EXHIBIT 10.22
CREDIT AGREEMENT
DATED AS OF AUGUST 29, 1996
AMONG
STAT HEALTHCARE, INC.,
AS BORROWER,
SOUTHWEST BANK OF TEXAS, N.A.,
INDIVIDUALLY AS LENDER AND AS AGENT,
AND
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS,
AS LENDER
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 CERTAIN DEFINED TERMS...................................................1
Section 1.02 ACCOUNTING TERMS AND DETERMINATIONS....................................11
Section 1.03 OTHER DEFINITIONAL TERMS...............................................11
ARTICLE II
AMOUNT AND TERMS OF LOANS
Section 2.01 COMMITMENTS AND LOANS..................................................12
Section 2.02 NOTES AND AMORTIZATION.................................................13
Section 2.03 BORROWINGS.............................................................13
Section 2.04 DISBURSEMENT OF FUNDS..................................................14
Section 2.05 INTEREST...............................................................15
Section 2.06 INTEREST PERIODS.......................................................16
Section 2.07 CONTINUATION OPTIONS...................................................17
Section 2.08 CONVERSION OPTIONS.....................................................17
Section 2.09 VOLUNTARY PREPAYMENTS..................................................17
Section 2.10 FEES...................................................................18
Section 2.11 PAYMENTS...............................................................18
Section 2.12 INTEREST RATE NOT ASCERTAINABLE, ETC...................................19
Section 2.13 ILLEGALITY.............................................................19
Section 2.14 INCREASED COSTS........................................................20
Section 2.15 CHANGE OF LENDING OFFICE...............................................22
Section 2.16 FUNDING LOSSES.........................................................22
Section 2.17 SHARING OF PAYMENTS, ETC...............................................22
Section 2.18 TAXES..................................................................22
Section 2.19 PRO RATA TREATMENT.....................................................25
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01 INITIAL LOANS..........................................................26
Section 3.02 CONDITIONS PRECEDENT TO EACH LOAN......................................27
Section 3.03 POSSESSION OF COLLATERAL SECURITY......................................28
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 CORPORATE EXISTENCE....................................................28
Section 4.02 FINANCIAL CONDITION....................................................29
Section 4.03 LIABILITIES; LITIGATION................................................29
Section 4.04 NO BREACH..............................................................29
Section 4.05 CORPORATE ACTION.......................................................29
Section 4.06 APPROVALS..............................................................30
Section 4.07 USE OF LOANS...........................................................30
Section 4.08 ERISA..................................................................30
Section 4.09 TAXES..................................................................30
Section 4.10 TITLES, ETC............................................................31
Section 4.11 NO MATERIAL MISSTATEMENTS..............................................31
Section 4.12 INVESTMENT COMPANY ACT.................................................31
Section 4.13 PUBLIC UTILITY HOLDING COMPANY ACT.....................................31
Section 4.14 SUBSIDIARIES, AFFILIATED PROFESSIONAL ASSOCIATIONS, AND PARTNERSHIPS...31
Section 4.15 LOCATION OF BUSINESS AND OFFICES.......................................31
Section 4.16 ENVIRONMENTAL MATTERS..................................................31
Section 4.17 DEFAULTS...............................................................32
Section 4.18 COMPLIANCE WITH THE LAW................................................32
Section 4.19 INSURANCE..............................................................33
Section 4.20 MANAGEMENT FEES........................................................33
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01 FINANCIAL STATEMENTS AND OTHER REPORTS.................................33
Section 5.02 LITIGATION.............................................................35
Section 5.03 MAINTENANCE OF EXISTENCE, ETC..........................................35
Section 5.04 ENVIRONMENTAL MATTERS..................................................36
Section 5.05 FURTHER ASSURANCES.....................................................36
Section 5.06 PERFORMANCE OF OBLIGATIONS.............................................37
Section 5.07 INSURANCE..............................................................37
Section 5.08 ACCOUNTS AND RECORDS...................................................37
Section 5.09 RIGHT OF INSPECTION....................................................38
Section 5.10 TAXES AND OTHER LIENS..................................................38
Section 5.11 NOTICE OF CERTAIN EVENTS...............................................38
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Section 5.12 ERISA INFORMATION AND COMPLIANCE.......................................39
Section 5.13 PERFORMANCE OF DESIGNATED CONTRACTS...................................39
Section 5.14 AUDIT, MANAGEMENT AND OTHER REPORTS...................................39
Section 5.15 SEC AND OTHER REPORTS.................................................39
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01 DEBT...................................................................40
Section 6.02 LIENS..................................................................40
Section 6.03 INVESTMENTS, LOANS AND ADVANCES........................................41
Section 6.04 DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS...............................41
Section 6.05 SALES AND LEASEBACKS...................................................41
Section 6.06 NATURE OF BUSINESS.....................................................42
Section 6.07 SUBSIDIARIES AND AFFILIATES............................................42
Section 6.08 MERGERS, DISPOSITIONS, ETC.............................................42
Section 6.09 ERISA COMPLIANCE.......................................................42
Section 6.10 SALE OR DISCOUNT OF RECEIVABLES........................................43
Section 6.11 TANGIBLE NET WORTH.....................................................43
Section 6.12 CURRENT RATIO..........................................................43
Section 6.13 FUNDED INDEBTEDNESS COVERAGE RATIO.....................................43
Section 6.14 FIXED CHARGE COVERAGE RATIO............................................43
Section 6.15 ENVIRONMENTAL MATTERS..................................................43
Section 6.16 TRANSACTIONS WITH AFFILIATES...........................................43
Section 6.17 NEGATIVE PLEDGE AGREEMENTS.............................................44
Section 6.18 COMPENSATION...........................................................44
Section 6.19 PROCEEDS OF NOTES......................................................44
Section 6.20 PRESERVATION OF DESIGNATED CONTRACTS...................................44
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 EVENTS OF DEFAULT......................................................44
Section 7.02 APPLICATION OF PROCEEDS................................................46
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ARTICLE VIII
THE AGENT
Section 8.01 APPOINTMENT AND POWERS.................................................47
Section 8.02 POWERS.................................................................47
Section 8.03 GENERAL IMMUNITY.......................................................47
Section 8.04 NATURE OF DUTIES OF AGENT..............................................47
Section 8.05 RIGHT TO INDEMNITY.....................................................47
Section 8.06 ACTION ON INSTRUCTIONS OF LENDERS......................................47
Section 8.07 LIMITATION ON AGENT'S DUTIES...........................................48
Section 8.08 EMPLOYMENT OF AGENTS AND COUNSEL.......................................48
Section 8.09 RELIANCE ON DOCUMENTS; COUNSEL.........................................48
Section 8.10 MAY TREAT LENDER AS OWNER..............................................48
Section 8.11 AGENT'S REIMBURSEMENT..................................................48
Section 8.12 RIGHTS AS A LENDER.....................................................48
Section 8.13 LENDER CREDIT DECISION.................................................49
ARTICLE IX
MISCELLANEOUS
Section 9.01 WAIVER.................................................................49
Section 9.02 NOTICES................................................................49
Section 9.03 PAYMENT OF EXPENSES, INDEMNITIES, ETC..................................50
Section 9.04 AMENDMENTS, ETC........................................................52
Section 9.05 SUCCESSORS AND ASSIGNS.................................................52
Section 9.06 INVALIDITY.............................................................52
Section 9.07 COUNTERPARTS...........................................................52
Section 9.08 CAPTIONS...............................................................53
Section 9.09 NO ORAL AGREEMENTS.....................................................53
Section 9.10 GOVERNING LAW..........................................................53
Section 9.11 INTEREST...............................................................53
Section 9.12 WAIVER OF JURY TRIAL...................................................54
Section 9.13 BINDING ARBITRATION....................................................54
Section 9.14 EXCULPATION PROVISIONS.................................................56
Section 9.15 CUMULATIVE RIGHTS......................................................56
Section 9.16 SINGULAR AND PLURAL....................................................56
Section 9.17 SEVERAL OBLIGATIONS....................................................56
Section 9.18 EXHIBITS...............................................................57
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Section 9.19 SATISFACTION REQUIREMENT...............................................57
Annex I -- Total Commitments
Schedule 1.01 -- Designated Contracts
Schedule 4.03 -- Liabilities; Litigation
Schedule 4.14 -- Subsidiaries, Affiliated Professional Associations, and
Partnerships
Schedule 4.16 -- Environmental Matters
Schedule 4.19 -- Insurance
Schedule 5.03(f) -- Existing Loans
Schedule 6.01(b) -- Debt of the Borrower
Exhibit A -- Form of Revolving Credit Note
Exhibit B -- Form of Term Note
Exhibit C -- Form of Borrowing Request
Exhibit D -- Security Instruments
Exhibit E -- Form of Legal Opinion
Exhibit F -- Form of Compliance Certificate
Exhibit G -- Form of Borrowing Base Certificate
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CREDIT AGREEMENT
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of August 29, 1996 (the "AGREEMENT"), by
and among STAT HEALTHCARE, INC., a corporation duly organized and validly
existing under the laws of the State of Delaware (the "BORROWER"), SOUTHWEST
BANK OF TEXAS, N.A., a national banking association, individually and as
administrative agent for the financial institutions party hereto (in its
capacity as administrative agent, the "AGENT" ), and THE BOATMEN'S NATIONAL BANK
OF ST. LOUIS, a national banking association (together with the Agent, the
"LENDERS").
RECITALS
A. The Borrower has requested that the Lenders provide certain loans to
it to refinance certain existing indebtedness, to finance certain equipment
purchases, and for general corporate purposes.
B. The Lenders have agreed to make such loans subject to the terms and
conditions set forth in this Agreement.
C. Therefore, in consideration of the mutual covenants and agreements
herein contained and of the loans and commitments hereinafter referred to, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 CERTAIN DEFINED TERMS. As used herein, the following terms
shall have the following meanings (all terms defined in this Article I or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and VICE VERSA):
"ADJUSTED TANGIBLE NET WORTH" shall mean, from time to time,
Tangible Net Worth PLUS 100% of the amount of any increase in equity in
the Borrower, including, without limitation, (i) the injection of new
capital and (ii) any conversion of Debt to
equity.
"ADVANCE NOTICE" shall mean written notice (or telephonic notice
promptly confirmed by telecopy or otherwise in writing), which in each
case shall be irrevocable, from the Borrower to be received by the Agent
before 10:00 a.m. (Houston time), by the number of Business Days in
advance of any borrowing, conversion, continuation, or voluntary
prepayment of any Loan pursuant to this Agreement as respectively
indicated below:
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(i) LIBOR Loans - three (3) Business Days; and
(ii) Base Rate Loans - 11:00 a.m. of the same Business Day.
For the purpose of determining the applicable Loan in the case of the
conversion from one Type of Loan into another, the Loan into which there
is to be a conversion shall
control.
"AFFILIATE" of any Person shall mean (i) any Person directly or
indirectly controlled by, controlling or under common control with such
first Person, (ii) any director or officer of such first Person or of
any Person referred to in clause (i) above and, (iii) if any Person in
clause (i) above is an individual, any member of the immediate family
(including parents, spouse and children) of such individual and any
trust whose principal beneficiary is such individual or one or more
members of such immediate family and any Person who is controlled by any
such member or trust. As used in this definition, "CONTROL" (including,
with its correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL
WITH") shall mean any person which, at such time, owns directly or
indirectly ten percent (10%) or more of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation or ten percent (10%) or more of the partnership or other
ownership interests of any other Person (other than as a limited partner
of such other Person) will be deemed to control such corporation or
other Person.
"AGENT" shall have the meaning provided in the introductory
paragraph to this Agreement.
"AGREEMENT" shall mean this Credit Agreement, as the same may
from time to time be amended, supplemented, or modified.
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code
entitled "Bankruptcy" as now or hereafter in effect, or any successor
thereto.
"BASE RATE" shall have the meaning set forth in Section 2.05(a).
"BASE RATE LOAN" shall mean a Loan bearing interest at the rate
provided in Section 2.05(a).
"BORROWER" shall have the meaning provided in the introductory
paragraph to this Agreement.
"BORROWING" shall mean a borrowing pursuant to a Borrowing
Request, a continuation pursuant to Section 2.07, or a conversion
pursuant to Section 2.08 consisting,
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in each case, of the same Type of Loans having, in the case of LIBOR
Loans, the same Interest Period (except as otherwise provided in
Sections 2.13 and 2.14).
"BORROWING REQUEST" shall mean a request for a Borrowing pursuant
to Section 2.03, substantially in the form of EXHIBIT C hereto.
"BUSINESS DAY" shall mean any day excluding Saturday, Sunday, and
any other day on which banks are required or authorized to close in
Houston, Texas and, if the applicable Business Day relates to LIBOR
Loans, on which trading is carried on by and between banks in Dollar
deposits in the applicable London interbank LIBOR market.
"CAPITAL LEASE" shall mean any lease of Property which, in
accordance with GAAP, would be capitalized on the lessee's balance sheet
or for which the amount of the asset and liability thereunder as if so
capitalized should, in accordance with GAAP, be disclosed in a note to
such balance sheet.
"CHANGE OF CONTROL" shall mean a change in ownership or control
of the Borrower effected through one of the following transactions:
(a) the acquisition, directly or indirectly, by any person
or related group of persons (other than the Borrower or an
Affiliate of the Borrower) of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than fifty percent (50%)
of the total combined voting power of the Borrower's outstanding
securities; or
(b) Xxxxx Xxxxx or Xxxxxxx Xxxxxxxxx, collectively, cease
to be the "beneficial owners" (within the meaning of Rule 13d-3
of the Securities Exchange Act of 1934, as amended) of at least
thirty-five percent (35%) of the total combined voting power of
the outstanding securities of the Borrower; or
(c) a change in the composition of the Board of Directors
of the Borrower over a period of thirty-six (36) consecutive
months or less such that a majority of the members of the Board
of Directors ceases to be comprised of individuals who either (i)
have been members of the Board of Directors continuously since
the beginning of such period or (ii) have been elected or
nominated for election as members of the Board of Directors
during such period by at least a majority of the members of the
Board of Directors described in clause (i) who were still in
office at the time such election or nomination was approved by
the Board of Directors.
"CLOSING DATE" shall mean August 29, 1996.
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"CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"COMMITMENT" shall mean, with respect to each Lender, the
obligation of such Lender to make loans to the Borrower under Section
2.01, up to the maximum amount set forth opposite such Lender's name on
Annex I under the caption "Total Commitment." Such Lender's Commitment
is the sum of its Revolving Credit Commitment and its Term
Commitment.
"CONSOLIDATED OPERATING CASH FLOW" shall mean, for any period,
without duplication, net income prior to all federal, state, local, and
foreign income taxes and after salary and bonuses paid to officers, in
each case of the Borrower and the Guarantors on a consolidated basis for
such period, PLUS the sum of (i) all depreciation and amortization of
assets (including goodwill and other intangible assets) of the Borrower
and the Guarantors, (ii) interest paid during such period, and (iii) all
other non-cash operating charges, in each case deducted in determining
net income for such period, and MINUS the sum of all federal, state,
local, and foreign income taxes (actually paid) of the Borrower and the
Guarantors, in each case, during such period.
"DEBT" shall mean, for any Person the sum of the following
(without duplication): (a) all obligations of such Person for borrowed
money or evidenced by bonds, debentures, notes, or other similar
instruments; (b) all obligations of such Person (whether contingent or
otherwise) in respect of letters of credit, bankers' acceptances, surety
or other bonds, and similar instruments; (c) all obligations of such
Person to pay the deferred purchase price of Property or services,
except trade accounts payable (other than for borrowed money) arising in
the ordinary course of business of such Person; (d) all obligations
under leases, whether designated as capital or operating leases, in
respect of which such Person is liable, contingently or otherwise, as
obligor, guarantor, or otherwise, or in respect of which obligations
such Person otherwise assures a creditor against loss; (e) all Debt of
others secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person; (f) all Debt of others guaranteed
by such Person or upon which such Person is otherwise liable as a
partner or otherwise; and (g) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial position or
covenants of other Persons.
"DEFAULT" shall mean an Event of Default or any condition or
event which, with notice or lapse of time or both, would constitute an
Event of Default.
"DEFAULT RATE" shall have the meaning assigned to that term in
Section 2.05(c).
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"DESIGNATED CONTRACTS" shall mean each agreement (whether one or
more) identified on SCHEDULE 1.01 to this Agreement.
"DOLLARS" and "$" shall mean lawful money of the United States of
America.
"DRAWDOWN TERMINATION DATE" shall mean the last Business Day
prior to the Revolving Credit Maturity Date.
"ENVIRONMENTAL LAWS" shall mean any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any
Governmental Authority pertaining to health or the environment in effect
in any and all jurisdictions in which the Borrower is conducting or at
any time has conducted business, or where any Property of the Borrower
is located, or where any hazardous substances generated by or disposed
of by the Borrower is located, including without limitation, the Clean
Air Act, as amended, the Comprehensive Environ mental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the
Federal Water Pollution Control Act, as amended, the Occupational Safety
and Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976 ("RCRA"), as amended, the Safe Drinking Water Act,
as amended, the Toxic Substances Control Act, as amended, the Superfund
Amendments and Reauthorization Act of 1986, as amended, the Hazardous
Materials Transportation Act, as amended, the Texas Solid Waste Disposal
Act, as amended (the "PETROLEUM STORAGE TANK REMEDIATION FUND ACT"), and
other environmental conservation or protection laws. The terms
"hazardous substance," "release" and "threatened release" have the
meanings specified in CERCLA, the terms "solid waste" and "disposal" (or
"disposed") have the meanings specified in RCRA, and the term "petroleum
product" and "petroleum storage tank" have the meaning specified in the
Petroleum Storage Tank Remediation Fund Act; PROVIDED, HOWEVER, in the
event either CERCLA, RCRA or the Petroleum Storage Tank Remediation Fund
Act is amended so as to broaden the meaning of any term defined thereby,
such broader meaning shall apply subsequent to the effective date of
such amendment with respect to all provisions of this Agreement other
than Article IV hereof; PROVIDED FURTHER that, to the extent the laws of
the state in which any Property of the Borrower is located establish a
meaning for "petroleum product," "petroleum storage tank," "hazardous
substance," "contaminants," "release," "solid waste" or "disposal" which
is broader than that specified in either CERCLA, RCRA or the Petroleum
Storage Tank Remediation Fund Act, such broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA AFFILIATE" shall mean any corporation or trade or business
which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the
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Code) as the Borrower or is under common control (within the meaning of
Section 414(c) of the Code) with the Borrower.
"EVENT OF DEFAULT" shall have the meaning assigned to that term
in Section 7.01.
"FINANCIAL STATEMENTS" shall mean the financial statements of the
Borrower described or referred to in Section 4.02.
"FIXED CHARGES" shall mean, for any period, without duplication,
the sum of (i) the aggregate current maturities of all Funded
Indebtedness of the Borrower and the Guarantors paid during such period,
PLUS (ii) all interest paid by the Borrower and the Guarantors during
such period, PLUS (iii) all dividends declared or paid during such
period, PLUS (iv) all capitalized maintenance expenditures of the
Borrower and the Guarantors for such period, and PLUS (v) any operating
lease payments made by the Borrower and the Guarantors during such
period.
"FORM 1001 CERTIFICATION" shall have the meaning provided in
Section 2.18(f).
"FORM 4224 CERTIFICATION" shall have the meaning provided in
Section 2.18(f).
"FUNDED INDEBTEDNESS" shall mean, without duplication and with
respect to the Borrower and the Guarantors on a consolidated basis, all
Indebtedness for borrowed money, any Capital Lease obligations of the
Borrower and the Guarantors, and any guarantee by the Borrower and the
Guarantors with respect to Funded Indebtedness of another Person.
"GAAP" shall mean generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" includes the United States, the state,
county, parish, province, municipal, and political subdivisions in which
any Property of the Borrower or any Guarantor is located or which
exercises jurisdiction over any such Property, and any court, agency,
department, commission, board, bureau, or instrumentality of any of them
which exercises jurisdiction over any such Property.
"GOVERNMENTAL REQUIREMENT" shall mean any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization, or other
direction or requirement (including, without limitation, Environmental
Laws, energy regulations and occupational, safety and health standards
or controls) of any Governmental Authority.
"GUARANTORS" shall mean the Persons listed on SCHEDULE 4.14 and
any other Person which becomes a guarantor pursuant to Section 6.07.
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"HIGHEST LAWFUL RATE" shall mean the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted
for, taken, reserved, charged, or received on the Loans or on other
indebtedness under laws applicable to the Lenders which are presently in
effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum
nonusurious interest rate than presently applicable laws now allow.
"INDEBTEDNESS" shall mean any and all amounts owing or to be
owing by the Borrower to the Lenders in connection with the Notes or any
Security Instrument, including this Agreement, and all renewals,
extensions, replacements, amendments, and/or
rearrangements thereof.
"INDEMNIFIED PARTIES" shall have the meaning provided in Section
9.03(b).
"INDEMNITY MATTERS" shall mean any and all actions, suits,
proceedings (including any investigations, litigation or inquiries),
claims, demands, and causes of action made or threatened against a
Person, and, in connection therewith, all reasonable costs, losses,
liabilities, damages or expenses of any kind or nature whatsoever
incurred by such Person.
"INTEREST PERIOD" shall have the meaning provided in Section
2.06.
"LENDER" or "LENDERS" shall have the meaning provided in the
introductory paragraph to this Agreement.
"LENDING OFFICE" shall mean, for each Lender, the office
specified opposite such Lender's name on the signature pages hereof, or
such other office as such Lender may designate in writing from time to
time to the Borrower and the Agent.
"LIBO RATE" or "LIBOR" shall mean the interest rate per annum
equal to the arithmetic average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the offered quotations appearing on Telerate Page
3750 (or if such Telerate Page shall not be available, any successor or
similar service as may be selected by the Agent and the Borrower) as of
10:00 a.m. Houston time, (or as soon thereafter as practicable), on the
day two (2) Business Days prior to the first day of such Interest Period
for Dollar deposits in amounts in immediately available funds comparable
to the principal amount of the LIBOR Loan of the Lenders for which the
LIBO Rate is being determined with maturities comparable to the Interest
Period for which such LIBO Rate will apply.
"LIBOR LOAN" shall mean a Loan bearing interest at the rate
provided in Section 2.05(b).
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"LIENS" shall mean, with respect to any asset, any mortgage,
lien, pledge, charge, security interest, or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, a Person
shall be deemed to own, subject to a Lien, any asset which it has
acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease, or other title retention
agreement relating to such asset.
"LOAN" shall mean a Revolving Credit Loan or a Term Loan, and
"LOANS" shall mean, collectively, the Revolving Credit Loans or the Term
Loans or one or more of them as provided herein.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, and the
Security Instruments.
"MATERIAL ADVERSE EFFECT" shall mean any material and adverse
effect on (i) the assets, liabilities, financial condition, business,
operations, affairs, or circumstances of the Borrower or any of the
Guarantors from those reflected in the Financial Statements or from the
facts represented or warranted in this Agreement or any other Security
Instrument, or (ii) the ability of the Borrower to carry out and
continue to carry out its business as carried out at the date of this
Agreement or meet its obligations under the Note, this Agreement or the
other Security Instruments on a timely basis.
"MULTIEMPLOYER PLAN" shall mean a Plan defined as such in Section
3(37) of ERISA to which contributions have been made by the Borrower or
any ERISA Affiliate and which
is covered by Title IV of ERISA.
"NOTES" shall mean, collectively, the Revolving Credit Notes and
the Term Notes.
"OTHER TAXES" shall have the meaning provided in Section 2.18(b).
"PAYMENT OFFICE" shall mean the Agent's office located at P. O.
Xxx 00000, Xxxxxxx, Xxxxx 00000-0000, Attention: Xxxxxxx Xxxxxxxxxxx.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"PERCENTAGE SHARE" shall mean, as to each Lender, the fraction,
expressed as a percentage, the numerator of which is the amount of the
Lender's Commitment and the denominator of which is the amount of the
aggregate Commitments.
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"PERSON" shall mean any individual, corporation, limited
liability company, voluntary association, partnership, joint venture,
trust, unincorporated organization, or government or any agency,
instrumentality, or political subdivision thereof, or any other form of
entity.
"PLAN" shall mean an employee pension benefit or other plan
established or maintained by the Borrower or any ERISA Affiliate and
which is covered by Title IV of ERISA, other than a Multiemployer Plan.
"PRIME RATE" shall mean the rate of interest from time to time
announced publicly by the Agent as its prime commercial lending rate.
Such rate is set by the Agent as a general reference rate of interest,
taking into account such factors as the Agent may deem appropriate, it
being understood that many of the Agent's commercial or other loans are
priced in relation to such rate, that it is not necessarily the lowest
or best rate actually charged to any customer and that the Agent may
make various commercial or other loans at rates of interest having no
relationship to such rate.
"PROPERTY" shall mean any interest in any kind of property or
asset, whether real, personal, or mixed, or tangible or intangible.
References to the "Borrower's Properties", "Properties of the Borrower",
or any other similar expressions shall mean any Property owned by the
Borrower as co-owner or owned by the Borrower individually.
"QUARTERLY DATES" shall mean the last Business Day of each March,
June, September, and December.
"RESPONSIBLE OFFICER" shall mean, (i) with respect to any
corporation, the chairman of the board, the president, any executive
vice president, the vice president of finance, the chief financial
officer, the chief operating officer, or the treasurer of such
corporation, and (ii) with respect to any professional association, the
chairman of the board, the president, any vice president, the secretary,
or the treasurer of such professional association.
"REVOLVING CREDIT BORROWING BASE" shall mean, at any time, an
amount equal to the sum of (a) an amount equal to twenty percent (20%)
of the amount of Medicare and Medicaid receivables of the Borrower and
the Guarantors having maturities of less than ninety (90) days, PLUS (b)
an amount equal to eighty-five percent (85%) of the amount of private
insurance accounts receivable of the Borrower and the Guarantors having
maturities of less than ninety (90) days.
"REVOLVING CREDIT COMMITMENT" shall mean the obligation of the
Lenders, upon the terms and conditions stated herein, in the Notes and
in the other Security Instruments, to make Revolving Credit Loans not to
exceed in the aggregate the lesser of (i)
$3,000,000.00
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CREDIT AGREEMENT
August 29, 1996
and (ii) the Revolving Credit Borrowing Base from the Closing
Date until the Drawdown Termination Date.
"REVOLVING CREDIT LOANS" shall have the meaning set forth in
Section 2.01(a).
"REVOLVING CREDIT MATURITY DATE" shall mean August 29, 1997.
"REVOLVING CREDIT NOTES" shall mean the revolving credit notes
issued by the Borrower evidencing the Revolving Credit Loans,
substantially in the form of EXHIBIT A to the Agreement.
"ROLLING PERIOD" shall mean for any fiscal quarter ending on a
Quarterly Date, such quarter and three preceding fiscal quarters.
"SECURITY INSTRUMENTS" shall mean this Agreement, the Notes, all
agreements listed on EXHIBIT D hereto, and any and all other agreements
or instruments now or hereafter executed and delivered by the Borrower
or any other Person in connection with, or as security for the payment
or performance of, the Notes, or this Agreement, as such agreements may
be amended or supplemented from time to time.
"SUBSIDIARY" shall mean, with respect to the Borrower, any
corporation of which at least a majority of the outstanding shares of
stock having by the terms thereof ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the
appending of any contingency) is at the time directly or indirectly
owned or controlled by the Borrower or one or more of the Subsidiaries.
"TANGIBLE NET WORTH" shall mean, as of any time, the sum of the
following for the Borrower determined (without duplication) in
accordance with GAAP:
(a) the sum of preferred stock (if any) and the par value
of common stock of the Borrower, PLUS
(b) the amount of surplus and retained earnings (or, in
the case of a surplus or retained earnings deficit, MINUS the
amount of such deficit), MINUS
(c) the sum of the following: cost of treasury shares and
the book value of all assets of the Borrower which should be
classified as intangibles (without duplication of deductions in
respect of items already deducted in arriving at surplus and
retained earnings) but in any event including as such intangibles
the following: goodwill, research and development costs,
trademarks, trade names, copyrights,
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CREDIT AGREEMENT
August 29, 1996
patents and franchises, unamortized debt discount and expense,
all reserves and any writeup in the book value of assets
resulting from a revaluation thereof or resulting
from any changes in GAAP.
"TAXES" shall have the meaning provided in Section 2.18(a).
"TERM COMMITMENT" shall mean the obligation of the Lenders, upon
the terms and conditions stated herein, in the Notes and in the other
Security Instruments, to make Term
Loans not to exceed, in the aggregate, $3,500,000.00.
"TERM LOANS" shall have the meaning set forth in Section 2.01(a).
"TERM MATURITY DATE" shall mean August 30, 1999.
"TERM NOTES" shall mean the term notes issued by the Borrower
evidencing the term loans, substantially in the form of EXHIBIT B to the
Agreement.
"TOTAL LIABILITIES" shall mean, as of any time, all Debt of the
Borrower, whether direct, contingent, or otherwise.
"TYPE" shall mean a Base Rate Loan or a LIBOR Loan.
Section 1.02 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Agent or the Lenders hereunder shall be prepared
in accordance with GAAP, as in effect and applied on a basis consistent with the
Financial Statements (except for changes concurred with by the Borrower's
independent public accountants).
Section 1.03 OTHER DEFINITIONAL TERMS. The words "hereof," "herein," and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule, Exhibit, Annex, and like references
are to this Agreement unless otherwise specified.
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CREDIT AGREEMENT
August 29, 1996
ARTICLE II
AMOUNT AND TERMS OF LOANS
Section 2.01 COMMITMENTS AND LOANS.
(a) LOANS. Subject to the terms and conditions and relying on the
representations and warranties herein set forth, each Lender severally agrees
(i) from time to time and at any time prior to the Drawdown Termination Date, to
make revolving credit loans (each a "REVOLVING CREDIT LOAN") to the Borrower,
and (ii) from time to time and at any time prior to the Term Maturity Date, to
make term loans (each a "TERM LOAN") to the Borrower.
(b) TYPES OF LOANS. The Revolving Credit Loans made pursuant hereto
shall, at the option of the Borrower, be either Base Rate Loans or LIBOR Loans
and may be continued or converted pursuant to Sections 2.07 and 2.08,
respectively, provided that, except as otherwise specifically provided herein,
all Loans made pursuant to the same Borrowing shall be of the same
Type. The Term Loans shall be Base Rate Loans only.
(c) REVOLVING CREDIT COMMITMENTS. The Revolving Credit Loans made
pursuant hereto by each Lender shall not exceed in aggregate principal amount
outstanding at any one time the amount set forth opposite such Lender's name on
ANNEX I under the caption "Revolving Credit Loan Commitment"; PROVIDED, HOWEVER,
that the aggregate principal amount of all Revolving Credit Loans by the Lenders
at any one time outstanding shall not exceed the Revolving Credit Commitment.
Within the foregoing limits and subject to the conditions set out in Article
III, the Borrower may obtain Borrowings of Revolving Credit Loans, repay or
prepay such Revolving Credit Loans, and re-borrow such Revolving Credit Loans.
(d) TERM COMMITMENTS. The Term Loans made pursuant hereto by each Lender
shall not exceed the principal amount set forth opposite such Lender's name on
ANNEX I attached hereto under the caption "Term Loan Commitment." The portion of
each Lender's Term Commitment not utilized by August 29, 1997 shall be
permanently canceled. Any portion of the Term Loans that is repaid or prepaid
may not be re-borrowed.
(e) AMOUNTS OF BORROWINGS, ETC. The aggregate principal amount of each
Borrowing (i) of LIBOR Loans hereunder shall be not less than $50,000.00 and
shall be in integral multiples of $50,000.00 in excess thereof, and (ii) of Base
Rate Loans hereunder shall be not less than $50,000.00 and shall be in integral
multiples in excess thereof of $50,000.00 in excess thereof, except that any
Borrowing of Loans that are Base Rate Loans may be in the aggregate amount of
the unused Commitment. Borrowings of more than one Type may be outstanding at
the same time; PROVIDED, HOWEVER, that the Borrower shall not be entitled to
request any Borrowing that, if made, would result in an aggregate of more than
five (5) separate Borrowings of LIBOR Loans being
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CREDIT AGREEMENT
August 29, 1996
outstanding at any one time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.
Section 2.02 NOTES AND AMORTIZATION.
(a) REVOLVING CREDIT LOANS. The Borrower's obligation to pay the
principal of, and interest on, the Revolving Credit Loans made by each Lender
shall be further evidenced by the Borrower's issuance, execution, and delivery
of a Revolving Credit Note payable to the order of such Lender in the amount of
such Lender's Revolving Credit Commitment and dated as of the date of issuance
of such Revolving Credit Note. The principal amount of the Revolving Credit
Notes shall be payable on or before the Drawdown Termination Date.
(b) TERM LOANS. The Borrower's obligation to pay the principal of, and
interest on, the Term Loans made by each Lender shall be further evidenced by
the Borrower's issuance, execution and delivery of Term Notes payable to the
order of each such Lender in the amount of such Lender's Term Commitment and
dated as of the date of issuance of such Term Note. The principal amount of the
Term Notes shall be repaid in the following manner:
(i) Commencing on October 10, 1996 and thereafter on the tenth
(10th) Business Day of each calendar month to and including September
10, 1997, an amount equal to one thirty-sixth (1/36) of the principal
balance of the Term Loans then outstanding;
(ii) On October 10, 1997 and thereafter on the tenth (10th)
Business Day of each calendar month, an amount equal to one
twenty-fourth (1/24) of the principal balance of the Term Loans
outstanding on October 10, 1997, with the final installment in the
amount of the unpaid principal balance then owing thereunder being
payable on or before the Term Maturity Date.
Any prepayment of the principal amount of the Term Notes shall be applied in the
inverse order of maturity to reduce the amounts of the installments unpaid at
such time.
Section 2.03 BORROWINGS.
(a) INITIAL LOANS. The initial Loans hereunder under (i) the Revolving
Credit Commitment shall be a renewal, extension, and rearrangement of the
principal balance outstanding on the Closing Date of that certain $1,500,000.00
note, dated April 10, 1996, executed by the Borrower payable to the order of the
Agent, and (ii) the Term Commitment shall be a renewal, extension, and
rearrangement of the principal balance outstanding on the Closing Date of (1)
that certain $313,800.00 note, dated May 9, 1996, executed by Brownsville
Hyperbaric Healthcare Ltd.
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CREDIT AGREEMENT
August 29, 1996
payable to the order of the Agent and (2) that certain $150,000.00 note, dated
May 9, 1996, executed by AmHealth Enterprises of the Valley, Inc. payable to the
order of the Agent.
(b) BORROWING REQUESTS. Whenever the Borrower desires to make an
additional Borrowing hereunder, it shall give (i) Advance Notice in the form of
a Borrowing Request, specifying, subject to the provisions hereof, (1) the
aggregate principal amount of the Loans to be made pursuant to such Borrowing,
(2) the date of Borrowing (which shall be a Business Day), (3) in the case of
Revolving Credit Loans, whether the Loans being made pursuant to such Borrowing
are to be Base Rate Loans or LIBOR Loans, and (4) in the case of LIBOR Loans,
the Interest Period to be applicable thereto, and (ii) an executed Borrowing
Base Certificate substantially in the form of EXHIBIT G hereto.
(c) NOTICE TO LENDERS. The Agent shall promptly give each Lender
telecopy or telephonic notice (and, in the case of telephonic notices, confirmed
by telecopy or otherwise in writing) of the proposed Borrowing, of such Lender's
proportionate share thereof and of the other matters covered by the Advance
Notice. Without in any way limiting the Borrower's obligation to confirm in
writing any telephonic notice, the Agent may act without liability upon the
basis of telephonic notice believed by the Agent in good faith to be from the
Borrower prior to receipt of written confirmation. In each such case, the
Borrower hereby waives the right to dispute the Agent's record of the terms of
such telephonic notice, absent manifest error.
Section 2.04 DISBURSEMENT OF FUNDS.
(a) AVAILABILITY. No later than 4:00 p.m. (Houston time) on the date of
each Borrowing of Revolving Credit Loans, each Lender will make available its
PRO RATA portion of the amount (if any) by which the principal amount of the
Borrowing requested to be made on such date exceeds the principal amount of
Revolving Credit Loans (if any) maturing on such date, in Dollars and in
immediately available funds at the Payment Office. The Agent will make available
to the Borrower at the Payment Office the aggregate of the amounts (if any) so
made available by the Lenders.
To
the extent that Revolving Credit Loans mature on the date of a requested
Borrowing of Revolving Credit Loans, the Lenders shall apply the proceeds of the
Revolving Credit Loans then being made, to the extent thereof, to the repayment
of such maturing Revolving Credit Loans, and such
repayments are intended to be a contemporaneous exchange.
(b) FUNDS TO AGENT. Unless the Agent shall have been notified by any
Lender prior to the date of a Borrowing that such Lender does not intend to make
available to the Agent such Lender's portion of the Borrowing to be made on such
date, the Agent may assume that such Lender has made such amount available to
the Agent on such date, and the Agent may make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Lender on the date of a Borrowing, the Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest at the customary rate set
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CREDIT AGREEMENT
August 29, 1996
by the Agent for the correction of errors among banks. If such Lender does not
pay such corresponding amount forthwith upon the Agent's demand therefor, the
Agent shall promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Agent together with interest at the rate
specified for the Borrowing which includes such amount
paid.
Nothing in this Section shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment hereunder or to prejudice any rights which
the Borrower may have against any Lender
as a result of any default by such Lender hereunder.
(c) LENDERS' RESPONSIBILITIES. No Lender shall be responsible for any
default by any other Lender in its obligation to make Loans hereunder, and each
Lender shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to fulfill its Commitment
hereunder.
Section 2.05 INTEREST. In all cases subject to Section 9.11:
(a) BASE RATE LOANS. With respect to either Term Loans or
Revolving Credit Loans that are Base Rate Loans, the Borrower agrees to
pay interest in respect of the unpaid principal amount of each such Loan
from the date thereof until payment in full thereof at a rate per annum
(the "BASE RATE") equal to, for any day, the Prime Rate in effect on
such day; PROVIDED, that, with respect to Revolving Credit Loans only,
for any period during which the Funded Debt Coverage Ratio is greater
than 2.00 to 1.00, the Base Rate shall be equal to the Prime Rate PLUS
one fourth of one percent (0.25%); PROVIDED FURTHER, that in no event
shall the Base Rate exceed the Highest Lawful Rate.
(b) LIBOR LOANS. With respect to Revolving Credit Loans that are
LIBOR Loans, the Borrower agrees to pay interest in respect of the
unpaid principal amount of each such Loan from the date thereof until
payment in full thereof at a rate per annum equal to the relevant LIBO
Rate PLUS:
(i) one and one half percent (1.5%), for any period during
which the Funded Debt Coverage Ratio is less than 1.00 to 1.00;
(ii) one and three fourths percent (1.75%), for any period
during which the Funded Debt Coverage Ratio is equal to or
greater than 1.00 to 1.00, but not more than 2.00 to 1.00; or
(iii) two and one fourth percent (2.25%), for any period
during which the Funded Debt Coverage Ratio is greater than 2.00
to 1.00.
In no event, however, shall such rate exceed the Highest Lawful Rate.
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CREDIT AGREEMENT
August 29, 1996
(c) DEFAULT INTEREST. Upon the occurrence and during the
continuance of an Event of Default specified in Section 7.01, principal
and, to the extent permitted by law, overdue interest in respect of each
Loan and all other amounts then due and payable hereunder shall bear
interest for each day at a rate per annum (the "DEFAULT RATE") equal to
three percent (3%) in excess of the Base Rate in effect for each such
day, but in no event to exceed the Highest Lawful Rate; PROVIDED,
HOWEVER, that no Loan shall bear interest after maturity (whether by
acceleration or otherwise) at a rate per annum less than three percent
(3%) in excess of the rate of interest applicable thereto at maturity,
but in no event to exceed the Highest Lawful Rate.
(d) MISCELLANEOUS. Interest on each Loan shall accrue from and
including the date of such Loan to but excluding the date of payment in
full thereof. Interest on each Loan shall be payable on the tenth (10th)
Business Day of each calendar month, commencing on the first of such
days to occur after such Loan is made, and on any prepayment (other than
voluntary partial prepayments of Base Rate Loans) on the amount prepaid,
at maturity (whether by acceleration or otherwise), and, after maturity,
on demand.
(e) NOTICE BY AGENT. The Agent, upon determining the LIBO Rate
for any Interest Period, shall promptly notify by telephone (confirmed
by telecopy or otherwise in writing) or in writing the Borrower and the
Lenders thereof.
Section 2.06 INTEREST PERIODS. In connection with each Borrowing of
LIBOR Loans, the Borrower shall elect an interest period (each an "INTEREST
PERIOD") to be applicable to such Borrowing, which Interest Period shall begin
on and include, as the case may be, the date selected by the Borrower pursuant
to Section 2.03, the conversion date or the date of expiration of the then
current Interest Period applicable thereto, and end on but exclude the date
which is either one, two, three, or six months thereafter, as selected by the
Borrower; PROVIDED that:
(a) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, PROVIDED, FURTHER, that if any Interest Period
(other than in respect of a Borrowing of LIBOR Loans the Interest Period
of which is expiring pursuant to Section 2.13(b) hereof) would otherwise
expire on a day which is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day;
(b) any Interest Period which begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to part (c) below, end on the last Business Day
of a calendar month;
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CREDIT AGREEMENT
August 29, 1996
(c) no Interest Period shall extend beyond any date that any
principal payment or prepayment is scheduled to be due unless the
aggregate principal amount of Borrowings which are Borrowings of Base
Rate Loans or which have Interest Periods which will expire on or before
such date, less the aggregate amount of any other principal payments or
prepayments due during such Interest Period, is equal to or in excess of
the amount of such principal payment or prepayment; and
(d) no Interest Period shall extend beyond the Drawdown
Termination Date.
Section 2.07 CONTINUATION OPTIONS. The Borrower may elect to continue
all or any part of any Borrowing of LIBOR Loans beyond the expiration of the
then current Interest Period relating thereto by giving Advance Notice of such
election, specifying the Borrowings of LIBOR Loans or portion thereof to be
continued and the Interest Period therefor; PROVIDED, HOWEVER, that any
continuation of such Borrowing shall be (as to each Borrowing as continued for
an applicable Interest Period) in the principal amount of not less than
$50,000.00 and in integral multiples of $50,000.00 in excess thereof. Promptly
after receipt of Advance Notice, the Agent shall notify each Lender of the
proposed continuation. In the absence of such a timely and proper election, the
Borrower shall be deemed to have elected to convert such Borrowing of LIBOR
Loans to a Borrowing of Base Rate Loans pursuant to Section 2.08(a).
Section 2.08 CONVERSION OPTIONS. With respect to Revolving Credit Loans,
(a) CONVERSION TO BASE RATE. The Borrower may elect to convert
any Borrowing of LIBOR Loans on the last day of the then current
Interest Period relating thereto to a Borrowing of Base Rate Loans by
giving Advance Notice of such election. Promptly after receipt of the
Advance Notice, the Agent shall notify each Lender of the proposed
conversion.
(b) CONVERSION TO LIBO RATE. The Borrower may elect to convert a
Borrowing of Base Rate Loans at any time or from time to time to a
Borrowing of LIBOR Loans by giving Advance Notice of such election;
PROVIDED, HOWEVER, that any conversion of such Borrowing shall be (as to
each Borrowing into which there is a conversion for an applicable
Interest Period) in the principal amount of not less than $50,000.00 and
in integral multiples of $50,000.00 in excess thereof. Promptly after
receipt of the Advance Notice, the Agent shall notify each Lender of the
proposed conversion.
Section 2.09 VOLUNTARY PREPAYMENTS. The Borrower may, at its option, at
any time and from time to time, prepay Loans, in whole or in part, without
premium or penalty (other than funding losses, breakage, and re-employment
costs, if any, resulting from such prepayment being made other than on the last
day of an Interest Period with respect to any LIBOR Loan as provided in Section
2.16), upon giving Advance Notice. Such notice shall specify the date and amount
of
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CREDIT AGREEMENT
August 29, 1996
prepayment and the Loan or Loans to which such prepayment is to be applicable.
Upon receipt of such notice, the Agent shall promptly notify each Lender of the
contents thereof and of such Lender's ratable share of such prepayment. The
payment amount specified in such notice shall be due and payable on the date
specified. Each prepayment shall be in a principal amount of not less than
$50,000.00, or any whole multiple of $10,000.00 in excess thereof, or the
aggregate balance outstanding on the applicable Notes. Each prepayment of Term
Loans made pursuant to this Section shall be accompanied by all interest accrued
on the amount prepaid to the date of such prepayment. Each prepayment shall be
applied ratably to prepay the Loans of the several Lenders.
Section 2.10 FEES.
(a) REVOLVING CREDIT COMMITMENTS. The Borrower shall pay to the Agent
for the account of and distribution to each Lender in accordance with its
Percentage Share a commitment fee for the period commencing on the Closing Date
to and including the Revolving Credit Maturity Date (or such earlier date as the
Revolving Credit Commitments shall have been terminated entirely) computed at a
rate per annum set forth below on the average daily unused portion of the
Revolving Credit Loan Commitments set forth in Annex I, payable in arrears on
the Quarterly Dates, commencing on the first Quarterly Date to occur after the
date of this Agreement:
(i) two tenths of one percent (0.20%), for any period during
which the Funded Debt Coverage Ratio is less than 1.00 to 1.00;
(ii) one fourth of one percent (0.25%), for any period during
which the Funded Debt Coverage Ratio is equal to or greater than 1.00 to
1.00.
Section 2.11 PAYMENTS.
(a) WITHOUT SETOFF, ETC. Except as otherwise specifically provided
herein, all payments under the Notes and this Agreement shall be made without
defense, set-off, or counterclaim to the Agent not later than 11:00 a.m.
(Houston time) on the date when due and shall be made in lawful money of the
United States of America in immediately available funds at the Payment Office.
The Agent will promptly thereafter distribute funds in the form received
relating to the payment of principal or interest ratably to the Lenders for the
account of their respective Lending Offices, and funds in the form received
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its Lending Office.
(b) NON-BUSINESS DAYS. Whenever any payment to be made hereunder or
under the Notes shall be stated to be due on a day which is not a Business Day,
the due date thereof shall, subject to Section 2.06, be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall accrue at the applicable rate during such extension.
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CREDIT AGREEMENT
August 29, 1996
(c) COMPUTATIONS. All computations of interest shall be made on the
basis of a year of 360 days (unless such calculation would result in a usurious
rate, in which case interest shall be calculated on the basis of a year of 365
or 366 days, as the case may be) in the case of LIBOR Loans, and 365 or 366 days
(as the case may be) in the case of Base Rate Loans, and all computations of
fees shall be made on the basis of a year of 360 days (unless such calculation
would result in a usurious rate, in which case interest shall be calculated on
the basis of a year of 365 or 366 days, as the case may be), in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Agent of an interest rate or fee hereunder shall, except
for manifest error, be final, conclusive, and binding for all purposes.
Section 2.12 INTEREST RATE NOT ASCERTAINABLE, ETC. In the event that the
Agent shall have determined (which determination shall, absent manifest error,
be final, conclusive, and binding upon all parties) that on any date for
determining the LIBO Rate for any Interest Period, by reason of any changes
arising after the date of this Agreement affecting the interbank LIBOR market,
or any Lender's position in such market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in the
definition of LIBO Rate, then, and in any such event, the Agent shall forthwith
give notice (by telephone confirmed by telecopy or otherwise in writing) to the
Borrower and to the Lenders of such determination. Until the Agent notifies the
Borrower that the circumstances giving rise to the suspension described herein
no longer exist, the obligations of the Lenders to make LIBOR Loans shall be
immediately suspended, any LIBOR Loan that is requested (by continuation,
conversion or otherwise) shall instead be made as a Base Rate Loan, and any
outstanding LIBOR Loan shall be converted, on the last day of the then current
Interest Period applicable thereto, to a Base Rate Loan.
Section 2.13 ILLEGALITY.
(a) DETERMINATION OF ILLEGALITY. In the event that any Lender shall have
determined (which determination shall, absent manifest error, be final,
conclusive, and binding upon all parties) at any time that the making or
continuance of any LIBOR Loan has become unlawful by compliance by such Lender
in good faith with any applicable law, governmental rule, regulation, guideline
or order (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) then, in any such event, the Lender shall
give prompt notice (by telephone confirmed by telecopy or otherwise in writing)
to the Borrower and to the Agent of such determination (which notice the Agent
shall promptly transmit to the other Lenders).
(b) LIBOR LOANS SUSPENDED. Upon the giving of the notice to the Borrower
referred to in subsection (a) above, (i) the Borrower's right to request (by
continuation, conversion, or otherwise) and such Lender's obligation to make
LIBOR Loans shall be immediately suspended, and any such requested LIBOR Loan
shall instead be made as a Base Rate Loan, and (ii) if the affected LIBOR Loan
or Loans are then outstanding, the Borrower shall immediately, or if permitted
by
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CREDIT AGREEMENT
August 29, 1996
applicable law, no later than the date permitted thereby, upon at least one
Business Day's written notice to the Agent and the affected Lender, convert each
such LIBOR Loan into a Base Rate Loan, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 2.13(b).
Section 2.14 INCREASED COSTS.
(a) LIBOR REGULATIONS, ETC. If, by reason of (x) after the date hereof,
the introduction of or any change (including but not limited to any change by
way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation, or (y) the compliance with any
guideline or request from any central bank or other governmental authority or
quasi-governmental authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
(i) any Lender (or its applicable Lending Office) shall be
subject to any tax, duty, or other charge with respect to its LIBOR
Loans or its obligation to make LIBOR Loans, or shall change the basis
of taxation of payments to any Lender of the principal of or interest on
its LIBOR Loans or its obligation to make LIBOR Loans (except for
changes in the rate of tax on the overall net income of such Lender or
its applicable Lending Office imposed by the jurisdiction in which such
Lender's principal executive office or applicable Lending Office is
located);
(ii) any reserve (including but not limited to any imposed by the
Board of Governors of the Federal Reserve System), special deposit or
similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender's applicable Lending Office either
shall be imposed or deemed applicable to its LIBOR Loans or its
obligation to make LIBOR Loans or shall be imposed on any Lender or its
applicable Lending Office or the interbank LIBOR market; or
(iii) there shall be imposed on a Lender or its applicable
Lending Office any other condition affecting any LIBOR Loan or its
obligation to make LIBOR Loans;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining LIBOR Loans (except to the
extent already included in the determination of the applicable LIBO Rate), or
there shall be a reduction in the amount received or receivable by such Lender
or its applicable Lending Office, then the Borrower shall from time to time,
upon written notice from and demand by such Lender (with a copy of such notice
and demand to the Agent), pay to the Agent for the account of such Lender,
within five (5) Business Days after the date specified in such notice and
demand, additional amounts sufficient to indemnify or compensate such Lender
against such increased cost. A certificate as to the amount of such
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CREDIT AGREEMENT
August 29, 1996
increased cost, submitted to the Borrower and the Agent by such Lender, shall,
except for manifest error, be final, conclusive, and binding for all purposes.
(b) COSTS. If any Lender shall advise the Agent that at any time,
because of the circumstances described in clauses (x) or (y) in Section 2.14(a)
or any other circumstances arising after the Closing Date affecting such Lender
or the interbank LIBOR market or such Lender's position in such market, the LIBO
Rate, as determined by the Agent, will not adequately and fairly reflect the
cost to such Lender of funding its LIBOR Loans, then, and in any such event:
(i) the Agent shall forthwith give notice (by telephone confirmed
by telecopy or otherwise in writing) to the Borrower and to the Lenders
of such advice; and
(ii) the Borrower's right to request and such Lender's obligation
to make LIBOR Loans shall be immediately suspended, any such LIBOR Loan
that is requested (by continuation, conversion, or otherwise) shall
instead be made as a Base Rate Loan, and any such outstanding LIBOR Loan
shall be converted, on the last day of the then current Interest Period
applicable thereto, to a Base Rate Loan.
(c) CAPITAL ADEQUACY. Without limiting the foregoing, in the event that
any Lender shall have determined that the adoption of any law, treaty,
governmental or quasi-governmental rule, regulation, guideline, or order
regarding capital adequacy, or any change therein or in the interpretation or
application thereof, or compliance by any Lender with any request or directive
regarding capital adequacy (whether or not having the force of law and whether
or not failure to comply therewith would be unlawful) from any central bank or
governmental agency or body having jurisdiction, does or shall have the effect
of increasing the amount of capital required to be maintained by such Lender
(including, without limitation, with respect to any Lender's Commitment), then
the Borrower shall from time to time upon demand from such Lender (with a copy
to the Agent), pay to the Agent, for the account of such Lender, additional
amounts sufficient to compensate such Lender for the cost of such additional
required capital. A certificate as to the amount of such cost, submitted to the
Borrower and the Agent by such Lender, shall, absent manifest error, be final,
conclusive, and binding for all purposes.
(d) If any Lender elects to pass through to the Borrower any material
charge or cost under Section 2.14 or elects to terminate the availability of
LIBOR Loans, for any material period of time, the Borrower may, within sixty
(60) days after the date of such event and so long as no Event of Default shall
have occurred and be continuing, elect to terminate such Lender as a party to
this Agreement; PROVIDED that, concurrently with such termination the Borrower
shall, if the Agent and each of the other Lenders shall consent, pay that Lender
all principal, interest, and fees and other amounts owed to such Lender through
such date of termination.
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CREDIT AGREEMENT
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Section 2.15 CHANGE OF LENDING OFFICE. Each Lender agrees that it will
use reasonable efforts to designate an alternate Lending Office with respect to
any of its LIBOR Loans affected by the matters or circumstances described in
Sections 2.12, 2.13, or 2.14 to reduce the liability of the Borrower or avoid
the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as determined by such Lender in its sole
discretion.
Section 2.16 FUNDING LOSSES. The Borrower shall compensate each Lender,
upon its written request (which request shall set forth the basis for requesting
such amounts and which request shall, absent manifest error, be final,
conclusive, and binding upon all of the parties hereto) for all reasonable
losses, expenses, and liabilities (including but not limited to any interest
paid by such Lender to lenders of funds borrowed by it to make or carry its
LIBOR Loans to the extent not recovered by the Lender in connection with the
re-employment of such funds), which the Lender may sustain: (i) if for any
reason (other than a default by such Lender) a borrowing, continuation, or
conversion of LIBOR Loans does not occur on the date or in the amount specified
therefor in an Advance Notice (whether or not withdrawn), or (ii) if any
payment, prepayment, or conversion of any of its LIBOR Loans occurs on a date
which is not the last day of an Interest Period applicable thereto (including
pursuant to Section 2.13).
Section 2.17 SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment or reduction (including but not limited to any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of any obligation of the Borrower hereunder (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share of payments or reductions on account of such
obligations obtained by all the Lenders, such Lender shall forthwith (i) notify
each of the other Lenders and the Agent of such receipt, and (ii) purchase from
the other Lenders such participations in the affected obligations as shall be
necessary to cause such purchasing Lender to share the excess payment or
reduction, net of costs incurred in connection therewith, ratably with each of
them; PROVIDED that if all or any portion of such excess payment or reduction is
thereafter recovered from such purchasing Lender or additional costs are
incurred, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery or such additional costs, but without interest. 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 the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
Section 2.18 TAXES.
(a) PAYMENTS FREE AND CLEAR. Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.11, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect thereto,
EXCLUDING, in the case of each Lender and the Agent, taxes imposed on its
income,
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CREDIT AGREEMENT
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and franchise or similar taxes imposed on it, by (i) any jurisdiction (or
political subdivision thereof) of which the Agent, or such Lender, as the case
may be, is a citizen or resident or in which such Lender has a permanent
establishment (or is otherwise engaged in the active conduct of its banking
business through an office or a branch) which is such Lender's applicable
Lending Office, (ii) the jurisdiction (or any political subdivision thereof) in
which the Agent or such Lender is organized, or (iii) any jurisdiction (or
political subdivision thereof) in which such Lender or the Agent is presently
doing business which taxes are imposed solely as a result of doing business in
such jurisdiction (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "TAXES").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to the Lenders or the Agent (X) the sum payable
shall be increased by the amount necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.18) such Lender or the Agent (as the case may be) shall receive
an amount equal to the sum it would have received had no such deductions been
made, (Y) the Borrower shall make such deductions and (Z) the Borrower shall pay
the full amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with applicable law.
(b) OTHER TAXES. In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges, or similar levies that arise from any payment made hereunder or from
the execution, delivery, or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "OTHER Taxes").
(c) INDEMNIFICATION. The Borrower will indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including, but not limited
to, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 2.18) paid by such Lender or the Agent (on their behalf or on
behalf of any Lender), as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted. Any
payment pursuant to such indemnification shall be made within thirty (30) days
after the date any Lender or the Agent, as the case may be, makes written demand
therefor. If any Lender or the Agent receives a refund or credit in respect of
any Taxes or Other Taxes for which such Lender or the Agent has received payment
from the Borrower hereunder it shall promptly notify the Borrower of such refund
or credit and shall, within thirty (30) days after receipt of a request by the
Borrower (or promptly upon receipt, if the Borrower has requested application
for such refund or credit pursuant hereto), pay an amount equal to such refund
or credit to the Borrower without interest (but with any interest so refunded or
credited), provided that the Borrower, upon the request of such Lender or the
Agent, agrees to return such refund or credit (plus penalties, interest or other
charges) to such Lender or the Agent in the event such Lender or the Agent is
required to repay such refund or credit.
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CREDIT AGREEMENT
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(d) RECEIPTS. Within thirty (30) days after the date of any payment of
Taxes or Other Taxes withheld by the Borrower in respect of any payment to any
Lender or the Agent, the Borrower will furnish to the Agent the original or a
certified copy of a receipt evidencing payment
thereof.
(e) SURVIVAL. Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.18
shall survive the payment in full of principal and interest hereunder.
(f) LENDER REPRESENTATIONS. Each Lender represents that it is either (i)
a corporation organized under the laws of the United States of America or any
state thereof or (ii) it is entitled to complete exemption from United States
withholding tax imposed on or with respect to any payments, including fees, to
be made to it pursuant to this Agreement (1) under an applicable provision of a
tax convention to which the United States of America is a party or (2) because
it is acting through a branch, agency or office in the United States of America
and any payment to be received by it hereunder is effectively connected with a
trade or business in the United States of America. Each Lender that is not a
corporation organized under the laws of the United States of America or any
state thereof agrees to provide to the Borrower and the Agent on the Closing
Date, or on the date of its delivery of the Assignment and Acceptance pursuant
to which it becomes a Lender, and at such other times as required by United
States law or as the Borrower or the Agent shall reasonably request, two
accurate and complete original signed copies of either (X) Internal Revenue
Service Form 4224 (or successor form) certifying that all payments to be made to
it hereunder will be effectively connected to a United States trade or business
(the "FORM 4224 CERTIFICATION") or (Y) Internal Revenue Service Form 1001 (or
successor form) certifying that it is entitled to the benefit of a provision of
a tax convention to which the United States of America is a party which
completely exempts from United States withholding tax all payments to be made to
it hereunder (the "FORM 1001 CERTIFICATION"). In addition, each Lender agrees
that if it previously filed a Form 4224 Certification it will deliver to the
Borrower and the Agent a new Form 4224 Certification prior to the first payment
date occurring in each of its subsequent taxable years; and if it previously
filed a Form 1001 Certification, it will deliver to the Borrower and the Agent a
new certification prior to the first payment date falling in the third year
following the previous filing of such certification. Each Lender also agrees to
deliver to the Borrower and the Agent such other or supplemental forms as may at
any time be required as a result of changes in applicable law or regulation in
order to confirm or maintain in effect its entitlement to exemption from United
States withholding tax on any payments hereunder, PROVIDED that the
circumstances of the Lender at the relevant time and applicable laws permit it
to do so. If a Lender determines, as a result of any change in either (i)
applicable law, regulation or treaty, or in any official application thereof or
(ii) its circumstances, that it is unable to submit any form or certificate that
it is obligated to submit pursuant to this Section, or that it is required to
withdraw or cancel any such form or certificate previously submitted, it shall
promptly notify the Borrower and the Agent of such fact. If a Lender is
organized under the laws of a jurisdiction outside the United States of America,
unless the Borrower and the Agent have received a Form 1001 Certification or
Form 4224 Certification
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CREDIT AGREEMENT
August 29, 1996
satisfactory to them indicating that all payments to be made to such Lender
hereunder are not subject to United States withholding tax, the Borrower shall
withhold taxes from such payments at the applicable statutory rate. Each Lender
agrees to indemnify and hold harmless from any United States taxes, penalties,
interest and other expenses, costs and losses incurred or payable by (i) the
Agent as a result of such Lender's failure to submit any form or certificate
that it is required to provide pursuant to this Section or (ii) the Borrower or
the Agent as a result of their reliance on any such form or certificate which it
has provided to them pursuant to this Section.
(g) FAILURE TO PROVIDE FORM. For any period with respect to which a
Lender has failed to provide the Borrower with the form required pursuant to
Section 2.18(f), if any, (other than if such failure is due to a change in
treaty, law or regulation occurring subsequent to the date on which a form
originally was required to be provided), such Lender shall not be entitled to
indemnification under Section 2.18(c) with respect to Taxes imposed by the
United States which Taxes would not have been imposed but for such failure to
provide such forms; PROVIDED, HOWEVER, that should a Lender, which is otherwise
exempt from or subject to a reduced rate of withholding tax becomes subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.
(h) EFFORTS TO AVOID OR REDUCE. Any Lender claiming any additional
amounts payable pursuant to this Section 2.18 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document requested by the Borrower or the Agent or to change the jurisdiction of
its applicable Lending Office or to contest any tax imposed if the making of
such a filing or change or contesting such tax would avoid the need for or
reduce the amount of any such additional amounts that may thereafter accrue and
would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
Section 2.19 PRO RATA TREATMENT. Except as required under Section 2.13
or 2.14, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the fees, each
reduction of the Commitments, and each refinancing of any Borrowing, conversion
of any Borrowing to or continuation of any Borrowing as a Borrowing of any Type,
shall be allocated PRO RATA among the Lenders in accordance with their
respective applicable Commitments (or, if such Commitments shall have expired or
been terminated, in accordance with the respective principal amounts of their
outstanding Loans made pursuant to such applicable Commitments). Each Lender
agrees that in computing such Lender's portion of any Borrowing to be made
hereunder, the Agent may, in its discretion, round each Lender's percentage of
such Borrowing to the next higher or lower whole dollar amount.
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CREDIT AGREEMENT
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.01 INITIAL LOANS. At the time of the making by such Lender of
its initial Loans hereunder, all obligations of the Borrower hereunder to the
Agent or any Lender incurred prior to such initial Loan (including but not
limited to the Borrower's obligation to reimburse the fees and disbursements of
counsel to the Agent) shall have been paid in full, and the Agent shall have
received the following, each dated as of the Closing Date, in form and substance
reasonably satisfactory to the Agent with an original thereof for the Agent and
with sufficient copies thereof for each Lender (except that in the case of the
Notes, the originals thereof shall be delivered to the respective Lenders):
(a) An executed certificate of the Secretary or Assistant
Secretary of the Borrower setting forth (i) certified resolutions of its
board of directors in form and substance reasonably satisfactory to the
Agent with respect to the authorization of the Notes, this Agreement and
the other Security Instruments to which it is a party; (ii) the officers
of the Borrower (y) who are authorized to sign this Agreement, the
Notes, and the other Security Instruments to which it is a party, and
(z) who will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the purposes
of signing documents and giving notices and other communications in
connection with this Agreement and the transactions contemplated hereby,
(iii) specimen signatures of the officers so authorized, and (iv) the
articles or certificate of incorporation and the bylaws of the Borrower,
certified as being true and complete. The Agent and the Lenders may
conclusively rely on such certificate until the Agent receives notice in
writing from the Borrower to the contrary.
(b) Executed certificates of the Secretary or Assistant Secretary
of each Guarantor that is a party to any Loan Document setting forth, in
each case, (i) certified resolutions of its board of directors in form
and substance reasonably satisfactory to the Agent with respect to the
authorization of the Loan Documents to which such Guarantor is a party;
(ii) the officers of the Guarantor (y) who are authorized to sign the
Loan Documents to which such Guarantor is a party, and (z) who will,
until replaced by another officer or officers duly authorized for that
purpose, act as its representative for the purposes of signing documents
and giving notices and other communications in connection with the Loan
Documents and the transactions contemplated thereby, (iii) specimen
signatures of the officers so authorized, and (iv) the articles or
certificate of incorporation and the bylaws of each such Guarantor,
certified as being true and complete. The Agent and the Lenders may
conclusively rely on such certificates until the Agent receives notice
in writing from the relevant Guarantor to the contrary.
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CREDIT AGREEMENT
August 29, 1996
(c) Certificates of the appropriate state agencies with respect
to the valid existence and good standing of the Borrower and each
Guarantor.
(d) The Notes, duly completed and executed.
(e) The Security Instruments listed on EXHIBIT D hereto, duly
completed and executed in sufficient number of counterparts for
recording purposes, as applicable.
(f) An opinion of counsel to the Borrower in substantially the
form of EXHIBIT E hereto.
(g) Appropriate UCC search certificates reflecting no prior Liens
or security interests other than Liens permitted by SCHEDULE 6.02.
(h) A certificate of insurance coverage of the Borrower
evidencing that the Borrower is carrying insurance in accordance with
Section 4.19 and SCHEDULE 4.19 hereof.
(i) A compliance certificate in substantially the form of EXHIBIT
F, reflecting that no Default or Event of Default has occurred and is
continuing.
(j) Each of the Designated Contracts.
(k) Evidence reasonably satisfactory to the Agent that the
following mergers have been consummated:
(i) Each of AmHealth Kidney Center of the Valley, Ltd.,
Weslaco Kidney Center, Ltd., Starr Dialysis Center, Ltd., and
Mission Kidney Center, Ltd. with and into STAT Dialysis
Corporation; and
(ii) Each of AmHealth Medical Management, Ltd.,
Brownsville Hyperbaric Healthcare, Ltd., Southwestern Infusion
Healthcare, Ltd., and AmHealth Ambulatory Healthcare, Ltd. with
and into STAT Management Corporation.
(l) Such other documents as the Agent or special counsel to the
Agent may reasonably request.
Section 3.02 CONDITIONS PRECEDENT TO EACH LOAN. At the time of the
making by such Lender of each Loan, including the initial Loan (before as well
as after giving effect to such Loan and to the proposed use of the proceeds
thereof):
(a) there shall exist no Default or Event of Default;
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CREDIT AGREEMENT
August 29, 1996
(b) no condition causing a Material Adverse Effect shall have
occurred and be continuing;
(c) all representations and warranties contained herein shall be
true and correct in all material respects with the same effect as though
such representations and warranties
had been made on and as of the date of such Loan; and
(d) the Agent shall have received such other documents or legal
opinions as the Agent or any Lender or special counsel to the Agent may
reasonably request, all in form and
substance reasonably satisfactory to the Agent.
Each Borrowing Request and the acceptance by the Borrower of the proceeds
thereof or request for continuation or conversion of a Borrowing shall
constitute a representation and warranty by the Borrower, as of the date of the
Loans comprising such Borrowing, that the conditions specified in subsections
(a), (b), and (c) of this Section 3.02 have been satisfied.
Section 3.03 POSSESSION OF COLLATERAL SECURITY. The Property in which
the Agent shall at any time be entitled to have a Lien pursuant to this
Agreement or any other Security Instrument shall have been physically delivered
to the possession of the Agent or any bailee of the Agent to the extent that
such possession is necessary or appropriate for the purpose of perfecting the
Agent's Lien in such collateral security.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that (each
representation and warranty herein is given as of the date of this Agreement and
shall be deemed repeated and reaffirmed on the
dates provided in Section 3.02):
Section 4.01 CORPORATE EXISTENCE. The Borrower: (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdictions in which it is incorporated; (b) has all requisite corporate
power, and has all material governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being or
as proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify would have a Material
Adverse Effect.
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CREDIT AGREEMENT
August 29, 1996
Section 4.02 FINANCIAL CONDITION.
(a) The financial statements of the Borrower dated June 30, 1996
heretofore furnished to the Agent are complete and correct and fairly present
the financial condition of the Borrower on a consolidated and consolidating
basis and the results of operations as at said date or dates and for the period
or periods stated (subject only to normal year-end adjustments with respect to
such unaudited interim statements), all in accordance with GAAP.
(b) The Borrower did not have on the respective dates set forth above,
any material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the Financial
Statements. Since June 30, 1996, there has been no change or event having a
Material Adverse Effect.
Section 4.03 LIABILITIES; LITIGATION. Except for liabilities incurred in
the normal course of business, the Borrower has no material (individually or in
the aggregate) liabilities, direct or contingent, except as disclosed or
referred to in the Financial Statements. There is no material litigation, legal,
administrative, or arbitral proceeding, investigation or other action of any
nature (individually or in the aggregate) pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower except as disclosed in
SCHEDULE 4.03.
Section 4.04 NO BREACH. Neither the execution and delivery of this
Agreement, the Notes, or the other Security Instruments, nor compliance with the
terms and provisions thereof will conflict with or result in a breach of, or
require any consent under, the respective charter or by-laws of the Borrower, or
any applicable law or regulation, or any order, writ, injunction, or decree of
any court or Governmental Authority, or any agreement or instrument to which the
Borrower is a party or by which the Borrower is bound or to which the Borrower
is subject, or constitute a default under any such agreement or instrument, or
result in the creation or imposition of any Lien upon any of the revenues or
assets of the Borrower pursuant to the terms of any such agreement or
instrument.
Section 4.05 CORPORATE ACTION. The Borrower is duly authorized and
empowered to execute, deliver and perform the Security Instruments to which it
is a party, including this Agreement, and the Borrower is duly authorized and
empowered to create and issue the Notes; all corporate action on the Borrower's
part requisite for the creation and issuance of the Notes and the due execution,
delivery and performance of each Security Instrument to which it is a party has
been duly and effectively taken; and this Agreement does, and the Notes and
other Security Instruments to which the Borrower is a party upon their creation,
issuance, execution, and delivery will, constitute valid and binding obligations
of the Borrower enforceable in accordance with their respective terms (except as
limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws
of general application relating to or affecting creditors' rights and general
principles of equity (whether considered in a proceeding in equity or at law)).
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CREDIT AGREEMENT
August 29, 1996
Section 4.06 APPROVALS. The Borrower has obtained all authorizations,
approvals and consents of, and have made all filings and registrations with, any
Governmental Authority necessary for the execution, delivery or performance by
the Borrower of the Security Instruments to which it is a party, or for the
validity or enforceability thereof (except as to which such failure to obtain,
file, register, or perform would not have a material adverse effect on the
financial condition or business of the Borrower). The Borrower has not violated
any Governmental Requirement or failed to obtain any license, permit, franchise
or other governmental authorization necessary for the ownership of any of its
Properties or the conduct of its business (except as to which such violation or
failure to obtain would not have a material adverse effect on the financial
condition or business of the Borrower).
Section 4.07 USE OF LOANS.
(a) The proceeds of the Revolving Credit Loans shall be used by the
Borrower (i) for general corporate purposes, and (ii) to refinance certain
existing indebtedness in the aggregate
principal amount of $1,500,000.00.
(b) The proceeds of the Term Loans shall be used by the Borrower (i) to
finance seventy-five percent (75%) of the invoice price of equipment purchases
made after the Closing Date by Borrower or any Subsidiary, and (ii) to refinance
certain existing indebtedness in the aggregate
principal amount of $425,150.00.
(c) The Borrower is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying margin stock (within
the meaning of Regulations U or X of the Board of Governors of the Federal
Reserve System),and no part of the proceeds of any Loans hereunder will be used
to buy or carry any margin stock.
Section 4.08 ERISA. The Borrower and the ERISA Affiliates have fulfilled
their obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code, and have not incurred any
liability to the PBGC or any Plan or Multiemployer Plan.
Section 4.09 TAXES. The Borrower has filed all United States Federal
income tax returns and all other material tax returns which are required to be
filed by it and has paid all taxes due pursuant to such returns or pursuant to
any assessment received by it, except for such assessments which are being
contested in good faith by appropriate proceedings. The charges, accruals, and
reserves on the books of the Borrower in respect of taxes and other governmental
charges are, in the opinion of the Borrower, adequate. No tax lien has been
filed and, to the knowledge of the Borrower, no claim is being asserted with
respect to any such tax, fee or other charge.
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CREDIT AGREEMENT
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Section 4.10 TITLES, ETC. The Borrower has and upon the initial funding
hereunder will have good, marketable, and indefeasible title to its Properties,
free and clear of all liens and encumbrances except as disclosed in SCHEDULE
6.01.
Section 4.11 NO MATERIAL MISSTATEMENTS. No material information,
statement, exhibit, certificate, document, or report furnished to the Agent by
or on behalf of the Borrower in connection with the negotiation of this
Agreement contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statement contained therein not
materially misleading.
Section 4.12 INVESTMENT COMPANY ACT. The Borrower is not an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
Section 4.13 PUBLIC UTILITY HOLDING COMPANY ACT. The Borrower is not 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," or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 4.14 SUBSIDIARIES, AFFILIATED PROFESSIONAL ASSOCIATIONS, AND
PARTNERSHIPS. Except as set forth on SCHEDULE 4.14, the Borrower has no
Subsidiaries, is not affiliated with any Person doing business as a professional
association, and does not have any interest in any partnerships or other
Persons.
Section 4.15 LOCATION OF BUSINESS AND OFFICES. The Borrower's principal
place of business and chief executive offices are located at the address stated
on the signature page of this Agreement.
Section 4.16 ENVIRONMENTAL MATTERS. Except (i) as provided in SCHEDULE
4.16 or (ii) as would not have a Material Adverse Effect (or with respect to
(c), (d), and (e) below, where the failure to take such actions would not have a
Material Adverse Effect):
(a) No Property of the Borrower nor the operations conducted
thereon violate any Environmental Laws or any order or requirement of
any court or Governmental Authority to the extent pertaining to human
health or the environment, nor are there any conditions existing on or
resulting from operations conducted on or in connection with such
Property that may give rise on any on-site or off-site remedial
obligations under any Environmental Laws;
(b) Without limitation of clause (a) above, no Property of the
Borrower nor the operations currently conducted thereon or by any prior
owner or operator of such Property or operation, are subject to any
existing, pending, or (to the knowledge of the
Borrower)
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CREDIT AGREEMENT
August 29, 1996
threatened action, suit, investigation, inquiry, or proceeding by or
before any court or Governmental Authority with respect to Environmental
Laws or to any remedial obligations under any Environmental Laws;
(c) All notices, permits, licenses, or similar authorizations, if
any, required to be obtained or filed in connection with the operation
or use of any and all Property of the Borrower, including without
limitation, treatment, storage, disposal, or release of a petroleum
product, hazardous substance or solid waste into the environment, have
been duly obtained or filed, and the Borrower is in compliance with the
terms and conditions of all such notices, permits, licenses and similar
authorizations;
(d) All hazardous substances and solid wastes generated at any
and all Property of the Borrower has in the past been transported,
treated, and disposed of in accordance with all applicable Environmental
Laws and all such transport carriers and treatment and disposal
facilities have been and are operating in compliance with all applicable
Environmental Laws and, to the best of the Borrower's knowledge, are not
the subject of any existing, pending, or threatened action,
investigation, or inquiry by any Governmental Authority in connection
with any Environmental Laws;
(e) No petroleum product, hazardous substance, or solid waste has
been disposed of or otherwise released and there has been no threatened
disposal or release of any petroleum products, hazardous substances, or
solid wastes on, under or about any Property of the Borrower so as to
pose an imminent and substantial endangerment to public health or
welfare or the environment; and
(f) The Borrower has no contingent liability in connection with
any release or threatened release of any petroleum product, hazardous
substance, or solid waste into the
environment.
Section 4.17 DEFAULTS. The Borrower is not in default nor has any event
or circumstance occurred which, but for the expiration of any applicable grace
period or the giving of notice, or both, would constitute a default which in any
respect which would have a Material Adverse Effect under any Designated Contract
or any other material agreement or other instrument to which it is a party or by
which it is bound.
Section 4.18 COMPLIANCE WITH THE LAW. The Borrower has not violated any
Governmental Requirement or failed to obtain any license, permit, franchise, or
other governmental authorization necessary for the ownership of any of its
Properties or the conduct of its respective business, which violation or failure
would have (in the event such violation or failure were asserted by any Person
through appropriate action) a Material Adverse Effect.
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CREDIT AGREEMENT
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Section 4.19 INSURANCE. SCHEDULE 4.19 attached hereto contains an
accurate and complete description of all material policies of fire, general
liability, professional liability, workmen's compensation, automobile
comprehensive liability, and other forms of insurance owned or held by the
Borrower. All such policies are in full force and effect, all premiums with
respect thereto covering all periods up to and including the date of the closing
have been paid, and no notice of cancellation or termination has been received
with respect to any such policy. Such policies are sufficient for compliance
with all requirements of law and of all agreements to the Borrower is a party;
are valid, outstanding, and enforceable policies; provide adequate insurance
coverage in at least such amounts and against at least such risks (but including
in any event public liability) as are usually insured against in the same
general area by companies engaged in the same or a similar business for the
assets and operations of the Borrower; will remain in full force and effect
through the respective dates set forth in SCHEDULE 4.19 without the payment of
additional premiums; and will not in any way be affected by, or terminate or
lapse by reason of the transactions contemplated by this Agreement. SCHEDULE
4.19 identifies all material risks, if any, which the Borrower and its Board of
Directors or officers have designated as being self insured. The Borrower has
not been refused any insurance with respect to its assets or operations, nor has
its coverage been limited below usual and customary policy limits, by an
insurance carrier to which it has applied for any such insurance or with which
it has carried insurance during the last three (3) years.
Section 4.20 MANAGEMENT FEES. The fees and other compensation payable to
Borrower under that certain Management Services Agreement, dated February 1,
1996, between Borrower and STAT Physicians, P.A. and that certain Management
Services Agreement, dated September 1, 0000, xxxxxxx Xxxxxxxx xxx Xxxxx Xxxxx
Acute Trauma Physicians, P.A., as amended, represent the fair market value of
the services to be rendered by the Borrower thereunder.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower agrees that, so long as any of the Commitments are in
effect and until payment in full of all Indebtedness hereunder, all interest
thereon and all other amounts payable
hereunder:
Section 5.01 FINANCIAL STATEMENTS AND OTHER REPORTS. The Borrower shall
deliver, or shall cause to be delivered to the Agent:
(a) As soon as available and in any event within ninety (90) days
after the end of each fiscal year of the Borrower, the audited
consolidated statements of income, stockholders' equity, changes in
financial position, and cash flow of the Borrower for such fiscal year,
and the related consolidated balance sheets of the Borrower as at the
end of such fiscal year, and setting forth in each case in comparative
form the corresponding figures for
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the preceding fiscal year, and accompanied by the related opinion of
independent public accountants of recognized national standing
acceptable to the Lenders which opinion shall state that said financial
statements fairly present the consolidated financial condition and
results of operations of the Borrower as at the end of, and for, such
fiscal year and that such financial statements have been prepared in
accordance with GAAP except for such changes in such principles with
which the independent public accountants shall have concurred and such
opinion shall not contain a "going concern" or like qualification or
exception, and a certificate, to the extent obtainable, of such
accountants stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically stated, of
any Default.
(b) As soon as available and in any event within forty-five (45)
days after the end of each fiscal month of the Borrower, a consolidated
statement of income, stockholders' equity, changes in financial
position, and cash flow of the Borrower for such period and for the
period from the beginning of the respective fiscal year to the end of
such period, and the related consolidated balance sheets as at the end
of such period, and setting forth in each case in comparative form the
corresponding figures for the corresponding period in the preceding
fiscal year, accompanied by the certificate of an officer of the
Borrower, which certificate shall state that said financial statements
fairly present the consolidated and consolidating financial condition
and results of operations of the Borrower in accordance with GAAP, as at
the end of, and for, such period (subject to normal year-end audit
adjustments).
(c) As soon as available and in any event within forty-five (45)
days after the end of each fiscal month of the Borrower, (i) a Borrowing
Base Certificate in the form of EXHIBIT G, executed by a Responsible
Officer of the Borrower, with information required therein completed to
reflect the Revolving Credit Borrowing Base as of the end of such fiscal
month, (ii) accounts receivable reports, dated as at the end of such
fiscal month, for each of the Borrower and the Guarantors, including
detailed listing and aging information in a form reasonably satisfactory
to the Agent in its sole discretion, and (iii) copies of all Accounts
Receivable Aging by Payor reports (also known as IDS Report No. 595)
received by Borrower from Insurance Data Services, dated as at the end
of such fiscal month.
(d) Promptly after the Borrower knows that any Default, including
without limitation any default or event of default on any Debt in excess
of $50,000.00 or any Material Adverse Effect has occurred, a notice of
such Default, default, or Material Adverse Effect, describing the same
in reasonable detail and the action the Borrower proposes to take with
respect thereto.
(e) Promptly upon receipt thereof, a copy of each other report or
letter submitted to the Borrower by independent accountants in
connection with any annual, interim or
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CREDIT AGREEMENT
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special audit made by it of the books of the Borrower, and a copy of any
response by the Borrower or the Board of Directors of the Borrower to
such letter or report.
(f) From time to time such other information regarding the
business, affairs, or financial condition of the Borrower (including,
without limitation, any Plan or Multi employer Plan and any reports or
other information required to be filed under ERISA) as the Agent may
reasonably request.
The Borrower will furnish to the Agent, at the time they furnish each set of
financial statements pursuant to paragraph (a) or (b) above and at the time of
each Borrowing hereunder, a compliance certificate of a senior financial officer
of the Borrower in substantially the form of EXHIBIT F hereto and setting forth
in reasonable detail the computations necessary to determine whether the
Borrower is in compliance with Sections 6.11, 6.12, 6.13, and 6.14 as of the end
of the applicable Rolling Period.
Section 5.02 LITIGATION. The Borrower shall promptly give to the Agent
notice of: (a) all legal or arbitral proceedings, and of all proceedings before
any Governmental Authority affecting the Borrower and/or the Guarantors, except
proceedings which, if adversely determined, would not have a Material Adverse
Effect, and (b) of any litigation or proceeding affecting the Borrower, in which
(i) the amount involved exceeds $50,000.00 and is not covered by insurance, (ii)
the amount involved is in excess of $300,000.00, or (iii) in which injunctive or
similar relief is sought, PROVIDED, HOWEVER, that in the event the aggregate
amount of litigation or proceedings affecting the Borrower that are not covered
by insurance exceed $125,000.00 or the aggregate amount of litigation or
proceedings (whether or not covered by insurance) exceed $500,000.00, then, in
such event, the Borrower shall promptly provide notice of such event to the
Agent and provide reasonably detailed reports to the Agent of all such
litigation.
Section 5.03 MAINTENANCE OF EXISTENCE, ETC. The Borrower will, and will
cause each Guarantor to,: (i) do or cause to be done all things reasonably
necessary to preserve and maintain its existence and all of its material rights,
privileges and franchises; (ii) keep books of record and account in which full,
true, and correct entries will be made of all material dealings or transactions
in relation to its business and activities; (iii) comply with all Governmental
Requirements if failure to comply with such requirements would have a Material
Adverse Effect; (iv) pay and discharge all taxes, assessments, and governmental
charges or levies imposed on it or on its income or profits or on any of its
Property prior to the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is being contested in
good faith and by proper proceedings and against which adequate reserves are
being maintained; (v) upon forty-eight (48) hours' notice permit representatives
of the Lenders, during normal business hours, to examine, copy and make extracts
from its books and records, to inspect its Properties, and to discuss its
business and affairs with its officers, all to the extent reasonably requested
by the Lenders; and (vi) keep insured by financially sound and reputable
insurers all Property of a character usually insured by
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CREDIT AGREEMENT
August 29, 1996
corporations engaged in the same or similar business similarly situated against
loss or damage of the kinds and in the amounts customarily insured against by
such corporations and carry such other insurance as is usually carried by such
corporations including, without limitation, fire and extended coverage insurance
covering all assets, business interruption insurance, workers' compensation
insurance, and liability insurance, all in such amounts as are satisfactory to
the Lenders.
Section 5.04 ENVIRONMENTAL MATTERS.
(a) The Borrower will establish and implement such procedures as may be
necessary to continuously determine and assure that any failure of the following
does not have a Material Adverse Effect: (i) all Property of the Borrower or any
Guarantor, and the operations conducted thereon, are in compliance with and do
not violate any Environmental Laws in a quantity that either exceeds five (5)
gallons or causes a sheen on nearby surface water, (ii) no solid wastes are
disposed of or otherwise released on, under or about any Property owned by any
such party except in compliance with Environmental Laws, (iii) no hazardous
substance will be released on, under or about any such Property in a quantity
equal to or exceeding that quantity which requires reporting pursuant to Section
103 of CERCLA, and (iv) no petroleum products are released on, under or about
such Property in a quantity that either exceeds five (5) gallons or causes a
sheen on nearby surface water.
(b) The Borrower will promptly notify the Lenders in writing within
three (3) Business Days of (i) any threatened action, investigation, or inquiry
by any Governmental Authority in connection with any Environmental Laws,
excluding routine testing and corrective action, (ii) any threatened action or
claim by any Person in connection with any loss or injury allegedly resulting
from the disposal or release of any petroleum product, hazardous substance, or
hazardous or solid waste or from any violation or alleged violation of any
Environmental Laws, (iii) the discovery of any occurrence or condition on,
under, or about any of Property of the Borrower or any Guarantor (or properties
on, under or about such Properties) of which the Borrower or any Guarantor
becomes aware, which may cause any, or any portion of, such Properties to be in
violation or alleged violation of any Environmental Laws.
(c) The Borrower will promptly and diligently investigate and pursue
remediation of any environmental contamination existing as of the Closing Date
or which arises after such date to the extent such contamination requires
remediation under applicable Environmental Laws.
Section 5.05 FURTHER ASSURANCES. The Borrower will, and will cause each
Guarantor to, cure promptly any defects in the creation and issuance of the
Notes and the execution and delivery of the Security Instruments, including this
Agreement. The Borrower at its expense will promptly execute and deliver, or
cause to be executed and delivered, to the Agent upon request all such other and
further documents, agreements, and instruments (or cause any of the Guarantors
to take such action) in compliance with or accomplishment of the covenants and
agreements of the Borrower in the Security Instruments, including this
Agreement, or to further evidence and more fully describe
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CREDIT AGREEMENT
August 29, 1996
the collateral intended as security for the Notes, or to correct any omissions
in the Security Instruments, or more fully state the security obligations set
out herein or in any of the Security Instruments, or to perfect, protect, or
preserve any liens created pursuant to any of the Security Instruments, or to
make any recordings, to file any notices, or obtain any consents, all as may be
necessary or appropriate in connection therewith.
Section 5.06 PERFORMANCE OF OBLIGATIONS. The Borrower will pay the Notes
according to the reading, tenor, and effect thereof; and the Borrower will do
and perform every act and discharge all of the obligations provided to be
performed and discharged by the Borrower under the Security Instruments,
including this Agreement, at the time or times and in the manner specified, and
cause each of the Guarantors to take such action with respect to their
obligations to be performed and discharged under the Security Instruments to
which they respectively are parties.
Section 5.07 INSURANCE.
(a) The Borrower maintains or causes to be maintained with financially
sound and reputable insurers, insurance with respect to its Properties and
business and the Properties and business of the Guarantors against such
liabilities, casualties, risks, losses, damages, and contingencies of the kinds
customarily insured against by reputable Persons in the same or similar
business, such insurance to be of such types and in such amounts (with such
deductible amounts) as is customary for Persons engaged in the same or similar
businesses and similarly situated.
Upon
the request of the Agent, the Borrower will furnish or cause to be furnished to
the Agent from time to time a summary of the insurance coverage of the Borrower
and the Guarantors in form and substance satisfactory to the Agent in its sole
discretion and if requested will furnish the Agent copies of the applicable
policies. In the case of any fire, accident, or other casualty causing loss of
damage to any Properties of the Borrower, the proceeds shall be used, at
Borrower's option, (i) to repair or replace the damaged Property, or (ii) to
prepay the Indebtedness.
(b) Notwithstanding anything to the contrary herein set forth, Borrower
shall at all times maintain professional liability coverage for itself and the
Guarantors for the emergency room operations in amounts not lower than
$1,000,000.00 per incident and $3,000,000.00 in the aggregate
per physician per hospital.
Section 5.08 ACCOUNTS AND RECORDS. The Borrower will keep, and will
cause each Guarantor to keep, books of record and account in which full, true,
and correct entries will be made of all material dealings or transactions in
relation to their respective business and activities, in accordance with
generally accepted accounting principles, consistently applied except only for
changes in accounting principles or practices with which the Borrower's
independent public accountants concur.
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CREDIT AGREEMENT
August 29, 1996
Section 5.09 RIGHT OF INSPECTION. Upon reasonable prior written notice,
the Borrower will permit, and will cause each Guarantor to permit, any officer,
employee, or agent of the Agent or any of the Lenders to visit and inspect any
of the Properties of the Borrower or any Guarantor during normal business hours,
examine the Borrower's or any Guarantor's books of record and accounts, take
copies and extracts therefrom, and discuss the affairs, finances, and accounts
of the Borrower or any Guarantor with the Borrower's or Guarantor's officers,
accountants, and auditors, all at such reasonable times and as often as the
Agent or any of the Lenders may reasonably desire.
Section 5.10 TAXES AND OTHER LIENS. The Borrower will pay and discharge
promptly all taxes, assessments, and governmental charges or levies imposed upon
the Borrower or any Guarantor or upon the income or any Property of the Borrower
or any Guarantor as well as all claims of any kind (including claims for labor,
materials, supplies and rent) which, if unpaid, might become a Lien upon any or
all of the Property of the Borrower or any Guarantor; PROVIDED, HOWEVER, that
neither the Borrower nor any Guarantor shall be required to pay any such tax,
assessment, charge, levy, or claim if the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate proceedings
diligently conducted by or on behalf of the Borrower or its Guarantor, and if
the Borrower or its Guarantor shall have set up reserves therefor adequate under
generally accepted accounting principles.
Section 5.11 NOTICE OF CERTAIN EVENTS. Promptly after a Responsible
Officer obtains knowledge of the receipt of occurrence of any of the following,
a certificate of a Responsible Officer of the Borrower specifying (i) any
official notice of any material violation, possible violation, non-compliance,
or claim made by any Governmental Authority pertaining to all or part of the
Properties of the Borrower or any of the Guarantors; (ii) any event which
constitutes a Default, together with a detailed statement by a Responsible
Officer of the Borrower of the steps being taken to cure the effect of such
Default; (iii) the receipt of any notice from, or the taking of any other action
by, the holder of any promissory note, debenture, or other evidence of
indebtedness of the Borrower or any Guarantor or of any security (as defined in
the Securities Act of 1933, as amended) of the Borrower or any Guarantor with
respect to a claimed default, together with a detailed statement by a
Responsible Officer of the Borrower specifying the notice given or other action
taken by such holder and the nature of the claimed default and what action the
Borrower or its Guarantor is taking or proposes to take with respect thereto;
(iv) any legal, judicial, or regulatory proceedings affecting the Borrower or
any Guarantor or any of the Properties of the Borrower or any Guarantor in which
the amount involved is material and is not covered by insurance or which, if
adversely determined, would have a Material Adverse Effect; (v) any dispute
between the Borrower or any Guarantor and any governmental or regulatory body or
any other Person which, if adversely determined, would have a Material Adverse
Effect; (vi) any material default or noncompliance of any party to any material
contract with any of the terms and conditions of such contract, or any notice of
termination or other material proceedings or actions which might adversely
affect any material contract; or (vii) any event or condition which may be
reasonably expected to have a Material Adverse Effect.
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CREDIT AGREEMENT
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Section 5.12 ERISA INFORMATION AND COMPLIANCE. The Borrower will
promptly furnish, and will cause the Guarantors and any ERISA Affiliate to
promptly furnish, to the Agent (i) immediately upon becoming aware of the
occurrence of any ERISA Event or of any "PROHIBITED TRANSACTION," as described
in Section 4975 of the Code, in connection with any Plan or any trust created
thereunder, a written notice signed by the President or the principal financial
officer of the Borrower, the Guarantor, or the ERISA Affiliate, as the case may
be, specifying the nature thereof, what action the Borrower, the Guarantor, or
the ERISA Affiliate is taking or proposes to take with respect thereto, and,
when known, any action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, and (ii) immediately upon
receipt thereof, copies of any notice of the PBGC's intention to terminate or to
have a trustee appointed to administer any Plan. With respect to each Plan
(other than a Multiemployer Plan), the Borrower will, and will cause each
Guarantor and ERISA Affiliate to, (X) satisfy in full and in a timely manner,
without incurring any late payment or underpayment charge or penalty and without
giving rise to any Lien, all of the contribution and funding requirements of
Section 412 of the Code (determined without regard to Subsections (d), (e), (f)
and (k) thereof) and of Section 302 of ERISA (determined without regard to
Sections 303, 304 and 306 of ERISA), and (Y) pay, or cause to be paid, to the
PBGC in a timely manner, without incurring any late payment or underpayment
charge or penalty, all premiums required pursuant to Sections 4006 and 4007 of
ERISA.
Section 5.13 PERFORMANCE OF DESIGNATED CONTRACTS. The Borrower will, and
will cause each Guarantor to, perform and observe in all material respects each
of the provisions of each Designated Contract to which it is a party on its part
to be performed or observed prior to the termination thereof, unless and to the
extent only that (i) the same shall be contested in good faith by appropriate
action by or on behalf of the Borrower or the applicable Guarantor or (ii) the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
Section 5.14 AUDIT, MANAGEMENT AND OTHER REPORTS. Immediately upon the
request of the Agent, a copy of each written report submitted to Borrower or any
Guarantor by independent accountants in any annual, quarterly, or special audit,
review, or examination.
Section 5.15 SEC AND OTHER REPORTS. Promptly upon its becoming
available, one copy of each financial statement, report, notice or proxy
statement sent by Borrower or any Guarantor to its stockholders or debtholders
generally and of each regular or periodic report, registration statement or
prospectus filed by Borrower or any Guarantor with any securities exchange or
the Securities and Exchange Commission or any successor agency or any similar
Governmental Authority of a foreign country, and of any order issued by any
Governmental Authority in an proceeding in which Borrower or any Guarantor is a
party.
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CREDIT AGREEMENT
August 29, 1996
ARTICLE VI
NEGATIVE COVENANTS
The Borrower agrees that, so long as any of the Commitments are in
effect and until payment in full of the Indebtedness hereunder, all interest
thereon and all other amounts payable
hereunder:
Section 6.01 DEBT. Neither the Borrower nor any Guarantor shall incur,
create, assume, or suffer to exist any Debt, except:
(a) the Notes or other Indebtedness, and any guarantee thereof or
suretyship obligation therefore;
(b) Debt of the Borrower and the Guarantors existing on the date
of this Agreement which is reflected in the Financial Statements, and
more fully described in SCHEDULE 6.01(B) with regard to the Borrower and
any renewals and extensions (but not increases) thereof;
(c) accounts payable (for the deferred purchase price of Property
or services) from time to time incurred in the ordinary course of
business and which, if greater than sixty (60) days past the invoice or
billing date, are being contested in good faith by the Borrower as the
case may be; and
(d) additional Debt of the Borrower and the Subsidiaries in an
amount not to exceed $500,000.00 in the aggregate at any time.
Section 6.02 LIENS. Neither the Borrower nor any Guarantor shall create,
incur, assume, or permit to exist any Lien on any of its Properties (now owned
or hereafter acquired), except:
(a) Liens securing the payment of any Indebtedness;
(b) Liens existing on Property owned by the Borrower or any
Guarantor on the date of this Agreement which have been disclosed to the
Agent in the Financial Statements or in SCHEDULE 6.01(B) and any
renewals and extensions thereof; and
(c) Liens securing Debt permitted by Section 6.01(d); PROVIDED,
HOWEVER, in no event shall such Liens be permitted on Property on which
the Lenders have a Lien or on which any Security Instrument purports to
create a Lien in favor of the Lenders.
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CREDIT AGREEMENT
August 29, 1996
Section 6.03 INVESTMENTS, LOANS AND ADVANCES. Neither the Borrower nor
any Guarantor will make or permit to remain outstanding any loans or advances to
or investments in any Person, except that the foregoing restriction shall not
apply to:
(a) investments, loans, or advances reflected in the Financial
Statements;
(b) accounts receivable arising in the ordinary course of
business;
(c) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof, in each case maturing within one year from the date of creation
thereof;
(d) commercial paper maturing within one year from the date of
creation thereof rated in the highest grade by Standard & Poors Ratings
Group or Xxxxx'x Investors Service, Inc.;
(e) deposits maturing within one year from the date of creation
thereof with, in cluding certificates of deposit issued by, the Lenders
or any other bank or trust company which is organized under the laws of
the United States or any state thereof, has capital, surplus and
undivided profits aggregating at least $35,000,000.00 (as of the date of
such Lenders or trust company's most recent financial reports) and has a
short term deposit rating of no lower than A2 or P2, as such rating is
set forth from time to time, by Standard & Poors Ratings Group or
Xxxxx'x Investors Service, Inc., respectively;
(f) existing loans to Xxxxxxx X. Xxxx and Xxxxxx X. Xxxxxxx
described in SCHEDULE 5.03(F); and
(g) Working Capital Management Accounts, existing on the date
hereof, with Xxxxxxx Xxxxx.
Section 6.04 DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS. The Borrower will
not declare or pay any dividend, purchase, redeem or otherwise acquire for value
any of its stock now or hereafter outstanding, return any capital to its
stockholders, or make any distribution of its assets to its stockholders as
such, or permit any of the Guarantors to purchase or otherwise acquire for value
any stock of the Borrower; PROVIDED, HOWEVER, Borrower shall be permitted to
redeem the approximately 599,726 Class A Warrants currently outstanding at the
stated redemption rate of $0.05 per warrant.
Section 6.05 SALES AND LEASEBACKS. Neither the Borrower nor any
Guarantor will enter into any arrangements, directly or indirectly, with any
Person, whereby the Borrower or any Guarantor shall sell or transfer any
Property, whether now owned or hereafter acquired, and whereby the
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CREDIT AGREEMENT
August 29, 1996
Borrower or any Guarantor shall then or thereafter rent or lease as lessee such
Property or any part thereof or other Property which the Borrower or any
Guarantor intends to use for substantially the same purpose or purposes as the
Property sold or transferred.
Section 6.06 NATURE OF BUSINESS. Neither the Borrower nor any Guarantor
will allow any material change to be made in the character of its business as
carried on at the Closing Date.
Section 6.07 SUBSIDIARIES AND AFFILIATES. The Borrower shall not,
without the prior written consent of the Lenders, (i) create or acquire any
additional Subsidiaries or (ii) become affiliated with any additional Persons
doing business as professional associations that provide medical services. If
the Lenders grant such consent, the Borrower will take, or cause such Subsidiary
or Affiliate to take, all of the actions specified below:
(a) The Borrower will cause any such Subsidiary or Affiliate to
execute a guaranty agreement in form and substance substantially similar
to the guaranty agreement executed by the Guarantors guaranteeing the
Indebtedness and a security agreement in form and substance
substantially similar to the security agreements executed by each of the
Guarantors granting the Agent a security interest to secure its guaranty
obligations; and
(b) In the case of a new Subsidiary, the Borrower will pledge one
hundred percent (100%) of the voting stock of such Subsidiary owned,
directly or indirectly, by the Borrower to secure the Indebtedness.
Section 6.08 MERGERS, DISPOSITIONS, ETC. The Borrower will not, without
the prior written consent of the Lenders, merge into, acquire or consolidate
with any other Person (whether in one transaction or in a series of
transactions) where (i) the net book value of the Person to be acquired in such
merger, acquisition, or consolidation is $1,000,000.00 or greater, or (ii) the
liabilities of the Person. The Borrower will not sell, lease, or otherwise
dispose of (whether in one transaction or in a series of transactions) its
Property or assets except sales of assets in the ordinary course of business.
Section 6.09 ERISA COMPLIANCE. The Borrower and the Guarantors will not
at any time permit any Plan maintained by each of them, respectively, to:
(a) engage in any "prohibited transaction" as such term is
defined in Section 4975 of the Code;
(b) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA; or
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CREDIT AGREEMENT
August 29, 1996
(c) terminate any such Plan in a manner which could result in the
imposition of a Lien on the Property of the Borrower or the Guarantors
pursuant to Section 4068 of ERISA.
Section 6.10 SALE OR DISCOUNT OF RECEIVABLES. Neither the Borrower nor
any Guarantor will discount or sell (with or without recourse) any of its notes
receivable or accounts receivable.
Section 6.11 TANGIBLE NET WORTH. On or after the Closing Date, the
Borrower will not permit its consolidated Tangible Net Worth, determined as of
each Quarterly Date for the immediately preceding Rolling Period, to be less
than $3,500,000.00.
Section 6.12 CURRENT RATIO. On or after the Closing Date, the Borrower
will not permit its ratio of (i) consolidated current assets (determined in
accordance with GAAP) to (ii) consolidated current liabilities (determined in
accordance with GAAP), determined as of each Quarterly Date for the immediately
preceding Rolling Period, to be less than 1.50 to 1.00 at any time.
Section 6.13 FUNDED INDEBTEDNESS COVERAGE RATIO. On or after the Closing
Date, the Borrower will not permit its ratio of (i) Funded Indebtedness to (ii)
Consolidated Operating Cash Flow, determined as of each Quarterly Date for the
immediately preceding Rolling Period, to be
greater than 2.50 to 1.00.
Section 6.14 FIXED CHARGE COVERAGE RATIO. On or after the Closing Date,
the Borrower will not permit its ratio of (i) the sum of Consolidated Operating
Cash Flow PLUS operating lease payments made by the Borrower and the Guarantor
during such period to (ii) Fixed Charges, determined as of each Quarterly Date
for the immediately preceding Rolling Period, to be less than 1.25 to 1.00.
Section 6.15 ENVIRONMENTAL MATTERS. The Borrower will not permit any of
its Property to be in violation of, or do anything or permit anything to be done
which will subject any such Property to any fines, penalties, assessments,
citations, orders, or remedial obligations in excess of (i) $25,000.00
individually, or (ii) $50,000.00 in the aggregate, during any twelve (12) month
period, under any Environmental Laws, assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions, and circumstances, if
any, pertaining to such Property.
Section 6.16 TRANSACTIONS WITH AFFILIATES. The Borrower will not enter
into any transaction, including, without limitation, any purchase, sale, lease,
or exchange of Property or the rendering of any service, with any Affiliate if
such transactions are otherwise restricted under this Agreement, are not in the
ordinary course of its business, or are not upon fair and reasonable terms no
less favorable to it than it would obtain in a comparable arm's length
transaction with a Person not an Affiliate.
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CREDIT AGREEMENT
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Section 6.17 NEGATIVE PLEDGE AGREEMENTS. Neither the Borrower nor any
Guarantor will create, incur, assume or suffer to exist any contract, agreement,
or understanding (other than this Agreement and the Security Instruments) which
in any way prohibits or restricts the granting, conveying, creation, or
imposition of any Lien on any of its Property or which requires the consent of
or notice to other Persons in connection therewith.
Section 6.18 COMPENSATION. The Borrower and the Guarantors will not pay
compensation to their officers and directors in any fiscal year of the Borrower
in the form of any kind of incentive bonus or other incentive compensation if
either before or after giving effect to such payment, there exists or would
exist a Default or Event of Default.
Section 6.19 PROCEEDS OF NOTES. The Borrower will not permit the
proceeds of the Notes to be used for any purpose other than those permitted by
Section 4.07.
Section 6.20 PRESERVATION OF DESIGNATED CONTRACTS. The Borrower will
not, and will not permit any Guarantor to, agree to any change, modification, or
amendment to or waiver of any of the terms or provisions of any Designated
Contract. The Borrower will not, and will not permit any Guarantor to, take any
action or permit any action to be taken by others which will release any Person
from its obligations or liabilities under any Designated Contract.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 EVENTS OF DEFAULT. If one or more of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) The Borrower shall default in the payment when due of any
principal, or the Borrower shall default in the payment when due of any
interest on any Loan or fees or other amount payable by it hereunder and
such default shall continue unremedied for a period of five (5) days;
(b) The Borrower or any of the Guarantors shall default in the
payment when due of any principal of or interest on any of its other
Debt in excess of $50,000.00, individually or in the aggregate, or any
event specified in any note, agreement, indenture, or other document
evidencing or relating to any such Debt shall occur if the effect of
such event is to cause, or (with the giving of any notice or the
expiration of any applicable grace period or both) to permit the holder
or holders of such Debt (or a trustee or agent on behalf of such holder
or holders) to cause, such Debt to become due prior to its stated
maturity;
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CREDIT AGREEMENT
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(c) Any representation, warranty, or certification made or deemed
made herein or in any other Security Instrument by the Borrower or any
Guarantor or in any certificate furnished to the Lenders pursuant to the
provisions hereof or any other Security Instrument, shall prove to have
been false or misleading as of the time made or furnished in any
material respect;
(d) The Borrower shall default in the performance of any of its
obligations (other than the payment of money which shall be governed by
Section 7.01(a)) under this Agreement or under any Security Instrument
and such default shall continue unremedied for a period of fifteen (15)
days after notice thereof to the Borrower by the Lenders;
(e) The Borrower shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due;
(f) The Borrower shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of all or a substantial part of its
Property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy Code (as
now or hereafter in effect), (iv) file a petition seeking to take
advantage of any other law relating to Bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of debts, (v)
fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under
the Bankruptcy Code, or (vi) take any corporate action for the purpose
of effecting any of the foregoing;
(g) A proceeding or case shall be commenced, without the
application or consent of the Borrower, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution,
or winding-up, or the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator, or the like
of any of them for all or any substantial part of its assets, or (iii)
similar relief in respect of the Borrower under any law relating to
Bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment, or decree approving or ordering any
of the foregoing shall be entered and continue unstayed and in effect,
for a period of thirty (30) days; or (iv) any order for relief against
the Borrower shall be entered in an involuntary case under the
Bankruptcy Code;
(h) A final judgment or judgments for the payment of money in
excess of $50,000.00 individually or in the aggregate shall be rendered
by a court or courts against the Borrower or any Guarantor and the same
shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within
thirty (30) days from the date of entry thereof and the Borrower, as the
case may be, shall not, within said period of thirty (30) days, or such
longer period during which execution of the
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CREDIT AGREEMENT
August 29, 1996
same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal;
(i) An event or condition specified in Section 6.09 shall occur
or exist with respect to any Plan or Multiemployer Plan and, as a result
of such event or condition, together with all other such events or
conditions, the Borrower, any Guarantor, or any ERISA Affiliate shall
incur, or in the opinion of the Lenders shall be reasonably likely to
incur, a liability to a Plan, a Multiemployer Plan, or PBGC (or any
combination of the foregoing) which is, in the determination of the
Lenders, material in relation to the financial position of the Borrower;
or
(k) A Change of Control has occurred; or
(l) The occurrence of any event having a Material Adverse Effect.
THEREUPON: (i) in the case of an Event of Default other than one referred to in
clause (e), (f), or (g), the Lenders may by notice to the Borrower, cancel the
Commitments and/or declare the principal amount then outstanding of and the
accrued interest on the Loans and all other amounts payable by the Borrower
hereunder and under the Notes to be forthwith due and payable, whereupon such
amounts shall be immediately due and payable without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration, or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower; and (ii) in the case of the occurrence of an Event of Default referred
to in clause (e), (f), or (g), the Commitments shall be automatically canceled
and the principal amount then outstanding of, and the accrued interest on, the
Indebtedness shall become automatically immediately due and payable without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other formalities of any kind, all of which are hereby expressly
waived by the Borrower.
Section 7.02 APPLICATION OF PROCEEDS. All proceeds received after the
Maturity Dates of the Notes, whether by acceleration or otherwise shall be
applied first to reimbursement of expenses and indemnities provided for in this
Agreement and the Security Instruments; second to accrued interest on the Notes;
third to fees payable to the Lenders under this Agreement; fourth PRO RATA to
principal outstanding on the Notes and other Indebtedness; and any excess shall
be paid to the Borrower or as otherwise required by any Governmental
Requirement.
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CREDIT AGREEMENT
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ARTICLE VIII
THE AGENT
Section 8.01 APPOINTMENT AND POWERS. Southwest Bank of Texas, N.A., is
hereby appointed Agent hereunder and under the Notes and the other Security
Instruments, and each of the Lenders irrevocably authorizes the Agent to act as
the agent of such Lender hereunder and under the Notes and the other Security
Instruments. The Agent agrees to act as such upon the express conditions
contained in this Article VIII.
Section 8.02 POWERS. The Agent shall have and may exercise such powers
hereunder and under the Notes and the other Security Instruments as are
specifically delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. The Agent shall have no implied
duties to the Lenders or any obligation to the Lenders to take any action
hereunder or thereunder except any action specifically provided by this
Agreement or the other Security Instruments to be taken by the Agent.
Section 8.03 GENERAL IMMUNITY. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Lenders or any
Lender for any action taken or omitted to be taken by it or them hereunder or
under the Notes or the Security Instruments, including this Agreement, or in
connection herewith or therewith except for its or their own gross negligence or
wilful misconduct.
Section 8.04 NATURE OF DUTIES OF AGENT The Agent shall be responsible to
the Lenders for any recitals, reports, statements, warranties, or
representations herein or in the other Security Instruments, or for any loans
hereunder or be bound to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement or the other Security
Instruments. The Agent shall not be responsible for determining the Highest
Lawful Rate, if any, such determination being the sole responsibility of each
Lender.
Section 8.05 RIGHT TO INDEMNITY. The Agent shall be fully justified in
failing or refusing to take any action hereunder or under the Notes or other
Security Instruments, as Agent, unless it shall first be indemnified to its
satisfaction by the Lenders PRO RATA against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action.
Section 8.06 ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder or
under the Notes or other Security Instruments in accordance with written
instructions signed by all Lenders, and such instructions and any action taken
or failure to act pursuant thereto shall be binding on all the Lenders and on
all holders of the Notes. The Agent shall not be required to take any action
pursuant to or in connection with Section 9.11 with respect to the Highest
Lawful Rate, if any, applicable to any Lender except
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in accordance with the written instructions of such Lender; and the Agent shall
be fully protected by such Lender in acting in accordance with such
instructions.
Section 8.07 LIMITATION ON AGENT'S DUTIES. Notwithstanding any other
provision of this Article VIII or any indemnity or instructions provided by any
or all of the Lenders, the Agent shall not be required to take any action which
exposes the Agent to personal liability or which is contrary to this Agreement
or applicable law.
Section 8.08 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any
of its duties as Agent hereunder or under the Notes or other Security
Instruments by or through employees, agents, and attorneys-in-fact and shall not
be answerable to the Lenders, except as to money or securities received by it or
its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning all matters pertaining to the agency
hereby created and its duties hereunder or under the Notes or other Security
Instruments.
Section 8.09 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled
to rely upon any Note, notice, consent, certificate, affidavit, letter, telex,
telegram, telecopy, statement, paper, or document believed by it to be genuine
and correct and to have been signed or sent by the proper Person or Persons,
and, in respect to legal matters, upon the opinion of counsel selected by the
Agent.
Section 8.10 MAY TREAT LENDER AS OWNER. The Agent may deem and treat
each Lender as the owner of such Lender's Notes for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have been
filed with the Agent. Any request, authority, or consent of any Person who at
the time of making such request or giving such authority or consent is the owner
of the Notes shall be conclusive and binding on any subsequent owner,
transferee, or assignee of such Notes.
Section 8.11 AGENT'S REIMBURSEMENT. Each Lender agrees to reimburse the
Agent in the amount of such Lender's PRO RATA share of the Commitments for any
expenses not reimbursed by or for the account of the Borrower (i) for which the
Agent is entitled to reimbursement by the Borrower under this Agreement, the
Notes or other Security Instruments and (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration, and enforcement of this Agreement, the
Notes, and the other Security Instruments.
Section 8.12 RIGHTS AS A LENDER. With respect to its Commitment, loans
made by it and its proportionate interest in the Notes, the Agent shall have the
same rights and powers hereunder as any Lender and may exercise the same as
though it were not the Agent, and the term "Lender" or "LENDERS" shall, unless
the context otherwise indicates, include the Agent in its individual capacity.
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CREDIT AGREEMENT
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The Agent may accept deposits from, lend money to, and generally engage in any
kind of banking or trust business with the Borrower as if it were not the Agent.
Section 8.13 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the Financial Statements referred to in Section 5.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, the Notes, or the other Security
Instruments.
ARTICLE IX
MISCELLANEOUS
Section 9.01 WAIVER. No failure on the part of the Lenders to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power, or privilege under this Agreement or the Notes or any other Security
Instrument shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under this Agreement, or the Notes,
or any other Security Instrument preclude any other or further exercise thereof
or the exercise of any other right, power, or privilege. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.
Section 9.02 NOTICES. All notices and other communications provided for
herein and in the other Security Instruments (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the other
Security Instruments) shall be given or made by telecopy or in writing and
telecopied, mailed, or delivered to the intended recipient at the address
specified below its name on the signature pages hereof or in the other Security
Instruments; or, as to any party, at such other address as shall be designated
by such party in a notice to each other party. Except as otherwise provided in
this Agreement or in the other Security Instruments, all such communications
shall be deemed to have been duly given when transmitted by telecopier or
personally delivered or, in the case of a mailed notice, upon the earlier of
receipt or five (5) days after deposit in the U.S. mail, postage prepaid.
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CREDIT AGREEMENT
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Section 9.03 PAYMENT OF EXPENSES, INDEMNITIES, ETC. The Borrower agrees
to:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable expenses of the Lenders in the
origination of the Loans (both before and after the execution hereof
including the advice of counsel), and in connection with the
negotiation, syndication, investigation, preparation, execution and
delivery of, recording or filing of, preservation of rights under,
enforcement of, and refinancing, renegotiation, or restructuring of,
this Agreement, the Notes, and the other Security Instruments and any
amendment, waiver, or consent relating thereto (including, without
limitation, travel, photocopy, mailing, courier, telephone, and other
similar expenses of the Lenders, the cost of environmental audits, site
assessments, and environmental consultants retained by the Lenders and
the reasonable fees and disbursements of counsel for the Lenders); and
promptly reimburse the Lenders for all amounts expended, advanced, or
incurred by the Lenders to satisfy any obligation of the Borrower under
this Agreement, the Notes, or any Security Instrument; and to the
fullest extent permitted by applicable law, the Borrower agrees to pay
any present or future stamp or documentary taxes or any other excise or
property taxes, charges, or similar levies that arise from any payment
made hereunder or from the execution, delivery, or registration of, or
otherwise with respect to, this Agreement, the Notes, or any other
Security Instrument;
(b) INDEMNIFY THE LENDERS AND ITS AFFILIATES AND EACH OF THEIR OF
FICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS,
ACCOUNTANTS, AND EXPERTS ("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM
HARMLESS AGAINST AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM
FOR THE INDEMNITY MATTERS WHICH MAY BE INCURRED BY OR ASSERTED AGAINST
OR INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY
THERETO) AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY
ACTUAL OR PROPOSED USE BY THE BORROWER OF THE PROCEEDS OF ANY OF THE
LOANS, (II) THE EXECUTION, DELIVERY, AND PERFORMANCE OF THIS AGREEMENT,
THE NOTES, AND THE OTHER SECURITY INSTRUMENTS, (III) THE OPERATIONS OF
THE BUSINESS OF THE BORROWER, (IV) THE FAILURE OF THE BORROWER TO COMPLY
WITH THE TERMS OF ANY SECURITY INSTRUMENT, INCLUDING THIS AGREEMENT, OR
WITH ANY GOVERNMENTAL REQUIREMENT, (V) ANY INACCURACY OF ANY
REPRESENTATION OR ANY BREACH OF ANY WARRANTY OF THE BORROWER SET FORTH
IN THIS AGREEMENT OR THE OTHER SECURITY INSTRUMENTS, OR (VI) ANY OTHER
ASPECT OF THIS AGREEMENT, THE NOTES, AND THE SECURITY INSTRUMENTS,
INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF
COUNSEL AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT,
PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION, OR INQUIRIES), OR
CLAIM AND INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON OF THE
ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY, BUT EXCLUDING ALL
INDEMNITY MATTERS
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CREDIT AGREEMENT
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ARISING SOLELY BY REASON OF CLAIMS BETWEEN THE LENDERS AND A SHAREHOLDER
AGAINST THE LENDERS OR BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT ON THE PART OF THE INDEMNIFIED PARTY; AND
(c) INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED
PARTIES FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY
ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES, AND LIABILITIES
TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL
LAW APPLICABLE TO THE BORROWER OR ANY OF ITS PROPERTIES, INCLUDING
WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON
ANY OF ITS PROPERTIES, (II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE
BY THE BORROWER WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER,
(III) DUE TO PAST OWNERSHIP BY THE BORROWER OF ANY OF ITS PROPERTIES OR
PAST ACTIVITY ON ANY OF ITS PROPERTIES OR PAST ACTIVITY ON ANY OF ITS
PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD
RESULT IN PRESENT LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY THE BORROWER, OR (V) ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THIS
AGREEMENT, THE NOTES, OR ANY OTHER SECURITY INSTRUMENT, PROVIDED,
HOWEVER, NO INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 9.03(C) IN
RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE ARISING FROM THE ACTS OR
OMISSIONS OF THE LENDERS DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS
SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED POSSESSION OF SUCH PROPERTY
(WHETHER BY FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS
MORTGAGEE-IN-POSSESSION OR OTHERWISE).
(d) No Indemnified Party may settle any claim to be indemnified
without the consent of the indemnitor, such consent not to be
unreasonably withheld; provided, that the indemnitor may not reasonably
withhold consent to any settlement that an Indemnified Party proposes,
if the indemnitor does not have the financial ability to pay all its
obligations outstanding and asserted against the indemnitor at that
time, including the reasonably estimated maximum potential liability of
the Indemnified Party as determined by counsel of such indemnitor and as
agreed to by counsel to the Indemnified Party to be indemnified pursuant
to this Section 9.03.
(e) In the case of any indemnification hereunder, the Lenders
shall give notice to the Borrower of any such claim or demand being made
against the Indemnified Party and the Borrower shall have the
non-exclusive right to join in the defense against any such claim or
demand provided that if the Borrower provides a defense, the Indemnified
Party shall bear its own cost of defense unless there is a conflict
between the Borrower and such Indemnified Party.
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CREDIT AGREEMENT
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(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED
PARTIES NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND
OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN
AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES
OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY
IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. TO
THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND TO HAVE COMMITTED AN ACT
OF GROSS NEGLIGENCE OR WILFUL MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF
INDEMNIFICATION SHALL CONTINUE BUT SHALL ONLY EXTEND TO THE PORTION OF
THE CLAIM THAT IS DEEMED TO HAVE OCCURRED BY REASON OF EVENTS OTHER THAN
THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE INDEMNIFIED PARTY.
(g) The Borrower's obligations under this Section 9.03 shall
survive any termination of this Agreement and the payment of the Notes
and shall continue thereafter in full force and effect.
(h) The Borrower shall pay any amounts due under this Section
9.03 within thirty (30) days of the receipt by the Borrower of notice of
the amount due.
Section 9.04 AMENDMENTS, ETC. No provision of this Agreement or any
other Security Instruments may be amended, modified, or waived without each
Lender's express written consent.
Section 9.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned, either in
whole or in part, by the Borrower without the express written consent of the
Lenders. In the event that any Lender sells participations in the Notes or other
Indebtedness of the Borrower or to be incurred pursuant to this Agreement, to
other lenders, each of such other lenders shall have the rights of set-off
against such Indebtedness and similar rights or Liens to the same extent as may
be available to the Agent or the Lenders.
Section 9.06 INVALIDITY. In the event that any one or more of the
provisions contained in the Notes, this Agreement or in any other Security
Instrument shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of the Notes, this Agreement or any other Security
Instrument.
Section 9.07 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
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CREDIT AGREEMENT
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Section 9.08 CAPTIONS. Captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.
Section 9.09 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT, THE NOTES, AND
THE OTHER SECURITY INSTRUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
Section 9.10 GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of Texas;
except that Tex. Rev. Civ. Stat. Xxx. Art. 5069, ch. 15 (which regulates certain
revolving credit loan accounts and revolving tri-party accounts) shall not apply
to this Agreement or the Notes.
Section 9.11 INTEREST. It is the intention of the parties hereto that
the Lenders shall conform strictly to usury laws applicable to it. Accordingly,
if the transactions contemplated hereby would be usurious as to the Lenders
under laws applicable to it (including the laws of the United States of America
and the State of Texas or any other jurisdiction whose laws may be mandatorily
applicable to the Lenders notwithstanding the other provisions of this
Agreement), then, in that event, notwithstanding anything to the contrary in the
Notes, this Agreement, or in any other Security Instrument or agreement entered
into in connection with or as security for the Notes, it is agreed as follows:
(i) the aggregate of all consideration which constitutes interest under law
applicable to the Lenders that is contracted for, taken, reserved, charged, or
received by the Lenders under the Notes, this Agreement, or under any of the
other Security Instruments or agreements or otherwise in connection with the
Notes shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by the Lenders on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by the Lenders to the
Borrower); and (ii) in the event that the maturity of the Notes is accelerated
by reason of an election of the holder thereof resulting from any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to the Lenders may never include more than the maximum amount
allowed by such applicable law, and excess interest, if any, provided for in
this Agreement or otherwise shall be canceled automatically by the Lenders as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited by the Lenders on the principal amount of the Indebtedness (or, to the
extent that the principal amount of the Indebtedness shall have been or would
thereby be paid in full, refunded by the Lenders to the Borrower). All sums paid
or agreed to be paid to the Lenders for the use, forbearance or detention of
sums due hereunder shall, to the extent permitted by law applicable to the
Lenders, be amortized, prorated, allocated and spread in
-53-
CREDIT AGREEMENT
August 29, 1996
equal parts throughout the full term of the Loans evidenced by the Notes until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (i) the amount of interest payable to the
Lenders on any date shall be computed at the Highest Lawful Rate applicable to
the Lenders pursuant to this Section 9.11 and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to the
Lenders would be less than the amount of interest payable to the Lenders
computed at the Highest Lawful Rate applicable to the Lenders, then the amount
of interest payable to the Lenders in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to the Lenders until the total amount of interest payable to the
Lenders shall equal the total amount of interest which would have been payable
to the Lenders if the total amount of interest had been computed without giving
effect to this Section.
For the purpose of determining the Highest Lawful Rate, the Lenders
hereby elect to determine the applicable rate ceiling under Article 5069-1.04 of
the Texas Revised Civil Statutes by the indicated (weekly) rate ceiling from
time to time in effect.
Section 9.12 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, THE NOTES, OR ANY OTHER SECURITY INSTRUMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, THE NOTES, R ANY OTHER SECURITY
INSTRUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
Section 9.13 BINDING ARBITRATION.
(A) ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THE NOTES OR
THE SECURITY INSTRUMENTS, INCLUDING ANY CLAIM OR CONTROVERSY OF ANY KIND BASED
ON OR ARISING IN TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE
WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, APPLICABLE STATE LAW),
THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES
OR JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC. ("J.A.M.S.") AND THE RULES
SET FORTH IN SECTION 9.13(B) BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE RULES
SET FORTH IN SECTION 9.13(B) BELOW SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
-54-
CREDIT AGREEMENT
August 29, 1996
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THE NOTES OR
THE SECURITY INSTRUMENTS MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH EITHER
THE NOTES, OR ANY SECURITY INSTRUMENT APPLIES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
(B) THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF HOUSTON, TEXAS AND
ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR. IF J.A.M.S. IS UNABLE
OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN
ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCE
WITHIN NINETY (90) DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR
SHALL, ONLY UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF
SUCH HEARING FOR AN ADDITIONAL SIXTY (60) DAYS.
(C) NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO (I) LIMIT THE
APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE OR
ANY WAIVERS CONTAINED IN THE NOTES OR THE SECURITY INSTRUMENTS; (II) BE A WAIVER
BY THE LENDERS OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SS. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDERS (AND
THE BORROWER, AS APPLICABLE) (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT
LIMITED TO) SETOFF, (B) TO FORECLOSE AGAINST ANY COLLATERAL, WHETHER REAL OR
PERSONAL PROPERTY, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS, BUT NOT LIMITED TO, INJUNCTIVE RELIEF, WRIT OF POSSESSION, OR
THE APPOINTMENT OF A RECEIVER. THE LENDERS (AND THE BORROWER, AS APPLICABLE) MAY
EXERCISE SUCH SELF HELP RIGHTS, FORECLOSURE UPON SUCH COLLATERAL, OR OBTAIN SUCH
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THE NOTES, OR THE SECURITY
INSTRUMENTS. NEITHER THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES
SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN
SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.
(D) THE PROVISIONS OF THIS SECTION 9.13 SHALL SURVIVE ANY TERMINATION,
AMENDMENT, OR EXPIRATION OF THE DOCUMENTS
-55-
CREDIT AGREEMENT
August 29, 1996
EVIDENCING THE TRANSACTIONS. EACH PARTY AGREES TO KEEP ALL DISPUTES AND
ARBITRATION PROCEEDINGS STRICTLY CONFIDENTIAL, EXCEPT FOR DISCLOSURES OF
INFORMATION REQUIRED IN THE ORDINARY COURSE OF BUSINESS OF THE PARTIES OR BY
APPLICABLE LAW OR REGULATION.
Section 9.14 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER
SECURITY INSTRUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF
THE TERMS OF THIS AGREEMENT, THE NOTES, AND THE OTHER SECURITY INSTRUMENTS; THAT
IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND
KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS
BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER SECURITY
INSTRUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE OTHER SECURITY INSTRUMENTS; AND THAT IT RECOGNIZES THAT
CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER SECURITY INSTRUMENTS RESULT
IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION
AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH
PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER
SECURITY INSTRUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF
SUCH PROVISION OR THAT THE PROVISION IS NOT "CONSPICUOUS."
Section 9.15 CUMULATIVE RIGHTS. Rights and remedies of the Agent and the
Lenders under the Notes, this Agreement, and each other Security Instrument
shall be cumulative, and the exercise or partial exercise of any such right or
remedy shall not preclude the exercise of any other right or remedy.
Section 9.16 SINGULAR AND PLURAL. Words used herein in the singular,
where the context so permits, shall be deemed to include the plural and vice
versa. The definitions of words in the singular herein shall apply to such words
when used in the plural where the context so permits and vice versa.
Section 9.17 SEVERAL OBLIGATIONS. The respective obligations of the
Lenders under this Agreement are several and not joint, and no Lender shall be
the partner or agent of any other (except to the extent to which the Agent is
authorized to act as such). The failure of any Lender to perform
-56-
CREDIT AGREEMENT
August 29, 1996
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder.
Section 9.18 EXHIBITS. The exhibits attached to this Agreement are
incorporated herein and shall be considered a part of this Agreement for the
purposes stated herein, except that in the event of any conflict between any of
the provisions of such exhibits and the provisions of this Agreement, the
provisions of this Agreement shall prevail.
Section 9.19 SATISFACTION REQUIREMENT. If any agreement, certificate,
instrument, or other writing, or any action taken or to be taken, is by the
terms of this Agreement required to be satisfactory to any party, the
determination of such satisfaction shall be made by such party in its sole and
exclusive judgment exercised reasonably and in good faith.
-57-
CREDIT AGREEMENT
August 29, 1996
NOW, THEREFORE, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
BORROWER: STAT HEALTHCARE, INC.
By:
Xxx X. Xxxxxxx
Chief Financial Officer
Address: 00000 Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
LENDERS: SOUTHWEST BANK OF TEXAS, N.A.,
INDIVIDUALLY AS LENDER AND AS AGENT
By:
Yale Xxxxx
Executive Vice President
Address: Commercial Banking Group
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
Attn: Yale Xxxxx
-58-
CREDIT AGREEMENT
August 29, 1996
THE BOATMEN'S NATIONAL BANK OF
ST. LOUIS, AS LENDER
By:
Name:
Title:
Corporate Banking Xxxxxx
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
Attn: Xxxxxx X. Xxxxxx
-59-
CREDIT AGREEMENT
August 29, 1996
ANNEX I
Lender Revolving Credit Term Loan Total Commitment
Loan Commitment Commitment
Southwest Bank of $1,500,000 $1,750,000 $3,250,000
Texas N.A.
The Boatmen's $1,500,000 $1,750,000 $3,250,000
National Bank of St.
Louis
CREDIT AGREEMENT
August 29, 1996
Annex I-1
EXHIBIT A
FORM OF
REVOLVING CREDIT NOTE
$1,500,000.00 August 29, 1996
STAT HEALTHCARE, INC., a Delaware corporation (the "BORROWER"), for
value received, promises and agrees (i) to pay on or before the Revolving Credit
Maturity Date to __________________________, (the "BANK"), or order, at
the principal sum of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AND NO/100
($1,500,000.00), or such lesser amount as shall equal the aggregate unpaid
principal amount of the Revolving Credit Loans made by the Bank to the Borrower
hereunder and pursuant to the terms and conditions of the Credit Agreement, as
hereafter defined, in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts provided
in the Credit Agreement referred to below, and (ii) to pay interest on the
unpaid principal amount as provided in the Credit Agreement for such Revolving
Credit Loans, at such office, in like money and funds, for the period commencing
on the date of each such Revolving Credit Loan until such Revolving Credit Loan
shall be paid in full, at the rates per annum and on the dates provided in the
Credit Agreement.
In addition to and cumulative of any payments required to be made
against this Note pursuant to the Credit Agreement, this Note, including all
principal and accrued interest then unpaid, shall be due and payable on the
Revolving Credit Maturity Date. All payments shall be applied first to accrued
interest and the balance to principal, except as otherwise expressly provided in
the Credit Agreement. Prepayments on this Note shall be applied in the manner
set forth in the Credit Agreement.
This Note is the Revolving Credit Note referred to in the Credit
Agreement dated as of August 29, 1996 between the Borrower, Southwest Bank of
Texas, individually as Lender and as Agent, and The Boatmen's National Bank of
St. Louis, as Lender (together with all amendments or supplements thereto, the
"CREDIT AGREEMENT"). This Note evidences the Revolving Credit Loans made by the
Bank thereunder and shall be governed by the Credit Agreement. Capitalized terms
used in this Note and not defined in this Note, but which are defined in the
Credit Agreement, have the respective meanings herein as are assigned to them in
the Credit Agreement.
The Bank is hereby authorized to record all advances and all payments
and prepayments of the Loans evidenced hereby on account of principal and
interest on the schedules (or a continuation thereof) attached hereto and made a
part hereof for all purposes and to provide continuations to such schedule as
may be necessary. The failure of the Bank to record any such amounts shall not
CREDIT AGREEMENT
August 29, 1996
A-1
diminish or impair the Borrower's obligation to repay all principal advanced and
to pay all interest accruing under this Note.
The Borrower and any and each co-maker, guarantor, accommodation party,
endorser or other Person liable for the payment or collection of this Note,
except as specifically provided in the Credit Agreement, expressly waive demand
and presentment for payment, notice of nonpayment, protest, notice of protest,
notice of dishonor, notice of intent to accelerate, notice of acceleration,
bringing of suit, and diligence in taking any action to collect amounts called
for hereunder and in the handling of Property at any time existing as security
in connection herewith, and shall be directly and primarily liable for the
payment of all sums owing and to be owing hereon, regardless of and without any
notice, diligence, act or omission as or with respect to the collection of any
amount called for hereunder or in connection with any Lien at any time had or
existing as security for any amount called for hereunder.
If default is made in the payment of this Note (whether of principal,
interest or other amounts) when due (regardless of how the maturity of this Note
may be brought about) and the same is placed in the hands of an attorney for
collection, or suit is filed hereon, or proceedings are had in bankruptcy,
probate, receivership, or other judicial proceedings for the establishment or
collection of any amount called for hereunder, or any amount payable or to be
payable hereunder is collected through any such proceedings, the Borrower agrees
to pay to the owner and holder of this Note the reasonable attorneys' fees
incurred by the holder in connection therewith.
This Note is issued pursuant to and is entitled to the benefits of the
Credit Agreement and the Security Instruments. Reference is made to the Credit
Agreement for provisions for the acceleration of the maturity hereof on the
occurrence of certain events specified therein and for all
other pertinent purposes.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN
EFFECT.
STAT HEALTHCARE, INC.
By:
Xxx X. Xxxxxxx
Chief Financial Officer
CREDIT AGREEMENT
August 29, 1996
A-2
SCHEDULE A
BASE RATE LOANS, CONVERSIONS
AND REPAYMENTS OF BASE RATE LOANS
AMOUNT CONVERTED
FROM LIBOR AMOUNT OF AMOUNT CONVERTED
AMOUNT OF TO BASE RATE BASE RATE FROM BASE RATE TO UNPAID PRINCIPAL
DATE BASE RATE LOAN LOANS (1) LOANS REPAID LIBOR LOANS (2) OF BASE RATE LOANS NOTATION MADE BY
(1) Conversions which increase the amount of Base Rate Loans (from LIBOR
Loans to Base Rate Loans) go in this column, and require a corresponding
entry in the column marked "Amount Converted from LIBOR to Base Rate
Loans" on Schedule B, as well as a higher "Unpaid Principal Balance of
Base Rate Loans" entry.
(2) Conversions which decrease the amount of Base Rate Loans (from Base Rate
Loans to LIBOR Loans) go in this column, and require a corresponding
entry in the column marked "Amount Converted from Base Rate to LIBOR
Loans" on Schedule B, as well as a lower "Unpaid Principal Balance of
Base Rate Loans" entry.
CREDIT AGREEMENT
August 29, 1996
A-3
SCHEDULE B
EURODOLLAR RATE LOANS, CONVERSIONS
AND REPAYMENTS OF EURODOLLAR LOANS
AMOUNT
AMOUNT CONVERTED CONVERTED AMOUNT
CONTINUED FROM BASE AMOUNT OF UNPAID PRINCIPAL
ADJUSTED LIBOR AMOUNT OF FROM PRIOR RATE TO LIBOR FROM EURO- BALANCE OF
LIBOR INTEREST LIBOR LIBOR LIBOR LOANS DOLLAR TO LIBOR
DATE RATE PERIOD LOAN LOANS LOANS(1) REPAID BASE RATE LOANS(2) LOANS NOTATION MADE BY
(1) Conversions which increase the amount of LIBOR Loans (from Base Rate Loans
to LIBOR Loans) go in this column, and require a corresponding entry in
the column marked "Amount Converted from Base Rate to LIBOR Loans" on
Schedule A, as well as a higher "Unpaid Principal Balance of LIBOR Loans"
entry.
(2) Conversions which decrease the amount of LIBOR Loans (from LIBOR Loans to
Base Rate Loans) go in this column, and require a corresponding entry in
the column marked "Amount Converted from LIBOR to Base Rate Loans" on
Schedule A, as well as a lower "Unpaid Principal Balance of LIBOR Loans"
entry.
CREDIT AGREEMENT
August 29, 1996
A-4
EXHIBIT B
FORM OF
TERM NOTE
$1,750,000.00 August 29, 1996
STAT HEALTHCARE, INC., a Delaware corporation (the "BORROWER"), for
value received, promises and agrees (i) to pay on or before the Term Maturity
Date to
(the
"BANK"), or order, at _____________________________________, the principal sum
of ONE MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS AND NO/100 ($1,750,000.00),
or such lesser amount as shall equal the aggregate unpaid principal amount of
the Term Loans made by the Bank to the Borrower hereunder and pursuant to the
terms and conditions of the Credit Agreement, as hereinafter defined, in lawful
money of the United States of America and in immediately available funds, in
installments on the dates and in the principal amounts provided in the Credit
Agreement, and (ii) to pay interest on the unpaid principal amount of the Term
Loans made by the Bank to the Borrower under the Credit Agreement, at such
office, in like money and funds, for the period commencing on the date of the
Term Loan until such Term Loan shall be paid in full, at the rates per annum and
on the dates provided in the Credit Agreement.
In addition to and cumulative of any payment required to be made against
this Note pursuant to the Credit Agreement, this Note, including all principal
and accrued interest then unpaid, shall be due and payable on the Term Maturity
Date. All payments shall be applied first to accrued interest and the balance to
principal, except as otherwise expressly provided in the Credit Agreement.
Prepayments on this Note shall be applied in the manner set forth in the Credit
Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement
dated as of August 29, 1996, by and among the Borrower and Southwest Bank of
Texas, N.A., individually as Lender and as Agent, and The Boatmen's National
Bank of St. Louis, as Lender (together with all amendments or supplements
thereto, the "CREDIT AGREEMENT"). This Note evidences the Term Loans made by the
Bank thereunder and shall be governed by the Credit Agreement. Capitalized terms
used in this Note and not defined in this Note, but which are defined in the
Credit Agreement, have the respective meanings herein as are assigned to them in
the Credit Agreement.
The Bank is hereby authorized by the Borrower to record all advances and
all payments and prepayments of the Term Loans evidenced hereby on account of
principal and interest on schedule A (or a continuation thereof) attached hereto
and made a part hereof for all purposes and to provide continuations to such
Schedule A as may be necessary. The failure of the Bank to record any such
amounts shall not diminish or impair the obligations of the Borrower to repay
all principal advanced and to pay all interest accruing under this Note in
respect of such Term Loans.
The Borrower and any and each co-maker, guarantor, accommodation party,
endorser or other Person liable for the payment or collection of this Note,
except as specifically provided in the Credit Agreement, expressly waive demand
and presentment for payment, notice of nonpayment, protest, notice of protest,
notice of dishonor, notice of intent to accelerate, notice of acceleration,
CREDIT AGREEMENT
August 29, 1996
B-1
bringing of suit, and diligence in taking any action to collect amounts called
for hereunder and in the handling of Property at any time existing as security
in connection herewith, and shall be directly and primarily liable for the
payment of all sums owing and to be owing hereon, regardless of and without any
notice, diligence, act or omission as or with respect to the collection of any
amount called for hereunder or in connection with any Lien at any time had or
existing as security for any amount called for hereunder.
If default is made in the payment of this Note (whether of principal,
interest or other amounts) when due (regardless of how the maturity of this Note
may be brought about) and the same is placed in the hands of an attorney for
collection, or suit is filed hereon, or proceedings are had in bankruptcy,
probate, receivership, or other judicial proceedings for the establishment or
collection of any amount called for hereunder, or any amount payable or to be
payable hereunder is collected through any such proceedings, the Borrower agrees
to pay to the owner and holder of this Note the reasonable attorneys' fees
incurred by the holder in connection therewith.
This Note is issued pursuant to and is entitled to the benefits of the
Credit Agreement and the Security Instruments. Reference is made to the Credit
Agreement for provisions for the acceleration of the maturity hereof on the
occurrence of certain events specified therein and for all
other pertinent purposes.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN
EFFECT.
STAT HEALTHCARE, INC.
By:
Xxx X. Xxxxxxx
Chief Financial Officer
CREDIT AGREEMENT
August 29, 1996
B-2
SCHEDULE A
TO
TERM NOTE
This Note evidences the Term Loans made by the Bank under the Credit
Agreement to the Borrower by the Bank, in the principal amount set forth below
and the applicable rates for each such Term Loan, subject to the payments of
principal set forth below:
SCHEDULE
OF
LOANS AND PAYMENTS OF PRINCIPAL AND INTEREST
DATE RATE PRINCIPAL AMOUNT AMOUNT OF PRINCIPAL BALANCE OF NOTATION
OF LOAN PAID OR REPAID LOANS MADE BY
CREDIT AGREEMENT
August 29, 1996
B-3
EXHIBIT C
FORM OF
BORROWING, CONTINUATION, AND CONVERSION REQUEST
_____________________, 199__
STAT HEALTHCARE, INC., a Delaware corporation (the "BORROWER"), pursuant
to the Credit Agreement dated as of August 29, 1996 (together with all
amendments or supplements thereto, the "CREDIT AGREEMENT") among the Borrower,
Southwest Bank of Texas, N.A., individually as Lender and as administrative
agent (the "AGENT"), and The Boatmen's National Bank of St.
Louis,
as Lender, hereby requests [a loan] [loans] on the date and in the amount[s] as
follows (unless otherwise defined herein, capitalized terms are defined in the
Credit Agreement):
1. Term Loans:
(a) Aggregate amount of new Term Loans to be $______________________;
(b) Requested funding date is _________________, 199__;
2. Revolving Credit Loans:
(a) Aggregate amount of new Revolving Credit Loans to be
$______________________;
(b) Requested funding date is _________________, 199__;
(c) $_____________________ of such borrowings are to be LIBOR Loans;
$_____________________ of such borrowings are to be Base Rate Loans; and
(d) Length of Interest Period for LIBOR Loans is:
_________________________.
3. LIBOR Loan Continuation for LIBOR Loans maturing on
_____________________:
(a) Aggregate amount to be continued as LIBOR Loans is $__________________;
(b) Aggregate amount to be converted to Base Rate Loans is
$____________________;
(c) Length of Interest Period for continued LIBOR Loans is
________________________.
CREDIT AGREEMENT
August 29, 1996
C-1
4. Conversion of Outstanding Base Rate Loans to LIBOR Loans:
Convert $__________________ of the outstanding Base Rate Loans to
LIBOR Loans on ____________________ with an Interest Period of
______________________.
5. Conversion of Outstanding LIBOR Loans to Base Rate Loans:
Convert $__________________ of the outstanding LIBOR Loans with
Interest Period maturing on ______________________, 199_, to Base
Rate Loans.
The undersigned certifies that he is the _____________________ of the
Borrower, and that as such he is authorized to execute this certificate on
behalf of the Borrower. The undersigned further certifies, represents and
warrants on behalf of the Borrower that the Borrower is entitled to receive the
requested borrowing, continuation, or conversion under the terms and conditions
of the Credit Agreement.
STAT HEALTHCARE, INC.
By:
Name:
Title:
CREDIT AGREEMENT
August 29, 1996
C-2
EXHIBIT D
ADDITIONAL SECURITY INSTRUMENTS
1. Guaranty Agreement of South Texas Acute Trauma Physicians, P.A., STAT
Physicians P.A., Old STAT, Inc., STAT Dialysis Corporation., and STAT
Management Corporation.
2. Pledge and Security Agreement executed by the Borrower granting to the
Lenders security interest in accounts receivables and equipment and
pledging stock of Subsidiaries.
3. Financing Statement with respect to item 2.
4. Security Agreements executed by South Texas Acute Trauma Physicians,
P.A., STAT Physicians P.A., Old STAT, Inc., STAT Dialysis Corp., and
STAT Management Corp. granting to the Lenders security interest in
accounts receivables and equipment.
5. Financing Statements with respect to item 4.
6. Subrogation and Contribution Agreement among Guarantors and Borrower.
CREDIT AGREEMENT
August 29, 1996
D-1
EXHIBIT E
[FORM OF LEGAL OPINION]
August 29, 1996
To Each of the Lenders Parties
to the Credit Agreement Hereinafter
Referred to and Southwest Bank of Texas, N.A.,
as Agent
Re: Credit Agreement dated as of August 29, 1996 (the "CREDIT
AGREEMENT"), among STAT Healthcare, Inc. a Delaware corporation
(the "BORROWER"), Southwest Bank of Texas, N.A., individually as
Lender and as administrative agent (the "AGENT"), and The
Boatmen's National Bank of St. Louis, as Lender (together with
the Agent, the "LENDERS").
Gentlemen:
We have acted as special counsel for the Borrower, South Texas Acute
Trauma Physicians, P.A., a Texas professional association ("STAT P.A."), STAT
Physicians, P.A., a Texas professional association, Old STAT, Inc., a Texas
corporation, STAT Dialysis Corporation., a Texas corporation, and STAT
Management Corporation, a Texas corporation (STAT P.A., STAT Physicians, P.A.,
Old STAT, Inc., STAT Dialysis Corporation, and STAT Management Corporation,
collectively being the "GUARANTORS") in connection with the Credit Agreement.
This opinion is delivered to you pursuant to Section 3.01(f) of the Credit
Agreement. Capitalized terms not otherwise defined herein are defined as set
forth in the Credit Agreement, and other terms which are defined in the Uniform
Commercial Code as in effect in the State of Texas (the "CODE") have the same
meanings when used herein unless otherwise indicated by the context in which
such terms are so used.
In connection with the opinions hereinafter expressed, we have (i)
investigated such questions of law, (ii) examined such organizing and governing
documents and records of the Borrower and the Guarantors and certificates of
public officials, and (iii) received such information from officers and
representatives of the Borrower and the Guarantors, as we have deemed necessary
or appropriate for the purposes of this opinion. We have examined the following
documents (those identified in items (a) through (f) below being referred to
collectively as "LOAN DOCUMENTS"):
(a) An executed copy of the Credit Agreement;
(b) The executed promissory notes dated of even date with the
Credit Agreement issued by the Borrower payable to the order of the
Lenders (the "NOTES");
(c) An executed copy of each of (i) the Security Agreement (the
"BORROWER SECURITY AGREEMENT") dated of even date with the Credit
Agreement executed by the Borrower, as debtor, in favor of the Agent, as
secured party and (ii) the Security Agreements (the "GUARANTOR SECURITY
AGREEMENTS") dated of even date with the Credit Agreement executed by
each of STAT P.A., STAT Physicians, P.A., Old STAT, Inc., STAT Dialysis
CREDIT AGREEMENT
August 29, 1996
E-1
Corporation and STAT Management Corporation, each as debtor, in favor of
the Agent, as secured party (the Borrower Security Agreement and
Guarantor Security Agreements being collectively referred to herein as
the "SECURITY AGREEMENTS");
(d) An executed copy of the financing statements executed in
connection with the Security Agreements (the "FINANCING STATEMENTS");
(e) An executed copy of the Guaranty Agreement dated of even date
with the Credit Agreement executed by each of the Guarantors
(collectively, the "GUARANTY AGREEMENTS");
(f) An executed copy of the Subrogation and Contribution
Agreement dated of even date with the Credit Agreement executed by the
Borrower and each of the Guarantors (the "SUBROGATION AND CONTRIBUTION
AGREEMENT"); and
(g) The Designated Contracts.
In rendering the opinions herein set forth, we have assumed (i) the due
authorization, execution and delivery of each document referred to in clauses
(a) through (f) of the second paragraph of this opinion by all parties to such
document other than the Borrower and the Guarantors), and that each such
document is valid, binding and enforceable against the parties thereto other
than the Borrower and the Guarantors, (ii) the legal capacity of natural
persons, (iii) the genuineness of all signatures, (iv) the authenticity of all
documents submitted to us as originals and (v) the conformity to original
documents of all documents submitted to us as copies. As to various questions of
fact material to our opinion we have relied upon the representations made in the
Loan Documents and upon certificates of officers of the Borrower.
Based upon the foregoing and subject to the qualifications set forth
below, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, and is qualified to do
business in the State of Texas and, to the best of our knowledge, in each other
jurisdiction in which the ownership of its properties or the nature of its
activities makes such qualification necessary, except for such jurisdictions in
which the failure to so qualify would not have a Material Adverse Effect on the
Borrower or on its ability to perform its obligations, under the Loan Documents.
2. STAT P.A. and STAT Physicians, P.A. are professional associations
validly existing under the laws of the State of Texas. Each of Old STAT, Inc.,
STAT Dialysis Corporation, and STAT Management Corporation is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Texas. Each Guarantor is qualified to do business in the State of Texas and,
to the best of our knowledge, in each other jurisdiction in which the ownership
of its properties or the nature of its activities makes such qualification
necessary, except for such jurisdictions in which the failure to so qualify
would not have a Material Adverse Effect on such Guarantor or on its ability to
perform its obligations, under the Loan Documents.
3. The Borrower has the corporate power and authority to enter into and
perform its obligations under the Loan Documents to which it is a party and to
issue the Notes. The Borrower's
CREDIT AGREEMENT
August 29, 1996
E-2
execution and delivery of the Loan Documents to which it is a party and the
issuance and delivery of the Notes have been duly authorized by all requisite
corporate action.
4. Each Guarantor has the power and authority to enter into and perform
its obligations under the Loan Documents to which it is a party. Each
Guarantor's execution and delivery of the Loan Documents to which it is a party
have been duly authorized by all requisite action.
5. The Loan Documents to which the Borrower is a party constitute legal,
valid and binding obligations of the Borrower enforceable against the Borrower
in accordance with their respective terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws of general application
relating to or affecting creditors' rights. The Loan Documents to which each
Guarantor is a party constitute legal, valid, and binding obligations of each of
the Guarantors enforceable against them in accordance with their respective
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium,
or similar laws of general application relating to or affecting creditors'
rights. The enforceability and binding nature of the Loan Documents is subject
to (a) the qualification that certain provisions of the Loan Documents are or
may be unenforceable in whole or in part (but the inclusion of such provisions
does not affect the validity of such instruments and each such instrument
contains adequate provisions for the practical realization of the rights and
benefits afforded thereby) and (b) general principles of equity.
6. The execution and delivery of the Loan Documents to which each of the
Borrower and the Guarantors is a party and the performance by each of the
Borrower and the Guarantors of their respective terms do not conflict with or
result in a violation of the Certificate of Incorporation or By-laws of the
Borrower or the Guarantors, applicable provisions of statutory law or regulation
or, to the best of our knowledge, any material agreement, instrument or judicial
or regulatory order to which the Borrower or the Guarantors are party or are
subject or result in the Borrower or the Guarantors being obligated to create or
impose any Lien upon any of their Properties, other than those contemplated by
the Credit Agreement.
7. No approval, authorization, or other action by or filing with any
governmental authority is required in connection with the execution and delivery
by the Borrower or the Guarantors of the Loan Documents.
8. Except as described in the schedule of litigation heretofore
furnished to the Agent by the Borrower, there are, to the best of our knowledge,
no actions, suits, or proceedings pending or threatened against the Borrower
before any court or arbitrator(s) or by or before any administrative agency or
governmental authority, in which there is a reasonable possibility of an adverse
decision which could have a materially adverse effect on the financial condition
or business of the Borrower.
9. The Borrower is not an "investment company" or a company "controlled"
by an "investment company," within the meaning of the Investment Company Act of
1940, as amended.
10. The Security Agreements create valid security interests in favor of
the Agent in the Collateral (as defined in each Security Agreement
respectively), if adequately described therein, to the extent the Code is
applicable thereto as security for the Notes. The Financing Statements are in
appropriate form and has been duly filed pursuant to the Code resulting in the
perfection of such security interests. We call to your attention that the
perfection of the above security interests will be terminated (i) as to any
Collateral (as to which the filing of a financing statement is necessary)
CREDIT AGREEMENT
August 29, 1996
E-3
acquired by the Borrower, as the case may be, more than four (4) months after
the Borrower, respectively, so changes its name, identity, or corporate
structure as to make the financing statements seriously misleading, unless new
appropriate financing statements indicating the new name, identity or structure
of the Borrower are properly filed before the expiration of such four (4) months
and (ii) as to any Collateral consisting of accounts, general intangibles,
mobile goods, and (in the case of a non-possessory security interest) chattel
paper four (4) months after the Borrower changes its chief executive office to a
new jurisdiction outside the State of Texas unless such security interests are
perfected in such new jurisdiction before that termination.
11. The security interests referred to in paragraph 10 above as now
perfected are first priority.
12. The pledged securities listed in the Borrower Security Agreement
have been duly authorized and validly issued, are fully paid and non-assessable,
and constitute one hundred percent (100%) of the issued and outstanding shares
of stock of the respective issuers thereof.
13. The Designated Contracts are valid, binding, and enforceable on the
parties thereto and do not conflict with applicable provisions of statutory law
or regulations, including, without limitation, the Texas Medical Practices Act.
14. (i) Each of AmHealth Kidney Center of the Valley, Ltd., Weslaco
Kidney Center, Ltd., Starr Dialysis Center, Ltd., and Mission Kidney Center,
Ltd., each a Texas limited partnership, has been merged with and into STAT
Dialysis Corporation; (ii) each of AmHealth Medical Management, Ltd.,
Brownsville Hyperbaric Healthcare, Ltd., Southwestern Infusion Healthcare, Ltd.,
and AmHealth Ambulatory Healthcare, Ltd., each a Texas limited partnership, has
been merged with and into STAT Management Corporation; and (iii) each of the
mergers described in this paragraph has been duly authorized, has been filed,
and is effective in compliance with applicable law, and is final, binding, and
enforceable upon each of the entities and their owners under applicable law.
We are qualified to practice law in the State of Texas and we do not
purport to be experts on or express any opinion herein concerning any law other
than the law of the State of Texas and the federal law of the United States. The
opinions herein have been furnished at your request and are solely for your
benefit in connection with the subject transaction and may not be relied upon by
any other person or furnished to anyone else without the prior written consent
of the undersigned.
Very truly yours,
CREDIT AGREEMENT
August 29, 1996
E-4
EXHIBIT F
FORM OF
COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the ________________ of STAT
HEALTHCARE, INC., a Delaware corporation ("the BORROWER"), and that as such he
is authorized to execute and deliver this certificate on behalf of the Borrower
with reference to the Credit Agreement dated as of August 29, 1996 (together
with all amendments or supplements thereto being the "AGREEMENT") among the
Borrower, Southwest Bank of Texas, N.A., individually as a Lender (as defined in
the Agreement) and as administrative agent (the "AGENT"), and The Boatmen's
National Bank of St. Louis, as a Lender (together with the Agent, the
"LENDERS"). Each capitalized term used herein having the same meaning given to
it in the Agreement unless otherwise specified.
(a) The representations and warranties of the Borrower contained
in Article IV of the Agreement and in the Security Instruments and
otherwise made in writing by or on behalf of the Borrower pursuant to the
Agreement and the Security Instruments were true and correct when made,
and are repeated at and as of the time of delivery hereof and are true
and correct at and as of the time of delivery hereof, except as such
representations and warranties are modified to give effect to the
transactions expressly permitted by the Agreement or deviations from such
representations and warranties as to which the Borrower has notified the
Lenders in writing of even date herewith.
(b) The Borrower has performed and complied with all agreements
and conditions contained in the Agreement and in the Security Instruments
required to be performed or complied with prior to or at the time of
delivery hereof.
(c) The Borrower has not incurred any material liabilities,
direct or contingent, since August 29, 1996 except those set forth in
SCHEDULE 4.03 to the Agreement and except those allowed by the terms of
the Agreement or consented to by the Lenders in writing.
(d) Since August 29, 1996, no change has occurred, either in any
case or in the aggregate, in the condition of the Borrower which would
have a Material Adverse Effect.
(e) There exists, and, after giving effect to the loan or loans
with respect to which this certificate is being delivered, will exist, no
Default under the Agreement or any event or circumstance which
constitutes, or with notice or lapse of time (or both) would constitute,
an event of default under any material loan or credit agreement,
indenture, deed of trust, security agreement or other material agreement
or instrument evidencing or pertaining to any Debt of the Borrower, or
under any material agreement or instrument to which the Borrower is a
party or by which the Borrower is bound.
CREDIT AGREEMENT
August 29, 1996
F-1
EXECUTED AND DELIVERED this ____ day of ______________.
STAT HEALTHCARE, INC.
By:
Name:
Title:
CREDIT AGREEMENT
August 29, 1996
F-2
Schedule I to
Compliance Certificate
Computation of Financial Ratios for the
ROLLING PERIOD ENDED ON __________, 19__
I. SECTION 6.11 TANGIBLE NET WORTH
A. Preferred Stock....................................................$___________
B. Common Stock (par value)...........................................$___________
C. Capital in excess of I.B...........................................$___________
D. Surplus and Retained Earnings
(($______ ), if negative)..........................................$___________
E. Cost of Treasury Shares............................................$___________
F. Book Value of all Intangible Assets (not already
deducted from I.D. but including goodwill,
R&D costs, trademarks, trade names,
copyrights, franchises, unamortized debt
discount and expense and all reserves and
writeups in book value from revaluation
or changes in GAAP)................................................$___________
G. Tangible Net Worth (I.A. + I.B. + I.C. + I.D.
(- I.D., if negative)) - (I.E. + I.F.).............................$___________
H. Required Minimum..................................................$3,500,000.00
II. SECTION 6.12 CURRENT RATIO
A. Consolidated Current Assets (in accordance with GAAP)..............$___________
B. Consolidated Current Liabilities (in accordance with GAAP).........$___________
C. Ratio = II.A. / II.B...............................................____ to 1.00
D. Required Minimum...................................................1.50 to 1.00
CREDIT AGREEMENT
August 29, 1996
F-3
III. SECTION 6.13 FUNDED INDEBTEDNESS COVERAGE RATIO
A. Indebtedness (as defined in the Credit Agreement)..................$___________
B. Capital Lease Obligations..........................................$___________
C. Guaranteed Amount of any Funded Indebtedness.......................$___________
D. Total Funded Indebtedness (III.A. + III.B. + III.C.)...............$___________
E. Consolidated Net Income (prior to all federal, state, local
and foreign income taxes and after salary and bonuses
paid to officers)..................................................$___________
F. Depreciation and Amortization of Assets (including goodwill
and other intangible assets).......................................$___________
G. Interest Paid during such period...................................$___________
H. Other Non-Cash Operating Charges ..................................$___________
I. Federal, state, local, and foreign income taxes (actually paid)....$___________
J. Consolidated Operating Cash Flow (III.E. + III.F. + III.G. +
III.H. - (III.I.)..................................................$___________
K. Ratio = III.D. / III.J............................................_____ to 1.00
L. Maximum Permissible................................................2.50 to 1.00
IV. SECTION 6.14 FIXED CHARGE COVERAGE RATIO
A. III.J..............................................................$___________
B. Current maturities of III.D........................................$___________
C. Interest paid during such period...................................$___________
D. Dividends declared or paid during such period......................$___________
E. Capitalized maintenance expenditures for such period...............$___________
F. Total Fixed Charges (IV.B. + IV.C. + IV.D. + IV.E.)................$___________
G. Ratio of IV.A. to IV.F.............................................____ to 1.00
H. Required Minimum...................................................1.25 to 1.00
CREDIT AGREEMENT
August 29, 1996
F-4
EXHIBIT G
FORM OF
BORROWING BASE CERTIFICATE
The undersigned hereby certifies that he is the ________________ of STAT
HEALTHCARE, INC., a Delaware corporation ("the BORROWER"), and that as such he
is authorized to execute and deliver this certificate on behalf of the Borrower
with reference to the Credit Agreement dated as of August 29, 1996 (together
with all amendments or supplements thereto being the "AGREEMENT") among the
Borrower, Southwest Bank of Texas, N.A., individually as a Lender (as defined in
the Agreement) and as administrative agent (the "AGENT"), and The Boatmen's
National Bank of St. Louis, as a Lender (together with the Agent, the
"LENDERS").
I. TOTAL PRIVATE INSURANCE ACCOUNTS RECEIVABLE
(90 DAYS AND UNDER).....................................................$______________
II. ELIGIBLE PRIVATE INSURANCE ACCOUNTS RECEIVABLE
(85% of Line I).........................................................$______________
III. TOTAL MEDICARE AND MEDICAID RECEIVABLES
(90 DAYS AND UNDER).....................................................$______________
IV. ELIGIBLE MEDICARE AND MEDICAID RECEIVABLES
(20% of Line III).......................................................$______________
V. AVAILABLE REVOLVING CREDIT BORROWING BASE...............................$______________
(Line II PLUS Line IV)
VI. MAXIMUM REVOLVING CREDIT COMMITMENT.......................................$3,000,000.00
VII. OUTSTANDING LOAN BALANCE................................................$______________
VIII. AVAILABLE CREDIT........................................................$______________
( (greater than) of V or VI, minus VII)
CREDIT AGREEMENT
August 29, 1996
G-1
The undersigned certifies that he is the __________________ of the
Borrower and that as such he is authorized to execute this certificate on behalf
of the Borrower. The undersigned further certifies, represents and warrants on
behalf of the Borrower that information and calculations contained herein are
true and correct as of ______________________..
EXECUTED AND DELIVERED this ____ day of ______________.
STAT HEALTHCARE, INC.
By:
Name:
Title:
CREDIT AGREEMENT
August 29, 1996
G-2
