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Exhibit 10.7
U.S. $250,000,000
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF JULY 1, 1997
AMONG
PHYCOR, INC.
AS BORROWER,
THE BANKS NAMED HEREIN,
AS BANKS,
AND
CITIBANK, N.A.,
AS AGENT
Amended and Restated Revolving Credit Agreement
DOCUMENT.02
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TABLE OF CONTENTS
Section Page
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ARTICLE I - DEFINITIONS AND ACCOUNTING TERMS...............................................1
SECTION 1.01 Certain Defined Terms..............................................1
SECTION 1.02 Computation of Time Periods.......................................24
SECTION 1.03 Accounting Terms..................................................24
ARTICLE II - AMOUNTS AND TERMS OF THE ADVANCES............................................25
SECTION 2.01 The Committed Rate Advances.......................................25
SECTION 2.02 The Competitive Bid Advances......................................26
SECTION 2.03 Fees..............................................................30
SECTION 2.04 Optional Reduction of the Commitments.............................30
SECTION 2.05 Repayment.........................................................31
SECTION 2.06 Interest..........................................................31
SECTION 2.07 Interest Rate Determination and Protection........................32
SECTION 2.08 Voluntary and Automatic Conversion of Committed Rate Advances.....32
SECTION 2.09 Prepayments.......................................................33
SECTION 2.10 Increased Costs...................................................34
SECTION 2.11 Illegality........................................................35
SECTION 2.12 Payments and Computations.........................................35
SECTION 2.13 Taxes.............................................................37
SECTION 2.14 Sharing of Payments, Etc..........................................38
SECTION 2.15 Evidence of Debt/Register.........................................39
SECTION 2.16 Use of Proceeds...................................................39
SECTION 2.17 Outstanding Advances; Existing Collateral.........................39
ARTICLE III - AMOUNT AND TERMS OF LETTERS OF CREDIT AND PARTICIPATIONS THEREIN............40
SECTION 3.01 Letters of Credit.................................................40
SECTION 3.02 Issuing the Letters of Credit.....................................40
SECTION 3.03 Reimbursement Obligations.........................................41
SECTION 3.04 Participations Purchased by the Banks.............................41
SECTION 3.05 Letter of Credit Fees.............................................42
SECTION 3.06 Indemnification Nature of the Issuing Bank's Duties...............43
SECTION 3.07 Increased Costs...................................................44
SECTION 3.08 Uniform Customs and Practice......................................45
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ARTICLE IV - CONDITIONS OF LENDING........................................................45
SECTION 4.01 Conditions Precedent to Any Borrowing and Letter of Credit.........45
SECTION 4.02 Conditions Precedent to Initial Advances..........................46
ARTICLE V - REPRESENTATIONS AND WARRANTIES................................................47
SECTION 5.01 Representations and Warranties of the Borrower....................47
ARTICLE VI - COVENANTS OF THE BORROWER....................................................51
SECTION 6.01 Affirmative Covenants.............................................51
SECTION 6.02 Negative Covenants................................................55
SECTION 6.03 Financial Covenants...............................................64
SECTION 6.04 Reporting Requirements............................................66
ARTICLE VII - EVENTS OF DEFAULT...........................................................68
SECTION 7.01 Events of Default.................................................68
ARTICLE VIII - THE AGENT..................................................................72
SECTION 8.01 Authorization and Action..........................................72
SECTION 8.02 Agent's Reliance, Etc.............................................72
SECTION 8.03 Citibank and Affiliates...........................................73
SECTION 8.04 Bank Credit Decision..............................................73
SECTION 8.05 Indemnification...................................................73
SECTION 8.06 Successor Agent/Issuing Bank......................................74
SECTION 8.07 Documentation Agent...............................................74
ARTICLE IX - MISCELLANEOUS................................................................75
SECTION 9.01 Amendments, Etc...................................................75
SECTION 9.02 Notices, Etc......................................................75
SECTION 9.03 No Waiver; Remedies...............................................76
SECTION 9.04 Costs, Expenses and Taxes.........................................76
SECTION 9.05 Right of Set-off..................................................76
SECTION 9.06 Indemnification...................................................77
SECTION 9.07 Binding Effect....................................................78
SECTION 9.08 Assignments and Participations....................................78
SECTION 9.09 Headings..........................................................81
SECTION 9.10 Confidentiality...................................................81
SECTION 9.11 Severability of Provisions........................................81
SECTION 9.12 Independent of Provisions.........................................81
SECTION 9.13 Consent to Jurisdiction...........................................82
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SECTION 9.14 GOVERNING LAW.....................................................82
SECTION 9.15 WAIVER OF JURY TRIAL..............................................82
SECTION 9.16 Execution in Counterparts.........................................82
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SCHEDULES
Schedule I - Real Property
Schedule II - Subsidiaries
Schedule III - Service Agreements
Schedule IV - Existing Debt
Schedule V - Existing Liens
Schedule VI - Litigation
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EXHIBITS
Exhibit A-1 - Form of Committed Rate Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Borrowing
Exhibit B-2 - Form of Competitive Bid Request
Exhibit C - Form of Guaranty
Exhibit D - Form of Intercompany Subordination Agreement
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Subordination Agreement
Exhibit G - Forms of Opinion of Counsel
Exhibit H - Form of Acquisition Approval Letter
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Amended and Restated Revolving Credit Agreement, dated as of July 1,
1997 (this "Agreement"), among PHYCOR, INC., a Tennessee corporation (the
"Borrower"), the banks (the "Banks") listed on the signature pages hereof and
from time to time parties hereto, and CITIBANK, N.A. ("Citibank"), as an Issuing
Bank hereunder and as agent (the "Agent") for the Banks and the Issuing Banks.
PRELIMINARY STATEMENT:
The Borrower has requested that a portion of the Fifth Amended and
Restated Revolving Credit Agreement, dated as of July 22, 1996, as amended,
among the Borrower, the banks named therein, NationsBank, N.A., as documentation
agent, and Citibank, as agent (the "Existing Credit Agreement"), be amended and
restated to provide for the making of advances to it and to provide for the
issuance of letters of credit for its account under a revolving credit facility
in the principal amount of up to $250,000,000, on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"$150,000,000 Credit Agreement" means the Credit Agreement,
dated as of July 1, 1997, among the Borrower, the banks named therein,
and Citibank, as agent for such banks, providing for a revolving credit
facility in the principal amount of up to $150,000,000, as amended,
supplemented, restated or otherwise modified from time to time.
"Accounts" means all present and future rights of the Borrower
or any Subsidiary of the Borrower to payment for goods (including
medications) sold or leased or for services rendered pursuant to any
Service Agreement (except those evidenced by instruments or chattel
paper), whether now existing or hereafter arising and wherever arising
and whether or not earned by performance (including, without
limitation, accounts receivable purchased by the Borrower or any of its
Subsidiaries from any physician group which has entered into a Service
Agreement with the Borrower or such Subsidiary).
"Administrative Details Reply Form" means, with respect to
each Bank, an administrative questionnaire in the form prepared by the
Agent, submitted by such Bank to the Agent (with a copy to the
Borrower) and duly completed by such Bank.
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"Advance" means a Committed Rate Advance or a Competitive Bid
Advance. In the case of Committed Rate Advances, "Advance" also refers
to a Base Rate Advance or Eurodollar Rate Advance (each of which shall
be a "Type" of Committed Rate Advance). In the case of Competitive Bid
Advances, "Advance" also refers to a Fixed Rate Advance or a LIBOR
Advance (each of which shall be a "Type" of Competitive Bid Advance).
"Affiliate" means, with respect to any Person, any other
entity that, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such
Person.
"Applicable Eurodollar Rate Margin" means for the Initial
Effective Period (as defined below) 0.4375% per annum and thereafter
0.5250% per annum; provided, however, that if the Borrower shall have
satisfied the Consolidated Debt/EBITDA Ratio test indicated in the
table below, the Applicable Eurodollar Rate Margin for any Advance, as
applicable, made on or after the fifth Business Day after the delivery
of quarterly certified Consolidated financial statements and a schedule
evidencing financial covenant compliance delivered to the Banks
pursuant to Section 6.04(b) (each a "Quarterly Delivery"), and while
the Borrower is in compliance with Section 6.04(b), shall be the
percentage rate per annum set forth opposite the appropriate test for
the fiscal quarter reported on for such Quarterly Delivery for such
Advance in the table below.
Applicable Eurodollar
Consolidated Rate Margin for
Debt/EBITDA Ratio Advances
------------------------------------------------------------------------------
Greater than 3.25 to 1.00 0.5250%
Less than or equal to 3.25 to 1.00 but greater 0.4375%
than 2.50 to 1.00
Less than or equal to 2.50 to 1.00 but greater 0.3250%
than 2.00 to 1.00
Less than or equal to 2.00 to 1.00 but greater 0.2875%
than 1.50 to 1.00
Less than or equal to 1.50 to 1.00 0.2500%
The Applicable Eurodollar Rate Margin shall be determined by
the Agent each quarter on the basis of quarterly certified
Consolidated financial statements and a schedule evidencing
financial covenant compliance delivered to the Banks pursuant
to Section 6.04(b). The "Initial Effective Period" shall be
the period commencing on the Closing Date and ending the fifth
Business Day after the Quarterly Delivery for the fiscal
quarter ended June 30, 1997. Notwithstanding
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the foregoing, the Applicable Eurodollar Rate Margin shall be
deemed to be 0.5250% per annum in respect of Advances made on
any day as of which the deliveries required to calculate the
Applicable Eurodollar Rate Margin shall not have been made.
"Applicable Facility Fee Rate" means for the Initial
Effective Period 0.1875% per annum and thereafter for each
Effective Period (as defined below) 0.2250% per annum;
provided, however, that if the Borrower shall have satisfied
the Consolidated Debt/EBITDA Ratio test indicated in the table
below, the Applicable Facility Fee Rate for the Effective
Period as to which such test is satisfied shall be the
percentage rate per annum set forth opposite the appropriate
test for the Commitment in the table below.
Consolidated Applicable Facility Fee
Debt/EBITDA Ratio Rate for the Commitment
--------------------------------------------------------------------------------
Greater than 3.25 to 1.00 0.2250%
Less than or equal to 3.25 to 1.00 but greater 0.1875%
than 2.50 to 1.00
Less than or equal to 2.50 to 1.00 but greater 0.1750%
than 2.00 to 1.00
Less than or equal to 2.00 to 1.00 but greater 0.1500%
than 1.50 to 1.00
Less than or equal to 1.50 to 1.00 0.1250%
The Applicable Facility Fee Rate shall be determined by the
Agent each quarter on the basis of quarterly certified
Consolidated financial statements and a schedule evidencing
financial covenant compliance delivered to the Banks pursuant
to Section 6.04(b). The "Effective Period" with respect to the
Applicable Facility Fee Rate shall be the period commencing on
the fifth Business Day after the Borrower shall have delivered
to the Agent the quarterly certified Consolidated financial
statements and financial covenant compliance schedule for such
quarter and ending on the date that is five Business Days
after delivery to the Agent of quarterly certified
Consolidated financial statements and financial covenant
compliance certificate for the subsequent quarter.
Notwithstanding the foregoing, the Applicable Facility Fee
Rate shall be deemed to be 0.2250% per annum for each day
during an Effective Period as of which the deliveries required
to calculate the Applicable Facility Fee Rate shall not have
been made.
"Applicable Lending Office" means, with respect to
each Bank, such Bank's Domestic Lending Office in the case of
a Base Rate Advance or a Fixed
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Rate Advance and such Bank's Eurodollar Lending Office in the
case of a Eurodollar Rate Advance or a LIBOR Advance.
"Asset Purchase Agreement" means any agreement
between the Borrower or any of its Subsidiaries and any Person
relating to the purchase by the Borrower or any of its
Subsidiaries of the assets of any Facility or Related
Business.
"Assignment and Acceptance" means an assignment and
acceptance entered into by an assigning Bank and an Eligible
Assignee, and accepted by the Agent, in accordance with
Section 9.08 and in substantially the form of Exhibit E.
"Banks" means the banks listed on the signature pages
hereof and, after the date hereof, includes each Eligible
Assignee that has entered into an Assignment and Acceptance
which has been accepted by the Agent.
"Base Rate" means, for any period, a fluctuating
interest rate per annum as shall be in effect from time to
time which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly
by Citibank in New York, New York, from time to time,
as Citibank's base rate; or
(b) 1/2 of one percent per annum above the
latest three-week moving average of secondary market
morning offering rates in the United States for
three-month certificates of deposit of major United
States money market banks, such three-week moving
average being determined weekly on each Monday (or,
if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period
ending on the previous Friday by Citibank on the
basis of such rates reported by certificate of
deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from
three New York certificate of deposit dealers of
recognized standing selected by Citibank in either
case adjusted to the nearest 1/16 of one percent or,
if there is no nearest 1/16 of one percent, to the
next higher 1/16 of one percent; or
(c) the Federal Funds Rate plus 1/2 of one
percent.
"Base Rate Advance" means a Committed Rate Advance
which bears interest as provided in Section 2.06(a)(i).
"Bid Due Date" has the meaning set forth in Section
2.02(c).
"Borrowing" means a Borrowing that is a Committed
Rate Borrowing or a Competitive Bid Borrowing.
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"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City and,
if the applicable Business Day relates to any Eurodollar Rate
Advances or LIBOR Advances, on which dealings in dollar
deposits are carried on in the London interbank market.
"Capital Expenditures" means, with respect to any
Person for any period, the aggregate of all expenditures paid
or accrued by such Person during such period that, in
accordance with generally accepted accounting principles,
should be included in or reflected by the property, plant or
equipment or similar fixed asset account reflected in the
balance sheet of such Person.
"Capital Investments" means (without duplication),
with respect to any Person for any period, the aggregate of
all investments by such Person in (i) Capital Expenditures,
(ii) joint ventures, general or limited partnerships, limited
liability companies or any other type of Person that is not a
Subsidiary, including loans and advances to such Person
(including loans and advances to any physician group or other
third party related to a Facility or Related Business, or any
third party with whom such Person has entered into a Service
Agreement), (iii) capital investments in, and loans and
advances to, a Subsidiary which becomes a Subsidiary as a
result of such investment, (iv) the purchase of the homes of
employees of such Person in connection with the relocation of
such employees, and (v) Existing Clinic Acquisitions.
"Capital Lease" of any Person means any lease of any
property (whether real, personal or mixed) by such Person as
lessee, which lease should, in accordance with generally
accepted accounting principles, 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, as amended
(42 U.S.C. ss. 9601 et seq.), and any regulations promulgated
thereunder.
"Change of Control" means the occurrence, after the
date of this Agreement, of (i) any Person or two or more
Persons acting in concert acquiring beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934,
as amended), directly or indirectly, of securities of the
Borrower (or other securities convertible into such
securities) representing 50% or more of the combined voting
power of all securities of the Borrower entitled to vote in
the election of directors; or (ii) during any period of up to
24 consecutive months, commencing before or after the date of
this Agreement, individuals who at the beginning of such
24-month period were directors of the Borrower ceasing for any
reason to constitute a majority of the Board of Directors of
the Borrower unless the Persons replacing such individuals
were nominated by the Board of Directors of the Borrower; or
(iii) any Person or two or more Persons acting in concert
acquiring by contract or
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otherwise, or entering into a contract or arrangement which
upon consummation will result in its or their acquisition of,
or control over, securities of the Borrower (or other
securities convertible into such securities) representing 50%
or more of the combined voting power of all securities of the
Borrower entitled to vote in the election of directors.
"Closing Date" means the Business Day on which all of
the conditions set forth in Section 4.02 shall have been
fulfilled.
"Committed Rate Advance" means an Advance pursuant to
Section 2.01.
"Committed Rate Borrowing" means a Borrowing pursuant
to Section 2.01.
"Committed Rate Note" means a promissory note of the
Borrower payable to the order of a Bank, in substantially the
form of Exhibit A-1, evidencing the aggregate indebtedness of
the Borrower to such Bank resulting from the Committed Rate
Advances made by such Bank, and "Committed Rate Notes" means
such promissory notes collectively.
"Commitment" means, as to any Bank, the amount of
commitment to make Committed Rate Advances or participate in
Letters of Credit set forth opposite such Bank's name on the
signature pages hereof or, if such Bank has entered into one
or more Assignments and Acceptances, the amount thereof set
forth for such Bank in the Register maintained by the Agent
pursuant to Section 9.08(c), as such amount may be reduced
from time to time pursuant to Section 2.04.
"Commitment Percentage" means, as to any Bank, the
percentage equal to such Bank's Commitment divided by the
aggregate Commitments of all Banks.
"Common Stock" means Securities having ordinary
voting power for the election of directors that are not
entitled to any preference as to dividends or other
distributions or on liquidation.
"Competitive Bid" has the meaning set forth in
Section 2.02(c).
"Competitive Bid Advance" means an Advance made
pursuant to Section 2.02.
"Competitive Bid Borrowing" means a Borrowing
pursuant to Section 2.02.
"Competitive Bid Reduction" has the meaning set forth
in Section 2.01(a).
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"Competitive Bid Note" means a promissory note of the
Borrower payable to the order of a Designated Bidder, in
substantially the form of Exhibit A-2, evidencing the
indebtedness of the Borrower to such Designated Bidder
resulting from Competitive Bid Advances made by such
Designated Bidder, and "Competitive Bid Notes" means such
promissory notes collectively.
"Competitive Bid Request" has the meaning set forth
in Section 2.02(b).
"Consolidated" and any derivative thereof each means,
with reference to the accounts or financial reports of any
Person, the consolidated accounts or financial reports of such
Person and each Subsidiary of such Person determined in
accordance with generally accepted accounting principles,
including principles of consolidation, consistent with those
applied in the preparation of the Borrower's December 31, 1996
Consolidated financial statements delivered to the Banks prior
to the date hereof.
"Contingent Obligation" of any Person means, without
duplication, (i) any direct or indirect liability, contingent
or otherwise, of such Person with respect to any obligation of
the type specified in clause (ii) or (iii) below or other
obligation of another Person, including, without limitation,
any obligation directly or indirectly guaranteed, endorsed
(other than for collection or deposit in the ordinary course
of business), co-made, discounted or sold with recourse by
such Person, or in respect of which such Person is otherwise
directly or indirectly liable (including, without limitation,
liable through any agreement to purchase, repurchase or
otherwise acquire such obligation or provide or purchase any
security therefor, or to provide funds for the payment or
discharge of such obligation, or to maintaining any financial
condition of the obligor of such obligation, or to make
payment for any products, materials or supplies or for any
transportation, services or lease (regardless of the
non-delivery or non-furnishing thereof), in any such case if
the purpose or intent of such agreement is to provide
assurance that such obligation will be paid or discharged, or
that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against
loss in respect thereof), (ii) obligations of such Person with
respect to undrawn letters of credit or unpaid bankers'
acceptances, bankers' assurances or guarantees or similar
items, and (iii) obligations of such Person with respect to
any interest rate protection, hedge, cap, collar or similar
agreement or any foreign exchange or forward sale agreement,
or any similar agreement.
"Convert", "Conversion" and "Converted" each refers
to a conversion of Advances of one Type into Advances of
another Type pursuant to Section 2.07 or 2.08.
"Current Liabilities" of any Person means, as of any
date of determination, (i) all Debt (excluding any Debt under
Operating Leases) which by its terms is payable on demand or
matures within one year from the date of creation
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(excluding any Debt renewable or extendible, at the exclusive
option of the debtor, to a date more than one year from such
date or arising under a revolving credit or similar agreement
that unconditionally obligates the lender or lenders to extend
credit in respect thereof during a period of more than one
year from such date), and (ii) all other items (including
taxes accrued as estimated) which in accordance with generally
accepted accounting principles should be included as current
liabilities of such Person, in each case, including all
amounts required to be paid or prepaid with respect to any
Debt of such Person within one year from the date of
determination.
"Debt" of any Person means, without duplication, (i)
all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (but
excluding, in the case of the acquisition of any Facility (or
the assets thereof), any Existing Clinic Acquisition or the
acquisition of a Related Business, any contingent obligation
to make payments (other than deferred purchase price payments)
after the closing of such acquisition), (ii) all obligations
of such Person in connection with any agreement to purchase,
redeem, exchange, convert or otherwise acquire for value any
Securities of such Person or any warrants, rights or options
to acquire such Securities, now or hereafter outstanding,
(iii) all obligations of such Person evidenced by bonds,
notes, debentures, convertible debentures or other similar
instruments, (iv) all indebtedness created or arising under
any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such
agreement in the event of default, acceleration, or
termination are limited to repossession or sale of such
property), (v) all obligations of such Person under Capital
Leases, (vi) the amount of all Contingent Obligations (other
than guarantees of medical group real property leases at
Facilities to the extent the amount thereof incurred in any
twelve - month period does not exceed $5,000,000 in the
aggregate), (vii) all Debt referred to in clause (i), (ii),
(iii), (iv), (v) or (vi) above secured by (or for which the
holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any lien, security interest or
other charge or encumbrance upon or in property (including,
without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become
liable for the payment of such Debt, (viii) all mandatorily
redeemable preferred stock, valued at the applicable
redemption price, plus accrued and unpaid dividends payable in
respect of such mandatorily redeemable preferred stock, (ix)
if an ERISA Event shall have occurred with respect to any
Plan, the Insufficiency (if any) of such Plan (or, in the case
of a Plan with respect to which an ERISA Event described in
clauses (iii) through (vi) of the definition of ERISA Event
shall have occurred, the liability related thereto), and (x)
net obligations under any interest rate, currency or other
protection, hedge, cap, collar, swap or similar agreement.
"Debt/EBITDA Ratio" of any Person means, at any date
of determination, the ratio that (a) such Person's total Debt
outstanding at such date of determination
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(including, without limitation, all Subordinated Debt other
than, in the case of the Borrower and its Subsidiaries, the
Excluded Convertible Acquisition Debt), less the amount, if
any, by which such Person's unrestricted cash and cash
equivalents exceeds $15,000,000 at such date of determination,
bears to (b) such Person's EBITDA.
"Debt/Total Capitalization Ratio" of any Person
means, at any date of determination, the ratio that such
Person's Funded Debt at such date of determination bears to
such Person's Total Capitalization.
"Deferred Acquisition Consideration" means, in the
case of the acquisition of any Facility (or the assets
thereof) or any Related Business, all deferred cash and
non-cash consideration to be paid by the Borrower or any of
its Subsidiaries after the closing of such acquisition;
provided that Deferred Acquisition Consideration shall not
include any contingent payments that may be made by the
Borrower or any of its Subsidiaries after such closing.
"Designated Bidder" means each Bank (or its nominee
so long as the beneficial interest in the Competitive Bid
Advances held by such nominee is retained by such Bank) unless
such Bank has elected, by notice in writing to the Agent, the
other Banks and the Borrower, not to be a potential bidder in
respect of Competitive Bid Advances. Any such election may be
terminated, at any time, by notice in writing to the Agent,
the other Banks and the Borrower.
"Documentation Agent" means NationsBank, N.A.
"Domestic Lending Office" means, with respect to any
Bank, the office of such Bank specified as its "Domestic
Lending Office" in its Administrative Details Reply Form or on
the signature page of the Assignment and Acceptance pursuant
to which it became a Bank, or such other office or Affiliate
of such Bank as such Bank may from time to time specify to the
Borrower and the Agent.
"EBITDA" means, with respect to any Person for any
fiscal period, the sum (without duplication) of (i) Net Income
(whether positive or negative), plus (ii) Interest Expense,
plus (iii) income tax expense, plus (iv) depreciation expense,
plus (v) amortization expense, plus (vi) extraordinary losses
(determined in accordance with GAAP), minus (vi) extraordinary
gains (determined in accordance with GAAP).
"EBITDAL" means, with respect to any Person for any
fiscal period, the sum (without duplication) of EBITDA plus
Lease Expense.
"Eligible Assignee" means (i) a commercial bank
organized under the laws of the United States, or any state
thereof, having a combined capital and surplus of at least
$100,000,000; (ii) a savings and loan association or savings
bank organized under the laws of the United States or any
state thereof, and having a
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combined capital and surplus of at least $100,000,000; (iii) a
commercial bank organized under the laws of any other country
which is a member of the OECD, or a political subdivision of
any such country, and having a combined capital and surplus of
at least $100,000,000, provided, that, such bank is acting
through a branch, agency or Affiliate located in the United
States or managed and controlled by a branch, agency or
affiliate located in the United States; (iv) any Affiliate of
any Bank if such Affiliate has Total Assets in excess of
$100,000,000; (v) any insurance company organized under the
laws of the United States or any state thereof, and having
Total Assets in excess of $100,000,000 and any other
commercial financial entity having Total Assets in excess of
$100,000,000; and (vi) any other Person mutually agreed to in
writing by the Borrower and the Agent.
"Environmental Activity" means any past, present or
future storage, holding, existence, release, threatened
release, emission, discharge, generation, processing,
abatement, disposition, handling or transportation of any
Hazardous Substance (i) from, under, into or on any Facility,
or (ii) relating to any Facility, or the ownership, use,
operation or occupancy thereof, or any threat of such
activity.
"Environmental Laws" means any and all laws,
statutes, ordinances, rules, regulations, judgments, orders,
decrees, permits, licenses, or other governmental restrictions
or requirements relating to the environment, any Hazardous
Substance or any Environmental Activity in effect in any and
all jurisdictions in which the Borrower or any of its
Subsidiaries is or from time to time may be doing business, or
where any of the Facilities are from time to time located,
including, without limitation, CERCLA and RCRA.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means any Person who for purposes
of Title IV of ERISA is a member of the Borrower's controlled
group, or under common control with the Borrower, within the
meaning of Section 414 of the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated
pursuant thereto and the rulings issued thereunder.
"ERISA Event" means (i) the occurrence of a
reportable event, within the meaning of Section 4043 of ERISA,
unless the 30-day notice requirement with respect thereto has
been waived by the PBGC; (ii) the provision by the
administrator of any Plan of a notice of intent to terminate
such Plan, pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to
in Section 4041(e) of ERISA); (iii) the cessation of
operations at a facility in the circumstances described in
Section 4062(e) of
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ERISA; (iv) the withdrawal by the Borrower or an ERISA
Affiliate from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (v) the failure by the Borrower or any
ERISA Affiliate to make a material payment to a Plan required
under Section 302(f)(1) of ERISA; (vi) the adoption of an
amendment to a Plan requiring the provision of initial or
additional security to such Plan, pursuant to Section 307 of
ERISA; or (vii) the institution by the PBGC of proceedings to
terminate a Plan, pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned
to that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to
any Bank, the office of such Bank specified as its "Eurodollar
Lending Office" in its Administrative Details Reply Form or on
the signature page of the Assignment and Acceptance pursuant
to which it became a Bank (or, if no such office is specified,
its Domestic Lending Office), or such other office of such
Bank as such Bank may from time to time specify to the
Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for
each Eurodollar Rate Advance or LIBOR Advance comprising part
of the same Borrowing, an interest rate per annum obtained by
dividing (i) the rate of interest determined by the Agent to
be equal to the average (rounded upward to the nearest whole
multiple of 1/16 of one percent per annum, if such average is
not such a multiple) of the rate per annum at which deposits
in United States dollars are offered by the principal office
of Citibank in London to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before
the first day of such Interest Period in an amount
substantially equal to the Advance comprising part of such
Borrowing and for a period equal to such Interest Period by
(ii) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period. The Eurodollar
Rate for any Interest Period for each Eurodollar Rate Advance
or LIBOR Advance comprising part of the same Borrowing shall
be determined by the Agent on the basis of applicable rates
furnished to and received by the Agent from Citibank two
Business Days before the first day of such Interest Period,
subject, however, to the provisions of Section 2.07.
"Eurodollar Rate Advance" means a Committed Rate
Advance which bears interest as provided in Section
2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Bank for
any Interest Period for any Eurodollar Rate Advance or LIBOR
Advance means the reserve percentage applicable during such
Interest Period (or if more than one such
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percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during
which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Bank with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"Event of Default" has the meaning specified in
Section 7.01.
"Excluded Convertible Acquisition Debt" means the
subordinated convertible notes issued by the Borrower or any
of its Subsidiaries as consideration for the acquisition of
Facilities that, at any date of determination, are convertible
into shares of the Borrower's common stock having a Market
Value, as of such date, equal to 140% of the conversion price
of such notes.
"Existing Clinic Acquisition" means the acquisition
of an additional Facility or single-specialty clinic, or the
assets thereof, by the Borrower or a Subsidiary of the
Borrower which already owns and operates one or more
Facilities, or the addition of physicians to such Facilities,
which acquisition or addition will supplement the operations
of the existing Facilities.
"Facility" means any multi-specialty medical clinic
(including any satellite locations and all real, personal and
mixed property relating to any such clinic) and related
businesses certain of the assets of which are now owned or
leased and operated or hereafter owned or leased and operated
by the Borrower or any existing or future Subsidiary of the
Borrower or, in the case of an acquisition, that such a
Subsidiary intends to acquire.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by it.
"Fixed Charge Coverage Ratio" of any Person means, at
any date of determination for any period, the ratio that such
Person's EBITDAL for such period, minus (i) Consolidated cash
income tax expense and minus (ii) Capital Expenditures other
than Capital Expenditures which are funded by Advances or
other Debt (to the extent such Debt is permitted under this
Agreement) or by Net
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Cash Proceeds received from the issuance, sale or disposition
of the Borrower's Securities (common, preferred or special),
securities convertible into or exchangeable for Securities,
and any rights, options, warrants and similar instruments,
bears to such Person's Interest Expense for such period plus
(i) Lease Expense, and plus (ii) all scheduled Debt principal
payments (including the principal component of payments in
respect of Capital Leases but excluding payments of any
deferred purchase price in connection with the acquisition of
any Facility (or the assets thereof), any Existing Clinic
Acquisition or the acquisition of any Related Business and any
contingent payments made in connection with such acquisition)
for such period.
"Fixed Rate" has the meaning set forth in Section
2.02(c).
"Fixed Rate Advance" means a Competitive Bid Advance
which bears interest as provided in Section 2.06(b).
"Funded Debt" of any Person means Debt (including,
without limitation, all Subordinated Debt other than, in the
case of the Borrower and its Subsidiaries, the Excluded
Convertible Acquisition Debt) which matures more than one year
from the date of determination or matures within one year from
such date but is renewable or extendible, at the option of
such Person, to a date more than one year from such date or
arises under a revolving credit or similar agreement which
obligates the lender or lenders to extend credit during a
period of more than one year from such date, including,
without limitation, all amounts of Funded Debt required to be
paid or prepaid within one year from the date of
determination.
"Guarantors" means the Subsidiaries listed on
Schedule II hereto and each other Subsidiary that from time to
time may enter into a Guaranty pursuant hereto; provided that
Immaterial Subsidiaries shall not be required to be
Guarantors; provided further that ▇▇▇▇▇▇ Health Systems, Inc.
and its Subsidiaries as of the date hereof (the "▇▇▇▇▇▇
Subsidiaries") shall not be Guarantors so long as less than
3.0% of the EBITDA of the Borrower and its Subsidiaries
(calculated on a rolling four quarter basis) is attributable
to their interests in the ▇▇▇▇▇▇ Subsidiaries.
"Guaranty" means a guaranty of payment in favor of
the Agent, in substantially the form of Exhibit C, as amended,
supplemented, restated or otherwise modified from time to
time.
"Hazardous Substance" means (i) any hazardous
substance and toxic substance as such terms are presently
deemed or used in ss. 101(14) of CERCLA (42 U.S.C. ss.
9601(14)), in 33 U.S.C. ss. 1251 et seq. (Clean Water Act), or
15 U.S.C. ss. 2601 et seq. (Toxic Substances Control Act),
(ii) any additional substances or materials which are now or
hereafter hazardous or toxic substances under any applicable
laws, and (iii) as of any date of determination, any
additional substances or materials which are hereafter
incorporated in or added to the
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definition or use of "hazardous substance" or "toxic
substance" for purposes of CERCLA or any other applicable law.
"Immaterial Subsidiary" means a Subsidiary of the
Borrower that, on a Consolidated basis with its Subsidiaries,
as of the end of each fiscal quarter, does not account for 1%
or more of the Consolidated Total Assets of the Borrower or 1%
or more of the Consolidated total revenues of the Borrower, as
determined in accordance with generally accepted accounting
principles; provided that if as of the end of any fiscal
quarter the Immaterial Subsidiaries shall account, in the
aggregate, for 5% or more of the Consolidated Total Assets of
the Borrower or 5% or more of the Consolidated total revenues
of the Borrower as so determined, the Borrower shall promptly,
by written notice to the Agent, designate one or more of such
Subsidiaries not to be Immaterial Subsidiaries so that the
Immaterial Subsidiaries do not account for 5% or more of such
Consolidated Total Assets or such Consolidated total revenues,
and the subsidiaries so designated shall thereupon cease to be
Immaterial Subsidiaries.
"Indemnitee" or "Indemnitees" has the meaning set
forth in Section 9.06.
"Insufficiency" means, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities, as
defined in Section 4001(a)(18) of ERISA.
"Intercompany Creditor" means PhyCor of Nashville,
Inc., a Tennessee corporation and wholly owned Subsidiary of
the Borrower.
"Intercompany Debt" means any and all indebtedness
from time to time owed (i) to the Borrower by any of its
Subsidiaries, (ii) to the Intercompany Creditor by any other
Subsidiary of the Borrower, or (iii) to any Subsidiary of the
Borrower by the Borrower, including any investments by the
Borrower in any of its Subsidiaries to the extent such
investments are made in the form of loans or advances by the
Borrower to such Subsidiary. All Intercompany Debt shall be
payable on demand.
"Intercompany Subordination Agreement" means an
intercompany subordination agreement in substantially the form
of Exhibit D among the Borrower and each of its Subsidiaries,
other than, subject to Section 6.01(j), Immaterial
Subsidiaries as the same may be amended, supplemented or
otherwise modified from time to time.
"Interest Expense" of any Person means the aggregate
amount of interest paid, accrued or scheduled to be paid or
accrued in respect of any Debt (including the interest portion
of rentals under Capital Leases, but excluding, in the case of
the Borrower and its Subsidiaries, any interest paid, accrued
or scheduled to be paid or accrued in respect of the Excluded
Convertible Acquisition Debt to the extent, and only to the
extent, that such interest is offset by a corresponding
increase in fees payable to the Borrower or its Subsidiary
pursuant to the Service
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Agreement relating to such acquisition) and all but the
principal component of payments in respect of conditional
sales, equipment trust or other title retention agreements
paid, accrued or scheduled to be paid or accrued by such
Person, in each case determined in accordance with generally
accepted accounting principles.
"Interest Period" means, for each Eurodollar Rate
Advance or LIBOR Advance, as the case may be, comprising part
of the same Borrowing, the period commencing on the date of
such Advance or, in the case of a Eurodollar Rate Advance, the
date of the Conversion of any Advance into such Type of
Advance and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and, thereafter,
in the case of a Eurodollar Rate Advance, each subsequent
period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three
or six months in the case of a Eurodollar Rate Advance or a
LIBOR Advance; provided, however, that:
(i) the Borrower may not select any Interest Period
which ends after the Revolver Termination Date;
(ii) Interest Periods commencing on the same date for
Advances comprising part of the same Committed Rate Borrowing
shall be of the same duration;
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day; provided, in the case of any
Interest Period for a Eurodollar Rate Advance or LIBOR
Advance, that if such extension would cause the last day of
such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the
next preceding Business Day; and
(iv) the Borrower may not have more than eight
Eurodollar Rate Borrowings outstanding on any given date.
"Investment Grade" means a rating of Debt of at least
BBB by Standard & Poor's Ratings Group or Baa2 by ▇▇▇▇▇'▇
Investors Service, Inc.
"Issue" means, with respect to any Letter of Credit,
either to issue, or to extend the expiry of, or to renew, or
to increase the amount of, such Letter of Credit, and the term
"Issued" or "Issuance" shall have corresponding meanings.
"Issuing Bank" means (i) Citibank, N.A. or any
Affiliate of Citibank, N.A. that may from time to time Issue
Letters of Credit for the account of the Borrower
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and (ii) any other Bank that agrees in writing to act as an
Issuing Bank hereunder with the written consent of the
Borrower, the Majority Banks and the Agent.
"Lease" means any lease, rental contract, occupancy
agreement, license or other arrangement pursuant to which any
Person occupies or has the right to occupy all or any part of
the Real Property.
"Lease Expense" of any Person means all payments made
by such Person under Operating Leases. For the purpose of
calculating the Fixed Charge Coverage Ratio of the Borrower
and its Subsidiaries, Lease Expense shall refer to all
payments made by (i) PhyCor Vero Beach pursuant to that
certain Lease entered into by and between PhyCor Vero Beach
and Healthcare Realty Trust, and (ii) the Borrower or any of
its Subsidiaries in connection with any other Lease entered
into in the future by such Person which is not cancelable upon
termination of the related Service Agreement or for which the
payments thereunder are not fully reimbursable to the Borrower
or such Subsidiary pursuant to the related Service Agreement.
"Letter of Credit" means any standby letter of credit
in form satisfactory to the Issuing Bank therefor, which is at
any time Issued by such Issuing Bank pursuant to Article III,
in each case as amended, supplemented or otherwise modified
from time to time.
"Letter of Credit Liability" means, as of any date of
determination, all then existing liabilities of the Borrower
to the Issuing Banks in respect of the Letters of Credit
Issued for its account, whether such liability is contingent
or fixed, and shall, in each case, consist of the sum of (i)
the aggregate maximum amount then available to be drawn under
such Letters of Credit (the determination of such maximum
amount to assume compliance with all conditions for drawing)
and (ii) the aggregate amount which has then been paid by, and
not been reimbursed to, the Issuing Banks under such Letters
of Credit.
"LIBOR Advance" means a Competitive Bid Advance which
bears interest as provided in Section 2.06(b).
"LIBOR Margin" has the meaning set forth in Section
2.02(c).
"Lien" means any assignment, chattel mortgage, pledge
or other security interest or any mortgage, deed of trust or
other lien, or other charge or encumbrance, upon property or
rights (including after-acquired property or rights), or any
preferential arrangement with respect to property or rights
(including after-acquired property or rights) which has the
practical effect of constituting a security interest or lien.
"Loan Documents" means this Agreement, the Notes, the
Guaranty, the Subordination Agreements, the Intercompany
Subordination Agreement and all
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other documents delivered by the Loan Parties in connection
with this Agreement, in each case as amended, supplemented,
restated or otherwise modified from time to time.
"Loan Party" means, individually, the Borrower and
each Guarantor; and "Loan Parties" means the Borrower and the
Guarantors, collectively.
"Majority Banks" means, at any time, Banks holding at
least 66-2/3% of the then aggregate unpaid principal amount of
the Committed Rate Advances owing to the Banks, or, if no such
principal amount is then outstanding, having at least 66-2/3%
of the Commitments.
"Market Value" means, with respect to any publicly
traded Security at any date of determination, the amount equal
to the average closing price for such Security during the 15
trading days immediately preceding the date of determination.
The closing price of a publicly traded security on each day
shall be the closing price on such day as reported on any
stock exchange, the National Market System of the National
Association of Securities Dealers' Automated Quotation System,
or an established securities quotation service, as the case
may be.
"Merger Agreement" means any agreement between the
Borrower or any of its Subsidiaries and any Person relating to
the purchase by and merger into the Borrower or any of its
Subsidiaries of any Facility (or the assets thereof) or any
Related Business.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower
or any ERISA Affiliate is making or accruing an obligation to
make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make
contributions, such plan being maintained pursuant to one or
more collective bargaining agreements.
"Multiple Employer Plan" means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, which (i) is
maintained for employees of the Borrower or an ERlSA Affiliate
and at least one Person other than the Borrower and its ERISA
Affiliates or (ii) was so maintained and in respect of which
the Borrower or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been
or were to be terminated.
"NAMM" means North American Medical Management, Inc.,
a Tennessee corporation.
"Net Cash Proceeds" means, as to any sale, lease or
other disposition of any Facility (or the assets thereof) or
any Related Business, or of the assets of the Borrower and its
Subsidiaries, by the Borrower or any Subsidiary of the
Borrower
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24
to any Person other than the Borrower or any Subsidiary of the
Borrower, or the sale or issuance of any Securities, any
securities convertible into or exchangeable for Securities, or
any warrants, rights or options to acquire Securities of the
Borrower or any of its Subsidiaries to any Person other than
the Borrower or any Subsidiary of the Borrower (other than
such sale or issuance pursuant to the Borrower's employee
stock purchase plans or employee and director stock option
plans and other than the issuance of Securities as
consideration for the acquisition of any Facility (or the
assets thereof), any Existing Clinic Acquisition or the
acquisition of any Related Business to the extent such
acquisition satisfies the applicable requirements of Section
6.02(f)(i) or (ii)), or the issuance of any Subordinated Debt,
whether convertible into or exchangeable for Securities (other
than in the case of the Borrower and its Subsidiaries, the
subordinated convertible notes issued by the Borrower or any
of its Subsidiaries as consideration for the acquisition of
Facilities (or the assets thereof), Existing Clinic
Acquisitions or the acquisition of Related Businesses), an
amount equal to (i) the cash and other consideration paid by
such Person (but not including (i) any Debt of the Borrower or
its Subsidiaries assumed by such Person in connection with
such sale, lease or other disposition or (ii) any Debt of the
Borrower or its Subsidiaries owed to such Person which is
offset against the Total Consideration of such Facility or
Related Business), minus (ii) the sum of (A) in the case of a
Facility, the unpaid principal balance on the date of such
sale or other disposition of any Debt secured by a Lien on
such Facility that may be accelerated as a result of such sale
or secured by Liens not prohibited by the terms of this
Agreement and affecting only such Facility, in each case which
is required to be repaid, and is actually repaid, by the
Borrower or any of its existing or future Subsidiaries on the
date of such sale or other disposition, (B) any tax paid or
payable by the Borrower or any of its existing or future
Subsidiaries in connection with or as a consequence of such
sale or other disposition (excluding any such tax for which
the Borrower or any of its existing or future Subsidiaries
seller is reimbursed by such Person to the extent not
otherwise included in the determination of Net Cash Proceeds),
(C) the amount of any reserve (other than in respect of
inventory) required to be retained in connection with such
sale or other disposition under generally accepted accounting
principles (excluding any reserve in respect of any amounts
not payable within 180 days), provided, however, that the
unused amount of such reserve at the termination of such
reserve in accordance with generally accepted accounting
principles shall be deemed Net Cash Proceeds in the amount of
such unused amount, and (D) reasonable out-of-pocket costs of
such sale or other disposition incurred by the Borrower or any
of its existing or future Subsidiaries to third parties
directly in connection therewith, including, without
limitation, sales commissions, escrow fees, legal fees, title
insurance premiums and similar expenses.
"Net Income" of any Person, for any period, means the
net income of such Person for such period, determined in
accordance with generally accepted accounting principles,
excluding:
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(i) the proceeds of any life insurance policy;
(ii) any earnings (or losses), prior to the date of
acquisition, of any other Person acquired in any manner;
(iii) in the case of a successor to such Person by
consolidation or merger or a transferee of its assets, any
earnings (or losses) of the successor or transferee
corporation prior to the consolidation, merger or transfer of
assets; and
(iv) any deferred credit (or debit) (or amortization
of a deferred credit) arising from the acquisition of any
Person.
"Net Worth" of any Person, as of any date of
determination, means the excess of such Person's Total Assets
over Total Liabilities.
"Note" means a Committed Rate Note or a Competitive
Bid Note, and "Notes" means such promissory notes
collectively.
"Notice of Borrowing" means a written notice, in
substantially the form of Exhibit B-1 hereto, delivered in
accordance with, and within the periods specified in, Section
2.01(b).
"OECD" means the Organization for Economic
Cooperation and Development or any successor.
"Operating Lease" means any lease of real, personal
or mixed property which is not a Capital Lease.
"Other Taxes" has the meaning set forth in Section
2.13(b).
"PBGC" means the Pension Benefit Guaranty Corporation
or any successor.
"Permitted Lien" means:
(i) Any Liens (other than Liens securing Debt,
taxes, assessments or governmental charges or levies,
obligations under ERISA or the Environmental Laws, or other
obligations) affecting any of the Real Property which do not
materially adversely affect the use of such Real Property;
(ii) Liens for taxes, assessments or governmental
charges or levies to the extent not past due or to the extent
contested, in good faith, by appropriate proceedings and for
which adequate reserves have been established;
(iii) Liens imposed by law, such as materialman's,
mechanic's, carrier's, workman's, and repairman's Liens and
other similar Liens arising in the ordinary course of business
which relate to obligations which are not overdue for a period
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26
of more than 30 days or which are being contested in good
faith, by appropriate proceedings and for which adequate
reserves have been established;
(iv) pledges or deposits in the ordinary course of
business to secure nondelinquent obligations under ▇▇▇▇▇▇▇'▇
compensation or unemployment laws or similar legislation or to
secure the performance of leases or contracts entered into in
the ordinary course of business or of public or nondelinquent
statutory obligations, bids, or appeal bonds;
(v) Liens upon or in any property acquired or held
by the Borrower or any of its Subsidiaries (other than the
Intercompany Creditor) to secure the purchase price or
construction costs (and, to the extent financed, sales and
excise taxes, delivery and installation costs and other
related expenses) of such property or to secure indebtedness
incurred solely for the purpose of financing or refinancing
the acquisition or construction of any such property to be
subject to such Liens, or Liens existing on any such property
at the time of acquisition, or extensions, renewals or
replacements of any of the foregoing for the same or a lesser
amount, provided that such Lien is established within thirty
days of the acquisition of said property or expenditure of
said construction costs, and provided, further, that no such
Lien shall extend to or cover any property other than the
property being acquired and no such extension, renewal or
replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or
replaced, and provided, further, that the incurrence of any
Debt secured by the Liens permitted by this clause (v) shall
not exceed the amount then allowed under any of the covenants
set forth in Section 6.03;
(vi) zoning restrictions, easements, licenses,
landlord's liens or restrictions on the use of real property
owned or leased by the Borrower or any of its Subsidiaries,
which do not materially impair the use of such property in the
operation of the business of the Borrower or any of its
Subsidiaries or the value of such property for the purpose of
such business;
(vii) Liens on the property or assets of any
Subsidiary in favor of the Borrower or a Subsidiary, provided
that the holder and grantor of such Lien have each entered
into the Intercompany Subordination Agreement;
(viii) Liens listed on Schedule V; and
(ix) Liens not described in subclauses (i) through
(viii) above that relate to liabilities which are not in
excess of $10,000,000 in the aggregate.
"Person" means a individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or
a government or any political subdivision or agency or
instrumentality thereof.
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"Plan" means a Single Employer Plan or a Multiple
Employer Plan.
"Process Agent" has the meaning set forth in Section
9.13(a).
"RCRA" means the Resource Conservation and Recovery
Act of 1976, as amended (42 U.S.C. ss. 6901 et seq.), and any
regulations promulgated thereunder.
"Real Property" means the real property of the
Borrower and its Subsidiaries located in the United States
described in Schedule I hereto, consisting of real property or
any interest in real property, including a leasehold interest
or an option to purchase, and all buildings, structures and
improvements now or hereafter located on all or any portion of
said real property, provided, that, notwithstanding the
foregoing, only leasehold interests of the Borrower and its
Subsidiaries which relate to the main clinic of any Facility
or for which the Borrower or any of its Subsidiaries incurs
Lease Expense equal to or in excess of $100,000 per year shall
be described in Schedule I.
"Register" has the meaning specified in Section
9.08(c).
"Related Business" means (i) a business that
principally operates (A) one or more independent practice
associations (each an "IPA") providing general organizational
structure and management to physician networks and related
management companies providing information and operating
systems, actuarial and financial analysis, medical management
and provider contract services to the IPAs or (B) one or more
management service organizations (each a "MSO") providing IPAs
with practice management services, including billing, staffing
and financial management services, or (ii) a business (other
than a single-specialty clinic, or the assets thereof) related
to the operation of a Facility, IPA or MSO, the acquisition or
operation of which would not result in a material change in
the nature of the Borrower's business as of the date hereof. A
Related Business shall also include all real, personal and
mixed property relating thereto.
"Restricted Payment" of any Person, means any
dividend payment or other distribution of assets, properties,
cash, rights, obligations or securities on account of any
shares of any class of Securities of such Person, or any
purchase, redemption or other acquisition for value of any
shares of any class of Securities of such Person, or any
warrants, rights or options to acquire any such Securities,
now or hereafter outstanding; provided, however, that (i) any
dividend payment or other distribution payable in common stock
of such Person and (ii) any purchase, redemption or other
acquisition of shares of such Person's Securities or warrants,
rights or options to acquire any such Securities with the
proceeds received from the substantially concurrent issue of
new shares of such Person's Securities shall not be considered
a Restricted Payment.
"Revolver Termination Date" means June 30, 2002, or
the earlier date of termination in whole of the Commitments
pursuant to Section 2.04 or 7.01.
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"Securities" means shares of capital stock of a
corporation (or similar property right in the case of
partnerships, limited liability companies and trusts).
"Senior Debt" means all Debt outstanding pursuant to
this Agreement and any other Debt of the Borrower and its
Subsidiaries not expressly subordinated on terms satisfactory
to the Majority Banks to the Debt outstanding under this
Agreement.
"Senior Debt/EBITDA Ratio" of any Person means, at
any date of determination, the ratio that (i) such Person's
total Senior Debt outstanding at such date of determination,
less the amount, if any, by which such Person's unrestricted
cash or cash equivalents exceed $15,000,000 at such date of
determination, bears to (ii) such Person's EBITDA.
"Service Agreement" means any of (i) the Service
Agreements listed on Schedule III and (ii) any similar
agreement entered into by the Borrower or any existing or
future Subsidiary of the Borrower or related professional
association or corporation after the Closing Date, in each
case as any of such agreements may from time to time be
amended, restated, supplemented or otherwise modified.
"Single-Employer Plan" means a single-employer plan,
as defined in Section 4001(a)(15) of ERISA, which (i) is
maintained for employees of the Borrower or an ERISA Affiliate
and no Person other than the Borrower and its ERISA Affiliates
or (ii) was so maintained and in respect of which the Borrower
or an ERISA Affiliate could have liability under Section 4069
of ERISA in the event such plan has been or were to be
terminated.
"Solvent" means, with respect to any Person, that as
of any date of determination, (i) the then fair saleable value
of the assets of such Person is (a) greater than the then
total amount of liabilities (including contingent,
subordinated, matured and unliquidated liabilities) of such
Person and (b) greater than the amount that will be required
to pay such Person's probable liability on such Person's then
existing debts as they become absolute and matured, (ii) such
Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction, and
(iii) such Person does not intend to incur, or believe or
reasonably should believe that it will incur, debts beyond its
ability to pay such debts as they become due.
"Stock Purchase Agreement" means any agreement
between the Borrower or any of its Subsidiaries and any Person
that operates a Facility or a Related Business relating to the
purchase by the Borrower or any of its Subsidiaries of all of
the Securities of such Person.
"Subordinated Debt" means any Debt of the Borrower
that is subordinated to the Debt of the Borrower under this
Agreement and the Notes on, and that otherwise contains, terms
and conditions satisfactory to the Majority Banks.
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"Subordination Agreement" means a duly executed
subordination agreement in substantially the form of Exhibit
F, as amended, supplemented or otherwise modified from time to
time.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, limited liability company, trust or
other Person of which more than 50% of the outstanding
Securities having ordinary voting power to elect a majority of
the board of directors of such corporation (or similar
governing body or Person with respect to partnerships, limited
liability companies and trusts) (irrespective of whether or
not at the time Securities of any other class or classes of
such Person shall or might have voting power upon the
occurrence of any contingency) is at the time directly or
indirectly owned by such Person, or one or more other
Subsidiaries of such Person, or by one or more other
Subsidiaries of such Person.
"Tangible Net Assets" of any Person, as at any date
of determination, means (without duplication) such Person's
cash, net Accounts, inventory, equipment, fixtures, real
property and the refundable portion of any prepaid expense
which, in accordance with generally accepted accounting
principles, are treated as tangible assets of such Person, in
each case (to the extent applicable), less the sum of (i)
Current Liabilities, (ii) cash held in a sinking or other
analogous fund established for the purpose of redemption,
retirement or prepayment of Securities or Debt, and (iii) any
write-up in the book value of such asset resulting from a
revaluation (but not a valuation of an asset in connection
with an acquisition subject to purchase accounting treatment
under generally accepted accounting principles; provided that
such valuation is accomplished in accordance with such
principles).
"Taxes" has the meaning set forth in Section 2.13(a).
"Total Assets" of any Person, as of the date of
determination, means all property, whether real, personal,
tangible, intangible or otherwise, which, in accordance with
generally accepted accounting principles, should be included
in determining total assets as shown on the assets portion of
a balance sheet of such Person.
"Total Capitalization" of any Person, as of the date
of determination, means the sum of such Person's Funded Debt
plus Net Worth.
"Total Consideration" means, with respect to the
acquisition of any Facility (or the assets thereof) or Related
Business, whether or not such acquisition is accomplished by
Securities purchase or asset purchase or by merger, the sum of
(i) all cash and non-cash consideration (including, without
limitation, assumed liabilities and equity consideration) paid
by the Borrower or any of its Subsidiaries at the closing of
such transaction, and (ii) all Deferred Acquisition
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Consideration; provided that Total Consideration shall not
include any contingent payments that may be made by the
Borrower or any of its Subsidiaries after such closing.
"Total Liabilities" of any Person, as of the date of
determination, means all obligations, including, without
limitation, all Debt of such Person, which, in accordance with
generally accepted accounting principles, should be included
in determining total liabilities as shown on the liabilities
portion of a balance sheet of such Person, including all
Subordinated Debt other than, in the case of the Borrower and
its Subsidiaries, the Excluded Convertible Acquisition Debt.
"UCP" has the meaning set forth in Section 3.08.
"Unused Commitment" means, with respect to any Bank
at any time, (a) such Bank's Commitment at such time (as such
Commitment may be reduced pursuant to Section 2.04 or on
account of an Assignment and Acceptance entered into by such
Bank) minus (b) the aggregate principal amount of all
Committed Rate Advances made by such Bank outstanding at such
time.
"Welfare Plan" means a welfare plan, as defined in
Section 3(1) of ERISA, which section covers plans, funds and
programs providing (among other things) medical, surgical, or
hospital care or benefits, or benefits in the event of
sickness, accident, disability, death or unemployment,
together with plans which provide workmen's compensation,
unemployment compensation or disability insurance benefits.
"Withdrawal Liability" has the meaning given such
term under Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
unless otherwise stated, the word "from" or "commencing" means "from and
including" and the word "to" or "until" means "to but excluding."
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with United States generally
accepted accounting principles consistent with those applied in the preparation
of the Borrower's December 31, 1996 Consolidated financial statements delivered
to the Banks prior to the date hereof.
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ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Committed Rate Advances.
(a) Each Bank severally agrees, on the terms and conditions hereinafter
set forth, to make Committed Rate Advances to the Borrower from time to time on
any Business Day during the period from the Closing Date until the Revolver
Termination Date, in an amount for each such Advance not to exceed such Bank's
Unused Commitment on such Business Day; provided, however, that such Bank shall
not be obligated to make such Committed Rate Advance if, after giving effect to
such Committed Rate Advance and the other Committed Rate Advances to be made by
the other Banks as part of the same Borrowing, the then outstanding aggregate
principal amount of all Committed Rate Advances plus the then existing Letter
of Credit Liability shall exceed the aggregate Commitments of the Banks less
the then outstanding aggregate principal amount of all Competitive Bid
Advances; provided further that, for the purposes of this Section 2.01(a), such
Bank's Unused Commitment shall be deemed to be reduced on such Business Day by
an amount equal to the product of (i) the then outstanding principal amount of
all Competitive Bid Advances and (ii) such Bank's Commitment Percentage (the
"Competitive Bid Reduction"). Each Committed Rate Borrowing shall be in an
aggregate amount of $3,000,000 or an integral multiple of $1,000,000 in excess
thereof, and shall consist of Advances made on the same day by the Banks
ratably according to their respective Commitments. Within the limits of each
Bank's Unused Commitment (as deemed reduced by the Competitive Bid Reduction)
in effect from time to time, the Borrower may borrow under this Section
2.01(a), prepay pursuant to Section 2.09 and reborrow under this Section
2.01(a).
(b) Each Committed Rate Borrowing shall be made on notice, given not later
than 11:00 A.M. (New York City time) (i) on the second Business Day prior to the
date of the proposed Borrowing, in the case of Eurodollar Rate Advances, and
(ii) on the date of the proposed Borrowing, in the case of Base Rate Advances,
by the Borrower to the Agent, which shall give each Bank prompt notice thereof
by telecopier, telex or cable. Each such notice of a Borrowing (a "Notice of
Borrowing") shall be by telecopier, telex or cable, confirmed immediately in
writing, in substantially the form of Exhibit B-1 hereto, specifying therein
(i) the requested date of such Borrowing, (ii) the requested Type of Advances
comprising such Borrowing, (iii) the requested aggregate amount of such
Borrowing, and (iv) in the case of a Borrowing comprised of Eurodollar Rate
Advances, the requested initial Interest Period for each such Advance. Each
Bank shall, before 12:00 noon (New York City time) on the date of such
Borrowing, make available for the account of its Applicable Lending Office to
the Agent at its address referred to in Section 9.02, in same day funds, such
Bank's ratable portion of such Borrowing. After the Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
IV, the Agent will make such funds available to the Borrower at the Agent's
aforesaid address. Anything in this subsection (b) above to the contrary
notwithstanding, (A) the Borrower may not select Eurodollar Rate Advances for
any Committed Rate Borrowing if the obligation of the Banks to make Eurodollar
Rate Advances shall then be
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suspended pursuant to Section 2.11 and (B) no more than eight Committed Rate
Borrowings consisting of Eurodollar Rate Advances may be outstanding at any one
time.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Committed Rate Borrowing which the related Notice
of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the
Borrower shall indemnify each Bank against any loss (including loss of
anticipated profits), cost or expense incurred by such Bank as a result of any
failure to fulfill on or before the date specified in such Notice of Borrowing
for such Borrowing the applicable conditions set forth in Article IV,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Bank to fund the Advance to be made by such Bank as part of such Borrowing when
such Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Bank prior to the
date of any Committed Rate Borrowing that such Bank will not make available to
the Agent such Bank's ratable portion of such Borrowing, the Agent may assume
that such Bank has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (b) above and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such ratable portion available to the Agent, such Bank and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to Advances comprising such Borrowing and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Bank's
Advance as part of such Borrowing for purposes of this Agreement. To the
extent that any Bank makes a payment of principal or interest to the Agent
pursuant to this subsection (d), the Borrower shall not be obligated to make
such payment.
(e) The failure of any Bank to make the Advance to be made by it as part
of any Committed Rate Borrowing shall not relieve any other Bank of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Bank shall be responsible for the failure of any other Bank
to make the Advance to be made by such other Bank on the date of any Committed
Rate Borrowing.
SECTION 2.02. The Competitive Bid Advances.
(a) Each Designated Bidder severally agrees, on the terms and conditions
hereinafter set forth, that the Borrower may avail itself of Competitive Bid
Advances from time to time on any Business Day during the period from the
Closing Date until 30 days prior to the Revolver Termination Date, in the
manner set forth in this Section 2.02; provided that the aggregate principal
amount of Competitive Bid Advances made on any Business Day may not exceed the
aggregate Unused Commitments of the Banks on such Business Day less the then
existing Letter of Credit Liability and the then outstanding principal amount
of any other Competitive Bid Advances.
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(b) The Borrower may request a Competitive Bid Borrowing by delivering to
the Agent, by telecopier, telex or cable, confirmed immediately in writing, a
request, in substantially the form of Exhibit B-2 (a "Competitive Bid
Request"), specifying therein (i) whether Fixed Rate Advances or LIBOR Advances
are being requested, (ii) the date (which shall be a Business Day) and
aggregate amount of the proposed Competitive Bid Borrowing, (iii) the maturity
date for repayment of the Competitive Bid Advances to be made as part of such
Borrowing (which maturity date shall be a date occurring (A) not less than
seven days after the date of such Borrowing in the case of a request for Fixed
Rate Advances or 30 days after the date of such Borrowing in the case of a
request for LIBOR Advances, but (B) not later than the Revolver Termination
Date), (iv) the interest payment date or dates relating thereto, in the case of
a request for Fixed Rate Advances, and the applicable Interest Period, in the
case of a request for LIBOR Advances, and (v) any other terms to be applicable
to such Borrowing, not later than 11:00 A.M. (New York City time) at least (A)
one Business Day, in the case of a request for Fixed Rate Advances, or (B) four
Business Days, in the case of a request for LIBOR Advances, prior to the date
of the proposed Competitive Bid Borrowing. The Agent shall in turn promptly
notify each Designated Bidder of each request for such Competitive Bid
Borrowing received by it by sending such Designated Bidder a copy of the
related Competitive Bid Request.
(c) Each Designated Bidder may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more Competitive Bid Advances to the
Borrower as part of such proposed Competitive Bid Borrowing at a rate or rates
of interest specified by such Designated Bidder in its sole discretion. Any
such offer (a "Competitive Bid") may be made by notifying the Agent (i) before
10:00 A.M. (New York City time) on the date of such proposed Competitive Bid
Borrowing, in the case of a request for Fixed Rate Advances, and (ii) before
10:00 A.M. (New York City time) on the third Business Day before the date of
such proposed Competitive Bid Borrowing, in the case of a request for LIBOR
Advances (the "Bid Due Date"), specifying the following:
(A) the amount of each Competitive Bid Borrowing which such
Designated Bidder would be willing to make as part of such proposed
Competitive Bid Borrowing (which amount may, subject to the proviso to
the first sentence of subsection (a) above, exceed a Bank's Commitment
but may not exceed the principal amount of the Competitive Bid Advances
of the Type and maturity requested by the Borrower);
(B) in the case of a request for a LIBOR Advance, the margin above
or below the applicable Eurodollar Rate (the "LIBOR Margin") offered for
such Competitive Bid Advance, expressed as a percentage (rounded upwards,
if necessary, to the nearest 1/16 of one percent) to be added to or
subtracted from the applicable Eurodollar Rate;
(C) in the case of a request for a Fixed Rate Advance, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/16 of
one percent) (the "Fixed Rate") offered for such Competitive Bid Advance;
and
(D) the identity of the Designated Bidder submitting the Competitive
Bid;
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provided that if the Agent in its capacity as a Designated Bidder shall, in its
sole discretion, elect to make any such Competitive Bid, it shall notify the
Borrower of such Competitive Bid before 9:30 A.M. (New York City time)
on the Bid Due Date. If any Designated Bidder shall elect not to make such a
Competitive Bid, such Designated Bidder shall so notify the Agent, before 10:00
A.M. (New York City time) on the Bid Due Date, and such Designated Bidder shall
not be obligated to, and shall not, make any Advance as part of such
Competitive Bid Borrowing; provided that the failure by any Designated Bidder
to give such notice shall not cause such Designated Bidder to be obligated to
make any Advance as part of such proposed Competitive Bid Borrowing. Unless
otherwise agreed by the Borrower and the Agent, no Competitive Bid shall
contain qualifying, conditional or similar language or propose terms other than
or in addition to those set forth in the Competitive Bid Request and, in
particular, no Competitive Bid may be conditioned upon acceptance by the
Borrower of all (or some specified minimum) of the principal amount of the
Competitive Bid Advances offered.
(d) The Agent shall, as promptly as practicable after the Competitive Bid
is submitted (but in any event not later than 10:15 A.M. (New York City time)
on the Bid Due Date), notify the Borrower of the terms (A) of any Competitive
Bid submitted that is in accordance with subsection (c) above and (B) of any
Competitive Bid that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid with respect to the same Competitive Bid Request. Any
such subsequent Competitive Bid may be submitted solely to correct a manifest
error in such former Competitive Bid. The Agent's notice to the Borrower shall
specify (1) the aggregate principal amount of the Competitive Bid Borrowing for
which Competitive Bids have been received and (2) the respective principal
amounts and the Fixed Rates and LIBOR Margins, as the case may be, so offered
by each Designated Bidder (identifying the Designated Bidder that made each
Competitive Bid).
(e) The Borrower shall, in turn, before 11:00 A.M. (New York City time)
(i) on the day of the proposed Competitive Bid Borrowing, in the case of
requests for Fixed Rate Advances, or (ii) on the third Business Day prior to
the date of the proposed Competitive Bid Advances, in the case of a request for
LIBOR Advances, (or, in any such case, such other time and date as the Borrower
and the Agent, with the consent of the Majority Banks, may agree), either:
(i) cancel such Competitive Bid Borrowing by giving the Agent notice
to that effect, or
(ii) accept one or more of the Competitive Bids, in its sole
discretion, by giving notice to the Agent of the amount of each
Competitive Bid Advance to be made by each Designated Bidder as part of
such Competitive Bid Borrowing, and reject any remaining Competitive Bids
by giving the Agent notice to that effect; provided that (A) the Borrower
may only accept Competitive Bids in the order of the lowest to the
highest Fixed Rates or LIBOR Margins, as the case may be, offered, (B)
the Borrower may not accept Competitive Bids in excess of the amount
requested pursuant to subsection (b) above, or the amount offered
pursuant to subsection (c) above, for any maturity date or Interest
Period, and (C) if two or more Designated Bidders make
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Competitive Bids at the same Fixed Rates or LIBOR Margins, as the case
may be, for the same maturity date or Interest Period, the Borrower may
only accept such Competitive Bids in proportion (as nearly as possible) to
the amounts which such Designated Bidders offered at such rate for such
maturity or Interest Period (in amounts of not less than $1,000,000 or an
integral multiple of $100,000 in excess thereof).
(f) If the Borrower notifies the Agent that such Competitive Bid Borrowing
is canceled pursuant to subsection (d)(i) above, the Agent shall give prompt
notice thereof to the Designated Bidders, and such Competitive Bid Borrowing
shall not be made.
(g) If the Borrower accepts one or more of the Competitive Bids made by
any Designated Bidder or Designated Bidders pursuant to subsection (d)(ii)
above, the Agent shall in turn promptly notify (A) each Designated Bidder that
has made a Competitive Bid as described in subsection (c) above, of the date
and aggregate amount of such Competitive Bid Borrowing and whether or not any
Competitive Bid or Bids made by such Designated Bidder pursuant to subsection
(c) above have been accepted by the Borrower, (B) each Designated Bidder that
is to make an Advance as part of such Competitive Bid Borrowing, of the amount
of each Advance to be made by such Bank as part of such Borrowing, and (C) each
Designated Bidder that is to make an Advance as part of such Competitive Bid
Borrowing, as to whether such Competitive Bid Borrowing conforms of the
requirements of Section 2.02. Each Designated Bidder that is to make an
Advance as part of such Competitive Bid Borrowing shall, before 11:30 A.M. (New
York City time) on the date of such Competitive Bid Borrowing specified in the
notice received from the Agent pursuant to clause (A) of the preceding sentence
(provided such Designated Bidder shall have received a Competitive Bid Note and
a favorable notice from the Agent pursuant to clause (C) of the preceding
sentence), make available to the Agent at its address referred to in Section
9.02, in same day funds, such Designated Bidder's portion of such Competitive
Bid Borrowing. Upon fulfillment of the applicable conditions set forth in
Article IV and after receipt by the Agent of such funds, the Agent will make
such funds available to the Borrower at the Agent's aforesaid address.
Promptly after each Competitive Bid Borrowing, the Agent shall notify each Bank
of the amount of the Competitive Bid Borrowing, the consequent Competitive Bid
Reduction and the dates upon which such Competitive Bid Reduction commenced and
will terminate.
(h) Each Competitive Bid Borrowing shall be in an aggregate amount not less
than $3,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of such Competitive Bid Borrowing, the Borrower shall be in
compliance with the limitations set forth in the proviso to the first sentence
of subsection (a) above.
(i) Each acceptance by Borrower pursuant to subsection (g) above shall be
irrevocable and binding on the Borrower. In the case of any acceptance of a
Competitive Bid for LIBOR Advances, the Borrower shall indemnify each
Designated Bidder against any loss (including loss of anticipated profits),
cost or expense incurred by such Designated Bidder as a result of any failure
to fulfill on or before the date specified pursuant to subsection (g) above for
such Competitive Bid Borrowing the applicable conditions set forth in Article
IV, including, without limitation, any loss, cost or expense incurred by reason
of the liquidation or
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reemployment of deposits or other funds acquired by such Designated Bidder to
fund the LIBOR Advance to be made by such Bank as part of such Borrowing when
such Advance, as a result of such failure, is not made on such date.
(j) The failure of any Designated Bidder to make the Advance to be made by
it as part of any Competitive Bid Borrowing shall not relieve any other
Designated Bidder of its obligation, if any, hereunder to make its Advance on
the date of such Borrowing, but no Designated Bidder shall be responsible for
the failure of any other Designated Bidder to make the Advance to be made by
such other Designated Bidder on the date of any Competitive Bid Borrowing.
(k) Within the limits and on the conditions set forth in this Section
2.02, the Borrower may from time to time borrow under this Section 2.02, repay
pursuant to Section 2.05 and reborrow under this Section 2.02; provided that
not more than ten Competitive Bid Borrowings may be outstanding at any time
(for which purpose Competitive Bid Advances made on the same date, but having
different maturities or representing Borrowings under different Commitments,
shall be deemed to be separate Competitive Bid Borrowings).
SECTION 2.03. Fees.
(a) Facility Fees. The Borrower agrees to pay to the Agent, for the
account of each of the Banks, a facility fee on the average daily Commitment of
such Bank from the Closing Date until the Revolver Termination Date at the
Applicable Facility Fee Rate from time to time in effect, payable quarterly in
arrears on the last day of each March, June, September and December, commencing
September 30, 1997, and on the Revolver Termination Date.
(b) Agency, Auction and Arrangement Fees. The Borrower agrees to pay to
the Agent, for its own account, the agency fees and the auction fees and to an
Affiliate of the Agent, the arrangement fee, in such amounts and on such dates
as are specified in the letter agreement dated as of June 2, 1997, between the
Borrower and the Agent.
SECTION 2.04. Optional Reduction of the Commitments. The Borrower shall
have the right, upon at least three Business Days' notice to the Agent,
permanently to terminate in whole or reduce ratably in part the Unused
Commitments; provided that (a) each partial reduction shall be in the aggregate
amount of $3,000,000 or an integral $1,000,000 multiple in excess thereof, (b)
each reduction shall be made ratably among the Banks in accordance with their
Unused Commitments, (c) no reduction may reduce the aggregate Commitments of
the Banks below the aggregate amount of the then outstanding Letter of Credit
Liability and the then outstanding principal amount of the Competitive Bid
Advances, and (d) no reduction may reduce the aggregate Commitments of the
Banks while any commitments to lend are in effect under the $150,000,000 Credit
Agreement.
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SECTION 2.05. Repayment.
(a) The Borrower shall repay on the Revolver Termination Date the
aggregate principal amount of the Committed Rate Advances of each Bank
outstanding on the Revolver Termination Date, together with accrued interest
thereon.
(b) The Borrower shall repay the aggregate principal amount of the
Competitive Bid Advances of each Designated Bidder, together with accrued
interest thereon, in such amounts and on such dates as specified pursuant to
Section 2.02(b).
SECTION 2.06. Interest.
(a) The Borrower shall pay interest on the unpaid principal amount of each
Committed Rate Advance made by each Bank from the date of such Advance until
such principal amount shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of the Base
Rate in effect from time to time, payable quarterly in arrears on the last
day of each March, June, September and December during such periods and on
the date such Base Rate Advance shall be Converted or paid in full.
Notwithstanding the foregoing, during the continuance of an Event of
Default, the principal amount of each Base Rate Advance shall bear
interest, to the fullest extent permitted by law, from the date on which
such amount is due until such amount is paid in full, payable on demand,
at a fluctuating rate per annum equal at all times to 2% per annum above
the Base Rate in effect from time to time.
(ii) Eurodollar Rate Advances. During such periods as such Advance
is a Eurodollar Rate Advance, a rate per annum equal at all times during
the Interest Period for such Advance to the sum of the Eurodollar Rate
for such Interest Period plus the Applicable Eurodollar Rate Margin,
payable on the last day of such Interest Period and, if such Interest
Period has a duration of six months, on the day that occurs during such
Interest Period three months from the first day of such Interest Period;
provided, however, that in the event that the Applicable Eurodollar Rate
Margin for any fiscal quarter of the Borrower has not yet been determined
in accordance with the provisions of the definition of Applicable
Eurodollar Rate Margin in Section 1.01 as of the time when interest on a
Eurodollar Rate Advance becomes due, the Borrower shall pay such interest
on the date when due based on the then existing Applicable Eurodollar
Rate Margin and any necessary subsequent adjustments in the amount of
interest payable hereunder (due to any subsequent change in the
Applicable Eurodollar Rate Margin) shall be made on the first date on
which any interest on any Committed Rate Advance is payable after the
date of determination of the Applicable Eurodollar Rate Margin.
Notwithstanding the foregoing, during the continuance of an Event of
Default, the principal amount of each Eurodollar Rate Advance shall bear
interest, to the fullest extent permitted by law, from the date on which
such amount is due until such amount is paid in full, payable on demand,
at a rate per annum equal at all times to 2% per annum above the
Eurodollar
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Rate plus the Applicable Eurodollar Rate Margin until the end
of the Interest Period applicable to such Eurodollar Rate Advance, at
which time the rate per annum shall become 2% per annum above the Base
Rate, in each case as in effect from time to time.
(b) The Borrower shall pay interest on the unpaid principal amount of each
Competitive Bid Advance from the date of such Advance until such principal
amount shall be paid in full, at the rate of interest for such Advance specified
by the Designated Bidder making such Advance in its Competitive Bid with respect
thereto delivered pursuant to Section 2.02(c), payable on the interest payment
date or dates specified by the Borrower for such Advance in the related
Competitive Bid Request delivered pursuant to Section 2.02(b) and on the
maturity date of such Competitive Bid Advance. Notwithstanding the foregoing,
during the continuance of an Event of Default, the principal amount of each
Competitive Bid Advance shall bear interest, to the fullest extent permitted by
law, from the date on which such amount is due until such amount is paid in
full, payable on demand, at a rate equal to 2% per annum above the interest rate
specified by the Designated Bidder that made such Advance in its Competitive Bid
with respect thereto delivered pursuant to Section 2.02(c).
SECTION 2.07. Interest Rate Determination and Protection.
(a) The Agent shall give prompt notice to the Borrower and the Banks of
the applicable interest rate under Section 2.06(a)(i) or (ii).
(b) If, with respect to any Eurodollar Rate Advance, the Majority Banks
notify the Agent that the Eurodollar Rate for any Interest Period for such
Advance will not adequately reflect the cost to such Majority Banks of making,
funding or maintaining their respective Eurodollar Rate Advance for such
Interest Period, the Agent shall forthwith so notify the Borrower and the
Banks, whereupon:
(i) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and
(ii) the obligation of the Banks to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and the Banks that the circumstances causing such
suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advance in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the Agent
will forthwith so notify the Borrower and the Banks and such Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances.
SECTION 2.08. Voluntary and Automatic Conversion of Committed Rate
Advances.
(a) The Borrower may on any Business Day, upon notice given to the Agent
not later than 11:00 A.M. (New York City time) on the second Business Day prior
to the date of the proposed Conversion and subject to the provisions of
Sections 2.07 and 2.11, Convert all
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Committed Rate Advances of one Type comprising the same Borrowing into Committed
Rate Advances of another Type; provided, however, that any Conversion of any
Eurodollar Rate Advances into Base Rate Advances shall be made on, and only on,
the last day of an Interest Period for such Eurodollar Rate Advances. Each such
notice of Conversion shall, within the restrictions specified above, specify (i)
the date of such Conversion, (ii) the Advances to be Converted, and (iii) if
such Conversion is into Eurodollar Rate Advances, the duration of the Interest
Period for each such Advance.
(b) On the date on which the unpaid aggregate principal amount of
Eurodollar Rate Advances comprising any Committed Rate Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $3,000,000, the
Eurodollar Rate Advances comprising such Borrowing shall automatically Convert
into Base Rate Advances, and on and after such date the Borrower may not
convert such Base Rate Advances to Eurodollar Rate Advances until such time as
the aggregate principal amount of Base Rate Advances equals or exceeds
$3,000,000.
SECTION 2.09. Prepayments.
(a) Voluntary Prepayments. The Borrower may, upon at least (i) in the
case of Eurodollar Rate Advances, two Business Days' and (ii) in the case of
Base Rate Advances, the same Business Day's notice to the Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given, the Borrower shall, prepay the outstanding principal amounts
of the Advances comprising part of the same Committed Rate Borrowing in whole
or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid and, in the case of Eurodollar Rate
Advances, any amounts payable under Section 9.04(b); provided, however, that
(i) each partial prepayment shall be in an aggregate principal amount not less
than $3,000,000 or any integral multiple of $1,000,000 in excess thereof and
(ii) Advances may not be prepaid if any Committed Rate Advances (as defined in
the $150,000,000 Credit Agreement) are outstanding under the $150,000,000
Credit Agreement. The Borrower may not prepay any Competitive Bid Advances.
(b) Asset Sales Mandatory Prepayments. Subject to Section 2.09(f), upon
the sale, lease or other disposition by the Borrower or any Subsidiary of the
Borrower of assets of the Borrower and its Subsidiaries constituting more than
5% of the Consolidated Total Assets of the Borrower and its Subsidiaries at the
time of sale, lease or other disposition, then (x) the Net Cash Proceeds of
such sale, lease or other disposition shall be delivered as soon as practicable
to the Agent and (y) any deferred cash proceeds of such sale, lease, or other
disposition shall be delivered to the Agent as soon as practicable after their
receipt (at which time the same shall become Net Cash Proceeds). Any such Net
Cash Proceeds shall be applied in accordance with Section 2.09(e).
(c) Subordinated Debt Issuance Mandatory Prepayments. Subject to Section
2.09(f), upon the issuance, if permitted in writing by the Majority Banks, by
the Borrower or any of its Subsidiaries of any Subordinated Debt, whether or
not convertible into or exchangeable for Securities (other than the
subordinated convertible notes issued by the Borrower or any of its
Subsidiaries as consideration for the acquisition of Facilities (or the assets
thereof), any Existing
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Clinic Acquisitions or the acquisition of Related Businesses), then (x) 75% of
the Net Cash Proceeds of such issuance shall be delivered as soon as practicable
to the Agent and (y) 75% of any deferred cash proceeds of such issuance shall be
delivered to the Agent as soon as practicable after their receipt (at which time
the same shall become Net Cash Proceeds). Any such Net Cash Proceeds shall be
applied in accordance with Section 2.09(e).
(d) Securities Issuance Mandatory Prepayment. Subject to Section 2.09(f),
upon the sale or issuance by the Borrower or any of its Subsidiaries of any
Securities, any securities convertible into or exchangeable for Securities
(other than Subordinated Debt subject to Section 2.09(c)), or any warrants,
rights or options to acquire Securities to any Person other than the Borrower
or any of its Subsidiaries other than such sale or issuance pursuant to the
Borrower's employee stock purchase plans or employee and director stock option
plans or similar plan available to physicians practicing at a Facility or
Related Business and other than the issuance of Securities as consideration
for, or the proceeds of which are within 180 days after receipt used for, or
the issuance of subordinated convertible notes as consideration for, the
acquisition of any Facility (or the assets thereof) or any Existing Clinic
Acquisitions or the acquisition of any Related Businesses to the extent such
acquisition satisfies all the requirements of Section 6.02(f)(i) or (ii), as
the case may be), then (x) 50% of the Net Cash Proceeds of such sale or
issuance shall be delivered as soon as practicable to the Agent and (y) 50% of
any deferred cash proceeds of such sale or issuance shall be delivered to the
Agent as soon as practicable after their receipt (at which time the same shall
become Net Cash Proceeds). Any such Net Cash Proceeds shall be applied in
accordance with Section 2.09(e).
(e) Application of Prepayments. Mandatory prepayments pursuant to Section
2.09(b), (c) or (d) shall be: first, applied to the payment of any amount
required to be prepaid or pledged under the $150,000,000 Credit Agreement;
second, applied to the ratable payment of outstanding Committed Rate Advances,
together with accrued interest to the date of such payment on the principal
amount repaid and any amounts payable pursuant to Section 9.04(b)
in respect thereof; and third, delivered to the Agent to be held as pledged
collateral to be applied to the ratable payment when due of outstanding
Competitive Bid Advances, together with accrued interest to the date of such
payment on the principal amount repaid, to the aggregate amount of such
principal and interest.
(f) Effect of Investment Grade Rating. Notwithstanding Sections 2.09(b),
(c), (d) or (e), no prepayment shall be required by any of such sections if at
the time of the sale, lease or other disposition, issuance or sale referred to
therein any of the then outstanding Debt of the Borrower shall then be rated
Investment Grade.
SECTION 2.10. Increased Costs.
(a) If, due to either (i) the introduction of or any change (other than
any change by way of imposition or increase of reserve requirements, in the
case of Eurodollar Rate Advances or LIBOR Advances, included in the Eurodollar
Rate Reserve Percentage) in or in the interpretation of any law or regulation
or (ii) the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there
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shall be any increase in the cost to any Bank of agreeing to make or making,
funding or maintaining Eurodollar Rate Advances or LIBOR Advances, then the
Borrower shall from time to time, upon demand by such Bank (with a copy of such
demand to the Agent), pay to the Agent for the account of such Bank additional
amounts sufficient to compensate such Bank for such increased cost. A
certificate as to the amount of such increased cost, submitted to the Borrower
and the Agent by such Bank, shall be conclusive and binding for all purposes,
absent manifest error.
(b) If any Bank determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital (or the rate of return on capital) required or expected to be
maintained by such Bank or any corporation controlling such Bank and that the
amount of such capital is increased (or such rate of return is reduced) by or
based upon the existence of such Bank's commitment, or offer or agreement, to
lend hereunder and other commitments, or offers or agreements, of this type,
then, upon notice by such Bank (with a copy of such notice to the Agent), the
Borrower shall immediately pay to the Agent for the account of such Bank, from
time to time as specified by such Bank, additional amounts sufficient to
compensate such Bank or such corporation in the light of such circumstances, to
the extent that such Bank reasonably determines such increase in capital (or
reduction in rate of return) to be allocable to the existence of such Bank's
commitment, or offer or agreement, to lend hereunder. Such notice as to such
amounts submitted and delivered to the Borrower and the Agent by such Bank
shall set forth in summary fashion the basis of such allocation and shall be
conclusive and binding for all purposes, absent manifest error.
SECTION 2.11. Illegality. Notwithstanding any other provision of this
Agreement, if any Bank shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is
unlawful, for any Bank or its Eurodollar Lending Office to perform its
obligations or agreements hereunder to make Eurodollar Rate Advances or LIBOR
Advances or to fund or maintain Eurodollar Rate Advances or LIBOR Advances
hereunder: (a) in the case of Eurodollar Rate Advances, (i) the obligation of
the Banks to make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended until the Agent shall notify the Borrower and the Banks that the
circumstances causing such suspension no longer exist and (ii) the Borrower
shall forthwith prepay in full all Eurodollar Rate Advances of all Banks then
outstanding, together with interest accrued thereon and any costs payable
pursuant to Section 9.04(b), unless the Borrower, within five Business Days of
notice from the Agent, Converts all Eurodollar Rate Advances of all Banks then
outstanding into Base Rate Advances in accordance with Section 2.08, and (b) in
the case of LIBOR Advances, such Bank shall no longer be obligated to fund any
LIBOR Advance it has agreed to fund thereafter.
SECTION 2.12. Payments and Computations.
(a) The Borrower shall make each payment hereunder and under the Notes not
later than 11:00 A.M. (New York City time) on the day when due free and clear
of any taxes, offset or other charge in United States dollars to the Agent at
its address referred to in Section 9.02 in
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same day funds. The Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal or interest or facility fees (i)
ratably (other than amounts payable pursuant to Section 2.10, 2.13 or 9.04) to
the Banks for the account of their respective Applicable Lending Offices, in the
case of Committed Rate Advances, and to the applicable Designated Bidder (for
the account of its Applicable Lending Office), in the case of Competitive Bid
Advances, and like funds relating to the payment of any other amount payable to
any Bank to such Bank for the account of its Applicable Lending Office, in each
case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 9.08(d), from and after
the effective date specified in such Assignment and Acceptance, the Agent shall
make all payments hereunder in respect of the interest assigned thereby to the
Bank assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) The Borrower hereby authorizes each Bank, if and to the extent payment
owed to such Bank is not made when due hereunder or under the Note held by such
Bank, to charge from time to time against any or all of the Borrower's accounts
with such Bank any amount so due.
(c) All computations of interest (other than interest on Base Rate
Advances) and of fees shall be made on the basis of a year of 360 days, and all
computations of interest on Base Rate Advances shall be made on the basis of a
year of 365 or 366 days (as the case may be), in each case for the actual
number of days (including the first day but excluding the last day) occurring
in the period for which such interest or fees are payable. Each determination
by the Agent of an interest rate or fee hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, if such extension would cause payment of interest on
or principal of Eurodollar Rate Advances or LIBOR Advances to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Banks hereunder in respect of
Committed Rate Advances that the Borrower will not make such payment in full,
the Agent may assume that the Borrower has made such payment in full to the
Agent on such date and the Agent may, in reliance upon such assumption, cause
to be distributed to each Bank on such due date an amount equal to the amount
then due such Bank. If and to the extent the Borrower shall not have so made
such payment in full to the Agent, each Bank shall repay to the Agent forthwith
on demand such amount distributed to such Bank together with interest thereon,
for each day from the date such amount is distributed to such Bank until the
date such Bank repays such amount to the Agent, at the Federal Funds Rate.
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(f) Notwithstanding any provision in this Agreement or any other Loan
Document to the contrary, all payments received by the Agent under the other
Loan Documents, the application of which are not provided for in such Loan
Documents, may be then or at any time thereafter be applied in whole or
in part by the Agent for the ratable benefit of the Banks (except in the case
of Competitive Bid Advances), against all or part of the Advances or other
obligations of the Borrower hereunder or under the other Loan Documents, in
such order and manner as the Agent shall elect.
SECTION 2.13. Taxes.
(a) Any and all payments by the Borrower hereunder or under the Notes
shall be made, in accordance with Section 2.12, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding,
in the case of each Bank and the Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Bank or the Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Bank or the Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.13) such Bank or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under the Notes or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Bank and the Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.13) paid by such Bank or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Bank or the Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Agent, at its address referred to in Section 9.02, the
original or a certified copy of a receipt evidencing payment thereof.
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(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.13 shall survive the payment in full of principal and interest
hereunder and under the Notes.
(f) Prior to the date of the first Borrowing under this Agreement in the
case of each Bank party hereto on the date hereof, on the date of the
effectiveness of the Assignment and Acceptance pursuant to which it became a
Bank in the case of each other Bank, and within 30 days following the first day
of each calendar year or if otherwise requested from time to time by the
Borrower or the Agent, each Bank organized under the laws of a jurisdiction
outside the United States shall provide the Agent and the Borrower with two
counterparts of each of the forms prescribed by the Internal Revenue Service
(Form 1001 or 4224, or successor form(s), as the case may be, or another
appropriate form) of the United States certifying as to such Bank's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to such Bank under any Loan Document.
Unless the Borrower and the Agent have received such forms or other documents
satisfactory to them indicating that payments under any Loan Document are not
subject to United States withholding tax, the Borrower or the Agent (if not
withheld by the Borrower) shall withhold taxes from such payments at the
applicable statutory rate, without any obligation to "gross-up" or make such
Bank or the Agent whole under Section 2.13(a); provided, however, that the
Borrower shall have the obligation to make such Bank or the Agent whole and to
"gross-up" under Section 2.13(a), if the failure to so deliver such forms or
make such statements (other than the forms and statements required to be
delivered on or made prior to the date of the initial Borrowing, on the date of
the Assignment and Acceptance pursuant to which an Eligible Assignee became a
Bank) is the result of the occurrence of an event (including, without
limitation, any change in treaty, law or regulation) which (alone or in
conjunction with other events) renders such forms inapplicable, that would
prevent such Bank or the Agent from making the statements contemplated by such
forms or which removes or reduces an exemption (whether partial or complete)
from withholding tax previously available to such Bank or the Agent. Each Bank
(and the Agent, if applicable) will promptly notify the Borrower of the
occurrence (when known to it) of an event contemplated by the foregoing
proviso.
SECTION 2.14. Sharing of Payments. Etc. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of any Committed Rate Advances made by it
(other than pursuant to Section 2.10, 2.13 or 9.04) in excess of its ratable
share of payments on account of such Committed Rate Advances obtained by all the
Banks, such Bank shall forthwith purchase from the other Banks such
participations in such Committed Rate Advances made by them as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase from
each Bank shall be rescinded and such Bank shall repay to the purchasing Bank
the purchase price to the extent of such recovery together with an amount equal
to such Bank's ratable share (according to the proportion of (i) the amount of
such Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrower
agrees that any Bank so purchasing a participation from another Bank
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pursuant to this Section 2.14 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank were the direct creditor
of the Borrower in the amount of such participation.
SECTION 2.15. Evidence of Debt/Register.
(a) The Debt of the Borrower resulting from the Committed Rate Advances
and Competitive Bid Advances shall be evidenced by the Committed Rate Notes and
the Competitive Bid Notes, respectively, delivered to the Banks pursuant to
Article IV, and the remaining principal amount thereof shall be recorded by the
Banks, and, prior to any transfer, endorsed on the grids thereto in accordance
with the terms of the Notes. The Agent shall also maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the
Borrower under this Agreement and the amounts of principal and interest payable
and paid to each Bank from time to time under this Agreement.
(b) The Register maintained by the Agent pursuant to Section 9.08(c) shall
include a control account, and a subsidiary account for each Bank, in which
accounts (taken together) shall be recorded: (i) the date and amount of each
Borrowing, the Commitment to which such Borrowing relates, the Type of Advance
comprising such Borrowing and the Interest Period applicable thereto (if any)
from time to time, (ii) the terms of each Assignment and Acceptance delivered
to and accepted by it, (iii) the amount of any principal or interest due
and payable or to become due and payable from the Borrower to each Bank, and
(iv) the amount of any sum received by the Agent from the Borrower hereunder
and each Bank's share thereof.
SECTION 2.16. Use of Proceeds. The proceeds of the Advances shall be
used by the Borrower for Capital Investments (to the extent permitted under
this Agreement), including, without limitation, acquisitions of Facilities and
Related Businesses (to the extent permitted under this Agreement), and other
general corporate purposes.
SECTION 2.17. Outstanding Advances; Existing Collateral
(a) Conversion to Advances; Termination of Commitment under Existing
Credit Agreement. On the Closing Date: (i) all outstanding Base Rate Advances
(as defined in the Existing Credit Agreement) shall automatically become Base
Rate Advances under the Commitments as if borrowed on the Closing Date and
shall thereafter bear interest as provided herein and payable at such times and
otherwise on such terms as are provided herein for Base Rate Advances under the
Commitments, (ii) there shall be no outstanding Eurodollar Rate Advances,
Competitive Bid Advances, or B Advances (as such terms are defined in the
Existing Credit Agreement) and (iii) the A Commitments (as such term is defined
in the Existing Credit Agreement) shall be permanently terminated in full.
(b) Adjustment Assignments and Payments Among Banks. Notwithstanding the
requirements set forth in Section 9.08 or any other provision to the contrary
contained herein, on the Closing Date, through the Agent, the Banks shall enter
into such assignments and make such payments (including any accrued interest or
fees) in immediately available funds among themselves as shall be necessary for
each Bank to have funded its ratable share, in accordance
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with its Commitment hereunder, of all Existing Base Rate Advances as if such
Advances were borrowed on the Closing Date hereunder and to participate, in
accordance with its Commitment hereunder, in all Letters of Credit outstanding
on the Closing Date.
(c) Release of Collateral. On the Closing Date, all Liens on the
Collateral (as defined in the Existing Credit Agreement) shall be released and
terminated, and from and after the Closing Date, the Agent shall execute and
deliver, at the Borrower's expense, such termination statements and other
documents as the Borrower may reasonably request to evidence the release and
termination of such liens.
ARTICLE III
AMOUNT AND TERMS OF LETTERS OF
CREDIT AND PARTICIPATIONS THEREIN
SECTION 3.01. Letters of Credit. Each Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to Issue for the account of the Borrower,
one or more Letters of Credit from time to time during the period from the
Closing Date until the date which occurs 30 days before the Revolver
Termination Date in an aggregate undrawn amount not to exceed at any time
$20,000,000, each such Letter of Credit upon its Issuance to expire on or
before the earlier of (x) the date which occurs one year from the date of its
Issuance or (y) the Revolver Termination Date; provided, however, that any
letter of credit issued under the Existing Credit Agreement which continues to
be undrawn in whole or in part on the Closing Date shall be deemed to be a
Letter of Credit Issued hereunder from and after the Closing Date; provided,
further, no Issuing Bank shall be obligated or permitted to Issue any Letter of
Credit if:
(i) after giving effect to the Issuance of such Letter of Credit,
the then outstanding aggregate amount of the Letter of Credit Liability
and all Advances (including any Advances required to be made but not
funded) shall exceed the aggregate amount of the Commitments of the
Banks; or
(ii) the Agent or the Majority Banks shall have notified such
Issuing Bank and the Borrower, that no further Letters of Credit are to
be Issued by such Issuing Bank due to failure to meet any of the
applicable conditions set forth in Article IV, and such notice has not
expired or been withdrawn by the Majority Banks.
Within the limits of the obligations of each Issuing Bank set forth above, the
Borrower may request an Issuing Bank to Issue one or more Letters of Credit,
reimburse such Issuing Bank for payments made thereunder pursuant to Section
3.03(a), and request any Issuing Bank to Issue one or more additional Letters
of Credit under this Section 3.01.
SECTION 3.02. Issuing the Letters of Credit. Each Letter of Credit shall
be Issued on at least five Business Days' notice from the Borrower to the
Issuing Bank specifying the date, amount, expiry, and beneficiary thereof,
accompanied by such application and agreement for letter of credit and other
documents as the Issuing Bank may specify to the Borrower, each in form and
substance satisfactory to the Issuing Bank. On the date specified by the
Borrower in
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such notice and upon fulfillment of the applicable conditions set forth in
Section 3.01 and Article IV, the Issuing Bank shall Issue such Letter of Credit
in the form specified in such notice and such application and agreement for
letter of credit and shall promptly notify the Agent thereof.
SECTION 3.03. Reimbursement Obligations.
(a) Notwithstanding any provisions to the contrary in any application and
agreement for letter of credit applicable to any Letter of Credit, the Borrower
shall:
(i) pay to the Issuing Bank an amount equal to, and in reimbursement
for, each amount which such Issuing Bank pays under any Letter of Credit
on or before the earlier of (A) the time specified therefor in the
application and agreement for letter of credit applicable to such Letter
of Credit or (B) the date which occurs one Business Day after payment of
such amount by such Issuing Bank under such Letter of Credit; and
(ii) pay to the Issuing Bank interest on any amount remaining unpaid
under clause (i) above from the date on which such Issuing Bank pays such
amount under any Letter of Credit until such amount is reimbursed in full
to such Issuing Bank pursuant to clause (i) above, payable on demand, at
a fluctuating rate per annum equal to the sum of the Base Rate in effect
from time to time, provided that any such amount which is not reimbursed
to such Issuing Bank within one Business Day after notice thereof by the
Issuing Bank shall thereafter bear interest, until such amount is
reimbursed in full to such Issuing Bank pursuant to clause (i) above,
payable on demand, at the Base Rate in effect from time to time plus
2-1/2% per annum.
(b) All amounts to be reimbursed to the Issuing Bank in accordance with
subsection (a) above may, subject to the limitations set forth in Section 2.01
(exclusive of the minimum borrowing limitations), be paid from the proceeds of
Committed Rate Advances. The Borrower hereby authorizes the Banks to make
pursuant to Section 2.01 Committed Rate Advances which are in the amounts of
the reimbursement obligations of the Borrower set forth in subsection (a)
above, and further authorizes the Agent (i) to give the Banks, pursuant to
Section 2.01(b), a Notice of Borrowing with respect to the Borrowing comprised
of such Advances (which shall be Base Rate Advances) and (ii) to distribute the
proceeds of such Advances to the Issuing Bank to pay such amounts. The Borrower
agrees that all such Advances so made shall be deemed to have been requested by
it, and directs that all proceeds thereof shall be used to pay such
reimbursement obligations under subsection (a) above.
SECTION 3.04. Participations Purchased by the Banks.
(a) On the date of Issuance of each Letter of Credit, the Issuing Bank
shall be deemed irrevocably and unconditionally to have sold and transferred to
each Bank without recourse or warranty, and each Bank shall be deemed to have
irrevocably and unconditionally purchased and received from such Issuing Bank,
an undivided interest and participation, to the extent of such Bank's
Commitment Percentage, in effect from time to time, in such Letter of Credit
and all Letter of Credit Liability relating to such Letter of Credit and all
Loan Documents securing,
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guaranteeing, supporting, or otherwise benefiting the payment of such Letter of
Credit Liability. As to each Letter of Credit Issued or to be Issued by the
Issuing Bank, the Agent will promptly (after it receives notification from the
Issuing Bank pursuant to Section 3.02) notify each Bank of such Letter of
Credit and its date of Issue, amount, expiry, and reference number.
(b) In the event that any reimbursement obligation under Section 3.03(a)
is not paid when due to the Issuing Bank with respect to any Letter of Credit,
the Issuing Bank shall promptly notify the Agent to that effect, and the Agent
shall promptly notify the Banks of the amount of such reimbursement obligation
and each Bank shall immediately pay to the Issuing Bank, in lawful money of the
United States and in same day funds, an amount equal to such Bank's Commitment
Percentage then in effect of the amount of such unpaid reimbursement obligation
with interest at the Federal Funds Rate for each day after such notification
until such amount is paid to the Agent.
(c) Promptly after the Issuing Bank receives a payment on account of a
reimbursement obligation with respect to any Letter of Credit, the Issuing Bank
shall promptly pay to the Agent, and the Agent shall promptly pay to each Bank
which funded its participation therein, in lawful money of the United States
and in the kind of funds so received, an amount equal to such Bank's ratable
share thereof.
(d) Upon the request of any Bank, the Agent shall furnish to such Bank
copies of any Letter of Credit and any application and agreement for letter of
credit and other documents related thereto as may be reasonably requested by
such Bank.
(e) The obligation of each Bank to make payments under Section 3.04(b)
above shall be unconditional and irrevocable and shall be made under all
circumstances, including, without limitation, any of the circumstances referred
to in Section 3.06(b).
(f) If any payment received on account of any reimbursement obligation
with respect to a Letter of Credit and distributed to a Bank as a participant
under Section 3.04(c) is thereafter recovered from the Issuing Bank in
connection with any bankruptcy or insolvency proceeding relating to the
Borrower, each Bank which received such distribution shall, upon demand by the
Agent, repay to the Issuing Bank such Bank's ratable share of the amount so
recovered together with an amount equal to such Bank's ratable share (according
to the proportion of (i) the amount of such Bank's required repayment to (ii)
the total amount so recovered) of any interest or other amount paid or payable
by such Issuing Bank in respect of the total amount so recovered.
SECTION 3.05. Letter of Credit Fees.
(a) The Borrower hereby agrees to pay nonrefundable letter of credit fees
with respect to each Letter of Credit on the maximum amount available to be
drawn under such Letter of Credit from time to time after giving effect to
scheduled reductions thereof (the determination of such maximum amount to
assume compliance with all conditions for drawing) from the date of Issuance of
such Letter of Credit until the expiry date of such Letter of Credit, (i) to
each Bank (in accordance with its Commitment Percentage) at a rate equal to (A)
the Applicable Eurodollar Rate Margin in effect on the date of Issuance thereof
less (B) 1/8 of one percent per annum and
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(ii) to the Issuing Bank at a rate equal to 1/8 of one percent per annum, for
the number of months or any fraction thereof that such Letter of Credit is
outstanding, payable in advance on the date of Issuance of each Letter of
Credit and on the last day of each March, June, September and December
thereafter prior to the expiry date of such Letter of Credit for the number of
months or fraction thereof until the earlier of (A) the expiry date of such
Letter of Credit and (B) the date three months after such date.
(b) The Borrower shall pay to the Issuing Bank, for its own account and on
demand, sums equal to standard fees (other than its letter of credit fee),
charges and expenses that such Issuing Bank may impose, pay or incur in
connection with the Issuance, amendment, administration, transfer or
cancellation of any or all Letters of Credit or in connection with any payment
by such Issuing Bank thereunder.
SECTION 3.06. Indemnification: Nature of the Issuing Bank's Duties.
(a) The Borrower agrees to indemnify and save harmless the Agent, each
Issuing Bank and each Bank from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which the Agent, such Issuing Bank or such Bank may incur or
be subject to as a consequence, direct or indirect, of (i) the Issuance of any
Letter of Credit or (ii) any action or proceeding relating to a court order,
injunction, or other process or decree restraining or seeking to restrain such
Issuing Bank from paying any amount under any Letter of Credit.
(b) The obligations of the Borrower hereunder with respect to Letters of
Credit shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms hereof under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit
or Loan Document or any agreement or instrument relating thereto;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against the beneficiary, or any
transferee, of any Letter of Credit, or any Issuing Bank, any Bank, or
any other Person;
(iii) any draft, certificate, or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) any lack of validity, effectiveness, or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part;
(v) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit
or of the proceeds thereof;
(vi) the release or non-perfection of any collateral;
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(vii) any failure of the beneficiary of a Letter of Credit to
strictly comply with the conditions required in order to draw upon any
Letter of Credit;
(viii) any misapplication by the beneficiary of any Letter of Credit
of the proceeds of any drawing under such Letter of Credit; or
(ix) any other circumstance or happening whatsoever, whether or not
similar to the foregoing;
provided, that, notwithstanding the foregoing, neither an Issuing Bank nor the
Agent shall be relieved of any liability it may otherwise have as a result of
its gross negligence or willful misconduct.
SECTION 3.07. Increased Costs.
(a) Change in Law. If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (i) impose, modify or deem
applicable any reserve, special deposit or similar requirement against letters
of credit issued by an Issuing Bank or (ii) impose on such Issuing Bank or any
Bank any other condition regarding letters of credit or, in the case of such
Bank, its participation hereunder in Letters of Credit, and the result of any
event referred to in the preceding clause (i) or (ii) shall be to increase the
cost to such Issuing Bank of Issuing or maintaining or, in the case of such
Bank, having a participation in Letters of Credit, then, upon demand by such
Issuing Bank or such Bank (with a copy to the Agent), the Borrower shall
immediately pay to such Issuing Bank or such Bank from time to time as
specified by such or such Bank (with a copy to the Agent) additional amounts
which shall be to compensate such Issuing Bank or such Bank for such increased
cost. Each certificate as to such increased cost, and amount thereof, incurred
by any Issuing Bank or any Bank as a result of any event mentioned in clause
(i) or (ii) above, submitted by such Issuing Bank or such Bank to the Borrower
and the Agent, shall set out in reasonable detail the calculation of such
amounts and shall be conclusive and binding for all purposes, absent manifest
error.
(b) Capital. If any Issuing Bank or any Bank determines that compliance
with any law or regulation or with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law)
has or would have the effect of reducing the rate of return on the capital of
any Issuing Bank or such Bank or any corporation controlling such Issuing Bank
or such Bank as a consequence of, or with reference to, such Issuing Bank's
commitment to issue, issuance of, or, with respect to such Bank's commitment,
to participate in, any Letter of Credit hereunder below the rate that such
Issuing Bank, such Bank or such other corporation could have achieved but for
compliance (taking into account the policies of such Issuing Bank, such Bank or
corporation with capital), then the Borrower, shall from time to time, upon
demand by such Issuing Bank or such Bank (with a copy of such demand to the
Agent), immediately pay to such Issuing Bank or such Bank additional amounts
sufficient to compensate such Issuing Bank or other corporation for such
reduction. A certificate as to such amounts, to the Borrower and the Agent by
such Issuing Bank or such Bank, shall be conclusive and binding
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for all purposes, absent manifest error. Each Issuing Bank and each Bank agree
promptly to notify the Borrower and the Agent of any circumstances that would
Borrower to pay additional amounts pursuant to this subsection (b), provided
that the failure to give such notice shall not affect the Borrower's
obligation to pay such additional amounts hereunder.
(c) Survival of Obligations. Without prejudice to the survival of any
other obligation of the Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 3.07 shall survive the payment in full
of the Advances (after the Revolver Termination Date).
SECTION 3.08. Uniform Customs and Practice. The Uniform Customs and
Practice for Documentary Credits as most recently published by the
International Chamber of Commerce ("UCP") shall in all respects be deemed a
part of this Article III as if incorporated herein and shall apply to the
Letters of Credit.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. Conditions Precedent to Any Borrowing and Letter of Credit.
The obligation of each Bank to make an Advance on the occasion of any
Borrowing, and the obligation of each Issuing Bank to Issue any Letter of
Credit, shall be subject to the conditions precedent that on the date of such
Borrowing or Issuance (a) the following statements shall be true and the Agent
shall have received a certificate signed by a duly authorized officer of the
Borrower, dated the date of such Borrowing or Issuance, stating that such
statements are true (and each of the giving of the applicable Notice of
Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing
or the issuance of such Letter of Credit shall constitute a representation and
warranty by the Borrower and each Loan Party (as to each Loan Document to which
it is a party) that on the date of such Borrowing or such Issuance such
statements are true):
(i) the representations and warranties contained in Section 5.01 of
this Agreement, in Section 6 of the Guaranty, and in Section 11 of the
Intercompany Subordination Agreement, are correct on and as of the date
of such Borrowing or Issuance, before and after giving effect to such
Borrowing or Issuance and to the application of the proceeds therefrom,
as though made on and as of such date; and
(ii) no event has occurred and is continuing, or would result from
such Borrowing or such Issuance or from the application of the proceeds
therefrom, which constitutes an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or time
elapse or both;
and (b) the Competitive Bid Note, duly executed by the Borrower, to the order
of the appropriate Designated Bidder, shall have been received by the Agent,
and (c) the Agent shall have received such other approvals, opinions or
documents as the Agent may reasonably request.
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SECTION 4.02. Conditions Precedent to Initial Advances. The obligations
of each Bank to make its initial Advance and each Issuing Bank to Issue its
initial Letter of Credit on or after the Closing Date are subject to the
following conditions precedent:
(i) The Agent shall have received evidence satisfactory to it that
all fees and expenses payable by the Borrower under the Existing Loan
Agreement shall have been paid in full.
(ii) The Agent shall have received the following documents, each
dated the Closing Date and in form and substance satisfactory to the
Agent and (with respect to the Guaranty and the Intercompany
Subordination Agreement) in sufficient copies for each Bank:
(a) The Committed Rate Notes, each duly executed by the
Borrower, to the order of the appropriate Banks.
(b) The Guaranty, duly executed by each Guarantor.
(c) The Intercompany Subordination Agreement, duly executed
by each Loan Party.
(d) Certified copies of the (i) resolutions of the Board of
Directors or other governing body of each Loan Party approving each
Loan Document to which it is a party, and of all documents
evidencing other necessary corporate, limited liability company or
partnership action and governmental approvals, if any, with respect
to each such Loan Document, (ii) all documents evidencing other
corporate, limited liability company or partnership action or
governmental approvals, if any, necessary or, in the reasonable
opinion of the Agent, advisable in connection with the execution,
delivery and performance of each Loan Document; (iii) the
certificate or articles of incorporation, by-laws or other
constituent instruments of the Borrower and of each of its
Subsidiaries other than Immaterial Subsidiaries, as amended through
the Closing Date or, with respect to any of the Borrower's
Subsidiaries other than Immaterial Subsidiaries, a certification
that such Subsidiary's certificate or articles of incorporation,
bylaws or other constituent instruments delivered to Citibank in
connection with the Existing Credit Agreement are true and correct
copies of the certificate or articles of incorporation, bylaws or
other constituent instruments of such Subsidiary and that such
certificate or articles of incorporation, bylaws or other
constituent instruments have not been amended or otherwise modified
since the date such copies were delivered to Citibank and (iv) good
standing certificates with respect to the Borrower and each of its
Subsidiaries other than Immaterial Subsidiaries from the Secretary
of State (or similar official) of the state in which the Borrower
or such Subsidiary is incorporated or organized.
(e) A certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying the names and true signatures of the
officers of such Loan
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Party authorized to sign each Loan Document to which it is a party
and the other documents to be delivered hereunder.
(f) A certificate of the Borrower, signed on behalf of the
Borrower by its President or a Vice President, certifying as to the
absence of any event occurring and continuing, or resulting from
this Agreement, that constitutes an Event of Default or would
constitute an Event of Default but for the requirement that notice
be given or time elapse or both.
(g) Favorable opinions of N. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, general counsel
of the Borrower, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel
for the Borrower and the other Loan Parties, substantially in the
forms of Exhibit G.
(h) A favorable opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
counsel for the Agent, satisfactory to the Agent.
(i) Such other agreements, certificates, consents and other
documents that the Agent or any Bank may reasonably request.
(iii) The Borrower shall have paid all fees payable hereunder on or
before the Closing Date.
(iv) Other than as set forth on Schedule VI, no judgment, order,
decree, injunction or other restraint affecting any Loan Party shall have
been rendered or imposed by any court, governmental agency or arbitrator,
and there shall be no pending or threatened action or proceeding
affecting any Loan Party before any court, governmental agency or
arbitrator, which could reasonably be expected to have a material adverse
effect on the business, prospects or condition (financial or otherwise)
or operations of the Borrower and its Subsidiaries, taken as a whole, or
which purports to affect the legality, validity or enforceability of this
Agreement or any other Loan Document.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, is duly qualified as a foreign corporation and is in good
standing in each jurisdiction as to which the location of its assets or
the nature of its business makes qualification necessary, and has all
power, corporate or otherwise, to conduct its business and to own, or
hold under lease, its assets, and to execute and deliver, and to perform
all of its obligations under, each of the Loan Documents to which it is
or will be a party. Each of the Borrower's Subsidiaries other than
Immaterial Subsidiaries is a corporation, limited liability company or
partnership
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duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of organization, is duly
qualified as a foreign corporation, limited liability company or
partnership and is in good standing in each jurisdiction as to which the
location of its assets or the nature of its business makes qualification
necessary, and has all power (corporate, limited liability company,
partnership or otherwise) to conduct its business and to own, or hold
under lease, its assets, and to execute and deliver, and to perform all
of its obligations under, each of the Loan Documents to which it is or
will be a party.
(b) The execution, delivery and performance by each Loan Party of
each Loan Document to which it is or will be a party are within such Loan
Party's corporate, limited liability company or partnership powers, have
been duly authorized by all necessary corporate, limited liability
company or partnership action, and do not contravene (i) such Loan
Party's certificate or articles of incorporation, by-laws or other
constituent instruments, or (ii) any law, rule, regulation (including,
without limitation, Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award binding on or affecting such Loan Party or any of
its properties, or (iii) any contractual restriction binding on or
affecting such Loan Party or any of its properties, and do not result in
or require the creation of any Lien upon or with respect to any of its
properties; and no Loan Party is in default in any material respect under
any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination, award or restriction.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by any Loan
Party of any Loan Document to which it is or will be a party except for
those which have been duly obtained or made and are in full force and
effect.
(d) This Agreement is, and each other Loan Document to which each
Loan Party will be a party when executed and delivered hereunder will be,
the legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms.
(e) The Consolidated balance sheets of the Borrower and its
Subsidiaries as at December 31, 1996 and March 31, 1997 and the related
Consolidated statements of operations, stockholders' equity and cash flow
of the Borrower and its Subsidiaries for the fiscal year and three
months, respectively, then ended have been furnished to the Agent. Such
financial statements, and all financial statements hereafter delivered
pursuant to Sections 6.04(b) and (c), fairly present, or will fairly
present, the financial condition of the Borrower and its Subsidiaries as
at the dates thereof and the results of the operations of the Borrower
and its Subsidiaries for the periods then ended or ending, all in
accordance with generally accepted accounting principles consistently
applied. Since December 31, 1996, there has been no material adverse
change, in the business, prospects
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or condition (financial or otherwise) or in the results of operations of
the Borrower and its Subsidiaries taken as a whole.
(f) Each Loan Party has good title to all of its material property,
free and clear of all Liens, except for Permitted Liens. Each Lease or
other agreement relating to the Real Property described in Schedule I
operated by each Loan Party is a valid and subsisting Lease or other
agreement and is in full force and effect in accordance with the terms
thereof; and the Borrower or its Subsidiary is in possession of all such
leaseholds and no material default by the Borrower or any of its
Subsidiaries exists under any such Lease or other agreement and, to the
best of the Borrower's knowledge, no lessor has any accrued right to
terminate any such Lease or other agreement on account of a default by
the Borrower or its Subsidiaries.
(g) Each Service Agreement is a valid and subsisting agreement and
is in full force and effect in accordance with the terms thereof; and no
material default by the Borrower or any of its Subsidiaries exists under
any Service Agreement and, to the best of the Borrower's knowledge, no
party to any of the Service Agreements has any accrued right to terminate
any Service Agreement on account of a default by the Borrower or any of
its Subsidiaries.
(h) Other than as set forth on Schedule VI, no judgment, order,
decree, injunction or other restraint affecting any Loan Party has been
rendered or imposed by any court, governmental agency or arbitrator, and
there is no pending or, to the best knowledge of the Borrower, threatened
action or proceeding affecting any Loan Party before any court,
governmental agency or arbitrator, which could reasonably be expected to
have a material adverse effect on the business, prospects or condition
(financial or otherwise) or operations of the Borrower and its
Subsidiaries, taken as a whole, or which purports to affect the legality,
validity or enforceability of this Agreement or any other Loan Document.
(i) Set forth on Schedule II is a complete and accurate list of all
of the Subsidiaries of the Borrower, other than Immaterial Subsidiaries,
as of the date hereof, showing as of such date (as to each such
Subsidiary) the nature of its organization, the jurisdiction of its
organization, the number of shares or the amount of interests of each
class of Securities outstanding on the date hereof, the direct owner of
the outstanding shares or the amount of interests of each such class
owned, and the jurisdictions in which such Subsidiary is qualified to do
business as a foreign entity. There are no outstanding options,
warrants, rights of conversion or purchase, and similar rights to acquire
Securities of any of such Subsidiaries, except as set forth on Schedule
II, and all of the outstanding Securities of all of such Subsidiaries
have been validly issued, are fully paid and nonassessable and are owned
by the Borrower or, in the case of limited liability companies, the
Intercompany Creditor, free and clear of (i) all Liens and (ii) any
restrictions (other than laws, rules or regulations) on the ability to
vote or alienate such Securities.
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(j) All information, exhibits and reports furnished in writing by or
on behalf of the Borrower or any of its Subsidiaries other than
Immaterial Subsidiaries and made available to the Agent or any Bank
relating to the condition (financial or otherwise), operations, business
or properties of the Borrower or such Subsidiary, are true, correct and
complete and not misleading in all material respects.
(k) With respect to all business plans and other forecasts and
projections furnished by or on behalf of the Borrower or any of its
Subsidiaries other than Immaterial Subsidiaries and made available to the
Agent or any Bank relating to the financial condition, operations,
business, properties or prospects of the Borrower or such Subsidiary, to
the best of the Borrower's knowledge: (i) all facts stated as such
therein are true and complete in all material respects, (ii) all facts
upon which the forecasts or projections therein contained are based are
true and complete in all material respects, and (iii) all estimates and
assumptions were made in good faith and believed to be reasonable at the
time made.
(l) Schedule IV sets forth, as of the date hereof, all Debt of the
Borrower and its Subsidiaries other than Debt representing miscellaneous
liabilities not in excess of $5,000,000 in the aggregate.
(m) Neither the business nor the properties of the Borrower or any
of its Subsidiaries are affected by any strike, lockout, fire, explosion,
earthquake, embargo, act of God or of the public enemy or other casualty
which could reasonably be expected to have a material adverse effect on
the business, prospects, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries taken as a whole.
(n) No ERISA Event has occurred with respect to any Plan or is
reasonably expected to occur with respect to any Plan.
(o) Schedule B (Actuarial Information) to the most recently
completed annual report (Form 5500 Series) for each Plan of the Borrower
or its Subsidiaries, copies of which have been or will be filed with the
Internal Revenue Service, is complete and accurate in all material
respects and fairly presents the funding status of such Plan, and since
the date of such Schedule B there has been no material adverse change in
such funding status.
(p) Neither the Borrower nor any ERISA Affiliate has incurred or is
reasonably expected to incur any material Withdrawal Liability to any
Multiemployer Plan.
(q) Neither the Borrower nor any ERISA Affiliate has been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA and no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
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(r) The Borrower and its Subsidiaries on a Consolidated basis are,
and each Loan Party individually is, and after receipt and application of
the Advances in accordance with the terms of this Agreement and execution
of each Loan Document to which it is or is to be a party will be,
Solvent.
(s) Neither the Borrower nor any Subsidiary of the Borrower is, or
is required to be, registered under the Investment Company Act of 1940,
as amended.
(t) Each of the Borrower and its Subsidiaries is in compliance in
all material respects with the provisions of all Environmental Laws.
Neither the Borrower nor any of its Subsidiaries nor, to the knowledge of
the Borrower, any other Person, has engaged in any Environmental
Activity, nor, to the knowledge of the Borrower, has any Environmental
Activity otherwise occurred, in material violation of any provision of
any applicable Environmental Laws.
(u) Neither the Borrower nor any of its Subsidiaries has any
liability, absolute or contingent, in connection with any Environmental
Activity the satisfaction of which could reasonably be expected to have a
material adverse effect on the business, prospects, condition (financial
or otherwise) or results of operations of the Borrower and its
Subsidiaries taken as a whole.
(v) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System). No proceeds of any Advance will be used to purchase or
carry any margin stock (within the meaning of Regulation U issued by the
Board of Governors of the Federal Reserve System) or to extend credit to
others for the purpose of purchasing or carrying any margin stock (within
the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System) in violation of applicable law, including,
without limitation, Regulation U issued by the Board of Governors of the
Federal Reserve System.
(w) The Intercompany Creditor (i) is not liable in respect of any
Debt other than Intercompany Debt, (ii) has no other liabilities or
obligations other than contingent obligations that are not material in
amount in respect of operating leases entered into prior to May 1, 1993,
and (iii) has not engaged in any operations, and has not received any
notice of a claim or threatened claim in respect of any operations or the
sale thereof, since May 1, 1993.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01. Affirmative Covenants. So long as any Note shall remain
unpaid, any Letter of Credit shall remain outstanding, any amount shall remain
due hereunder, or any Bank shall have any Commitment hereunder, the Borrower
will, unless the Majority Banks shall otherwise consent in writing:
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(a) Payment of Taxes, Etc. Pay and discharge, and cause each
Subsidiary to pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed
upon it or upon its property, and (ii) all lawful claims which, if
unpaid, might by law become a Lien upon its property; provided, however,
that neither the Borrower nor any Subsidiary shall be required to pay or
discharge any such tax, assessment, charge or claim which is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained.
(b) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations (i) in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates, and (ii) reasonably satisfactory to
the Agent, and naming the Agent as an additional insured or as loss payee
as the respective interests appear.
(c) Preservation of Corporate Existence, Etc. Except as is
otherwise expressly permitted hereby, preserve and maintain, and cause
each Subsidiary to preserve and maintain, its corporate existence, rights
(charter and statutory) and franchises.
(d) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with the requirements
of all applicable laws, rules, regulations and orders, including, without
limitation, all Environmental Laws relating to the Real Property and the
ownership, use, operation and occupancy thereof.
(e) Visitation Rights. At any reasonable time and from time to time
after notice, permit the Agent or any of the Banks or any agents or
representatives thereof, to examine and make copies of and abstracts from
the records and books of account of, and visit the properties of, the
Borrower and/or any of the Subsidiaries of the Borrower, and to discuss
the affairs, finances and accounts of the Borrower and any such
Subsidiary with any of their officers or directors and with their
independent certified public accountants.
(f) Keeping of Books. Keep, and cause each Subsidiary of the
Borrower to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the
assets and business of the Borrower and each such Subsidiary in
accordance with generally accepted accounting principles consistently
applied.
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each Subsidiary of the Borrower to maintain and preserve, all of
its properties which are used or useful in the conduct of its business
in good working order and condition, ordinary wear and tear excepted.
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(h) Compliance with Terms of All Leaseholds. Make all payments and
otherwise perform, and cause each of its Subsidiaries to make all
payments and otherwise perform, all of its material obligations in
respect of all material Leases, and use its best efforts, and cause each
of its Subsidiaries to use its best efforts, to keep, and to take all
action to keep, such Leases in full force and effect and not allow any
such Leases to lapse or be terminated or any rights to renew such Leases
to be forfeited or canceled; provided, however, that any such Lease may
lapse or be terminated or such renewal rights may be forfeited or
canceled if in the reasonable business judgment of the Borrower or its
Subsidiary, as the case may be, it is in its best economic interests to
allow or cause such lapse, termination, forfeiture or cancellation.
(i) Solvency. Continue, and cause each of its Subsidiaries to
continue, to be Solvent.
(j) Further Assurances.
(A) If and to the extent requested by the Agent from time to
time, execute and deliver such documents and take such other
action, and cause each of its Subsidiaries to execute and deliver
such documents and take such other action, as may be necessary or
reasonably requested by the Agent, in order to assure and confirm
that all obligations under this Agreement (including reimbursement
obligations in respect of outstanding Letters of Credit), the Notes
or any of the other Loan Documents are at all times guaranteed on
terms satisfactory to the Agent by Guaranties of each of its
present and future Subsidiaries other than Immaterial Subsidiaries.
(B) Promptly upon the acquisition by the Borrower or one of
its Subsidiaries of the Securities of any Subsidiary that is not an
Immaterial Subsidiary or, in the event any Subsidiary of the
Borrower ceases to be an Immaterial Subsidiary, within 30 days
after such Subsidiary ceases to be an Immaterial Subsidiary, the
Borrower will cause such Subsidiary to enter into a Guaranty.
(C) Promptly upon the acquisition of the Securities of any
Subsidiary of the Borrower or one of its Subsidiaries that is not
an Immaterial Subsidiary or, in the event any Subsidiary of the
Borrower ceases to be an Immaterial Subsidiary or is owed by the
Borrower more than $100,000 in Intercompany Debt, within 30 days
after such Subsidiary ceases to be an Immaterial Subsidiary or
first is owed such amount of Intercompany Debt, the Borrower will
cause such Subsidiary to enter into the Intercompany Subordination
Agreement.
(D) Use its best efforts, from and after the Closing Date, to
obtain supplements to the Subordination Agreements outstanding on
the Closing Date confirming the continued subordination of the Debt
referred to therein, in form and substance reasonably satisfactory
to the Agent.
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(k) Employment of Technology; Disposal of Hazardous Materials, Etc.
(i) Employ, and cause each of its Subsidiaries to employ, in connection
with its use, if any, of the Real Property, appropriate technology and
compliance procedures to maintain compliance with any applicable
Environmental Laws, (ii) obtain and maintain, and cause each of its
Subsidiaries to obtain and maintain, any and all material permits
required by applicable Environmental Laws in connection with its or its
Subsidiaries' operations and (iii) dispose of, and cause each of its
Subsidiaries to dispose of, any and all Hazardous Substances only at
facilities and with carriers reasonably believed to possess valid permits
under RCRA, if applicable, and any applicable state and local
Environmental Laws. The Borrower shall use its best efforts, and cause
each of its Subsidiaries to use its best efforts, to obtain all
certificates required by law to be obtained by the Borrower and its
Subsidiaries from all contractors employed by the Borrower or any of its
Subsidiaries in connection with the transport or disposal of any
Hazardous Substances.
(l) Environmental Matters. If the Borrower or any of its
Subsidiaries shall:
(i) receive written notice that any material violation of any
Environmental Laws may have been committed or is about to be
committed by the Borrower or any of its Subsidiaries;
(ii) receive written notice that any administrative or
judicial complaint or order has been filed or is about to be filed
against the Borrower or any of its Subsidiaries alleging any
material violation of any Environmental Laws or requiring the
Borrower or any of its Subsidiaries to take any action in
connection with the release or threatened release of Hazardous
Substances or solid waste into the environment; or
(iii) receive written notice from a federal, state, foreign or
local governmental agency or private party alleging that the
Borrower or any of its Subsidiaries is liable or responsible for
costs associated with the response to cleanup, stabilization or
neutralization of any Environmental Activity;
then it shall provide the Agent with a copy of such notice within five
Business Days of the Borrower's or such Subsidiary's receipt thereof.
Within ten days of the date the Borrower or such Subsidiary shall have
learned of the enactment or promulgation of any Environmental Laws which
may have a material adverse effect on the business, property, condition
(financial or otherwise) or results of operations of the Borrower and its
Subsidiaries, taken as a whole, the Borrower shall provide the Agent with
notice thereof. The Borrower shall monitor compliance with Environmental
Laws by any and all owners or operators of the Real Property.
(m) Violation of Law, Etc. Prior to the Borrower or any Subsidiary
of the Borrower commencing any acquisition of any margin stock (within
the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System), including, without limitation, commencing a
merger or tender offer for shares of another
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Person, the Borrower will deliver to the Agent an opinion of the general
counsel of the Borrower satisfactory to the Agent that such activity
(taking into account Section 6.02(a) and the use or proposed use of the
proceeds of any Advances in connection with such activity) does not
violate any law, rule or regulation (including without limitation
Regulation U issued by the Board of Governors of the Federal Reserve
System).
SECTION 6.02. Negative Covenants. So long as any Note shall remain
unpaid, any Letter of Credit shall remain outstanding, any amount shall remain
due hereunder, or any Bank shall have any Commitment hereunder, the Borrower
will not, without the written consent of the Majority Banks:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Lien upon
or with respect to any of its properties of any character (including, without
limitation, Accounts), whether now owned or hereafter acquired, or assign any
right to receive income, or sign or file, or permit any of its Subsidiaries to
sign or file, under the Uniform Commercial Code a financing statement that
names the Borrower or any of its Subsidiaries as debtor or the equivalent or
sign, or permit any of its Subsidiaries to sign, any security agreement
authorizing any secured party thereunder to file any such financing statement
or other document, or assign, or permit any of its Subsidiaries to assign, any
Accounts, excluding, however, from the operation of the foregoing restrictions
the Liens created by or pursuant to the Loan Documents or the $150,000,000
Credit Agreement and Permitted Liens.
(b) Restrictive Covenants. Enter into, or permit any of its
Subsidiaries to enter into, any agreement or instrument (other than the Loan
Documents) (i) which restricts the ability of the Borrower or any of its
Subsidiaries to create or suffer to exist any Lien upon or with respect to its
Securities, whether now or hereafter issued, or upon or with respect to any of
its properties, whether now owned or leased or hereafter acquired or leased,
except in connection with transactions contemplated by clause (v) of the
definition "Permitted Lien" in which case any such agreement shall be limited
to the property acquired in connection with such transactions and any Lien
granted is limited as provided in said clause (v) and except for investments of
no more than $10,000,000 in any individual case (or series of individual
cases), but in no event more than $20,000,000 in the aggregate at any time, by
the Borrower and its Subsidiaries in any Person which is not a Subsidiary, in
which the Borrower or its Subsidiaries hold less than 50% of the equity
interest and as to which the Borrower or its Subsidiaries are prohibited by law
to ▇▇▇▇▇ ▇ ▇▇▇▇ on any such equity interest, or (ii) which restricts the
ability of any Subsidiary of the Borrower to (A) pay dividends or make other
distributions on its Securities or to the Borrower or any other Subsidiary of
the Borrower, (B) make any loan or advance to the Borrower or any of its
Subsidiaries, or (C) create, incur, assume or suffer to exist, or pay or
prepay, any Intercompany Debt, provided, that any such agreement or instrument
mandated by any federal law, rule or regulation or order governing the business
of the Borrower and its Subsidiaries shall not be a violation of this Section
6.02(b)(ii).
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(c) Debt. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt other
than:
(i) Debt hereunder;
(ii) Debt under the Loan Documents or under the $150,000,000
Credit Agreement (and the Loan Documents referred to and as defined
therein);
(iii) Debt secured by Liens permitted by clause (v) of the
definition of "Permitted Lien";
(iv) the Debt listed on Schedule IV, provided that such Debt
may be renewed, extended or otherwise modified on terms no less
favorable to the Borrower or its Subsidiaries or the Banks than the
existing terms of such Debt;
(v) Debt not otherwise permitted by this Section 6.02(c)
incurred by the Borrower and/or its Subsidiaries (other than the
Intercompany Creditor) in connection with the acquisition of any
Facility (or the assets thereof), any Existing Clinic Acquisition
or the acquisition of any Related Business, so long as such
acquisition satisfies all the conditions precedent set forth in
Section 6.02(f)(i) or (ii), as the case may be;
(vi) convertible Subordinated Debt incurred by the Borrower
or any Subsidiary of the Borrower (other than the Intercompany
Creditor) in connection with the acquisition of a Facility (or the
assets thereof), any Existing Clinic Acquisition or the acquisition
of any Related Business, provided that the holder of any such Debt
shall have executed and delivered a Subordination Agreement to the
Agent;
(vii) Subordinated Debt, whether convertible or not, in an
aggregate principal amount not in excess of $150,000,000; provided
that the Agent and the Majority Banks shall have approved in
writing prior to the issuance thereof the terms and conditions
relating to the issuance of such Subordinated Debt, including the
terms of any indenture executed in connection therewith;
(viii) any Intercompany Debt or Debt permitted under the terms
of Section 6.02(i) or 6.02(o);
(ix) Contingent Obligations permitted under Section 6.02(d);
(x) Debt under any interest rate, currency or other
protection, hedge, cap, collar, swap or similar agreement entered
into by the Borrower with any of the Banks or their respective
Affiliates from time to time; and
(xi) unsecured Senior Debt in an aggregate principal amount
not in excess of $50,000,000 incurred by the Borrower or any of its
Subsidiaries (other
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than the Intercompany Creditor) to fund any Existing Clinic
Acquisition or the acquisition of any Facility (or the assets
thereof) or any Related Business; provided, however, that such
unsecured Senior Debt contains terms and conditions, including,
without limitation, interest rates, covenants and defaults, no
greater or more restrictive, as the case may be, than those
contained herein; provided, further, that there can be no principal
repayments of such unsecured Senior Debt until one year after the
Revolver Termination Date.
(d) Contingent Obligations. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Contingent Obligations except (i) by reason of
endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business, (ii) Contingent
Obligations created pursuant to the Loan Documents or under the
$150,000,000 Credit Agreement (and the Loan Documents referred to and as
defined therein), (iii) guaranties by the Borrower of Capital Leases,
Operating Leases or Service Agreements of any Subsidiary of the Borrower
(including consents by the Borrower to the assignment of such
guaranties), provided that such Capital Leases or Operating Leases are
otherwise permitted hereunder, (iv) Contingent Obligations of the type
specified in clauses (ii) and (iii) of the definition of "Contingent
Obligation" created in the ordinary course of business, (v) miscellaneous
Contingent Obligations not to exceed at any time outstanding $20,000,000,
(vi) guaranties by the Subsidiaries of the Borrower of the Borrower's
obligations under a Capital Lease or an Operating Lease provided that
such Capital Lease or Operating Lease is otherwise permitted hereunder
and only to the extent of the portion of such Capital Lease or Operating
Lease that directly benefits such Subsidiary, (vii) Contingent
Obligations not otherwise permitted by this Section 6.02(d) incurred by
the Borrower and/or its Subsidiaries (other than the Intercompany
Creditor) in connection with the acquisition of any Facility (or the
assets thereof), any Existing Clinic Acquisition or the acquisition of
any Related Business, so long as such acquisition satisfies all the
conditions precedent set forth in Section 6.02(f)(i) or (ii), as the case
may be, (viii) Contingent Obligations permitted pursuant to Section
6.02(c) and Contingent Obligations listed on Schedule IV and (ix)
Contingent Obligations to make recruitment subsidy advances pursuant to
any Service Agreement.
(e) Restricted Payments. Make, or permit any of its Subsidiaries to
make, any Restricted Payment if at the time such Restricted Payment is
made none of the then outstanding Debt of the Borrower shall be rated
Investment Grade, except that:
(i) the Borrower may pay dividends on its Common Stock, or
purchase or otherwise acquire for value any shares of its Common
Stock (each a "Common Stock Payment"), provided that (A) no Event of
Default or event that would constitute an Event of Default but for
the requirement that notice be given or time elapse or both shall
have occurred and be continuing or would result from such Common
Stock Payment, (B) the aggregate amount of Common Stock Payments made
during the period from January 1, 1997 through the date of such
Common Stock Payment shall not exceed an amount equal to ten percent
of the
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Consolidated Net Income of the Borrower and its Subsidiaries for the
period from January 1, 1997 through the last day of the fiscal
quarter most recently ended prior to the date of such Common Stock
Payment (treated for such purposes as a single accounting period),
provided that in no event may the aggregate amount of Common Stock
Payments made to purchase or otherwise acquire for value shares of
Common Stock exceed $20,000,000 in the aggregate for all such
purchases or other acquisitions, and (C) the Borrower shall have
provided the Agent with a certificate of the treasurer or chief
financial officer of the Borrower setting forth computations in
reasonable detail demonstrating satisfaction of the foregoing
conditions; and
(ii) the Borrower and its Subsidiaries may make Restricted
Payments to terminated employees in an amount not to exceed
$100,000 in any year.
(f) Capital Investments. Make, or permit any of its Subsidiaries to
make, any Capital Investments, provided that:
(i) the Borrower and the Subsidiaries of the Borrower (other
than the Intercompany Creditor) can make Capital Investments
consisting of an acquisition of a Facility (or the assets thereof)
or Related Businesses or Existing Clinic Acquisitions (whether
through the acquisition of assets or Securities) that satisfy all
of the following:
(A) the Total Consideration for each such acquisition
shall be less than $75,000,000;
(B) the aggregate Total Consideration for all such
acquisitions in any twelve-month period shall not exceed
$500,000,000;
(C) the aggregate number of such acquisitions (other
than Existing Clinic Acquisitions) in any twelve-month period
shall not exceed fifteen;
(D) except in the case of Existing Clinic Acquisitions,
the Agent and the Banks shall have received at least one day
before the scheduled closing for such acquisition the
following financial and other information:
(1) the Total Consideration to be paid for such
acquisition;
(2) summary financial information relating to the
Facility or Related Business to be acquired, including
operating forecasts and information as to the numbers
of physicians and physician assistants involved and any
other information reasonably requested by the Agent;
and
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(3) a schedule, duly certified by the chief
financial officer of the Borrower, demonstrating
compliance on a pro forma basis with the financial
covenants contained in Section 6.03 after such
acquisition; provided, however, that in preparing such
pro forma schedule, the Borrower shall include all Debt
to be incurred in connection with such acquisition and
the EBITDA of the Facility or Related Business to be
acquired (which shall be based on audited, if
available, historical numbers, adjusted as contemplated
by Section 6.03);
(E) the Agent and the Banks shall have received at least
one day before the scheduled closing of such acquisition all
other information, financial or otherwise, regarding such
acquisition as the Agent or the Banks may reasonably request;
(F) except in the case of Existing Clinic Acquisitions,
the Agent shall have received, on or before the date of such
acquisition, each of the following documents:
(1) a Guaranty (dated on or before the date of such
acquisition), duly executed by the Subsidiary of the
Borrower formed to acquire or resulting from the
acquisition of such Facility (or the assets thereof) or
Related Business, unless immediately after giving effect
to such acquisition such Subsidiary will be an
Immaterial Subsidiary;
(2) an amendment (dated on or before the date of
such acquisition) to the Intercompany Subordination
Agreement, which amendment shall make the Subsidiary of
the Borrower formed to acquire or resulting from the
acquisition of such Facility (or the assets thereof) or
Related Business a "Subordinated Creditor" under such
Intercompany Subordination Agreement, unless
immediately after giving effect to the acquisition such
Subsidiary will be an Immaterial Subsidiary;
(3) certified copies of resolutions of the Board
of Directors or other governing body of such Subsidiary
authorizing the execution and delivery of such Loan
Documents, together with certificates of incumbency
with respect to the individuals executing such Loan
Documents;
(4) a supplement to Schedule I hereto to the
extent such supplement is necessary to make the
representation and warranty contained in Section
5.01(f) correct on and as of the date of such
acquisition; and
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(5) such other documents (including a favorable
legal opinion of the general counsel of the Borrower)
as the Agent may reasonably request.
(ii) the Borrower and the Subsidiaries of the Borrower (other
than the Intercompany Creditor) can make Capital Investments
consisting of an acquisition of a Facility (or the assets thereof)
or Related Businesses for which the Total Consideration (whether
through the acquisition of assets or Securities) equals or exceeds
$75,000,000 only with the prior approval in writing of the terms and
conditions of such acquisition by the Majority Banks in
substantially the form of Exhibit H (it being understood that the
Banks shall use reasonable efforts to notify the Borrower within ten
Business Days after receipt of all of the information regarding a
proposed acquisition described in clause (A) below of their decision
to approve or disapprove the proposed acquisition), and
(A) the Banks and the Agent shall have received complete
information, financial and otherwise, regarding the proposed
acquisition as may be necessary or desirable, in the
reasonable judgment of the Banks, to enable the Banks to
evaluate the proposed acquisition for the purpose of
approving such acquisition under this Section 6.02(f)(ii),
including, without limitation, information regarding the
Total Consideration to be paid, a schedule, duly certified by
the chief financial officer of the Borrower, demonstrating
compliance on a pro forma basis with the financial covenants
contained in Section 6.03 after such acquisition, and any
other information as the Banks may reasonably request;
provided, however, that in preparing such pro forma schedule,
the Borrower shall include all Debt to be incurred in
connection with such acquisition and the EBITDA of the
Facility or Related Business to be acquired (which shall be
based on audited, if available, historical numbers, adjusted
as contemplated by Section 6.03); and
(B) the Agent shall have received on or before the day
of such acquisition, in form and substance satisfactory to
the Agent, each of the documents described in subsection
6.02(f)(i)(F).
(iii) the Borrower and its Subsidiaries may make Capital
Expenditures that are not acquisitions of, or other investments in,
Facilities, Related Businesses or other Persons (or all or
substantially all of the assets thereof) in the ordinary course of
business, provided that no Event of Default or event that would
constitute an Event of Default but for the requirement that notice
be given or time elapse or both shall have occurred and be
continuing or would result therefrom.
(iv) the Borrower and its Subsidiaries may make capital
investments in, and loans and advances to, Subsidiary joint
ventures, general or limited partnerships, limited liability
companies or other types of Persons that are not
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wholly-owned by the Borrower and its Subsidiaries in an aggregate
amount of not more than $10,000,000 during any fiscal year, and in
no event in an aggregate amount exceeding $30,000,000 at any time
outstanding.
(v) the Borrower and its Subsidiaries may make capital
investments in, and loans and advances to, joint ventures, general
or limited partnerships, limited liability companies or other types
of Persons that are not Subsidiaries in an aggregate amount not
exceeding $10,000,000 at any time outstanding.
(vi) without limiting amounts that may be invested in, or
loaned or advanced to other Persons pursuant to Section 6.02(f)(v),
the Borrower's Subsidiary PhyCor of Hawaii, Inc. ("PhyCor-Hawaii")
may make secured loans to ▇▇▇▇▇▇ Clinic & Hospital, Inc. ("▇▇▇▇▇▇")
to the extent required by, and in compliance with, Sections 5.8.1,
5.8.2 and 5.8.3 of its Service Agreement with ▇▇▇▇▇▇ (the "▇▇▇▇▇▇
Service Agreement"); provided that:
(A) at the time of each such loan and after giving
effect thereto, no Event of Default or event which would
constitute an Event of Default but for the requirement that
notice be given or time elapse or both shall occur and be
continuing;
(B) loans pursuant to Section 5.8.1 of the ▇▇▇▇▇▇
Service Agreement ("▇▇▇▇▇▇ Capital Loans") shall be secured
by a first priority security interest in all of the assets
directly or indirectly acquired by ▇▇▇▇▇▇ from the proceeds
of any such loans, free and clear of any other Liens; and the
aggregate principal amount of all ▇▇▇▇▇▇ Capital Loans may
not exceed $50,000,000 at any time outstanding;
(C) loans pursuant to Section 5.8.2 of the ▇▇▇▇▇▇
Service Agreement ("▇▇▇▇▇▇ Working Capital Loans";
collectively, with the ▇▇▇▇▇▇ Capital Loans, the "▇▇▇▇▇▇
Loans") shall be made pursuant to a single credit facility
providing loan availability for no more than one year from
the commencement of the term thereof (which may be renewed on
an annual basis, but not provide availability later than the
stated Revolver Termination Date) and shall be secured by a
first priority security interest in all of the accounts
receivable, inventory, supplies and other current assets of
▇▇▇▇▇▇ (the "▇▇▇▇▇▇ Loan Base"), free and clear of any other
Liens; and the aggregate principal amount of all ▇▇▇▇▇▇
Working Capital Loans may not exceed at any time
outstanding the lesser of (1) $40,000,000 or (2) the
aggregate book value (less any reserves applicable thereto)
of (x) the ▇▇▇▇▇▇ Loan Base as of such time and (y) any
current assets acquired by the Borrower in its merger with
▇▇▇▇▇▇ Clinic & Hospital, Incorporated and held by the
Borrower at such time, all as determined in accordance with
generally accepted accounting principles; and
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(D) each ▇▇▇▇▇▇ Loan shall be evidenced by a promissory
note (1) that shall have a final maturity not later than the
stated Revolver Termination Date and provide for the
repayment of principal prior to final maturity at the annual
rate of one-sixth of the principal outstanding at the time
loan availability under the applicable credit facility for
▇▇▇▇▇▇ ceases and (2) that shall be subject to the repurchase
right of ▇▇▇▇▇▇ provided in the ▇▇▇▇▇▇ Service Agreement.
(g) Mergers, Etc. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to, or acquire all or substantially all
of the assets (other than the acquisition of assets of any Facility or
Related Business or an Existing Clinic Acquisition, whether or not such
acquisition is accomplished by merger or by Securities or asset purchase,
so long as such acquisition satisfies all the conditions precedent set
forth in Section 6.02(f)(i) or (ii) and, if any merger involves the
Borrower, the Borrower is the surviving corporation) of, any Person, or
permit any of its Subsidiaries to do so, except that:
(i) any Subsidiary may consolidate with or merge into the
Borrower (only if the Borrower shall be the continuing or surviving
corporation) or (except for the Intercompany Creditor) with or into
one or more other Subsidiaries that are Guarantors, provided that
(A) immediately before and after giving effect to such
consolidation or merger, the parties thereto and the survivor
thereof all are Solvent, (B) all Guaranties shall continue in full
force and effect, and (C) the Agent shall have been furnished with
a favorable opinion of counsel reasonably satisfactory to the Agent
covering such matters as the Agent may reasonably request; and
(ii) the Borrower may consolidate or merge with any other
Person, provided that (A) immediately before and after giving
effect to such consolidation or merger, the parties thereto and the
survivor thereof all are Solvent, (B) the Borrower shall be the
continuing or surviving corporation, (C) no Change of Control shall
occur and (D) all Guaranties shall continue in full force and
effect;
provided, however, that immediately before and after any consolidation or
merger under this Section 6.02(g), no Event of Default, or event which,
with the giving of notice or lapse of time or both, would become an Event
of Default, shall have occurred and be continuing.
(h) Limitation on Sales of Assets. Except for the sale of inventory
in the ordinary course of business, the sale of worn-out or obsolete
assets and intercompany transfers permitted under Section 6.02(g), sell,
lease, transfer or otherwise dispose of its assets, or permit any
Subsidiary to sell, lease, transfer or otherwise dispose of its assets
(including any interest in a Subsidiary), unless (i) the book value of
such assets sold constitutes less than 5% of the value of the Borrower's
Consolidated Tangible Net Assets
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at the time of sale or other disposition, provided that the aggregate book
value of all such assets sold in any twelve-month period shall not exceed
15% of the value of the Borrower's average Consolidated Tangible Net
Assets for the twelve-month period ending with the quarter immediately
preceding the date of determination, as evidenced by a certificate duly
executed by the chief financial officer of the selling entity on the date
of such sale or disposition, and provided further that such assets do not
constitute Securities of the Intercompany Creditor or Intercompany Debt,
or (ii) such sale is required in connection with the termination of a
Service Agreement or a change in control under the Amended Securities
Purchase Agreement, dated as of January 1, 1995, with respect to NAMM,
and, in each case, the Net Cash Proceeds of such sale are delivered
directly to the Agent to be applied in accordance with Section 2.09(e).
(i) Transactions with Affiliates. Lend or advance money to,
contract with or engage in any other transactions with, or permit any
Subsidiary of the Borrower to lend or advance money to, contract with or
engage in any other transactions with, Subsidiaries or Affiliates of the
Borrower, except in the ordinary course of their business with third
parties or on terms and for consideration which is no less favorable to
the Borrower and its Subsidiaries than the terms and consideration which
the Borrower or such Subsidiaries would be obligated to pay in an arms'
length transaction, subject, however, to the limitation that the Borrower
and its Subsidiaries shall not loan more than $100,000 times the number
of Facilities operated by the Borrower and its Subsidiaries to employees
at any one time outstanding; provided, however, that nothing in this
Section 6.02(i) shall prohibit the Borrower and its Subsidiaries from
engaging in transactions with joint ventures in which the Borrower or any
of its Subsidiaries is a joint venture partner to the extent permitted by
Section 6.02(f)(iv) or (v).
(j) Prepayments of Debt. Prepay, redeem, defease (whether actually
or in substance) or purchase in any manner (or deposit or set aside funds
or securities for the purpose of the foregoing), or make any payment
(other than for scheduled payments of principal and interest due on the
date of payment thereof, if such payment is permitted to be made pursuant
to the terms of the documents evidencing or governing the applicable
Debt) in respect of, or establish any sinking fund, reserve or like
set-aside of funds or other property for the redemption, retirement or
repayment of, any Debt, or transfer any property in payment of or as
security for the payment of, or violate the subordination terms of, any
Debt, or amend, modify or change in any manner less favorable to Borrower
or any of its Subsidiaries or the Banks the terms of any Debt or any
instrument, indenture or other document evidencing, governing or
affecting the terms of any Debt, or cause or permit any of its
Subsidiaries to do any of the foregoing; provided, however, that nothing
in this Section 6.02(j) shall prohibit (i) any payments of the Debt under
this Agreement or the $150,000,000 Credit Agreement in accordance with
the terms hereof or thereof, (ii) the conversion of convertible
Subordinated Debt of the Borrower into Securities of the Borrower, (iii)
the prepayment in any fiscal year of the Borrower of up to $30,000,000 in
principal amount of Senior Debt of the Borrower or any of its
Subsidiaries if the effective yield payable in respect of such Senior
Debt is greater than the interest payable hereunder in respect of Base
Rate Advances or Eurodollar Rate
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Advances, whichever is lower, (iv) the prepayment of the existing
operating capital notes payable to the various physicians listed on
Schedule IV in the aggregate principal amount specified therein, (v)
setoff of any convertible Subordinated Debt against the purchase price to
be paid by the holder of such Debt in connection with the repurchase by
such holder of any Facility pursuant to the Asset Purchase Agreement
relating to such Facility, or (vi) payment of any Deferred Acquisition
Consideration in connection with any acquisition of Facilities (or the
assets thereof), any Existing Clinic Acquisition or any acquisition of a
Related Business to the extent such acquisition satisfies the requirements
of Section 6.02(f)(i) or (ii), as the case may be.
(k) Accounting Changes. Change its fiscal year, or make, or permit
any of its Subsidiaries to make, any other significant change in
Consolidated accounting treatment and reporting practices except as
required or permitted by generally accepted accounting principles.
(l) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business
as conducted as of the date hereof.
(m) Securities. Except as is provided in Section 6.02(g), permit
any of its Subsidiaries to issue or sell any of its Securities or any
rights, warrants or options to acquire any of its Securities, or permit
any of its Subsidiaries to sell or otherwise dispose of any Securities of
any of its Subsidiaries, or permit any of its Subsidiaries to amend its
charter, bylaws or other constituent instruments so as to affect the
conversion rights, payments, privileges or other terms in respect of such
Securities or in any respect that affects any of the foregoing interests
of its respective securityholders.
(n) Welfare Plan Liabilities. Create or suffer to exist, or permit
any of its Subsidiaries to create or suffer to exist, any liability with
respect to Welfare Plans if, immediately after giving effect to such
liability, the aggregate annualized cost (including, without limitation,
the cost of insurance premiums) with respect to Welfare Plans and other
benefit plans and insurance of the type described in the definition of
"Welfare Plans" contained in Section 1.01 for which the Borrower and its
Subsidiaries are or may become liable in any fiscal year of the Borrower
could have a material adverse effect on the business, property,
prospects, condition (financial or otherwise) or results of operations of
the Borrower and its Subsidiaries, taken as a whole.
(o) Intercompany Creditor. Permit the Intercompany Creditor to
engage in any business or operations except the receipt and advancing of
Intercompany Debt and the holding of Intercompany Debt or Securities of
other Subsidiaries of the Borrower.
SECTION 6.03. Financial Covenants. So long as any Note shall remain
unpaid, any Letter of Credit shall remain outstanding, any amount shall remain
due hereunder, or any Banks shall have any Commitment hereunder, the Borrower
will not, without the written consent of the Majority Banks:
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(a) Consolidated Net Worth. Permit at any date of determination the
Consolidated Net Worth of the Borrower and its Subsidiaries to be less
than $415,000,000, plus (i) 80% of the net proceeds received from the
issuance, sale or disposition of the Borrower's Securities (common,
preferred or special), securities converted into or exchanged for
Securities, and any rights, options, warrants and similar instruments
from December 31, 1996 to such date of determination and (ii) 50% of
positive Consolidated Net Income (if any) earned from December 31, 1996
through such date of determination.
(b) Fixed Charge Coverage Ratio. Permit, for the four consecutive
fiscal quarters ending June 30, 1997 and for each period of four
consecutive fiscal quarters ending thereafter, the Consolidated Fixed
Charge Coverage Ratio of the Borrower and its Subsidiaries, calculated at
the end of each fiscal quarter of the Borrower, to be less than 1.25 to
1.00.
(c) Consolidated Debt/Total Capitalization Ratio. Permit, at any
time, the Consolidated Debt/Total Capitalization Ratio of the Borrower
and its Subsidiaries to be greater than 60%.
(d) Consolidated Debt/EBITDA Ratio. Permit, for each period of four
consecutive fiscal quarters ending June 30, 1997 and for each period of
four consecutive fiscal quarters ending thereafter, the Consolidated
Debt/EBITDA Ratio of the Borrower and its Subsidiaries to be greater than
3.75 to 1.00.
(e) Consolidated Senior Debt/EBITDA Ratio. Permit, for each period
of four consecutive fiscal quarters ending June 30, 1997 and for each
period of four consecutive fiscal quarters ending thereafter, the
Consolidated Senior Debt/EBITDA Ratio of the Borrower and its
Subsidiaries to be greater than 2.50 to 1.00.
For the purposes of subsections (b), (c), (d) and (e) above and the calculation
of any Applicable Eurodollar Rate Margin and the Applicable Facility Fee Rates,
if, as of any date, a determination of EBITDA, EBITDAL, Lease Expense, Capital
Expenditures or any other component of the ratios referred to in such
subsections (the "Ratio Components") is required to be made as to any period
prior to the date of such determination (a "Determination Period"), such
determination shall be made so as to give effect to the following:
(i) if any Person, Facility or Related Business (an "Acquired
Business") shall have been acquired in compliance with this Agreement
since the beginning of such Determination Period and must be Consolidated
with the Borrower and its Subsidiaries in accordance with GAAP, the Ratio
Components of such Acquired Business from the beginning of the
Determination Period to the date of acquisition shall be included on a
pro forma basis with the same effect as if such Acquired Business had
been a Consolidated Subsidiary of the Borrower for such portion of the
Determination Period, subject to the following:
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(A) for any date of determination occurring on or before the
completion of one full fiscal quarter after the date of acquisition
of such Acquired Business, pro forma adjustments may be made to
reflect (1) specifically identified changes in physician
compensation, complements of physicians, malpractice insurance costs
and other group purchase arrangements, all of which shall be
consistent with the terms and conditions of any Service Agreement
entered into in connection with such acquisition and (2) other
planned cost savings which will be realized by such Acquired
Business as a consequence of such acquisition to the extent
demonstrated by the Borrower to the satisfaction of the Majority
Banks; and
(B) For any date of determination occurring after the
completion of one full fiscal quarter after the date of such
acquisition, the actual Ratio Components for the period through the
end of the then most recently ended fiscal quarter shall be
annualized for the Determination Period; and
(ii) if any Person, Facility or Related Business (a "Disposed
Business") which shall have been Consolidated with the Borrower and its
Subsidiaries shall have been discontinued, lost, sold or otherwise
disposed of as of the date of determination, the Ratio Components of such
Disposed Business shall be excluded for the Determination Period.
SECTION 6.04. Reporting Requirements. So long as any Note shall remain
unpaid, any Letter of Credit shall remain outstanding, or amount shall remain
due hereunder or any Bank shall have any Commitment hereunder, the Borrower
will furnish to the Agent, for distribution to the Banks, in sufficient copies
for each Bank, the following:
(a) as soon as available and in any event within 30 days after the
end of each month, Consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such month and Consolidated statements of
operations and cash flow position of the Borrower and its Subsidiaries
for such month and for the period commencing at the end of the previous
fiscal year and ending with the end of such month;
(b) as soon as available and in any event within 45 days after the
end of each fiscal quarter, Consolidated balance sheets of the Borrower
and its Subsidiaries as of the end of such fiscal quarter and Consolidated
statements of operations and cash flow of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such fiscal quarter, certified by the
chief financial officer of the Borrower, together with (i) a certificate
of said officer stating that no Event of Default has occurred and is
continuing or, if an Event of Default has occurred and is continuing, a
statement as to the nature thereof and the action that the Borrower has
taken or proposes to take with respect thereto, (ii) a schedule in form
satisfactory to the Agent of the computations used by the Borrower in
determining compliance with the covenants contained in Section 6.03 and in
sufficient detail for determining the Applicable Facility Fee Rates and
the Applicable Eurodollar Rate Margins in accordance with the definitions
of such terms set forth in Section 1.01, and (iii) a certificate of said
officer or of the
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general counsel of the Borrower regarding additions to and deletions
from Schedule I reflecting changes occurring during such fiscal quarter;
(c) as soon as available and in any event within 120 days after the
end of each fiscal year, a copy of the annual audit report for such year
for the Borrower, including therein an audited Consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of such fiscal year
and audited Consolidated statements of operations, stockholders' equity
and cash flow of the Borrower and its Subsidiaries for such fiscal year
(i) certified by a nationally recognized public accounting firm, together
with a certificate of such accounting firm stating that in the course of
the regular audit of the business of the Borrower, which audit was
conducted in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge that an Event of Default has
occurred and is continuing, or, if in the opinion of such accounting
firm, an Event of Default has occurred and is continuing, a statement as
to the nature thereof, and (ii) accompanied by a copy of the management
letter from such accounting firm accompanying such financial statements;
(d) as soon as possible and in any event within two days after the
occurrence of an Event of Default of which the Borrower or any Subsidiary
has knowledge, a statement of the chief financial officer of the Borrower
setting forth details of such Event of Default and the action which the
Borrower has taken and proposes to take with respect thereto;
(e) promptly after any change in accounting policies or reporting
practices that could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), operations, business,
assets or prospects of the Borrower or of any of its Subsidiaries or on
the rights of the Banks under any of the Loan Documents, notice and a
description in reasonable detail of such change;
(f) promptly and in any event within ten days after the Borrower or
any ERISA Affiliate knows or has reason to know that any ERISA Event has
occurred, a statement of the chief financial officer of the Borrower
describing such ERISA Event and the action, if any, that the Borrower or
such ERISA Affiliate has taken or proposes to take with respect thereto;
(g) promptly and in any event within two Business Days after receipt
thereof by the Borrower or any ERISA Affiliate (i) copies of each notice
from the PBGC stating its intention to terminate any Plan or to have a
trustee appointed to administer any Plan and (ii) copies of each material
notice received from the United States Department of Labor in connection
with any ERISA requirements;
(h) promptly and in any event within five Business Days after
receipt thereof by the Borrower or any ERISA Affiliate from the sponsor
of a Multiemployer Plan, a copy of each notice received by the Borrower
or any ERISA Affiliate concerning (i) the imposition of Withdrawal
Liability by a Multiemployer Plan, (ii) the determination that a
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Multiemployer Plan is, or is expected to be, in reorganization within the
meaning of Title IV of ERISA, (iii) the termination of a Multiemployer
Plan within the meaning of Title IV of ERISA or (iv) the amount of
liability incurred, or expected to be incurred, by the Borrower or any
ERISA Affiliate in connection with any event described in clause (i),
(ii) or (iii) above;
(i) promptly and in any event within ten days after the commencement
thereof, notice of all actions, suits and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or any of
its Subsidiaries, of the type described in Section 5.01(h);
(j) promptly and in any event within ten days after the sending or
filing in final form thereof, copies of all proxy statements and
financial statements that the Borrower or any of its Subsidiaries sends
to its securityholders generally, and copies of all registration
statements (other than those relating to employee stock plans), without
exhibits, all periodic reports on Forms 10-K and 10-Q and reports on Form
8-K that the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission or any governmental authority that
may substituted therefor, or any national securities exchange or with
the National Association of Securities Dealers;
(k) promptly after the occurrence thereof, notice of (A) any event
of which Borrower or any Subsidiary is aware which makes any of the
representations obtained in Section 5.01 inaccurate in any respect or (B)
the receipt by the Borrower or any Subsidiary of any notice, order,
directive or other communication from a governmental authority alleging
violations of or noncompliance with any Environmental Law; and
(l) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries as any
Bank through the Agent may from time to time reasonably request.
Notwithstanding the foregoing, upon the occurrence and during the continuance
of an Event of or a Default, the Borrower will, and will cause its Subsidiaries
to, provide to the Agent for each Bank additional information and any and all
of the above information more frequently to the extent reasonably requested by
the Agent or any Bank.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following events (each an
"Event of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Advance or
Note or any reimbursement obligation under any Letter of Credit, in each
case when the same becomes due and payable; or the Borrower shall fail to
pay any interest on any Advance, Note or reimbursement obligation under
any Letter of Credit, or any fees or other
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amounts payable under any Loan Document, in each case within five days
after the same becomes due and payable; or
(b) any representation or warranty made or deemed by any Loan Party
(or any of its officers) in any Loan Document or certificate or other
writing delivered pursuant thereto shall prove to have been incorrect in
any material respect when made or deemed made; or
(c) (i) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Section 6.01, Section 6.02 or Section
6.03; or (ii) any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement or in any other
Loan Document on its part to be performed or observed if such failure
shall remain unremedied for ten days after written notice thereof shall
have been given to such Loan Party by the Agent or any Bank; or
(d) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt which is outstanding
under the $150,000,000 Credit Agreement or in a principal amount of at
least $5,000,000 in the aggregate (but excluding Debt evidenced by the
Notes or under Letters of Credit) of such Loan Party or such Subsidiary
(as the case may be), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt; or any such
Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment and except as
required by Section 2.09 of the $150,000,000 Credit Agreement), redeemed,
purchased or defeased, or any offer to prepay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to the
stated maturity thereof; or
(e) any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against any Loan Party or any of its Subsidiaries seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, custodian
or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of 30 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of an
order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any
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substantial part of its property) shall occur; or any Loan Party or any
of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (e); or
(f) any proceeding shall be instituted against any Loan Party or any
of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property, and either such
proceeding shall remain undismissed or unstayed for a period of 30 days
or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property) shall occur; or
(g) any judgment or order for the payment of money in excess of
$5,000,000 which is not covered by insurance shall be rendered against
any Loan Party or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment
or order or (ii) there shall be any period of ten consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against the
Borrower or any of its Subsidiaries that is materially adverse to the
business, property, prospects, condition (financial or otherwise) or
results of operations of the Borrower and its Subsidiaries, taken as a
whole, and either (i) enforcement proceedings shall have been commenced
by any Person upon such judgment or order or (ii) there shall be any
period of ten consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect; or
(i) any Loan Document after delivery thereof pursuant to Article IV
hereof or otherwise shall, for any reason cease to be valid and binding
on the respective Loan Party or Loan Parties thereto; or a Loan Party
shall so state in writing or shall contest the validity or enforceability
of any material term or provision of any Loan Document; or
(j) any one or more Service Agreements shall be terminated during
any period of four consecutive fiscal quarters that represent, in the
aggregate, 5% of the Consolidated EBITDA of the Borrower and its
Subsidiaries for such period, measured as of the end of any fiscal
quarter ending after the date of any such termination, provided that it
shall not be an Event of Default hereunder if the Service Agreement for
the Facility owned by PhyCor of Ruston, Inc. is terminated without cause;
or
(k) any ERISA Event with respect to a Plan shall have occurred and,
30 days after notice thereof shall have been given to the Borrower by the
Agent, (i) such ERISA Event shall still exist and (ii) the sum
(determined as of the date of occurrence of such
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ERISA Event) of the Insufficiency of such Plan and the Insufficiency of
any and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or in the case of a Plan with respect to which an
ERISA Event described in clauses (iii) through (vi) of the definition of
ERISA Event shall have occurred and then exist, the liability related
thereto) is equal to or greater than $5,000,000 for any fiscal year; or
(l) the Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount that, when aggregated
with all other amounts required to be paid to Multiemployer Plans by the
Borrower and its ERISA Affiliates as Withdrawal Liability (determined as
of the date of such notification), exceeds $5,000,000 for any fiscal
year; or
(m) the Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and its ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan year of each such
Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $5,000,000;
or
(n) there shall occur any Change of Control; or
(o) any three of Messrs. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall, within any six-month period, cease
to be employed full time as officers of the Borrower other than by reason
of the death or incapacity of any such person; or
(p) since December 31, 1996 there has been, in the reasonable
judgment of the Agent or the Majority Banks, any material adverse change
in the Consolidated condition, financial or otherwise, operations,
properties or prospects of the Borrower and its Subsidiaries taken as a
whole;
then, and in any such event, the Agent (i) shall at the request, or may with
the consent, of the Majority Banks, by notice to the Borrower, declare the
obligation of each Bank to make Advances and the obligations of the Issuing
Bank to Issue Letters of Credit to be terminated, whereupon the same shall
forthwith terminate, (ii) shall at the request, or may with the consent, of the
Majority Banks, by notice to the Borrower, declare the Notes, all interest
thereon and all other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by the
Borrower, (iii) shall at the request, or may with the consent, of the Majority
Banks demand that the Borrower, and if such demand is made the Borrower shall,
pay
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to the Agent for the benefit of the Issuing Banks, an amount in immediately
available funds equal to the then outstanding Letter of Credit Liability which
shall be held by the Agent (or the Issuing Banks) as cash collateral in a cash
collateral account under the exclusive control and dominion of the Agent (or
Issuing Banks) and applied to the reduction of such Letter of Credit Liability
as drawings are made on outstanding Letters of Credit and (iv) shall at the
request, or may with the consent, of the Majority Banks exercise any other
remedies provided hereunder or by law; provided, however, that in the event of
an actual or deemed entry of an order for relief with respect to the Borrower
or any of its Subsidiaries under the Federal Bankruptcy Code, (A) the
obligation of each Bank to make Advances and of the Issuing Banks to Issue
Letters of Credit shall automatically be terminated and (B) the Notes, all such
interest and all such amounts (including the amounts referred to in clause
(iii) above) shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. Each Bank and each Issuing Bank
hereby appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Banks, and such instructions shall be binding upon all Banks and
all holders of Notes; provided, however, that the Agent shall not be required to
take any action which exposes the Agent to personal liability or which is
contrary to any Loan Document or applicable law. The Agent agrees to give to
each Bank prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 8.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may
treat the payee of any Note as the holder thereof, and treat the Bank that
purchased or funded a participation with respect to a Letter of Credit as the
holder or owner of the Debt resulting therefrom, until the Agent receives
written notice of the assignment or transfer thereof signed by such payee and
including the agreement of the assignee or transferee to be bound hereby as it
would have been if it had been an original Bank party hereto, in form
satisfactory to the Agent; (ii) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Bank
and shall not be responsible to any Bank for any statements, warranties or
representations (whether written or oral) made in or in
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connection with any Loan Document; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of any Loan Document on the part of the Borrower or any Subsidiary of
the Borrower or to inspect the property (including the books and records) of the
Borrower or any such Subsidiary; (v) shall not be responsible to any Bank for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of any Loan Document or any other instrument or document furnished
pursuant thereto; and (vi) shall incur no liability under or in respect of any
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram, cable facsimile or
telex) believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 8.03. Citibank and Affiliates. With respect to its Commitment,
the Advances made by it, the Notes issued to it and the participations in
Letters of Credit purchased by it, Citibank shall have the same rights and
powers under this Agreement as any other Bank and may exercise the same as
though it were not the Agent; and the term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include Citibank in its individual capacity.
Citibank and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
the Borrower, any of its Subsidiaries and any Person who may do business with
or own securities of the Borrower or any such Subsidiary, all as if Citibank
were not the Agent and without any duty to account therefor to the Banks.
SECTION 8.04. Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent, the Issuing Bank or any
other Bank and based on the financial statements referred to in Section 5.01(e)
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement and the other
Loan Documents. Each Bank also acknowledges that it will, independently and
without reliance upon the Agent, any Issuing Bank or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
SECTION 8.05. Indemnification. The Banks agree to indemnify the Agent
and each Issuing Bank (in each case, to the extent not reimbursed by the
Borrower), ratably according to the respective principal amounts of the
Committed Rate Advances then held by each of them (or if no Committed Rate
Advances are at the time outstanding ratably according to the respective
amounts of their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent or any Issuing Bank, as the case
may be, in any way relating to or arising out of this Agreement or any other
Loan Document or any Letter of Credit or any action taken or omitted by the
Agent or such Issuing Bank, as the case may be, under this Agreement or any
other Loan Document or any Letter of Credit, provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's or any Issuing Bank's, as the case may be, gross
negligence or willful misconduct. Without limitation of the foregoing, each
Bank agrees to
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reimburse the Agent and each Issuing Bank promptly upon demand for its ratable
share of any out-of-pocket expenses (including counsel fees) incurred by the
Agent or such Issuing Bank, as the case may be, in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any Letter of Credit, to the extent that the Agent or such Issuing Bank, as
the case may be, is not reimbursed for such expenses by the Borrower.
SECTION 8.06. Successor Agent/Issuing Bank. The Agent may resign at any
time by giving written notice thereof to the Banks and the Borrower and the
Agent and/or any Issuing Bank may be removed at any time with or without cause
by the Majority Banks. Upon any such resignation or removal, in the case of
the Agent, or removal, in the case of any Issuing Bank, the Majority Banks
shall have the right, subject to the approval of the Borrower (which shall not
be unreasonably withheld), to appoint a successor Agent or a successor Issuing
Bank, as the case may be. If no successor Agent or successor Issuing Bank, as
the case may be, shall have been so appointed by the Majority Banks, and shall
have accepted such appointment, within 30 days after the retiring Agent's
giving of notice of resignation or the Majority Banks' removal of the retiring
Agent or the retiring Issuing Bank, then the retiring Agent or the retiring
Issuing Bank, as the case may be, may, on behalf of the Banks, appoint a
successor Agent or a successor Issuing Bank, as the case may be, which shall be
a commercial bank organized under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent or as an Issuing
Bank hereunder by a successor Agent or a successor Issuing Bank, respectively,
such successor Agent or Issuing Bank shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
or the retiring Issuing Bank, as the case may be, and the retiring Agent or the
retiring Issuing Bank, as the case may be, shall be discharged from its duties
and obligations under this Agreement and the other Loan Documents. After any
retiring Agent's resignation or removal hereunder as Agent, or any retiring
Issuing Bank's removal hereunder as an Issuing Bank, the provisions of this
Article VIII shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent or an Issuing Bank, as the case may be, under
this Agreement and the other Loan Documents. Notwithstanding the foregoing, no
Issuing Bank may be removed unless prior to or contemporaneously with such
removal it shall have received an amount, in immediately available funds, equal
to all outstanding Letter of Credit Liability then outstanding and then owing
to such Issuing Bank and shall have been indemnified by the Borrower, the Banks
and such successor Issuing Bank, to the Issuing Bank's satisfaction, against
all such Letter of Credit Liability. The fees referred to in Section 3.05(b)
shall continue to inure to such Issuing Bank's benefit, with respect to each
Letter of Credit Issued by it, until such time as all Letter of Credit
Liability in respect of such Letter of Credit has been discharged in full.
SECTION 8.07. Documentation Agent. The Documentation Agent, as such,
shall have no duties or obligations whatsoever with respect to this Agreement,
the Notes or any of the other Loan Documents.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes or the Loan Documents, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Majority Banks (or consented to in
writing in the case of the Loan Documents), and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Banks, do any of following: (a) waive
any of the conditions specified in Article IV, (b) increase the Commitments of
the Banks or subject the Banks to any additional monetary obligations, (c)
reduce the principal of, or interest on, the Committed Rate Advances or the
Committed Rate Notes or any fees or other amounts payable hereunder, (d)
postpone the date fixed for the scheduled payment of principal of, or interest
on, the Committed Rate Advances or the Committed Rate Notes or any fees or
other amounts payable hereunder or waive any such payment when due, (e) change
the percentage of the Commitments or of the aggregate unpaid principal amount
of the Committed Rate Advances or the Committed Rate Notes, or the number or
percentage of Banks, which shall be required for the Banks or any of them to
take any action hereunder or (f) amend this Section 9.01; provided, further,
that no amendment, waiver or consent shall, in writing and signed by the Agent
in addition to the Banks required above to take such action, affect the rights
or duties of the Agent under this Agreement or any Note; and provided, further,
that no amendment, waiver or consent shall, unless in writing and signed by any
Issuing Bank in addition to the Banks required above to take such action,
affect the rights or duties of such Issuing Bank under this Agreement; and
provided also that no amendment, waiver or consent, unless in writing and
signed by the Designated Bidder holding such Note, affect the rights of the
holder of a Competitive Bid Note under such Note.
SECTION 9.02. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telecopier, telegraphic, telex or
cable communication) and mailed (by certified mail, return receipt requested),
telecopied, telegraphed, telexed, cabled or delivered, if to the Borrower, at
its address at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, telecopier no. (▇▇▇) ▇▇▇-▇▇▇▇; if to any Bank, at its
Domestic Lending Office as specified in its Administrative Details Reply Form;
if to the Agent, at its address at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, Zone ▇, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, telecopier
no. (▇▇▇) ▇▇▇-▇▇▇▇; and if to any Issuing Bank, as specified in its
Administrative Details Reply Form; with a copy, in the cases of notices to the
Agent or the Issuing Bank, to ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; or, as to each Person, at such other address or
telecopier number as shall be designated by such party in a written notice to
the other parties. All such notices and communications shall, when mailed (by
certified mail, return receipt requested), telecopied, telegraphed, telexed,
cabled, or faxed be effective when deposited in the mails, telecopied, delivered
to the telegraph company, confirmed by telex answerback, delivered to the cable
company or confirmed received in the case of a telecopy or facsimile,
respectively, except that notices and communications to the Agent pursuant to
Article II or VIII or to any Issuing Bank
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pursuant to Article III or VIII shall not be effective until received by the
Agent or such Issuing Bank, as the case may be.
SECTION 9.03. No Waiver: Remedies. No failure on the part of any Bank,
any Issuing Bank or the Agent to exercise, and no delay in exercising, any
right under any Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs. Expenses and Taxes.
(a) The Borrower agrees to pay the Agent and each Issuing Bank on demand
all reasonable costs and expenses of the Agent and such Issuing Bank in
connection with the preparation, negotiation, approval, execution, delivery,
filing, recording, administration, modification and amendment of the Loan
Documents and the other documents to be delivered under the Loan Documents,
including, without limitation, the reasonable fees and out-of-pocket expenses of
special and local counsel for the Agent and such Issuing Bank with respect
thereto and with respect to advising the Agent and such Issuing Bank as to its
rights and responsibilities under the Loan Documents and the other documents to
be delivered hereunder and thereunder. The Borrower further agrees to pay on
demand (i) all costs and expenses, if any, of the Agent, each Issuing Bank or
any Bank in connection with the enforcement (whether through negotiations or
legal proceedings, in bankruptcy, reorganization or other insolvency proceedings
or otherwise) of the Loan Documents and the other documents to be delivered
under the Loan Documents, including, without limitation, reasonable counsel fees
and expenses in connection with the enforcement of rights under this Section
9.04(a), and (ii) all costs and expenses in connection with appraisals,
valuations, audits and search reports, all insurance and title costs, and all
filing and recording fees required hereby or associated with any enforcement of
rights or remedies specified in clause (i).
(b) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance or LIBOR Advance is made other than on the last day of an Interest
Period relating to such Advance, as a result of a payment (including, without
limitation, any payment pursuant to Section 2.09) or Conversion pursuant to
Section 2.08 or 2.11 or acceleration of the maturity of the Notes pursuant to
Section 7.01 or for any other reason, the Borrower shall, upon demand by any
Bank (with a copy of such demand to the Agent), pay to the Agent for the
account of such Bank any amounts required to compensate such Bank for any
additional losses (including loss of anticipated profits), costs or expenses
which it may reasonably incur as a result of such payment or Conversion,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Bank to fund or maintain such Advance.
SECTION 9.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 7.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 7.01 or
to demand payment of (or cash collateralization of) all then
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outstanding Letter of Credit Liability, each Bank is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such Bank
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under any Loan Document to
such Bank (including, to the fullest extent permitted by law, obligations
indirectly owed to such Bank by virtue of its purchase of a participation of the
Letter of Credit Liability pursuant to Section 3.04), whether or not such Bank
shall have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Bank agrees promptly to notify the Borrower
after any such set-off and application made by such Bank, provided that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Bank under this Section 9.05 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which such Bank may have.
SECTION 9.06. Indemnification. The Borrower agrees to defend, protect,
indemnify and hold harmless the Agent, each Bank and each Issuing Bank and
their respective Affiliates and the directors, officers, employees, attorneys
and agents of the Agent, each Bank, each Issuing Bank and such Affiliates (each
of the foregoing being an "Indemnitee" and all of the foregoing being
collectively the "Indemnitees") from and against any and all claims, actions,
damages, liabilities, costs and expenses (including, without limitation, all
fees and disbursements of counsel and environmental consultants which may be
incurred in the investigation or defense of any matter) imposed upon, incurred
by or asserted against any Indemnitee by any third party, whether direct,
indirect or consequential and whether based on any federal, state or foreign
laws or other statutes or regulations (including, without limitation,
securities laws, commercial laws and Environmental Laws and regulations),
under common law or on equitable cause, or on contract, tort or otherwise,
including, without limitation, those arising:
(a) by reason of, relating to or in connection with the execution,
delivery, performance or enforcement of any Loan Document, any
commitments relating thereto, or any transaction contemplated by any Loan
Document; or
(b) in connection with any investigation, litigation, proceeding or
other action relating to any Loan Document (whether or not any Indemnitee
is a party thereto); or
(c) by reason of, relating to or in connection with any credit
extended or used under the Loan Documents or any act done or omitted by
any Person, or any event occurring, in connection therewith, or the
exercise of any rights or remedies thereunder, including, without
limitation, any Environmental Activity or Environmental Law; or
(d) arising out of, related to or in connection with any acquisition
or proposed acquisition (including, without limitation, by tender offer,
merger or other method) by the Borrower or any of its Subsidiaries or
Affiliates of any Facility (or the assets thereof) or any Related
Businesses or any Existing Clinic Acquisition, whether or not an
Indemnitee is a party thereto;
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provided, however, that, notwithstanding the foregoing, the Borrower shall not
be liable to any Indemnitee for any portion of such claims, damages,
liabilities and expenses resulting from such Indemnitee's or such Indemnitee's
Affiliate's, director's, officer's, employee's, attorney's or agent's gross
negligence or willful misconduct. In the event this indemnity is unenforceable
as a matter of law as to a particular matter or consequence referred to herein,
it shall be enforceable to the full extent permitted by law.
This indemnification applies, without limitation, to any act, omission,
event or circumstance existing or occurring on or prior to the date of payment
in full of the Advances, including any Environmental Activity or Environmental
Law, regardless of whether the act, omission, event or circumstance constituted
a violation of any Environmental Law at the time of its existence or
occurrence. The indemnification provisions set forth above shall be in
addition to any liability the Borrower may otherwise have. Without prejudice
to the survival of any other obligation of the Borrower hereunder, the
indemnities and obligations of the Borrower contained in this Section 9.06
shall survive the payment in full of the Advances.
SECTION 9.07. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower, the Agent and each Issuing Bank
and when the Agent shall have been notified by each Bank that such Bank has
executed it and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Agent, each Issuing Bank and each Bank and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Banks.
SECTION 9.08. Assignments and Participations.
(a) Each Bank may assign, with the prior consent of the Borrower, any
Issuing Bank and the Agent (which, in either case, shall not be unreasonably
withheld), to one or more banks, financial institutions or other entities all
or a portion of its rights and obligations as a Bank under this Agreement and
the other Loan Documents (including, without limitation, all or a portion of
its Commitment, the Advances owing to it and the Notes held by it in respect of
the Committed Rate Advances and its participation in reimbursement obligations
of the Borrower in respect of Letters of Credit); provided, however, that (i)
each such assignment shall be of a constant, and not a varying, percentage of
all of the assigning Bank's rights and obligations under the Loan Documents,
(ii) the amount of the Commitments, if any, of the assigning Bank being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $10,000,000, and shall be an integral multiple of $1,000,000 in
excess thereof, or the remaining amount of such Bank's Commitments, (iii) each
such assignment shall be to an Eligible Assignee, and (iv) the parties to each
such assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any
Notes subject to such assignment and a processing and recordation fee of
$3,000; provided, further, that each Bank may, without the consent of the
Borrower or the Agent, assign, as collateral or otherwise, any of its rights
under this Agreement and the other Loan Documents (including, without
limitation, the right to payment of principal and interest under the Notes) to
any Federal Reserve Bank, and such assignment of rights to the Federal
Reserve Bank shall not be subject to the conditions and restrictions set forth
in items (i) through (iv) of the immediately foregoing proviso; and provided,
further, that each Bank may, without the consent of (but with prior written
notice to) the Borrower or the Agent, assign, in whole or in part, any of its
rights and obligations under this Agreement and the other Loan Documents to any
of its Affiliates, and such assignment to Affiliates shall not be subject to
the conditions and
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restrictions set forth in items (i) through (iv) of the proviso above. Upon
such execution, delivery, acceptance and recording, from and after the effective
date specified in each Assignment and Acceptance, (x) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations under the
Loan Documents have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and thereunder
and (y) the Bank assignor thereunder shall, to the extent that rights and
obligations under the Loan Documents have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Loan Documents (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under the Loan Documents, such Bank shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the Bank
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document or any other instrument or document furnished
pursuant hereto or thereto; (ii) such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee confirms that it has
received a copy of each of the Loan Documents, together with copies of the
financial statements referred to in Section 5.01(e) and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, any Issuing Bank, such
assigning Bank or any other Bank and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement or any other Loan Document;
(v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Loan Documents are required to be performed by it as a Bank.
(c) The Agent shall maintain at its address referred to in Section 9.02 a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Banks and the
Commitment and principal amount of the Advances owing to, each Bank from time
to time (the "Register"). The entries in the Register
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shall be conclusive and binding for all purposes, absent manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any Bank at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee representing that it is an Eligible Assignee,
together with any Notes subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit E, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Committed Rate Notes, new Committed Rate
Notes to the order of such Eligible Assignee in an aggregate principal amount
equal to the principal amount of Committed Rate Advances owed to it pursuant to
such Assignment and Acceptance and, if the assigning Bank has retained any
principal amount of Committed Rate Advances hereunder, new Committed Rate Notes
to the order of the assigning Bank in an aggregate principal amount equal to
such principal amount. Such new Committed Rate Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Committed Rate Notes, shall be dated the effective date of such Assignment and
Acceptance, shall consist of Committed Rate Notes payable to the order of such
Eligible Assignee and, if the assigning Bank has retained ownership of any
Committed Rate Advances hereunder, the assigning Bank in the appropriate
principal amounts, and shall otherwise be in substantially the forms required
by this Agreement.
(e) Each Bank may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under the Loan
Documents (including, without limitation, all or a portion of its Commitments,
the Notes held by it and reimbursement obligations of the Borrower in respect
of Letters of Credit); provided, however, that (i) such Bank's obligations
under the Loan Documents (including, without limitation, its Commitments to the
Borrower hereunder) shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Bank shall remain the holder of any such Notes for all
purposes of the Loan Documents, and (iv) the Borrower, the Agent, each Issuing
Bank and the other Banks shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under the Loan
Documents; provided, further, that, to the extent of any such participation
(unless otherwise stated therein and subject to the preceding proviso), the
assignee or purchaser of such participation shall, to the fullest extent
permitted by law, have the same rights and benefits hereunder as it would have
if it were a Bank hereunder; and provided, further, that each such
participation shall be granted pursuant to an agreement providing that the
purchaser thereof shall not have the right to consent or object to any action
by the selling Bank (who shall retain such right) other than an action which
would (i) reduce principal of or interest on any Advance or fees in which such
purchaser has an interest or (ii) postpone any date fixed for payment of
principal of or interest on any such Advance or such fees.
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(f) The Borrower agrees that any Bank purchasing a participation from
another Bank pursuant to Section 2.14 or 9.08(e) may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Bank were the
direct creditor of the Borrower in the amount of such participation.
(g) Notwithstanding any other provision of this Section 9.08, each
Designated Bidder may assign to one or more Eligible Assignees any Competitive
Bid Note.
SECTION 9.09. Headings. Article and Section headings in this Agreement
are included for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose.
SECTION 9.10. Confidentiality. Neither the Agent nor any Bank shall
disclose to any third party any Confidential Information disclosed to the Agent
or such Bank pursuant to the Loan Documents, except that (i) the Agent or any
Bank may disclose Confidential Information to a third party to the extent
compelled by law, subpoena, civil investigative demand, interrogatory or
similar legal process or by any rule, regulation or request of any regulatory
authority having jurisdiction over the Agent or such Bank, as the case may be,
(ii) the Agent or any Bank may disclose Confidential Information to a potential
transferee who is an Eligible Assignee, provided that such potential transferee
agrees to be bound by the same confidentiality obligations as the Banks under
this Section and (iii) the Agent or any Bank may disclose Confidential
Information to its affiliates or its legal counsel or other agents provided
that prior to any such disclosure the Agent or such Bank, as the case may be,
informs such affiliates, counsel or agent of the confidential nature of
such Confidential Information. For purposes hereof, "Confidential Information"
is written information disclosed by the Borrower or any of its Subsidiaries to
the Agent or any Bank pursuant hereto that is not information which (x) has
become generally available to the public, other than as a result of disclosure
by the Agent or such Bank, (y) was available on a non-confidential basis prior
to its disclosure to the Agent or such Bank by the Borrower or any of its
Subsidiaries, or (z) becomes available to the Agent or such Bank on a
non-confidential basis from a source other than the Borrower or any of its
Subsidiaries. The Agent and the Banks acknowledge that the Confidential
Information may from time to time include material non-public information
relating to the Borrower or its Subsidiaries.
SECTION 9.11. Severability of Provisions. Each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
or unenforceable in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 9.12. Independence of Provisions. All agreements and covenants
hereunder and under the Loan Documents shall be given independent effect such
that if a particular action or condition is prohibited by the terms of any such
agreement or covenant, the fact that such
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action or condition would be permitted within the limitations of another
agreement or covenant shall not be construed as allowing such action to be
taken or condition to exist.
SECTION 9.13. Consent to Jurisdiction.
(a) The Borrower hereby irrevocably submits to the jurisdiction of any New
York State or Federal court sitting in New York City in any action or proceeding
arising out of or relating to this Agreement or any Loan Document, and the
Borrower hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State or Federal court.
The Borrower hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. The Borrower hereby irrevocably appoints CT
Corporation System (the "Process Agent"), with an office on the date hereof at
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, as its agent to receive
on behalf of the Borrower and its property service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding. Such service may be made by mailing or delivering a copy of such
process to the Borrower in care of the Process Agent at the Process Agent's
above address, and the Borrower hereby irrevocably authorizes and directs the
Process Agent to accept such service on his behalf. As an alternative method
of service, the Borrower also irrevocably consents to the service of any and
all process in any such action or proceeding by the mailing of copies of such
process to the Borrower at its address specified in Section 9.02. The Borrower
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
(b) Nothing in this section shall affect the right of any Bank, any
Issuing Bank or the Agent to serve legal process in any other manner permitted
by law or affect the right of any Bank, any Issuing Bank or the Agent to bring
any action or proceeding against the Borrower or its property in the courts of
any other jurisdictions.
SECTION 9.14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS THAT WOULD RESULT IN THE
APPLICATION OF ANY OTHER LAW.
SECTION 9.15. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT, THE
ISSUING BANK AND THE BANKS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT' OF OR RELATING TO ANY OF
THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
SECTION 9.16. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
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89
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE BORROWER
PHYCOR, INC.
By
------------------------------
Name:
Title:
THE AGENT
CITIBANK, N.A.,
as Agent
By
------------------------------
Name:
Title:
THE ISSUING BANK
CITIBANK, N.A.,
as Issuing Bank
By
------------------------------
Name:
Title:
83
90
THE DOCUMENTATION AGENT
NATIONSBANK, N.A.,
as Documentation Agent
By
------------------------------
Name:
Title:
84
91
Commitment: THE BANKS
Commitment: $21,250,000.00 CITIBANK, N.A.
By
------------------------------
Name:
Title:
Commitment: $6,250,000.00 AMSOUTH BANK
By
------------------------------
Name:
Title:
Commitment: $9,375,000.00 BANK OF AMERICA ILLINOIS
By
------------------------------
Name:
Title:
Commitment: $16,875,000.00 THE BANK OF NOVA SCOTIA
By
------------------------------
Name:
Title:
Commitment: $9,375,000.00 BANKERS TRUST COMPANY
By
------------------------------
Name:
Title:
85
92
Commitment: $6,250,000.00 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND"
By
------------------------------
Name:
Title:
Commitment: $12,500,000.00 CORESTATES BANK, N.A.
By
------------------------------
Name:
Title:
Commitment: $12,500,000.00 CREDIT LYONNAIS NEW YORK BRANCH
By
------------------------------
Name:
Title:
Commitment: $12,500,000.00 DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES
By
------------------------------
Name:
Title:
By
------------------------------
Name:
Title:
Commitment: $15,625,000.00 FIRST AMERICAN NATIONAL BANK
By
------------------------------
Name:
Title:
86
93
Commitment: $6,250,000.00 THE FIRST NATIONAL BANK OF CHICAGO
By
------------------------------
Name:
Title:
Commitment: $16,875,000.00 FIRST UNION NATIONAL BANK
By
------------------------------
Name:
Title:
Commitment: $6,250,000.00 THE FUJI BANK, LIMITED
By
------------------------------
Name:
Title:
Commitment: $15,625,000.00 MELLON BANK, N.A.
By
------------------------------
Name:
Title:
Commitment: $18,750,000.00 NATIONSBANK, N.A.
By
------------------------------
Name:
Title:
Commitment: $12,500,000.00 PNC BANK, KENTUCKY, INC.
By
------------------------------
Name:
Title:
87
94
Commitment: $12,500,000.00 THE SUMITOMO BANK, LIMITED
By
------------------------------
Name:
Title:
Commitment: $16,875,000.00 SUNTRUST BANK, NASHVILLE, N.A.
By
------------------------------
Name:
Title:
Commitment: $15,625,000.00 TORONTO DOMINION (TEXAS), INC.
By
------------------------------
Name:
Title:
Commitment: $6,250,000.00 UNION BANK OF SWITZERLAND, NEW YORK BRANCH
By
------------------------------
Name:
Title:
Total Commitments: $250,000,000
88
