital stock (or other securities
convertible into such capital stock) of the Borrower representing 35% or more of
the combined voting power of all capital stock of the Borrower entitled to vote
in the election of directors, or (b) during any period of 12 consecutive
calendar months, the ceasing of those individuals (the "Continuing Directors")
who (i) were directors of the Borrower, on the first day of each such period or
(ii) subsequently became directors of the Borrower, and whose initial election
or initial nomination for election subsequent to that date was approved either
by (A) a majority of the Continuing Directors then on the board of directors of
the Borrower or (B) the shareholders who, in accordance with the provisions of
the Articles of Incorporation of the Borrower, are entitled to elect such
director, to constitute a majority of the board of directors of the Borrower.
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Credit Party in or upon which a
Lien now or hereafter exists in favor of the Agent on behalf of the Lenders,
whether under this Agreement, Collateral
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Document or under any other documents executed by any such Credit Party and
delivered to the Agent.
"Collateral Documents" means, collectively, (a) the Borrower Security
Agreement, the Guarantor Security Agreement, the Guaranty, the Borrower Pledge
Agreement, the Guarantor Pledge Agreement, the Reaffirmation of Collateral
Documents, the Intellectual Property Assignments and all other security
agreements, pledge agreements, assignments, guarantees and other similar
agreements between a Credit Party and the Agent for the benefit of the Lenders
now or hereafter delivered to the Lenders or the Agent pursuant to or in
connection with the transactions contemplated hereby, and all financing
statements (or comparable documents now or hereafter filed in accordance with
the Uniform Commercial Code or comparable law) against a Credit Party as debtor
in favor of the Agent, for the benefit of the Lenders, as secured party and (b)
any amendments, restatements, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of any of the
foregoing.
"Consideration" means with respect to any Permitted Acquisition, the
aggregate of (i) the cash paid by the Borrower or any of its Subsidiaries,
directly or indirectly, to the seller in connection therewith, (ii) the
Indebtedness incurred or assumed by the Borrower or any of its Subsidiaries
(including, without limitation, Indebtedness of a person becoming a Credit Party
in connection with a Permitted Acquisition, which Indebtedness continues to
exist following the consummation of such Permitted Acquisition), whether in
favor of the seller or otherwise and whether fixed or contingent, in connection
therewith, (iii) any guaranty given or incurred by the Borrower or any of its
Subsidiaries in connection therewith, (iv) the fair market value of any equity
issued by the Borrower, in connection therewith, and (v) any other consideration
given or obligation incurred by the Borrower or any of its Subsidiaries in
connection therewith; provided, however, that the amount of any deferred
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earn-out payments to any seller not required by GAAP to be reflected as a
liability on the consolidated balance sheet of the Borrower as of the date of
consummation of such Permitted Acquisition shall be excluded from the
determination under clauses (i) through (v) of this definition.
"Consolidated Interest Expenses" means, for any period, the total
interest expense (including that attributable to capital leases) of the Borrower
and its Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries, including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and unused line fees but excluding any of the
foregoing to the extent it constitutes a non-cash item.
"Contingent Liability" means any agreement, undertaking or arrangement
which would be reflected in a footnote to a balance sheet as a contingent
liability in accordance with GAAP.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
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"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Credit Party" means the Borrower and any Subsidiary of the Borrower
party to a Loan Document.
"Default" means any condition, occurrence or event which, after notice
or lapse of time or both, would constitute an Event of Default.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender, as the case may be, to each other Person
party hereto. A Lender may have separate Domestic Offices for purposes of
making, maintaining or continuing, as the case may be, Base Rate Loans.
"EBITDA" means, for any applicable computation period, the Borrower's
Net Income on a consolidated basis from all continuing operations, plus (a)
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income and franchise taxes paid or accrued during such period, (b) interest
expenses paid or accrued during such period, (c) amortization and depreciation
deducted in determining Net Income for such period, and (d) for the four (4)
consecutive quarters beginning with the quarter ending September 30, 2001, plus
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(i) nonrecurring restructuring and other nonrecurring charges up to $14,600,000
and (ii) EBITDA from discontinued operations as calculated and certified by the
Borrower on Annex B, Part III of Schedule 2 hereto. For the purpose of
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determining compliance with Section 7.2.4(b) and (c), "EBITDA" shall be as
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adjusted pursuant to the formula described in Schedule 2.
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"Effective Maturity Date" is defined in Section 3.1.3.
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"Employment Agreement" means any employment agreement entered into by
any Provider, who is a shareholder of a Practice, with such Practice.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"Equity Provider" means any individual or group of individuals who had
an equity interest in (i) a Practice acquired in a Permitted Acquisition, on the
date of such Permitted Acquisition, or (ii) any other Practice with which the
Borrower has a Service Agreement, on the date of the execution of any such
Service Agreement."
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Event of Default" is defined in Section 8.1.
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"Extension Effective Date" is defined in Section 3.1.3.
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"Extension Response Date" is defined in Section 3.1.3.
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"Extension Request" is defined in Section 3.1.3.
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"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g. the "2000 Fiscal Year") refer to the Fiscal Year
---
ending on the December 31 occurring during such calendar year.
"Fixed Charges" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis, as of any date of determination, (a)
Consolidated Interest Expenses for the period of four fiscal quarters ending on
the date of determination, and (b) scheduled principal payments on Indebtedness
required to be made in such period and (c) 10% of the outstanding principal
amount of the Loans and (d) rent expenses incurred by the Borrower and its
Subsidiaries.
"Fraud and Abuse Laws" means Section 1128B(b) of the Social Security
Act, 42 U.S.C. Section 1320a-7b(b) and Section 1877 of the Social Security Act,
42 U.S.C. Section 1395nn, each as from time to time amended; any successor
statute(s) thereto; all rules and regulations promulgated thereunder; any other
federal or state law concerning the referral of patients by physicians; and any
law, rule, regulation or successor thereto concerning or related to false or
fraudulent billing for medical goods or services.
-8-
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination; provided, however, that for purposes of all computations required
-------- -------
to be made with respect to compliance by the Borrower with Sections 7.2.4,
--------------
8.1.11 and 8.1.12 such term shall mean generally accepted accounting principles
------ ------
as in effect on the date of this Agreement, applied in a manner consistent with
those used in preparing the financial statements referred to in Section 6.5.
-----------
"Guarantor" means each Person party to a Guaranty.
"Guarantor Pledge Agreement" means the Pledge Agreement substantially
in the form of Exhibit F-2 hereto, as amended, supplemented, restated or
-----------
otherwise modified from time to time.
"Guarantor Security Agreement" means the Security Agreement
substantially in the form of Exhibit G-2 hereto, as amended, supplemented,
-----------
restated or otherwise modified from time to time.
"Guaranty" means, collectively, the Guaranty substantially in the form
of Exhibit E hereto, as amended, supplemented, restated or otherwise modified
---------
from time to time.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous
or toxic chemical, material or substance within the meaning of any
other applicable federal, state or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning
any medical, hazardous, toxic or dangerous waste, substance or
material, all as amended or hereafter amended.
-9-
"HCFA" shall mean the United States Health Care Financing
Administration and any successor thereto.
"Hedging Agreements" means any Interest Rate Agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging agreement,
provided that such agreement is not entered into for speculative purposes, is
entered into with the Agent or a Lender.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of any Credit Party, any qualification or exception to such opinion or
certification:
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of
examination of matters relevant to such financial statement; or
(c) which relates to the treatment or classification of
any item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause such Credit Party to be in default of any of its
obligations under Section 7.2.4.
-------------
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
------- -------
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money
and all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(b) all obligations, contingent or otherwise, relative to
the face amount of all letters of credit (including Letters of Credit),
whether or not drawn, and banker's acceptances issued for the account
of such Person;
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
-10-
(d) all other liabilities for borrowed money in
accordance with GAAP included on the liability side of the balance
sheet of such Person as of the date at which Indebtedness is to be
determined;
(e) net liabilities of such Person under all Hedging
Agreements;
(f) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to pay the
deferred purchase price of property or services, and indebtedness
(excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether
or not such indebtedness shall have been assumed by such Person or is
limited in recourse; and
(g) all Contingent Liabilities of such Person in respect
of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, except to the extent payments have been
made or are required to be made with respect to such Indebtedness solely by a
general partner or a joint venture partner other than a Subsidiary.
"Indemnified Liabilities" is defined in Section 10.4.
------------
"Indemnified Parties" is defined in Section 10.4.
------------
"Intercompany Loans" is defined in Section 7.2.2.
-------------
"Intercompany Notes" is defined in Section 7.2.2.
-------------
"Intellectual Property Assignment" means that certain Intellectual
Property Assignment in form and substance satisfactory to the Agent, duly
executed and delivered by a Credit Party in favor of the Agent, for the benefit
of itself and the Lenders, as the same may be amended, supplemented or otherwise
modified from time to time.
"Interest Period" means, relative to any LIBO Rate Loans, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
----------- ---
and shall end on (but exclude) either (i) the day one week subsequent to such
day, or (ii) the day which numerically corresponds to such date one, two, three
or six months thereafter (or, if such month has no numerically corresponding
day, on the last Business Day of such month), as the Borrower may select in its
relevant notice pursuant to Section 2.3 or 2.4; provided, however, that
----------- --- -------- -------
-11-
(a) the Borrower shall not be permitted to select
Interest Periods to be in effect at any one time which have expiration
dates occurring on more than seven different dates;
(b) Interest Periods commencing on the same date for
Loans comprising part of the same Borrowing shall be of the same
duration;
(c) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of the immediately succeeding calendar month, in
which case such Interest Period shall end on the Business Day next
preceding such numerically corresponding day);
(d) no Interest Period with respect to Loans made prior
to the Revolving Commitment Termination Date may end later than the
date set forth in clause (a) of the definition of "Revolving Commitment
----------
Termination Date";
(e) no Interest Period for any Loan outstanding on
and after the Revolving Commitment Termination Date shall extend
beyond the Maturity Date; and
(f) no Interest Period applicable to a Loan outstanding
on and after the Revolving Commitment Termination Date, or portion
thereof, shall extend beyond any date upon which is due any scheduled
principal payment in respect of the Loans unless the aggregate
principal amount of Loans represented by LIBO Rate Loans having
Interest Periods that will expire on or before such date, equals or
exceeds the amount of such principal payment.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement or arrangement designed to protect the
Borrower or any of its Subsidiaries against fluctuations in interest
rates.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person
in any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial
-12-
condition of such other Person) and shall, if made by the transfer or exchange
of property other than cash, be deemed to have been made in an original
principal or capital amount equal to the fair market value of such property.
"LC Notice" has the meaning specified in Section 2.7.
-----------
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit D hereto.
---------
"Lenders" is defined in the preamble.
--------
"Letter of Credit" shall mean a Letter of Credit that is issued
pursuant to Section 2.7.
-----------
"Letter of Credit Cash Collateral Account" has the meaning specified in
Section 8.4.
"Letter of Credit Expiry Date" shall mean the date which is five
Business Days prior to the Revolving Commitment Termination Date.
"Letter of Credit Issuer" shall mean National City.
"Letter of Credit Obligations" shall mean, as at the time of
determination thereof, the sum of (a) the aggregate amount of all unpaid and
outstanding reimbursement obligations and (b) without duplication, the aggregate
stated amount at such time of Letters of Credit then outstanding and undrawn (as
such aggregate stated amount shall be adjusted, from time to time, as a result
of drawings, the issuance of Letters of Credit, or otherwise).
"Letter of Credit Sublimit" shall mean an aggregate amount of
$5,000,000.
"LIBO Rate" is defined in Section 3.2.1.
-------------
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" is defined in Section 3.2.1.
-------------
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender as designated from time to
time by notice from such Lender to the Borrower and the Agent, whether or not
outside the United States, which shall be making or maintaining LIBO Rate Loans
of such Lender hereunder.
"LIBOR Reserve Percentage" is defined in Section 3.2.1.
-------------
-13-
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Loan" is defined in Section 2.1.1.
-------------
"Loan Document" means this Agreement, the Notes, each Collateral
Document, each Hedging Agreement and each other document delivered pursuant to
Section 7.1.12.
--------------
"Majority Lenders" means Lenders holding at least 50.1% of the then
aggregate outstanding principal amount of all of the Notes then held by the
Lenders, or, if no such principal amount is then outstanding, Lenders having at
least 50.1% of the Revolving Commitments.
"Management Services Segment" means those Practices, Providers and
Subsidiaries which are involved the business of providing management services.
"Material Adverse Effect" means a material adverse effect on the
financial condition, operations, assets, business, properties or prospects of
the Borrower and its Subsidiaries taken as a whole or the Borrower and its
Subsidiaries, taken as a whole.
"Maturity Date" means the earliest of:
(a) June 30, 2003; or
(b) the date on which any Termination Event occurs.
"Medicaid Certification" means a certification by a state agency or
other entity responsible for certifying Medicaid providers and suppliers that a
health care provider or supplier is in compliance with all the conditions of
participation set forth in the Medicaid Regulations.
"Medicaid Provider Agreement" means an agreement entered into between
HCFA or a state agency or other such entity administering the Medicaid program
and a health care provider or supplier under which the health care provider or
supplier agrees to provide services for Medicaid patients in accordance with the
terms of the agreement and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act and any successor statute(s); (ii) all applicable provisions of all
federal rules, regulations, manuals and orders of all governmental authorities
promulgated pursuant to or in connection with the statutes described in clause
(i) above and all federal administrative, reimbursement and other guidelines of
all governmental authorities having the force of law promulgated pursuant to or
in connection with the statutes
-14-
described in clause (i) above; (iii) all state statutes and plans for medical
assistance enacted in connection with the statutes and provisions described in
clauses (i) and (ii) above; and (iv) all applicable provisions of all rules,
regulations, manuals and orders of all governmental authorities promulgated
pursuant to or in connection with the statutes described in clause (iii) above
and all state administrative, reimbursement and other guidelines of all
governmental authorities having the force of law promulgated pursuant to or in
connection with the statutes described in clause (iii) above, in each case as
may be amended, supplemented or other wise modified from time to time.
"Medicare Certification" means certification by HCFA or a state agency
or entity under contract with HCFA that the health care operation is in
compliance with all the conditions of participation set forth in the Medicare
Regulation.
"Medicare Provider Agreement" means an agreement entered into between
HCFA or a state agency or other such entity administering the Medicare program
and a health care provider or supplier under which the health care provider or
supplier agrees to provide services for Medicare patients in accordance with the
terms of the agreement and Medicare Regulations.
"Medicare Regulations" means, collectively, all federal statues
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any successor statute(s); together
with all applicable provisions of all rules, regulations, manuals and orders and
administrative, reimbursement and other guidelines of all governmental
authorities (including without limitation, the United States Department of
Health and Human Services ("HHS"), HCFA, the Office of the Inspector General for
HHS, or any person succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing having the
force of law, as each may be amended, supplemented or otherwise modified from
time to time.
"National City" means National City Bank of Michigan/Illinois, acting
in its individual capacity.
"Net Available Proceeds" means (a) with respect to any Asset
Disposition, the sum of cash or readily marketable cash equivalents received
(including by way of a cash generating sale or discounting of a note or account
receivable) therefrom, whether at the time of such disposition or subsequent
thereto, or (b) with respect to any sale or issuance of any debt or equity
securities of the Borrower or any Subsidiary, cash or readily marketable cash
equivalents received therefrom, whether at the time of such disposition or
subsequent thereto, net, in either case, of all legal, title and recording tax
expenses, commissions and other fees and all costs and expenses incurred and all
federal, state, local and other taxes required to be accrued as a liability as a
consequence of such transactions and, in the case of an Asset Disposition, net
of all payments made by the Borrower or any of its Subsidiaries, including any
prepayment premiums, on any Indebtedness which is secured by such assets
pursuant to a Permitted Lien upon or with respect
-15-
to such assets or which must, by the terms of such Lien, in order to obtain a
necessary consent to such Asset Disposition, or by applicable law, be repaid
out of the proceeds from such Asset Disposition.
"Net Income" means, for any computation period, with respect to the
Borrower, on a consolidated basis, cumulative net income earned during such
period as determined in accordance with GAAP (other than net income from any
Subsidiary which is restricted from declaring or paying dividends, distributions
or otherwise advancing funds to its borrower whether by contract or otherwise,
except to the extent of any such net income actually received which is not in
violation of the applicable restriction). Net Income shall be determined without
giving effect to any non-cash, non-recurring loss (excluding non-cash,
non-recurring losses taken in the Fiscal Quarter ending September 30, 2001).
"Net Worth" means, for any computation period, the consolidated
shareholders' equity of the Borrower determined in accordance with GAAP, which
consolidated shareholders' equity shall be deemed to include the preferred stock
of the Borrower.
"Non-Wholly-Owned ASC Subsidiary" means an ASC Subsidiary in which the
Borrower or a Subsidiary of the Borrower owns less than 100% of the equity
interests; provided, however, it is understood that the Borrower or a Subsidiary
-------- -------
of the Borrower will at all times own at least 50.1% of the equity interests of
each ASC Subsidiary.
"Note" means a promissory note of the Borrower payable to any Lender,
in the form of Exhibit A hereto (as such promissory note may be amended,
---------
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from outstanding Loans,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Obligations" means all obligations (monetary or otherwise) of each
Credit Party arising under or in connection with this Agreement, the Notes, the
Letters of Credit and each other Loan Document.
"Organizational Document" means, relative to any Subsidiary, its
certificate of incorporation, its by-laws, its limited liability company
agreement, partnership agreement and all shareholder agreements, voting trusts
and similar arrangements applicable to any of its authorized shares of capital
stock, partnership interests, or membership interests, as the case may be.
"Original Closing Date" means June 28, 2000.
"Original Closing Date Stockholders" means, collectively, the
stockholders of record of the Borrower as of the Original Closing Date listed
on Schedule 1.
----------
"Original Credit Agreement" has the meaning specified in the Recitals
hereto.
-16-
"Participant" is defined in Section 10.11.
-------------
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set forth
opposite its name on Schedule 10.1 hereto or set forth in the Lender Assignment
-------------
Agreement, as such percentage may be adjusted from time to time pursuant to
Lender Assignment Agreement(s) executed by such Lender and its Assignee
Lender(s) and delivered pursuant to Section 10.11.
-------------
"Permitted Acquisition" means the purchase (by asset purchase, stock
purchase, membership interest purchase, other equity interest purchase, merger
or otherwise, subject to the other requirements of this definition set forth
below) by the Borrower or a Wholly-Owned Subsidiary of the Borrower (or, in the
case of the purchase of an ASC Practice, by the Borrower or a Subsidiary of the
Borrower) of the assets, stock, membership interests or other equity interests
of a Practice (it being acknowledged that medical records and certain other
professional assets that are required by law to be owned by a Provider are not
acquired in these transactions), which purchase meets the following criteria:
(a) no Default or Event of Default shall have occurred or be
continuing both before and after giving effect to such acquisition;
(b) in the event the Borrower's Total Leverage Ratio on a pro
forma basis (after giving effect to the Permitted Acquisition) is
greater than or equal to 1.875:1.0, the Borrower must be able to comply
on a pro forma basis with all of the covenants in this Agreement;
provided, however, in no event shall the Borrower's Total Leverage
--------
Ratio on a pro forma basis (after giving effect to the Permitted
Acquisition) be greater than 2.25:1.0;
(c) in the event the Borrower's Total Leverage Ratio on a pro
forma basis (after giving effect to the Permitted Acquisition) is
greater than 1.875:1.0 the aggregate Consideration (including any
Indebtedness pursuant to Section 7.2.2(h), (i), (j) and (k) relating to
----------------------------------
such Permitted Acquisitions) in connection with such Permitted
Acquisition shall not exceed (unless otherwise consented to by the
Required Lenders) $5,000,000 individually and $12,500,000 for all
Permitted Acquisitions (without giving effect to the transaction
described on Schedule 1.1.) consummated within the previous twelve (12)
-------------
-17-
month period when aggregated with Investments made by the Borrower or
any of its Subsidiaries permitted under Section 7.2.5(k) during such
----------------
period;
(d) the acquisition shall have been of the assets and/or
working capital of a Practice or, if for stock or other equity interest
in a Practice, shall be for not less than 50.1% of the equity interest
therein, shall (other than with respect to an ASC Practice) either, to
the extent permitted by applicable law, be merged with and into the
Borrower or a Wholly-Owned Subsidiary of the Borrower, or be a
Wholly-Owned Subsidiary of the Borrower;
(e) the acquired Practice, on a pro forma basis shall
have positive EBITDA for the period of four fiscal quarters ending on
the date of any such acquisition;
(f) the Borrower shall have delivered to the Agent, not later
than 30 days after the closing of the acquisition (i) pro forma
financial statements or certificates demonstrating continued compliance
with all covenants in this Agreement following the inclusion of the
target in the Borrower's consolidated enterprise, (ii) a copy of the
related acquisition agreement and Service Agreement and each Employment
Agreement (all to the extent applicable) provided, however, in the
-------- -------
event the approval of the Lenders is required for any acquisition, the
Borrower shall have delivered to the Agent the documents contemplated
by clauses (i) and (ii) of this clause (f) not later than 15 days prior
-------------------- ----------
to the closing of such acquisition (with the documents contemplated in
(ii) being in draft form); and
(g) the Borrower shall have delivered to the Agent, not later
than 30 days after the closing of the acquisition a fully executed
Agreed EBITDA Form.
"Permitted Asset Disposition" has the meaning specified on Exhibit K
---------
hereto.
"Permitted Equity Ownership Sale" means the sale, transfer or other
disposition of the outstanding capital stock, membership interest or other
equity interests in an ASC Subsidiary or the issuance of additional equity
interests in an ASC Subsidiary, so long as:
(i) after giving effect to such sale, a Credit Party
shall own not less than 50.1% of the equity interests (including
securities convertible into equity interests) of such ASC Subsidiary;
(ii) the equity interests in such ASC Subsidiary which are
held by the Borrower or a Subsidiary of the Borrower after such sale
continue to be pledged to the Lenders pursuant to either the Borrower
Pledge Agreement or Subsidiary Guarantor Pledge Agreement, as the case
may be;
(iii) the chief financial officer or chief executive
officer of the Borrower shall have delivered a certificate, dated the
date of such sale, to the Agent certifying (a) that no
-18-
Default or Event of Default exists or would result from such sale and
(b) pro forma financial statements demonstrating compliance with
Section 7.2.4 for the twelve-month period following such sale;
-------------
(iv) after giving effect to a Permitted Equity Ownership
Sale, the Adjusted Equity Ownership EBITDA Amount (as set forth in an
Adjusted Equity Ownership EBITDA Amount Certificate (in the form of
Exhibit J hereto) delivered to the Agent on or prior to the date of
---------
such Permitted Equity Ownership Sale) is greater than $1; and
(v) the proceeds (other than any proceeds received by a
minority equity holder) of any such sale are applied in the manner set
forth in Section 2.2.2(c).
----------------
Upon the consummation of any Permitted Equity Ownership Sale
and at the request of the Borrower, the ASC Subsidiary which has become
a Non-Wholly Owned ASC Subsidiary as a result of such Permitted Equity
Ownership Sale shall be released from the Guaranty, the Guarantor
Pledge Agreement and Guarantor Security Agreement and the liens of the
Lenders on the assets of such ASC Subsidiary shall be released (except
to the extent of the pledge to the Lenders of the equity interests of
such ASC Subsidiary retained by the Borrower or a Subsidiary of the
Borrower) and the Agent is hereby authorized to execute and file the
necessary release documentation to reflect such release.
"Permitted Liens" means those liens listed in Section 7.2.3.
-------------
* * *
"Permitted Unwind Transaction" means any transaction to which the
Borrower or any of its Subsidiaries is a party and is consummated pursuant to
the Restructuring in which (a) the Borrower or any of its Subsidiaries: (i)
terminates any or all Management Services Segment Service Agreements, (ii)
terminates any or all Employment Agreements between Providers and Practices
that are a party to such Management Services Segment Service Agreements, (iii)
terminates any or all employees of the Borrower or its Subsidiaries who provide
services to the Practices under such Service Agreements, and/or (iv) transfers
any, all or substantially all of the assets relating to the services performed
under such Service Agreements, which may include, without limitation, fixed
assets, equipment, information technology hardware and software, leasehold
interests, accounts receivable and inventory and (b) the Borrower shall have
delivered to the Agent, not later than thirty (30) days after the closing of
the Permitted Unwind Transaction, a copy of the principal documents executed
and delivered in connection therewith.
* Confidential portion omitted and filed separately with the Commission.
-19-
"Person" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledged Collateral" has the meaning specified in the Borrower Pledge
Agreement and the Guarantor Pledge Agreement.
"Practice" means (i) any ASP Business, (ii) any business that sells,
leases or provides medical equipment to doctors, hospitals or other health
organizations, and (iii) any medical or ophthalmology practice, ambulatory
surgery center or management service center, optometry practice, optical
dispensory or optical laboratory, vision correction centers (including, without
limitation, laser vision correction centers), companies that own, operate and/or
manage vision correction centers (including, without limitation, laser vision
correction centers), clinical research organizations or entities engaged in the
provision of clinical research and/or sight management services to ophthalmic
device and/or pharmaceutical companies, or reasonable extensions thereof
(including any company which leases or sells equipment or provides services to
any of the foregoing), at a single location or various locations. Whenever in
this Agreement "Practice" is used in describing an acquisition by the Borrower
or a Subsidiary of the Borrower of equity interests, such reference is to the
acquisition of the assets used in the operation of the Practice that can
lawfully be acquired by the Borrower or a Subsidiary of the Borrower or to the
acquisition of the equity interests of a Person that owns, as of the time of
purchase, only those assets that can be lawfully acquired by the Borrower or a
Subsidiary of the Borrower.
"Provider" means any Person who performs professional medical services
for a Practice that is either managed by a Credit Party or the assets of which
are owned by a Credit Party.
"Quarterly EBITDA Certificate" is defined in Schedule 2.
----------
"Quarterly Payment Date" means the last day of each March, June,
September, and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"Reaffirmation of Collateral Documents" means that certain
Reaffirmation of Collateral Documents substantially in the form attached hereto
as Exhibit I.
---------
"Release" means a "release", as such term is defined in CERCLA.
"Replacement Lender" is defined in Section 4.12.
------------
"Reporting Person" shall mean, The Eye Center, Inc., NovaMed Eye
Surgery Center of North County, LLC, Illinois Eye Specialist, LTD, NovaMed Eye
Surgery Center of Maryville, L.L.C., Dominion Eye Associates, P.C., NovaMed of
Richmond, Inc., NovaMed Management of Kansas City, Inc., NovaMed Eye Surgery
Center (Plaza) L.L.C., NovaMed Surgery Center of
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Overland Park, L.L.C., SureVision Eye Centers, LLC, Surevision Eye Centers
Midwest LLC, Xxxxxxx Eye Centers, P.C. and each Practice acquired by the
Borrower or a Wholly-Owned Subsidiary of the Borrower pursuant to a Permitted
Acquisition since the Original Closing Date.
"Required Lenders" means, (i) at any time less than three Lenders are a
party to this Agreement, all Lenders and (ii) at any other time, Lenders holding
at least 66-2/3% of the then aggregate outstanding principal amount of all of
the Notes then held by the Lenders, or, if no such principal amount is then
outstanding, Lenders having at least 66-2/3% of the Revolving Commitments.
"Required Unwind Valuation" means, for any Permitted Unwind
Transaction, the fair market value of the assets and other terms relating to
such Permitted Unwind Transaction, which fair market value is consistent with
(i) fair market value guidelines agreed to from time to time by Agent, the
Lenders and Borrower, (ii) approval of the Borrower's Board of Directors (or any
special committee thereof), and (iii) a fairness opinion rendered by an
independent third party valuation firm.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect
-- ---
from time to time.
"Restructuring" means the Borrower's plans to divest its Management
Services Segment by, among other things, entering into Permitted Unwind
Transactions, which plans have been accounted for by Borrower during the quarter
ended September 30, 2001 using the accounting treatments for "Discontinued
Operations" and "Restructuring" (as defined under GAAP).
"Revolving Commitment" means, relative to any Lender, such Lender's
obligation to make Loans pursuant to Section 2.1.1.
-------------
"Revolving Commitment Amount" means: (i) from the Second Amendment and
Restatement Effective Date through December 31, 2001, $45,000,000, (ii) from
January 1, 2002 through March 31, 2002, $42,500,000, (iii) from April 1, 2002
through June 30, 2002, $40,000,000, (iv) from July 1, 2002 through September 30,
2002, $37,500,000 and (v) on October 1, 2002 and each date thereafter,
$35,000,000. The Revolving Commitment Amount then in effect may be reduced from
time to time pursuant to Section 2.2.
-----------
"Revolving Commitment Termination Date" means the earliest of
(a) June 30, 2003;
(b) the date on which the Revolving Commitment Amount
is terminated in full or reduced to zero pursuant to Section 2.2; and
-----------
(c) the date on which any Termination Event occurs.
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Upon the occurrence of any event described in clause (b) or (c), the Revolving
---------- ---
Commitments shall terminate automatically and without further action.
"Second Amendment and Restatement Effective Date" is defined in
Section 5.3.
-----------
"Service Agreement" means any of (i) the Service Agreements listed on
Schedule 6.18 and (ii) any similar agreement entered into by any Credit Party on
-------------
and after the Original Closing Date in each case as any of such agreements may
from time to time be amended, restated, supplemented or otherwise modified.
"Senior Debt" shall mean Indebtedness of the type described in clauses
-------
(a), (c) and (d) of the definition "Indebtedness" (other than Subordinated Debt)
--- --- ---
of the Borrower on a consolidated basis.
"Solvent" means, when used with respect to a Person, that (a) the fair
saleable value of the assets of such Person is in excess of the total amount of
the present value of its liabilities (including for purposes of this definition
all liabilities whether or not reflected on a balance sheet prepared in
accordance with GAAP and whether direct or indirect, fixed or contingent,
secured or unsecured, disputed or undisputed), (b) such Person is able to pay
its debts or obligations in the ordinary course as they mature and (c) such
Person does not have unreasonably small capital to carry out its business as
conducted and as proposed to be conducted. "Solvency" shall have a correlative
meaning.
"Subordinated Debt" means all Indebtedness the repayment of which is
subordinated, upon terms satisfactory to the Majority Lenders, in right of
payment to the payment in full in cash of all Obligations.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than 50% of the voting stock, membership interests or other
equity interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof.
"Taxes" is defined in Section 4.6.
-----------
"Termination Event" means
(a) the occurrence of any Default described in
clauses (a) through (e) of Section 8.1.9; or
----------- --- -------------
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of the Loans to be due and
payable pursuant to Section 8.3, or
-----------
-22-
(ii) in the absence of such declaration, the
giving of notice by the Agent, acting at the direction of the
Required Lenders, to the Borrower that the Revolving
Commitments have been terminated.
"Total Funded Debt" of any Person means all Indebtedness of such Person
except Indebtedness specified in clauses (b) and (g) of the definition of
-------------------
Indebtedness.
"Total Leverage Ratio" has the meaning assigned to it in Section 3.2.1.
-------------
"Type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of America, its
fifty States and the District of Columbia.
"Welfare Plan" means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.
"Wholly-Owned Subsidiary" means any Person in which (other than
directors' qualifying shares required by law) 100% of the equity interests of
each class having ordinary voting power, and 100% of the equity interests of
every other class, in each case, at the time as of which any determination is
being made, is owned, beneficially and of record, by the Borrower or by one or
more of the other Wholly-Owned Subsidiaries, or both.
SECTION 1.2 Use of Defined Terms. Unless otherwise defined or the
--------------------
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Schedules and in each Note,
Borrowing Request, Continuation/Conversion Notice, Loan Document, notice and
other communication delivered from time to time in connection with this
Agreement or any other Loan Document.
SECTION 1.3 Cross-References. Unless otherwise specified, references
----------------
in this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in
any Article, Section or definition to any clause are references to such clause
of such Article, Section or definition.
-23-
SECTION 1.4 Accounting Principles. Unless the context otherwise clearly
---------------------
requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall
be made, in accordance with GAAP, consistently applied. For purposes of
clarification, it shall be understood that for any financial computation with
respect to a Non-Wholly Owned Subsidiary there shall be deducted, in
accordance with GAAP, from such financial computation the income or loss (as
the case may be) of such Non-Wholly Owned Subsidiary which constitutes the
associated share of any minority equity holder of such Non-Wholly Owned
Subsidiary in such income or loss (as the case may be).
ARTICLE II
REVOLVING COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1 Revolving Commitments. On the terms and subject to the
---------------------
conditions of this Agreement (including Article V), each Lender severally
---------
agrees to make Loans pursuant to the Revolving Commitments described in this
Section 2.1.
-----------
SECTION 2.1.1 Revolving Commitment of Each Lender. From time to time
-----------------------------------
on any Business Day occurring prior to the Revolving Commitment Termination
Date, each Lender will make loans (relative to such Lender, and of any type,
its "Loans") to the Borrower, which, when added to the Letter of Credit
Obligations at such time, equal to such Lender's Percentage of the aggregate
amount of the Borrowing requested by the Borrower to be made on such day. The
commitment of each Lender described in this Section 2.1.1 is herein referred to
-------------
as its "Revolving Commitment". On the terms and subject to the conditions
hereof, the Borrower may from time to time borrow, prepay and reborrow Loans.
SECTION 2.1.2 Lenders Not Permitted or Required To Make Loans. No
-------------------------------------------------
Lender shall be permitted or required to make any Loan if, after giving effect
thereto, the aggregate outstanding principal amount of all Loans
(a) of all Lenders would exceed the Revolving Commitment
Amount, or
(b) of such Lender would exceed such Lender's
Percentage of the Revolving Commitment Amount.
SECTION 2.2 Reduction of Revolving Commitment Amount. The Revolving
----------------------------------------
Commitment Amount is subject to reduction from time to time pursuant to this
Section 2.2.
-----------
SECTION 2.2.1 Optional. The Borrower may, from time to time on any
--------
Business Day occurring after the time of the initial Borrowing hereunder,
voluntarily reduce the Revolving Commitment Amount; provided, however, that all
-------- -------
such reductions shall require at least three Business Days' prior notice to the
Agent and be permanent, and any partial reduction of the
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Revolving Commitment Amount shall be in a minimum amount of $2,000,000 and in
an integral multiple of $1,000,000.
SECTION 2.2.2 Mandatory Reductions and Prepayments. The Revolving
------------------------------------
Commitment Amount shall, without any further action, automatically and
permanently be reduced to zero on the Revolving Commitment Termination Date and:
(a) The Borrower shall prepay Loans in an amount equal to 100% of
the insurance proceeds received by the Borrower or any Subsidiary following a
casualty involving such Person's Property, to the extent not applied (or
intended to be applied) within 90 days after the consummation or receipt
thereof, as applicable, to the purchase of replacement assets or repair of
damaged assets;
(b) The Borrower shall prepay Loans in an amount equal to 100% of
the sum of the Net Available Proceeds realized upon all Asset Dispositions to
the extent not applied (or committed to be applied) within 180 days of such
Asset Disposition to the purchase of other assets that are not classified as
current assets under GAAP and are used or useful in the business of the Company
and its Subsidiaries;
(c) The Borrower shall prepay Loans in an amount equal to (i) 50%
of the sum of the Net Available Proceeds realized upon all equity issuances
(other than in connection with a Permitted Acquisition) by the Borrower and its
Subsidiaries and (ii) 100% of the sum of the Net Available Proceeds realized
upon all Permitted Equity Ownership Sales;
(d) The Borrower shall prepay Loans in an amount equal to 100% of
the sum of the Net Available Proceeds realized upon all debt issuances (other
than in connection with a Permitted Acquisition) by the Borrower and its
Subsidiaries;
(f) The Borrower shall notify the Agent of the amount of any
required prepayment at least three (3) Business Days before it is made. The
Borrower shall pay any accrued interest on the Loans which are being prepaid
pursuant to this Section 2.2.2 and shall pay any break funding costs associated
-------------
with such required prepayment; and
(g) Notwithstanding anything contained herein to the contrary,
Borrower shall prepay Loans in an amount equal to 100% of the sum of the Net
Available Proceeds realized upon all Permitted Unwind Transactions.
Any prepayments pursuant to Sections 2.2.1 or 2.2.2 hereof shall be
-----------------------
without penalty or premium of any kind other than break funding and other
charges expressly provided by this Agreement with respect to LIBOR breakage
costs; provided, however, at the reasonable request of the Borrower and to avoid
-------- -------
any break funding charges with respect to LIBOR breakage costs associated with
any prepayment, any amounts to be prepaid pursuant to Section 2.2.2 shall be
-------------
deposited by the Borrower in an escrow account under the control of the Agent to
return an interest rate equal to the average deposit rate payable by the Agent
for commercial deposits of
-25-
like size and duration as determined by the Agent in its sole discretion, such
amounts to be applied in the manner set forth in this Section 2.2.2. at the
-------------
expiration of the Interest Period for the Loans as to which break funding
charges would otherwise have applied.
SECTION 2.3 Borrowing Procedure. By delivering a Borrowing Request to
-------------------
the Agent on or before 10:00 a.m., Chicago time, on a Business Day, the
Borrower may from time to time irrevocably request, on notice on the date of
the requested Borrowing in the case of Base Rate Loans and on not less than
three nor more than five Business Days' notice in the case of LIBO Rate Loans,
that a Borrowing be made in a minimum amount of (i) $500,000 if such Loan is a
LIBO Rate Loan or (ii) the lesser of the unused amount of the Revolving
Commitments or $100,000, if such Loan is a Base Rate Loan and an integral
multiple of $100,000, to the extent such additional amount is permitted to be
borrowed hereunder. On the terms and subject to the conditions of this
Agreement, each Borrowing shall be comprised of the type of Loans, and shall be
made on the Business Day, specified in such Borrowing Request. On or before
1:00 p.m. (Chicago time) on such Business Day, each Lender shall deposit with
the Agent same day funds in an amount equal to such Lender's Percentage of the
requested Borrowing. Such deposit will be made to an account which the Agent
shall specify from time to time by notice to the Lenders. To the extent funds
are received from the Lenders, the Agent shall make such funds available to the
Borrower by wire transfer to the accounts the Borrower shall have specified in
its Borrowing Request. No Lender's obligation to make any Loan shall be
affected by any other Lender's failure to make any Loan.
SECTION 2.4 Continuation and Conversion Elections. By delivering a
----------------------------------------
Continuation/Conversion Notice to the Agent on or before 10:00 a.m., Chicago
time, on a Business Day, the Borrower may from time to time irrevocably elect,
on not less than three nor more than five Business Days' notice that all, or
any portion in an aggregate minimum amount of $500,000 and an integral multiple
of $100,000, of any Loans be, in the case of Base Rate Loans, converted into
LIBO Rate Loans or, in the case of LIBO Rate Loans, be converted into a Base
Rate Loan or continued as a LIBO Rate Loan (in the absence of delivery of a
Continuation/ Conversion Notice with respect to any LIBO Rate Loan at least
three Business Days before the last day of the then current Interest Period
with respect thereto, such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan); provided, however, that (i) each
-------- -------
such conversion or continuation shall be pro rated among the applicable
outstanding Loans of all Lenders, and (ii) no portion of the outstanding
principal amount of any Loans may be continued as, or be converted into, LIBO
Rate Loans when any Event of Default has occurred and is continuing.
SECTION 2.5 Funding. Each Lender may, if it so elects, fulfill its
-------
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
--------
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
-------
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign
-26-
branch, Affiliate or international banking facility. In addition, the Borrower
hereby consents and agrees that, for purposes of any determination to be made
for purposes of Sections 4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed
------------ --- --- ---
that each Lender elected to fund all LIBO Rate Loans by purchasing Dollar
deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6 Notes. Each Lender's Loans under its Revolving Commitment
-----
shall be evidenced by a Note payable to the order of such Lender in a maximum
principal amount equal to such Lender's Percentage of the original Revolving
Commitment Amount. The Borrower hereby irrevocably authorizes each Lender to
make (or cause to be made) appropriate notations on the grid attached to such
Lender's Note (or on any continuation of such grid), which notations, if made,
shall evidence, inter alia, the date of, the outstanding principal of, and the
----------
interest rate and Interest Period applicable to the Loans evidenced thereby.
Such notations shall be conclusive and binding on the Borrower absent manifest
error; provided, however, that the failure of any Lender to make any such
-------- -------
notations shall not limit or otherwise affect any Obligations of the Borrower
or any other Credit Party.
SECTION 2.7 Letters of Credit.
-----------------
SECTION 2.7.1 Issuance of Letters of Credit. From and after the date
-----------------------------
hereof, the Letter of Credit Issuer agrees, upon the terms and conditions set
forth in this Agreement, and subject to the satisfaction of such policy
standards and conditions relating to the issuance of standby letters of credit
generally as may be established by the Letter of Credit Issuer from time to
time, to issue standby letters of credit, for the account of the Borrower, from
time to time from the Original Closing Date to the Letter of Credit Expiry
Date; provided that the Borrower shall not request and the Letter of Credit
--------
Issuer shall not issue, any Letter of Credit which would cause the aggregate
Letter of Credit Obligations (after giving effect to the issuance of such
Letter of Credit) to exceed the amount of the lesser of (i) the Letter of
Credit Sublimit and (ii) the unused aggregate Revolving Commitment.
SECTION 2.7.2 Participating Interests. Immediately upon the issuance
-----------------------
by the Letter of Credit Issuer of a Letter of Credit, each Lender shall be
deemed to have irrevocably and unconditionally purchased and received from the
Letter of Credit Issuer, without recourse, representation or warranty, an
undivided participation interest equal to its Percentage of the face amount of
such Letter of Credit and each draw paid by the Letter of Credit Issuer
thereunder. Each Lender's obligation to pay its proportionate share of all
draws under the Letters of Credit, absent gross negligence or willful
misconduct by the Letter of Credit Issuer in honoring any such draw, shall be
absolute, unconditional and irrevocable and in each case shall be made without
counterclaim or set-off by such Lender.
SECTION 2.7.3 Reimbursement Upon Drawing. (a) The Borrower agrees to
--------------------------
reimburse the Letter of Credit Issuer for the amount of each draft drawn on a
Letter of Credit within one Business Day after the date such draft is so drawn.
The Borrower agrees to reimburse the Letter of Credit Issuer immediately when
due, under all circumstances, including, without limitation,
-27-
any of the following circumstances: (w) any lack of validity or enforceability
of this Agreement or any instrument executed pursuant hereto; (x) the existence
of any claim, set-off, defense or other right which the Borrower may have at
any time against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any Person for whom any such transferee may be
acting), any Lender or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between the
Borrower and the beneficiary named in any Letter of Credit); (y) the validity,
sufficiency or genuineness of any document which the Letter of Credit Issuer
reasonably has determined in good faith complies on its face with the terms of
the applicable Letter of Credit, even if such document should later prove,
without the knowledge of the Letter of Credit Issuer, to have been forged,
fraudulent, invalid or insufficient in any respect or any statement therein
shall have been untrue or inaccurate in any respect; or (z) the surrender or
material impairment of any security for the performance or observance of any of
the terms hereof.
(b) If the Borrower does not pay any such reimbursement
obligations when due, the Borrower shall be deemed to have immediately
requested that the Lenders make a Base Rate Loan under this Agreement
in a principal amount equal to such unreimbursed reimbursement
obligations. The Agent shall promptly notify the Lenders of such deemed
request and, without the necessity of compliance with the requirements
of Sections 2.1 and 5.2, each Lender shall make available to the Agent
------------ ---
its Loan. The proceeds of such Loans shall be paid over by the Agent to
the Letter of Credit Issuer for the account of the Borrower in
satisfaction of such unreimbursed reimbursement obligations, which
shall thereupon be deemed satisfied by the proceeds of, and replaced
by, such Loan.
(c) If the Letter of Credit Issuer makes a payment on
account of any Letter of Credit and is not concurrently reimbursed
therefor by the Borrower and if for any reason a Loan may not be made
pursuant to Section 2.7.3(b), then as promptly as practical during
----------------
normal banking hours on the date of its receipt of such notice or, if
not practicable on such date, not later than 12:00 noon (Chicago time)
on the Business Day immediately succeeding such date of notification,
each Lender shall deliver to the Agent for the account of the Letter
of Credit Issuer, in immediately available funds, the purchase price
for such Lender's interest in such unreimbursed reimbursement
obligations, which shall be an amount equal to such Lender's pro-rata
share of such payment. Each Lender shall, upon demand by the Letter of
Credit Issuer, pay the Letter of Credit Issuer interest on such
Lender's pro-rata share of such draw from the date of payment by the
Letter of Credit Issuer on account of such Letter of Credit until the
date of delivery of such funds to the Letter of Credit Issuer by such
Lender at a rate per annum, computed for actual days elapsed based on
a 360-day year, equal to the Federal Funds Effective Rate for such
period; provided, that such payments shall be made by the Lenders only
--------
in the event and to the extent that the Letter of Credit Issuer is not
reimbursed in full by the Borrower for interest on the amount of any
draw on the Letters of Credit.
-28-
SECTION 2.7.4 Request for Letter of Credit. Each Letter of Credit
----------------------------
shall be issued upon receipt by the Letter of Credit Issuer and the Agent from
the Borrower of an irrevocable request thereof (an "LC Notice") not later than
11:00 a.m. (Chicago time) three (3) Business Days prior the issuance date.
Each LC Notice for a Letter of Credit issued shall be in form and substance
satisfactory to the Letter of Credit Issuer.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1 Repayments and Prepayments.
--------------------------
SECTION 3.1.1 Prior to the Revolving Commitment Termination Date.
--------------------------------------------------
The Borrower
(a) may, from time to time on any Business Day prior to
the Revolving Commitment Termination Date, make a voluntary prepayment,
in whole or in part, of the outstanding principal amount of any Loans;
provided, however, that:
-------- -------
(i) any such prepayment shall be made pro rata among
--- ----
Loans of the same type and, if applicable, having the same
Interest Period of all Lenders;
(ii) unless the Borrower complies with Section 4.4,
-----------
no such prepayment of any LIBO Rate Loan may be made on any
day other than the last day of the Interest Period for such
Loan; and
(b) shall, immediately upon any acceleration of the
Maturity Date of any Loans pursuant to Section 8.2 or Section 8.3,
----------- -----------
repay all Loans, unless, pursuant to Section 8.3, only a portion of
-----------
all Loans is so accelerated.
Each prepayment of any Loans made pursuant to this Section 3.1.1 shall be
-------------
without premium or penalty, except as may be required by Section 4.4. No
-----------
voluntary prepayment of principal of any Loans pursuant to this Section 3.1.1
-------------
shall cause a reduction in the Revolving Commitment Amount.
SECTION 3.1.2 On the Maturity Date. On the Maturity Date, the Borrower
--------------------
shall repay the principal of the Loans then outstanding.
SECTION 3.1.3 Extension of Maturity Date. The Borrower may, by written
--------------------------
request to the Agent and the Lenders given not later than one hundred eighty
(180) days prior to the Maturity Date then in effect (the "Effective Maturity
Date") request (an "Extension Request") that such Effective Maturity Date be
extended to a date which is twenty-four (24) months after such Effective
Maturity Date. No later than the date (the "Extension Response Date") which is
30 days after such Extension Request has been delivered to each of the Lenders,
each Lender will notify the Borrower in writing (with a copy to the Agent)
whether or
-29-
not it consents to such Extension Request (which consent may be granted or
denied by each Lender in its sole discretion and may be conditioned on receipt
of such financial information or other documentation as may be specified by
such Lender); provided, that any Lender that fails to so advise the Borrower on
or prior to the Extension Response Date shall be deemed to have denied such
Extension Request. The extension of the Maturity Date contemplated by an
Extension Request shall become effective as of the applicable Effective
Maturity Date; provided, that (i) all of the Lenders shall have consented to
such Extension Request; and (ii) (x) each of the representations and warranties
made by the Borrower in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of each of the date of such
Extension Request and such Effective Maturity Date as if made on and as of such
date, except to the extent relating to an earlier date, (y) no Default or Event
of Default shall have occurred and be continuing on the date of such Extension
Request or on such Effective Maturity Date and (z) on each of the date of such
Extension Request and such Effective Maturity Date, the Agent shall have
received a certificate of the Borrower as to the matters set forth in clauses
(x) and (y) above.
SECTION 3.2 Interest Provisions. Interest on the outstanding principal
-------------------
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
-----------
SECTION 3.2.1 Rates. Pursuant to an appropriately delivered Borrowing
-----
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a
Base Rate Loan, equal to the sum of the Base Rate from time to time in
effect plus the Applicable Margin for Base Rate Loans; or
(b) on that portion maintained as a LIBO Rate Loan,
during each Interest Period applicable thereto, equal to the sum of the
LIBO Rate (Reserve Adjusted) for such Interest Period plus the
Applicable Margin for LIBO Rate Loans.
The "LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
--------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Agent on the basis of the LIBOR Reserve
Percentage in effect on, and the
-30-
applicable rates furnished to and received by the Agent from National City,
two Business Days before the first day of such Interest Period.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to National City's LIBOR Office in the
London interbank market as at or about 10:00 a.m. London time two Business Days
prior to the beginning of such Interest Period for delivery on the first day of
such Interest Period, and in an amount approximately equal to the amount of
National City's LIBO Rate Loan and for a period approximately equal to such
Interest Period.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
All LIBO Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such LIBOR
Rate Loan.
"Applicable Margin" means on any date the applicable percentage set
forth below based upon the Level as shown in the certificate then most recently
delivered to the Lenders pursuant to Section 7.1.1(d):
----------------
Level Base Rate LIBOR Rate Commitment Fee
----- --------- ---------- --------------
I 1.00% 3.00% .500%
II .75% 2.50% .500%
III .50% 2.00% .375%
IV 0% 1.50% .375%
; provided, however that if the Borrower shall have failed to deliver to the
-------- -------
Lenders by the date required hereunder any certificate pursuant to Section
-------
7.1.1(d), then from the date such certificate was required to be delivered until
--------
the date of such delivery the Applicable Margin shall be deemed to be Level I.
Each change in the Applicable Margin shall take effect with respect to all
outstanding Loans on the third Business Day immediately succeeding the day on
which such certificate is received by the Agent. Notwithstanding the foregoing,
no reduction in the Applicable Margin shall be effected if a Default or an Event
of Default shall have occurred and be continuing on the date when such change
would otherwise occur, it being understood that
-31-
on the third Business Day immediately succeeding the day on which such Default
or Event of Default is either waived or cured (assuming no other Default or
Event of Default shall be then pending), the Applicable Margin shall be reduced
(on a prospective basis) in accordance with the then most recently delivered
certificate.
"Level" means, and includes, Level I, Level II, Level III or Level IV,
whichever is in effect at the relevant time.
"Level I" shall exist at any time the Total Leverage Ratio is equal to
or greater than 2.00:1.0.
"Level II" shall exist at any time the Total Leverage Ratio is less
than 2.00:1.0 but equal to or greater than 1.50:1.0.
"Level III" shall exist at any time the Total Leverage Ratio is less
than 1.50:1.0 but equal to or greater than 1.00:1.0.
"Level IV" shall exist at any time the Total Leverage Ratio is less
than 1.00:1.0.
"Total Leverage Ratio" means, with respect to any period, the ratio of
(i) Total Funded Debt to (ii) EBITDA, as of the end of the relevant period.
SECTION 3.2.2 Post-Maturity Rates. After the date any principal amount
-------------------
of any Loan is due and payable (whether on the Revolving Commitment Termination
Date, upon acceleration or otherwise), or after any other monetary Obligation
of the Borrower shall have become due and payable, the Borrower shall pay, but
only to the extent permitted by law, interest (after as well as before
judgment) on such amounts at a rate per annum equal to the Base Rate plus a
margin of 2.00%.
SECTION 3.2.3 Payment Dates. Interest accrued on each Loan shall be
-------------
payable, without duplication:
(a) on the Revolving Commitment Termination Date;
(b) on the date of any payment or prepayment, in whole
or in part, of principal outstanding on such Loan;
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the Original Closing Date;
(d) with respect to LIBO Rate Loans, the last day of each
applicable Interest Period and, in the case of an Interest period in
excess of three months, on the dates which are successively three
months after the commencement of such Interest Period;
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(e) with respect to any Base Rate Loans converted into
LIBO Rate Loans on a day when interest would not otherwise have been
payable pursuant to clause (c), on the date of such conversion; and
----------
(f) on that portion of any Loans the Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3,
----------- -----------
immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Maturity Date, upon acceleration or otherwise) shall be
payable upon demand.
SECTION 3.3 Fees. The Borrower agrees to pay the fees set forth in
----
this Section 3.3. All such fees shall be non-refundable.
-----------
SECTION 3.3.1 Revolving Commitment Fee. The Borrower agrees to pay to
------------------------
the Agent for the account of each Lender, for the period (including any portion
thereof when its Revolving Commitment is suspended by reason of the Borrower's
inability to satisfy any condition of Article V) commencing on the Original
---------
Closing Date and continuing through the Revolving Commitment Termination Date,
a commitment fee at the rate equal to the Applicable Margin for Commitment Fees
per annum on such Lender's Percentage of the sum of the average daily unused
portion of the Revolving Commitment Amount. Such commitment fees shall be
payable by the Borrower in arrears on each Quarterly Payment Date, commencing
with the first such day following the Original Closing Date and on the
Revolving Commitment Termination Date.
SECTION 3.3.2 Letter of Credit Fees. (a) The Borrower agrees to pay
---------------------
the Agent, for the account of each Lender pro-rata on the basis of its
Revolving Commitment, a fee in respect of each Letter of Credit computed at the
Applicable Margin for LIBO Rate Loans on the average daily stated amount of
such Letter of Credit (computed on the basis of a 360-day year for the actual
days elapsed), such fee to be due and payable quarterly in arrears on each
Quarterly Payment Date and on the Revolving Commitment Termination Date.
(b) The Borrower shall pay to the Letter of Credit Issuer a
letter of credit fronting fee for each Letter of Credit issued by the Letter of
Credit Issuer equal to 1/4 of 1% of the face amount (or increased face amount)
of such Letter of Credit. Such Letter of Credit fronting fee shall be due and
payable on each date of issuance (or date of increase) of a Letter of Credit.
(c) The Borrower agrees to pay directly to the Letter of
Credit Issuer upon each issuance of, drawing under, and/or amendment of, a
Letter of Credit issued by it in such amount as shall at the time of such
issuance, drawing or amendment be the administrative charge which the Letter of
Credit Issuer is customarily charging for issuances of, drawing under or
amendments of, letters of credit issued by it.
SECTION 3.3.3 Agency Fees. The Borrower shall pay to the Agent (x) on
-----------
the Original Closing Date for its own account and/or for distribution to the
Lenders such fees as heretofore
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agreed by the Borrower and the Agent and (y) for its own account such other
fees as may be agreed to from time to time between the Borrower and the Agent,
when and as due.
ARTICLE IV
LIBO RATE AND OTHER PROVISIONS
SECTION 4.1 LIBO Rate Lending Unlawful. If any Lender shall determine
--------------------------
(which determination shall, upon notice thereof to the Borrower and the
Lenders, be conclusive and binding on the Borrower) that the introduction of or
any change in or in the interpretation of any law makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
such Lender to make, continue or maintain any Loan as, or to convert any Loan
into, a LIBO Rate Loan of a certain type, subject to the provisions of Section
-------
4.11 hereof, the obligations of all Lenders to make, continue, maintain or
----
convert any such Loans shall, upon such determination, forthwith be suspended
until such Lender shall notify the Agent that the circumstances causing such
suspension no longer exist, and all LIBO Rate Loans of such type shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
SECTION 4.2 Deposits Unavailable. If the Agent shall have determined
--------------------
that
(a) Dollar certificates of deposit or Dollar deposits,
as the case may be, in the relevant amount and for the relevant
Interest Period are not available to a Lender in its relevant market;
or
(b) by reason of circumstances affecting a Lender's
relevant market, adequate means do not exist for ascertaining the
interest rate applicable hereunder to LIBO Rate Loans of such type,
then, upon notice from the Agent to the Borrower and the Lenders, subject to the
provisions of Section 4.11 hereof, the obligations of all Lenders under Section
------------ -------
2.3 and Section 2.4 to make or continue any Loans as, or to convert any Loans
--- -----------
into, LIBO Rate Loans of such type shall forthwith be suspended until the Agent
shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 4.3 Increased LIBO Rate Loan Costs, etc. The Borrower agrees to
-----------------------------------
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans, subject to the provisions of Section 4.11 hereof.
------------
Such Lender shall promptly notify the Agent and the Borrower in writing of the
occurrence of any such event, such notice to state, in reasonable detail, the
reasons therefor and the additional amount required fully to compensate such
Lender for such increased cost or reduced amount.
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Such additional amounts shall be payable by the Borrower directly to such
Lender within five days of its receipt of such notice, and such notice shall,
in the absence of manifest error, be conclusive and binding on the Borrower;
provided, however, in no event shall Borrower be obligated to pay increased
-------- -------
costs for a period greater than 180 days prior to the date of receipt of such
notice.
SECTION 4.4 Funding Losses. In the event any Lender shall incur any
--------------
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan) as a result of;
(a) any conversion or repayment or prepayment of the
principal amount of any LIBO Rate Loans on a date other than the
scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 3.1 or otherwise;
-----------
(b) any Loans not being made as LIBO Rate Loans in
accordance with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into,
LIBO Rate Loans in accordance with the Continuation/ Conversion Notice
therefor;
then, subject to the provisions of Section 4.11 hereof, upon the written notice
------------
of such Lender (which notice shall be delivered within thirty days of the
incurrence thereof by such Lender) to the Borrower (with a copy to the Agent),
the Borrower shall, within five days of its receipt thereof, pay directly to
such Lender such amount as will (in the reasonable determination of such Lender)
reimburse such Lender for such loss or expense. Such written notice (which shall
include calculations in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on the Borrower.
SECTION 4.5 Increased Capital Costs. If any change in, or the
-----------------------
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person controlling
such Lender, and such Lender determines (in its sole and absolute discretion)
that the rate of return on its or such controlling Person's capital as a
consequence of its Revolving Commitment or the Loans made by such Lender is
reduced to a level below that which such Lender or such controlling Person
could have achieved but for the occurrence of any such circumstance, then, in
any such case upon notice from time to time by such Lender to the Borrower,
subject to the provisions of Section 4.11 hereof, the Borrower shall
------------
immediately pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return. A statement of such Lender as to any such additional amount or amounts
-35-
(including calculations thereof in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower. In determining such
amount, such Lender may use any method of averaging and attribution that it (in
its sole and absolute discretion) shall deem applicable; provided, however, in
-------- -------
no event shall Borrower be obligated to pay increased costs for a period
greater than 180 days prior to the date of receipt of the notice required by
this Section 4.5.
-----------
SECTION 4.6 Taxes. All payments by the Borrower of principal of, and
-----
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "Taxes"). In the event
that any withholding or deduction from any payment to be made by the Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then the Borrower will:
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such authority; and
(c) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Borrower will promptly pay such
additional amounts (including any penalties, interest or expenses, other than
those penalties, interest or expenses which are due to any delay by Agent or any
Lender) as is necessary in order that the net amount received by such person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such person would have received had not such Taxes been
asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lenders, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 4.6, a distribution hereunder by the
-----------
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
-36-
Upon the request of the Borrower or the Agent, each Lender that is
organized under the laws of a jurisdiction other than the United States shall,
prior to the due date of any payments under the Notes, execute and deliver to
the Borrower and the Agent, on or about the first scheduled payment date in each
Fiscal Year, one or more (as the Borrower or the Agent may reasonably request)
United States Internal Revenue Service Forms 4224 or Forms 1001 or such other
forms or documents (or successor forms or documents), appropriately completed,
as may be applicable to establish the extent, if any, to which a payment to such
Lender is exempt from withholding or deduction of Taxes.
SECTION 4.7 Payments, Computations, etc. Unless otherwise expressly
---------------------------
provided, all payments by the Borrower pursuant to this Agreement, the Notes
or any other Loan Document shall be made by the Borrower to the Agent for the
pro rata account of the Lenders entitled to receive such payment. All such
--- ----
payments required to be made to the Agent shall be made, without setoff,
deduction or counterclaim, not later than 11:00 a.m., Chicago time, on the date
due, in same day or immediately available funds, to such account as the Agent
shall specify from time to time by notice to the Borrower. Funds received after
that time shall be deemed to have been received by the Agent on the next
succeeding Business Day. The Agent shall promptly remit in same day funds to
each Lender its share, if any, of such payments received by the Agent for the
account of such Lender. All interest and fees shall be computed on the basis of
the actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of 360 days (or, in the case of interest on a Base Rate Loan,
365 days or, if appropriate, 366 days). Whenever any payment to be made shall
otherwise be due on a day which is not a Business Day, such payment shall
(except as otherwise required by clause (c) of the definition of the term
----------
"Interest Period" with respect to LIBO Rate Loans) be made on the next
----------------
succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such payment.
SECTION 4.8 Sharing of Payments. If any Lender shall obtain any payment
-------------------
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections
--------
4.3, 4.4 and 4.5) in excess of its pro rata share of payments then or therewith
--- --- --- --- ----
obtained by all Lenders, such Lender shall purchase from the other Lenders such
participations in Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of the excess
-------- -------
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and each Lender which has sold a participation
to the purchasing Lender shall repay to the purchasing Lender the purchase
price to the ratable extent of such recovery together with an amount equal to
such selling Lender's ratable share (according to the proportion of:
(a) the amount of such selling Lender's required
repayment to the purchasing Lender
-37-
to
--
(b) the total amount so recovered from the purchasing
Lender);
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation as fully
-----------
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION 4.9 Setoff. Each Lender shall, upon the occurrence of any
------
Default described in clauses (a) through (d) of Section 8.1.9 or, with the
----------- --- -------------
consent of the Required Lenders, upon the occurrence of any other Event of
Default, have the right to appropriate and apply to the payment of the
Obligations owing to it (whether or not then due), and (as security for such
Obligations) the Borrower hereby grants to each Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of the
Borrower then or thereafter maintained with such Lender; provided, however,
-------- -------
that any such appropriation and application shall be subject to the provisions
of Section 4.8. Each Lender agrees promptly to notify the Borrower and the
-----------
Agent after any such setoff and application made by such Lender; provided,
--------
however, that the failure to give such notice shall not affect the validity of
-------
such setoff and application. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff
under applicable law or otherwise) which such Lender may have.
SECTION 4.10 Use of Proceeds. The Borrower shall apply the proceeds of
---------------
each Borrowing in accordance with the fourth recital; without limiting the
------ -------
foregoing, no proceeds of any Loan will be used to acquire any equity security
of a class which is registered pursuant to Section 12 of the Securities
Exchange Act of 1934 or any "margin stock", as defined in F.R.S. Board
Regulation U.
SECTION 4.11 Changes to Other Branches; Equal Treatment of Borrower.
------------------------------------------------------
If a Lender claims any additional amounts payable or that its is unable to make
LIBOR Loans available, as described more fully in Sections 4.1 through 4.5
------------ ---
hereof, such Lender shall (i) use its reasonable efforts (consistent with legal
and regulatory restrictions) to avoid the need for paying such additional
amounts or such unavailability, including changing the jurisdiction of its
applicable lending office or moving the applicable Loan(s) to an Affiliate or
Subsidiary; provided, that the taking of any such action would not, in the
--------
reasonable judgment of such Lender, be disadvantageous to such Lender and (ii)
treat the Borrower, with respect to all such issues, in a
-38-
manner consistent with the treatment of other similarly situated borrowers with
respect to such issues.
SECTION 4.12 Replacement of Lenders. Within fifteen (15) days after
----------------------
receipt by Borrower of written notice and demand from any Lender for payment
pursuant to Section 4.5 or 4.6 (any such Lender demanding such payment being
------------------
referred to herein as an "Affected Lender"), Borrower may, at its option,
notify Agent and such Affected Lender of its intention to do one of the
following:
(A) Borrower may obtain, at Borrower's expense, a
replacement Lender ("Replacement Lender") for such Affected Lender, which
Replacement Lender shall be reasonably satisfactory to Agent. In the event
Borrower obtains a Replacement Lender that will refinance all outstanding
Obligations owed to such Affected Lender and assume its Commitments hereunder
within ninety (90) days following notice of Borrower's intention to do so, the
Affected Lender shall sell and assign all of its rights and delegate all of its
obligations under this Agreement to such Replacement Lender in accordance with
the provisions of Section 10.11.1, provided that Borrower has reimbursed such
--------------- --------
Affected Lender for any administrative fee payable pursuant to Section 10.11.1
---------------
and, in any case where such replacement occurs as the result of a demand for
payment pursuant to Section 4.5 or 5.6, paid all amounts required to be paid to
------------------
such Affected Lender pursuant to subsection 4.5 or 4.6 through the date of such
---------------------
sale and assignment; or
(B) Borrower may, upon consent of the Majority Lenders
(other than the Affected Lender), prepay in full all outstanding Obligations
owed to such Affected Lender and terminate such Affected Lender's Revolving
Commitment, in which case the Revolving Commitment Amount will be reduced by
the amount of such Affected Lender's Revolving Commitment. Borrower shall,
within ninety (90) days following notice of its intention to do so, prepay in
full all outstanding Obligations owed to such Affected Lender (including, in
any case where such replacement occurs as the result of a demand for payment
for increased costs, such Affected Lender's increased costs for which it is
entitled to reimbursement under this Agreement through the date of such
prepayment), and terminate such Affected Lender's obligations under the
Revolving Commitment Amount.
ARTICLE V
CONDITIONS TO BORROWING
SECTION 5.1 Initial Borrowing. The obligations of the Lenders to fund
-----------------
the initial Borrowing and the Letter of Credit Issuer to issue, and the Lenders
to participate in, any letter of Credit, shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set forth in this
Section 5.1.
-----------
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SECTION 5.1.1 Resolutions, etc. The Agent shall have received from each
----------------
Credit Party a certificate, dated the date of the initial Borrowing, of its
Secretary or Assistant Secretary as to:
(a) resolutions of its Board of Directors then in full
force and effect authorizing the execution, delivery and performance of
this Agreement, the Notes and each other Loan Document to be executed
by it; and
(b) the incumbency and signatures of those of its
officers authorized to act with respect to this Agreement, the Notes
and each other Loan Document executed by it;
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary of such Credit Party canceling
or amending such prior certificate.
SECTION 5.1.2 Delivery of Notes. The Agent shall have received, for
-----------------
the account of each Lender, its Notes duly executed and delivered by the
Borrower.
SECTION 5.1.3 Applicable Margin. The Agent shall receive a certificate,
-----------------
executed by an Authorized Officer of the Borrower, delineating the Applicable
Margin after giving pro forma effect to the Loans to be incurred on the
Original Closing Date.
SECTION 5.1.4 Guaranty. The Agent shall have received the Guaranty,
--------
dated the date hereof, duly executed by each Subsidiary of the Borrower.
SECTION 5.1.5 Pledge Agreements. The Agent shall have received executed
-----------------
counterparts of the Borrower Pledge Agreement and the Guarantor Pledge
Agreement, each dated as of the date hereof, duly executed by each Credit Party
party thereto, together with stock certificates, accompanied by undated stock
powers duly executed in blank, and promissory notes, duly endorsed in blank,
required to be delivered to the Agent pursuant to the Borrower Pledge Agreement
and the Guarantor Pledge Agreement.
SECTION 5.1.6 Security Agreements. The Agent shall have received
-------------------
executed counterparts of the Borrower Security Agreement and the Guarantor
Security Agreement, each dated as of the date hereof, duly executed by each
Credit Party thereto, together with:
(a) acknowledgment copies of properly filed Uniform
Commercial Code financing statements naming the relevant Credit Party
as the debtor and the Agent as the secured party, or other similar
instruments or documents, filed under the Uniform Commercial Code of
all jurisdictions as may be necessary or, in the opinion of the Agent,
desirable to perfect the security interest of the Agent pursuant to
such Security Agreement;
-40-
(b) executed copies of proper Uniform Commercial Code Form
UCC-3 termination statements, if any, necessary to release all Liens
and other rights of any Person:
(i) in any collateral described in such Security Agreement
previously granted by any Person, and
(ii) securing any of the Indebtedness identified in Part A
of Schedule 6.17, together with such other Uniform Commercial
-------------
Code Form UCC-3 termination statements as the Agent may
reasonably request from such Credit Party; and
(c) copies of Uniform Commercial Code Requests for Information
or Copies (Form UCC-11), or a similar search report certified by a
party acceptable to the Agent, dated a date reasonably near to the
date of the initial Borrowing, listing all effective financing
statements which name each Credit Party (under its present name and
any previous names) as the debtor and which are filed in the
jurisdictions in which filings were made pursuant to clause (a)
----------
above, together with copies of such financing statements (none of
which (other than those described in clause (a), if such Form UCC-11
---------
or search report, as the case may be, is current enough to list such
financing statements described in clause (a)) shall cover any
----------
collateral described in such Security Agreement).
SECTION 5.1.7 Intellectual Property Assignment. The Agent shall have
--------------------------------
received executed counterparts of an Intellectual Property Assignment, dated the
date hereof, duly executed by each Credit Party.
SECTION 5.1.8 Opinions of Counsel. The Agent shall have received
-------------------
opinions, dated the date of the initial Borrowing and addressed to the Agent
and all Lenders, from Xxxxxx Xxxxxx Xxxxx, counsel to the Borrower and its
Subsidiaries, substantially in the form of Exhibit H hereto.
---------
SECTION 5.1.9 Agreements. The Agent shall have received true and
-----------
correct copies, certified as such by an Authorized Officer of the Borrower,
of each agreement governing Indebtedness listed on Schedule 6.17 and each
-------------
Service Agreement and Employment Agreement listed on Schedule 6.18.
--------------
SECTION 5.1.10 Closing Fees, Expenses, etc. The Agent shall have
---------------------------
received for its own account, or for the account of each Lender, as the case
may be, all fees, costs and expenses due and payable on the Original Closing
Date pursuant to Section 3.3 and, to the extent invoiced on such date,
-----------
Section 10.3.
-------------
SECTION 5.2 All Borrowings and Letters of Credit. The obligation of
------------------------------------
each Lender to fund any Loan on the occasion of any Borrowing (including the
initial Borrowing) and the
-41-
obligation of the Letter of Credit Issuer to issue any Letter of Credit shall
be subject to the satisfaction of each of the conditions precedent set forth in
this Section 5.2.
SECTION 5.2.1 Compliance with Warranties, No Default, etc. Both before
-------------------------------------------
and after giving effect to any Borrowing (but, if any Default of the nature
referred to in Section 8.1.5 shall have occurred with respect to any other
-------------
Indebtedness, without giving effect to the application, directly or indirectly,
of the proceeds thereof) the following statements shall be true and correct:
(a) the representations and warranties set forth in Article VI
----------
shall be true and correct with the same effect as if then made (unless
stated to relate solely to an early date, in which case such
representations and warranties shall be true and correct as of such
earlier date); and
(b) no Default or Event of Default shall have then occurred
and be continuing.
SECTION 5.2.2 Borrowing Request; LC Notice. The Agent shall have
----------------------------
received a Borrowing Request for such Borrowing or LC Notice for the issuance
of a Letter of Credit. Each of the delivery of a Borrowing Request or LC
Notice, as the case may be, and the acceptance by the Borrower of the proceeds
of such Borrowing or the issuance of such Letter of Credit, as the case may be,
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing or the issuance of such Letter of Credit, as the case may be
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof or the issuance of such Letter of Credit,
as the case may be,) the statements made in Section 5.2.1 are true and correct.
-------------
SECTION 5.2.3 Satisfactory Legal Form. All documents executed or
-----------------------
submitted pursuant hereto by or on behalf of each Credit Party shall be
reasonably satisfactory in form and substance to the Agent and its counsel; the
Agent and its counsel shall have received all information, approvals, opinions,
documents or instruments as the Agent or its counsel may reasonably request.
-42-
SECTION 5.3 . Conditions to Second Amendment and Restatement Effective
--------------------------------------------------------
Date. This Agreement shall become effective upon the later of October 23, 2001
----
and the date of the satisfaction of each of the following (the "Second
Amendment and Restatement Effective Date"):
SECTION 5.3.1 Executed Signature Pages to Agreement. Execution of this
-------------------------------------
Agreement and delivery of executed signature pages to this Agreement by the
Borrower, each Lender and the Agent.
SECTION 5.3.2 Executed Reaffirmation of Collateral Documents. Execution
----------------------------------------------
of the Reaffirmation of Collateral Documents by the Borrower and each
Subsidiary Guarantor and delivery of the signature pages executed by the
Borrower and each Subsidiary Guarantor to the Reaffirmation of Collateral
Documents to the Agent.
SECTION 5.3.3 Payment of Fees and Expenses. Payment by the Borrower to
----------------------------
the Agent of all reasonable out of pocket fees and expenses (including, without
limitation, the reasonable fees and expenses of Winston & Xxxxxx) of the Agent
and the Lenders in connection with this Agreement.
SECTION 5.3.4 Resolutions, etc. The Agent shall have received from each
----------------
Credit Party a certificate, dated as of the Second Amendment and Restatement
Effective Date, of its Secretary or Assistant Secretary as to:
(a) resolutions of its Board of Directors then in full force
and effect authorizing the execution, delivery and performance of this
Agreement and each other Loan Document to be executed by it; and
(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement and each other Loan
Document executed by it;
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary of such Credit Party canceling
or amending such prior certificate.
SECTION 5.3.5 Certificate.
-----------
A certificate signed by the chief financial officer or chief
executive officer of the Borrower, dated as of the Second Amendment and
Restatement Effective Date and after giving effect to this Agreement:
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(i) stating that the representations and warranties
contained in Article VI are true and correct on and as of such date as
----------
though made on and as of such date; and
(ii) stating that no Default or Event of Default
exists.
SECTION 5.3.6 Updated Disclosure Schedules
----------------------------
A certificate signed by the chief financial officer or chief
executive officer of the Borrower dated as of the Second Amendment and
Restatement Effective Date, proposing any necessary changes to the Schedules to
this Agreement in form and substance reasonably satisfactory to the Agent
occurring after the Original Closing Date.
SECTION 5.3.7 Projections.
-----------
Updated projections of the financial performance of the Borrower
and its Subsidiaries giving effect to the Restructuring in form and substance
reasonably satisfactory to the Agent and the Lenders.
SECTION 5.3.8 Legal Opinion.
--------------
An opinion of Xxxxxx Xxxxxx Zavis, special counsel to the Credit
Parties, dated as of the Second Amendment and Restatement Effective Date in form
and substance satisfactory to the Agent.
SECTION 5.3.9 Payment of Amendment Fee.
-------------------------
Borrower shall have paid to the Agent for the account of each
Lender executing this Agreement on or before the Second Amendment and
Restatement Effective Date an amendment fee equal to .25% times each such
Lender's Percentage of the Revolving Commitment Amount in effect on the Second
Amendment and Restatement Effective Date after giving effect to this Agreement.
SECTION 5.3.10 Other Documents
--------------
Such other customary approvals, opinions, documents or materials
as the Agent may reasonably request.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this
Agreement and to make Loans hereunder, the Borrower represents and warrants unto
the Agent and each Lender as set forth in this Article VI.
-----------
SECTION 6.1 Organization, etc. The Borrower and each of its
-----------------
Subsidiaries, including, without limitation, the Borrower, is validly
organized and existing and in good standing under the laws of the State of its
organization, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the nature of its business
requires such qualification, and has full power and authority and holds all
requisite governmental licenses, permits and other approvals to enter into and
perform its Obligations under this Agreement, the Notes and each other Loan
Document to which it is a party and to own and hold under lease its property
and to conduct its business substantially as currently conducted by it.
SECTION 6.2 Due Authorization, Non-Contravention, etc. The execution,
------------------------------------------
delivery and performance by the Borrower and each of its Subsidiaries,
including without limitation, the Borrower, of this Agreement, the Notes and
each other Loan Document executed or to be executed by it, are within each such
Credit Party's powers, have been duly authorized by all necessary corporate
action, and do not:
(a) contravene such Credit Party's Organizational Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting such Credit Party, which contravention reasonably would be
expected to have a Material Adverse Effect; or
(c) result in, or require the creation or imposition of, any Lien
on any of such Credit Party's properties other than a Permitted Lien.
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SECTION 6.3 Government Approval, Regulation, etc. No authorization or
------------------------------------
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the due execution,
delivery or performance by any Credit Party, including, without limitation, the
Borrower, of this Agreement, the Notes or any other Loan Document to which it
is a party, other than as described in Schedule 6.3 which have been obtained or
------------
delivered on or prior to the Original Closing Date. Neither the Borrower nor
any of its Subsidiaries, is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4 Validity, etc. This Agreement constitutes, and the Notes
-------------
and each other Loan Document executed by each Credit Party thereto will, on
the due execution and delivery thereof, constitute, the legal, valid and
binding obligations of such Credit Party enforceable in accordance with their
respective terms, except that the validity or enforceability of any such Loan
Document may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforceability of creditors' rights
generally or by equitable principles, whether enforcement thereof is sought in
a court of law or equity.
SECTION 6.5 Financial Information. The audited financial statements of
---------------------
the Borrower and its Subsidiaries on a consolidated basis as of December 31,
1999, and the unaudited financial statements of the Borrower and its
Subsidiaries on a consolidated basis as at March 31, 2000, copies of which have
been furnished to the Agent and each Lender, have been prepared in accordance
with GAAP consistently applied (subject to ordinary, good faith year end audit
adjustments), and present fairly the consolidated financial position of the
Persons covered thereby as at the dates thereof and the results of their
operations for the periods then ended.
SECTION 6.6 No Material Adverse Change. Since December 31, 2000,
--------------------------
there has been no material adverse change in the financial condition,
operations, assets, business, properties or prospects of the Borrower and its
Subsidiaries taken as a whole; provided, however, Agent and the Lenders hereby
--------
acknowledge and agree that, notwithstanding any other provision contained in
this Agreement, the Restructuring in and of itself shall not constitute, for
the quarter ended September 30, 2001, a material adverse change to the
financial condition, operations, assets, business, properties or prospects of
the Borrower and its Subsidiaries taken as a whole..
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SECTION 6.7 Litigation, Labor Controversies, etc. There is no pending
------------------------------------
or, to the knowledge of the Borrower, threatened litigation, action,
proceeding, or labor controversy affecting any Credit Party, or any of their
respective properties, businesses, assets or revenues, or any Person who
provided health care services under contract with any Credit Party, which
reasonably would be expected to have a Material Adverse Effect or which
purports to affect the legality, validity or enforceability of this Agreement,
the Notes or any other Loan Document.
SECTION 6.8 Subsidiaries. (a) The Borrower has no Subsidiaries,
------------
except those Subsidiaries:
(i) which are identified in Schedule 6.8; or
------------
(ii) which are permitted to have been acquired by the Borrower
in accordance with Section 7.2.5 or 7.2.8.
------------- -----
SECTION 6.9 Ownership of Properties. The Borrower and each of its
-----------------------
Subsidiaries owns good and marketable title (or valid leasehold title, with
respect to leasehold estates) to all of its properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges or claims (including infringement claims with respect to
patents, trademarks, copyrights and the like) except as permitted pursuant to
Section 7.2.3.
-------------
SECTION 6.10 Taxes. Except as described on Schedule 6.10, the Borrower
-----
and each of its Subsidiaries has filed all tax returns and reports required by
law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 6.11 Pension and Welfare Plans. During the twelve-consecutive-
-------------------------
month period prior to the Original Closing Date and prior to the date of any
Borrowing hereunder, no steps have been taken to terminate any Pension Plan,
and no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition
exists or event or transaction has occurred with respect to any Pension Plan
which reasonably would be expected to result in the incurrence by the Borrower
or any member of the Controlled Group of any material liability, fine or
penalty. Neither the Borrower nor any member of the Controlled Group has any
contingent liability with respect to any post-retirement benefit under a
Welfare Plan, other than liability for continuation coverage described in Part
6 of Title I of ERISA.
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SECTION 6.12 Environmental Warranties. (a) All facilities and property
------------------------
including underlying groundwater) owned or leased by the Borrower or any of its
Subsidiaries have been, and continue to be, owned or leased by the Borrower and
its Subsidiaries in material compliance with all applicable Environmental Laws.
(b) There have been no past (which have not been remedied or
resolved), and there are no pending or, to the best knowledge of the
Borrower, threatened:
(i) claims, complaints, notices or requests for
information received by the Borrower or any of its Subsidiaries
with respect to any alleged material violation of any
Environmental Law, or
(ii) complaints, notices or inquiries to the Borrower or
any of its Subsidiaries regarding potential material liability
under any Environmental Law.
(c) There have been no Releases of Hazardous Materials at, on
or under any property now or previously owned or leased by the Borrower or any
of its Subsidiaries that, singly or in the aggregate, have, or would reasonably
be expected to have, a Material Adverse Effect.
(d) The Borrower and its Subsidiaries have been issued and are in
material compliance with all material permits, certificates, approvals,
licenses and other material authorizations relating to environmental matters
and necessary or desirable for their businesses.
(e) No property now or previously owned or leased by the
Borrower or any of its Subsidiaries is listed or proposed for listing (with
respect to owned property only) on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar state list of sites requiring
investigation or clean-up.
(f) There are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or previously
owned or leased by the Borrower or any of its Subsidiaries.
(g) Neither the Borrower nor any of its Subsidiaries has directly
transported or directly arranged for the transportation of any Hazardous
Material to any location which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar
state list or which is the subject of federal, state or local enforcement
actions or other investigations which reasonably would be expected to lead to
material claims against the Borrower or such Subsidiary thereof for any
remedial work, damage to natural resources or personal injury, including claims
under CERCLA.
(h) To the best of the Borrower's knowledge after due inquiry,
there are no polychlorinated biphenyls or friable asbestos present at any
property now or previously owned or leased by the Borrower or any of its
Subsidiaries.
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(i) No conditions exist at, on or under any property now or
previously owned or leased by the Borrower or any of its Subsidiaries which,
with the passage of time, or the giving of notice or both, reasonably would be
expected to give rise to any material liability under any Environmental Law.
SECTION 6.13 Regulations T, U and X. Neither the Borrower nor any of
----------------------
its Subsidiaries is engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock, and no proceeds of any Loans or any
Letter of Credit will be used for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation U or X. Terms for which meanings are
provided in F.R.S. Board Regulation T, U or X or any regulations substituted
therefor, as from time to time in effect, are used in this Section with such
meanings.
SECTION 6.14 Accuracy of Information. All factual information
-----------------------
heretofore or contemporaneously furnished by or on behalf of any Credit Party
in writing to the Agent or any Lender for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all other such
factual information hereafter furnished by or on behalf of any Credit Party to
the Agent or any Lender will be, true and accurate in every material respect on
the date as of which such information is dated or certified and as of the date
of execution and delivery of this Agreement by the Agent and such Lender, and
such information is not, or shall not be, as the case may be, incomplete by
omitting to state any material fact necessary to make such information not
misleading.
SECTION 6.15 Solvency. As of the Original Closing Date, after giving
--------
effect to the consummation of the transaction contemplated by the Loan
Documents and the payment of all fees, costs and expenses payable by the
Borrower with respect to the transactions contemplated by the Loan Documents,
the Borrower and its Subsidiaries are Solvent on a consolidated basis.
SECTION 6.16 Collateral Documents. (a) Subject to the provisions of
--------------------
clause (b) below with respect to the requirement of the Agent to maintain
possession as the Pledged Collateral, the provisions of each of the Collateral
Documents are effective to create in favor of the Agent for the benefit of the
Lenders and the Agent, a legal, valid and enforceable first priority security
interest in all right, title and interest of each Credit Party in the
Collateral described therein; and financing statements have been filed in the
offices in all of the jurisdictions listed in the schedule to the Borrower
Security Agreement and the Guarantor Security Agreement, and each Intellectual
Property Assignment has been filed in the U.S. Patent and Trademark Office and
the U.S. Copyright Office.
(b) The provisions of the Borrower Pledge Agreement and the
Guarantor Pledge Agreement are effective to create, in favor of the Agent for
the benefit of the Lenders and the Agent, a legal, valid and enforceable first
priority security interest in all of the Collateral described therein; and the
Pledged Collateral was delivered to the Agent or its nominee in accordance with
the terms thereof. The Lien of the Borrower Pledge Agreement and the Guarantor
Pledge Agreement constitutes a perfected, first priority security interest in
all right,
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title and interest of the Credit Party thereto in the Pledged Collateral
described therein, prior and superior to all other Liens and interests,
provided the Agent maintains possession of the Pledged Collateral for the term
of each such Borrower Pledge Agreement or Guarantor Pledge Agreement, as
applicable.
(c) All representations and warranties of each Credit Party
contained in the Collateral Documents are true and correct as of the date on
which made, except to the extent such representations pertain to a prior date,
in which case such representations and warranties are true and correct as of
such prior date.
SECTION 6.17 Indebtedness. Attached hereto as Schedule 6.17 is a
------------ -------------
complete and correct list of all Indebtedness of the Borrower and its
Subsidiaries outstanding on the Second Amendment and Restatement Effective
Date, showing the aggregate principal amount which was outstanding on such
date. The Borrower has delivered or caused to be delivered to the Agent a true
and complete copy of each instrument evidencing any Indebtedness listed on
Schedule 6.17 and of each document pursuant to which any of such Indebtedness
-------------
was issued.
SECTION 6.18 Service Agreements; Employment Agreements. As of the
-----------------------------------------
Second Amendment and Restatement Effective Date, the Borrower has delivered to
the Agent a true and complete copy of each Service Agreement and Employment
Agreement, and of each amendment of modification thereof, listed on Schedule
--------
6.18. Each such Service Agreement and Employment Agreement is a valid and
----
subsisting agreement and is in full force and effect in accordance with the
terms thereof, and no material default by the Borrower or any of its
Subsidiaries exists under any such Service Agreement or such Employment
Agreement and, to the best of the Borrower's knowledge, no party to any Service
Agreement or Employment Agreement has any accrued right to terminate any such
Service Agreement or Employment Agreement on account of a default by the
Borrower or any of its Subsidiaries which right of default reasonably would be
expected to have a Material Adverse Effect.
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SECTION 6.19 Other Agreements/Program Eligibility. Neither the Borrower
------------------------------------
nor any of its Subsidiaries, and to the knowledge of the Borrower's officers,
no Practice or Provider, is in default in the performance, observance or
fulfillment of any obligation, covenant or condition contained in or applicable
with respect to any Medicaid Provider Agreement, Medicare Provider Agreement,
other agreement or instrument to which the Borrower, a Subsidiary, Practice or
Provider is a party with a third party payor, or participation in medicare,
medicaid or a third party payor program in which the Borrower, a Subsidiary,
Practice or Provider participates, which default, if not remedied within any
applicable grace period, reasonably would be expected to (i) result in the
revocation, termination, cancellation, suspension or non-renewal of Medicaid
Certification, Medicare Certification, any similar certification of a material
third party payor, if any, a Medicare Provider Agreement, Medicaid Provider
Agreement or agreement with a third party payor, or eligibility to participate,
directly or indirectly, in medicare, medicaid or material third party payor
programs, or (ii) have a Material Adverse Effect.
SECTION 6.20 Reimbursement from Third Party Payors. The accounts
-------------------------------------
receivable of the Borrower, each of its Subsidiaries and, to the knowledge of
the Borrower's officers, each Practice, have been and will continue to be
adjusted reasonably to reflect reimbursement experiences with and policies of
third party payors such as Medicare, Medicaid, Blue Cross/Blue Shield, private
insurance companies, health maintenance organizations, preferred provider
organizations, alternative delivery systems, managed care systems, government
contracting agencies and other third party payors. In particular, accounts
receivable relating to such third party payors do not and shall not exceed
amounts any obligee is entitled to receive under any capitation arrangement,
fee schedule, discount formula, cost-based reimbursement or other adjustment or
limitation to its usual charges.
SECTION 6.21 Legal Compliance. The Borrower and each of its
----------------
Subsidiaries, and to the knowledge of any of the Borrower's or any of its
Subsidiaries' officers, each Practice and each Provider, have duly complied and
are in compliance with all requirements, restrictions and prohibitions of law,
including, without limitation, any statute, law, treaty, rule, regulation,
manual, guidelines, rules of professional conduct, or order, decree, writ,
injunction or other determination of an arbitrator, court or other governmental
authority, in each case applicable to or binding upon such Person or any of its
property or to which such person or its property is subject and having the
force of law, other than those noncompliance with which would not reasonably be
expected to have a Material Adverse Effect.
SECTION 6.22 Licensing and Accreditation. Each of the Borrower and
---------------------------
each of its Subsidiaries, and, to the extent applicable, to the knowledge of
the Borrower's officers, each Practice and Provider has, to the extent
applicable, (i) obtained (or been duly assigned) all required certificates of
need (other than as described on Schedule 6.22) or determinations of need, as
-------------
required by the relevant state governmental authority, for the acquisition,
construction, expansion of, investment in or operation of its businesses or
facilities as currently operated; (ii) obtained and maintains in good standing
all required licenses; (iii) to the extent customary in
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the industry in which it is engaged, obtained and maintains accreditation from
all generally recognized accrediting agencies; (iv) obtained and maintains
Medicaid Certification, Medicare Certification and any similar third party
payor certification, if any; and (v) entered into and maintains in good
standing, if applicable, its Medicare Provider Agreement, its Medicaid Provider
Agreement and its agreements with third party payors. To the knowledge of the
Borrower's officers, each Provider is duly licensed (where licensing is
required) by each federal or state agency or commission, or any other
governmental authority having jurisdiction over the provision of such services
rendered by such Provider, and all such required licenses are in full force and
effect on the date hereof and have not been revoked or suspended or otherwise
limited.
SECTION 6.23 Subordination Provisions. The subordination provisions
------------------------
contained in all notes, debentures and other instruments entered into or issued
in respect of Subordinated Debt are enforceable against the issuer of the
respective security and the holders thereof in accordance with their respective
terms, and the Loans and all other Obligations are within the definitions of
"Senior Indebtedness", or other comparable definition, included in such
provisions.
SECTION 6.24 RICO. None of the Borrower nor any of its Subsidiaries is
----
engaged in or has engaged in any course of conduct that reasonably would be
expected to subject any of their respective properties to any Lien, seizure or
other forfeiture under any criminal law, racketeer influenced and corrupt
organizations law, civil or criminal, or other similar laws.
ARTICLE VII
COVENANTS
SECTION 7.1 Affirmative Covenants. The Borrower agrees with the Agent
---------------------
and each Lender that, until all Revolving Commitments have terminated and all
Obligations have been paid and performed in full, each Credit Party will
perform the obligations set forth in this Section 7.1 applicable to such Credit
-----------
Party.
SECTION 7.1.1 Financial Information, Reports, Notices, etc. The
---------------------------------------------
Borrower will furnish, or will cause to be furnished, to each Lender and the
Agent copies of the following financial statements, reports, notices and
information:
(a) as soon as available and in any event within 45 days
after the end of each of the first three Fiscal Quarters (commencing
with the Fiscal Quarter ending June 30, 2000) of each Fiscal Year of
the Borrower, to the extent prepared to comply with SEC requirements,
a copy of the SEC Form 10-Qs filed by the Borrower with the SEC for
each such quarterly period, or if no such Form 10-Q was so filed by
the Borrower with respect to any such quarterly period, consolidated
and consolidating balance sheets of the
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Borrower and its Subsidiaries as of the end of such Fiscal Quarter
and consolidated and consolidating statements of earnings and cash
flow of the Borrower and its Subsidiaries for such Fiscal Quarter and
for the period commencing at the end of the previous Fiscal Year and
ending with the end of such Fiscal Quarter (including profit and loss
statements of the continuing businesses of Borrower and its
Subsidiaries, profit and loss statements of the discontinued
businesses of Borrower and its Subsidiaries and profit and loss
statements on a combined basis), certified by the Authorized Officer
of the Borrower;
(b) as soon as available and in any event within 90 days after
the end of each Fiscal Year of the Borrower, to the extent prepared
to comply with SEC requirements, a copy of the SEC Form 10-Ks filed
by the Borrower with the SEC for such fiscal year, or, if no such
Form 10-K was so filed by the Borrower for such fiscal year, a copy
of the annual audit report for such Fiscal Year for the Borrower and
its Subsidiaries including therein consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries (which
consolidating balance sheets shall be prepared and delivered under
separate cover by the Borrower) as of the end of such Fiscal Year and
consolidated and consolidating statements of earnings and cash flow
of the Borrower and its Subsidiaries (which consolidating statements
shall be prepared and delivered under separate cover by the Borrower)
for such Fiscal Year, in the case of the consolidated financial
statements, certified (without any Impermissible Qualification) by
Xxxxxx Xxxxxxxx LLP or other independent public accountants
reasonably acceptable to the Agent, together with a certificate from
such accountants containing a computation of, and showing compliance
with, each of the financial ratios and restrictions contained in
Section 7.2.4 and to the effect that, in making the examination
-------------
necessary for the signing of such annual report by such accountants,
they have not become aware of any Default or Event of Default that
has occurred and is continuing, or, if they have become aware of such
Default or Event of Default, describing such Default or Event of
Default and the steps, if any, which they have been advised are being
taken to cure it;
(c) as soon as available and in any event within 45 days
after the end of each Fiscal Quarter, a certificate, executed by the
chief financial officer and/or principal accounting officer of the
Borrower, showing (in reasonable detail and with appropriate
calculations and computations in all respects satisfactory to the
Agent, including, without limitation, the delivery of a Quarterly
EBITDA Certificate for each Reporting Person) compliance with the
financial covenants set forth in Section 7.2.4.;
--------------
(d) as soon as possible and in any event within three Business
Days after the occurrence of each Default, a statement of the chief
financial officer and/or principal accounting officer of the Borrower
setting forth details of such Default and the action which the
Borrower has taken and proposes to take with respect thereto;
(e) as soon as possible and in any event within three Business
Days after (x) the occurrence of any adverse development with
respect to any litigation, action,
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proceeding, or labor controversy described in Section 6.7 or (y) the
-----------
commencement of any labor controversy, litigation, action, proceeding
of the type described in Section 6.7, any of which reasonably would
-----------
be expected to have a Material Adverse Effect, notice thereof and
copies of all documentation relating thereto;
(f) promptly, but not later than five days after the date of
filing with the SEC, copies of all financial statements and reports
that Borrower sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including
Forms 10-K, 10-Q and 8-K) that Borrower or any of its Subsidiaries may
make to, or file with, the SEC (including, without limitation, pursuant
to Section 7.2.9(b) or any national securities exchange;
---------------
(g) immediately upon becoming aware of the institution of any
steps by the Borrower or any other Person to terminate any Pension
Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA, or the taking of any action with respect to
a Pension Plan which reasonably would be expected to result in the
requirement that the Borrower furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any event with
respect to any Pension Plan which reasonably would be expected to
result in the incurrence by the Borrower of any material liability,
fine or penalty, or any material increase in the contingent liability
of the Borrower with respect to any post-retirement Welfare Plan
benefit, notice thereof and copies of all documentation relating
thereto;
(h) immediately upon becoming aware of any litigation or other
proceedings being instituted against any Credit Party or any
Practice or Provider to suspend, revoke or terminate any Medicaid
Provider Agreement, Medicaid Certification, Medicare Provider
Agreement, Medicare Certification, eligibility to participate in
Medicare or Medicaid, or agreement with or certification by, if any,
or eligibility to participate in a program of a third party payor,
which suspension, revocation or termination reasonably would be
expected to have a Material Adverse Effect, promptly deliver to the
Agent written notice thereof stating the nature and status of such
litigation, dispute, proceeding, levy, execution or other process;
and
(i) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries or any Practice as any Lender through the Agent may from
time to time reasonably request.
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SECTION 7.1.2 Compliance with Laws, etc. (a) The Borrower will, and
-------------------------
will cause each of its Subsidiaries to, comply in all material respects with
all applicable laws, rules, regulations and orders (including, without
limitation, Fraud and Abuse Laws, Medicare Regulations, Medicaid Regulations
and the rules and regulations established by any third party payor), such
compliance to include (without limitation):
(i) the maintenance and preservation of its corporate
existence and qualification as a foreign corporation, except to the
extent no longer necessary within the reasonable business judgment of
the Borrower or such Subsidiary, as applicable, or if otherwise
terminated pursuant to a transaction consummated in accordance with the
provisions of Section 7.2.8; and
-------------
(ii) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or upon
its property except to the extent being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
(b) the Borrower will further use its reasonable best efforts,
subject to applicable laws, to assure the compliance by all Practices and
Providers with all applicable laws, including, but not limited to, medical
licensure and Fraud and Abuse Laws, relating to their providing of healthcare
services in all material respects.
-55-
SECTION 7.1.3 Maintenance of Properties. The Borrower will, and will
-------------------------
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition, and make necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times unless the Borrower
determines in good faith that the continued maintenance of any of its
properties is no longer economically desirable.
SECTION 7.1.4 Insurance. (a) Schedule 7.1.4 sets forth as of the date
--------- --------------
of this Agreement a true and complete listing of all insurance maintained by
the Borrower and each of its Subsidiaries and by each physician and
non-physician Provider. The Borrower will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained with responsible insurance
companies insurance with respect to its properties and business (including
business interruption insurance) against at least such casualties and
contingencies and of at least such types and in at least such amounts as are
described in Schedule 7.1.4 which insurance shall name the Agent as loss payee
--------------
and an additional insured, and will, upon request of the Agent, furnish to each
Lender at reasonable intervals (provided that, so long as no Event of Default
shall have occurred and be continuing, no such certification shall be required
to be delivered more than once in any Fiscal Year) a certificate of an
Authorized Officer of the Borrower setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries in accordance with
this Section.
(b) The Borrower will, and with cause each of its
Subsidiaries to, maintain insurance for claims, however characterized, against
them in connection with the provision of medical services by Providers and/or
ancillary services provided by them for Practices covered by Service
Agreements, in at least such amounts per occurrence as are described in
Schedule 7.1.4, which insurance shall name the Agent as an additional insured.
--------------
The Borrower will further cause each Practice to maintain medical malpractice
insurance in at least such amounts per occurrence as are described in Schedule
--------
7.1.4.
------
SECTION 7.1.5 Books and Records. The Borrower will, and will cause each
-----------------
of its Subsidiaries to, keep books and records which accurately reflect all of
its business affairs and transactions and permit the Agent and each Lender or
any of their respective representatives, at reasonable times and intervals,
upon, so long as no Event of Default shall exist and be continuing, reasonable
prior notice delivered during regular business hours, to visit all of its
offices, to discuss its financial matters with its officers and independent
public accountant (and the Borrower hereby authorizes such independent public
accountant to discuss the Borrower's financial matters with each Lender or its
representatives, provided, so long as no Event of Default shall exist or be
continuing, a representative of the Borrower is present) and to examine (and,
at the expense of the Borrower, photocopy extracts from) any of its books or
other corporate records. The Borrower shall pay any fees of such independent
public accountant incurred in connection with the Agent's or any Lender's
exercise of its rights pursuant to this Section provided, however, that so long
as no Event of Default shall exist and be continuing, the Borrower shall not be
liable for the fees and expenses of such independent public accountant
-56-
related to more than one visit during any Fiscal Year. All visits conducted
pursuant to this Section 7.1.5 shall be conducted in such a manner so as not to
-------------
disrupt the business operations of the applicable office. All information
obtained during any such visit shall be subject to the provisions of Section
-------
10.12.
-----
SECTION 7.1.6 Environmental Covenant. The Borrower will, and will cause
----------------------
each of its Subsidiaries to:
(a) use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all necessary
material permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain
in material compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Environmental Laws;
(b) immediately notify the Agent and provide copies upon receipt
of all written material claims, complaints, notices or inquiries
relating to, the condition of its facilities and properties or
compliance with Environmental Laws, and shall promptly cure and have
dismissed with prejudice to the reasonable satisfaction of the Agent
any actions and proceedings relating to compliance with Environmental
Laws; and
(c) provide such information and certifications which the Agent
may reasonably request from time to time to evidence compliance with
this Section 7.1.6.
--------------
-57-
SECTION 7.1.7 Changes to Certain Agreements. Without the prior written
-----------------------------
consent of the Required Lenders, no Credit Party shall make any amendment,
supplement or modification to any agreements evidencing Subordinated Debt;
provided, however, that any such amendment which conforms with applicable law
in all material respects and is not materially adverse to the interests of the
Lenders as Lenders under the Loan Documents shall be permitted without any
consent. Copies of such amended agreements shall be delivered promptly to the
Agent by the Borrower.
SECTION 7.1.8 Governmental Licenses. The Borrower will, and will cause
---------------------
each of its Subsidiaries to, obtain and maintain all material licenses,
permits, agreements, certifications and approvals of all applicable
governmental authorities as are required for the conduct of its business as
currently conducted and herein contemplated, Medicaid Certifications and
Medicare Certifications and certifications of third party payors, if any.
SECTION 7.1.9 Covenants Extending to Other Persons. The Borrower will,
------------------------------------
and will cause each of its Subsidiaries to, use its reasonable best efforts, in
accordance with applicable law (which shall include, without limitation, the
exercise of contractual rights and remedies available to the Borrower and its
Subsidiaries) to cause each Practice or Provider, as appropriate to do with
respect to itself, its business and its assets, each of the things required of
a Credit Party in Sections 7.1.2 through 7.1.8 inclusive, subject, however, in
-------------- -----
the case of Section 7.1.5 to any laws, rules or regulations concerning the
-------------
confidentiality of medical records.
SECTION 7.1.10 Solvency. The Borrower and its Subsidiaries on a
--------
consolidated basis shall at all times be Solvent.
SECTION 7.1.11 Further Assurances. (a) The Borrower shall ensure that
------------------
all written information, exhibits and reports furnished to the Agent or the
Lenders do not and will not contain any untrue statement of a material fact and
do not and will not omit to state any material fact or any fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made, and will promptly disclose to the Agent and the
Lenders and correct any defect or error that may be discovered therein or in
any Loan Document or in the execution, acknowledgment or recordation thereof.
(b) Promptly upon request of the Agent or the Required Lenders,
the Borrower shall (and shall cause any of its Subsidiaries to) execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments the Agent or such
Lenders, as the case may be, may reasonably require from time to time in order
(i) to carry out more effectively the purposes of this Agreement or any other
Loan Document, (ii) to subject any of the properties, rights or interests
covered by any of the Collateral Documents to the Liens intended to be created
by any of the Collateral Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any
-58-
of the Collateral Documents and the Liens intended to be created thereby, and
(iv) to better assure, convey, grant, assign, transfer, preserve, protect and
confirm to the Agent and the Lenders the rights granted or now or hereafter
intended to be granted to the Agent and the Lenders under any Loan Document or
under any other document executed in connection therewith.
SECTION 7.1.12 New Subsidiaries. Within 30 Business Days after the date
----------------
of the acquisition or creation of any Subsidiary by the Borrower or a
Subsidiary of the Borrower or in the case of a Non-Wholly Owned ASC Subsidiary
which becomes a Wholly-Owned Subsidiary, such Person will cause to be delivered
to the Agent for the benefit of the Lenders each of the following:
(i) in the case of a Subsidiary other than a Non-Wholly-Owned ASC
Subsidiary, a joinder to the Guaranty, the Guarantor Pledge Agreement
and the Guarantor Security Agreement;
(ii) in the case of a Subsidiary other than a Non-Wholly-Owned
ASC Subsidiary, if such Subsidiary is a corporation, a limited
liability company or a partnership that has issued certificates
evidencing ownership of interests therein, the capital stock or, if
applicable, certificates of ownership of such limited liability company
or partnership, as the case may be, of such Person pertaining thereto,
together with duly executed stock powers or powers of assignment in
blank affixed thereto;
(iii) in the case of a Subsidiary other than a Non-Wholly-Owned
ASC Subsidiary, if such Subsidiary is a limited liability company or
a partnership not described in clause (ii) immediately above, an
acknowledgment of security interest of such limited liability company
or partnership, as the case may be, with respect to the registration
of the Lien on membership or partnership interests in such
Subsidiary, as the case may be, of such Person which acknowledgment
shall be in form and substance satisfactory to the Agent;
(iv) a supplement to the appropriate schedules attached to the
Collateral Documents to reflect the acquisition by the Borrower or, a
Subsidiary (other than a Non-Wholly-Owned ASC Subsidiary) of the
Borrower, of such Subsidiary, certified as true, correct and complete
by the Authorized Officer of the relevant Credit Party (provided that
the failure to deliver such supplement shall not impair the rights
conferred under the Collateral Documents in after acquired Collateral
and Pledged Collateral);
(v) to the extent requested by Agent in its reasonable discretion,
an opinion or opinions of counsel to the Borrower and such
Subsidiary (other than a Non-Wholly-Owned ASC Subsidiary), dated as
of the date of delivery of any of the documents provided in the
foregoing clause (i) and addressed to the Agent and the Lenders, in
form and substance reasonably acceptable to the Agent (which opinion
may include assumptions and qualifications of similar effect to those
contained in the opinions of counsel delivered pursuant to Section
-------
5.1.8), to the effect that:
-----
-59-
(A) such Subsidiary is duly organized, validly existing and in
good standing in the jurisdiction of its organization, has the
requisite power and authority to own its properties and conduct its
business as then owned and then proposed to be conducted and is duly
qualified to transact business and is in good standing in each
jurisdiction listed on the schedule attached to such opinion;
(B) the execution, delivery and performance of the Guaranty, the
Guarantor Pledge Agreement and the Guarantor Security Agreement, as
applicable, described in clause (i) of this Section 7.1.12, have been
--------------
duly authorized by all requisite action (including any required
shareholder, member or partner approval), such agreement has been
duly executed and delivered and constitutes the valid and binding
obligation of such Subsidiary, enforceable against such Subsidiary in
accordance with its terms, except to the extent such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to creditors' rights and remedies
generally, or to general principles of equity, whether enforcement
thereof is considered in a court of law or equity; and
(C) all financing statements, instruments and documents are in a
form which is sufficient to create a security interest in favor of
the Agent in the Pledged Collateral and the Collateral, as the case
may be;
(vi) current copies of the charter documents, including, limited
liability agreements and certificates of formation, partnership agreements
and certificates of limited partnership, if applicable, and bylaws of such
Subsidiary, minutes of duly called and conducted meetings (or duly effected
consent actions) of the Board of Directors, members, partners, or
appropriate committees thereof (and, if required by such charter documents,
bylaws or by applicable laws, of the shareholders, members or partners) of
such Subsidiary authorizing the actions and the execution and delivery of
documents described in this Section 7.1.2 and evidence satisfactory to the
Agent (confirmation of the receipt of which will be provided by the Agent
to the Lenders) that such Subsidiary is Solvent as of such date and after
giving effect to the execution of any of the documents required by clause
(i) above.
SECTION 7.2 Negative Covenants. The Borrower agrees with the Agent and
------------------
each Lender that, until all Revolving Commitments have terminated and all
Obligations have been paid and performed in full, each Credit Party will
perform the obligations set forth in this Section 7.2.
------------
SECTION 7.2.1 Business Activities. The Borrower will not, and will not
-------------------
permit any of its Subsidiaries, including, without limitation, any New
Subsidiary, to, engage in any business activity, except in the fields of
enterprise relating to eye care as it is presently conducting and
-60-
such activities as may be incidental or related thereto and reasonable
extensions thereof, including, without limitation, the ASP Business.
SECTION 7.2.2 Indebtedness. The Borrower will not, and will not permit any
------------
of its Subsidiaries to, create, incur, assume or suffer to exist or otherwise
become or be liable in respect of any Indebtedness, other than, without
duplication, the following:
(a) Indebtedness in respect of the Loans and other
Obligations;
(b) until the date of the initial Borrowing,
Indebtedness identified in Part A of Schedule 6.17;
-------------
(c) Indebtedness, including Subordinated Debt, existing
as of the Second Amendment and Restatement Effective Date which is
identified in Part B of Schedule 6.17, but without giving effect to any
-------------
extensions, renewals or refinancing thereof;
(d) Indebtedness in respect of Liens to the extent
permitted in Section 7.2.3(c);
----------------
(e) unsecured Indebtedness incurred in the ordinary
course of business (including open accounts extended by suppliers on
normal trade terms in connection with purchases of goods and services,
but excluding Indebtedness incurred through the borrowing of money or
Contingent Liabilities);
(f) Indebtedness, in respect of Capitalized Lease
Liabilities, at any one time not to exceed in the aggregate $3,000,000
less the amount of any Indebtedness which is outstanding and permitted
solely under subsection 7.2.3.(c);
--------------------
(g) Indebtedness consisting of intercompany loans and
advances made by the Borrower to any Credit Party or by such Credit
Party to the Borrower or another Credit Party ("Intercompany Loans"),
provided that (i) if requested by the Agent, the payor Credit Party
--------
shall have executed and delivered to the payee Credit Party a demand
note (the "Intercompany Note") to evidence any such Intercompany Loan,
which Intercompany Note shall be in form and substance satisfactory to
Agent pledged to the Agent pursuant to the relevant Collateral
Documents as additional collateral security for the Obligations, (ii)
the payee Credit Party shall record all Intercompany Loans on its books
and records in a manner satisfactory to Agent, (iii) at the time any
such Intercompany Loan is made by a payee Credit Party and after giving
effect thereto, each of the payee Credit Party and the payor Credit
Party shall be Solvent and (iv) the aggregate outstanding principal
amount of Intercompany Loans to Credit Parties that are
non-Wholly-Owned Subsidiaries of the Borrower shall not at any one time
exceed in the aggregate $500,000, provided, however, that the dollar
-------- -------
limitation contained in this clause (iv) shall not apply to any
non-Wholly-Owned Subsidiary that has executed and delivered to the
Agent a guaranty, pledge agreement and security agreement in form and
substance
-61-
similar to the forms of such documents executed by Wholly-Owned
Subsidiaries of the Borrower;
(h) Subordinated Debt of the Borrower issued to a
Provider in connection with a Permitted Acquisition, such Indebtedness
to be on terms and conditions reasonably satisfactory to the Agent (the
Agent hereby acknowledges and agrees that the subordination provisions
contained in the Subordinated Debt existing as of the date hereof are
satisfactory);
(i) Subordinated Debt of the Borrower, such Subordinated
Debt to mature no earlier than one year after the Maturity Date and
shall otherwise be on terms and conditions reasonably satisfactory to
the Agent (the Agent hereby acknowledges and agrees that the
subordination provisions contained in the Subordinated Debt existing as
of the date hereof are satisfactory);
(j) Indebtedness of the Borrower constituting unpaid
minority interests to a Provider in connection with a Permitted
Acquisition, such Indebtedness to be on terms and conditions reasonably
satisfactory to the Agent;
(k) Indebtedness of a Practice which exists at the time
such Practice is the subject of a Permitted Acquisition, which
Indebtedness is assumed by the Credit Party which is a party to such
Permitted Acquisition and is otherwise permitted pursuant to this
Section 7.2.2; and
-------------
(l) Indebtedness represented by the Investments described
in Section 7.2.5(h); provided, however, that no Indebtedness otherwise
---------------- -------- -------
permitted by clauses (d), (e), (f), (g), (h), (i), (j), (k) or (l) shall be
---------- --- --- --- --- --- --- --- ---
permitted if, after giving effect to the incurrence thereof, any Default shall
have occurred and be continuing.
SECTION 7.2.3 Liens. The Borrower will not, and will not permit any of
-----
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except:
(a) Liens securing payment of the Obligations, granted
pursuant to any Loan Document;
(b) until the date of the initial Borrowing; Liens
securing payment of Indebtedness of the type permitted and described in
clause (b) of Section 7.2.2;
---------- -------------
(c) purchase money security interests, in addition to,
and not in limitation of, the Capitalized Lease Liabilities described
in clause (j) hereof, on any property acquired or held by any Credit
Party in the ordinary course of business, securing Indebtedness
incurred or assumed for the purpose of financing all or any part of the
cost of acquiring
-62-
such property; provided that (i) any such Lien attaches to such
-------- ----
property concurrently with or within 20 days after the acquisition
thereof, (ii) such Lien attaches solely to the property so acquired in
such transaction, and (iii) the principal amount of the Indebtedness
which is outstanding and which is secured by any and all such purchase
money security interests shall not at any time exceed $3,000,000 less
the amount of Indebtedness outstanding and permitted solely under
subsection 7.2.2(f);
-------------------
(d) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter payable
without penalty or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(e) Liens of carriers, warehousemen, mechanics,
materialmen and landlords incurred in the ordinary course of business
for sums not overdue or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(f) Liens (other than any Lien imposed by ERISA)
incurred in the ordinary course of business in connection with
workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
(g) judgment Liens in existence less than 30 days after
the entry thereof or with respect to which execution has been stayed or
the payment of which is bonded or covered in full (subject to a
customary deductible) by insurance maintained with responsible
insurance companies;
(h) Liens in existence on the Second Amendment and
Restatement Effective Date and listed on Schedule 7.2.3, but without
--------------
giving effect to any extensions or renewals thereof; and
(i) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which,
in the aggregate, do not materially detract from the value of the
property subject thereto or interfere with the ordinary conduct of the
business of the property of the Person which is subject thereto;
(j) Liens in connection with Capitalized Lease
Liabilities in the amount and to the extent permitted by subsection
----------
7.2.2(f);
--------
(k) Liens on property leased by the Borrower or any
Subsidiary or other interest or title of the lessor under operating
leases securing obligations of the Borrower or such Subsidiary to the
lessor under such leases; and
-63-
(l) Liens on property of a Practice which exist at the
time such Practice becomes the subject of a Permitted Acquisition to
the extent such Liens are otherwise permitted pursuant to this Section
-------
7.2.3.
-----
SECTION 7.2.4 Financial Condition. The Borrower will not permit:
-------------------
(a) Its Net Worth as of (i) September 30, 2001 to be
less than $42,069,000 and (ii) the last day of each Fiscal Quarter
ending thereafter to be less than $42,069,000, plus 50% of Net Income
----
(without giving effect to any losses) for each Fiscal Quarter occurring
since September 30, 2001 plus 50% of the net proceeds from any equity
----
issuance by the Borrower or any of its Subsidiaries occurring since
September 30, 2001, plus 50% of any incremental additive equity
----
associated with any Permitted Acquisition.
(b) the Total Leverage Ratio as of the end of each Fiscal
Quarter for the twelve month period preceding such date to be greater
than 2.50:1.00.
(c) as of the last day of any Fiscal Quarter the ratio of
(a) EBITDA plus rent expenses incurred by the Borrower and its
----
Subsidiaries, minus Capital Expenditures incurred by the Borrower and
-----
its Subsidiaries, minus cash taxes paid by the Borrower and its
-----
Subsidiaries, in each case for the period of four fiscal quarters then
ending, to (b) Fixed Charges for such four fiscal quarter period to be
less than the ratio set forth below for such period:
Fiscal Quarter Ended Ratio
-------------------- -----
Original Closing Date through June 30, 1.15:1.0
2000
July 1, 2000 through September 30, 2000 1.20:1.0
October 1, 2000 and each Fiscal Quarter 1.25:1.0
thereafter
SECTION 7.2.5 Investments. The Borrower will not, and will not permit
-----------
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:
(a) Investments existing on the Second Amendment and
Restatement Effective Date and identified in Schedule 7.2.5;
--------------
(b) Cash Equivalent Investments and cash, provided,
--------
however, that the balance maintained in any deposit account not subject
-------
to a Lien of the Agent shall not exceed $100,000 for a period of seven
consecutive days;
-64-
(c) without duplication, Investments permitted as
Indebtedness pursuant to Section 7.2.2;
-------------
(d) without duplication, Investments permitted as Capital
Expenditures;
(e) in the ordinary course of business, (1) Investments
by the Borrower in any of its Wholly-Owned Subsidiaries, or in any new
Wholly-Owned Subsidiary created after the Original Closing Date in
connection with a Permitted Acquisition, or by any non-Wholly-Owned
Subsidiary in any of its Subsidiaries, by way of contributions to
capital and (2) Investments by the Borrower or any Wholly-Owned
Subsidiary in any Non-Wholly-Owned ASC Subsidiary in an amount not to
exceed $500,000 for all Investments consummated pursuant to this clause
------
(e)(2) within the previous twelve (12) month period provided that the
------
Borrower is in compliance on a pro forma basis after giving effect to
such Investment with all of the covenants contained in this Agreement;
(f) Permitted Acquisitions by the Borrower or a
Wholly-Owned Subsidiary of the Borrower (or, in the case of the
purchase of an ASC Practice, by the Borrower or a Subsidiary of the
Borrower);
(g) the acquisition by the Borrower or a Wholly-Owned
Subsidiary of the Borrower of 100% of the minority interests held by a
Provider in a non-Wholly-Owned Subsidiary, provided that any such
--------
acquisition is made solely in connection with the merger of such
non-Wholly-Owned Subsidiary into the Borrower or a Wholly-Owned
Subsidiary of the Borrower as permitted by Section 7.2.8;
-------------
(h) Investments by the Borrower or any Subsidiary
consisting of loans to Providers in an amount not to exceed $300,000
individually or $2,000,000 in the aggregate outstanding at any one
time;
(i) Investments constituting Hedging Agreements of the
Borrower;
(j) Investments by a Practice which exist at the time
such Practice is the subject of a Permitted Acquisition to the extent
such Investments are otherwise permitted pursuant to this Section
-------
7.2.5;
-----
(k) Investments by the Borrower or a Subsidiary of the
Borrower pursuant to ASC Subsidiary Capital Events provided that (1) no
Default or Event of Default shall have occurred or be continuing both
before and after giving effect to such ASC Subsidiary Capital Event,
(2) the Borrower must be able to comply on a pro forma basis after
giving effect to such ASC Subsidiary Capital Event with all of the
covenants of this Agreement; and (3) in the event that the Borrower's
Total Leverage Ratio on a pro forma basis (after giving effect to the
ASC Subsidiary Capital Event) is greater than 2.25:1.0 the aggregate
consideration in connection with such ASC Subsidiary Capital Event
shall not exceed $10,000,000 individually and $30,000,0000 for all ASC
Subsidiary Capital
-65-
Events consummated within the previous twelve (12) month period when
aggregated with the Consideration paid for Permitted Acquisitions
permitted by Section 7.2.5(f) during such period, without duplication;
----------------
and
(l) * * *
provided, however, that
-------- -------
(m) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent Investment"
may continue to be held notwithstanding that such Investment if made
thereafter would not comply with such requirements; and
(n) no Investment otherwise permitted by clauses (e),
-----------
(f), (g), (h), (i), (j) or (m) shall be permitted to be made if,
--- --- --- ---
immediately before or after giving effect thereto, any Default shall
exist and be continuing.
SECTION 7.2.6 Restricted Payments, etc. On and at all times after the
------------------------
Original Closing Date:
(a) The Borrower will not, and will not permit any of its
Subsidiaries to, declare, pay or make any dividend or distribution (in
cash, property or obligations) on any shares of any class of capital
stock (now or hereafter outstanding) of the Borrower or such Subsidiary
or on any warrants, options or other rights with respect to any shares
of any class of capital stock (now or hereafter outstanding) of the
Borrower or such Subsidiary (other than in the case of (I) the Borrower
(x) dividends or distributions payable in its common stock or warrants
to purchase its common stock or splitups or reclassifications of its
stock into additional or other shares of its common stock, (y)
scheduled dividend payments on its preferred stock so long as no
Default or Event of Default has occurred and is continuing both before
and after giving effect to the payment of such dividend and (z)
distributions to any Subsidiary which is a limited liability company of
the Borrower solely to permit the members thereof to make payment of
its federal and state income tax liability attributable to such limited
liability company's taxable income, whether or not a Default or an
Event of Default then or (II) any Subsidiary which is a limited
liability company, distributions to members of any such Subsidiary
solely to permit such members to make payment of their federal and
state income tax liability attributably to such member's taxable income
of such Subsidiary whether or not a Default or an Event of Default than
exists) or apply, or permit any of its Subsidiaries to apply, any of
its funds, property or assets to the purchase, redemption, sinking fund
or other retirement of, or agree or permit any of its Subsidiaries to
purchase or redeem, any shares of any class of capital stock (now or
hereafter outstanding) of the Borrower, or warrants, options or other
rights with respect to any shares of any class of capital stock (now or
hereafter outstanding) of the Borrower, except that, (A), in addition
to distributions permitted pursuant to clause (a)(II) above, any
--------------------
Subsidiary of the
-66-
Borrower may declare and pay cash dividends and distributions to its
equity holders and (B) so long as no Default or Event of Default then
exists or would result therefrom and so long as the Borrower would be
able to comply on a pro forma basis, assuming such redemption or
purchase occurred, with all of the covenants contained in this
Agreement, the Borrower may redeem or purchase shares of its stock
held by former employees of the Borrower or any of its Subsidiaries
following their death, disability or the termination of their
employment;
(b) Borrower will not, and will not permit any of its
Subsidiaries to:
(i) make any payment or prepayment of principal of,
or make any payment of interest on, any Subordinated Debt or
on any put option granted to a holder of Subordinated Debt on
any day other than the stated, scheduled date for such payment
or prepayment set forth in the documents and instruments
memorializing such Subordinated Debt or such put option, or
which would violate the subordination provisions of such
Subordinated Debt or such put option, or while any Default or
Event of Default exists and is continuing both before and
after giving effect to such payment; or
(ii) redeem, purchase or defease any Subordinated
Debt other than Subordinated Debt held by a Provider or a
Practice, so long as no Default or Event of Default exists or
is continuing both before and after giving effect to such
redemption, purchase or defeasance; and
(c) Borrower will not, and will not permit any Subsidiary
to, make any sinking fund payment or deposit for any of the foregoing
purposes.
SECTION 7.2.7 Intentionally Omitted.
SECTION 7.2.8 Consolidation, Merger, etc. (a) The Borrower will
--------------------------
not and will not permit any of its Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with, any other corporation, or purchase or
otherwise acquire all or substantially all of the assets of any Person (or of
any division thereof) except:
(a) any such Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower or any
Wholly-Owned Subsidiary of the Borrower or any Guarantor, and the
assets or stock of any Subsidiary may be purchased or otherwise
acquired by the Borrower or any Wholly-Owned Subsidiary of the
Borrower or any Guarantor;
(b) so long as no Default or Event of Default exists and
is continuing or would occur after giving effect thereto, the
Borrower or any Wholly-Owned Subsidiary of the Borrower (or in the
case of the purchase of an ASC Practice, the Borrower or any
Subsidiary of the Borrower) may consummate a Permitted Acquisition;
and
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(c) any Subsidiary may liquidate or dissolve into or
merge with or into any other Person, provided that, after giving
effect thereto (i) no Default or Event of Default shall exist or be
continuing; (ii) the Net Worth of the surviving Person shall be at
least equal to the Net Worth of the applicable Subsidiary immediately
prior to the consummation of any such liquidation, dissolution or
merger and (iii) the surviving Person shall assume all Obligations of
the applicable Subsidiary under the Loan Documents.
SECTION 7.2.9 Asset and Capital Stock Dispositions, etc.(a) The
-----------------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, sell,
transfer, lease, contribute or otherwise convey, or grant options, warrants or
other rights with respect to, all or any substantial part of its assets
(including accounts receivable and capital stock of Subsidiaries) to any
Person, unless:
(i) such sale, transfer, lease, contribution or
conveyance is in the ordinary course of its business or is
permitted by Section 7.2.9(b);
----------------
(ii) the net book value of such assets, together
with the net book value of all other assets sold, transferred,
leased, contributed or conveyed otherwise than in the ordinary
course of business by the Borrower or any of its Subsidiaries
pursuant to this clause since the Original Closing Date, does
not exceed $100,000 (exclusive of the value of any transaction
described in the preceding clause (i));
(iii) the Borrower or any Subsidiary of the Borrower
may consummate a Permitted Asset Disposition;
(iv) the Borrower or any Subsidiary may
consummate a Permitted Unwind Transaction in which the
total consideration received by the Borrower or such
Subsidiary is no less than the Required Unwind Valuation;
or
(v) with the prior written consent of the
Required Lenders, the Borrower or any Subsidiary may
consummate a Permitted Unwind Transaction in which the total
consideration received by the Borrower or such Subsidiary is
less than the Required Unwind Valuation.
(b) the Borrower will not, and will not permit any of its
Subsidiaries to, issue, sell, assign, pledge or otherwise encumber or
dispose of any shares of capital stock or other equity securities in
the Borrower or any such Subsidiary (other than pursuant to this
Agreement or any other Loan Document), including warrants, rights or
options to acquire shares or other equity securities of the Borrower or
any of its Subsidiaries; provided that, notwithstanding the foregoing,
--------
and so long as no Default or Event of Default will result therefrom:
(i) (x) the Borrower may issue capital stock (or
warrants, rights or options to purchase capital stock) of the
Borrower in connection with a Permitted
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Acquisition and (y) a Subsidiary of the Borrower may
undertake a Permitted Equity Ownership Sale;
(ii) the Borrower may issue common stock of the
Borrower to a Provider upon the conversion of Subordinated
Debt held by such Provider into common stock of the Borrower
pursuant to the terms and conditions contained in the
documentation governing such Subordinated Debt;
(iii) the Borrower may issue common stock of the
Borrower in connection with a registered offering, provided,
however, that the Borrower shall have delivered a certified
copy of each agreement, document or other instrument
(including, without limitation, any registration statement and
underwriting agreement) entered into by the Borrower in
connection with such registered offering;
(iv) the Borrower may issue capital stock, and
related options, of the Borrower to any permitted participant
under Borrower's stock incentive plan or to any permitted
participant under any future stock incentive plans established
by the Borrower and reasonably acceptable to the Agent;
(v) the Borrower may issue capital stock (or
warrants, rights or options to purchase capital stock) of the
Borrower so long as in connection with a private placement of
its capital stock the consideration received by the Borrower
in connection with such sale is (x) for fair market value (as
determined by the Board of Directors of the Borrower) and (y)
paid in immediately available funds;
(vi) the Borrower or any Subsidiary may
consummate a Permitted Unwind Transaction in which the
total consideration received by the Borrower or such
Subsidiary is no less than the Required Unwind Valuation;
and
(vii) with the prior written consent of the
Required Lenders, the Borrower or any Subsidiary may
consummate a Permitted Unwind Transaction in which the
total consideration received by the Borrower or such
Subsidiary is less than the Required Unwind Valuation.
To the extent the Required Lenders waive the provisions of this Section 7.2.9
-------------
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 7.2.9, such Collateral shall be sold free and clear of
-------------
the Liens created by the Collateral Documents and, if requested by the Borrower,
the Guarantor owner of such Collateral shall be released from the Guaranty, and
the portion of the Collateral owned by such Guarantor shall be released from the
Guarantor Security Agreement and the Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.
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SECTION 7.2.10 Modification of Certain Agreements. Except as otherwise
----------------------------------
permitted pursuant to the Restructuring or Section 7.1.7 hereof, the Borrower
-------------
will not, and will not permit any of its Subsidiaries to, consent to any
amendment, supplement or other modification of any of the terms or provisions
contained in, or applicable to, its Organizational Documents, any Service
Agreement or Employment Agreement listed on Schedule 6.18, any document, once
-------------
entered into, relating to a Permitted Acquisition, other than any amendment,
supplement or other modification that conforms with applicable laws in all
material respects and is not material or does not have an adverse effect on the
Lenders as Lenders under the Loan Documents, or any document or instrument
evidencing or applicable to any Subordinated Debt or any put option granted to
the holders of Subordinated Debt, other than any amendment, supplement or other
modification which extends the date or reduces the amount of any required
repayment or redemption. Notwithstanding anything else in this Section 7.2.10
--------------
to the contrary, the Borrower and its Subsidiaries may terminate or make any
necessary modification to the Organizational Documents, Service Agreements or
Employment Agreements of a Subsidiary which is the subject of a Permitted Asset
Disposition, Permitted Unwind Transaction or any other transaction entered into
pursuant to the Restructuring.
SECTION 7.2.11 Transactions with Affiliates. The Borrower will not, and
----------------------------
will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
(other than a Subsidiary Guarantor) unless such arrangement or contract is (i)
is entered into pursuant to the Restructuring or (ii) fair and equitable to the
Borrower or such Subsidiary and is an arrangement or contract of the kind which
would be entered into by a prudent Person in the position of the Borrower or
such Subsidiary with a Person which is not one of its Affiliates.
SECTION 7.2.12 Negative Pledges, Restrictive Agreements, etc. The
---------------------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement, any other Loan Document and any
agreement governing any Indebtedness permitted either by clause (b) of Section
---------- -------
7.2.2 as in effect on the Second Amendment and Restatement Effective Date or by
-----
clause (d) of Section 7.2.2 as to the assets financed with the proceeds of such
---------- -------------
Indebtedness) prohibiting:
(a) the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of any Credit Party to amend or otherwise
modify this Agreement or any other Loan Document; or
(b) the ability of any Subsidiary to make any payments,
directly or indirectly, to the Borrower by way of dividends,
distributions, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges, expenses
and accruals or other returns on investments, or any other agreement or
arrangement which restricts the ability of any such Subsidiary to make
any payment, directly or indirectly, to the Borrower.
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ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 Listing of Events of Default. Each of the following events
----------------------------
or occurrences described in this Section 8.1 shall constitute an "Event of
-----------
Default".
SECTION 8.1.1 Non-Payment of Obligations. The Borrower shall default in
--------------------------
the payment or prepayment when due of any principal of or interest on any Loan
or any reimbursement obligation when due, or the Borrower shall default (and
such default shall continue unremedied for a period of five days) in the
payment when due of any commitment fee or other fee or of any other Obligation.
SECTION 8.1.2 Breach of Warranty. Any representation or warranty of any
------------------
Credit Party made or deemed to be made hereunder or in any other Loan Document
executed by it, any Letter of Credit or any other writing or certificate
furnished by or on behalf of any Credit Party to the Agent or any Lender for
the purposes of or in connection with this Agreement or any such other Loan
Document or Letter of Credit (including any certificates delivered pursuant to
Article V) is or shall be incorrect when made in any material respect.
---------
SECTION 8.1.3 Non-Performance of Certain Covenants and Obligations. Any
----------------------------------------------------
Credit Party shall default in the due performance and observance of any of its
obligations under Sections 7.1.1, 7.1.7, 7.1.8, 7.1.11, 7.1.12 or Section 7.2.
-------------- ----- ----- ------ ------ -----------
SECTION 8.1.4 Non-Performance of Other Covenants and Obligations. Any
--------------------------------------------------
Credit Party shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrower by the Agent or any Lender.
SECTION 8.1.5 Default on Other Indebtedness. A default shall occur in
-----------------------------
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of any Credit Party having a principal amount,
-------------
individually or in the aggregate, in excess of $1,000,000, or a default shall
occur in the performance or observance of any obligation or condition with
respect to such Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue unremedied for
any applicable period of time sufficient to permit the holder or holders of
such Indebtedness, or any trustee or agent for such holders, to cause such
Indebtedness to become due and payable prior to its expressed maturity.
SECTION 8.1.6 Judgments. Any judgment or order for the payment of money
---------
in excess of $1,000,000 shall be rendered against any Credit Party (which
judgement is not covered by
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insurance and with respect to such judgment an insurance carrier has not
accepted responsibility for coverage) and either:
(a) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order; or
(b) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect.
SECTION 8.1.7 Pension Plans. Any of the following events shall occur
-------------
with respect to any Pension Plan:
(a) the institution of any steps by the Borrower, any
member of its Controlled Group or any other Person to terminate a
Pension Plan if, as a result of such termination, the Borrower or
any such member reasonably would be expected to be required to make
a contribution to such Pension Plan, or would reasonably expect to
incur a liability or obligation to such Pension Plan, in excess of
$1,000,000; or
(b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a Lien under Section 302(f)
of ERISA.
SECTION 8.1.8 Change of Control. Any Change of Control shall occur.
-----------------
SECTION 8.1.9 Bankruptcy, Insolvency, etc. Any Credit Party shall:
----------------------------
(a) become insolvent or generally fail to pay, or
admit in writing its inability or unwillingness to pay, its debts as
they become due;
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, sequestrator or other custodian
for such Credit Party or any property of such Credit Party, or make
a general assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee,
receiver, sequestrator or other custodian for such Credit Party or for
a substantial part of the property of such Credit Party, and such
trustee, receiver, sequestrator or other custodian shall not be
discharged within 60 days, provided that the Borrower hereby expressly
--------
authorizes the Agent and each Lender to appear in any court conducting
any relevant proceeding during such 60-day period to preserve, protect
and defend their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of
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such Credit Party, and, if any such case or proceeding is not
commenced by such Credit Party, such case or proceeding shall be
consented to or acquiesced in by such Credit Party or shall result
in the entry of an order for relief or shall remain for 60 days
undismissed, provided that the Borrower hereby expressly authorizes
--------
the Agent and each Lender to appear in any court conducting any such
case or proceeding during such 60-day period to preserve, protect
and defend their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of,
any of the foregoing.
SECTION 8.1.10 Impairment of Security, etc. Any Loan Document, or any
---------------------------
Lien granted thereunder, shall (except in accordance with its terms or pursuant
to Section 7.2.9), in whole or in part, terminate, cease to be effective or
-------------
cease to be the legally valid, binding and enforceable obligation of any Credit
Party thereto; any Credit Party or any other party shall, directly or
indirectly, contest in any manner the effectiveness, validity, binding nature
or enforceability of any Loan Document or Lien granted thereunder; or any Lien
securing any Obligation shall, in whole or in part, cease to be a perfected
first priority Lien, subject only to those exceptions expressly permitted by
such Loan Document.
SECTION 8.1.11 Fraud and Abuse Laws. Receipt by any Credit Party,
--------------------
Practice or Provider of a notice from a governmental authority or third party
payor that it intends to disallow requested reimbursements, or intends to
demand or demands adjustment or repayment of past reimbursements in excess of
two percent (2%) of the gross revenues of the Borrower for the previous fiscal
quarter respecting amounts submitted for reimbursement or collected by such
Credit Party, Practice or Provider from participation in the Medicare, Medicaid
or third party payor programs if the gross revenues (determined in accordance
with GAAP) to such Credit Party arising from the affected Credit Party,
Practice or Provider exceed one-half percent (1/2%) of the gross revenues
(determined in accordance with GAAP) of the Borrower for the previous Fiscal
Quarter.
SECTION 8.1.12 Certifications. (i) Revocation, suspension or
--------------
involuntary cancellation or termination of any Medicare Certification, Medicare
Provider Agreement, Medicaid Certification, Medicaid Provider Agreement or
third party payor certification, if any, or agreement of or affecting any
Credit Party, Practice or Provider, or (ii) the loss of any other permits,
licenses, authorizations, certifications or approval from any federal, state or
local governmental authority or termination of any contract with any such
authority by a Credit Party, Practice or Provider, in either case which
cancellation, revocation, suspension or termination, (x) continues for a period
greater than 60 days and (y) results in the suspension or termination of
operations of any Credit Party or Practice or in the failure of any Credit
Party, Practice or Provider to be eligible to participate in Medicare, Medicaid
or third party payor programs or to accept assignments of rights to
reimbursement under Medicaid Regulations, Medicare Regulations or guidelines
established by a third party payor, provided that any such events described in
--------
this Section 8.1.12 shall result either singly or in the aggregate in the
--------------
termination, cancellation, revocation, suspension or material impairment of
operations or rights to
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reimbursement which produce two percent (2%) or more of the Borrower's gross
revenues (determined in accordance with GAAP).
SECTION 8.1.13 Service Agreements. (a) The termination of any Service
------------------
Agreement (other than in connection with a Permitted Asset Disposition or a
Permitted Unwind Transaction) by a Credit Party or Practice which, either
individually, or when aggregated with other Service Agreements (other than in
connection with a Permitted Asset Disposition or a Permitted Unwind
Transaction) that have been terminated during the preceding twelve-month period
constitutes more than 10% of annual EBITDA of the Borrower; or (b) any Equity
Provider or group of Equity Providers within a given Practice cease to be
employed or otherwise retained by such Practice (other than in connection with
a Permitted Asset Disposition or a Permitted Unwind Transaction) and such
Equity Provider or group of Equity Providers accounted for 10% or more of the
consolidated net revenues (either individually, or when aggregated with the net
revenues of other Equity Providers who have ceased to be employed or otherwise
retained by Reporting Persons within the preceding twelve-month period (other
than in connection with a Permitted Asset Disposition or a Permitted Unwind
Transaction)) of the Borrower and its Subsidiaries, in each case for the
twelve-month period immediately preceding the date of such termination.
SECTION 8.2 Action if Bankruptcy. If any Event of Default described in
--------------------
clauses (a) through (e) of Section 8.1.9 shall occur, the Revolving Commitments
---------- --- -------------
(if not theretofore terminated) and the obligation of the Letter of Credit
Issuer to issue Letters of Credit shall automatically terminate and the
outstanding principal amount of all outstanding Loans and all other Obligations
shall automatically be and become immediately due and payable, without notice
or demand.
SECTION 8.3 Action if Other Event of Default. If any Event of Default
--------------------------------
(other than any Event of Default described in clauses (a) through (e) of
----------- ---
Section 8.1.9) shall occur for any reason, whether voluntary or involuntary,
-------------
and be continuing, the Agent, upon the direction of the Required Lenders, shall
by notice to the Borrower declare all or any portion of the outstanding
principal amount of the Loans and other Obligations to be due and payable
and/or the Revolving Commitments (if not theretofore terminated) and/or the
obligation of the Letter of Credit Issuer to issue Letters of Credit to be
terminated, whereupon the full unpaid amount of such Loans and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the Revolving Commitments shall terminate.
SECTION 8.4 Letters of Credit. In addition to the foregoing, following
-----------------
the occurrence and during the continuance of an Event of Default, so long as
any Letter of Credit has not been fully drawn and has not been canceled or
expired by its terms, upon demand by the Lenders, the Borrower shall deposit in
an account (the "Letter of Credit Cash Collateral Account") maintained with
National City in the name of the Agent, for the benefit of itself and the
Lenders, cash in an amount equal to the aggregate undrawn face amount of all
outstanding
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Letters of Credit and all fees and other amounts due or which may become due
with respect thereto. The Borrower shall have no control over funds in the
Letter of Credit Cash Collateral Account, which funds shall be invested by the
Agent from time to time in its discretion in certificates of deposit of
National City having a maturity not exceeding thirty days. Such funds shall be
promptly applied by the Agent to reimburse the Letter of Credit Issuer for
drafts drawn from time to time under the Letters of Credit. Such funds, if any,
remaining in the Letter of Credit Cash Collateral Account following the payment
of all Obligations in full or the earlier termination of all Events of Default
shall, unless the Agent is otherwise directed by a court of competent
jurisdiction, be promptly paid over to the Borrower.
ARTICLE IX
THE AGENT
SECTION 9.1 Actions. Each Lender hereby appoints National City as its
-------
Agent under and for purposes of this Agreement, the Notes and each other Loan
Document. Each Lender authorizes the Agent to act on behalf of such Lender
under this Agreement, the Notes and each other Loan Document and, in the
absence of other written instructions from the Required Lenders received from
time to time by the Agent (with respect to which the Agent agrees that it will
comply, except as otherwise provided in this Section or as otherwise advised by
counsel), to exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof, together
with such powers as may be reasonably incidental thereto. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Agent, pro rata according to such Lender's Percentage, from and against any
--- ----
and all liabilities, obligations, losses, damages, claims, costs or expenses of
any kind or nature whatsoever which may at any time be imposed on, incurred by,
or asserted against, the Agent in any way relating to or arising out of this
Agreement, the Notes and any other Loan Document, including reasonable
attorneys' fees, and as to which the Agent is not reimbursed by the Borrower;
provided, however, that no Lender shall be liable for the payment of any
-------- -------
portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted solely from the Agent's gross negligence or willful
misconduct. The Agent shall not be required to take any action hereunder, under
the Notes or under any other Loan Document, or to prosecute or defend any suit
in respect of this Agreement, the Notes or any other Loan Document, unless it
is indemnified hereunder to its satisfaction. If any indemnity in favor of the
Agent shall be or become, in the Agent's determination, inadequate, the Agent
may call for additional indemnification from the Lenders and cease to do the
acts indemnified against hereunder until such additional indemnity is given.
SECTION 9.2 Funding Reliance, etc. Unless the Agent shall have been
---------------------
notified by telephone, confirmed in writing, by any Lender by 5:00 p.m.,
Chicago time, on the day prior to a Borrowing that such Lender will not make
available the amount which would constitute its Percentage of such Borrowing on
the date specified therefor, the Agent may assume that such
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Lender has made such amount available to the Agent and, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If and to
the extent that such Lender shall not have made such amount available to the
Agent, such Lender and the Borrower severally, without duplication, agree to
repay the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Agent made such amount
available to the Borrower to the date such amount is repaid to the Agent, at
the interest rate applicable at the time to Loans comprising such Borrowing.
SECTION 9.3 Exculpation. Neither the Agent nor any of its directors,
-----------
officers, employees or agents shall be liable to any Lender for any action
taken or omitted to be taken by it under this Agreement or any other Loan
Document, or in connection herewith or therewith, except for its own willful
misconduct or gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor for the creation,
perfection or priority of any Liens purported to be created by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by the Borrower of its obligations hereunder or under any other
Loan Document. Any such inquiry which may be made by the Agent shall not
obligate it to make any further inquiry or to take any action. The Agent shall
be entitled to rely upon advice of counsel concerning legal matters and upon
any notice, consent, certificate, statement or writing which the Agent believes
to be genuine and to have been presented by a proper Person.
SECTION 9.4 Successor. The Agent may resign as such at any time upon
---------
at least 30 days' prior notice to the Borrower and all Lenders. If the Agent at
any time shall resign, the Required Lenders, with, so long as no Default or
Event of Default exists and is continuing, the consent of the Borrower, may
appoint another Lender as a successor Agent which shall thereupon become the
Agent hereunder. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be
one of the Lenders or a commercial banking institution organized under the laws
of the U.S. (or any State thereof) or a U.S. branch or agency of a commercial
banking institution, and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor
Agent may reasonably request, and shall thereupon succeed to and become vested
with all rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation hereunder as the Agent, the
provisions of
(i) this Article IX shall inure to its benefit as to any
----------
actions taken or omitted to be taken by it while it was the Agent under
this Agreement; and
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(ii) Section 10.3 and Section 10.4 shall continue to inure to
------------ ------------
its benefit.
SECTION 9.5 Loans by National City. National City shall have the same
----------------------
rights and powers with respect to (x) the Loans made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not the Agent. National City and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or Affiliate of
Borrower as if National City were not the Agent hereunder.
SECTION 9.6 Credit Decisions. Each Lender acknowledges that it has,
----------------
independently of the Agent and each other Lender, and based on such Lender's
review of the financial information of each Credit Party, this Agreement, the
other Loan Documents (the terms and provisions of which being satisfactory to
such Lender) and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to extend its
Revolving Commitment. Each Lender also acknowledges that it will, independently
of the Agent and each other Lender, and based on such other documents,
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this
Agreement or any other Loan Document.
SECTION 9.7 Copies, etc. The Agent shall give prompt notice to each
-----------
Lender of each notice or request required or permitted to be given to the Agent
by any Credit Party pursuant to the terms of this Agreement (unless concurrently
delivered to the Lenders by such Credit Party). The Agent will distribute to
each Lender each document or instrument received for its account and copies of
all other communications received by the Agent from any Credit Party for
distribution to the Lenders by the Agent in accordance with the terms of this
Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Waivers, Amendments, etc. The provisions of this
------------------------
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Required Lenders; provided, however, that
-------- -------
no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders shall be effective
unless consented to by each Lender;
(b) modify this Section 10.1, change the definition of
------------
"Required Lenders", increase the Revolving Commitment Amount
or the Percentage of any Lender, reduce any fees described in Article
-------
III, change the schedule of repayments of Loans provided
---
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for in Section 3.1.2, release any Guarantor from its obligations
-------------
pursuant to any Guaranty (except in connection with a Permitted Unwind
Transaction, in which such cases no consent of any Lender is
required), release all or substantially all of the collateral
security, except as otherwise specifically provided in any Loan
Document or extend the Revolving Commitment Termination Date or
Maturity Date shall be made without the consent of each Lender and
each holder of a Note;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on any
Loan or any fee payable to a Lender (or reduce the principal amount of
or rate of interest on any Loan) shall be made without the consent of
the holder of that Note evidencing such Loan or Lender entitled to such
fee;
(d) affect adversely the interests, rights or obligations of
the Agent qua the Agent shall be made without consent of the Agent; or
---
(e) modify Section 2.7 or 8.4 shall be made without the
----------- ---
consent of the Letter of Credit Issuer.
No failure or delay on the part of the Agent, any Lender or the holder of any
Note in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
any Credit Party in any case shall entitle it to any notice or demand in similar
or other circumstances. No waiver or approval by the Agent, any Lender or the
holder of any Note under this Agreement or any other Loan Document shall, except
as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2 Notices. All notices and other communications provided to
-------
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile transmission and addressed, delivered or transmitted to
such party at its address, facsimile number transmission set forth below in
Schedule 10.2 hereto or set forth in the Lender Assignment Agreement or at such
-------------
other address, or facsimile transmission number as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if
transmitted by facsimile transmission, shall be deemed given when transmitted,
provided such notice is delivered or facsimile transmitted during regular
business hours on a Business Day.
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SECTION 10.3 Payment of Costs and Expenses. The Borrower agrees to pay
-----------------------------
on demand all reasonable expenses of the Agent (including the reasonable fees
and out-of-pocket expenses of counsel to the Agent and of local counsel, if
any, who may be retained by counsel to the Agent) in connection with:
(i) the negotiation, preparation, execution and delivery of
this Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from
time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated, and
(ii) the filing, recording, refiling or rerecording of any
Security Document and/or any Uniform Commercial Code financing
statements relating thereto and all amendments, supplements and
modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or
refiled or rerecorded by the terms hereof or of such Security Document,
and
(iii) the preparation and review of the form of any document or
instrument required by this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Agent and the Lenders
harmless from all liability for, any stamp or other taxes which may be payable
in connection with the execution or delivery of this Agreement, the borrowings
hereunder, or the issuance of the Notes or any other Loan Documents. The
Borrower also agrees to reimburse the Agent and each Lender upon demand for all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
legal expenses) incurred by the Agent or such Lender in connection with (x) the
negotiation of any restructuring or "work-out", whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations. Notwithstanding
anything contained herein to the contrary, the Borrower shall not be responsible
for any costs or expenses incurred by the Agent or any Lender in connection with
the transactions contemplated by either of Section 10.11(a) or 10.11(b) hereof.
---------------- --------
SECTION 10.4 Indemnification. In consideration of the execution and
---------------
delivery of this Agreement by each Lender and the extension of the Revolving
Commitments and the making of the Loans, the Borrower hereby indemnifies,
exonerates and holds the Agent and each Lender and each of their respective
officers, directors, employees and agents (collectively, the "Indemnified
Parties") free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to:
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(i) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan;
(ii) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of the Borrower as the result of any
determination by the Required Lenders pursuant to Article V not to fund
---------
any Borrowing);
(iii) any investigation, litigation or proceeding related to
any acquisition or proposed acquisition by the Borrower of all or any
portion of the stock or assets of any Person, whether or not the Agent
or such Lender is party thereto;
(iv) any investigation, litigation or proceeding related to
any environmental cleanup, audit, compliance or other matter relating
to the protection of the environment or the Release by Borrower or any
of its Subsidiaries of any Hazardous Material; or
(v) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 10.5 Survival. The obligations of the Borrower under Sections
-------- --------
4.3, 4.4, 4.5, 4.6 and 10.3 and 10.4, and the obligations of the Lenders under
--- --- --- --- ---- ----
Section 9.1, shall in each case survive any termination of this Agreement, the
-----------
payment in full of all Obligations and the termination of all Revolving
Commitments. The representations and warranties made by the Borrower in this
Agreement and in each other Loan Document shall survive the execution and
delivery of this Agreement and each such other Loan Document.
SECTION 10.6 Severability. Any provision of this Agreement or any
------------
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7 Headings. The various headings of this Agreement and of
--------
each other Loan Document are inserted for convenience only and shall not affect
the meaning or
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interpretation of this Agreement or such other Loan Document or any provisions
hereof or thereof.
SECTION 10.8 Execution in Counterparts, Effectiveness, etc. This
---------------------------------------------
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be executed by the Borrower and the Agent and be deemed to be an
original and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective when counterparts hereof
executed on behalf of the Borrower and each Lender (or notice thereof
satisfactory to the Agent) shall have been received by the Agent and notice
thereof shall have been given by the Agent to the Borrower and each Lender.
SECTION 10.9 Governing Law; Entire Agreement. THIS AGREEMENT, THE
-------------------------------
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. This
Agreement, the Notes and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
hereof and supersede any prior agreements, written or oral, with respect
thereto.
SECTION 10.10 Successors and Assigns. This Agreement shall be binding
----------------------
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
-------- -------
(i) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the Agent
and all Lenders; and
(ii) the rights of sale, assignment and transfer of the Lenders
are subject to Section 10.11.
-------------
SECTION 10.11 Sale and Transfer of Loans and Note; Participations in
------------------------------------------------------
Loans and Note. Each Lender may assign, or sell participations in, its Loans
--------------
and Revolving Commitment to one or more other Persons in accordance with this
Section 10.11.
-------------
SECTION 10.11.1 Assignments. Any Lender:
-----------
(i) with the written consent of the Agent and, provided no
Event of Default then shall exist or be continuing, the Borrower (which
consent shall not be unreasonably delayed or withheld) may at any time
assign and delegate to one or more commercial banks or other financial
institutions, and
(ii) with notice to the Borrower and the Agent, but without
the consent of the Borrower or the Agent, may assign and delegate to any
of its Affiliates or to any other Lender,
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(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Lender's total Loans and
Revolving Commitment (which assignment and delegation shall be of a constant,
and not a varying, percentage of all the assigning Lender's Loans and Revolving
Commitment) in a minimum aggregate amount of $5,000,000 (or such lesser amount
to the extent that after giving effect to such assignment such Lender's total
Loans and Revolving Commitment is reduced to zero); provided, however, that any
-------- -------
such Assignee Lender will comply, if applicable, with the provisions contained
in the penultimate sentence of Section 4.6, and provided further, however, that,
----------- -------- ------- -------
the Borrower and the Agent shall be entitled to continue to deal solely and
directly with such Lender in connection with the interests so assigned and
delegated to an Assignee Lender until:
(iii) written notice of such assignment and delegation, together
with payment instructions, addresses and related information with
respect to such Assignee Lender, shall have been given to the Borrower
and the Agent by such Lender and such Assignee Lender,
(iv) such Assignee Lender shall have executed and delivered to
the Borrower and the Agent a Lender Assignment Agreement, accepted by
the Agent, and
(v) the processing fees described below shall have been paid.
From and after the date that the Agent accepts such Lender Assignment Agreement,
(x) the Assignee Lender thereunder shall be deemed automatically to have become
a party hereto and to the extent that rights and obligations hereunder have been
assigned and delegated to such Assignee Lender in connection with such Lender
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (y) the assignor Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan Documents.
Within five Business Days after its receipt of notice that the Agent has
received an executed Lender Assignment Agreement, the Borrower shall execute and
deliver to the Agent (for delivery to the relevant Assignee Lender) a new Note
evidencing such Assignee Lender's assigned Loans and Revolving Commitment and,
if the assignor Lender has retained Loans and a Revolving Commitment hereunder,
a replacement Note in the principal amount of the Loans and Revolving Commitment
retained by the assignor Lender hereunder (such Note to be in exchange for, but
not in payment of, that Note then held by such assignor Lender). Each such Note
shall be dated the date of the predecessor Note. The assignor Lender shall xxxx
the predecessor Note "exchanged" and deliver it to the Borrower. Accrued
interest on that part of the predecessor Note evidenced by the new Note, and
accrued fees, shall be paid as provided in the Lender Assignment Agreement.
Accrued interest on that part of the predecessor Note evidenced by the
replacement Note shall be paid to the assignor Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided in the predecessor
Note and in this Agreement. Such assignor Lender or such Assignee Lender must
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also pay a processing fee to the Agent upon delivery of any Lender Assignment
Agreement in the amount of $3,500. Any attempted assignment and delegation not
made in accordance with this Section 10.11.1 shall be null and void.
---------------
SECTION 10.11.2 Participations. Any Lender may at any time sell to one
--------------
or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "Participant") participating interests in
any of the Loans, its Revolving Commitment, or other interests of such Lender
hereunder; provided, however, that:
-------- -------
(i) no participation contemplated in this Section 10.11 shall
-------------
relieve such Lender from its Revolving Commitment or its other
obligations hereunder or under any other Loan Document,
(ii) such Lender shall remain solely responsible for the
performance of its Revolving Commitment and such other obligations,
(iii) the Borrower and the Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement and each of the other Loan
Documents,
(iv) no Participant, unless such Participant is an Affiliate
of such Lender, or is itself a Lender, shall be entitled to require
such Lender to take or refrain from taking any action hereunder or
under any other Loan Document, except that such Lender may agree with
any Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in clause (b) or (c) of
--------- ---
Section 10.1, and
------------
(v) the Borrower shall not be required to pay any amount under
Section 4.6 that is greater than the amount which it would have been
-----------
required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a
------------ --- --- --- --- --- ---- ----
Lender.
SECTION 10.12 Confidentiality. The Lenders shall hold all non-public
---------------
information (which has been identified as such by Borrower) obtained pursuant
to the requirements of this Agreement in accordance with their customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure to any of their examiners, Affiliates, outside auditors, counsel and
other professional advisors in connection with this Agreement or as reasonably
required by any bona fide transferee, participant or assignee or as required or
requested by any governmental agency or representative thereof or pursuant to
legal process; provided, however, that:
-------- -------
(i) unless specifically prohibited by applicable law or court
order, each Lender shall notify the Borrower of any request by any
governmental agency or
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representative thereof (other than any such request in connection with
an examination of the financial condition of such Lender by such
governmental agency) for disclosure of any such non-public information
prior to disclosure of such information;
(ii) prior to any such disclosure pursuant to this Section
-------
10.12, each Lender shall require any such bona fide transferee,
-----
participant and assignee receiving a disclosure of non-public
information to agree in writing:
(1) to be bound by this Section 10.12; and
-------------
(2) to require such Person to require any other Person
to whom such Person discloses such non-public information to be
similarly bound by this Section 10.12; and
-------------
(iii) except as may be required by an order of a court of
competent jurisdiction and to the extent set forth therein, no Lender
shall be obligated or required to return any materials furnished by any
Credit Party.
SECTION 10.13 Other Transactions. Nothing contained herein shall
------------------
preclude the Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which Borrower or such Affiliate
is not restricted hereby from engaging with any other Person.
SECTION 10.14 Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS OR ANY CREDIT PARTY SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
-------- -------
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
ILLINOIS. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
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TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, EACH SUCH CREDIT PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.15 Waiver of Jury Trial. THE AGENT, THE LENDERS AND THE
--------------------
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER. THE
BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
SECTION 10.16 No Material Adverse Change. The Agent and the Lenders
--------------------------
hereby acknowledge and agree that, notwithstanding any other provision
contained in this Agreement (including, without limitation, Sections 6.6 and
----------------
6.14 hereof), the Restructuring in and of itself shall not constitute, for the
----
quarter ended September 30, 2001, a Material Adverse Effect or other material
and adverse change to the financial condition, operations, assets, business,
properties or prospects of the Borrower and its Subsidiaries taken as a whole.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
NOVAMED EYECARE, INC.
By /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Title:
NATIONAL CITY BANK OF
MICHIGAN/ILLINOIS,
Individually as a Lender, as Letter of
Credit Issuer and as Agent
By /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Title:
LASALLE BANK NATIONAL ASSOCIATION
Individually as a Lender
By /s/ Xxx X. X'Xxxxxxxxxxx
------------------------------------
Title:
THE NORTHERN TRUST COMPANY
Individually as a Lender
By /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Title:
BANK OF AMERICA, N.A.
Individually as a Lender
By /s/ Xxx Xxxxx Xxxxxxxx
------------------------------------
Title:
Schedule 10.1
-------------
COMMITMENT PERCENTAGES
================================================================================
Lender Percentage of aggregate Revolving
Commitment Amount
================================================================================
National City Bank of Michigan/Illinois 35.00%
--------------------------------------------------------------------------------
Lasalle Bank National Association 30.00%
--------------------------------------------------------------------------------
The Northern Trust Company 25.00%
--------------------------------------------------------------------------------
Bank of America, N.A. 10.00%
--------------------------------------------------------------------------------
Total 100.00%
================================================================================
