AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF NOVEMBER 13, 1997
AMONG
PROMEDCO MANAGEMENT COMPANY
THE LENDERS REFERRED TO HEREIN
AND
NATIONSCREDIT COMMERCIAL CORPORATION,
AS AGENT
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................................................1
SECTION 1.01. Certain Defined Terms..................................................................1
SECTION 1.02. Accounting Terms and Determinations...................................................18
SECTION 1.03. Other Definitional Provisions.........................................................18
ARTICLE II REVOLVING CREDIT LOANS................................................................19
SECTION 2.01. Revolving Credit Loans and Commitments................................................19
SECTION 2.02. Revolving Credit Notes................................................................20
SECTION 2.03. Interest on the Revolving Credit Loans................................................20
SECTION 2.04. Advancing Revolving Credit Loans......................................................22
SECTION 2.05. Mandatory Repayments and Prepayments..................................................22
SECTION 2.06. Optional Prepayments..................................................................23
SECTION 2.07. Application of Payments...............................................................23
SECTION 2.08. Reduction of Commitment...............................................................23
ARTICLE III CONDITIONS............................................................................24
SECTION 3.01. Conditions to Closing.................................................................24
SECTION 3.02. Conditions to Acquisition Loans.......................................................26
SECTION 3.03. Conditions to Each Loan...............................................................27
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................27
SECTION 4.01. Corporate Existence and Power.........................................................27
SECTION 4.02. Corporate and Governmental Authorization; No Contravention............................28
SECTION 4.03. Binding Effect; Liens of Security Documents...........................................28
SECTION 4.04. Financial Information.................................................................28
SECTION 4.05. Litigation............................................................................29
SECTION 4.06. Ownership of Property, Liens..........................................................30
SECTION 4.07. No Default............................................................................30
SECTION 4.08. No Burdensome Restrictions............................................................30
SECTION 4.09. Labor Matters.........................................................................30
SECTION 4.10. Subsidiaries; Other Equity Investments................................................30
SECTION 4.11. Investment Company Act................................................................31
SECTION 4.12. Margin Regulations....................................................................31
SECTION 4.13. Taxes.................................................................................31
SECTION 4.14. Compliance with ERISA.................................................................31
SECTION 4.15. Brokers...............................................................................32
SECTION 4.16. Employment, Shareholders and Subscription Agreements..................................32
SECTION 4.17. Full Disclosure.......................................................................32
SECTION 4.18. Private Offering......................................................................32
SECTION 4.19. Compliance with Environmental Requirements; No Hazardous Materials....................32
SECTION 4.20. Real Property Interests...............................................................34
SECTION 4.21. Third Party Reimbursement.............................................................34
SECTION 4.22 Additional Representations; Schedules.................................................34
ARTICLE V AFFIRMATIVE COVENANTS.................................................................35
SECTION 5.01. Financial Statements and Other Reports................................................35
SECTION 5.02. Payment of Obligations................................................................39
SECTION 5.03. Conduct of Business and Maintenance of Existence......................................39
SECTION 5.04. Maintenance of Property; Insurance....................................................39
SECTION 5.05. Compliance with Laws..................................................................40
SECTION 5.06. Inspection of Property, Books and Records.............................................40
SECTION 5.07. Use of Proceeds.......................................................................41
SECTION 5.08. Further Assurances....................................................................41
SECTION 5.09. Lenders' Meetings.....................................................................41
SECTION 5.10. Hedging Facilities....................................................................41
SECTION 5.11. Hazardous Materials; Remediation......................................................41
SECTION 5.12. Collateral Reports....................................................................42
SECTION 5.13. Collections; Right to Notify Account Debtors..........................................42
SECTION 5.14. Enforcement of Covenants Not to Compete...............................................42
SECTION 5.15. Landlord and Warehouseman Waivers.....................................................42
SECTION 5.16. Additional Subsidiaries...............................................................43
SECTION 5.17. Accreditation and Licensing...........................................................43
ARTICLE VI NEGATIVE COVENANTS....................................................................43
SECTION 6.01. Debt..................................................................................43
SECTION 6.02. Negative Pledge.......................................................................44
SECTION 6.03. Capital Stock.........................................................................45
SECTION 6.04. Restricted Payments...................................................................45
SECTION 6.05. ERISA.................................................................................45
SECTION 6.06. Consolidations, Mergers and Sales of Assets...........................................46
SECTION 6.07. Purchase of Assets, Investments.......................................................46
SECTION 6.08. Transactions with Affiliates..........................................................47
SECTION 6.09. Amendments or Waivers.................................................................47
SECTION 6.10. Fiscal Year...........................................................................47
SECTION 6.11. Management Compensation...............................................................48
SECTION 6.12. Lease Payments........................................................................48
SECTION 6.13. Capital Expenditures..................................................................48
SECTION 6.14. Total Debt Coverage Ratio.............................................................48
SECTION 6.15. Debt to Capitalization................................................................48
SECTION 6.16. Senior Debt to EBITDA.................................................................49
SECTION 6.17. [Reserved]............................................................................49
SECTION 6.18. Minimum Net Worth.....................................................................49
SECTION 6.19. Transition Rules......................................................................49
ARTICLE VII EVENTS OF DEFAULT.....................................................................50
SECTION 7.01. Events of Default.....................................................................50
ARTICLE VIII FEES, EXPENSES AND INDEMNITIES; GENERAL PROVISIONS RELATING TO
PAYMENTS..............................................................................54
SECTION 8.01. Fees..................................................................................54
SECTION 8.02. Computation of Interest and Fees......................................................54
SECTION 8.03. General Provisions Regarding Payments.................................................54
SECTION 8.04. Expenses..............................................................................54
SECTION 8.05. Indemnity.............................................................................55
SECTION 8.06. Taxes.................................................................................56
SECTION 8.07. Funding Losses........................................................................56
SECTION 8.08. Maximum Interest......................................................................56
ARTICLE IX THE AGENT.............................................................................57
SECTION 9.01. Appointment and Authorization.........................................................57
SECTION 9.02. Agent and Affiliates..................................................................57
SECTION 9.03. Action by Agent.......................................................................57
SECTION 9.04. Consultation with Experts.............................................................57
SECTION 9.05. Liability of Agent....................................................................58
SECTION 9.06. Indemnification.......................................................................58
SECTION 9.07. Credit Decision.......................................................................58
SECTION 9.08. Successor Agent.......................................................................58
ARTICLE X MISCELLANEOUS.........................................................................59
SECTION 10.01. Survival..............................................................................59
SECTION 10.02. No Waivers............................................................................59
SECTION 10.03. Notices...............................................................................59
SECTION 10.04. Severability..........................................................................59
SECTION 10.05. Amendments and Waivers................................................................59
SECTION 10.06. Successors and Assigns; Registration..................................................60
SECTION 10.07. Collateral............................................................................62
SECTION 10.08. Headings..............................................................................62
SECTION 10.09. Governing Law; Submission to Jurisdiction.............................................62
SECTION 10.10. Notice of Breach by Agent or Lender...................................................62
SECTION 10.11. Waiver of Jury Trial..................................................................63
SECTION 10.12. Counterparts..........................................................................63
SECTION 10.13. Special Provision Relating to this Amendment and Restatement..........................63
EXHIBIT A.........- Revolving Credit Note
EXHIBIT B.........- Notice of Borrowing
EXHIBIT C.........- Company Security Agreement
EXHIBIT D.........- Pledge Agreement
EXHIBIT E.........- Subsidiary Guaranty Agreement
EXHIBIT F.........- Subsidiary Security Agreement
EXHIBIT G.........- Professional Service Provider Security Agreement
EXHIBIT H.........- Borrowing Base Certificate
EXHIBIT I.........- Opinion of counsel to the Company
EXHIBIT J.........- Opinion of Xxxxxxxxxx Xxxxxxxx LLP, Special Counsel to the Agent
EXHIBIT K.........- Option Agreement
SCHEDULE 3.01(n)..- Schedule of Management
SCHEDULE 4.10.....- Schedule of Subsidiaries
SCHEDULE 4.16.....- Employment, Shareholders' and Subscription Agreements
SCHEDULE 4.19.....- Environmental Matters
SCHEDULE 4.20.....- Real Property Interests
SCHEDULE 5.04.....- Required Insurance
SCHEDULE 6.01.....- Outstanding Debt
SCHEDULE 6.04.....- Existing Additional Acquisition Liabilities
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of November 13, 1997, among PROMEDCO
MANAGEMENT COMPANY (F/K/A PROMEDCO, INC.), the LENDERS listed on the signature
pages hereof and NATIONSCREDIT COMMERCIAL CORPORATION, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. The following terms have the following
meanings:
"Account Debtor" shall mean any Person who may become
obligated to any Credit Party under, with respect to, or on account of a
Receivable of such Credit Party (including without limitation any guarantor of
the payment or performance of a Receivable or any Third Party Payor).
"Acquisition" means the purchase by the Company of any
physician practice or physician practice group or a majority of the assets of a
physician practice or physician practice group or of any other business the
purchase of which the Required Lenders shall consent to in their sole and
absolute discretion, with the proceeds of an Acquisition Loan provided pursuant
to Section 2.01(c).
"Acquisition Availability" has the Meaning specified in
Section 2.01(c).
"Acquisition Loans" means, collectively, the Revolving Credit
Loans of the Lenders to be made to the Company pursuant to Section 2.01(c).
"Additional Acquisition Liabilities" means the Existing
Additional Acquisition Liabilities and the Future Additional Acquisition
Liabilities.
"Adjusted LIBOR" means a rate per annum (rounded upward, if
necessary to the next higher 1/16 of 1%) equal to the rate obtained by dividing
(a) LIBOR (similarly rounded) by (b) a percentage equal to 1 minus the Reserve
Requirement in effect from time to time.
"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Company (a "Controlling
Person") or (ii) any Person (other than the Company or any of its Subsidiaries)
which is controlled by or is under common control with a Controlling Person. As
used herein, the term "control" of a Person means the possession, directly or
indirectly, of the power to vote 10% or more of any class of voting securities
of such Person or to direct or cause the direction of the management or policies
of a Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means NationsCredit in its capacity as agent for the
Lenders hereunder, and its successors in such capacity.
"Agreement Date," "date hereof," "even date herewith," "date
of this Agreement" and words of similar import mean the date as of which this
Agreement was originally executed, or June 12, 1996.
"AmSouth Bank" means AmSouth Bank, an Alabama banking
corporation, and its successors.
"Applicable Margin" means for any Revolving Credit Loan held
by AmSouth Bank or any assignee thereof, (i) in the case of Loans bearing
interest based on Adjusted LIBOR, 3.25% per annum, in the case of Loans bearing
interest based on the Index Rate, 3.25% per annum, and in the case of Loans
bearing interest based on the Prime Rate, 1.75% per annum, in each case, from
and including the Restatement Effective Date, to but excluding the first day of
the month in which the Company shall first deliver financial statements to the
Lenders pursuant to Section 5.01(a) subsequent to the Restatement Effective Date
that relate to a month ended on the last day of a fiscal quarter of the Company
(the "Initial Adjustment Date"), and (ii) commencing on the Initial Adjustment
Date and on the first day of each month thereafter in which the Company shall
deliver financial statements to the Lenders pursuant to Section 5.01(a) that
relate to a month ended on the last day of a fiscal quarter of the Company, the
per annum interest rate margin shall be that set forth hereafter below the
applicable rate determination option that is opposite the Leverage Ratio
determined from such statements for the fiscal quarter covered thereby:
Leverage Ratio Index Rate Adjusted LIBOR Prime
= 1.00 1.375% 1.375% 0.000%
1.00 but = 2.00 1.500% 1.500% 0.000%
2.00 but = 2.50 1.750% 1.750% 0.250%
2.50 but = 3.00 2.000% 2.000% 0.500%
3.00 but = 3.50 2.250% 2.250% 0.750%
3.50 but = 4.00 2.750% 2.750% 1.250%
4.00 3.250% 3.250% 1.750%
Notwithstanding the foregoing, so long as a Default shall have occurred and be
continuing, the Applicable Margins shall be the highest rates specified in the
table above.
"Authorized Signatory" means a Person designated as such by
the Company to the Agent in writing.
"Availability Termination Date" means December 31, 1998, or
such later date to which the Lenders and the Company may mutually agree to
extend the Company's ability to incur Revolving Loans.
"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Blue Cross/Blue Shield" means any and all contracts or
agreements in force between any Credit Party and any Blue Cross/Blue Shield
plan.
"Borrowing Base" means, on any date, a dollar amount
equal to 80% of Eligible Receivables determined as of such date.
"Borrowing Base Certificate" means a certificate, duly
executed by the chief financial officer or treasurer of the Company,
appropriately completed and substantially in the form of Exhibit I.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Chicago, Nashville or New York City are
authorized by law to close.
"Capital Lease" of any Person means any lease of any property
(whether real, personal or mixed) by such Person as lessee which would, in
accordance with GAAP, be required to be accounted for as a capital lease on the
balance sheet of such Person.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.), as
amended from time to time, and regulations promulgated thereunder.
"CHAMPUS Receivable" means a Receivable payable pursuant to
CHAMPUS.
"CHAMPUS" means, collectively, the Civilian Health and Medical
Program of the Uniformed Service, a program of medical benefits covering former
and active members of the uniformed services and certain of their dependents,
financed and administered by the United States Departments of Defense, Health
and Human Services and Transportation, and all laws, rules, regulations,
manuals, orders, guidelines or requirements pertaining to such program including
(a) all federal statutes (whether set forth in 10 U.S.C. ss.ss.1071-1106 or
elsewhere) affecting such program; and (b) all rules, regulations (including 32
C.F.R. ss.199), manuals, orders and administrative, reimbursement and other
guidelines of all governmental authorities promulgated in connection with such
program (whether or not having the force of law), in each case as the same may
be amended, supplemented or otherwise modified from time to time.
"CHAMPVA Receivable" means a Receivable payable pursuant to
CHAMPVA.
"CHAMPVA" means, collectively, the Civilian Health and Medical
Program of the Department of Veteran Affairs, a program of medical benefits
covering retirees and dependents of former members of the armed services
administered by the United States Department of Veteran Affairs, and all laws,
rules, regulations, manuals, orders, guidelines or requirements pertaining to
such program including (a) all federal statutes (whether set forth in 38 U.S.C.
ss.1713 or elsewhere) affecting such program or, to the extent applicable to
CHAMPVA, CHAMPUS; and (b) all rules, regulations (including 38 C.F.R. ss.17.54),
manuals, orders and administrative, reimbursement and other guidelines of all
governmental authorities promulgated in connection with such program (whether or
not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"Class" defines a Revolving Credit Loan by reference to the
subfacility under which it is made. A Revolving Credit Loan is either a Working
Capital Loan or an Acquisition Loan.
"Closing Date" means the date of the initial funding of the
Loans which funding shall not in any event occur later than July 15, 1996.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means all property mortgaged, pledged or
otherwise purported to be subjected to a Lien pursuant to the Security
Documents.
"Commitment" means the Revolving Credit Commitment.
"Commitment Termination Date" shall have the meaning assigned
to it in Section 2.05.
"Common Stock" means the company's common stock, par value
___, per share.
"Company" means ProMedCo Management Company, a Delaware
corporation, which is the successor by merger to ProMedCo, Inc., a Texas
corporation.
"Company Account" means the account specified on the signature
pages hereof into which all Loans to the Company shall be made available, or
such other account as the Company shall from time to time specify by notice to
the Lenders.
"Company Security Agreement" means the Security Agreement
dated as of the Original Agreement Date between the Company and the Agent,
substantially in the form of Exhibit C.
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount of expenditures by the Company and its Consolidated
Subsidiaries for plant, property and equipment during such period but excluding
any such expenditures made for the replacement or restoration of assets to the
extent financed by condemnation awards or proceeds of insurance received with
respect to the loss or taking of or damage to the asset or assets being replaced
or restored.
"Consolidated Capitalization" means at any time of
determination, the sum of (a) the Consolidated Total Debt at such time, and (b)
the Consolidated Net Worth at such time.
"Consolidated Free Cash Flow" means, for any period, EBITDA
for such period minus the following amounts:
(a) all cash payments of income taxes by the Company
and its Consolidated Subsidiaries during such period;
(b) Consolidated Capital Expenditures for such period, to the
extent that such Consolidated Capital Expenditures are not financed
during such period (and are not anticipated to be financed in any
future period) with the proceeds of Debt of the Company; and
(c) any net gain in respect of asset sales during such period.
"Consolidated Net Income" means, for any period, net income of
the Company and its Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Worth" means as of the date of any
determination thereof, the amount of the shareholder's equity of the Company and
its Consolidated Subsidiaries as would be shown on the consolidated balance
sheet of the Company and its Consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that the Company shall be
deemed to have received $4,000,000 of Net Proceeds in connection with the
issuance of its common stock in the acquisition of Western Medical Management
Corporation, Inc., which amount shall be included in the calculation of
Consolidated Net Worth.
"Consolidated Senior Debt" means at any date the principal
amount of the Obligations and any Debt other than debt that is subordinated to
the Obligations on terms and conditions satisfactory to the Agent and the
Required Lenders.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Company in its consolidated financial statements if such statements were
prepared as of such date.
"Consolidated Total Debt" means at any date the Debt of the
Company and its Consolidated Subsidiaries, determined on a consolidated basis at
such date.
"Credit Party" means any of the Company, any Subsidiary or any
party to a Service Agreement.
"Debt" of a Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all Capital Leases of such Person, (v) all obligations of such
Person to purchase securities (or other property) which arise out of or in
connection with the issuance or sale of the same or substantially similar
securities (or property), (vi) all non-contingent obligations of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of
credit or similar instrument, (vii) all equity securities of such Person subject
to repurchase or redemption otherwise than at the sole option of such Person,
(viii) all obligations of such Person to make payments or advances with respect
to Program Loans (ix) all Debt secured by a Lien on any asset of such Person,
whether or not such Debt is otherwise an obligation of such Person, and (ix) all
Debt of others Guaranteed by such Person.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning set forth in Section 2.03(e),
provided that with respect to any Obligation for which a rate of interest is not
otherwise specified herein, the Default Rate shall be the Prime Rate plus 3.75%
per annum.
"EBITDA" means, for any period, the consolidated net income of
the Company and its Consolidated Subsidiaries for such period, after all
expenses and other proper charges except depreciation, interest, amortization
and income taxes, determined in accordance with GAAP eliminating without
duplication: (i) all intercompany items, (ii) all earnings attributable to
equity interests in Persons that are not Subsidiaries unless actually received
by the Company or a Consolidated Subsidiary, (iii) all income arising from the
forgiveness, adjustment, or negotiated settlement of any indebtedness, (iv) any
extraordinary items of income or expense, (v) any increase or decrease in income
arising from any change in the Company's method of accounting, subject to
Section 1.02, and (vi) any interest income other than interest income received
in connection with Program Loans.
"Eligible Receivables" means, at any date of determination
thereof, the aggregate amount of all Receivables at such date due to the Company
and each of its Subsidiaries other than the following (determined without
duplication):
(a) any Receivable due from an Account Debtor that is not both
domiciled in the United States of America and (if not a natural person)
organized under the laws of the United States of America or any
political subdivision thereof and any Receivable that is not
denominated and payable in U.S. dollars;
(b) any Receivable that does not comply with all applicable
legal requirements, including, without limitation, all laws, rules,
regulations and orders of any governmental or judicial authority
(including any Receivable due from an Account Debtor located in the
States of Indiana, New Jersey or Minnesota, unless the Company or the
applicable Subsidiary (at the time the Receivable was created and at
all times thereafter) (i) had filed and has maintained effective a
current notice of business activities report with the appropriate
office or agency of the State of Indiana, New Jersey or Minnesota, as
applicable, or (ii) was and has continued to be exempt from filing such
report and has provided Agent with satisfactory evidence thereof);
(c) any Receivable in respect of which there is any unresolved
dispute with the Account Debtor, but only to the extent of such
dispute;
(d) any Receivable payable more than 30 days after the date of
the issuance of the original invoice therefor;
(e) any Receivable that remains unpaid for more than 120 days
from the date of the original issuance of the invoice therefor;
(f) any unbilled Receivable;
(g) any Receivable arising outside the ordinary course of
business of the Credit Party whose activities gave rise thereto;
(h) (i) that portion of any Receivable in respect of which
there has been, or should have been, established by the Company a
contra account whether in respect of contractual allowances, audit
adjustments, anticipated discounts or otherwise, or (ii) which is a
Private Receivable and is due from an Account Debtor to whom the
Company owes a trade payable, but only to the extent of such account or
trade payable or (iii) which Receivable is subject to any right of
recession, set-off, recoupment, counterclaim or defense, whether
arising out of transactions concerning the provision of medical
services or otherwise, provided that this clause (iii) shall not apply
to adjustments in the ordinary course with respect to Government
Receivables;
(i) any Receivable that is not subject to a first priority
perfected Lien under the Security Documents and any Receivable
evidenced by an "instrument" (as defined in the UCC) not in the
possession of the Agent;
(j) any Receivable due from any Third Party Payor (i) as to
which on such date Receivables representing more than 25% of aggregate
amount of all Receivables of such Third Party Payor have remained
unpaid for more than 120 days from the original due date specified at
the time of the original issuance of the original invoice therefor,
(ii) in respect of which a credit loss has been recognized or reserved
by any Credit Party, (iii) in respect of which the Agent shall have
notified the Company that such Third Party Payor does not have a
satisfactory credit standing as determined in good faith by the Agent,
(iv) that is a Subsidiary or Affiliate of the Company, (v) that, except
in the case of a Government Receivable, is the United States of America
or any state government or any department, agency or instrumentality
thereof, unless the Company has complied in all respects with the
Federal Assignment of Claims Act of 1940 or the corresponding provision
of any applicable state law, or (vi) that is the subject of a case or
proceeding of the type described in clauses (g) and (h) of Section 7.01
or that is not Solvent;
(k) any Receivables other than Government Receivables due from
a Third Party Payor at any time, to the extent that the aggregate
outstanding amount of Receivables due from such Third Party Payor and
its affiliates at such time exceeds 10% of the aggregate amount of all
Receivables due to the Company at such time, but only to the extent of
such excess;
(l) if such Receivable is a Private Receivable, the Third
Party Payor thereon has not received such notice of the assignment
thereof to the Agent as the Agent shall reasonably require; and
(m) the Credit Party owning such Receivable has not executed a
Security Agreement or such other documents as the Agent shall require
assigning its rights to such Receivables to the Agent as security for
the Obligations.
"Employment Contracts" means the employment contracts
delivered by the Company to NationsCredit on the Closing Date pursuant to
Section 3.01(n), and listed on Schedule 4.16 from time to time.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and governmental restrictions, whether
now or hereafter in effect, relating to human health, the environment or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Materials or wastes into the environment, including ambient air, surface water,
ground water or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Materials or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor statute.
"ERISA Group" means the Company, any Subsidiary and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Company or any Subsidiary, are treated as a single employer under Section 414 of
the Code.
"Event of Default" has the meaning set forth in Section 7.01.
"Excess Cash Flow" means, for any period, an amount equal to:
(i) EBITDA for such period, minus (ii) the sum of: (x) Consolidated Capital
Expenditures (to the extent such Consolidated Capital Expenditures are permitted
pursuant to Section 6.13 and except to the extent financed by the proceeds of
Debt of the Company permitted by Section 6.01), (y) Total Debt Service
(exclusive of amortization of debt discount or premium) and all prepayments of
the Loans hereunder that result in a permanent reduction of the Commitment, and
(z) all cash payments of income taxes by the Company and its Subsidiaries, all
as determined for such period, plus (iii) any interest income for such period.
"Existing Additional Acquisition Liabilities" means those
obligations (actual or contingent) of the Company and/or any of its Subsidiaries
to pay additional consideration in respect of acquisitions existing on the
Agreement Date and described on Schedule 6.04, whether arising under the
acquisition agreement relating thereto or any Service Agreement, in the amounts
and upon the terms described on Schedule 6.04.
"Financing Documents" means this Agreement, the Notes, the
Subsidiary Guaranty Agreement, the Option Agreement and the Security Documents.
"Fiscal Year" means a fiscal year of the Company.
"Future Additional Acquisition Liabilities" means those
obligations (actual or contingent), of the Company and/or any of its
Subsidiaries to pay additional consideration in respect of acquisitions, whether
arising under the acquisition agreement relating thereto, or any Service
Agreement, that are not described on Schedule 6.04.
"GAAP" has the meaning set forth in Section 1.02.
"Government Receivables" means, collectively, any and all
Receivables which are (a) Medicare Receivables, (b) Medicaid Receivables, (c)
CHAMPUS Receivables, (d) CHAMPVA Receivables, or (e) any other Receivable
payable by a governmental authority approved by the Required Lenders.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"HCFA" shall mean the Health Care Financing Administration,
an agency of HHS, and any successor thereto.
"HHS" means the United States Department of Health and Human
Services or any successor thereto.
"Hazardous Materials" means (i) any "hazardous substance" as
defined in CERCLA; (ii) asbestos; (iii) polychlorinated biphenyls; (iv)
petroleum, its derivatives, by-products and other hydrocarbons; and (v) any
other toxic, radioactive, caustic or otherwise hazardous substance regulated
under Environmental Laws.
"Hazardous Materials Contamination" means contamination
(whether now existing or hereafter occurring) of the improvements, buildings,
facilities, personalty, soil, groundwater, air or other elements on or of the
relevant property by Hazardous Materials, or any derivatives thereof, or on or
of any other property as a result of Hazardous Materials, or any derivatives
thereof, generated on, emanating from or disposed of in connection with the
relevant property.
"Healthcare Law" means, collectively, any and all federal,
state or local laws, rules, regulations, manuals, orders, guidelines and
requirements pertaining to Government Receivables, including without limitation
all laws, rules, regulations, manuals, orders, guidelines and requirements
pertaining to CHAMPUS, CHAMPVA, Medicaid or Medicare
"Indemnitees" has the meaning set forth in Section 8.05.
"Index Rate" means for any day in any calendar month, the rate
of interest equivalent to the money market yield for the Interest Determination
Date falling in such month on the one month commercial paper rate for
dealer-placed commercial paper of issuers whose corporate bonds are rated "AA"
or its equivalent by a nationally recognized rating agency, as such rate is made
available on a discount basis or otherwise by the Federal Reserve Bank of New
York and published weekly by the Board of Governors of the Federal Reserve
System in its H.15 report, or any successor publication published by the Board
of Governors of the Federal Reserve System or, if such rate for such date is not
yet published in such statistical release, the rate for that date will be the
rate set forth in the weekly statistical release designated as such, or any
successor publication, published by the Board of Governors of the Federal
Reserve System.
"Interest Determination Date" means June 3, 1996 and the first
Business Day of each calendar month thereafter.
"Inventory" means inventory as defined in Article 9 of the
UCC.
"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution, loan, time deposit or otherwise.
"Lender" shall mean NationsCredit, the other Lenders named on
the signature pages of the Agreement, and each other Person that becomes a
holder of a Note pursuant to Section 10.06, and their respective successors, and
"Lenders" means all of the foregoing.
"Leverage Ratio" shall mean, for any fiscal quarter of the
Company, the ratio of Consolidated Senior Debt as of the last day of such
quarter, to EBITDA for the four fiscal quarters ended on the last day of such
quarter.
"LIBOR" means, with respect to any Interest Determination
Date, (i) the London Interbank Offered Rate for deposits in U.S. dollars for a
period of time comparable to the period from and including such Interest
Determination Date to and including the next succeeding Interest Determination
Date which is published in The Wall Street Journal (Eastern Edition) under the
caption "Money Rates - London Interbank Offered Rates (LIBOR)" on such Interest
Determination Date; or (ii) if The Wall Street Journal does not publish such
rate, the offered rate for deposits in U.S. dollars for a period of time
comparable to the period from and including such Interest Determination Date to
and including the next succeeding Interest Determination Date which appears on
the Dow Xxxxx Markets Page 3750 as of 10:00 a.m., New York time, on such
Interest Determination Date, provided that if at least two rates appear on the
Dow Xxxxx Markets Page 3750, the "London Interbank Offered Rate" applicable to
such period shall be the arithmetic mean of such rates; or (iii) if The Wall
Street Journal does not publish such rate and no such rate appears on the Dow
Xxxxx Markets Page 3750 at such time, the rate per annum at which deposits in
U.S. dollars are offered by the principal London office of The Chase Manhattan
Bank, N.A. to leading banks in the London interbank market at approximately
11:00 a.m., London time, on such Interest Determination Date in an amount
approximately equal to the principal amount of the Loans for a period of time
comparable to the period from and including such Interest Determination Date to
and including the next succeeding Interest Determination Date, in each case as
determined by the Agent whose determination shall be conclusive absent manifest
error.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement and the
other Financing Documents, the Company or any Subsidiary 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.
"Loans" means the Revolving Credit Loans.
"Lockbox Accounts" has the meaning set forth in the Security
Agreements.
"Lockbox Agreement" means, collectively, the Lockbox
Agreements each in form and substance satisfactory to Lender, entered into among
the Agent, the Company and its Subsidiaries and the Lockbox Banks pursuant to
the Security Agreements.
"Lockbox Bank" means, collectively, the banks or other
depository institutions at which Lockbox Accounts are established and
maintained.
"Margin Stock" has the meaning assigned thereto in Regulation
G, U or X of the Federal Reserve Board, as the same may be amended, supplemented
or modified from time to time.
"Material Adverse Effect" means, with respect to any event,
act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon, any of
(a) the financial condition, operations, business, properties or prospects of
the Company and its Subsidiaries, taken as a whole, (b) the rights and remedies
of the Agent or the Lenders under the Financing Documents, or the ability of the
Company or any Subsidiary to perform its obligations under the Financing
Documents to which it is a party, as applicable, (c) the legality, validity or
enforceability of any Financing Document, or (d) the existence, perfection or
priority of any security interest granted in the Financing Documents.
"Material Plan" means at any time a Plan having Unfunded
Liabilities.
"Maximum Lawful Rate" has the meaning set forth in Section
2.03.
"Medicaid" means, collectively, the healthcare assistance
program established by Title XIX of the Social Security Act (42 U.S.C.
ss.ss.1396 et seq.) and any statutes succeeding thereto, and all laws, rules,
regulations, manuals, orders, guidelines or requirements pertaining to such
program including (a) all federal statutes (whether set forth in Title XIX of
the Social Security Act or elsewhere) affecting such program; (b) all state
statutes and plans for medical assistance enacted in connection with such
program and federal rules and regulations promulgated in connection with such
program; and (c) all applicable provisions of all rules, regulations, manuals,
orders and administrative, reimbursement, guidelines and requirements of all
government authorities promulgated in connection with such program (whether or
not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"Medicaid Receivable" means a Receivable payable pursuant to
a Medicaid Provider Agreement.
"Medicaid Certification" means certification of a facility by
HCFA or a state agency or entity under contract with HCFA that such healthcare
facility fully complies with all the conditions of Medicaid.
"Medicaid Provider Agreement" means an agreement entered into
between a state agency or other entity administering Medicaid in such state and
a health care facility or physician under which the health care facility or
physician agrees to provide services or merchandise for Medicaid patients.
"Medicare" means, collectively, the health insurance program
for the aged and disabled established by Title XVIII of the Social Security Act
(42 U.S.C. ss.ss.1395 et seq.) and any statutes succeeding thereto, and all
laws, rules, regulations, manuals, orders or guidelines pertaining to such
program including (a) all federal statutes (whether set forth in Title XVIII of
the Social Security Act or elsewhere) affecting such program; and (b) all
applicable provisions of all rules, regulations, manuals, orders and
administrative, reimbursement, guidelines and requirements of all governmental
authorities promulgated in connected with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.
"Medicare Receivable " means a Receivable payable pursuant to
Medicare Provider Agreement.
"Medicare Certification" mean certification of a facility by
HCFA or a state agency or entity under contract with HCFA that such healthcare
facility fully complies with all conditions for such facility's participation in
Medicare.
"Medicare Provider Agreement" means an agreement entered into
between a state agency or other entity administering Medicare in such state and
a health care facility or physician under which the health care facility or
physician agrees to provide services or merchandise for Medicare patients.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the ERISA
Group during such five year period.
"NationsCredit" means NationsCredit Commercial Corporation,
a Delaware corporation, and its successors.
"Net Proceeds of Capital Stock" means any consideration
received by the Company or any of its Consolidated Subsidiaries in respect of
the issuance of capital stock (including, without limitation, by way of
conversion of Debt into such capital stock), after deducting therefrom all
reasonable and customary costs and expenses incurred by such Person or such
Subsidiary directly in connection with the issuance of such capital stock.
"Note" means a Revolving Credit Note.
"Notice of Borrowing" has the meaning set forth in Section
2.04.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Company to the Lenders
or to any Lender, the Agent or any indemnified party hereunder arising under the
Financing Documents.
"Officers' Certificate" means a certificate executed on behalf
of a Person by its chairman of the board (if an officer), chief executive
officer or president or one of its vice presidents and by its chief financial
officer or treasurer.
"Option Agreement" means the Option Agreement, dated the
Original Agreement Date, in substantially the form of Exhibit K.
"Options" means the rights to acquire Common Stock of the
Company issued to NationsCredit pursuant to the Option Agreement.
"Original Agreement Date" means June 12, 1996.
"Payment Account" means, with respect to each Lender, the
account specified on the signature pages hereof into which all payments by or on
behalf of the Company to such Lender under the Financing Documents shall be
made, or such other account as such Lender shall from time to time specify by
notice to the Company.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Contest" means a contest maintained in good faith
by appropriate proceedings promptly instituted and diligently conducted and with
respect to which such reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made; provided that
compliance with the obligation that is the subject of such contest is
effectively stayed during such challenge.
"Permitted Liens" means Liens permitted pursuant to Section
6.02.
"Permitted Refinancing" means any refunding or refinancing of
an item of Debt at a market rate of interest; provided, that (i) the principal
amount thereof shall not be increased except, in the case of a public debt
offering for accrued interest thereon (in an amount not to exceed 6 months
interest), (ii) the time for repayment therefor shall not be reduced, (iii) the
security thereof shall not be increased, and (iv) the terms thereof shall not
otherwise be materially altered.
"Person" means any natural person, corporation, limited
partnership, limited liability company, professional association, general
partnership, joint stock company, joint venture, association, company, trust,
bank, trust company, land trust, business trust or other organization, whether
or not a legal entity, and any government agency or political subdivision
thereof.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Pledge Agreement" means the Pledge Agreement dated as of the
Original Agreement Date between the Company and the Agent, substantially in the
form of Exhibit D.
"Prime Rate" means the rate publicly announced from time to
time by NationsBank of North Carolina, N.A. as its "prime rate". Changes in the
Prime Rate shall be effective as of the opening of business on the date of each
announced change therein.
"Private Receivables" mean, collectively, any and all
Receivables that are not Government Receivables.
"Professional Service Provider Security Agreement" means any
Professional Service Provider Security Agreement between the Agent and any
professional service provider that has entered into a Service Agreement with the
Company, which agreement shall be in substantially the form of Exhibit G hereto.
"Program Loans" shall mean loans made, or commitments to make
loans, to physician groups or professional associations, on terms and conditions
satisfactory to the Required Lenders, for the purpose of funding loans or
advances to members of such groups or associations or other physicians in
connection with the affiliation of such professional association or group with
the Company and the execution of a management services agreement between the
Company or one of its Subsidiaries and such association or group.
"Quarterly Date" means the first Business Day of each January,
April, July and October occurring after the Agreement Date.
"Receivable" means, as at any date of determination thereof,
the unpaid portion of the obligation, as stated in the respective invoice, of a
patient of any Credit Party in respect of Inventory or medical services rendered
in the ordinary course of business, which amount has been earned by performance
under the terms of the related contract and recognized as revenue on the books
of the Company, net of any credits, rebates or offsets owed to the patient or
any Third Party Payor in respect thereof and also net of any commissions payable
to Persons other than a Credit Party or any employee thereof.
"Receivables Report" has the meaning given such term in
Section 5.01(m).
"Required Lenders" means at any time, Lenders who hold Notes
evidencing at least 51% of the aggregate unpaid principal amount of the Loans
or, if no Loans are outstanding, having at least 51% of the aggregate amount of
the Commitments, provided that so long as there are at least 2 unaffiliated
lenders hereunder, Required Lenders must also include at least two Lenders who
are not affiliates of one another.
"Reserve Requirement" means at any time the then current
maximum rate for which reserves (including any marginal, supplemental or
emergency reserve) are required to be maintained under Regulation D by member
banks of the Federal Reserve System in New York City with deposits comparable in
amount to those of NationsBank of North Carolina, N.A. against "Eurocurrency
liabilities", as that term is used Regulation D. Adjusted LIBOR shall be
adjusted automatically on and as of the effective date of any change in the
Reserve Requirement.
"Restatement Effective Date" means the date upon which all of
the conditions to the effectiveness of this Agreement under Section 10.13 have
been satisfied.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of the Company's capital stock (except dividends
payable solely in shares of its capital stock of the same class or payment of
cash in lieu of fractional shares), (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Company's capital
stock or (b) any option, warrant or other right to acquire shares of the
Company's capital stock, and (iii) any payment in respect of subordinated Debt.
"Revolving Credit Commitment" means (i) as to each of
NationsCredit and AmSouth Bank, initially such Lender's Revolving Credit
Commitment as set forth on the signature page to the Agreement, less any amount
assigned to another person that becomes a Lender after the date hereof (a
"Subsequent Lender") and (ii) for any Subsequent Lender, the amount of Revolving
Credit Commitment assigned to such Lender, in each case as such amount may be
reduced from time to time in accordance with this agreement.
"Revolving Credit Loan" shall have the meaning assigned to it
in Section 2.01(a).
"Revolving Credit Note" shall have the meaning assigned to it
in Section 2.03 and each Revolving Credit Note shall be substantially in the
form of Exhibit A hereto.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder.
"Security Agreements" means, collectively, the Company
Security Agreement and the Subsidiary Security Agreement.
"Security Documents" means the Security Agreements, the
Professional Service Provider Security Agreements, the Pledge Agreement and any
other agreement pursuant to which the Company or any of its Subsidiaries or
Affiliates or any other Credit Party provides a Lien on its assets in favor of
the Agent for the benefit of the Lenders, and all supplementary assignments,
security agreements, pledge agreements, acknowledgments or other documents
delivered or to be delivered pursuant to the terms hereof or of any other
Security Document.
"Service Agreement" means an agreement between the Company
and/or one or more of its Subsidiaries and one or more physician practice groups
pursuant to which the Company and/or such Subsidiary agrees to provide certain
management services to the group.
"Solvent" shall mean, with respect to any Person, such Person:
(i) owns property whose fair salable value is greater than the amount required
to pay all of such Person's liabilities (including contingent debts), (ii) is
able to pay all of its liabilities as such liabilities mature, and (iii) has
capital sufficient to carry on its business and transactions and all business
and transactions to which it is about to engage.
"Subsidiary" means any Person of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the time
directly or indirectly owned by the Company.
"Subsidiary Guaranty Agreement" means the guaranty agreement
between the Subsidiaries listed on Exhibit A thereto and the Agent,
substantially in the form of Exhibit E.
"Subsidiary Security Agreement" means the Security Agreement
between the Subsidiaries listed on Exhibit A thereto and the Agent,
substantially in the form of Exhibit F.
"Temporary Cash Investment" means any Investment in: (i)
direct obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
rated at least A-1 by Standard & Poor's Rating Group and P-1 by Xxxxx'x
Investors Service, Inc., (iii) time deposits with, including certificates of
deposit issued by, any office located in the United States of any bank or trust
company which is organized under the laws of the United States or any State
thereof and has capital, surplus and undivided profits aggregating at least
$500,000,000 and which issues (or the parent of which issues) certificates of
deposit or commercial paper with a rating described in clause (ii) above, (iv)
repurchase agreements with respect to securities described in clause (i) above
entered into with an office of a bank or trust company meeting the criteria
specified in clause (iii) above, provided in each case that such Investment
matures within one year from the date of acquisition thereof by the Company or
any of its Subsidiaries or (v) any open ended, redeemable money market or mutual
fund that invests only in the foregoing, the sponsor of which is nationally
recognized as a responsible sponsor.
"Third Party Payor" means any governmental entity, insurance
company, health maintenance organization, preferred provider organization or
similar entity that is obligated to make payments with respect to a Receivable.
"Total Debt Service" means, for any period, the sum of: (i)
Total Interest Expense, and (ii) the aggregate amount of all scheduled principal
payments on all Debt, including the portion of any payment under Capital Leases
that is allocable to principal.
"Total Interest Expense" means, for any period, the aggregate
interest charges incurred by the Company and its Consolidated Subsidiaries and
required to be paid in cash for such period, whether expensed or capitalized,
including the cash portion of any obligation under Capital Leases allocable to
interest expense in accordance with GAAP, less any interest income earned by the
Company and its Consolidated Subsidiaries for such period other than interest
income received in respect of Program Loans..
"UCC" has the meaning set forth in the Security Agreements.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.
"Working Capital Availability" has the meaning specified in
Section 2.01(b).
"Working Capital Loans" means Revolving Credit Loans made
to the Company pursuant to Section 2.01(b).
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time ("GAAP"), applied on a basis consistent (except for changes concurred in
by the Company's independent public accountants) with the most recent audited
consolidated financial statements of the Company and its Consolidated
Subsidiaries delivered to the Lenders; provided that, if the Company notifies
the Lenders that the Company wishes to amend any covenant in Article VI or the
definition of "Excess Cash Flow" or any related definition to eliminate the
effect of any change in GAAP on the operation of such covenant or the
determination of "Excess Cash Flow" (or if the Agent notifies the Company that
the Required Lenders wish to amend Article VI or the definition of "Excess Cash
Flow" or any related definition for such purpose), then the Company's compliance
with such covenant or "Excess Cash Flow", as the case may be, shall be
determined on the basis of GAAP in effect immediately before the relevant change
in GAAP became effective, until either such notice is withdrawn or such covenant
is amended in a manner satisfactory to the Company and the Required Lenders.
SECTION 1.03. Other Definitional Provisions. References in
this Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.01 may,
unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import. "Writing", "written" and
comparable terms refer to printing, typing and other means of reproducing words
in a visible form. References to any agreement or contract are to such agreement
or contract as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof. References to any Person include the
successors and assigns of such Person. References "from" or "through" any date
mean, unless otherwise specified, "from and including" or "through and
including", respectively.
ARTICLE II
REVOLVING CREDIT LOANS
SECTION 2.01. Revolving Credit Loans and Commitments. (a) Upon
the terms and subject to the conditions set forth herein, from time to time
prior to the Availability Termination Date, each Lender severally and not
jointly agrees to make revolving credit loans ("Revolving Credit Loans") from
time to time to the Company in an aggregate principal amount at any time
outstanding not to exceed such Lender's Revolving Credit Commitment. Such
Revolving Credit Loans shall constitute either Working Capital Loans or
Acquisition Loans. All Loans made by the Lenders hereunder shall be made pro
rata in the proportion that each such Lender's Revolving Credit Commitment bears
to the Revolving Credit Commitments.
(b) (i) Working Capital Loans shall be available for the
working capital needs of the Company and its Subsidiaries and shall not exceed
in aggregate principal amount at any time outstanding the least of (the "Working
Capital Availability"):
(A) $10,000,000,
(B) prior to the Availability Termination Date,
an amount equal to the Borrowing Base, and
(C) the Revolving Credit Commitment then in
effect, less the aggregate outstanding
principal amount of Acquisition Loans.
(ii) Each borrowing of Working Capital Loans shall be in an aggregate amount of
$100,000 or an integral multiple of $10,000 in excess thereof. No more than two
borrowings of Working Capital Loans shall be made within any week beginning on
Monday of such week and ending on the last Business Day of such week.
(c) (i) Acquisition Loans shall be available in the sole good
faith discretion of the Agent and the Required Lenders for the purpose of
financing Acquisitions by the Company, in an aggregate principal amount not to
exceed at any time outstanding (the "Acquisition Availability") the Revolving
Credit Commitment then in effect, less the aggregate outstanding principal
amount of Working Capital Loans.
(ii) Acquisition Loans may be made in such amounts and at such times as the
Agent and the Required Lenders shall agree in good faith and upon such terms and
conditions as the Agent and the Required Lenders shall require.
(iii) In connection with the Agent's and Required Lenders' approval of any
Acquisition and any borrowing of Acquisition Loans, the Company agrees to
provide the Agent and the Lenders, as soon as practicable following the
execution thereof, with copies of any term sheet or commitment letter agreed to
in connection with such Acquisition. As promptly as practicable following
receipt of such term sheet and/or commitment, the Agent and the Required Lenders
agree to notify the Company whether they can consent to the proposed Acquisition
as the basic terms thereof are outlined in the documents provided. Such
indication shall be subject to approval of the definitive documentation and the
results of any due diligence performed in connection therewith. At the time of
such approval, the Agent shall notify the Company of any due diligence materials
that it wishes to review. Promptly upon the completion of the definitive
documentation and as soon as the due diligence materials required are available,
the Company shall furnish a copy of such documentation and/or such materials to
the Agent and the Agent and the Required Lenders agree to review the same
promptly and respond to the Company as promptly as practicable as to whether
they approve the Acquisition.
(d) Within the foregoing limits, to but excluding the
Availability Termination Date, the Company may borrow under this Section 2.01,
prepay or repay Revolving Credit Loans as required under Section 2.05(b) or to
the extent permitted by Section 2.06, and reborrow pursuant to this Section
2.01.
SECTION 2.02. Revolving Credit Notes. The Revolving Credit
Loans of each Lender shall be evidenced by a single Revolving Credit Note,
substantially in the form of Exhibit A (each such note, a "Revolving Credit
Note"), dated the Restatement Effective Date in an aggregate principal amount
equal to the amount of such Lender's Revolving Credit Commitment, duly executed
and delivered and payable to such Lender. Each Lender shall record the date and
amount of each Revolving Credit Loan made by it, whether such Revolving Credit
Loan was a Working Capital Loan or an Acquisition Loan, and the date and amount
of each payment of principal made by the Company with respect thereto, and prior
to any transfer of its Revolving Credit Note shall endorse on Schedule A thereto
(or any continuation thereof) forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Revolving Credit
Loan then outstanding; provided that the failure of any Lender to make any such
recordation or endorsement shall not affect the obligations of the Company
hereunder or under the Revolving Credit Notes. Each Lender is hereby irrevocably
authorized by the Company so to endorse its Revolving Credit Note and to attach
to and make a part of its Revolving Credit Note a continuation of any such
schedule as and when required.
SECTION 2.03. Interest on the Revolving Credit Loans. (a) The
Company shall pay interest on the Revolving Credit Loans to the Lenders monthly
in arrears on the first (1st) day of each calendar month immediately succeeding
the month for which such interest accrues, commencing with the first (1st) day
of the calendar month following the calendar month in which the Closing Date
occurs. In all cases accrued interest on all of the Revolving Credit Loans shall
be payable by the Company to the Lenders on the Commitment Termination Date.
Interest that accrues at the Default Rate shall be payable upon demand by the
Lenders. If any interest on any of the Revolving Credit Loans accrues or remains
payable after the Commitment Termination Date, such interest shall be payable by
the Company upon demand by the Lenders.
(b) (i) Except as provided in paragraphs (c) below, the Company shall be
obligated to pay interest to the Lenders on the outstanding principal balance of
each Revolving Credit Loan from the date such Revolving Credit Loan is made
until such Revolving Credit Loan is repaid in full.
(ii) Subject to Section 2.03(e), interest on all Revolving Credit Loans
held by NationsCredit, or any Lender to whom NationsCredit has assigned its Note
or any portion thereof in accordance with the terms of Section 10.06,
outstanding during any month shall accrue at a floating rate per annum equal, at
the Company's option, to one of: (i) the Index Rate plus three and one-quarter
percentage points (3.25%), (ii) Adjusted LIBOR plus three and one-quarter
percentage points (3.25%), or (iii) the Prime Rate plus one-half of a percentage
point (0.50%).
(iii) Subject to 2.03(e), interest on all Revolving Credit Loans held by
AmSouth Bank, or any other Lender to whom AmSouth Bank has assigned its Note or
any portion thereof in accordance with the terms of Section 10.06, outstanding
during any month shall accrue at a floating rate per annum equal, at the
Company's option, to one of: (A) the Index Rate, (B) the Adjusted LIBOR, or (C)
the Prime Rate, in each case ((A),(B), and (C)) plus the Applicable Margin.
(iv) On the Closing Date, continuing through the last day of the calendar
month in which the Closing Date occurs and thereafter unless the Company shall
have selected another rate or shall be deemed to have selected another rate as
provided below, the Revolving Credit Loans shall bear interest based on the
Prime Rate. Thereafter, provided that no Default or Event of Default has
occurred and is then continuing, and subject to the terms and conditions set
forth herein, the Company may by written notice (or by telephonic notice
confirmed promptly in writing) delivered to the Agent not later than the Second
Business Day preceding the beginning of each calendar month, elect whether the
interest payable to the Lenders for such calendar month shall be based on the
Prime Rate, Adjusted LIBOR or the Index Rate (each such notice being referred to
as a "Notice of Floating Rate Election"). In the event that the Company shall
fail to deliver any Notice of Floating Rate Election on the date required above,
provided that no Default or Event of Default shall have occurred and be
continuing, the Company shall be deemed to have delivered a Notice of Floating
Rate Election that elects to continue in effect for the calendar month the
interest rate determination mechanism in effect for the previous month.
(c) The Agent shall be entitled to rely upon and shall be fully protected
under this Agreement in relying on any Notice of Floating Rate Election believed
by the Agent to be genuine and to assume that the persons giving the same on
behalf of the Company were duly authorized unless the responsible individual
acting thereon for the Agent shall have actual notice to the contrary.
(d) All computations of interest hereunder or under the other Loan
Documents for Revolving Credit Loans shall be made by the Agent on the basis of
a 360 day year for the actual number of days occurring in the period for which
such interest is payable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(e) So long as any Event of Default shall have occurred and be continuing,
the interest rate applicable to the Loans or other Obligations of the Company or
any of its Subsidiaries under the Financing Documents may be increased by the
Required Lenders, at their option, by up to two percentage points (2%) per annum
above the rate otherwise applicable (the "Default Rate").
(a) Except as provided in the last sentence of this Section 2.04(a), each
Revolving Credit Loan shall be made on notice by the Company to the Lenders,
given no later than 11:00 a.m. (New York time) on the Business Day of the
proposed Revolving Credit Loan. Such notice (each a "Notice of Borrowing") shall
be substantially in the form of Exhibit B hereto, shall be duly completed and
executed by an Authorized Signatory, and shall specify therein the requested
date and amount of such Revolving Credit Loan, and such other information as may
be required by the Agent. Each Notice of Borrowing shall be given in writing (by
telecopy, telex or cable) or by telephone and confirmed immediately in writing.
Notwithstanding the foregoing, no Notice of Borrowing that requests an
Acquisition Loan shall be effective until the Agent notifies the Company that
the Agent and the Required Lenders have consented to the proposed Acquisition
after having been provided such information respecting the proposed Acquisition
as is required to be delivered pursuant to Section 3.02 and such time to review
the same as the Agent and the Required Lenders shall reasonably deem necessary.
(b) Not later than 1:00 P.M. (New York City time) on the date of each
borrowing specified in a Notice of Borrowing, each Lender shall make available
its ratable share of such borrowing of Loans, in immediately available funds, to
the Company Account.
(c) The failure of any Lender to make a Loan on any date shall not
relieve any other Lender of its obligation, if any, hereunder to make its Loan
on that date. Neither the Agent nor any Lender shall be responsible for the
failure of any other Person to make any Loan hereunder on the date required
therefor.
SECTION 2.05. Mandatory Repayments and Prepayments. (a) The
Revolving Credit Commitment of each Lender shall terminate at the opening of
business on January 2, 2004 (the "Commitment Termination Date"), and there shall
become due and the Company shall pay on the Commitment Termination Date, the
entire outstanding principal amount of each Revolving Credit Loan, together with
accrued and unpaid interest thereon to but excluding the Termination Date.
(b) If at any time (i) the aggregate unpaid principal balance
of the Working Capital Loans exceeds the Working Capital Availability, or (ii)
the aggregate unpaid principal balance of the Acquisition Loans exceeds the
Acquisition Availability, then, on the next succeeding Business Day, the Company
shall prepay Working Capital Loans and/or Acquisition Loans in an aggregate
principal amount equal to such excess.
(c) Commencing on April 1, 1999 (the "Amortization
Commencement Date") and continuing on each Quarterly Date thereafter, the
Company shall repay the Revolving Credit Loans in equal quarterly installments
of principal equal to 5% of the aggregate principal amount of the Revolving
Credit Loan outstanding on the Amortization Commencement Date.
(d) There shall become due and payable, and the Company shall
prepay, on the 90th day following the last day of each Fiscal Year, beginning
with the Fiscal Year ending December 31, 1999, an aggregate principal amount of
Revolving Credit Loans equal to fifty percent (50%) of the Excess Cash Flow for
such Fiscal Year.
SECTION 2.06. Optional Prepayments. The Company may prepay the
Revolving Credit Loans in whole or in part (in minimum principal amounts of
$100,000 or in any larger integral multiple of $10,000, or the total remaining
amount outstanding) upon at least three Business Days' prior irrevocable written
notice to the Lenders, without premium or penalty. The aggregate principal
amount of the Revolving Credit Loans designated for prepayment in any notice of
optional prepayment given pursuant to this section shall become due and payable
on the date fixed for prepayment as specified in such notice.
SECTION 2.07. Application of Payments. Each payment or
prepayment of the principal of the Revolving Credit Loans shall be applied pro
rata to the Revolving Credit Loans of each Lender according to their respective
outstanding principal amounts, and shall be applied to the Class of Loan
required under this Agreement or, if not so required, as directed by the
Company. The principal amount of each payment on Revolving Credit Loans pursuant
to Section 2.05(d) shall be applied to reduce the remaining payments required by
Section 2.05(c) in inverse order of the maturity thereof. The principal amount
of each payment on Revolving Credit Loans pursuant to Section 2.06 shall be
applied to reduce the remaining payments required by Section 2.05(c) (i) 50% in
inverse order of the maturity thereof, and (ii) 50% in the order of maturity
thereof. Except as provided in the definition of Excess Cash Flow, no payment of
the principal amount of Acquisition Loans pursuant to Section 2.05(b), 2.05(c)
or 2.06 shall reduce the amount of any payment required by 2.05(d). Each payment
of less than all outstanding aggregate principal amount of Revolving Credit
Loans of any Class shall be applied by the Lender receiving such payment, pro
rata to all Revolving Credit Loans of such Class held by such Lender in
according to their respective outstanding principal amounts.
SECTION 2.08. Reduction of Commitments. (a) The Revolving Credit Commitment
shall reduce: (i) to the amount of the aggregate outstanding principal amount of
the Revolving Credit Loans on the Availability Termination Date, and after such
date by the amount of each payment made pursuant to Section 2.06, and (ii) by
the amount of each payment required pursuant to Section 2.05(c) or (d).
(b) The Company shall have the right at any time to terminate in whole
this Agreement, or from time to time, irrevocably to reduce in part the amount
of the Revolving Credit Commitment, in each case without penalty or premium,
upon at least 15 days' prior written notice to the Agent. Such notice shall be
irrevocable on the part of the Company and shall specify the effective date of
such reduction or termination, whether a termination or reduction is being made,
and, in the case of any reduction, the amount thereof shall be in an amount of
Two Million Five Hundred Thousand Dollars ($2,500,000) or an integral multiple
thereof. Upon any such reduction, the Company shall simultaneously prepay any
outstanding Revolving Credit Loans to the extent necessary so that the aggregate
outstanding principal amount of the Revolving Credit Loans does not exceed the
amount of the Revolving Credit Commitment after giving effect to any partial
reduction thereof. The aforesaid prior notice requirement shall not apply to the
Agent's exercise of remedies under Section 7.01. In the event the Company
exercises its rights under this paragraph to prepay the Revolving Credit Loans
and terminate this Agreement, the Company agrees that such prepayment shall be
accompanied by the payment by the Company of all accrued and unpaid interest and
all fees and other remaining Obligations. The amount of the Revolving Credit
Commitment may not be reinstated if it is reduced or if this Agreement is
terminated by the Company.
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions to Closing. The obligation of each
Lender to make Loans on the Closing Date shall be subject to the satisfaction of
the following conditions precedent:
(a) receipt by the Agent of counterparts hereof signed by each
of the parties hereto (or, in the case of any party as to which an
executed counterpart shall not have been received, receipt by the Agent
in form satisfactory to it of telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by
such party);
(b) receipt by NationsCredit of a duly executed Revolving
Credit Note for its account, in the form provided for herein;
(c) receipt by the Agent of duly executed counterparts of each
Security Document required to be effective on the Closing Date
(including the Lockbox Agreements), together with evidence satisfactory
to it in its sole good faith discretion of the effectiveness, priority
and perfection of the security contemplated thereby and the lien search
reports and any additional documents reasonably requested by the Agent;
(d) receipt by the Agent of a duly executed counterpart of the
Option Agreement, substantially in the form of Exhibit K;
(e) receipt by the Agent of duly executed counterparts of the
Subsidiary Guaranty in the form of Exhibit E, duly executed by each
Subsidiary of the Company;
(f) receipt by the Agent of the initial Borrowing Base
Certificate, in the form of Exhibit H, duly executed and completed by
the Company;
(g) receipt by the Agent of an opinion of counsel for the
Company and its Subsidiaries, substantially in the form of Exhibit I,
and covering such additional matters relating to the transactions
contemplated hereby as NationsCredit may reasonably request (by its
execution and delivery of this Agreement, the Company authorizes and
directs such counsel to deliver such opinions to the Agent);
(h) receipt by the Agent of an opinion of Xxxxxxxxxx Xxxxxxxx
LLP, special counsel for the Agent, substantially in the form of
Exhibit J, and covering such additional matters relating to the
transactions contemplated hereby as NationsCredit may reasonably
request;
(i) receipt by NationsCredit, including in its capacity as
Agent, of all fees and any other amounts due and payable hereunder
(including fees and expenses payable pursuant to Section 8.04) of which
the Company has received notice;
(j) receipt by NationsCredit of any information it may request
concerning the financial condition, results of operations, liabilities
(contingent and otherwise, including with respect to environmental
liabilities and employee and retiree benefits) and prospects of, and
the financial reporting and accounting systems and the management
information systems of, the Company;
(k) satisfaction of NationsCredit in its sole good faith
discretion as to the absence of any event, act, condition or occurrence
of whatever nature that constitutes, or that is reasonably likely to
result in, a Material Adverse Effect;
(l) receipt by NationsCredit of a certificate signed by the
chief financial officer or treasurer of the Company to the effect that,
both before and immediately after the making of the Loans, and the
other transactions contemplated to take place on the Closing Date, (i)
no Default shall have occurred and be continuing and (ii) the
representations and warranties of the Company and each of its
Subsidiaries made in or pursuant to the Financing Documents executed by
such Person are true in all material respects;
(m) receipt by NationsCredit of (i) the financial statements
and balance sheet referred to in Sections 4.04(a), (b) and (c), and
(ii) payment instructions with respect to each wire transfer to be made
by the Agent on the Closing Date setting forth the amount of such
transfer, the purpose of such transfer, the name and number of the
account to which such transfer is to be made, the name and ABA number
of the bank or other financial institution where such account is
located and the name and telephone number of an individual that can be
contacted to confirm receipt of such transfer;
(n) receipt by the Agent of evidence satisfactory to it in its
sole good faith discretion of the effectiveness of employment contracts
between the Company and the Persons listed on Schedule 3.01(n); and
(o) receipt by the Agent of all documents it may reasonably
request relating to the existence of the Company and its Subsidiaries,
the corporate authority for and the validity of the Financing
Documents, and any other matters relevant hereto, all in form and
substance satisfactory to the Agent in its sole good faith discretion.
The documents referred to in this Section shall be delivered to the Agent no
later than the Closing Date. The certificates and opinions referred to in this
Section shall be dated the Closing Date.
SECTION 3.02. Conditions to Acquisition Loans. The obligation of any Lender
to make an Acquisition Loan on the occasion of any borrowing is subject to the
satisfaction of the following additional conditions:
(a) receipt by the Lenders of a Notice of Borrowing in
accordance with Section 2.04;
(b) receipt by the Agent of all documents, instruments and
agreements to be delivered in connection with the Acquisition and/or
any financing therefor;
(c) completion of, and satisfaction of the Agent and the
Lenders with, such legal and/or business due diligence review of the
Acquisition, the terms thereof, and the target thereof as the Agent and
the Lenders reasonably shall deem relevant;
(d) evidence satisfactory to the Agent that all property to be
acquired in the Acquisition, including all property of any Person that,
following such Acquisition, is to become a Subsidiary, will be pledged
to the Agent and the Lenders as security for the Obligations and that
the Liens granted pursuant thereto will constitute perfected Liens,
subject only to Permitted Liens, and that any Person that will become a
Subsidiary as a result of such Acquisition has executed a guaranty of
the Obligations in form and substance satisfactory to the Agent and the
Required Lenders and otherwise complied with the requirements of
Section 6.07;
(e) receipt by the Agent and the Lenders of such historical
financial statements and information and such market information
respecting the target of the Acquisition as the Agent and the Lenders
reasonably shall deem relevant;
(f) receipt by the Agent and the Lenders of pro forma
financial statements showing the target and the Company on a
consolidated basis after giving effect to such Acquisition as of the
date of the closing thereof and a certificate of the chief financial
officer or treasurer of the Company demonstrating that the Company,
both before and after giving effect to the Acquisition, will be in
compliance with the financial and other covenants contained herein and
in the other Loan Documents; and
(g) such other information respecting the Acquisition, the
target or the Company as the Agent and the Lenders reasonably shall
deem relevant.
SECTION 3.03. Conditions to Each Loan. The obligation of any
Lender to make a Loan on the occasion of any borrowing thereof (including on the
Closing Date) is subject to the satisfaction of the following additional
conditions:
(a) receipt by the Agent of a Notice of Borrowing in
accordance with Section 2.04;
(b) the fact that, immediately before and after such
borrowing, (i) in the case of all borrowings, no Default shall have
occurred and be continuing, and (ii) in the case of a borrowing of
Working Capital Loans, the aggregate outstanding principal amount of
Working Capital Loans shall be less than the Working Capital
Availability; and
(c) the fact that the representations and warranties of the
Company contained in the Financing Documents shall be true in all
material respects on and as of the date of such borrowing, except for
such changes therein as are expressly permitted by the terms of this
Agreement.
Each borrowing hereunder shall be deemed to be a representation and warranty by
the Company on the date of such borrowing as to the facts specified in clauses
(b) and (c) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants as to itself and each of
its Subsidiaries that:
SECTION 4.01. Corporate Existence and Power. The Company and
each Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of its organization, and the Company and
each other Credit Party has all corporate powers, if applicable, and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted and as will be conducted (including,
without limitation, accreditations and certifications as a provider of health
care services eligible to receive payment and compensation and to participate
under Medicare, Medicaid, CHAMPUS or CHAMPVA). The Company and each Subsidiary
is qualified to do business as a foreign corporation in each jurisdiction in
which the failure of the Company or such Subsidiary to be so qualified could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Company and each
of its Subsidiaries of the Financing Documents to which it is a party are within
the Company's or such Subsidiary's (as the case may be) corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official (other
than the filing of UCC-1 financing statements, which have been made and are in
full force and effect) and do not contravene, or constitute a default under, any
provision of applicable law or regulation (including specifically any applicable
rule or regulation relating to the eligibility of any Credit Party to receive
payment and to participate as an accredited and certified provider of health
care services under Medicare, Medicaid, CHAMPUS, CHAMPVA or any Blue Cross/Blue
Shield or equivalent program or relating to the licenses and permits required
therein or in connection therewith) or of the certificate of incorporation or
by-laws of the Company or any of its Subsidiaries or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company or any of
its Subsidiaries or result in the creation or imposition of any Lien (other than
the Liens created by the Security Documents) on any asset of the Company or any
of its Subsidiaries.
SECTION 4.03. Binding Effect; Liens of Security Documents. (a)
Each of the Financing Documents to which the Company is a party (other than the
Notes,) constitutes a valid and binding agreement of the Company, and each of
the Notes, when executed and delivered in accordance with this Agreement, will
constitute valid and binding obligations of the Company, in each case
enforceable in accordance with its respective terms, subject to: (i) the effect
of any applicable bankruptcy, fraudulent transfer, moratorium, insolvency,
reorganization or other similar laws affecting the rights of creditors
generally; and (ii) the effect of general principles of equity whether applied
by a court of equity or law.
(b) Each of the Financing Documents to which any Subsidiary of
the Company is a party constitutes a valid and binding agreement of such
Subsidiary enforceable in accordance with its terms, subject to: (i) the effect
of any applicable bankruptcy, fraudulent transfer, moratorium, insolvency,
reorganization or other similar laws affecting the rights of creditors
generally; and (ii) the effect of general principles of equity whether applied
by a court of equity or law.
(c) The Security Documents create valid security interests in,
the Collateral purported to be covered thereby, which security interests are and
will remain perfected security interests, prior to all other Liens other than
Permitted Liens. Each of the representations and warranties made by the Company
or any of its Subsidiaries in the Security Documents is true and correct.
SECTION 4.04. Financial Information.
(a) (i) The unaudited consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of June 30, 1995 and the related
unaudited consolidated statements of operations and cash flows for the fiscal
year then ended, (ii) the unaudited consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of December 31, 1995 and the related
unaudited consolidated statements of operations and cash flows for the 6 months
then ended, and (iii) the unaudited consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of April 30, 1996 and the related unaudited
consolidated statements of operations and cash flows for the four (4) months
then ended, copies of each of which ((i), (ii) and (iii)) have been delivered to
each of the Lenders, fairly present, in conformity with GAAP applied on a
consistent basis the consolidated financial position of the Company and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for the periods then ended (subject to normal year-end
adjustments). As of the date of the latest such balance sheet and the date
hereof, neither the Company nor any of its Subsidiaries had or has any material
liabilities, contingent or otherwise, including liabilities for taxes, long-term
leases or forward or long-term commitments, which are not properly reflected on
such balance sheet.
(b) The information contained in the most recently delivered
Borrowing Base Certificate is complete and correct and the amounts shown therein
as "Eligible Receivables" have been determined as provided in the Financing
Documents.
(c) Since April 30, 1996, there has been no event, act,
condition or occurrence of whatever nature that constitutes, or that could
reasonably be expected to result in, a Material Adverse Effect.
SECTION 4.05. Litigation. There is no action, suit or
proceeding pending against, or to the knowledge of the Company threatened
against or affecting, the Company or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
There is no action, suit or proceeding pending against, or to the knowledge of
the Company threatened against or affecting, any party to any of the Financing
Documents before any court or arbitrator or any governmental body, agency or
official which in any manner draws into question the validity of any of the
Financing Documents. There is no pending investigation of any Credit Party by
HCFA or any other governmental authority, which investigation is not otherwise
conducted in the ordinary course of business and no criminal, civil or
administrative action, audit, or investigation by a fiscal intermediary or by or
on behalf of any governmental authority exists or, to the best knowledge of the
Company, is threatened with respect to any Credit Party which could reasonably
be expected to materially and adversely affect such Credit Party's right to
receive Medicare, Medicaid, CHAMPUS or CHAMPVA reimbursement to which such
Credit Party would otherwise be entitled, or right to participate in the
Medicare, Medicaid, CHAMPUS or CHAMPVA programs, or otherwise have a Material
Adverse Effect on the receipt of Medicare, Medicaid, CHAMPUS or CHAMPVA
reimbursement by such Credit Party, and, to the best knowledge of the Company,
no Credit Party is subject to any pending but unassessed Medicare, Medicaid,
CHAMPUS or CHAMPVA claim payment adjustments, except to the extent that such
Credit Party is contesting such assessment in good faith by appropriate
proceedings diligently pursued and has established and will maintain adequate
reserves for such adjustments in accordance with GAAP.
SECTION 4.06. Ownership of Property, Liens. On and as of the
Restatement Effective Date, the Company and each Subsidiary is the lawful owner
of, has good and marketable title to and is in lawful possession of, or has
valid leasehold interests in, all properties and other assets (real or personal,
tangible, intangible or mixed) purported to be owned or leased (as the case may
be) by such Person on the balance sheet referred to in Section 4.04(a), and none
of such Person's properties and assets is subject to any Liens, except Permitted
Liens. The Company and its Subsidiaries conduct their business without
infringement or claim of infringement of any material license, patent,
trademark, trade name, service xxxx, copyright, trade secret or other
intellectual property right of others and there is no infringement or claim of
infringement by others of any material license, patent, trademark, trade name,
service xxxx, copyright, trade secret or other intellectual property right of
the Company or any of its Subsidiaries.
SECTION 4.07. No Default. No Default has occurred and is
continuing and neither the Company nor any of its Subsidiaries is in default
under or with respect to any material contract, agreement, lease or other
material instrument to which it is a party or by which its property is bound or
affected. Neither the Company nor any other Credit Party has received
notification from any governmental authority that any such governmental
authority has taken or intends to take action to revoke, terminate or adversely
amend any license, certificate, accreditation or permit of such Person to
operate a healthcare facility or to participate under Medicare, Medicaid,
CHAMPUS or CHAMPVA.
SECTION 4.08. No Burdensome Restrictions. No contract, lease,
agreement or other instrument to which the Company or any of its Subsidiaries is
a party or by which any of its property is bound or affected, no charge,
corporate restriction, judgment, decree or order and no provision of applicable
law or governmental regulation is reasonably likely to have or result in a
Material Adverse Effect.
SECTION 4.09. Labor Matters. There are no strikes or other
labor disputes pending or, to the best knowledge of the Company, threatened,
against the Company or any of its Subsidiaries. Hours worked and payments made
to the employees of the Company and its Subsidiaries have not been in violation
of the Fair Labor Standards Act or any other applicable law dealing with such
matters. All payments due from the Company or any of its Subsidiaries, or for
which any claim may be made against any of them, on account of wages and
employee and retiree health and welfare insurance and other benefits have been
paid or accrued as a liability on their books, as the case may be. The
consummation of the transactions contemplated by the Financing Documents will
not give rise to a right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which it is a party or by
which it is bound.
SECTION 4.10. Subsidiaries; Other Equity Investments. Other
than as set forth on Schedule 4.10, the Company has no Subsidiaries on
Restatement Effective Date. Each such Subsidiary is, and, in the case of any
additional corporate Subsidiaries formed after the Restatement Effective Date,
each of such additional corporate Subsidiaries will be at each time that this
representation is made or deemed to be made after the Restatement Effective
Date, a wholly-owned Subsidiary that is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as then conducted. Neither the Company nor any of its Subsidiaries is
engaged in any joint venture or partnership with any other Person.
SECTION 4.11. Investment Company Act. The Company is not an
"investment company" as defined in the Investment Company Act of 1940, as
amended. The consummation of the transactions contemplated by the Financing
Documents do not and will not violate any provision of such Act or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder.
SECTION 4.12. Margin Regulations. None of the proceeds from
the Loans have been or will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any Margin
Stock or for any other purpose which might cause any of the loans under this
Agreement to be considered a "purpose credit" within the meaning of Regulation
G, U or X of the Board of Governors of the Federal Reserve Board.
SECTION 4.13. Taxes. The Company's federal tax identification
number is 00-0000000 and the federal tax identification number for each
Subsidiary is accurately listed for such Subsidiary on Schedule 4.10. All
Federal, state and local tax returns, reports and statements required to be
filed by or on behalf of the Company and its Subsidiaries have been filed with
the appropriate governmental agencies in all jurisdictions in which such
returns, reports and statements are required to be filed, and all taxes
(including real property taxes) and other charges shown to be due and payable
have been timely paid prior to the date on which any fine, penalty, interest,
late charge or loss may be added thereto for nonpayment thereof, except any of
the foregoing as may be subject to a Permitted Contest. All state and local
sales and use taxes required to be paid by the Company or any of its
Subsidiaries have been paid, except any of the foregoing as may be subject to a
Permitted Contest. All Federal and state returns have been filed by the Company
and its Subsidiaries for all periods for which returns were due with respect to
employee income tax withholding, social security and unemployment taxes, and the
amounts shown thereon to be due and payable have been paid in full or adequate
provisions therefor have been made.
SECTION 4.14. Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Code with
respect to each Plan. No member of the ERISA Group has (i) sought a waiver of
the minimum funding standard under Section 412 of the Code in respect of any
Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
reasonably be expected to result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA.
SECTION 4.15. Brokers. No broker, finder or other intermediary
has brought about the obtaining, making or closing of the transactions
contemplated by the Financing Documents, and the Company has and will have no
obligation to any Person in respect of any finder's or brokerage fees in
connection herewith or therewith.
SECTION 4.16. Employment, Shareholders and Subscription
Agreements. Except for the agreements described in Schedule 4.16 (which schedule
may be updated from time to time by the Company with the consent of the Agent
which consent shall not be unreasonably withheld), true and complete copies of
which have been delivered to the Lenders, there are no (i) employment agreements
covering the management of the Company or any of its Subsidiaries, (ii)
collective bargaining agreements or other labor agreements covering any group of
employees of the Company or its Subsidiaries, or (iii) agreements regarding the
Company or any of its Subsidiaries, their respective assets or operations or any
investment therein to which any of its stockholders is a party.
SECTION 4.17. Full Disclosure. None of the information
(financial or otherwise) furnished by or on behalf of the Company to the Agent
or any Lender in connection with the consummation of the transactions
contemplated by any of the Financing Documents contains any untrue statement of
a material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading in the light of the
circumstances under which such statements were made. All financial projections
delivered to the Lenders have been prepared on the basis of the assumptions
stated therein. Except as previously disclosed to the Agent in writing, such
projections represent the Company's best estimate of the Company's future
financial performance and such assumptions are believed by the Company to be
fair in light of current business conditions at the time such projections were
delivered to the Agent.
SECTION 4.18. Private Offering. Neither the Company nor any
Person acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the
Lenders and not more than five other institutional investors. Neither the
Company nor any Person acting on its behalf has taken, or will take, any action
which would subject the issuance or sale of the Notes to Section 5 of the
Securities Act.
SECTION 4.19. Compliance with Environmental Requirements;
No Hazardous Materials. Except as provided on Schedule 4.19:
(a) Other than generation in compliance with all applicable
Environmental Laws, no Hazardous Materials are located on any
properties now or previously owned, leased or operated by the Company
or any of its Subsidiaries or have been released into the environment,
or deposited, discharged, placed or disposed of at, on, under or near
any of such properties except such of the foregoing as could not
reasonably be expected to have a Material Adverse Effect. No portion of
any such property is being used in, or has been used at any previous
time, for the disposal, storage, treatment, processing or other
handling of Hazardous Materials (other than processing or handling
incidental to the generation of Hazardous Materials in compliance with
all applicable Environmental Laws), nor is any such property affected
by any Hazardous Materials Contamination except for such of the
foregoing as could not reasonably be expected to have a Material
Adverse Effect.
(b) No asbestos or asbestos-containing materials are present
on any of the properties now or previously owned, leased or operated by
the Company or any of its Subsidiaries except such of the foregoing as
could not reasonably be expected to have a Material Adverse Effect.
(c) No polychlorinated biphenyls are located on or in any
properties now or previously owned, leased or operated by the Company
or any of its Subsidiaries, in the form of electrical transformers,
fluorescent light fixtures with ballasts, cooling oils or any other
device or form except such of the foregoing as could not reasonably be
expected to have a Material Adverse Effect.
(d) No underground storage tanks are located on any properties
now or previously owned, leased or operated by the Company or any of
its Subsidiaries, or were located on any such property and subsequently
removed or filled except such of the foregoing as could not reasonably
be expected to have a Material Adverse Effect.
(e) Except as disclosed on Schedule 4.19 (as such schedule may
be updated from time to time by the Company with the consent of the
Agent which consent shall not be unreasonably withheld), no notice,
notification, demand, request for information, complaint, citation,
summons, investigation, administrative order, consent order and
agreement, litigation or settlement with respect to Hazardous Materials
or Hazardous Materials Contamination is in existence or, to the
Company's knowledge, proposed, threatened or anticipated with respect
to or in connection with the operation of any properties now or
previously owned, leased or operated by the Company or any of its
Subsidiaries. All such properties and their existing and prior uses
comply and at all times have complied with any applicable governmental
requirements relating to environmental matters or Hazardous Materials
except for such noncompliances as could not reasonably be expected to
have a Material Adverse Effect. Except as disclosed on Schedule 4.19
there is no condition on any of such properties which is in violation
of any applicable governmental requirements relating to Hazardous
Materials, and neither the Company nor any of its Subsidiaries has
received any communication from or on behalf of any governmental
authority that any such condition exists. Except disclosed on Schedule
4.19 (as such schedule may be updated from time to time by the Company
with the consent of the Agent which consent shall not be unreasonably
withheld), none of such properties nor any property to which the
Company has, directly or indirectly, transported or arranged for the
transportation of any material is listed or, to the Company's
knowledge, proposed for listing on the National Priorities List
promulgated pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or on
any similar federal, state or foreign list of sites requiring
investigation or cleanup, nor, to the knowledge of the Company, is any
such property anticipated or threatened to be placed on any such list.
(f) There has been no environmental investigation, study,
audit, test, review or other analysis conducted of which the Company
has knowledge in relation to the current or prior business of the
Company or any property or facility now or previously owned, leased or
operated by the Company or any of its Subsidiaries which has not been
delivered to the Lenders at least five days prior to the date hereof.
(g) For purposes of this Section 4.19, the terms "Company" and
"Subsidiary" shall include any business or business entity (including a
corporation) which is, in whole or in part, a predecessor of the
Company or any Subsidiary.
SECTION 4.20. Real Property Interests. Except for the
ownership, leasehold or other interests set forth in Schedule 4.20, the Company
and its Subsidiaries have, as of the Closing Date, no ownership, leasehold or
other interest in real property.
SECTION 4.21. Third Party Reimbursement . If any Credit Party
is or has been audited by Medicare, Medicaid, CHAMPUS, CHAMPVA or similar
governmental Third Party Payors, (i) none of such audits provides for
adjustments in reimbursable costs or asserts claims for reimbursement or
repayment by such Credit Party of costs and/or payments theretofore made by such
governmental Third Party Payor that, if adversely determined, could reasonably
be expected to have or result in a Material Adverse Effect and (ii) none of the
Credit Parties have had requests or assertions of claims for reimbursement or
repayment by it of costs and/or payments heretofore made by any other Third
Party Payor that, if adversely determined, could reasonably be expected to have
or result in a Material Adverse Effect, except in either case to the extent
described on Schedule 4.21.
SECTION 4.22. Additional Representations; Schedules. All
certifications, information, statements, conclusions and the like contained in
any Borrowing Base Certificate, Receivable Report, certificate, financial
statement or other instrument delivered by or on behalf of the Company or any
Subsidiary pursuant to any of the Financing Documents (including but not limited
to any such made in or in connection with any amendment to any of such
documents) shall constitute representations and warranties made under this
Agreement. Wherever a representation and warranty made under this Agreement
refers to a schedule or an amended schedule, it shall be deemed to refer to the
schedule attached hereto or, if one or more amended schedules have been
furnished, the amended schedule most recently so furnished prior to the date as
of which the representation and warranty is made, and the later delivery of an
amended schedule shall not retroactively effect a correction of any
representation and warranty which was incorrect or untrue when made.
ARTICLE V
AFFIRMATIVE COVENANTS
The Company agrees that, so long as any Lender has any
Commitment hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Financial Statements and Other Reports. The
Company will maintain a system of accounting established and administered in
accordance with sound business practices to permit preparation of financial
statements in accordance with GAAP, and will deliver to each of the Lenders:
(a) as soon as practicable and in any event within 45 days
after the end of each month, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as at the end of such month
and the related consolidated statements of operations and cash flows
for such month, and for the portion of the Fiscal Year ended at the end
of such month setting forth in each case in comparative form the
figures for the corresponding periods of the previous Fiscal Year and
the figures for such month and for such portion of the Fiscal Year
ended at the end of such month that are set forth in the annual
operating and capital expenditure budgets and cash flow forecast
delivered pursuant to Section 5.01(j), all in reasonable detail and
certified by the chief financial officer of the Company as fairly
presenting the financial condition and results of operations of the
Company and its Consolidated Subsidiaries and as having been prepared
in accordance with GAAP applied on a basis consistent with the audited
financial statements of the Company, subject to changes resulting from
audit and normal year-end adjustments;
(b) as soon as available and in any event within 100 days
after the end of each Fiscal Year, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of the end of such Fiscal
Year and the related consolidated statements of operations,
stockholders' equity and cash flows for such Fiscal Year, setting forth
in each case in comparative form the figures for the previous Fiscal
Year and the figures for such Fiscal Year that are set forth in the
annual operating and capital expenditure budgets and cash flow forecast
delivered pursuant to Section 5.01(j), certified (solely with respect
to such consolidated statements) without qualification by Xxxxxx,
Xxxxxxxx & Co. or other independent public accountants of nationally
recognized standing;
(c) (i) together with each delivery of financial statements
pursuant to (a) and (b) above, an Officers' Certificate of the Company
stating that the officers executing such certificate have reviewed the
terms of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of the Company during the accounting period covered by such
financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and that such
officers do not have knowledge of the existence as at the date of such
Officers' Certificate, of any Default, or, if any such Default existed
or exists, specifying the nature and period of existence thereof and
what action the Company has taken or is taking or proposes to take with
respect thereto; (ii) together with each delivery of financial
statements for each month and Fiscal Year, a compliance certificate of
the chief financial officer or treasurer of the Company (x) providing
details of all transactions between the Company and any Person referred
to in Section 6.08, (y) demonstrating in reasonable detail compliance
during and at the end of such accounting period with the covenants
contained in Sections 6.11 through 6.18, provided, however, that such
Officers' Certificate shall be required to calculate compliance with
Sections 6.12, 6.14, 6.16 and 6.17 only quarterly and (z) if not
specified in the financial statements delivered pursuant to (a) or (b)
above, as the case may be, specifying the aggregate amount of interest
paid or accrued and the aggregate amount of depreciation and
amortization charged, during such accounting period; and (iii)
beginning with the delivery of the fiscal year end 1998 financial
statements, together with each delivery of financial statements
pursuant to (b) above, a statement setting forth in reasonable detail
the computation of Excess Cash Flow, if any, for such Fiscal Year,
certified by the chief financial officer or treasurer of the Company as
having been prepared from such financial statements in accordance with
this Agreement;
(d) together with each delivery of financial statements
pursuant to (b) above, a written statement by the independent public
accountants giving the report thereon (i) stating that their audit
examination has included a review of the terms of this Agreement as it
relates to accounting matters, (ii) stating whether, in connection with
their audit examination, any Default has come to their attention, and
if such a condition or event has come to their attention, specifying
the nature and period of existence thereof, and (iii) stating that
based on their audit examination nothing has come to their attention
which causes them to believe that the information contained in the
certificates delivered therewith pursuant to (c) above is not correct
and that the matters set forth in the compliance certificate delivered
therewith pursuant to clause (ii) of (c) above for the applicable
Fiscal Year are not stated in accordance with the terms of this
Agreement;
(e) promptly upon receipt thereof, copies of all reports
submitted to the Company by independent public accountants in
connection with each annual, interim or special audit of the financial
statements of the Company made by such accountants, including the
comment letter submitted by such accountants to management in
connection with their annual audit;
(f) promptly upon their becoming available, copies of (i) all
financial statements, reports, notices and proxy statements sent or
made available generally by the Company to its security holders, (ii)
all regular and periodic reports and all registration statements and
prospectuses filed by the Company with any securities exchange or with
the Securities and Exchange Commission or any governmental authority
succeeding to any of its functions and (iii) all press releases and
other statements made available generally by the Company to the public
concerning material developments in the business of the Company;
(g) promptly upon any officer of the Company obtaining
knowledge (i) of the existence of any Default, or becoming aware that
the holder of any Debt of the Company or any Subsidiary that singly, or
when aggregated with all other Debt of the Company or its Subsidiaries
the holders of which have taken similar action, equals or exceeds
$50,000 in principal amount outstanding has given any notice or taken
any other action with respect to a claimed default thereunder, (ii) of
any change in the Company's certified accountant or any resignation, or
decision not to stand for re-election, by any member of the Company's
board of directors, (iii) that any Person has given any notice to the
Company or any Subsidiary or taken any other action with respect to a
claimed default under any agreement or instrument (other than the
Financing Documents) to which the Company or any of its Subsidiaries is
a party or by which any of their assets are bound the indebtedness or
obligation under which either singly or when aggregated with all other
claims of Persons taking similar action, is equal to or greater than
$50,000 or (iv) of the institution of any litigation or arbitration
involving an alleged liability of the Company or any of its
Subsidiaries equal to or greater than $50,000 or any adverse
determination in any litigation or arbitration proceedings that singly
or when aggregated with all other outstanding litigation or arbitration
claims involve a potential liability of the Company or any of its
Subsidiaries equal to or greater than $50,000, an Officers' Certificate
of the Company specifying the nature and period of existence of any
such condition or event, or specifying the notice given or action taken
by such holder or Person and the nature of such claimed default
(including any Default), event or condition, and what action the
Company or any affected Subsidiary has taken, is taking or proposes to
take with respect thereto;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability
under Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of the Code, a copy
of such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from
any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes
any amendment to any Plan or Benefit Arrangement which has resulted or
could result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the chief financial officer or the
chief accounting officer of the Company setting forth details as to
such occurrence and action, if any, which the Company or applicable
member of the ERISA Group is required or proposes to take;
(i) copies of any material reports or notices (but excluding
tax returns) related to taxes and any other material reports or notices
received by the Company from, or filed by the Company with, any
Federal, state or local governmental agency or body regulating the
activities of the Company;
(j) within 30 days after the conclusion of each Fiscal Year,
the Company's annual operating and capital expenditure budgets and cash
flow forecast for the following Fiscal Year presented on a monthly
basis, which shall be in a format reasonably consistent with
projections, budgets and forecasts theretofore provided to the Lenders;
(k) together with each Notice of Borrowing and on the seventh
Business Day of each month, a Borrowing Base Certificate as of the
close of business of the last Business Day of the preceding month;
(l) within five Business Days after any request therefor, such
information in such detail concerning the amount, composition and
manner of calculation of the Borrowing Base as any Lender may
reasonably request;
(m) within twenty days after the end of each month, a report,
in form and substance acceptable to the Required Lenders, as to all
accounts receivable of the Company outstanding as of the last day of
such month (a "Receivables Report"), which shall set forth in summary
form an aging of such Receivables and such other information as the
Agent shall reasonably request;
(n) together with the next delivery of a Receivables Report
after the Company becomes aware thereof, notice of any dispute between
any Third Party Payor and the Company, any Subsidiary or any other
Credit Party, with respect to any amounts due and owing that singly, or
when aggregated with all other similar disputes with other Third Party
Payors of the Company, the Subsidiaries and the other Credit Parties,
equals or exceeds $100,000, with an explanation in reasonable detail of
the reason for the dispute, all claims related thereto and the amount
in controversy; and
(o) with reasonable promptness, such other information and
data with respect to the Company or any of its Subsidiaries or any
other Credit Party as from time to time may be reasonably requested by
any Lender.
SECTION 5.02. Payment of Obligations. The Company (i) shall
pay and discharge, and cause each of its Subsidiaries to pay and discharge, at
or before maturity, all of their respective material obligations and
liabilities, including tax liabilities, except where the same may be the subject
of a Permitted Contest, (ii) shall maintain, and cause each of its Subsidiaries
to maintain, in accordance with GAAP, appropriate reserves for the accrual of
any of the same and (iii) shall not breach or permit any of its Subsidiaries to
breach, in any material respect, or permit to exist any default under, the terms
of any material lease, commitment, contract, instrument or obligation to which
it is a party, or by which its properties or assets are bound, subject to
Permitted Contests.
SECTION 5.03. Conduct of Business and Maintenance of
Existence. The Company will continue, and will cause each of its Subsidiaries to
continue, to engage in business of the same general type as now conducted by the
Company and its Subsidiaries, and will preserve, renew and keep in full force
and effect, and will cause each Subsidiary to preserve, renew and keep in full
force and effect their respective corporate existence and their respective
rights, privileges and franchises necessary or desirable in the normal conduct
of business; provided that nothing contained in this Section shall be deemed to
prohibit any merger or consolidation that is otherwise permitted under Section
6.06.
SECTION 5.04. Maintenance of Property; Insurance.
(a) The Company will keep, and will cause each of its Subsidiaries to keep,
all property necessary in its business in good working order and condition,
ordinary wear and tear excepted.
(b) The Company will maintain, and will cause each of its
Subsidiaries to maintain, (i) physical damage insurance on all real and personal
property on an all risks basis (including the perils of flood and quake where
reasonably required and available at a reasonable cost), covering the repair and
replacement of all such property and consequential loss coverage for business
interruption and extra expense, covering such risks, for amounts not less than
those, and with deductible amounts not greater than those, set forth in Part I
of Schedule 5.04, (ii) public liability insurance (including products/completed
operations liability and professional injury liability coverage) covering such
risks, for amounts not less than those, and with deductible amounts not greater
than those, set forth in Part II of Schedule 5.04 and (iii) such other insurance
coverage in such amounts and with respect to such risks as the Required Lenders
may reasonably request. All such insurance shall be provided by insurers having
an A.M. Best policyholders rating of not less than B+ or such other insurers as
the Required Lenders may approve in writing. The Company and each of its
Subsidiaries will cause each other Credit Party to comply with the insurance
requirements specified in the Service Agreement to which such Credit Party is a
party.
(c) On or prior to the Closing Date, the Company shall cause
the Agent to be named as an additional insured and loss payee on each insurance
policy required to be maintained pursuant to this Section 5.04. The Company will
deliver to the Lenders (i) on the Closing Date, a certificate from the Company's
insurance broker dated such date showing the amount of coverage as of such date,
and certifying that, in the opinion of such broker, such amounts are reasonable
and customary for companies of established repute engaged in the same or a
similar business, that such policies will include effective waivers (whether
under the terms of any such policy or otherwise) by the insurer of all claims
for insurance premiums against all loss payees and additional insureds and all
rights of subrogation against all loss payees and additional insureds, and that
if all or any part of such policy is canceled, terminated or expires, the
insurer will forthwith give notice thereof to each additional insured and loss
payee and that no cancellation, reduction in amount or material change in
coverage thereof shall be effective until at least 30 days after receipt by each
additional insured and loss payee of written notice thereof, (ii) upon the
request of the Agent from time to time full information as to the insurance
carried, (iii) within five days of receipt of notice from any insurer, a copy of
any notice of cancellation, nonrenewal or material change in coverage from that
existing on the Closing Date and (iv) forthwith, notice of any cancellation or
nonrenewal of coverage by the Company or any of its Subsidiaries.
SECTION 5.05. Compliance with Laws. The Company will comply,
and cause each of its Subsidiaries to comply with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including Environmental Laws and ERISA and the rules and regulations
thereunder), except for such noncompliances that, individually or when
aggregated with all other noncompliances, could not reasonably be expected to
have a Material Adverse Effect.
SECTION 5.06. Inspection of Property, Books and Records. The
Company will keep, and will cause each of its Subsidiaries and the other Credit
Parties to keep, proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities; and will permit, and will cause each of its
Subsidiaries and the other Credit Parties to permit, representatives of any
Lender, at the Lenders' expense, to visit and inspect any of their respective
properties, to examine and make abstracts or copies from any of their respective
books and records, to conduct a collateral audit and analysis of their
respective inventories and accounts receivable and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants, all at such reasonable times and as often as may
reasonably be desired.
SECTION 5.07. Use of Proceeds. The proceeds of Working Capital
Loans shall be used by the Company solely for working capital needs of the
Company and its Subsidiaries. The proceeds of Acquisition Loans shall be used by
the Company solely to fund Acquisitions consented to by the Agent and the
Lenders in their sole good faith discretion. None of such proceeds will be used
in violation of any applicable law or regulation.
SECTION 5.08. Further Assurances. The Company will, and the
Company will cause each of its Subsidiaries and each other Credit Party to, at
the Company's cost and expense, cause to be promptly and duly taken, executed,
acknowledged and delivered all such further acts, documents and assurances (x)
as may from time to time be necessary or as the Required Lenders may from time
to time reasonably request in order to carry out the intent and purposes of the
Financing Documents and the transactions contemplated thereby, including all
such actions to establish, preserve, protect and perfect the estate, right,
title and interest of the Lenders to the Collateral (including Collateral
acquired after the date hereof), including first priority Liens thereon, subject
only to Permitted Liens and (y) as the Lenders may from time to time reasonably
request, to establish, preserve, protect and perfect first priority Liens in
favor of the Lenders on any and all assets of the Company and its Subsidiaries
and on the Receivables of the other Credit Parties, now owned or hereafter
acquired, that are not Collateral on the date hereof. The Company shall promptly
give notice to the Agent of the acquisition after the Restatement Effective Date
by the Company or any Subsidiary of any real property (including leaseholds in
respect of real property), trademark, copyright or patent.
SECTION 5.09. Lenders' Meetings. Within 45 days after the end
of each Fiscal Year, the Company will conduct a meeting of the Lenders to
discuss such fiscal year's results and the financial condition of the Company at
which shall be present the chief executive officer and the chief financial
officer of the Company and such other officers of the Company as the Company's
chief executive officer shall designate. Such meetings shall be held at a time
and place convenient to the Lenders and to the Company.
SECTION 5.10. Hedging Facilities. If the aggregate principal
amount of Revolving Credit Loans outstanding reaches at any time an amount equal
to or greater than $15,000,000, the Lenders may require that the Company, at its
sole cost and expense, enter into and thereafter maintain in full force and
effect interest rate cap agreements in such amounts and on such terms as shall
reasonably be requested by the Agent.
SECTION 5.11. Hazardous Materials; Remediation. The Company
will (i) promptly give notice to the Lenders in writing of any complaint, order,
citation, notice or other written communication from any Person with respect to,
or if the Company becomes aware of, (x) the existence or alleged existence of a
violation of any applicable Environmental Law or the incurrence of any
liability, obligation, loss, damage, cost, expense, fine, penalty or sanction or
the requirement to commence any remedial action resulting from or in connection
with any air emission, water discharge, noise emission, Hazardous Material or
any other environmental, health or safety matter at, upon, under or within any
of the properties now or previously owned, leased or operated by the Company or
any of its Subsidiaries, or due to the operations or activities of the Company,
any Subsidiary or any other Person on or in connection with any such property or
any part thereof or (y) any release on any of such properties of Hazardous
Materials in a quantity that is reportable under any applicable Environmental
Law; (ii) promptly comply, subject to Permitted Contests, with any governmental
requirements requiring the removal, treatment or disposal of such Hazardous
Materials or Hazardous Materials Contamination and provide evidence satisfactory
to the Required Lenders of such compliance; and (iii) provide the Lenders,
within 30 days after demand therefor by the Required Lenders, with a bond,
letter of credit or similar financial assurance evidencing to the satisfaction
of the Required Lenders that sufficient funds are available to pay the cost of
removing, treating and disposing of such Hazardous Materials or Hazardous
Materials Contamination and discharging any assessment which may be established
on any such property as a result thereof where the projected cost thereof
exceeds $100,000.
SECTION 5.12. Collateral Reports. The Company shall keep, and
shall cause each of its Subsidiaries and the other Credit Parties to keep,
accurate and complete records of its accounts receivable in at least so much
detail as to enable the Company to provide the Receivables Reports and other
information described in Section 5.01.
SECTION 5.13. Collections; Right to Notify Account Debtors. At
any time following the occurrence of an Event of Default and during the
continuance thereof, in addition to the Lenders' rights under the Security
Documents, the Company hereby authorizes the Agent, at any time, to (i) notify
any or all account debtors that the accounts receivable of the Company and its
Subsidiaries and the other Credit Parties have been assigned to the Agent and
that the Agent has a security interest therein and (ii) direct such account
debtors to make all payments due from them to the Company upon such accounts
receivable directly to the Agent or to a lockbox designated by the Agent. The
Agent shall promptly furnish the Company with a copy of any such notice sent.
Any such notice, in the Agent's sole discretion, may be sent on the Company's,
such Subsidiaries' or such other Credit Parties' stationery, in which event the
Company shall, or shall cause such Subsidiary or other Credit Party to, if
requested by the Agent, co-sign such notice with the Agent. At any subsequent
time that no Events of Default are continuing, the Agent will withdraw such
notice at the Company's request.
SECTION 5.14. Enforcement of Covenants Not to Compete. The
Company and each of its Subsidiaries shall preserve, protect and defend, to the
extent permitted by applicable law, all of its rights, if any, with respect to
any covenant not to compete contained in any of the material contracts of such
Person or contained in any employment agreement with any employee whose annual
salary and other compensation payable by the Company and any Subsidiary of
either thereof is $100,000 or more.
SECTION 5.15. Landlord and Warehouseman Waivers. Upon the
request of the Agent, the Company shall use its best efforts to deliver to the
Agent waivers of contractual and statutory landlord's, landlord's mortgagee's
and warehouseman's Liens in form and substance satisfactory to the Agent under
each existing lease, warehouse agreement or similar agreement to which the
Company or any Subsidiary is a party; provided that such waivers will in any
event be incorporated when the existing lease, warehouse agreement or similar
agreement is amended, renewed or extended and the Company will obtain waivers of
both contractual and statutory landlord's, landlord's mortgagee's and
warehouseman's Liens in form and substance satisfactory to the Agent in
connection with each new lease, warehouse agreement or similar agreement entered
into by the Company or any Subsidiary.
SECTION 5.16. Additional Subsidiaries. Promptly after the
creation or acquisition of any Subsidiary by the Company, the Company shall
execute and deliver or cause to be executed and delivered, (i) a Subsidiary
Guaranty Agreement and a Subsidiary Security Agreement from such Subsidiary,
(ii) one or more Professional Service Provider Security Agreements, and (iii)
such other related documents as the Lender may request, all in form and
substance reasonably satisfactory to the Agent.
SECTION 5.17. Accreditation and Licensing. The Company shall,
and shall cause each other Credit Party to, keep itself fully licensed with all
licenses required to operate such Person's business under applicable law and
maintain such Person's qualification for participation in, and payment under,
Medicare, Medicaid, CHAMPUS, CHAMPVA and any other federal, state or local
governmental program or private program providing for payment or reimbursement
for services rendered by such Person, except to the extent that the loss or
relinquishment of such qualification would not or could not reasonably be
expected to have or result in a Material Adverse Effect; provided, however, that
nothing in this Agreement shall require the Company or any other Credit Party to
participate in the CHAMPUS or CHAMPVA programs if it elects not to accept
patients covered by such programs. The Company will promptly furnish the Agent
with copies of all reports and correspondence relating to any loss or revocation
(or threatened loss or revocation) of any qualification described in this
Section.
ARTICLE VI
NEGATIVE COVENANTS
The Company agrees that, so long as any Lender has any
Commitment hereunder or any amount payable under any Note remains unpaid:
SECTION 6.01. Debt. The Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee or otherwise become or remain directly or indirectly liable with
respect to, any Debt, except for:
(a) Debt of the Company outstanding on the date of this
Agreement as set forth in Schedule 6.01 and any Permitted Refinancing
thereof;
(b) The Existing Additional Acquisition Liabilities;
(c) Debt of the Company under the Financing Documents;
(d) Debt of the Company or any of its Subsidiaries incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring any fixed asset (including through Capital Leases), in an
aggregate principal amount at any time outstanding not greater than
$500,000;
(e) Debt of the Company or any of its Subsidiaries to a
wholly-owned Subsidiary of the Company, or of any Subsidiary of the
Company to the Company;
(f) Purchase money Debt of the Company incurred in connection
with an acquisition in accordance with terms and conditions of Section
6.07, which Debt shall be subordinated in all respects to any and all
Debt of the Company to the Agent and the Lenders, upon terms and
conditions satisfactory to the Lenders and the incurrence of which Debt
does not result in a Default or an Event of Default.
(g) Debt constituting liabilities under letters of credit,
surety bonds or similar instruments issued in the ordinary course of
business to secure bids, purchase orders, statutory obligations such as
workers compensation insurance or sales tax bonds, operating leases and
similar obligations (but not Debt), provided that the aggregate
outstanding obligation (whether fixed or contingent, drawn or undrawn)
of the Company and its Subsidiaries under all such instruments shall
not at any time exceed $50,000; and
(h) Other Debt of the Company and its Subsidiaries in an
aggregate principal amount (whether fixed or contingent, drawn or
undrawn) not to exceed at any time $50,000.
SECTION 6.02. Negative Pledge. Neither the Company nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) any Lien on any asset securing Debt permitted under
Section 6.01(d) incurred or assumed for the purpose of financing all or
any part of the cost of acquiring such asset, provided that such Lien
attaches to such asset concurrently with or within 90 days after the
acquisition thereof, and provided further that the principal amount of
the Debt secured shall not be less than 70% of the value of the asset
subject to such Lien;
(b) Liens existing on the date of this Agreement securing Debt
permitted by Section 6.01(a);
(c) Liens arising in the ordinary course of its business which
(i) do not secure Debt, (ii) do not secure any obligation in an amount
exceeding $50,000 and (iii) do not in the aggregate materially detract
from the value of its assets or materially impair the use thereof in
the operation of its business;
(d) Liens arising in connection with Debt incurred pursuant to
Section 6.07; provided, however such Lien shall be subordinate to any
Lien under paragraph (e) below upon terms and conditions satisfactory
to the Lenders; and
(e) Liens created by the Security Documents.
SECTION 6.03. Capital Stock. The Company will not permit any
Subsidiary to, issue any shares of capital stock except shares of capital stock
issued by any Subsidiary to the Company which are delivered to the Agent in
pledge for the benefit of the Agent and the Lenders.
SECTION 6.04. Restricted Payments. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, declare, order, pay,
make or set apart any sum for any Restricted Payment or make any payment in
respect of any Additional Acquisition Liabilities; provided that the foregoing
shall not restrict or prohibit:
(i) dividends or distributions by the Company at such times or
in such amounts as are necessary to permit purchases of shares of (or
options to purchase shares of) Common Stock from employees of the
Company or of any Subsidiary upon their death, termination or
retirement, so long as, (x) before and after giving effect to any such
dividend or distribution for such purpose, no Default shall have
occurred and be continuing and (y) such purchases or payments after the
date hereof do not exceed in any one Fiscal Year $75,000;
(ii) payments of Additional Acquisition Liabilities, so long
as, at the time of such payment, no Default shall have occurred and be
continuing, and prior to making such payment, the Company shall have
delivered to the Agent a certificate showing that, after giving effect
to such proposed payment, no Default will exist; and
(iii) scheduled payments of interest with respect to the
subordinated Debt, provided that no Default or Event of Default shall
have occurred and be continuing or would result after giving effect to
any payment pursuant to this clause (iii).
SECTION 6.05. ERISA. The Company will not, and will not permit
any of its Subsidiaries to:
(a) engage in any transaction in connection with which the
Company or any of its Subsidiaries could be subject to any material
liability arising from either a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code;
(b) terminate any Plan in a manner, or take any other action,
which could result in any material liability of any member of the ERISA
Group to the PBGC;
(c) fail to make full payment when due of all amounts which,
under the provisions of any Plan, it is required to pay as
contributions thereto, or permit to exist any accumulated funding
deficiency, whether or not waived, with respect to any Plan;
(d) permit the present value of all benefit liabilities under
all Plans to exceed the fair market value of the assets of such Plans;
or
(e) fail to make any payments to any Multiemployer Plan that
it may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto.
SECTION 6.06. Consolidations, Mergers and Sales of Assets. The
Company will not, and will not permit any of its Subsidiaries to, (i)
consolidate or merge with or into any other Person or (ii) sell, lease or
otherwise transfer, directly or indirectly, any of its or their assets, other
than (w) sales of any asset or group of related assets, the value of which does
not exceed $20,000, (x) sales of inventory in the ordinary course of their
respective businesses, (y) dispositions of Temporary Cash Investments and (z)
other dispositions for cash and fair value of assets that the board of directors
of the Company determines in good faith are no longer used or useful in the
business of the Company and its Subsidiaries, provided that immediately after
any such disposition, the aggregate fair market value of all such assets
disposed of pursuant to this clause (z) after the Original Agreement Date does
not exceed $250,000 and the aggregate fair market value of all such assets
disposed of during the Fiscal Year in which such disposition is made does not
exceed $100,000.
SECTION 6.07. Purchase of Assets, Investments. The Company
will not, and will not permit any Subsidiary to, acquire any assets other than
in the ordinary course of business, or to make, acquire or own any Investment in
any Person other than (a) Temporary Cash Investments, (b) Investments in
Subsidiaries, and (c) (i) acquisitions of a physician practice or physician
practice group or the assets of a physician practice or physician practice group
or an Investment (that constitutes a loan or advance for working capital or
capital expenditure purposes made pursuant to a Service Agreement in the
ordinary course of business, but not a Program Loan unless the Required Lenders
shall, in their sole discretion, give their prior written consent) in a
physician practice or physician practice group which acquisition the chief
financial officer or treasurer shall certify to the Agent meets the following
criteria:
(v) the physician practice or group to be acquired will not represent
more than 33% of the pro forma consolidated revenues of the Company,
(w) the purchase price is not more than eight (8) times greater than
any first year management fees reasonably projected to be paid by the
physician practice to the Company or any of its Subsidiaries,
(x) the sole consideration for such purchase is (1) the issuance of
Common Stock and/or a seller note upon terms and conditions
satisfactory to the Lenders and that is subordinate to the Obligations
on terms and conditions satisfactory to the Lenders and/or (2) cash on
hand of the Company, provided that the aggregate amount of cash on hand
used in any one acquisition shall not exceed $3,000,000 and the
aggregate amount of cash on hand used in all such acquisitions in any
one Fiscal Year shall not exceed $5,000,000 (cash on hand of the
Company expressly excludes the proceeds of any Revolving Credit Loans);
(y) the Service Agreement and other agreements executed in connection
with such acquisition contain terms that are substantially similar
(except for price and payment terms) to the terms of acquisitions made
by the Company through the Closing Date, and
(z) the Company shall provide to the Agent a certificate immediately
prior to such Acquisition demonstrating to the Agent's reasonable
satisfactions that both before and after giving effect to such
acquisition no Default will have occurred and be continuing,
or (ii) Acquisitions approved by the Required Lenders in their sole good faith
discretion. Without limiting the generality of the foregoing, the Company will
not, and will not permit any Subsidiary to, (i) acquire or create any Subsidiary
without the consent of the Required Lenders (except that such consent shall not
be required to create a corporate subsidiary that is wholly owned by the Company
and that is formed solely for the purpose of an acquisition permitted pursuant
to the preceding sentence) and arrangements satisfactory to the Required Lenders
for (w) a pledge of the stock of such Subsidiary to the Agent for the benefit of
the Lenders, (x) such Subsidiary to execute a joinder to the Subsidiary Guaranty
Agreement, (y) such Subsidiary to execute a joinder to the Subsidiary Security
Agreement and all financing statements and other documents and instruments
required thereunder, and (z) cause each professional association party to a
Service Agreement with such Subsidiary to execute a Professional Service
Provider Security Agreement and all financing statements, documents and
instruments required in connection therewith, or (ii) engage in any joint
venture or partnership with any other Person.
SECTION 6.08. Transactions with Affiliates. The Company will
not, and will not permit any Subsidiary to, directly or indirectly, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
the Company, on terms that are less favorable to the Company or such Subsidiary,
as the case may be, than those which might be obtained at the time from a Person
who is not an Affiliate of the Company.
SECTION 6.09. Amendments or Waivers. Without the prior written
consent of the Required Lenders, the Company will not, nor will it permit any
Subsidiary to, agree to (i) any amendment to or waiver of or in respect of the
certificate of incorporation or Bylaws of the Company or any Financing Document
or (ii) any other material amendment to or waiver of any material contract
constituting a part of the Collateral.
SECTION 6.10. Fiscal Year. The Company shall not change
its fiscal year from a fiscal year ending December 31.
SECTION 6.11. Management Compensation. The Company shall not,
and shall not permit any Subsidiary to, directly or indirectly, pay or become
obligated to pay, any compensation for services in any form to or for the
account of any Person listed on Schedule 4.16, except as expressly provided in
the Employment Contracts. In addition to the foregoing, the aggregate amount of
bonuses paid to such Persons in any Fiscal Year shall not exceed $1,000,000 and
the aggregate outstanding amount of any deferred compensation payable to any
such Person or any other employee shall not at any time exceed $500,000. The
limitation set forth in the preceding sentence shall not apply to payments in
the form of stock or stock options.
SECTION 6.12. Interest Coverage. The Company shall not permit
the ratio, calculated on the last day of any fiscal quarter for the number of
consecutive fiscal quarters then most recently ended since the Closing Date
(considered as a single account period, but not to exceed four quarters), of (i)
Consolidated Free Cash Flow to (ii) Total Interest Expense to be less than the
ratio set forth below opposite the period in which such last day shall fall:
Period Ratio
from the Closing Date through 1.75
and including June 30, 1998
July 1, 1998 through and including
December 31, 1998 2.00
January 1, 1999 and thereafter 2.25
SECTION 6.13. Capital Expenditures. The aggregate amount of
Consolidated Capital Expenditures for any period of four consecutive fiscal
quarters shall not exceed 2.50% of net revenues for such period through and
including March 31, 1998, and thereafter 2.00% of such net revenues. Any amounts
permitted to be spent for Capital Expenditures for any such period in excess of
the amounts actually expended during such period may be carried forward to the
next period of four fiscal quarters as permitted Capital Expenditures during
such period.
SECTION 6.14. Total Debt Service Coverage Ratio. The Company
shall not permit the ratio, calculated on the last day of any fiscal quarter for
the number of consecutive fiscal quarters then most recently ended since the
Restatement Effective Date (considered as a single account period, but not to
exceed four quarters), of (i) Consolidated Free Cash Flow to (ii) Total Debt
Service, to be less than 1.20:1.00.
SECTION 6.15. Debt to Capitalization. At no time shall the
ratio of (i) Consolidated Total Debt to (ii) Consolidated Capitalization exceed
66.7%.
SECTION 6.16. Senior Debt to EBITDA. The Company shall not
permit the ratio of (i) the sum, at such time, of (a) Consolidated Senior Debt
minus (b) the amount by which cash plus Temporary Cash Investments of the
Company and its Consolidated Subsidiaries exceeds $2,000,000, to (ii) EBITDA for
the four consecutive fiscal quarters then most recently ended (considered as a
single accounting period), to exceed the limit set forth below opposite the
period in which such fiscal quarter shall fall:
Period Ratio
from the Closing Date through and including 4.50
December 31, 1998
from January 1, 1999 through and including 3.75
December 31, 1999
from January 1, 2000 through and including 3.25
December 31, 2000
from January 1, 2001 and thereafter 2.75
SECTION 6.17. [Reserved]
SECTION 6.18. Minimum Net Worth. At no time shall
Consolidated Net Worth be less than the sum of:
(i) $3,300,000, plus
(ii) 75% of the positive amount of Consolidated Net Income
for each fiscal period ended after the Closing Date,
plus
(iii) 100% of the Net Proceeds of Capital Stock received
following the Agreement Date.
SECTION 6.19. Transition Rules. Except as otherwise
specifically provided herein, in calculating compliance with the financial
covenants for the period from the Closing Date through the first anniversary
thereof, compliance will be measured from the Closing Date to the date that such
compliance shall be required to be measured. For any test that requires
measurement over an entire year, results for the period from the Closing Date
through such date shall be annualized. In delivering pro forma covenant
calculations at any time for or including any entity that is the target of an
acquisition (whether such information is required pursuant to Section 3.02,
Section 6.04 or Section 6.07 or otherwise) or when including an acquisition
target that has not been under management by the Company or one of its
Subsidiaries for an entire fiscal quarter in calculating financial covenant
compliance, the Company shall use the actual EBITDA for the target over the
relevant period, as if such target had been a Subsidiary of the Company during
such period. To the extent such target has been under management by the Company
or one of its Subsidiaries for one or more entire fiscal quarters but less than
one year, the Company shall calculate EBITDA and net revenues with respect to
the target based on the annualized actual performance of the target during the
most recently ended number of complete quarters that such target has been under
management of the Company or one of its Subsidiaries. For the purposes of
calculating compliance with Sections 6.14, 6.15 and 6.16, Existing Additional
Acquisition Liabilities shall be excluded from:
(i) in the case of Section 6.14, Total Debt Service,
(ii) in the case of Section 6.15, Consolidated Total
Debt and Consolidated Total Capitalization (to the extent that
such amounts would otherwise be included in Consolidated Total
Debt), and
(iii) in the case of Section 6.16, Consolidated
Senior Debt.
SECTION 6.20. Changes Relating to Subordinated Debt. Neither
the Company nor any of its Subsidiaries shall change or amend the terms of any
subordinated Debt (or any indenture or agreement in connection therewith) if the
effect of such amendment is to: (a) increase the interest rate on such
subordinated Debt; (b) change the dates upon which payments of principal or
interest are due on such subordinated Debt other than to extend such dates; (c)
change any default or event of default or covenant other than to delete or make
less restrictive any default or covenant provision therein, or add any covenant
with respect to such subordinated Debt; (d) change the redemption or prepayment
provisions of such subordinated Debt other than to extend the dates therefor or
to reduce the premiums payable in connection therewith; (e) grant any security,
collateral or guaranty to secure payment of such subordinated Debt; or (f)
change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights to
the holder of such subordinated Debt in a manner adverse to the Company, any
Subsidiary, the Agent or any Lender.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any one or more of the
following events (each an "Event of Default") shall occur and be continuing for
any reason whatsoever (whether voluntary or involuntary, by operation of law or
otherwise):
(a) the Company shall fail to pay any principal amount due
hereunder when due, or shall fail to pay any interest or premium on any
Note, or any fees or any other amount payable hereunder within 3 days
following the due date therefor;
(b) the Company shall fail to observe or perform any covenant
contained in Section 5.13 or Article VI hereof, or Section 3(B) of the
Pledge Agreement or the Company, or any of its Subsidiaries shall fail
to perform or observe any covenant contained in Section 5 or Sections
4(A), (E) or (I) of the Security Agreements;
(c) the Company or any of its Subsidiaries shall fail to
observe or perform any covenant or agreement contained in the Financing
Documents (other than those covered by clause (a) or (b) above) for 30
days after notice thereof has been given to the Company by the Agent;
(d) any representation, warranty, certification or statement
made by the Company or any of its Subsidiaries in any Financing
Document or in any certificate, financial statement or other document
delivered pursuant to the Financing Documents shall prove to have been
incorrect in any respect (or in any material respect if such
representation, warranty, certification or statement is not by its
terms already qualified as to materiality) when made (or deemed made);
(e) the Company or any of its Subsidiaries shall fail to make
any payment in respect of any Debt (other than the Notes) the aggregate
outstanding principal amount of which Debt, either singly or when
aggregated with all other Debt with respect to which the Company or any
of its Subsidiaries has failed to make a payment equals or exceeds
$100,000 (such Debt, hereinafter "Material Debt");
(f) any event or condition shall occur which (i) results in
the acceleration of the maturity of any Material Debt of the Company or
any of its Subsidiaries, or (ii) enables (or, with the giving of notice
or lapse of time or both, would enable) the holder of such Debt or any
Person acting on such holder's behalf to accelerate the maturity
thereof, or (iii) results in a violation of, or a default under, any
provision of the certificate of incorporation of the Company;
(g) Company or any of its Subsidiaries shall commence a
voluntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidation,
custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment
of or taking possession by any such official in an involuntary case or
other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to
authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Company or any of its Subsidiaries seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 90 days; or an order
for relief shall be entered against the Company or any of its
Subsidiaries under the federal bankruptcy laws as now or hereafter in
effect;
(i) any one or more members of the ERISA Group shall fail to
pay when due an amount or amounts aggregating in excess of $100,000
which it shall have become liable to pay under Title IV of ERISA; or
notice of intent to terminate a Material Plan shall be filed under
Title IV of ERISA by any member of the ERISA Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any
Material Plan; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Material
Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5)
of ERISA, with respect to, one or more Multiemployer Plans which could
cause one or more members of the ERISA Group to incur a current payment
obligation in excess of $100,000;
(j) a judgment or order for the payment of money which when
aggregated with other such judgments or orders equals or exceeds
$100,000, shall be rendered against, the Company or any of its
Subsidiaries and such judgment or order shall continue unsatisfied and
unstayed for a period of 10 days or any judgment shall be rendered
against the Company or any Subsidiary that exceeds by more than
$2,000,000 any insurance coverage applicable thereto;
(k) except as the result of any transfer made pursuant to the
Pledge Agreement, the Company shall fail at any time to be the record
and beneficial owner of 100% of the issued and outstanding capital
stock any Subsidiary, free and clear of any Lien other than inchoate
tax Liens and Liens in favor of the Agent and the Lenders; any person
or group of persons (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchanges Commission under the Securities Exchange
Act of 1934, as amended), other than the current owners, other
employees and other than doctors who acquire Common Stock as
consideration for acquisitions, shall have acquired beneficial
ownership (within the meaning of such Rule 13d-3) of 5% or more of the
Common Stock of the Company; or both Xxxxx Xxxxx and Xxxxxxx X'Xxxxxx
shall cease to perform the functions of Chief Executive Officer and
Chief Operating Officer, respectively, of the Company and a successor
shall not have been appointed by the Company and approved by the
Required Lenders within 90 days thereafter; or the Persons listed on
Schedule 7.01(k), in the aggregate, shall cease to own beneficially at
least 51% of the shares (determined assuming the exercise of all
options or warrants to purchase Common Stock and adjusted for stock
splits, combinations and similar events) of each class of Common Stock;
or, during any period of twelve consecutive calendar months,
individuals who were directors of the Company on the first day of such
period shall cease to constitute a majority of the board of directors
of the Company;
(l) (i) the auditor's report or reports on the audited
statements delivered pursuant to Section 5.01 shall include any
material qualification (including with respect to the scope of audit)
or exception, or (ii) the Company shall fail to deliver to the Agent on
or prior to July 30, 1996, either (A) consolidated financial statements
for the Company for the fiscal period ended June 30,1996, with an audit
report thereon without qualification as to opinion or scope of review
by Xxxxxx Xxxxxxxx & Co. or other nationally recognized accounting
firm, or (B) a financial due diligence review performed by such
accountants, in each case (A) or (B), which financial statements,
audit, report and/or due diligence review (including the results
thereof) shall be satisfactory to the Agent and the Lenders in their
sole good faith discretion;
(m) the Lien created by any of the Security Documents shall at
any time fail to constitute a valid and perfected Lien on any portion
of the Collateral purported to be secured thereby which is deemed
material by the Agent, subject to no prior or equal Lien except
Permitted Liens, or the Company or any of its Subsidiaries shall so
assert in writing;
(n) the Company or any of its Subsidiaries shall be prohibited
or otherwise materially restrained from conducting the business
theretofore conducted by it by virtue of any determination, ruling,
decision, decree or order of any court or governmental authority of
competent jurisdiction and such determination, ruling, decision, decree
or order remains unstayed and in effect for any period of 10 days
beyond any period for which any business interruption insurance policy
of the Company and its Subsidiary shall provide full coverage to the
such person of any losses and lost profits; or
(o) any of the Financing Documents shall for any reason fail
to constitute the valid and binding agreement of any party thereto to
the extent described in Section 4.03, or any such party shall so assert
in writing;
then, and in every such event and at any time thereafter during the continuance
of such event, the Agent shall if requested by the Required Lenders, (i) by
notice to the Company terminate the Commitments and they shall thereupon
terminate and/or (ii) by notice to the Company declare the Notes (together with
accrued interest thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company; provided that in the
case of any of the Events of Default specified in clause (g) or (h) above with
respect to the Company, without any notice to the Company or any other act by
the Agent or the Lenders, the Commitments shall thereupon terminate and the
Notes (together with accrued interest thereon) shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Company.
ARTICLE VIII
FEES, EXPENSES AND INDEMNITIES;
GENERAL PROVISIONS RELATING TO PAYMENTS
SECTION 8.01. Fees. (a) Participation Fees. On the earlier of: (i) the
Closing Date and (ii) July 15, 1996, the Company shall pay to each Lender a fee
in an amount equal to 2.0% of the sum of such Lender's Revolving Credit
Commitment. Such fee shall be fully earned and nonrefundable on the date of the
execution hereof, whether or not any funding hereunder shall occur.
(b) Unused Commitment Fee. The Company shall pay to each
Lender a fee on the daily average amount by which the amount of such Lender's
Revolving Credit Commitment exceeds the aggregate outstanding principal amount
of its Loans, (i) from and including the Agreement Date, to but excluding the
Restatement Effective Date, at the rate of 0.50% per annum, and (ii) from and
including the Restatement Effective Date and thereafter, at the rate of 0.375%
per annum. Accrued fees under this Section shall be payable quarterly in arrears
on each Quarterly Date prior to the Availability Termination Date and on such
date.
(c) Administrative Fee. On the Restatement Effective Date and
on each anniversary thereof the Company shall pay to the Agent an administration
fee in the amount of $30,000.
SECTION 8.02. Computation of Interest and Fees. Commitment
fees pursuant to Section 8.01(b) and all interest hereunder and under the Notes
shall be calculated on the basis of a 360-day year for the actual number of days
elapsed.
SECTION 8.03. General Provisions Regarding Payments. All
payments (including prepayments) to be made by the Company under any Financing
Document, including payments of principal of and premium and interest on the
Notes, fees, expenses and indemnities, shall be made without set-off or
counterclaim and in immediately available funds. If any payment hereunder
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension. The Company shall make all payments in immediately available
funds to each Lender's Payment Account before 11:00 A.M. (New York City time) on
the date when due. Each payment (including prepayments) by the Company on
account of principal of and interest on any Loans shall be made pro rata
according to the respective outstanding principal amounts of Loans held by each
Lender. All amounts payable by the Company hereunder or under any other
Financing Document not paid within 5 days of the date when due (other than
payments of principal and interest on the Notes, which shall bear interest as
set forth therein) shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the Default Rate.
SECTION 8.04. Expenses. Whether or not the transactions
contemplated hereby shall be consummated, the Company agrees to pay on demand
(i) all costs and expenses of preparation of this Agreement, the other Financing
Documents and of the Company's performance of and compliance with all agreements
and conditions contained herein and therein, (ii) the fees, expenses and
disbursements of counsel to, and independent appraisers and consultants retained
by, the Lenders in connection with the negotiation, preparation, execution and
administration of this Agreement, the other Financing Documents and any
amendments hereto or thereto and waivers hereof and thereof, (iii) all
reasonable costs and expenses of creating, perfecting and/or maintaining the
Liens pursuant to the Financing Documents, including filing and recording fees
and expenses, the costs of any bonds required to be posted in respect of future
filing and recording fees and expenses, title investigations and fees and
expenses of such local counsel as the Agent shall request (iv) the fees,
expenses and disbursements of independent accountants or other experts retained
by the Agent in connection with accounting and collateral audits or reviews of
the Company, its Subsidiaries and its and their affairs, provided that, in the
absence of the occurrence and continuance of an Event of Default such audits
and/or reviews shall be limited to one per year (it being expressly agreed that
audits and/or reviews conducted during an Event of Default shall not be limited)
and (v) if an Event of Default occurs, all out-of-pocket expenses incurred by
the Agent and each Lender, including fees and disbursements of counsel based
upon time spent), in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.
Notwithstanding the foregoing, the fees, expenses and disbursements of
accountants, appraisers, attorney's and consultants, and the costs of lien and
title searches, in each case, to the extent (but only to the extent) incurred in
connection with the initial funding of the Loan, shall not exceed $40,000.
SECTION 8.05. Indemnity. Whether or not the transactions
contemplated hereby shall be consummated, the Company agrees to indemnify, pay
and hold harmless the Agent and each Lender and any subsequent holder of any of
the Notes, and the officers, directors, employees and agents of the Agent, each
Lender and such holders (collectively called the "Indemnitees") from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including the fees and disbursements of counsel for such
Indemnitee) in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitee shall be designated a party thereto
and including any such proceeding initiated by or on behalf of the Company or
any Subsidiary, and the expenses of investigation by engineers, environmental
consultants and similar technical personnel and any commission, fee or
compensation claimed by any broker (other than any broker retained by
NationsCredit) asserting any right to payment for the transactions contemplated
hereby, which may be imposed on, incurred by or asserted against such Indemnitee
as a result of or in connection with the transactions contemplated hereby or by
the other Financing Documents (including (i)(A) as a direct or indirect result
of the presence on or under, or escape, seepage, leakage, spillage, discharge,
emission or release from, any property now or previously owned, leased or
operated by the Company or any of its Subsidiaries of any Hazardous Materials or
any Hazardous Materials Contamination, (B) arising out of or relating to the
offsite disposal of any materials generated or present on any such property or
(C) arising out of or resulting from the environmental condition of any such
property or the applicability of any governmental requirements relating to
Hazardous Materials, whether or not occasioned wholly or in part by any
condition, accident or event caused by any act or omission of the Company or any
of its Subsidiaries, and (ii) proposed and actual extensions of credit under
this Agreement) and the use or intended use of the proceeds of the Notes, except
that the Company shall have no obligation hereunder to an Indemnitee with
respect to any liability resulting from the gross negligence or willful
misconduct of such Indemnitee. To the extent that the undertaking set forth in
the immediately preceding sentence may be unenforceable, the Company shall
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all such indemnified
liabilities incurred by the Indemnitees or any of them. Without limiting the
generality of any provision of this Section, to the fullest extent permitted by
law, the Company hereby waives all rights for contribution or any other rights
of recovery with respect to liabilities, losses, damages, costs and expenses
arising under or relating to Environmental Laws that it might have by statute or
otherwise against any Indemnitee; except to the extent that any thereof are
finally determined by a court of competent jurisdiction to have resulted from
the gross negligence or willful misconduct of such Indemnitee.
SECTION 8.06. Taxes. The Company agrees to pay all
governmental assessments, charges or taxes (except income or other similar taxes
imposed on any Lender or any holder of a Note), including any interest or
penalties thereon, at any time payable or ruled to be payable in respect of the
existence, execution or delivery of this Agreement, the other Financing
Documents, or the issuance of the Notes, and to indemnify and hold each Lender
and each and every holder of the Notes harmless against liability in connection
with any such assessments, charges or taxes.
SECTION 8.07. Funding Losses. If the Company fails to borrow
any Loans after notice has been given to any Lender in accordance with Section
2.04 or make any payment when due (including pursuant to a notice of optional
prepayment), the Company shall reimburse each Lender within 15 days after demand
for any resulting loss or expense incurred by it (or by an existing or
prospective participant in the related Loan), including any loss incurred in
obtaining, liquidating or employing deposits from third parties, but excluding
loss of margin for the period after any such payment or failure to borrow;
provided that such Lender shall have delivered to the Company a certificate
calculating in reasonable detail the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
SECTION 8.08. Maximum Interest. (a) In no event shall the
interest charged with respect to the Note or any other obligations of the
Company or any Subsidiary under the Financing Documents exceed the maximum
amount permitted under the laws of the State of Georgia or of any other
applicable jurisdiction.
(b) Notwithstanding anything to the contrary herein or
elsewhere, if at any time the rate of interest payable for the account of any
Lender hereunder or under the Note or other Financing Document (the "Stated
Rate") would exceed the highest rate of interest permitted under any applicable
law to be charged by such Lender (the "Maximum Lawful Rate"), then for so long
as the Maximum Lawful Rate would be so exceeded, the rate of interest payable
for the account of such Lender shall be equal to the Maximum Lawful Rate;
provided, that if at any time thereafter the Stated Rate is less than the
Maximum Lawful Rate, the Company shall, to the extent permitted by law, continue
to pay interest for the account of such Lender at the Maximum Lawful Rate until
such time as the total interest received by such Lender is equal to the total
interest which such Lender would have received had the Stated Rate been (but for
the operation of this provision) the interest rate payable. Thereafter, the
interest rate payable for the account of such Lender shall be the Stated Rate
unless and until the Stated Rate again would exceed the Maximum Lawful Rate, in
which event this provision shall again apply.
(c) In no event shall the total interest received by any
Lender exceed the amount which such Lender could lawfully have received had the
interest been calculated for the full term hereof at the Maximum Lawful Rate
with respect to such Lender.
(d) In computing interest payable with reference to the
Maximum Lawful Rate applicable to any Lender, such interest shall be calculated
at a daily rate equal to the Maximum Lawful Rate divided by the number of days
in the year in which such calculation is made.
(e) If any Lender has received interest hereunder in excess of
the Maximum Lawful Rate with respect to such Lender, such excess amount shall be
applied to the reduction of the principal balance of its Loans or to other
amounts (other than interest) payable hereunder, and if no such principal or
other amounts are then outstanding, such excess or part thereof remaining shall
be paid to the Company.
ARTICLE IX
THE AGENT
SECTION 9.01. Appointment and Authorization. Each Lender
irrevocably appoints and authorizes the Agent to enter into each of the Security
Documents on its behalf and to take such action as agent on its behalf and to
exercise such powers under the Financing Documents as are delegated to the Agent
by the terms thereof, together with all such powers as are reasonably incidental
thereto.
SECTION 9.02. Agent and Affiliates. NationsCredit shall have
the same rights and powers under the Financing Documents as any other Lender and
may exercise or refrain from exercising the same as though it were not the
Agent, and NationsCredit and its affiliates may lend money to and generally
engage in any kind of business with the Company or any Subsidiary or affiliate
of the Company as if it were not the Agent hereunder.
SECTION 9.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein and under the other
Financing Documents. Without limiting the generality of the foregoing, the Agent
shall not be required to take any action with respect to any Default, except as
expressly provided in Article VII.
SECTION 9.04. Consultation with Experts. The Agent may consult
with legal counsel (who may be counsel for the Company), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 9.05. Liability of Agent. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or not taken by it in connection with the Financing Documents (i) with the
consent or at the request of the Required Lenders or (ii) in the absence of its
own gross negligence or willful misconduct. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with any Financing Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Company; (iii) the satisfaction of any condition specified in
Article III, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness, sufficiency or genuineness of any Financing
Document or any other instrument or writing furnished in connection therewith.
The Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement, or other writing (which may be a bank wire,
telex, facsimile transmission or similar writing) believed by it to be genuine
or to be signed by the proper party or parties.
SECTION 9.06. Indemnification. Each Lender shall, ratably in
accordance with its Revolving Credit Commitment (whether or not the Revolving
Credit Commitments have been terminated), indemnify the Agent (to the extent not
reimbursed by the Company) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from the Agent's gross negligence or willful misconduct) that the Agent may
suffer or incur in connection with the Financing Documents or any action taken
or omitted by the Agent hereunder or thereunder.
SECTION 9.07. Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon the
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 any action under the Financing Documents.
SECTION 9.08. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Lenders and the Company. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor Agent which, absent the occurrence and continuance of a Default, must
be reasonably acceptable to the Company. If no successor Agent shall have been
so appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent gives notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be an institution organized or licensed under the laws of the United
States of America or of any State thereof. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Survival. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement and the other Financing Documents and the execution, sale and delivery
of the Notes. The indemnities and agreements set forth in Articles VIII and IX
shall survive the payment of the Notes and the termination of this Agreement.
SECTION 10.02. No Waivers. No failure or delay by the Agent or
any Lender in exercising any right, power or privilege under any Financing
Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein and
therein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 10.03. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including prepaid
overnight courier, telex, facsimile transmission or similar writing) and shall
be given to such party at its address or telecopy or telex number set forth on
the signature pages hereof (or, in the case of any such Lender who becomes a
Lender after the date hereof, in a notice delivered to the Company and the Agent
by the assignee Lender forthwith upon such assignment) or at such other address
or telecopy or telex number as such party may hereafter specify for the purpose
by notice to the Agent and the Company. Each such notice, request or other
communication shall be effective (i) if given by telex or telecopy, when such
telex or telecopy is transmitted to the telex or telecopy number specified in
this Section and the appropriate answerback is received (in the case of telex)
or telephonic confirmation of receipt thereof is obtained (in the case of
telecopy) or (ii) if given by mail, prepaid overnight courier or any other
means, when received at the address specified in this Section or when delivery
at such address is refused.
SECTION 10.04. Severability. In case any provision of or
obligation under this Agreement or the Notes or any other Financing Document
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 10.05. Amendments and Waivers. Any provision of this
Agreement or the other Financing Documents may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed by the Company and the
Required Lenders (and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or waiver shall, unless
signed by all the Lenders, (i) increase or decrease any Revolving Credit
Commitment of any Lender (except for a ratable decrease in the Revolving Credit
Commitments of all Lenders) or subject any Lender to any additional obligation,
(ii) reduce the principal of or rate of interest on any Loan or fees hereunder,
(iii) postpone the date fixed for any payment of principal of any Loan, or of
interest on any Loan or any fees hereunder or for any termination of any
Commitment, (iv) release any guarantor, or permit the modification, release or
substitution of all or any substantial portion of the Collateral, or (iv) change
the definition of Required Lenders or amend this Section.
SECTION 10.06. Successors and Assigns; Registration. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns (including any
transferee of any Note), except that the Company may not assign or otherwise
transfer any of its rights under this Agreement without the prior written
consent of all Lenders.
(b) The terms and provisions of this Agreement shall inure to
the benefit of any transferee or assignee of any Note to which the Company, in
the absence of the occurrence and continuance of an Event of Default (in which
case no consent shall be required), shall have consented (such consent not to be
unreasonably withheld) and, in the event of such transfer or assignment, the
rights and privileges herein conferred upon the assigning Lender shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. Any assignment shall be for an equal
percentage of such assignor Lender's Loans and its Revolving Credit Commitment,
and any such assignee Lender shall, upon its registration in the Note Register
referred to below, become a "Lender" for all purposes hereunder. Upon any such
assignment, the assignor Lender shall be released from its Revolving Credit
Commitment to the extent assigned to and assumed by the assignee Lender.
Notwithstanding the foregoing, in the absence of the occurrence and continuance
of an Event of Default, NationsCredit covenants for the benefit of the Company
that it will not assign its Revolving Credit Commitment below $15,000,000 except
that NationsCredit retains the unrestricted right to transfer, sell or assign
any or all of its interest and obligations in the Revolving Credit Commitment
and the Obligations without respect to this sentence in the following cases: the
transfer, sale or assignment to any Affiliate of NationsCredit, (ii) any
transfer, sale or assignment to any Person to the extent required to comply with
any order, directive or request from any regulating authority, or (iii) any
transfer, sale or assignment to any Person in connection with the sale by
NationsCredit of all or any substantial portion of its corporate finance
portfolio.
(c) Upon any assignment of any Note(s), the assigning Lender
shall surrender its Note(s) to the Company for exchange or registration of
transfer, and the Company will promptly execute and deliver in exchange therefor
a new Note or Note(s) of the same tenor and registered in the name of the
assignor Lender (if less than all of such Lender's Notes are assigned) and the
name of the assignee Lender.
(d) The Company shall maintain a register (the "Note
Register") of the Lenders and all assignee Lenders that are the holders of all
the Notes issued pursuant to this Agreement. The Company will allow any Lender
to inspect and copy such list at the Company's principal place of business
during normal business hours. Prior to the due presentment for registration of
transfer of any Note, the Company may deem and treat the Person in whose name a
Note is registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and premium and interest on such Note and for
all other purposes whatsoever, and the Company shall not be affected by notice
to the contrary.
(e) Each Lender (including any assignee Lender at the time of
such assignment) represents that it (i) is acquiring its Note solely for
investment purposes and not with a view toward, or for sale in connection with,
any distribution thereof, (ii) has received and reviewed such information as it
deems necessary to evaluate the merits and risks of its investment in the Note,
(iii) is an "accredited investor" within the meaning of Rule 501(a) under the
Securities Act and (iv) has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of its
investment in the Note, including a complete loss of its investment.
(f) Each Lender understands that the Note is being offered
only in a transaction not involving any public offering within the meaning of
the Securities Act, and that, if in the future such Lender decides to resell,
pledge or otherwise transfer the Note, the Note may be resold, pledged or
transferred only (i) to the Company, (ii) to a person who such Lender reasonably
believes is a qualified institutional buyer that purchases for its own account
or for the account of a qualified institutional buyer to whom notice is given
that such resale, pledge or transfer is being made in reliance on Rule 144A
under the Securities Act or (iii) pursuant to an exemption from registration
under the Securities Act.
(g) Each Lender understands that the Note will, unless
otherwise agreed by the Company and the holder thereof, bear a legend to the
following effect:
THIS SECURITY IS NOT BEING REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) TO THE
COMPANY, (2) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER THAT IS AWARE THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
(h) If the Note becomes mutilated and is surrendered by the
Lender with respect thereto to the Company, or if any Lender claims that its
Note has been lost, destroyed or wrongfully taken, the Company shall execute and
deliver to such Lender a replacement Note, upon the affidavit of such Lender
attesting to such loss, destruction or wrongful taking with respect to such Note
and such lost, destroyed, mutilated, surrendered or wrongfully taken Note shall
be deemed to be canceled for all purposes hereof. Such affidavit shall be
accepted as satisfactory evidence of the loss, wrongful taking or destruction
thereof and no indemnity shall be required as a condition of the execution and
delivery of a replacement Note. Any costs and expenses of the Company in
replacing any such Note shall be for the account of such Lender.
SECTION 10.07. Collateral. Each of the Lenders represents to
the Agent and each of the other Lenders that it in good faith is not relying
upon any Margin Stock as collateral in the extension or maintenance of the
credit provided for in this Agreement.
SECTION 10.08. Headings. Headings and captions used in the
Financing Documents (including the Exhibits and Schedules hereto and thereto)
are included herein and therein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 10.09. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF GEORGIA. THE COMPANY HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
GEORGIA AND OF ANY GEORGIA COURT SITTING IN THE CITY OF ATLANTA, GEORGIA FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.03. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 10.10. Notice of Breach by Agent or Lender. The
Company agrees to give the Agent and the Lenders notice of any action or
inaction by the Agent or any Lender or any agent or attorney of the Agent or any
Lender in connection with this Agreement or any other Financing Document or the
obligations of the Company under this Agreement or any other Financing Document
that may be actionable against the Agent or any Lender or any agent or attorney
of the Agent or any Lender or a defense to payment of any obligations of the
Company under this Agreement or any other Financing Document for any reason,
including commission of a tort or violation of any contractual duty or duty
implied by law. The Company agrees, to the fullest extent that it may lawfully
do so, that unless such notice is given promptly (and in any event within ten
(10) days after the Company has knowledge, or with the exercise of reasonable
diligence could have had knowledge, of any such action or inaction), the Company
shall not assert, and the Company shall be deemed to have waived, any claim or
defense arising therefrom to the extent that the Agent or any Lender could have
mitigated such claim or defense after receipt of such notice.
SECTION 10.11. WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY AND TO THE FULLEST EXTENT PERMITTED BY LAW
WAIVES ANY RIGHTS THAT IT MAY HAVE TO CLAIM OR RECEIVE CONSEQUENTIAL OR SPECIAL
DAMAGES IN CONNECTION WITH ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
SECTION 10.12. Counterparts. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement and the other Financing Documents constitute the entire agreement
and understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.
SECTION 10.13. Special Provision Relating to this Amendment and
Restatement. (a) This Agreement shall be effective upon receipt by the Agent of
the following items which shall be in form and substance satisfactory to the
Agent:
(i) counterparts of this Agreement duly executed by the
Borrower and AmSouth Bank;
(ii) receipt by NationsCredit of a duly executed Amended and
Restated $35,000,000 Revolving Credit Note for its account, in
the form provided for herein;
(iii) receipt by AmSouth Bank of a duly executed $15,000,000
Revolving Credit Note for its account, in the form provided
for herein;
(iv) counterparts of the Agreement Regarding Security
Documents duly executed by each Subsidiary in favor of the
Agent;
(v) counterparts of the Agreement Regarding Professional
Service Provider Security Agreement duly executed by each
physician or physician practice group party to a Service
Agreement;
(vi) an opinion of counsel to the Company and the Subsidiaries
as to the due execution and enforceability of this Agreement,
the Notes and the Agreement Regarding Security documents;
(vii) a certificate of the Company and each Subsidiary as to
the due authorization, execution and delivery of this Amended
and Restated Agreement, Financing Documents executed in
connection therewith and the truth of the representation and
warranties hereunder;
(viii) receipt by NationsCredit and AmSouth Bank of its
commitment fee in the amount of $100,000 and $150,000,
respectively, which fee will be fully earned and
non-refundable on the date of this Agreement;
(ix) receipt by NationsCredit of its $30,000 Administration
Fee, which will be fully earned and non-refundable on the date
of this Agreement;
(x) receipt by NationsCredit and AmSouth Bank of the fees and
expenses due to their respective counsel from the Company,
which amount will be $18,000 plus expenses in respect of this
Amendment and Restatement for counsel to NationsCredit plus
other amounts due with respect to other matters arising under
this Agreement both prior to and concurrent with this
Amendment and Restatement, and which amount will be $2,000 in
respect of this Amendment and Restatement for counsel to
AmSouth Bank; and
(xi) such other documents as the Agent or the Lenders shall request.
(b) This Agreement may be executed in any number of
counterparts, all of which shall be deemed to constitute but one original and
shall be binding upon all parties, their successors and permitted assigns.
(c) This Agreement shall amend and restate and replace that
certain prior Credit Agreement, dated as of June 12, 1996, between the Company,
the Lenders signatories thereto and the Agent (the "Prior Credit Agreement").
This Agreement is not intended nor shall it be construed to be a novation or an
accord and satisfaction of the Obligations or any other indebtedness,
liabilities or obligations of the Company under this Agreement or the other
Financing Documents. References to the Prior Credit Agreement contained in any
Financing Document shall be deemed to be a reference to such agreement as
amended and restated hereby.
(d) The following Schedules and Exhibits to the Prior Credit
Agreement are being added or replaced by this Amendment and Restatement:
Schedule 4.10
(e) The Company hereby acknowledges that, the Company Security
Agreement and the Pledge Agreement are and shall remain in full force and
effect, and hereby ratifies, confirms and approves the Company Security
Agreement and the Pledge Agreement and all of the terms and provisions thereof,
and agrees that each of the Company Security Agreement and the Pledge Agreement
constitutes the valid and binding obligation of the Company, enforceable by the
Agent and the Lenders in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER:
PROMEDCO MANAGEMENT COMPANY
By:
Name:
Title:
LENDERS:
Revolving Loan Commitment: NATIONSCREDIT COMMERCIAL
$35,000,000 CORPORATION
By:
Name:
Title:
Address:
Attn:
Telecopy:
Revolving Loan Commitment: AMSOUTH BANK
$15,000,000
By:
Name:
Title:
Address:
Attn:
Telecopy:
AGENT:
NATIONSCREDIT COMMERCIAL
CORPORATION
By:
Name:
Title:
Address:
Attn:
Telecopy:
