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EXHIBIT 10.53
EXECUTION COPY
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 31, 1998
by and among
PHYSICIANS' SPECIALTY CORP.,
as Borrower
THE FINANCIAL INSTITUTIONS PARTY HERETO
AND THEIR ASSIGNEES UNDER SECTION 12.6.,
as Lenders
and
NATIONSBANK, N.A.,
as Agent
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TABLE OF CONTENTS*
Article I. Definitions........................................................................... 1
Section 1.1. Definitions............................................................... 1
Section 1.2. General................................................................... 21
Article II. Credit Facility...................................................................... 21
Section 2.1. Amount of Revolving Loans................................................. 21
Section 2.2. Rates and Payment of Interest on Loans.................................... 22
Section 2.3. Number of Interest Periods................................................ 23
Section 2.4. Repayment of Loans........................................................ 23
Section 2.5. Prepayments............................................................... 23
Section 2.6. Continuation.............................................................. 23
Section 2.7. Conversion................................................................ 24
Section 2.8. Notes..................................................................... 24
Section 2.9. Voluntary Reductions of the Commitment.................................... 24
Section 2.10. Swingline Loans........................................................... 25
Section 2.11. Amount Limitations........................................................ 27
Article III. Payments, Fees and Other General Provisions......................................... 27
Section 3.1. Payments.................................................................. 27
Section 3.2. Pro Rata Treatment........................................................ 28
Section 3.3. Sharing of Payments, Etc.................................................. 28
Section 3.4. Several Obligations....................................................... 29
Section 3.5. Minimum Amounts........................................................... 29
Section 3.6. Fees...................................................................... 29
Section 3.7. Computations.............................................................. 30
Section 3.8. Usury..................................................................... 30
Section 3.9. Agreement Regarding Interest and Charges.................................. 30
Section 3.10. Statements of Account..................................................... 31
Section 3.11. Defaulting Lenders........................................................ 31
Section 3.12. Taxes..................................................................... 32
Article IV. Yield Protection, Etc................................................................ 33
Section 4.1. Additional Costs; Capital Adequacy........................................ 33
Section 4.2. Suspension of LIBOR Loans................................................. 34
Section 4.3. Illegality................................................................ 35
Section 4.4. Compensation.............................................................. 35
Section 4.5. Affected Lenders.......................................................... 36
Section 4.6. Treatment of Affected Loans............................................... 36
Section 4.7. Change of Lending Office.................................................. 37
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* THIS TABLE OF CONTENTS IS NOT PART OF THE CREDIT AGREEMENT AND IS
PROVIDED AS A CONVENIENCE ONLY.
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Article V. Conditions Precedent................................................................. 37
Section 5.1. Initial Conditions Precedent.............................................. 37
Section 5.2. Conditions Precedent to All Loans......................................... 39
Article VI. Representations and Warranties...................................................... 40
Section 6.1. Representations and Warranties............................................ 40
Section 6.2. Survival of Representations and Warranties, Etc........................... 49
Section 6.3. Representations Regarding Acquisitions.................................... 49
Section 6.4. Representations and Warranties in Acquisition Documents................... 49
Article VII. Affirmative Covenants.............................................................. 49
Section 7.1. Preservation of Existence and Similar Matters............................. 50
Section 7.2. Compliance With Applicable Law and Material Contracts..................... 50
Section 7.3. Maintenance of Property................................................... 50
Section 7.4. Conduct of Business....................................................... 50
Section 7.5. Insurance................................................................. 50
Section 7.6. Payment of Taxes and Claims............................................... 51
Section 7.7. Visits and Inspections.................................................... 51
Section 7.8. Use of Proceeds........................................................... 52
Section 7.9. Environmental Matters..................................................... 52
Section 7.10. Books and Records......................................................... 52
Section 7.11. Enforcement of Remedies under Acquisition Documents....................... 53
Section 7.12. Deposit and Collection Procedures......................................... 53
Section 7.13. Management Services Agreements............................................ 53
Section 7.14. Additional Material Subsidiaries.......................................... 53
Article VIII. Information....................................................................... 54
Section 8.1. Quarterly Financial Statements............................................ 54
Section 8.2. Year-End Statements....................................................... 54
Section 8.3. Compliance Certificate.................................................... 55
Section 8.4. Accountants' Letters and Budgets.......................................... 55
Section 8.5. Notice of Litigation and Other Matters.................................... 55
Section 8.6. ERISA..................................................................... 56
Section 8.7. Copies of Other Reports................................................... 57
Section 8.8. Other Information......................................................... 57
Article IX. Negative Covenants................................................................... 58
Section 9.1. Financial Covenants....................................................... 58
Section 9.2. Indebtedness.............................................................. 58
Section 9.3. Contingent Obligations.................................................... 59
Section 9.4. Investments............................................................... 59
Section 9.5. Liens; Agreements Regarding Liens; Other Matters.......................... 60
Section 9.6. Acquisitions.............................................................. 60
Section 9.7. Restricted Distributions and Purchases.................................... 63
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Section 9.8. Merger, Consolidation, Sales of Assets and Other Arrangements............. 63
Section 9.9. Fiscal Year............................................................... 64
Section 9.10. Modifications to Certain Contracts........................................ 64
Section 9.11. Transactions With Affiliates.............................................. 64
Section 9.12. Bank Accounts............................................................. 65
Article X. Default.............................................................................. 65
Section 10.1. Events of Default........................................................ 65
Section 10.2. Remedies Upon Event of Default........................................... 68
Section 10.3. Allocation of Proceeds................................................... 69
Section 10.4. Performance by Agent..................................................... 70
Section 10.5. Rights Cumulative........................................................ 70
Article XI. The Agent............................................................................ 71
Section 11.1. Authorization and Action................................................. 71
Section 11.2. Agent's Reliance, Etc.................................................... 71
Section 11.3. Notice of Defaults....................................................... 72
Section 11.4. NationsBank as Lender.................................................... 72
Section 11.5. Approvals of Lenders..................................................... 72
Section 11.6. Lender Credit Decision, Etc.............................................. 73
Section 11.7. Indemnification of Agent................................................. 73
Section 11.8. Collateral Matters....................................................... 74
Section 11.9. Successor Agent.......................................................... 75
Article XII. Miscellaneous...................................................................... 76
Section 12.1. Notices.................................................................. 76
Section 12.2. Expenses................................................................. 77
Section 12.3. Stamp, Intangible and Recording Taxes.................................... 78
Section 12.4. Setoff................................................................... 78
Section 12.5. Litigation; Jurisdiction; Other Matters; Waivers......................... 78
Section 12.6. Successors and Assigns................................................... 79
Section 12.7. Amendments............................................................... 81
Section 12.8. Confidentiality.......................................................... 82
Section 12.9. Indemnification.......................................................... 82
Section 12.10. Survival................................................................. 83
Section 12.11. Severability of Provisions............................................... 83
Section 12.12. GOVERNING LAW............................................................ 83
Section 12.13. Counterparts............................................................. 83
Section 12.14. Obligations With Respect to Loan Parties................................. 83
Section 12.15. Entire Agreement......................................................... 84
Section 12.16. Construction............................................................. 84
Section 12.17. No Novation; Effect of Amendment and Restatement......................... 84
SCHEDULE 1.1.(a) List of Loan Parties
SCHEDULE 6.1.(b) Ownership Structure
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SCHEDULE 6.1.(f) Title to Properties; Liens
SCHEDULE 6.1.(g) Indebtedness and Guaranties
SCHEDULE 6.1.(h) Material Contracts
SCHEDULE 6.1.(r) Affiliate Transactions
SCHEDULE 6.1.(t) Intellectual Property
SCHEDULE 6.1.(v) Deposit Accounts and Collection Arrangements
SCHEDULE 9.3. Existing Contingent Obligations
SCHEDULE 9.4. Existing Investments
EXHIBIT A Form of Accession Agreement
EXHIBIT B Form of Assignment and Acceptance Agreement
EXHIBIT C Form of Collateral Assignment of Management Services Agreements
EXHIBIT D Form of Guaranty
EXHIBIT E Form of Notice of Borrowing
EXHIBIT F Form of Notice of Continuation
EXHIBIT G Form of Notice of Conversion
EXHIBIT H Form of Notice of Swingline Borrowing
EXHIBIT I Form of Subordination Agreement
EXHIBIT J Form of Swingline Note
EXHIBIT K Form of Revolving Note
EXHIBIT L Form of Pledge Agreement
EXHIBIT M Form of Security Agreement
EXHIBIT N Form of Opinion of Counsel
EXHIBIT O Form of Compliance Certificate
EXHIBIT P Form of Acquisition Certificate
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THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of July 31,
1998, by and among PHYSICIANS' SPECIALTY CORP., a corporation organized under
the laws of the State of Delaware (the "Borrower"), each of the financial
institutions initially a signatory hereto together with their assignees pursuant
to Section 12.6. and NATIONSBANK, N.A., successor to NationsBank, N.A. (South),
as Agent (the "Agent").
WHEREAS, NationsBank, N.A., successor to NationsBank, N.A. (South)
("NationsBank"), and the Borrower entered into that certain Credit Agreement
dated as of April 30, 1997 (as amended and in effect immediately prior to the
date hereof, the "Existing Credit Agreement"), pursuant to which NationsBank
made available to the Borrower a credit facility, all on the terms and
conditions contained therein; and
WHEREAS, the parties hereto desire to amend and restate the Existing
Credit Agreement to increase the amount of such credit facility to $45,000,000,
to permit all of the Lenders to provide credit to the Borrower on the terms
contained herein, to appoint NationsBank as contractual representative for the
Lenders, and for the other purposes provided herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree that the Existing Credit Agreement is amended and restated as
follows:
ARTICLE I. DEFINITIONS
SECTION 1.1. DEFINITIONS.
In addition to terms defined elsewhere herein, the following terms
shall have the following meanings for the purposes of this Agreement:
"ACCOUNT DEBTOR" means a Person who is obligated on a Receivable.
"ACCESSION AGREEMENT" means an Accession Agreement substantially in the
form of Exhibit A.
"ACQUISITION" means any transaction, or any series of related
transactions, by which the Borrower or and/or any of its Subsidiaries directly
or indirectly (a) acquires any ongoing business or all or substantially all of
the assets of any Person or division or Asset Group thereof, whether through
purchase of assets, merger or otherwise, (b) acquires (in one transaction or as
the most recent transaction in a series of transactions) control of a majority
of the securities of a Person which have ordinary voting power for the election
of directors or (c) otherwise acquires control of 51% or greater ownership
interest in any such Person.
"ACQUISITION CONSIDERATION" means, with respect to an Acquisition by
the Borrower, the aggregate amount of consideration payable by the Borrower and
its Subsidiaries in connection with such Acquisition. for purposes of this
definition, such consideration shall include (without duplication), but shall
not be limited to, the following: (a) the amount of cash paid, together with
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the fair market value of all other assets conveyed, by the Borrower and its
Subsidiaries in consideration for such Acquisition, including but not limited to
the fair market value of all capital stock of the Borrower conveyed by the
Borrower in consideration for such Acquisition; (b) the aggregate amount of
Indebtedness acquired, incurred or assumed by the Borrower and its Subsidiaries
in connection with such Acquisition; (c) all amounts paid or to be paid by the
Borrower and its Subsidiaries in respect of any covenant not to compete granted
in connection with such Acquisition and accruing to the benefit of any New
Subsidiary or other Loan Party; (d) the aggregate capitalized amount of
consulting or other similar fees or payments to be paid by such New Subsidiary
or other Loan Party in connection with, or as a result of, such Acquisition; and
(e) the amount of all transaction fees and expenses (including, without
limitation, legal, accounting and brokers' fees and expenses) incurred by the
Borrower and its Subsidiaries in connection with such Acquisition.
"ACQUISITION DOCUMENTS" means, collectively, the asset purchase
agreement, stock purchase agreement, merger agreement or other primary agreement
to which the Borrower and/or one or more of its Subsidiaries is a party relating
to an Acquisition, together with all related agreements and conveyance
instruments executed in connection therewith or pursuant thereto, including
Seller Notes, if any.
"ACQUISITION EBITDA" means the aggregate pro forma amount of the
Management Fee payable with respect to a Target for the four quarters
immediately preceding an Acquisition of such Target, based on the assumption
that the related Management Services Agreement under which the Management Fee is
defined was actually in effect throughout such four-quarter period; provided,
however, if in connection with such Acquisition, no Management Services
Agreement will be entered into because such Target will either combine with an
existing Loan Party or will become a New Subsidiary, then Acquisition EBITDA
shall refer to the pro forma EBITDA of such Target for the four quarters
immediately preceding its Acquisition.
"ACQUISITION HISTORICAL FINANCIAL STATEMENTS" has the meaning given
that term in Section 9.6.(c)(iii).
"ADDITIONAL COSTS" has the meaning given that term in Section 4.1.
"AFFILIATE" means any Person (other than the Agent or any Lender): (a)
directly or indirectly controlling, controlled by, or under common control with,
the Borrower; (b) directly or indirectly owning or holding fifteen percent
(15.0%) or more of any equity interest in the Borrower; or (c) fifteen percent
(15.0%) or more of whose voting stock or other equity interest is directly or
indirectly owned or held by the Borrower. For purposes of this definition,
"control" (including with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with") means the possession directly
or indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities or
by contract or otherwise.
"AGREEMENT" means this Credit Agreement.
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"AGREEMENT DATE" means the date as of which this Agreement is dated.
"AGENT" means NationsBank, N.A., as contractual representative for the
Lenders under the terms of this Agreement, and any of its successors.
"APPLICABLE COMMITMENT FEE" means at any time the percentage set forth
in the table below corresponding to the Level at which the "Applicable Margin"
is then determined in accordance with the definition thereof:
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LEVEL COMMITMENT FEE
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5 0.375%
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4 0.300%
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3 0.300%
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2 0.250%
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1 0.200%
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Any change in the applicable Level at which the Applicable Margin is determined
shall result in a corresponding and simultaneous change in the Applicable
Commitment Fee.
"APPLICABLE LAW" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all governmental bodies and all
orders and decrees of all courts, tribunals and arbitrators.
"APPLICABLE MARGIN" means, except as set forth below in this
definition, (a) from the Effective Date through the date of receipt by the Agent
of a Compliance Certificate in respect of the fiscal period of the Borrower and
its Subsidiaries ending on June 30, 1998, 0.00% per annum with respect to Base
Rate Loans and 1.50% per annum with respect to LIBOR Loans and (b) thereafter
for each period beginning on the date five Business Days following the date of
receipt by the Agent of a Compliance Certificate in respect of any quarterly
fiscal period of the Borrower and its Subsidiaries ending after June 30, 1998
and ending on the date four Business Days following the date of receipt by the
Agent of a Compliance Certificate in respect of a subsequent fiscal period, that
percent per annum set forth below opposite the Funded Debt to EBITDA Ratio
(calculated consistent with Section 9.1.(b)) applicable to the fiscal period of
the Borrower and its Subsidiaries then ended as reflected in the applicable
Compliance Certificate:
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FUNDED DEBT TO APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
LEVEL EBITDA RATIO BASE RATE LOANS LIBOR LOANS
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5 Greater than or equal to 3.00 to 1.00 0.75% 2.125%
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4 Less than 3.00 to 1.00 but greater than or equal to 0.25% 1.75%
2.50 to 1.00
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3 Less than 2.50 to 1.00 but greater than or equal to 0.00% 1.50%
2.00 to 1.00
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2 Less than 2.00 to 1.00 but greater than or equal to 0.00% 1.25%
1.50 to 1.00
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1 Less than 1.50 to 1.00 0.00% 1.00%
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Notwithstanding the above, if the Borrower shall fail to deliver any such
Compliance Certificate within the time period required by Section 8.3., then the
Applicable Margin shall be 0.25% per annum with respect to Base Rate Loans and
1.75% per annum with respect to LIBOR Loans until the appropriate Compliance
Certificate is so delivered.
"APPROVED ACQUISITION" has the meaning given that term in Section
9.6.(c).
"ASSET GROUP" means any asset or group of assets with identifiable net
earnings (or loss).
"ASSIGNEE" has the meaning given that term in Section 12.6.(d).
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an Assignment and
Acceptance Agreement among a Lender, an Assignee and the Agent, substantially in
the form of Exhibit B.
"BASE RATE" means the rate which the Agent publicly announces from time
to time in Atlanta, Georgia as its prime lending rate. The prime lending rate of
the Agent is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer by the Agent or any Lender. The Agent
and the Lenders may make commercial loans or other loans at rates of interest
at, above, or below such prime lending rate. Any change in the Base Rate
hereunder shall be effective for purposes of this Agreement as of the date of
such change in such rate.
"BASE RATE LOAN" means a Revolving Loan bearing interest at a rate
based on the Base Rate.
"BORROWER" has the meaning set forth in the introductory paragraph
hereof and shall include the Borrower's successors and permitted assigns.
"BUSINESS DAY" means (a) any day other than a Saturday, Sunday or other
day on which banks in Atlanta, Georgia or Charlotte, North Carolina are
authorized or required to close and (b) with reference to a LIBOR Loan, any such
day that is also a day on which dealings in Dollar deposits are carried out in
the London interbank market.
"BUSINESS UNIT" means the assets constituting the business or a
division or operating unit thereof of any Person.
"CAPITAL ASSET" means any asset not customarily charged directly to
expense or depreciated or amortized over a useful life of twelve months or less
in accordance with GAAP, and shall include fixed assets (including without
limitation, assets subject to Capitalized Lease Obligations, land, buildings,
fixtures, machinery and equipment) and intangible assets (including without
limitation, patents, copyrights, trademarks, service marks, franchises and good
will).
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"CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets which
are not, in accordance with GAAP, treated as expense items for such Person in
the year made or incurred or as a prepaid expense applicable to a future year or
years, and shall include all Capitalized Lease Obligations.
"CAPITALIZED LEASE OBLIGATION" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with such principles.
"CASH EQUIVALENTS" means: (a) securities issued, guaranteed or insured
by the United States of America or any of its agencies with maturities of not
more than one year from the date acquired; (b) certificates of deposit with
maturities of not more than one year from the date acquired issued by a United
States federal or state chartered commercial bank of recognized standing, which
has capital and unimpaired surplus in excess of $500,000,000.00 and which bank
or its holding company has a short-term commercial paper rating of at least A-2
or the equivalent by S&P, or at least P-2 or the equivalent by Xxxxx'x; (c)
reverse repurchase agreements with terms of not more than seven days from the
date acquired, for securities of the type described in clause (a) above and
entered into only with commercial banks having the qualifications described in
clause (b) above; (d) commercial paper issued by any Person incorporated under
the laws of the United States of America or any State thereof and rated at least
A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof
by Xxxxx'x, in each case with maturities of not more than one year from the date
acquired; and (e) investments in money market funds registered under the
Investment Company Act of 1940, which have net assets of at least
$500,000,000.00 and at least 85% of whose assets consist of securities and other
obligations of the type described in clauses (a) through (d) above.
"COLLATERAL" means any collateral security hereafter pledged by any
Loan Party to secure the Obligations or any portion thereof.
"COLLATERAL ASSIGNMENT OF MANAGEMENT SERVICES AGREEMENTS" means the
Collateral Assignment of Management Services Agreements executed by PSC
Management and each Other Manager in favor of the Agent for the benefit of the
Lenders and substantially in the form of Exhibit C.
"COMBINED FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 9.6.(c)(v) hereof.
"COMMITMENT" means, as to each Lender, such Lender's obligation to make
Revolving Loans pursuant to Section 2.1. in an amount up to, but not exceeding,
the amount set forth for such Lender on its signature page hereto as such
Lender's "Commitment Amount" or as set forth in the applicable Assignment and
Acceptance Agreement, as the same may be reduced from time to time pursuant to
Section 2.9., or as appropriate to reflect assignments to or by such Lender
effected in accordance with Section 12.6.
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"COMMITMENT PERCENTAGE" means, as to each Lender, the ratio, expressed
as a percentage, of (a) the amount of such Lender's Commitment to (b) the sum of
the aggregate amount of the Commitments of all Lenders hereunder; provided,
however, that if at the time of determination the Commitments have terminated or
been reduced to zero, the "Commitment Percentage" of each Lender shall be the
Commitment Percentage of such Lender in effect immediately prior to such
termination or reduction.
"COMPLEMENTARY SPECIALTIES" means medical practices that, in the field
of medicine, are deemed complementary to Otolaryngology, including but not
limited to, Audiology, Pulmonology, sleep medicine, allergy, plastic surgery,
oral surgery, diagnostic imaging and vascular testing.
"COMPLIANCE CERTIFICATE" has the meaning given such term in Section
8.3.
"CONSOLIDATED INTEREST EXPENSE" means, for any fiscal period of the
Borrower, the total interest expense (including without limitation, interest
expense attributable to Capitalized Lease Obligations in accordance with GAAP)
of the Borrower and its Subsidiaries on a consolidated basis.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period of computation thereof, the net income (loss) of such Person on a
consolidated basis for such period; provided, however, that the following shall
be excluded when determining Consolidated Net Income: (a) any item of gain or
loss resulting from sale, conversion or other disposition of assets other than
in the ordinary course of business; (b) net gains or losses on the acquisition,
retirement, sale or other disposition of capital stock and other securities of
such Person; (c) the income (loss) for such fiscal period of any other Person
prior to the date such other Person becomes a Subsidiary of such Person or is
merged into or consolidated with such Person or any of its Subsidiaries, or such
other Person's assets are acquired by such Person or any of its Subsidiaries;
(d) net gains or losses on the collection of proceeds of life insurance
policies; (e) any write-up of any asset; (f) any other net gains or losses of an
extraordinary nature as determined in accordance with GAAP; (g) in the case of
the Borrower or any of its Subsidiaries, nonrecurring charges incurred in
connection with an Approved Acquisition and, in connection with any other
Acquisition, nonrecurring charges incurred in an amount not to exceed twenty
percent (20%) of the Acquisition Consideration for such other Acquisition; (h)
any portion of the income of such Person attributable to the unremitted earnings
of any other Person that is not a Subsidiary of such Person; and (h) any
earnings attributable to the amortization of negative goodwill.
"CONTINGENT OBLIGATIONS" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses, acts as surety for or
otherwise becomes or is contingently liable for (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment, to supply
funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor
against loss) the Indebtedness, obligation or other liability of any other
Person (other than by endorsements of instruments in the ordinary course of
business), or for the payment of dividends or other
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distributions upon the shares of any other Person or undertakes or agrees
(contingently or otherwise) to purchase, repurchase or otherwise acquire or
become responsible for any Indebtedness, obligation or liability or any security
therefor, or to provide funds for the payment or discharge thereof (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain solvency, assets, level of income, or other financial
condition of any other Person, or to transfer property to any other Person other
than for value received. Contingent Obligations shall not include the
obligations evidenced by any Contingent Seller Notes.
"CONTINGENT SELLER NOTE" means any promissory note issued by the
Borrower or any other Loan Party in connection with an Acquisition as payment of
any of the Acquisition Consideration for such Acquisition which meets all of the
following criteria: (a) the stated amount of such note does not bear interest
(whether as a stated rate, issuance at a discount, or otherwise); (b) such note
would not be required to be reflected as a liability on the balance sheet of the
maker of such note prepared in accordance with GAAP; and (c) all of the payment
obligations under such note are absolutely contingent and in the nature of
earn-out payments required to be made by the maker of such note in connection
with such Acquisition.
"CONTINUE," "CONTINUATION" and "CONTINUED" each refers to the
continuation of a LIBOR Loan from one Interest Period to another Interest Period
pursuant to Section 2.6.
"CONVERT," "CONVERSION" and "CONVERTED" each refers to the conversion
of a Loan of one Type into a Loan of another Type pursuant to Section 2.7.
"CREDIT EVENT" means any of the following: (a) the making (or deemed
making) of any Loan; and (b) the Conversion of a Loan.
"DEFAULT" means any of the events specified in Section 10.1., whether
or not there has been satisfied any requirement for the giving of notice, the
lapse of time, a determination of materiality or the happening of any other
condition.
"DEFAULTING LENDER" has the meaning set forth in Section 3.11.
"DOLLARS" or "$" means the lawful currency of the United States of
America.
"EBITDA" means, with respect to a Person and for a given fiscal period,
the Consolidated Net Income of such Person for such period plus the sum of the
following amounts (but in the case of the amount described in the following
clauses (a) through (d), only to the extent included in determining the
Consolidated Net Income of such Person for such period) determined on a
consolidated basis: (a) income tax expense of such Person in respect of such
period plus (b) interest expense of such Person for such period plus (c)
depreciation and amortization expense and other non-cash charges of such Person
for such period minus (d) payments to any physicians during such period which
were not treated as items of expense. For purposes of determining the Borrower's
EBITDA, (i) the net income (loss) of any Person accrued prior to the date it
became a Subsidiary of the Borrower or was merged into or consolidated with the
Borrower, or of any Asset Group accrued prior to the date such Asset Group was
acquired by the Borrower, shall be excluded from EBITDA if and to the extent
otherwise included in net income (loss) of the Borrower for such period; and
(ii) Acquisition EBITDA of any Person accrued prior to the date it became a
Subsidiary of the Borrower or was merged into or consolidated with
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the Borrower, or of any Asset Group accrued prior to the date such Asset Group
was acquired by the Borrower, less any incremental overhead of any such Person
or allocated to any such Asset Group, may be included in the Borrower's EBITDA,
but only if the Borrower provides the Agent with evidence of the calculation of
the Acquisition EBITDA of such Person or Asset Group, together with supporting
financial statements, which are acceptable to the Agent in its sole but
reasonable discretion.
"EFFECTIVE DATE" means the later of: (a) the Agreement Date; and (b)
the date on which all of the conditions precedent set forth in Section 5.1.
shall have been fulfilled or waived in writing by the Agent.
"ELIGIBLE ASSIGNEE" means any Person who is: (i) currently a Lender;
(ii) a commercial bank, trust company, insurance company, investment bank or
pension fund organized under the laws of the United States of America, or any
state thereof, and having total assets in excess of $5,000,000,000; (iii) a
savings and loan association or savings bank organized under the laws of the
United States of America, or any state thereof, and having a tangible net worth
of a least $500,000,000; or (iv) a commercial bank organized under the laws of
any other country which is a member of the Organization for Economic Cooperation
and Development ("OECD"), or a political subdivision of any such country, and
having total assets in excess of $10,000,000,000, provided that such bank is
acting through a branch or agency located in the United States of America. If
such Person is not currently a Lender, such Person's senior unsecured long term
indebtedness must be rated A or higher by S&P, A2 or higher by Moody's, or the
equivalent or higher of either such rating by another credit rating agency
acceptable to the Agent.
"EMPLOYEE BENEFIT PLAN" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained by the Borrower, any of
its Subsidiaries or any of its other ERISA Affiliates or is assumed by the
Borrower, any of its Subsidiaries or any of its other ERISA Affiliates in
connection with any acquisition or other business combination or (b) has at any
time been maintained by the Borrower, any of its Subsidiaries or any other
current or former ERISA Affiliate.
"ENVIRONMENTAL LAWS" means any Applicable Law relating to environmental
protection or the manufacture, storage, disposal or clean-up of Hazardous
Materials including, without limitation, the following: Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. ss.1251 et
seq.; Solid Waste Disposal Act, 42 U.S.C. ss.6901 et seq.; Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss.9601 et
seq.; National Environmental Policy Act, 42 U.S.C. ss.4321 et seq.; regulations
of the Environmental Protection Agency and any applicable rule of common law and
any judicial interpretation thereof relating primarily to the environment or
Hazardous Materials.
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"EQUITY ISSUANCE" means any issuance or sale by the Borrower or any
other Loan Party of its capital stock or other equity securities, or any
warrants, options or similar rights to acquire, or securities convertible into
or exchangeable for, such capital stock or equity securities.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"ERISA AFFILIATE" means any entity required at any relevant time to be
aggregated with the Borrower or any Subsidiary under Sections 414(b) or (c) of
the Internal Revenue Code. In addition, for purposes of any provision of this
Agreement that relates to Section 412(n) of the Internal Revenue Code, the term
ERISA Affiliate shall mean any entity aggregated with the Borrower or any
Subsidiary under Sections 414(b), (c), (m) or (o) of the Internal Revenue Code.
"EVENT OF DEFAULT" means any of the events specified in Section 10.1.,
provided that any requirement for notice or lapse of time or any other condition
has been satisfied.
"FAMILY MEMBER" means, with respect to an individual, any of such
individual's spouse and immediate lineal descendants (whether natural or
adopted) and any trusts established for the sole benefit of any of the
foregoing.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward to the nearest 1/100th of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such day,
provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to the
Agent by federal funds dealers selected by the Agent on such day on such
transaction as determined by the Agent.
"FEES" means the fees and commissions provided for or referred to in
Section 3.6. and any other fees payable by the Borrower hereunder or under any
other Loan Document.
"FIXED CHARGE COVERAGE RATIO" means the ratio of (a) the sum of (i) the
Borrower's EBITDA (plus any Acquisition EBITDA not otherwise included in the
calculation of the Borrower's EBITDA) for the period of four consecutive fiscal
quarters most recently ended plus (ii) to the extent deducted in arriving at
Borrower's EBITDA, lease, rental and all other payments made in respect of or in
connection with operating leases ("Rents") to (b) the sum of (i) the total
consolidated interest expense (including, without limitation, capitalized
interest expense) ("Interest Expense") of the Borrower for such period plus (ii)
regularly scheduled principal payments on Funded Debt during such period
(excluding any balloon, bullet or similar principal payment payable on any such
Funded Debt which repays such Funded Debt in full) ("Debt Service") of the
Borrower and its Subsidiaries plus (iii) Rents. When calculating the Fixed
Charge Coverage Ratio for any four-quarter period during which any Acquisition
occurred, the following amounts with respect to the Target of such Acquisition
shall be included: (A) pro
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forma Interest Expense calculated based on the prevailing interest rate payable
by the Borrower under this Agreement (or the Existing Credit Agreement, as
applicable) rather than the actual rate of interest charged to such Target; (B)
Debt Service of such Target on any Funded Debt which remained outstanding
following such Acquisition and (C) Rents paid by such Target under operating
leases which remained in effect following such Acquisition.
"FOREIGN LENDER" means any Lender organized under the laws of a
jurisdiction other than the United States of America.
"FOREIGN SUBSIDIARY" means, with respect to a Person, any Subsidiary of
such Person that is a "controlled foreign corporation" as defined in 26 U.S.C.A.
ss.957(a).
"FUNDED DEBT" means, with respect to any Person, at the time of
computation thereof, all of the following (without duplication): (a) obligations
of such Person in respect of money borrowed; (b) obligations of such Person
(other than trade debt incurred in the ordinary course of business), whether or
not for money borrowed (i) represented by notes payable, or drafts accepted, in
each case representing extensions of credit, (ii) evidenced by bonds,
debentures, notes or similar instruments, or (iii) constituting purchase money
indebtedness, conditional sales contracts, title retention debt instruments or
other similar instruments, upon which interest charges are customarily paid or
that are issued or assumed as full or partial payment for property; (c)
Capitalized Lease Obligations of such Person; (d) all reimbursement obligations
of such Person under any letters of credit or acceptances (whether or not the
same have been presented for payment); and (e) all Funded Debt of other Persons
which (i) such Person has Guaranteed or (ii) are secured by a Lien on any
property of such Person. Funded Debt shall not include the obligations evidenced
by any Contingent Seller Notes.
"GAAP" means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.
"GOVERNMENTAL APPROVALS" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"GOVERNMENTAL AUTHORITY" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau or entity (including, without limitation, the
Federal Deposit Insurance Corporation, the Comptroller of the Currency or the
Federal Reserve Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.
"GOVERNMENTAL RECEIVABLES" means any Receivable payable by an Account
Debtor which is a Governmental Authority, including without limitation, Medicare
and Medicaid Receivables.
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"GUARANTY," "GUARANTEED" or to "GUARANTEE" as applied to any obligation
means and includes: (a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation; or (b) an
agreement, direct or indirect, contingent or otherwise, and whether or not
constituting a guaranty, the practical effect of which is to assure the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation whether by: (i) the purchase of securities or
obligations; (ii) the purchase, sale or lease (as lessee or lessor) of property
or the purchase or sale of services primarily for the purpose of enabling the
obligor with respect to such obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of or on account of any part
or all of such obligation, or to assure the owner of such obligation against
loss; (iii) the supplying of funds to or in any other manner investing in the
obligor with respect to such obligation; (iv) repayment of amounts drawn down by
beneficiaries of letters of credit; or (v) the supplying of funds to or
investing in a Person on account of all or any part of such Person's obligation
under a Guaranty of any obligation or indemnifying or holding harmless, in any
way, such Person against any part or all of such obligation. As the context
requires, "Guaranty" shall also mean the Guaranty substantially in the form of
Exhibit D executed and delivered by the Material Subsidiaries pursuant to
Section 5.1. or otherwise.
"HAZARDOUS MATERIALS" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable Environmental Laws as "hazardous substances," "hazardous materials,"
"hazardous wastes," "toxic substances" or any other formulation intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity or
"TLCP" toxicity, "EP toxicity"; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources; (c)
any flammable substances or explosives or any radioactive materials; (d)
asbestos in any form; and (e) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.
"INDEBTEDNESS" as applied to a Person means, without duplication, all
items which in accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of such Person as
at the date as of which Indebtedness is to be determined, including without
limitation, all Funded Debt.
"INTELLECTUAL PROPERTY" has the meaning given that term in Section
6.1.(t).
"INTEREST PERIOD" means, with respect to any LIBOR Loan, each period
commencing on the date such LIBOR Loan is made or the last day of the next
preceding Interest Period for such Loan and ending on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, as the Borrower may select in a Notice of Borrowing, Notice of
Continuation or Notice of Conversion, as the case may be, except that each
Interest Period that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically
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corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month. Notwithstanding
the foregoing: (a) if any Interest Period would otherwise end after the
Termination Date, such Interest Period shall end on the Termination Date; (b)
each Interest Period that would otherwise end on a day which is not a Business
Day shall end on the next succeeding Business Day (or, if such next succeeding
Business Day falls in the next succeeding calendar month, on the next preceding
Business Day); and (c) notwithstanding the immediately preceding clause (a), no
Interest Period for any LIBOR Loan shall have a duration of less than one month
and, if the Interest Period for any LIBOR Loan would otherwise be a shorter
period, such Loan shall not be available hereunder for such period.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement intended to protect a Person against fluctuations in
interest rates.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended.
"INVESTMENT" means, with respect to any Person and whether or not such
investment constitutes a controlling interest in such Person:
(a) the purchase or other acquisition of any share of capital stock,
evidence of Indebtedness or other security issued by any other Person;
(b) any loan, advance or extension of credit to, or contribution (in
the form of money or goods) to the capital of, any other Person;
(c) any Guaranty of the Indebtedness of any other Person;
(d) any other investment in any other Person; and
(e) any commitment or option to make an Investment in any other Person.
"LENDER" means each financial institution from time to time party
hereto as a "Lender", together with its respective successors and permitted
assigns.
"LENDING OFFICE" means, for each Lender and for each Type of Loan, the
office of such Lender specified as such on its signature page hereto or in the
applicable Assignment and Acceptance Agreement, or such other office of such
Lender as such Lender may notify the Agent in writing from time to time.
"LIBOR" means, for any LIBOR Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR" shall mean, for any LIBOR Loan for any Interest
Period therefor, the rate per
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annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
"LIBOR LOAN" means a Revolving Loan bearing interest at a rate based on
LIBOR.
"LIEN" as applied to the property of any Person means: (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, pledge,
lien, charge or lease constituting a Capitalized Lease Obligation, conditional
sale or other title retention agreement, or other security title or encumbrance
of any kind in respect of any property of such Person, or upon the income or
profits therefrom; (b) any arrangement, express or implied, under which any
property of such Person is transferred, sequestered or otherwise identified for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to the payment of the general, unsecured
creditors of such Person; and (c) the filing of, or any agreement to give, any
financing statement under the Uniform Commercial Code or its equivalent in any
jurisdiction, other than in connection with a transaction evidencing a true
lease and not a security interest.
"LOAN" means a Revolving Loan or a Swingline Loan.
"LOAN DOCUMENT" means this Agreement, each Note, each Security Document
and each other document or instrument now or hereafter executed and delivered by
a Loan Party in connection with, pursuant to or relating to this Agreement.
"LOAN PARTY" means the Borrower and each of its Material Subsidiaries.
The Loan Parties as of the Agreement Date are identified on Schedule 1.1.(a).
"MANAGEMENT ACCOUNT" has the meaning given that term in Section 7.12.
"MANAGEMENT FEE," for purposes of calculating Acquisition EBITDA after
consummation of an Acquisition, shall mean the fees payable to PSC Management or
an Other Manager for services rendered in its capacity as manager under the
Management Services Agreement covering or relating to the New Subsidiary or
Asset Group that is a party to such Acquisition.
"MANAGEMENT GROUP" means Xxxxx X. Xxxxx, Xxxxxx X. Xxxxxxxx and Xxxxxxx
X. Xxxxxxx.
"MANAGEMENT SERVICES AGREEMENT" means each Management Services
Agreement entered into between PSC Management or an Other Manager and any other
Person offering medical services in the field of Otolaryngology, Related
Subspecialties or Complementary Specialties.
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"MATERIAL ADVERSE EFFECT" means a materially adverse effect on (a) the
business, assets, liabilities, financial condition, or results of operations of
the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower or any other Loan Party to perform its obligations under any Loan
Document to which it is a party, (c) the validity or enforceability of any of
the Loan Documents, (d) the rights and remedies of the Agent or the Lenders
under any of such Loan Documents or (e) the timely payment of the principal of
or interest on the Loans or other amounts payable in connection therewith.
Except with respect to representations made or deemed made by any Loan Party in
any of the other Loan Documents to which it is a party, all determinations of
materiality shall be made by the Requisite Lenders in their reasonable judgment
unless expressly provided otherwise.
"MATERIAL CONTRACT" means any contract or other arrangement (other than
any Loan Document), whether written or oral, to which the Borrower or any other
Loan Party is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could reasonably be expected to have a
Material Adverse Effect.
"MATERIAL SUBSIDIARY" means, as of the date of any determination
thereof, any Subsidiary which (a) directly or indirectly owns any capital stock
of, or other equity interest in, any other Material Subsidiary or (b) either:
(i) has total assets greater than or equal to 5.0% of total assets of the
Borrower and its Subsidiaries determined on a consolidated basis (calculated as
of the fiscal quarter most recently ending) or (ii) has EBITDA greater than or
equal to 5.0% of the EBITDA of the Borrower and its Subsidiaries determined on a
consolidated basis (calculated as of the fiscal quarter most recently ending).
In any event, the term "Material Subsidiaries" shall mean Subsidiaries of the
Borrower, that together with the Borrower have assets equal to not less than 95%
of the total assets (calculated as described above) and EBITDA of not less than
95% of EBITDA (calculated as described above) and if more than one combination
of Subsidiaries satisfies such threshold, then those Subsidiaries so determined
to be "Material Subsidiaries" shall be specified by the Borrower.
Notwithstanding the foregoing, a Subsidiary which satisfies the following
requirements shall not be considered to be a "Material Subsidiary" as long as it
continues to satisfy such requirements: (1) such Subsidiary was acquired in
connection with an Acquisition; (2) such Subsidiary is a Wholly-Owned
Subsidiary; (3) at no time following the consummation of such Acquisition does
such Subsidiary have any significant assets other than Receivables created prior
to such Acquisition; and (4) such Receivables are to be collected in the
ordinary course of business, and the proceeds of such Receivables, as collected,
will be promptly distributed to the Borrower or a Guarantor.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower, any of its Subsidiaries or any other
ERISA Affiliate is making, or is accruing an obligation to make, contributions
or has made, or been obligated to make, contributions.
"NATIONSBANK" means NationsBank, N.A., and its successors and permitted
assigns.
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"NET INCOME" means, with respect to any Person for a given period, such
Person's net income for such period.
"NET WORTH" means, with respect to any Person, such Person's total
consolidated shareholders' equity (including capital stock, additional paid-in
capital and retained earnings, after deducting treasury stock) which would
appear as such on a balance sheet of such Person prepared in accordance with
GAAP.
"NEW SUBSIDIARY" means, with respect to an Acquisition, any Subsidiary
of the Borrower formed in connection with, and for the purpose of effecting,
such Acquisition. If any outstanding capital stock of or other equity interest
in a Person is being acquired by the Borrower or any of its Subsidiaries in
connection with an Acquisition and after giving effect thereto such Person would
be a Subsidiary of the Borrower, then such Person shall also constitute a New
Subsidiary.
"NMS" means NationsBanc Xxxxxxxxxx Securities LLC, a Delaware limited
liability company.
"NOTE" means a Revolving Note or the Swingline Note.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit E to be delivered to the Agent pursuant to Section 2.1.(b) evidencing
the Borrower's request for a borrowing of Loans.
"NOTICE OF CONTINUATION" means a notice substantially in the form of
Exhibit F to be delivered to the Agent pursuant to Section 2.6. evidencing the
Borrower's request for the Continuation of a LIBOR Loan.
"NOTICE OF CONVERSION" means a notice substantially in the form of
Exhibit G to be delivered to the Agent pursuant to Section 2.7. evidencing the
Borrower's request for the Conversion of a Loan from one Type of Loan to another
Type of Loan.
"NOTICE OF SWINGLINE BORROWING" means a notice in the form of Exhibit H
to be delivered to Swingline Lender pursuant to Section 2.10.(b) evidencing the
Borrower's request for a Swingline Loan.
"OBLIGATIONS" means, individually and collectively: (a) the aggregate
principal balance of, and all accrued and unpaid interest on, all Loans; and (b)
all other indebtedness, liabilities, obligations, covenants and duties of the
Borrower and the other Loan Parties owing to the Agent, any Lender or the
Swingline Lender of every kind, nature and description, under or in respect of
this Agreement or any of the other Loan Documents, including, without
limitation, the Fees and indemnification obligations, whether direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any promissory note.
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"OPERATING ACCOUNT" shall mean the account maintained by the Borrower
with the Agent which the Borrower and the Agent have designated in writing as
the "Operating Account."
"OTHER MANAGER" means any Wholly Owned Subsidiary of the Borrower,
other than PSC Management, who serves as the manager under any Management
Services Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.
"PENSION PLAN" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which is
subject to the provisions of Title IV of ERISA or Section 412 of the Code and
which (a) is maintained by the Borrower, any of its Subsidiaries or any of its
other ERISA Affiliates or is assumed by the Borrower, any of its Subsidiaries or
any of its other ERISA Affiliates in connection with any acquisition or other
business combination or (b) has at any time been maintained by the Borrower, any
of its Subsidiaries or any other current or former ERISA Affiliate.
"PERMITTED LIENS" means, as to any Person: (a) Liens securing taxes,
assessments and other charges or levies imposed by any Governmental Authority
(excluding any Lien imposed pursuant to any of the provisions of ERISA) or the
claims of materialmen, mechanics, carriers, warehousemen or landlords for labor,
materials, supplies or rentals incurred in the ordinary course of business,
which are not at the time required to be paid or discharged under Section 7.6.;
(b) Liens consisting of deposits or pledges made, in the ordinary course of
business, in connection with, or to secure payment of, obligations under
workmen's compensation, unemployment insurance or similar Applicable Laws; (c)
Liens consisting of encumbrances in the nature of zoning restrictions,
easements, and rights or restrictions of record on the use of real property,
which do not materially detract from the value of such property or impair the
use thereof in the business of such Person; (d) Liens in existence as of the
Agreement Date and set forth in Schedule 6.1.(f); (e) Purchase Money Liens but
only to the extent the Indebtedness secured by such Liens is permitted pursuant
to Section 9.2.(d); (f) Liens securing Funded Debt permitted under Section
9.2.(b) but only to the extent such Liens encumber assets which are not current
assets as determined in accordance with GAAP; (g) any Lien securing a
Capitalized Lease Obligation to the extent such Capitalized Lease Obligation is
permitted pursuant to Section 9.2.(e) and provided that such Lien (i) attaches
only to the property the subject of the applicable capital lease and (ii)
secures only such Capitalized Lease Obligation (and customary indemnity
obligations, expense reimbursement obligations and other similar obligations
owing in connection with the applicable capital lease) and (h) Liens in favor of
the Agent for the benefit of the Lenders.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
"PLEDGE AGREEMENT" means the Pledge Agreement executed by various Loan
Parties in favor of the Agent for the benefit of the Lenders pursuant to Section
5.1. or otherwise.
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"POST-DEFAULT RATE" means, in respect of any principal of any Loan or
any other Obligation that is not paid when due (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum during the period from and including the due date to but excluding the
date on which such amount is paid in full equal to two percent (2.0%) plus the
Base Rate as in effect from time to time plus the Applicable Margin for Base
Rate Loans; provided that, if the amount so in default is the principal of a
LIBOR Loan and the due date thereof is a day other than the last day of the
Interest Period therefor, the "Post-Default Rate" for such principal shall be,
for the period from and including such due date to but excluding the last day of
the Interest Period, two percent (2.0%) plus the interest rate for such Loan as
provided in Section 2.2.(a), and thereafter, the rate provided for above in this
definition.
"PRINCIPAL OFFICE" means the main office of the Agent located at 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, or such other office of the
Agent as the Agent may designate from time to time.
"PSC MANAGEMENT" means PSC Management Corp., a Delaware corporation,
together with its successors and assigns.
"PURCHASE MONEY LIEN" means a Lien on any property being acquired by a
Person with proceeds of Funded Debt, which Lien attaches only to the property
being acquired, the Funded Debt incurred in connection with such acquisition
shall not exceed the purchase price of such property and such Lien shall secure
only such Funded Debt.
"RECEIVABLE" shall mean (a) all rights to the payment of money or other
forms of consideration of any kind (whether classified under the UCC as
accounts, contract rights, chattel paper, general intangibles or otherwise)
including, but not limited to, accounts receivable, letters of credit and the
right to receive payment thereunder, chattel paper, tax refunds, insurance
proceeds, any rights under contracts not yet earned by performance and not
evidenced by an instrument or chattel paper, notes, drafts, instruments,
documents, acceptances and all other debts, obligations and liabilities in
whatever form from any Person, (b) all guaranties, security and Liens securing
payment thereof, (c) all goods, whether now owned or hereafter acquired, and
whether sold, delivered, undelivered, in transit or returned, which may be
represented by, or the sale or lease of which may have given rise to, any such
right to payment or other debt, obligation or liability, and (d) all proceeds of
any of the foregoing.
"REGISTER" has the meaning given that term in Section 12.6.(e).
"REGULATORY CHANGE" means, with respect to any Lender, any change
effective after the Agreement Date in Applicable Law (including without
limitation, Regulation D of the Board of Governors of the Federal Reserve
System) or the adoption or making after such date of any interpretation,
directive or request applying to such Lender, of or under any Applicable Law
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any Governmental Authority or monetary authority
charged with the interpretation or administration thereof or compliance by such
Lender with any request or directive regarding capital adequacy.
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"RELATED SUBSPECIALTIES" means medical practices that, in the field of
medicine, are deemed subspecialties of Otolaryngology, including but not limited
to, Pediatric Otolaryngology, head and neck surgery, Rhinology, allergy, facial
plastics and reconstructive surgery, Otology, Neurotology and Laryngology.
"REPORTABLE EVENT" has the meaning set forth in Section 4043(b) of
ERISA, but shall not include a Reportable Event as to which the provision for 30
days' notice to the PBGC is waived under applicable regulations.
"REQUISITE LENDERS" means, as of any date, Lenders having at least
66-2/3% of the aggregate amount of the Commitments, or, if the Commitments have
been terminated or reduced to zero, Lenders holding at least 66-2/3% of the
principal amount of the Loans.
"RESTRICTED PAYMENT" means: (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock or other
equity interest of the Borrower or any of its Subsidiaries now or hereafter
outstanding, except a dividend payable solely in shares of that class of stock
to the holders of that class; (b) any redemption, conversion, exchange,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock or other equity
interest of the Borrower or any of its Subsidiaries now or hereafter
outstanding; (c) any payment or prepayment of principal of, premium, if any, or
interest on, redemption, conversion, exchange, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, any Subordinated Debt to the
extent not permitted under the applicable terms of subordination; and (d) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of the Borrower
or any of its Subsidiaries now or hereafter outstanding.
"REVOLVING LOAN" means a loan made by a Lender to the Borrower pursuant
to Section 2.1.(a).
"REVOLVING NOTE" has the meaning given that term in Section 2.8.
"S&P" means Standard & Poor's Rating Group, a division of XxXxxx-Xxxx
Companies, Inc.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, together with all rules and regulations issued thereunder.
"SECURITY AGREEMENT" means the Security Agreement executed by the Loan
Parties in favor of the Agent for the benefit of the Lenders pursuant to Section
5.1.
"SECURITY DOCUMENT" means the Security Agreement, the Pledge Agreement,
the Guaranty, the Collateral Assignment of Management Services Agreement, the
Collateral Assignment of Acquisition Documents and each other document or
instrument executed by the Borrower and each other Loan Party, if any, providing
for collateral security for the Obligations.
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"SELLER NOTE" means any promissory note issued by the Borrower in
connection with an Acquisition as payment of any of the Acquisition
Consideration for such Acquisition. The payment obligations under any and all
Seller Notes shall bear interest and shall be expressly subordinated in right of
payment and otherwise to the Loans and the other Obligations pursuant to a
Subordination Agreement or otherwise on terms approved in writing by the Agent
in its sole discretion.
"SENIOR FUNDED DEBT" means, with respect to a Person and at any time as
of which the amount thereof is to be determined, all Funded Debt of such Person
then outstanding minus the aggregate principal amount of any Funded Debt of such
Person then outstanding which is Subordinated Debt.
"SOLVENT" means, when used with respect to any Person, that (a) the
fair value and the fair salable value of its assets (excluding any Indebtedness
due from any Affiliate of such Person) are each in excess of the fair valuation
of its total liabilities (including all contingent liabilities); (b) such Person
is able to pay its debts or other obligations in the ordinary course as they
mature and (c) that the Person has capital not unreasonably small to carry on
its business and all business in which it proposes to be engaged.
"SUBORDINATED DEBT" means Indebtedness of the Borrower or any of its
Subsidiaries that is expressly subordinated in right of payment and otherwise to
the Loans and the other Obligations pursuant to a Subordination Agreement or
otherwise on terms approved in writing by the Agent in its sole discretion.
"SUBORDINATION AGREEMENT" means each Subordination Agreement entered
into between the Agent and another Person in accordance with the terms and
conditions of this Agreement substantially in the form of Exhibit I.
"SUBSIDIARY" means, for any Person, any corporation, partnership or
other entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (without regard to the occurrence of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.
"SWINGLINE COMMITMENT" means Swingline Lender's obligation to make
Swingline Loans pursuant to Section 2.10. in an amount up to, but not exceeding,
$2,500,000, as such amount may be reduced from time to time in accordance with
the terms hereof.
"SWINGLINE LENDER" means NationsBank, N.A., together with its
successors and permitted assigns.
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"SWINGLINE LOAN" means a loan made by the Swingline Lender to the
Borrower pursuant to Section 2.10.(a).
"SWINGLINE NOTE" means the promissory note of the Borrower payable to
the order of the Swingline Lender in a maximum principal amount equal to the
amount of the Swingline Commitment as originally in effect and otherwise duly
completed, substantially in the form of Exhibit I.
"TARGET" means, in the case of the acquisition of (i) all or
substantially all of the assets of a Person, such Person; (ii) a division or
Asset Group of a Person, such division or Asset Group and (iii) securities of a
Person, such Person.
"TAXES" has the meaning given that term in Section 3.12.
"TERMINATION DATE" means July 31, 2002.
"TERMINATION EVENT" means: (a) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (unless the notice
requirement has been waived by applicable regulation); or (b) the withdrawal of
the Borrower or any ERISA Affiliate from a Pension Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA
or was deemed such under Section 4068(f) of ERISA; or (c) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA; or (d) the institution of proceedings to terminate a Pension Plan by the
PBGC; or (e) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of a trustee
to administer, any Pension Plan; or (f) the partial or complete withdrawal of
the Borrower or any ERISA Affiliate from a Multiemployer Plan; or (g) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302 of
ERISA; or (h) any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or Section 4245 of ERISA,
respectively; or (i) any event or condition which results in the termination of
a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC
of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.
"TRANSACTIONS" shall mean (a) the execution and delivery of each of the
Loan Documents, and the Acquisition Documents, (b) the making by the Lenders and
the Swingline Lender, and the borrowing by the Borrower, of the Loans hereunder,
(c) any Acquisition and (d) the consummation of all of the other transactions
contemplated by the Acquisition Documents and the Loan Documents.
"TYPE" with respect to any Revolving Loan, refers to whether such
Revolving Loan is a LIBOR Loan or Base Rate Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of Georgia.
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"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of a Person which all of
the equity securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are at the time directly or
indirectly owned or controlled by such Person or one or more other Subsidiaries
of such Person or by such Person and one or more other Subsidiaries of such
Person.
SECTION 1.2. GENERAL.
Unless otherwise indicated, all accounting terms, ratios and
measurements shall be interpreted or determined in accordance with GAAP in
effect as of the Agreement Date. References in this Agreement to "Sections,"
"Articles," "Exhibits" and "Schedules" are to sections, articles, exhibits and
schedules herein and hereto unless otherwise indicated. references in this
Agreement to any document, instrument or agreement (a) shall include all
exhibits, schedules and other attachments thereto, (b) shall include all
documents, instruments or agreements issued or executed in replacement thereof,
to the extent permitted hereby and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, supplemented,
restated or otherwise modified from time to time to the extent permitted hereby
and in effect at any given time. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, the feminine and the neuter. Unless
explicitly set forth to the contrary, a reference to "Subsidiary" means a
Subsidiary of the Borrower or a Subsidiary of such Subsidiary and a reference to
an "Affiliate" means a reference to an Affiliate of the Borrower. Titles and
captions of Articles, Sections, subsections and clauses in this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement. Unless otherwise indicated, all references to time are references to
Atlanta, Georgia time.
ARTICLE II. CREDIT FACILITY
SECTION 2.1. AMOUNT OF REVOLVING LOANS.
(a) Generally. Each Lender severally and not jointly agrees, on the
terms and subject to the conditions contained herein, to make Revolving Loans to
the Borrower during the period from and including the Effective Date to but
excluding the Termination Date in an aggregate principal amount at any one time
outstanding of up to but not exceeding such Lender's Commitment. Subject to the
terms and conditions of this Agreement, during the period from the Effective
Date to but excluding the Termination Date, the Borrower may borrow, repay and
reborrow Revolving Loans hereunder.
(b) Requesting Loans. The Borrower shall give the Agent notice pursuant
to a Notice of Borrowing or telephonic notice of each borrowing of Revolving
Loans. Each Notice of Borrowing shall be delivered to the Agent before (a) 11:00
a.m. in the case of the borrowing of LIBOR Loans, on the date three Business
Days prior to the proposed date of such borrowing and (b) 11:00 a.m. in the case
of the borrowing of Base Rate Loans, on the date of such borrowing. Any such
telephonic notice shall include all information to be specified in a written
Notice of
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Borrowing and shall be promptly confirmed in writing by the Borrower pursuant to
a Notice of Borrowing sent to the Agent by telecopy on the same day of the
giving of such telephonic notice. The Agent will transmit by telecopy the Notice
of Borrowing (or the information contained in such Notice of Borrowing) to each
Lender promptly upon receipt by the Agent. Each Notice of Borrowing or
telephonic notice of each borrowing shall be irrevocable once given and binding
on the Borrower.
(c) Disbursements of Loan Proceeds. No later than 1:00 p.m. on the date
specified in the Notice of Borrowing, each Lender will make available for the
account of its applicable Lending Office to the Agent at the Principal Office,
in immediately available funds, the proceeds of the Loan to be made by such
Lender. With respect to Loans to be made after the Effective Date, unless the
Agent shall have been notified by any Lender prior to the specified date of
borrowing that such Lender does not intend to make available to the Agent the
Loan to be made by such Lender on such date, the Agent may assume that such
Lender will make the proceeds of such Loan available to the Agent on the date of
the requested borrowing as set forth in the Notice of Borrowing and the Agent
may (but shall not be obligated to, in reliance upon such assumption, make
available to the Borrower the amount of such Loan to be provided by such Lender.
Provided that the applicable conditions set forth in Article V. for the
borrowing of such Loan are fulfilled, the Agent will make the proceeds of such
borrowing of Loans available to the Borrower no later than 2:00 p.m. on the date
and at the account specified by the Borrower in such Notice of Borrowing.
SECTION 2.2. RATES AND PAYMENT OF INTEREST ON LOANS.
(a) Rates. The Borrower promises to pay to the Agent for the account of
each Lender interest on the unpaid principal amount of each Loan made by such
Lender for the period from and including the date of the making of such Loan to
but excluding the date such Loan shall be paid in full, at the following per
annum rates:
(i) during such periods as such Loan is a Base Rate Loan, at
the Base Rate (as in effect from time to time) plus the Applicable
Margin; and
(ii) during such periods as such Loan is a LIBOR Loan, at
LIBOR for such Loan for the Interest Period therefor plus the
Applicable Margin.
Notwithstanding the foregoing, the Borrower hereby promises to pay to the Agent
for the account of the applicable Lender interest at the applicable Post-Default
Rate on any principal of any Loan made by such Lender and on any other amount
payable by the Borrower hereunder or under the Notes to such Lender, which shall
not be paid in full when due (whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise), for the period from and including the due
date thereof to but excluding the date the same is paid in full.
(b) Payment. Accrued interest on each Loan shall be payable (i) in the
case of a Base Rate Loan, on the last day of each calendar month, (ii) in the
case of a LIBOR Loan, on the last day of each Interest Period therefor and, if
such Interest Period is longer than three months, at
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three-month intervals following the first day of such Interest Period, and (iii)
in the case of any Loan, upon the payment, prepayment or Continuation thereof or
the Conversion of such Loan to a Loan of another Type (but only on the principal
amount so paid, prepaid or Converted). Interest payable at the Post-Default Rate
shall be payable from time to time on demand. Promptly after the determination
of any interest rate provided for herein or any change therein, the Agent shall
give notice thereof to the Lenders to which such interest is payable and to the
Borrower. All determinations by the Agent of an interest rate hereunder shall be
conclusive and binding on the Lenders and the Borrower for all purposes, absent
manifest error.
SECTION 2.3. NUMBER OF INTEREST PERIODS.
There may be no more than five (5) different Interest Periods
outstanding at the same time.
SECTION 2.4. REPAYMENT OF LOANS.
The entire outstanding principal amount of, and all accrued but unpaid
interest on, the Loans shall be due and payable in full on the Termination Date.
SECTION 2.5. PREPAYMENTS.
(a) Optional. Subject to Section 4.4., the Borrower may prepay any Loan
without premium or penalty upon prior written notice to the Agent given no later
than 11:00 a.m. (i) on date of prepayment of any Base Rate Loan and (ii) three
Business Days prior to the date of prepayment of any LIBOR Loan.
(b) Mandatory. If at any time the aggregate principal amount of
outstanding Revolving Loans, together with the aggregate principal amount of all
outstanding Swingline Loans, shall exceed the aggregate amount of the
Commitments, the Borrower shall, within one Business Day of the occurrence of
such excess, prepay the Loans in an amount sufficient to eliminate such excess.
If the Borrower is required to pay any outstanding LIBOR Loans by reason of this
Section prior to the end of the applicable Interest Period therefor, the
Borrower shall pay all amounts due under Section 4.4.
SECTION 2.6. CONTINUATION.
So long as no Default or Event of Default shall have occurred, the
Borrower may on any Business Day, with respect to any LIBOR Loan, elect to
maintain such LIBOR Loan or any portion thereof as a LIBOR Loan by selecting a
new Interest Period for such LIBOR Loan. Each new Interest Period selected under
this Section shall commence on the last day of the immediately preceding
Interest Period. Each selection of a new Interest Period shall be made by the
Borrower giving to the Agent a Notice of Continuation not later than 12:00 noon
on the third Business Day prior to the date of any such Continuation. Such
notice by the Borrower of a Continuation shall be by telephone or telecopy,
confirmed immediately in writing if by telephone, in the form of a Notice of
Continuation, specifying (a) the proposed date of such Continuation, (b) the
LIBOR Loan and portion thereof subject to such Continuation and (c) the
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duration of the selected Interest Period, all of which shall be specified in
such manner as is necessary to comply with all limitations on Loans outstanding
hereunder. Each Notice of Continuation shall be irrevocable by and binding on
the Borrower once given. Promptly after receipt of a Notice of Continuation, the
Agent shall notify each Lender by telex or telecopy, or other similar form of
transmission of the proposed Continuation. If the Borrower shall fail to select
in a timely manner a new Interest Period for any LIBOR Loan in accordance with
this Section, such Loan will automatically, on the last day of the current
Interest Period therefore, Convert into a Base Rate Loan notwithstanding failure
of the Borrower to comply with Section 2.7.
SECTION 2.7. CONVERSION.
So long as no Default or Event of Default shall have occurred, the
Borrower may on any Business Day, upon the Borrower's giving of a Notice of
Conversion to the Agent, Convert all or a portion of a Loan of one Type into a
Loan of another Type. Any Conversion of a LIBOR Loan into a Base Rate Loan shall
be made on, and only on, the last day of an Interest Period for such LIBOR Loan
and, upon Conversion of a Base Rate Loan into a LIBOR Loan, the Borrower shall
pay accrued interest to the date of Conversion on the principal amount so
Converted. Each such Notice of Conversion shall be given not later than 12:00
noon on the Business Day prior to the date of any proposed Conversion into Base
Rate Loans and on the third Business Day prior to the date of any proposed
Conversion into LIBOR Loans. Promptly after receipt of a Notice of Conversion,
the Agent shall notify each Lender by telex or telecopy, or other similar form
of transmission of the proposed Conversion. Subject to the restrictions
specified above, each Notice of Conversion shall be by telephone or telecopy,
confirmed promptly in writing if by telephone, in the form of a Notice of
Conversion specifying (a) the requested date of such Conversion, (b) the Type of
Loan to be Converted, (c) the portion of such Type of Loan to be Converted, (d)
the Type of Loan such Loan is to be Converted into and (e) if such Conversion is
into a LIBOR Loan, the requested duration of the Interest Period of such Loan.
Each Notice of Conversion shall be irrevocable by and binding on the Borrower
once given.
SECTION 2.8. NOTES.
The Revolving Loans made by each Lender shall, in addition to this
Agreement, also be evidenced by a promissory note of the Borrower substantially
in the form of Exhibit K (each a "Revolving Note"), payable to the order of such
Lender in a maximum principal amount equal to the amount of such Lender's
Commitment as originally in effect and otherwise duly completed.
SECTION 2.9. VOLUNTARY REDUCTIONS OF THE COMMITMENT.
The Borrower shall have the right to terminate or reduce the aggregate
unused amount of the Commitments (for which purpose use of the Commitments shall
be deemed to include the aggregate principal amount of all outstanding Swingline
Loans) at any time and from time to time without penalty or premium upon not
less than three Business Days prior written notice to the Agent and the Lenders
of each such termination or reduction, which notice shall specify the effective
date thereof, and the amount of any such reduction and shall be irrevocable once
given and effective only upon receipt by the Agent. The Agent will promptly
transmit such notice to
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each Lender. The Commitments, once terminated or reduced, may not be increased
or reinstated. Any reduction in the aggregate amount of the Commitments shall
result in a proportionate reduction (rounded to the next lowest integral
multiple of multiple of $100,000) in the Swingline Commitment.
SECTION 2.10. SWINGLINE LOANS.
(a) Swingline Loans. Subject to the terms and conditions hereof,
including without limitation, Section 2.11., if necessary to meet the Borrower's
funding deadline, Swingline Lender agrees to make Swingline Loans to the
Borrower, during the period from the Effective Date to but excluding the
Termination Date, in an aggregate principal amount at any one time outstanding
up to, but not exceeding, the amount of the Swingline Commitment. If at any time
the aggregate outstanding principal amount of the Swingline Loans exceeds the
Swingline Commitment in effect at such time, the Borrower shall immediately pay
to the Agent for the account of Swingline Lender the amount of such excess.
Subject to the terms and conditions of this Agreement, the Borrower may borrow,
repay and reborrow Swingline Loans hereunder. Except as otherwise provided in
Section 2.9., the borrowing of a Swingline Loan shall not constitute usage of
any Lender's Commitment for purposes of calculation of the fee payable under
Section 3.6.(b) or otherwise.
(b) Procedure for Borrowing Swingline Loans. With respect to any
Swingline Loan not being made to the Borrower as contemplated under subsection
(f) below, the Borrower shall give the Agent and Swingline Lender notice
pursuant to a Notice of Swingline Borrowing or otherwise given to the Agent and
Swingline Lender in such manner, and no later than such time, as may be agreed
to by the Borrower and the Swingline Lender in writing from time to time. Each
Swingline Loan, other than one deemed requested as contemplated by subsection
(f) below, shall be in the minimum amount of $100,000 and integral multiples of
$50,000 in excess thereof, or such other minimum amounts agreed to by the
Swingline Lender and the Borrower. Not later than such time as may be agreed to
by the Borrower and the Swingline Lender from time to time and subject to
satisfaction of the applicable conditions set forth in Article V. for such
borrowing, the Swingline Lender will make the proceeds of such Swingline Loan
available to the Borrower in Dollars, in immediately available funds, at the
account specified by the Borrower in the Notice of Swingline Borrowing or as
otherwise directed by the Borrower in writing.
(c) Interest. Swingline Loans shall bear interest (i) at a per annum
rate equal to the Base Rate (as in effect from time to time) per annum or (ii)
at such other rate or rates as the Borrower and Swingline Lender may agree from
time to time in writing. Interest payable on Swingline Loans is solely for the
account of the Swingline Lender. All accrued and unpaid interest on Swingline
Loans shall be payable on the dates and in the manner provided in Section 2.2.
with respect to interest on Base Rate Loans (except as the Swingline Lender and
the Borrower may otherwise agree in writing in connection with any particular
Swingline Loan).
(d) Swingline Note. The Swingline Loans shall, in addition to this
Agreement, be evidenced by the Swingline Note.
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(e) Repayment and Participations of Swingline Loans. The Borrower
agrees to repay each Swingline Loan within one Business Day of demand therefor
by the Swingline Lender and in any event, within 10 Business Days after the date
such Swingline Loan was made. Notwithstanding the foregoing, the Borrower shall
repay the entire outstanding principal amount of, and all accrued but unpaid
interest on, the Swingline Loans on the Termination Date (or such earlier date
as the Swingline Lender and the Borrower may agree in writing). In lieu of
demanding repayment of any outstanding Swingline Loan from the Borrower, the
Swingline Lender may at any time, on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), request a
borrowing of Base Rate Loans from the Lenders in an amount equal to the
principal balance of such Swingline Loan. The Swingline Lender shall give notice
to the Agent of any such borrowing of Base Rate Loans not later than 11:00 a.m.
on the proposed date of such borrowing. Each Lender will make available to the
Agent for the account of the Swingline Lender, in immediately available funds,
the proceeds of the Loan to be made by such Lender. The Agent shall pay the
proceeds of such Loans to the Swingline Lender, which shall apply such proceeds
to repay such Swingline Loan. If Lenders are prohibited from making Loans
required to be made under this subsection for any reason whatsoever, including
without limitation, the occurrence of any of the Defaults or Events of Default
described in Sections 10.1.(e) or 10.1.(f), each Lender shall purchase from the
Swingline Lender, without recourse or warranty, an undivided interest and
participation to the extent of such Lender's Pro Rata Share of such Swingline
Loan, by directly purchasing a participation in such Swingline Loan in such
amount and paying the proceeds thereof to the Agent for the account of the
Swingline Lender in Dollars and in immediately available funds. A Lender's
obligation to purchase such a participation in a Swingline Loan shall be
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including without limitation, (i) any claim of setoff, counterclaim,
recoupment, defense or other right which such Lender or any other Person may
have or claim against the Agent, the Swingline Lender or any other Person
whatsoever, (ii) the occurrence or continuation of a Default or Event of Default
(including without limitation, any of the Defaults or Events of Default
described in Sections 10.1.(e) or (f)) or the termination of any Lender's
Commitment, (iii) the existence (or alleged existence) of an event of condition
which has had or could have a Material Adverse Effect, (iv) any breach of any
Loan Document by the Agent, any Lender or the Borrower or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. If such amount is not in fact made available to the Swingline
Lender by any Lender, the Swingline Lender shall be entitled to recover such
amount on demand from such Lender, together with accrued interest thereon for
each day from the date of demand thereof, at the Federal Funds Rate. If such
Lender does not pay such amount forthwith upon the Swingline Lender's demand
therefor, and until such time as such Lender makes the required payment, the
Swingline Lender shall be deemed to continue to have outstanding Swingline Loans
in the amount of such unpaid participation obligation for all purposes of the
Loan Documents (other than those provisions requiring the other Lenders to
purchase a participation therein). Further, such Lender shall be deemed to have
assigned any and all payments made of principal and interest on its Loans, and
any other amounts due to it hereunder, to the Swingline Lender to fund Swingline
Loans in the amount of the participation in Swingline Loans that such Lender
failed to purchase pursuant to this Section until such amount has been purchased
(as a result of such assignment or otherwise).
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(f) Auto Borrow/Auto Sweep Programs. At 5:00 p.m. on each Business Day
the Borrower shall be deemed to have requested that the Swingline Lender make to
the Borrower a Swingline Loan in an amount equal to the amount by which drafts
against the Operating Account exceed the available balance of funds then on
deposit in the Operating Account. The Agent shall notify the Swingline Lender of
the amount of such excess. The Swingline Lender shall make the proceeds of each
such Swingline Loan available to the Borrower by paying the same to the Agent
for deposit into the Operating Account. At 5:00 p.m. on each Business Day, the
Borrower shall repay a principal amount of Swingline Loans by an amount equal to
the positive balance, if any, of available funds then on deposit in the
Operating Account as determined by the Agent at such time. The Borrower hereby
authorizes the Agent to deduct such amount from the Operating Account without
notice to the Borrower, and to pay such amount to the Swingline Lender in
repayment of the then outstanding principal balance of Swingline Loans. The
provisions of this subsection shall not become effective until the Borrower has
executed and delivered the Swingline Lender's customary documentation relating
to its "Auto Borrow" and "Auto Sweep" programs.
SECTION 2.11. AMOUNT LIMITATIONS.
Notwithstanding any other term of this Agreement or any other Loan
Document, at no time may the aggregate principal amount of all outstanding
Revolving Loans, together with the aggregate principal amount of all outstanding
Swingline Loans, exceed the aggregate amount of the Commitments.
ARTICLE III. PAYMENTS, FEES AND OTHER GENERAL PROVISIONS
SECTION 3.1. PAYMENTS.
Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Borrower under this
Agreement or any other Loan Document shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to the Agent at its
Principal Office, not later than 2:00 p.m. on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day) and shall be made
as otherwise directed in writing by the Agent from time to time. The Borrower
shall, at the time of making each payment under this Agreement or any Note,
specify to the Agent the amounts payable by the Borrower hereunder to which such
payment is to be applied. Each payment received by the Agent for the account of
a Lender under this Agreement or any Note shall be paid to such Lender at the
applicable Lending Office of such Lender no later than 5:00 p.m. on the date of
receipt. Each payment received by Agent for the account of Swingline Lender
under this Agreement or the Swingline Note shall be paid to Swingline Lender by
wire transfer of immediately available funds in accordance with the wiring
instructions provided by Swingline Lender to the Agent from time to time. If the
due date of any payment under this Agreement or any other Loan Document would
otherwise fall on a day which is not a Business Day such date shall be extended
to the next succeeding Business Day and interest shall be payable for the period
of such extension.
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SECTION 3.2. PRO RATA TREATMENT.
Except to the extent otherwise provided herein: (a) each borrowing from
the Lenders under Section 2.1.(a) shall be made from the Lenders, each payment
of the Fees under Section 3.6.(a) and 3.6.(b) shall be made for the account of
the Lenders, and each termination or reduction of the amount of the Commitments
under Section 2.9. shall be applied to the respective Commitments of the
Lenders, pro rata according to the amounts of their respective Commitments; (b)
each payment or prepayment of principal of Revolving Loans by the Borrower shall
be made for the account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Revolving Loans held by them,
provided that if immediately prior to giving effect to any such payment in
respect of any Revolving Loans the outstanding principal amount of the Revolving
Loans shall not be held by the Lenders pro rata in accordance with their
respective Commitments in effect at the time such Loans were made, then such
payment shall be applied to the Revolving Loans in such manner as shall result,
as nearly as is practicable, in the outstanding principal amount of the
Revolving Loans being held by the Lenders pro rata in accordance with their
respective Commitments; (c) each payment of interest on Revolving Loans by the
Borrower shall be made for the account of the Lenders pro rata in accordance
with the amounts of interest on such Loans then due and payable to the
respective Lenders; (d) the making, Conversion and Continuation of Revolving
Loans of a particular Type (other than Conversions provided for by Section 4.6.)
shall be made pro rata among the Lenders according to the amounts of their
respective Commitments (in the case of making of Loans) or their respective
Loans of such Type (in the case of Conversions and Continuations of Loans) and
the then current Interest Period for each Lender's portion of each Loan of such
Type shall be coterminous and (e) the Lenders' participation in, and payment
obligations in respect of, Swingline Loans under Section 2.10., shall be pro
rata in accordance with their respective Commitments.
SECTION 3.3. SHARING OF PAYMENTS, ETC.
The Borrower agrees that, in addition to (and without limitation of)
any right of set-off, banker's lien or counterclaim a Lender or the Agent may
otherwise have, each Lender shall be entitled, at its option but subject to
receipt of the Agent's prior written consent, to offset balances held by such
Lender for the account of the Borrower at any of such Lender's offices, in
Dollars or in any other currency, against any principal of, or interest on, any
of such Lender's Loans hereunder (or other Obligations owing to such Lender
hereunder) which is not paid when due (regardless of whether such balances are
then due to the Borrower), in which case such Lender shall promptly notify the
Borrower, all other Lenders and the Agent thereof; provided, however, such
Lender's failure to give such notice shall not affect the validity of such
offset. If a Lender shall obtain payment of any principal of, or interest on,
any Loan made by it to the Borrower under this Agreement, or shall obtain
payment on any other Obligation owing by the Borrower or a Loan Party through
the exercise of any right of set-off, banker's lien or counterclaim or similar
right or otherwise or through voluntary prepayments directly to a Lender or
other payments made by the Borrower to a Lender not in accordance with the terms
of this Agreement and such payment should be distributed to the Lenders pro rata
in accordance with Section 3.2. or Section 10.3., as applicable, such Lender
shall promptly purchase from the other Lenders participations in (or, if and to
the extent specified by such Lender, direct interests in) the Loans made by the
other Lenders or other Obligations owed to such other Lenders in such amounts,
pay
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such amounts to the other Lenders and make such other adjustments from time to
time as shall be equitable, to the end that all the Lenders shall share the
benefit of such payment (net of any reasonable expenses which may be incurred by
such Lender in obtaining or preserving such benefit) pro rata in accordance with
Section 3.2. or Section 10.3. To such end, all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored. The
Borrower agrees that any Lender so purchasing a participation (or direct
interest) in the Loans or other Obligations owed to such other Lenders may
exercise all rights of set-off, banker's lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender were a direct
holder of Loans in the amount of such participation. Nothing contained herein
shall require any Lender to exercise any such right or shall affect the right of
any Lender to exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of the Borrower. All
payments of principal, interest, fees and other amounts in respect of the
Swingline Loans shall be for the account of Swingline Lender only (except to the
extent any Lender shall have acquired a participating interest in any such
Swingline Loan pursuant to Section 2.10.(e)).
SECTION 3.4. SEVERAL OBLIGATIONS.
No Lender shall be responsible for the failure of any other Lender to
make a Loan or to perform any other obligation to be made or performed by such
other Lender hereunder, and the failure of any Lender to make a Loan or to
perform any other obligation to be made or performed by it hereunder shall not
relieve the obligation of any other Lender to make any Loan or to perform any
other obligation to be made or performed by such other Lender.
SECTION 3.5. MINIMUM AMOUNTS.
(a) Borrowings. Each borrowing of Base Rate Loans shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in
excess thereof. Each borrowing of LIBOR Loans, and each Conversion of a Loan to
a LIBOR Loan, shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess thereof.
(b) Prepayments. Each voluntary prepayment of Revolving Loans shall be
in an aggregate minimum amount of $1,000,000 and integral multiples of $100,000
in excess thereof.
(c) Reductions of Commitment. Each reduction of the Commitments under
Section 2.9. shall be in an aggregate minimum amount of $100,000 and integral
multiples of $50,000 in excess thereof.
SECTION 3.6. FEES.
(a) Closing Fee. In consideration of the extension of the credit
facility established hereby, the Borrower agrees to pay to the Agent for the
account of each Lender on the Effective Date a closing fee in an amount equal to
one-quarter of one percent (0.25%) of the amount of such Lender's Commitment.
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(b) Commitment Fee. The Borrower agrees to pay to the Agent for the
account of the Lenders a commitment fee on the average daily amount by which the
Commitments (as the amount of the Commitments may be reduced from time to time
pursuant to Section 2.9. or otherwise) exceed the aggregate outstanding
principal balance of Revolving Loans at a rate per annum equal to the Applicable
Commitment Fee for the period from and including the Agreement Date to but
excluding the date the Commitments are terminated or reduced to zero or the
Termination Date. Such facility fee shall be payable in arrears on (i) the last
Business Day of March, June, September and December in each year commencing with
September 30, 1998, (ii) on the Termination Date, (iii) on the date the
Commitments are otherwise terminated or reduced to zero and (iv) thereafter from
time to time on demand of the Agent.
(c) Agent, Arranger and Other Fees. The Borrower agrees to pay the
administrative fees, arrangement fees and other fees of the Agent and NMS as may
be agreed to in writing from time to time.
SECTION 3.7. COMPUTATIONS.
Unless otherwise expressly set forth herein, (a) any accrued interest
on any Base Rate Loan and any Fees due hereunder shall be computed on the basis
of a year of 365 or 366 days, as appropriate, and the actual number of days
elapsed and (b) any accrued interest on any LIBOR Loan shall be computed on the
basis of a year of 360 days and the actual number of days elapsed.
SECTION 3.8. USURY.
In no event shall the amount of interest due or payable on the Loans or
other Obligations exceed the maximum rate of interest allowed by Applicable Law
and, if any such payment is paid by the Borrower or received by any Lender, then
such excess sum shall be credited as a payment of principal, unless the Borrower
shall notify the respective Lender (with a copy to the Agent) in writing that
the Borrower elects to have such excess sum returned to it forthwith. It is the
express intent of the parties hereto that the Borrower not pay and the Lenders
not receive, directly or indirectly, in any manner whatsoever, interest in
excess of that which may be lawfully paid by the Borrower under Applicable Law.
SECTION 3.9. AGREEMENT REGARDING INTEREST AND CHARGES.
The parties hereto hereby agree and stipulate that the only charge
imposed upon the Borrower for the use of money in connection with this Agreement
is and shall be the interest specifically described in Section 2.2.(a) and, with
respect to Swingline Loans, in Section 2.10.(c). Notwithstanding the foregoing,
the parties hereto further agree and stipulate that all commitment fees,
underwriting fees, agency fees, syndication fees, default charges, late charges,
funding or "breakage" charges, increased cost charges, attorneys' fees and
reimbursement for costs and expenses paid by the Agent or any Lender to third
parties or for damages incurred by the Agent or any Lender, are charges made to
compensate the Agent or such Lender for underwriting or administrative services
and costs or losses performed or incurred, and to be performed or incurred, by
the Agent and the Lenders in connection with this Agreement and shall under no
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circumstances be deemed to be charges for the use of money pursuant to Official
Code of Georgia Annotated Sections 7-4-2 and 7-4-18. All charges other than
charges for the use of money shall be fully earned and nonrefundable when due.
SECTION 3.10. STATEMENTS OF ACCOUNT.
The Agent will account to the Borrower with a statement of Loans,
accrued interest and Fees, charges and payments made pursuant to this Agreement
and the other Loan Documents, and such account rendered by the Agent shall be
deemed presumptively correct. The failure of the Agent to deliver such a
statement of accounts shall not relieve or discharge the Borrower from any of
its obligations hereunder.
SECTION 3.11. DEFAULTING LENDERS.
(a) Generally. If for any reason any Lender (a "Defaulting Lender")
shall fail or refuse to perform any of its obligations under this Agreement or
any other Loan Document to which it is a party within the time period specified
for performance of such obligation or, if no time period is specified, if such
failure or refusal continues for a period of two Business Days after notice from
the Agent, then, in addition to the rights and remedies that may be available to
the Agent or the Borrower under this Agreement or Applicable Law, such
Defaulting Lender's right to participate in the administration of the Loans,
this Agreement and the other Loan Documents, including without limitation, any
right to vote in respect of, to consent to or to direct any action or inaction
of the Agent or to be taken into account in the calculation of the Requisite
Lenders, shall be suspended during the pendency of such failure or refusal. If a
Lender is a Defaulting Lender because it has failed to make timely payment to
the Agent of any amount required to be paid to the Agent hereunder (without
giving effect to any notice or cure periods), in addition to other rights and
remedies which the Agent or the Borrower may have under the immediately
preceding provisions or otherwise, the Agent shall be entitled (i) to collect
interest from such Defaulting Lender on such delinquent payment for the period
from the date on which the payment was due until the date on which the payment
is made at the Federal Funds Rate, (ii) to withhold or setoff and to apply in
satisfaction of the defaulted payment and any related interest, any amounts
otherwise payable to such Defaulting Lender under this Agreement or any other
Loan Document and (iii) to bring an action or suit against such Defaulting
Lender in a court of competent jurisdiction to recover the defaulted amount and
any related interest. Any amounts received by the Agent in respect of a
Defaulting Lender's Loans shall not be paid to such Defaulting Lender and shall
be held uninvested by the Agent and either applied against the purchase price of
such Loans under the following subsection (b) or paid to such Defaulting Lender
upon the Defaulting Lender's curing of its default.
(b) Purchase of Defaulting Lender's Commitment. Any Lender who is not a
Defaulting Lender shall have the right, but not the obligation, in its sole
discretion, to acquire all of a Defaulting Lender's Commitment. Any Lender
desiring to exercise such right shall give written notice thereof to the Agent
no sooner than 10 Business Days and not later than 15 Business Days after such
Defaulting Lender became a Defaulting Lender. If more than one Lender exercises
such right, each such Lender shall have the right to acquire an amount of such
Defaulting Lender's Commitment in proportion to the Commitments of the other
Lenders
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exercising such right. Upon any such purchase, the Defaulting Lender's
interest in the Loans and its rights hereunder (but not its liability in respect
thereof or under the Loan Documents or this Agreement to the extent the same
relate to the period prior to the effective date of the purchase) shall
terminate on the date of purchase, and the Defaulting Lender shall promptly
execute all documents reasonably requested to surrender and transfer such
interest to the purchaser thereof, including an appropriate Assignment and
Acceptance Agreement and, notwithstanding Section 12.6.(d), shall pay to the
Agent an assignment fee in the amount of $7,000. The purchase price for the
Commitment of a Defaulting Lender shall be equal to the amount of the principal
balance of the Loans outstanding and owed by the Borrower to the Defaulting
Lender. Prior to payment of such purchase price to a Defaulting Lender, the
Agent shall apply against such purchase price any amounts retained by the Agent
pursuant to the last sentence of the immediately preceding subsection (a). The
Defaulting Lender shall be entitled to receive amounts owed to it by the
Borrower under the Loan Documents which accrued prior to the date of the default
by the Defaulting Lender, to the extent the same are received by the Agent from
or on behalf of the Borrower. There shall be no recourse against any Lender or
the Agent for the payment of such sums except to the extent of the receipt of
payments from any other party or in respect of the Loans.
SECTION 3.12. TAXES.
(a) Taxes Generally. All payments by the Borrower of principal of, and
interest on, the Loans and all other Obligations shall be made free and clear of
and without deduction for any present or future excise, stamp or other taxes,
fees, duties, levies, imposts, charges, deductions, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, but excluding
(i) franchise taxes, (ii) any taxes (other than withholding taxes) that would
not be imposed but for a connection between the Agent or a Lender and the
jurisdiction imposing such taxes (other than a connection arising solely by
virtue of the activities of the Agent or such Lender pursuant to or in respect
of this Agreement or any other Loan Document), (iii) any withholding taxes
payable with respect to payments hereunder or under any other Loan Document
under Applicable Law in effect on the Agreement Date, (iv) any taxes imposed on
or measured by the Agent's or any Lender's assets, net income, receipts or
branch profits and (v) any taxes arising after the Agreement Date solely as a
result of or attributable to a Lender changing its designated Lending Office
after the date such Lender becomes a party hereto (such non-excluded items being
collectively called "Taxes"). If any withholding or deduction from any payment
to be made by the Borrower hereunder is required in respect of any Taxes
pursuant to any Applicable Law, then the Borrower will:
(i) pay directly to the relevant Governmental Authority the full
amount required to be so withheld or deducted;
(ii) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such Governmental Authority; and
(iii) pay to the Agent for its account or the account of the
applicable Lender, as the case may be, such additional amount or
amounts as is necessary to ensure that the net
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amount actually received by the Agent or such Lender will equal the
full amount that the Agent or such Lender would have received had no
such withholding or deduction been required.
(b) Tax Indemnification. If the Borrower fails to pay any Taxes when
due to the appropriate Governmental Authority or fails to remit to the Agent for
its account or the account of the respective Lender, as the case may be, the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Lenders for any incremental Taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure. For purposes of this Section, a distribution hereunder by the
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
(c) Tax Forms. Prior to the date that any Lender or participant
organized under the laws of a jurisdiction outside the United States of America
becomes a party hereto, such Person shall deliver to the Borrower and the Agent
such certificates, documents or other evidence, as required by the Internal
Revenue Code or Treasury Regulations issued pursuant thereto (including Internal
Revenue Service Forms 4224 or 1001, as applicable, or appropriate successor
forms), properly completed, currently effective and duly executed by such Lender
or participant establishing that payments to it hereunder and under the Notes
are (i) not subject to United States Federal backup withholding tax or (ii) not
subject to United States Federal withholding tax under the Code because such
payment is either effectively connected with the conduct by such Lender or
participant of a trade or business in the United States or totally exempt from
United States Federal withholding tax by reason of the application of the
provisions of a treaty to which the United States is a party or such Lender is
otherwise exempt.
ARTICLE IV. YIELD PROTECTION, ETC.
SECTION 4.1. ADDITIONAL COSTS; CAPITAL ADEQUACY.
(a) Additional Costs. The Borrower shall promptly pay to the Agent for
the account of a Lender from time to time such amounts as such Lender may
reasonably determine to be necessary to compensate such Lender for any costs
incurred by such Lender that it determines are attributable to its making or
maintaining of any LIBOR Loans or its obligation to make any LIBOR Loans
hereunder, any reduction in any amount receivable by such Lender under this
Agreement or any of the other Loan Documents in respect of any of such Loans or
such obligations or the maintenance by such Lender of capital in respect of its
Loans or its Commitment (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change that: (i) changes the basis of taxation of any amounts payable
to such Lender under this Agreement or any of the other Loan Documents in
respect of any of such Loans or its Commitments (other than taxes imposed on or
measured by the overall net income of such Lender or of its Lending Office for
any of such Loans by the jurisdiction in which such Lender has its principal
office or such Lending Office); or (ii) imposes or modifies any reserve, special
deposit or similar requirements (including, without limitation, any reserves
required to be maintained against (1) "Eurocurrency liabilities" as specified in
Regulation D of the Board of Governors of the Federal Reserve System or (2) any
other category of liabilities which includes deposits by reference to which the
interest rate on
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LIBOR Loans is determined or (3) any category of extensions of credit or other
assets which includes loans by an office of any Lender outside of the United
States of America to residents of the United States of America)) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender, or any commitment of such Lender (including,
without limitation, the Commitments of such Lender); or (iii) has or would have
the effect of reducing the rate of return on capital of such Lender to a level
below that which such Lender could have achieved but for such Regulatory Change
(taking into consideration such Lender's policies with respect to capital
adequacy).
(b) Lender's Suspension of LIBOR Loans. Without limiting the effect of
the provisions of the immediately preceding subsection (a), if by reason of any
Regulatory Change, any Lender either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender that includes deposits by reference
to which the interest rate on LIBOR Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Lender
that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets that it may hold, then, if such
Lender so elects by notice to the Borrower (with a copy to the Agent), the
obligation of such Lender to make or Continue, or to Convert Base Rate Loans
into, LIBOR Loans hereunder shall be suspended until such Regulatory Change
ceases to be in effect (in which case the provisions of Section 4.6. shall
apply).
(c) Notification and Determination of Additional Costs. Each Lender
agrees to notify the Borrower (with a copy to the Agent) of any event occurring
after the Agreement Date entitling such Lender to compensation under any of the
preceding subsections of this Section as promptly as practicable; provided,
however, subject to the last sentence of this subsection, the failure of any
Lender to give such notice shall not release the Borrower from any of its
obligations hereunder. Such Lender agrees to furnish to the Borrower a
certificate setting forth in reasonable detail the basis and amount of each
request by such Lender for compensation under this Section. Determinations by
such Lender of the effect of any Regulatory Change shall be conclusive, provided
that such determinations are made on a reasonable basis and in good faith. A
Lender shall only be entitled to compensation under this Section for events of
which the Borrower has been provided notice during the 180 day period after the
occurrence of any such event entitling such Lender to compensation under this
Section.
SECTION 4.2. SUSPENSION OF LIBOR LOANS.
Anything herein to the contrary notwithstanding, if, on or prior to the
determination of LIBOR for any Interest Period:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining
LIBOR for such Interest Period, or
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(b) the Agent determines (which determination shall be
conclusive) that LIBOR will not adequately and fairly reflect the cost
to the Lenders of making or maintaining LIBOR Loans for such Interest
Period;
then the Agent shall give the Borrower and each Lender prompt notice thereof
and, so long as such condition remains in effect, the Lenders shall be under no
obligation to, and shall not, make additional LIBOR Loans, Continue LIBOR Loans
or Convert Loans into LIBOR Loans and the Borrower shall, on the last day of
each current Interest Period for each outstanding LIBOR Loan, either prepay such
Loan or Convert such Loan into a Base Rate Loan.
SECTION 4.3. ILLEGALITY.
Notwithstanding any other provision of this Agreement, if it becomes
unlawful for any Lender or its Lending Office to honor its obligation to make or
maintain LIBOR Loans hereunder, then such Lender shall promptly notify the
Borrower thereof (with a copy to the Agent) and such Lender's obligation to make
or Continue, or to Convert Loans of any other Type into, LIBOR Loans shall be
suspended until such time as such Lender may again make and maintain LIBOR Loans
(in which case the provisions of Section 4.6. shall be applicable).
SECTION 4.4 COMPENSATION.
The Borrower shall pay to the Agent for the account of each Lender,
upon the request of such Lender through the Agent, such amount or amounts as
shall be sufficient (in the reasonable opinion of such Lender) to compensate it
for any loss, cost or expense that such Lender reasonably determines is
attributable to:
(a) any payment or prepayment (whether mandatory or optional)
of a LIBOR Loan, or Conversion of a LIBOR Loan, made by such Lender for
any reason (including, without limitation, acceleration) on a date
other than the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any of the applicable conditions
precedent specified in Article V. to be satisfied) to borrow a LIBOR
Loan from such Lender on the date for such borrowing, or to Convert a
Base Rate Loan into a LIBOR Loan or Continue a LIBOR Loan on the
requested date of such Conversion or Continuation,
such compensation to include in the case of a LIBOR Loan, without limitation, an
amount equal to the excess, if any, of (i) the amount of interest that otherwise
would have accrued on the principal amount so paid, prepaid or Converted or not
borrowed for the period from the date of such payment, prepayment, Conversion or
failure to borrow or Convert to the last day of the then current Interest Period
for such Loan (or, in the case of a failure to borrow or Convert, the Interest
Period for such Loan that would have commenced on the date specified for such
borrowing or Conversion) at the applicable rate of interest for such Loan
provided for herein plus such Lender's normal administrative charges, if any,
associated with such payment, prepayment, Conversion or failure to borrow over
(ii) the amount of interest that otherwise would have
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accrued on such principal amount at a rate per annum equal to LIBOR at such time
for an amount comparable to such principal amount and for a maturity comparable
to such period (as reasonably determined by such Lender). Upon the Borrower's
request, if any Lender shall request compensation under this Section, such
Lender shall provide the Borrower with a statement setting forth in reasonable
detail the basis for requesting such compensation and the method for determining
the amount thereof. Any such statement shall be conclusive if made on a
reasonable basis and in good faith.
SECTION 4.5. AFFECTED LENDERS.
If any Lender requests compensation pursuant to Section 3.12. or 4.1.,
or the obligation of any Lender to make LIBOR Loans or to Continue, or to
Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section
4.1.(b), 4.2. or 4.3., then, so long as there does not then exist any Default or
Event of Default, the Borrower may either (a) demand that such Lender (the
"Affected Lender"), and upon such demand the Affected Lender shall promptly,
assign its Commitments to an Eligible Assignee subject to and in accordance with
the provisions of Section 12.6.(d) for a purchase price equal to the aggregate
principal balance of Loans then owing to the Affected Lender plus any accrued
but unpaid interest thereon and accrued but unpaid fees owing to the Affected
Lender, or (b) pay to the Affected Lender the aggregate principal balance of
Loans then owing to the Affected Lender plus any accrued but unpaid interest
thereon and accrued but unpaid fees owing to the Affected Lender, whereupon the
Affected Lender shall no longer be a party hereto or have any rights or
obligations hereunder or under any of the other Loan Documents. Each of the
Agent and the Affected Lender shall reasonably cooperate in effectuating the
replacement of such Affected Lender under this Section, but at no time shall the
Agent, such Affected Lender nor any other Lender be obligated in any way
whatsoever to initiate any such replacement or to assist in finding an Eligible
Assignee. The exercise by the Borrower of its rights under this Section shall be
at the Borrower's sole cost and expenses and at no cost or expense to the Agent,
the Affected Lender or any of the other Lenders. The terms of this Section shall
not in any way limit the Borrower's obligation to pay to any Affected Lender
compensation owing to such Affected Lender pursuant to Section 3.12. or 4.1.
SECTION 4.6. TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make LIBOR Loans or to Continue, or
to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 4.1.(b), Section 4.2. or Section 4.3., then all of such Lender's LIBOR
Loans shall be automatically Converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for LIBOR Loans (or, in the case of a
Conversion required by Section 4.1.(b) or 4.3., on such earlier date as such
Lender may specify to the Borrower (with a copy to the Agent)) and, unless and
until such Lender gives notice as provided below that the circumstances
specified in Section 4.1., Section 4.2. or 4.3. that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's LIBOR Loans have been so
Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's LIBOR Loans shall be applied
instead to its Base Rate Loans; and
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(b) all Loans that would otherwise be made or Continued by
such Lender as LIBOR Loans shall be made or Continued instead as Base
Rate Loans, and all Base Rate Loans of such Lender that would otherwise
be Converted into LIBOR Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 4.1. or 4.3. that gave rise to the Conversion
of such Lender's LIBOR Loans pursuant to this Section no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when LIBOR Loans made by other Lenders are outstanding, then such Lender's
Base Rate Loans shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding LIBOR Loans, to the
extent necessary so that, after giving effect thereto, all Loans held by the
Lenders holding LIBOR Loans and by such Lender are held pro rata (as to
principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.
SECTION 4.7. CHANGE OF LENDING OFFICE.
Each Lender agrees that it will use reasonable efforts to designate an
alternate Lending Office with respect to any of its Loans affected by the
matters or circumstances described in Sections 3.12., 4.1. or 4.3. to reduce the
liability of the Borrower or avoid the results provided thereunder, so long as
such designation is not disadvantageous to such Lender as determined by such
Lender in its sole discretion, except that such Lender shall have no obligation
to designate a Lending Office located in the United States of America.
ARTICLE V. CONDITIONS PRECEDENT
SECTION 5.1. INITIAL CONDITIONS PRECEDENT.
The obligation of any Lender to make any Loan, or the Swingline Lender
to make any Swingline Loan to Borrower, in each case is subject to the condition
precedent that the Agent shall have received each of the following, each of
which shall be satisfactory in form and substance to the Agent:
(i) a counterpart of this Agreement executed by the Borrower and each
of the Lenders;
(ii) the Revolving Notes executed by the Borrower, payable to each of
the Lenders and complying with the terms of Section 2.8., and the Swingline Note
executed by the Borrower, payable to the Swingline Lender;
(iii) the Guaranty executed by each Loan Party other than the Borrower;
(iv) the Pledge Agreement executed by each of the Borrower and each
other Loan Party owning any equity interest in any other Loan Party,
substantially in the form of Exhibit L;
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(v) the certificates issued in the name of the applicable Loan Party
evidencing the stock and other securities subject to the Lien of the Pledge
Agreement;
(vi) appropriate stock transfer powers endorsed in blank by each
applicable Loan Party with respect to the certificates referred to in the
immediately preceding subsection;
(vii) the Security Agreement executed by each of the Borrower and the
other Loan Parties substantially in the form of Exhibit M;
(viii) with respect to each of the Uniform Commercial Code financing
statements naming each Loan Party as debtor, NationsBank as secured party, and
filed pursuant to the Existing Credit Agreement, a Uniform Commercial Code
assignment statement executed by NationsBank as assignor in favor of the Agent
as assignee;
(ix) favorable UCC, tax and lien search reports with respect to each
Loan Party in all necessary or appropriate jurisdictions and under all legal and
appropriate trade names indicating that there are no prior Liens on any of the
Collateral other than Permitted Liens or Liens to be terminated prior to the
Effective Date;
(x) an opinion of Xxxxxxxx Xxxxxxx LLP, counsel to the Loan Parties,
in substantially the form of Exhibit N;
(xi) the articles of incorporation, articles of organization,
certificate of limited partnership or other comparable organizational instrument
(if any) of each Loan Party certified as of a recent date by the Secretary of
State of the State of formation of such Loan Party;
(xii) a Certificate of Good Standing or certificate of similar meaning
with respect to each Loan Party issued as of a recent date by the Secretary of
State of the State of formation of each such Loan Party and certificates of
qualification to transact business or other comparable certificates issued by
each Secretary of State of each state in which such Loan Party is required to be
so qualified;
(xiii) a certificate of incumbency signed by the Secretary or Assistant
Secretary (or other individual performing similar functions) of each Loan Party
with respect to each of the officers of such Loan Party authorized to execute
and deliver the Loan Documents to which such Loan Party is a party and to
execute and deliver Notices of Borrowing, Notices of Conversion, Notices of
Continuation and Notices of Swingline Borrowing;
(xiv) copies certified by the Secretary or Assistant Secretary of each
Loan Party (or other individual performing similar functions) of (i) the by-laws
of such Loan Party, if a corporation, the operating agreement, if a limited
liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form of legal
entity and (ii) all corporate, partnership, member or other necessary action
taken by such Loan Party to authorize the execution, delivery and performance of
the Loan Documents to which it is a party;
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(xv) a certificate executed by the chief executive officer or chief
financial officer of the Borrower, stating that: (i) on such date, and after
giving effect to the transactions contemplated hereby, no Default or Event of
Default has occurred and is continuing and (ii) the representations and
warranties made or deemed made by the Borrower or any other Loan Party in the
Loan Documents are true and correct in all material respects on and as of such
date with the same effect as though made on and as of such date;
(xvi) certificates of insurance evidencing the existence of all
insurance required to be maintained by each Loan Party pursuant to the Loan
Documents, together with loss payable clauses as required by such Loan
Documents;
(xvii) a key man life insurance policy on the life of Xxxxx X. Xxxxx,
M.D., in the amount of $2,500,000, naming the Borrower as beneficiary;
(xviii) copies of all executed Management Services Agreements;
(xix) the Collateral Assignment of Management Services Agreements
executed by PSC Management and each Other Manager, if any, relating to all such
Management Services Agreements;
(xx) the Fees, if any, then due under Section 3.6.;
(xxi) any and all financial statements described in Section 6.1.(k)
not previously delivered by the Borrower to the Lenders; and
(xxii) such other documents, instruments and agreements as the Agent
or any Lender through the Agent may reasonably request.
SECTION 5.2. CONDITIONS PRECEDENT TO ALL LOANS.
The obligation of any Lender to make any Loan hereunder (including the
initial Loans), and of Swingline Lender to make any Swingline Loan, is subject
to the further condition precedent that, both immediately prior to the making of
such Loan, and also after giving effect thereto:
(a) no Default or Event of Default shall have occurred and be
continuing;
(b) the representations and warranties made or deemed made by the Loan
Parties in each of the Loan Documents shall be true, complete and correct in all
material respects on and as of the date of the making of such extension of
credit with the same force and effect as if made on and as of such date (or, in
the case of any such representation and warranty made only as of a particular
date, as of such particular date); and
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(c) the Agent shall have timely received a duly executed Notice of
Borrowing, or in the case of a Swingline Loan, timely receipt by Swingline
Lender of a Notice of Swingline Borrowing.
Each Credit Event (including without limitation, the borrowing of a Swingline
Loan as provided in Section 2.10.(f)) shall constitute a certification by the
Borrower to the effect set forth in the preceding clauses (a) and (b) (both as
of the date of the giving of notice relating to such Credit Event and, unless
the Borrower otherwise notifies the Agent and the Lenders prior to the date of
such Credit Event, as of the date of the occurrence of such Credit Event).
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
SECTION 6.1. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders and the Swingline Lender to enter into
this Agreement and to make Loans and the Swingline Loans, as applicable, the
Borrower represents and warrants to the Agent, the Lenders and the Swingline
Lender as follows:
(a) Organization; Power; Qualification. Each of the Loan Parties is a
corporation, duly organized, validly existing and in good standing under the
jurisdiction of its incorporation, has the power and authority to own or lease
its respective properties and to carry on its respective business as now being
and hereafter proposed to be conducted and is duly qualified and is in good
standing as a foreign corporation, and authorized to do business, in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization, except where the failure
to be so qualified and in good standing could not reasonably be expected to have
a Material Adverse Effect.
(b) Ownership Structure. Schedule 6.1.(b) correctly sets forth as of
the Agreement Date the corporate structure of the Borrower and its Subsidiaries,
the correct legal name of the Borrower and each Subsidiary, the Persons holding
equity interests in the Borrower's Subsidiaries and their percentage equity or
voting interest in such Subsidiaries. Except as set forth in such Schedule as of
the Agreement Date: (i) no Subsidiary of the Borrower has issued to any third
party any securities convertible into such Subsidiary's capital stock or any
options, warrants or other rights to acquire any securities convertible into
such capital stock; and (ii) the outstanding stock and securities of, or other
equity interests, as applicable, in the Borrower's Subsidiaries are owned by the
Persons indicated on such Schedule, free and clear of all Liens, warrants,
options and rights of others of any kind whatsoever.
(c) Authorization. The Borrower and each other Loan Party has the right
and power, and has taken all necessary action to authorize it, to execute,
deliver and perform each of the Loan Documents and Acquisition Documents to
which it is a party in accordance with their respective terms and to consummate
the Transactions. Each of the Loan Documents and Acquisition Documents to which
the Borrower or any other Loan Party is a party has been duly executed and
delivered by the duly authorized officers or other representatives of such
Person and each is a legal, valid and binding obligation of such Person
enforceable against such Person in accordance with its respective terms, except
that the enforceability thereof may be limited by
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applicable bankruptcy, reorganization, insolvency, moratorium and other laws
from time to time in effect affecting creditors' rights generally and general
equitable principles.
(d) Compliance of Documents With Laws, etc. The execution, delivery and
performance of each of the Loan Documents and the Acquisition Documents to which
any Loan Party is a party in accordance with their respective terms and the
consummation of the Transactions do not and will not, by the passage of time,
the giving of notice, or otherwise: (i) require any Governmental Approval, other
than such as already have been obtained and are in full force and effect or
those the failure to obtain which could not reasonably be expected to have a
Material Adverse Effect, or violate any Applicable Law relating to any Loan
Party, other than violations which could not reasonably be expected, singly or
in the aggregate, to have a Material Adverse Effect; (ii) conflict with, result
in a breach of or constitute a default under the articles of incorporation or
the bylaws of the Borrower or the organizational documents of any other Loan
Party, or any indenture, agreement or other instrument to which any Loan Party
is a party or by which it or any of its properties may be bound; or (iii) result
in or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by any Loan Party other than Liens in
favor of the Agent for the benefit of the Lenders.
(e) Compliance with Law; Governmental Approvals. The Borrower and each
other Loan Party is in compliance with each Governmental Approval applicable to
it and in compliance with all other Applicable Law relating to the Borrower or
such Loan Party except for noncompliances which, and Governmental Approvals the
failure to possess which, would not, singly or in the aggregate, (i) cause a
Default or Event of Default or (ii) have a Material Adverse Effect.
(f) Title to Properties; Liens. Each of the Loan Parties has good,
marketable and legal title to, or a valid leasehold interest in, its respective
material assets, free and clear of all Liens except for those described in
Schedule 6.1.(f) and other Permitted Liens.
(g) Indebtedness and Guarantees. Schedule 6.1.(g) is, as of the
Agreement Date, a complete and correct listing of all Funded Debt of the
Borrower, its Subsidiaries and the other Loan Parties. No default or event of
default, or event or condition which with the giving of notice, the lapse of
time or otherwise, would constitute such a default or event of default, exists
with respect to any such Indebtedness.
(h) Material Contracts. Schedule 6.1.(h) is a true, correct and
complete listing of all Material Contracts as of the Agreement Date. No default
or event of default, or event or condition which with the giving of notice, the
lapse of time or otherwise, would constitute such a default or event of default,
exists with respect to any such Material Contract.
(i) Litigation. There are no actions, suits or proceedings pending
(nor, to the knowledge of the Borrower, are there any actions, suits or
proceedings threatened, nor is there any basis therefor) against or in any other
way relating adversely to or affecting the Borrower, any other Loan Party, any
of their respective property or any Transaction in any court or before any
arbitrator of any kind or before or by any Governmental Authority which if
adversely
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determined, could reasonably be expected to have a Material Adverse Effect.
There are no strikes, slow downs, work stoppages or walkouts or other labor
disputes in progress or threatened relating to the Borrower or any other Loan
Party which could reasonably be expected to have a Material Adverse Effect.
(j) Taxes. All federal, state and other tax returns of the Borrower,
any of its Subsidiaries or any of the other Loan Parties required by Applicable
Law to be filed have been duly filed, and all federal, state and other taxes,
assessments and other governmental charges or levies upon the Borrower and each
Loan Party and its respective properties, income, profits and assets which are
due and payable have been paid, except any such nonpayment which is at the time
permitted under Section 7.6. As of the Agreement Date, none of the United States
income tax returns of the Borrower, its Subsidiaries or any other Loan Party are
under audit. No tax liens have been filed and no claims are being asserted with
respect to any such taxes. All charges, accruals and reserves on the books of
the Borrower and each of its Subsidiaries in respect of any taxes or other
governmental charges are in accordance with GAAP.
(k) Financial Statements. The Borrower has furnished to the Agent and
each Lender each of the following financial statements: (i) the audited
consolidated balance sheets of the Borrower and its Subsidiaries as at December
31, 1996 and December 31, 1997, and the related consolidated statements of
income, retained earnings and cash flow for the fiscal years then ended; (ii) an
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at
March 31, 1998, and the related unaudited consolidated statements of income,
retained earnings and cash flow for the fiscal quarter then ended (together with
the financial statements referenced in the immediately proceeding clause (i),
the "Historical Financial Statements"); (iii) a pro forma projected unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as of March 31,
1998 after giving effect to any Acquisition effected prior to the Effective Date
but after December 31, 1997 (the "Pro Forma Financial Statements"); and (iv) pro
forma projected consolidated financial statements reflecting the forecasted
financial condition and results of operations of the Borrower and its
Subsidiaries on a quarterly and an annual basis for the four-year period ending
December 31, 2002 (the "Projected Financial Statements"). The Historical
Financial Statements are complete and correct in all material respects and
fairly present in all material respects the financial condition and results of
operations of the Borrower and its Subsidiaries as of and for the periods
covered thereby. Since December 31, 1997, there has been no material adverse
change in the business, property, assets, liabilities, condition (financial or
otherwise), operations or results of operations of the Borrower and its
Subsidiaries considered as a whole, and after giving effect to each Transaction
each Loan Party will be Solvent. The Pro Forma Financial Statements fairly
present the pro forma financial condition and results of operations of the
Borrower and its Subsidiaries as of and for the periods covered thereby. The
Projected Financial Statements are based on the assumptions set forth in the
supporting schedules thereto and constitute, in the good faith judgment of the
Borrower, reasonable estimations of future performance as of such date. With
respect to any given Acquisition, and except as disclosed by the Borrower to the
Agent and the Lenders in writing, the Borrower is not aware, and the Borrower
has no reason to be aware, that any of the following statements are untrue: (A)
the Acquisition Historical Financial Statements fairly present, in all material
respects, the financial condition and results of operations of the Target as of
and for the
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periods covered thereby; and (B) the Combined Financial Statements, if any,
delivered under Section 9.6. in connection with such Acquisition, fairly
present, in all material respects, the financial condition and results of
operations of the Target and the Company, on a combined basis for the periods
covered thereby.
(l) ERISA.
(i) Each of the Borrower, its Subsidiaries, and each other
ERISA Affiliate, is in compliance with all applicable provisions of
ERISA and the regulations and published interpretations thereunder
except for noncompliances which could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each Employee
Benefit Plan that is intended to be qualified under Section 401(a) of
the Internal Revenue Code shall be submitted (within the applicable
remedial amendment period, as described in Section 401(b) of the
Internal Revenue Code) to the Internal Revenue Service for
determination that it isso qualified, and each trust related to such
plan shall also be timely submitted to the Internal Revenue Service for
a determination that it is exempt under Section 501(a) of the Internal
Revenue Code. No liability has been incurred by the Borrower, any
Subsidiary or any other ERISA Affiliate which remains unsatisfied for
any taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan.
(ii) Neither the Borrower, any Subsidiary nor any other ERISA
Affiliate has (A) engaged in a nonexempt prohibited transaction
described in Section 4975 of the Internal Revenue Code or Section 406
of ERISA affecting any of the Employee Benefit Plans or the trusts
created thereunder which could subject any such Employee Benefit Plan
or trust to a tax or penalty on prohibited transactions imposed under
Section 4975 of the Internal Revenue Code or under ERISA, (B) incurred
any accumulated funding deficiency with respect to any Employee Benefit
Plan, whether or not waived, or any other liability to the PBGC which
remains outstanding other than the payment of premiums and there are no
premium payments which are due and unpaid, (C) failed to make a
required contribution or payment to a Multiemployer Plan, or (D) failed
to make a required installment or other required payment under Section
412 of the Internal Revenue Code, Section 302 of ERISA or the terms of
such Employee Benefit Plan.
(iii) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan, and neither the Borrower, any Subsidiary nor any other ERISA
Affiliate has incurred any unpaid withdrawal liability with respect to
any Multiemployer Plan.
(iv) The present value of all vested accrued benefits under
each Employee Benefit Plan which is subject to Title IV of ERISA, did
not, as of the most recent valuation date for each such plan, exceed
the then current value of the assets of such Employee Benefit Plan
allocable to such benefits.
(v) To the best of the Borrower's knowledge, each Employee
Benefit Plan subject to Title IV of ERISA, maintained by the Borrower,
any Subsidiary or any other
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ERISA Affiliate, has been administered in accordance with its terms in
all respects and is in compliance in all respects with all applicable
requirements of ERISA and other Applicable Laws, except where the
failure to be so administered or in compliance could not reasonably be
expected to have a Material Adverse Effect.
(vi) The consummation of the Loans provided for herein will
not involve any prohibited transaction under ERISA which is not subject
to a statutory or administrative exemption.
(vii) No proceeding, claim, lawsuit and/or investigation
exists or, to the best knowledge of the Borrower after due inquiry, is
threatened concerning or involving any Employee Benefit Plan which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect.
(m) Absence of Defaults. No Loan Party is in default under its articles
of incorporation, or other applicable organizational documents, and no event has
occurred, which has not been remedied, cured or waived: (i) which constitutes a
Default or an Event of Default; or (ii) which constitutes, or which with the
passage of time, the giving of notice or otherwise, would constitute a default
or event of default of any Loan Party under any agreement or judgment, decree or
order to which any Loan Party is a party or by which any Loan Party or any of
its properties may be bound which could reasonably be expected to have a
Material Adverse Effect.
(n) Environmental Laws. Each other Loan Party has obtained all
Governmental Approvals which are required under Environmental Laws and is in
compliance with all terms and conditions of such Governmental Approvals, except
where the failure to be in compliance could not reasonably be expected to have a
Material Adverse Effect. Each of the Borrower, its Subsidiaries and each other
Loan Party is also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables contained in the Environmental Laws, except where the failure to be
in compliance could not reasonably be expected to have a Material Adverse
Effect. The Borrower is not aware of, and has not received notice of, any past,
present, or future events, conditions, circumstances, activities, practices,
incidents, actions, or plans which, with respect to the Borrower, its
Subsidiaries and each other Loan Party, may interfere with or prevent compliance
or continued compliance with Environmental Laws, or may give rise to any
common-law or legal liability, or otherwise form the basis of any claim, action,
demand, suit, proceeding, hearing, study, or investigation, based on or related
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical, or industrial,
toxic, or other Hazardous Material which could reasonably be expected to have a
Material Adverse Effect; and there is no civil, criminal, or administrative
action, suit, demand, claim, hearing, notice, or demand letter, notice of
violation, investigation, or proceeding pending or, to the Borrower's knowledge,
threatened, against the Borrower, its Subsidiaries and each other Loan Party
relating in any way to Environmental Laws which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
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(o) Adverse Contracts. None of the Loan Parties has assumed liability
under or is a party to nor is it or any of its property subject to or bound by
any forward purchase contract, futures contract, covenant not to compete,
unconditional purchase, take or pay or other agreement which restricts its
ability to conduct its business, or which, singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(p) Investment Company; Public Utility Holding Company. Neither the
Borrower, nor any Subsidiary nor any other Loan Party is (i) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, (ii) a "holding company" or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (iii) subject
to any other Applicable Law which purports to regulate or restrict its ability
to consummate the Transactions or to perform its obligations under any Loan
Document or Acquisition Document to which it is a party.
(q) Margin Stock. Neither the Borrower nor any other Loan Party is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying "margin stock" within the meaning of Regulations U and X of
the Board of Governors of the Federal Reserve System, and no part of the
proceeds of any extension of credit hereunder will be used to buy or carry any
such "margin stock."
(r) Affiliate Transactions. As of the Agreement Date, except as set
forth on Schedule 6.1.(r) and except as otherwise permitted by Section 9.11.,
neither the Borrower nor any other Loan Party is a party to or bound by any
agreement or arrangement (whether oral or written) to which any Affiliate is a
party.
(s) Fiscal Year. The Borrower's fiscal year is the calendar year.
(t) Intellectual Property. Each of the Borrower, its Subsidiaries and
the other Loan Parties owns, is licensed to use or otherwise has the legal right
to use, all patents, trademarks, trade names, copyrights, technology, know-how
and processes used in or necessary for the conduct of its business as currently
conducted that are material to the condition (financial or other), business or
operations of such Person (collectively called "Intellectual Property"). All
Intellectual Property that is registered or for which application for
registration is pending is identified on Schedule 6.1.(t). Except as disclosed
in such Schedule, no material claim has been asserted by any Person with respect
to the use of any Intellectual Property, or challenging or questioning the
validity or effectiveness of any Intellectual Property. Except as disclosed in
such Schedule, to the knowledge of the Borrower, the use of such Intellectual
Property by the Borrower, its Subsidiaries and the other Loan Parties, does not
infringe on the rights of any Person.
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(u) Broker's Fees. No broker's or finder's fee, commission or similar
compensation are or will be payable by any Loan Party with respect to the
Transactions contemplated by the Loan Documents.
(v) Deposit Accounts and Collection Arrangements. Schedule 6.1.(v) is
an accurate description of how the Borrower, PSC Management and the other Loan
Parties handle the collection of their Receivables and the Receivables of the
various physicians and other service providers covered by any Management
Services Agreement or otherwise affiliated with any of the Loan Parties,
including without limitation, a detailing of the flow of the proceeds of all
such Receivables through collection and other deposit accounts maintained with
depository institutions.
(w) Healthcare Compliance. (i) Each Loan Party, has all Governmental
Approvals required for participation in Medicare, Medicaid, and other similar
government or private programs in which they are participating, all of which
Governmental Approvals are in full force and effect and have not been amended or
otherwise modified, rescinded, revoked or assigned. No condition exists or event
has occurred which will or could reasonably be expected to result in the
suspension, revocation, impairment, forfeiture or non-renewal of any such
Governmental Approval; and (ii) each "Practice," "Physician Shareholder" and
"Practice Employee" (as such terms are defined in each Management Services
Agreement), has all Governmental Approvals required for participation in
Medicare, Medicaid, and other similar government or private programs in which
they are participating, all of which Governmental Approvals are in full force
and effect and have not been amended or otherwise modified, rescinded, revoked
or assigned except where the failure to have such Governmental Approvals could
not reasonably be expected to have a Material Adverse Effect. No condition
exists or event has occurred which will or could reasonably be expected to
result in the suspension, revocation, impairment, forfeiture or non-renewal of
any such Governmental Approval, other than Governmental Approvals the failure to
have which could not reasonably be expected to have a Material Adverse Effect.
(x) Healthcare Xxxxxxxx. All xxxxxxxx by each Loan Party and each
"Practice," "Physician Shareholder" and "Practice Employee" (as such terms are
defined in each Management Services Agreement) to Medicare, Medicaid, and other
similar government or private programs have been made in accordance with
Applicable Law (including, without limitation, in accordance with all applicable
regulations and published policies and procedures and in the case of xxxxxxxx
effective on or after January 1, 1989 in accordance with the provisions of the
Omnibus Budget Reconciliation Act of 1987), except where the failure to comply
could not reasonably be expected to have a Material Adverse Effect, and there
has been no intentional or material overbilling or overcollecting from any such
program, other than as created by routine adjustments and disallowances made in
the ordinary course of business by such programs with respect to the xxxxxxxx.
(y) Conduct. (i) None of the Loan Parties has engaged in any activities
which are prohibited under 42 U.S.C. ss.1320a-7b, or the regulations promulgated
thereunder, or related Applicable Laws, or which are prohibited by rules of
professional conduct, including, without limitation, the following: (A)
knowingly and willfully making or causing to be made a false
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statement or misrepresentation of a material fact in any application for any
benefit or payment; (B) knowingly and willfully making or causing to be made any
false statement or misrepresentation of a material fact for use in determining
rights to any benefit or payment; (C) failure to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on its own behalf or on behalf of another, with intent
to fraudulently secure such benefit or payment; and (D) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe or
rebate), directly or indirectly, overtly or covertly, in cash or in kind, of
offering to pay or receive such remuneration (1) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare,
Medicaid or any other similar government or private program, or (2) in return
for purchasing, leasing, or ordering or arranging for or recommending
purchasing, leasing or ordering any good, facility, service, or item for which
payment may be made in whole or in part by Medicare, Medicaid or any other
similar government or private program; and (ii) except where the failure to
comply could not reasonably be expected to have a Material Adverse Effect, no
"Practice," "Physician Shareholder" and "Practice Employee" (as such terms are
defined in each Management Services Agreement) has engaged in any activities
which are prohibited under 42 U.S.C. ss.1320a-7b, or the regulations promulgated
thereunder, or related Applicable Laws, or which are prohibited by rules of
professional conduct, including, without limitation, the following: (A)
knowingly and willfully making or causing to be made a false statement or
misrepresentation of a material fact in any application for any benefit or
payment; (B) knowingly and willfully making or causing to be made any false
statement or misrepresentation of a material fact for use in determining rights
to any benefit or payment; (C) failure to disclose knowledge by a claimant of
the occurrence of any event affecting the initial or continued right to any
benefit or payment on its own behalf or on behalf of another, with intent to
fraudulently secure such benefit or payment; and (D) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe or
rebate), directly or indirectly, overtly or covertly, in cash or in kind, of
offering to pay or receive such remuneration (1) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare,
Medicaid or any other similar government or private program, or (2) in return
for purchasing, leasing, or ordering or arranging for or recommending
purchasing, leasing or ordering any good, facility, service, or item for which
payment may be made in whole or in part by Medicare, Medicaid or any other
similar government or private program.
(z) Certain Relationships. No Loan Party has unlawfully: (i) offered,
paid, solicited or received anything of value, paid directly or remuneration to
or from any physician, family member of a physician, or an entity in which a
physician or physician family member has an ownership or investment interest,
including, but not limited to: (1) payments for personal or management services
pursuant to a medical director agreement, consulting agreement, management
contract, personal services agreement, or otherwise; (2) payments for the use of
premises leased to or from a physician, a family member of a physician or an
entity in which a physician or family member has an ownership or investment
interest; (3) payments for the acquisition or lease of equipment, goods or
supplies from a physician, a family member of a physician or an entity in which
a physician or family member has an ownership or investment
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interest; or (ii) offered, paid, solicited or received any remuneration
(excluding fair market value payments for equipment or supplies) to or from any
healthcare provider, pharmacy, drug or equipment supplier, distributor or
manufacturer, including, but not limited to: (1) payments or exchanges of
anything of value under a warranty provided by a manufacturer or supplier of an
item to any Loan Party; or (2) discounts, rebates, or other reductions in price
on good or service received by any Loan Party; (iii) offered, paid, solicited or
received any remuneration to or from any person or entity in order to induce
business, including, but not limited to, payments intended not only to induce
referrals of patients, but also to induce the purchasing, leasing, ordering or
arrangement for any good, facility, service or item; (iv) entered into any joint
venture, partnership, co-ownership or other arrangement involving any ownership
or investment interest by any physician, or family member of a physician, or an
entity in which physician or physician family member has an ownership or
investment interest, directly or indirectly, through equity, debt, or other
means, including, but not limited to, an interest in an entity providing goods
or services to any Loan Party; (v) entered into any joint venture, partnership,
co-ownership or other arrangement involving any ownership or investment interest
by any person or entity including, but not limited to, a hospital, pharmacy,
drug or equipment supplier, distributor or manufacturer, that is or was in a
position to make or influence referrals, furnish items or services to, or
otherwise generate business for any Loan Party; or (vi) entered into any
agreement providing for (1) the referral of any patient for the provision of
goods or services by any Loan Party or (2) payments by any Loan Party as a
result of any referrals of patients.
(aa) Accuracy and Completeness of Information. All written information,
reports and other papers and data (other than Projections (as defined below))
furnished to the Agent, any Lender or the Swingline Lender by, on behalf of, or
at the direction of, the Borrower or any other Loan Party were, at the time the
same were so furnished, complete and correct in all material respects, to the
extent necessary to give the recipient a true and accurate knowledge of the
subject matter, or, in the case of financial statements, present fairly, in
accordance with GAAP consistently applied throughout the periods involved, the
financial position of the Persons involved as at the date thereof and the
results of operations for such periods. All financial projections concerning the
Borrower or any of its Subsidiaries that have been or are hereafter made
available to the Agent or any Lender by, on behalf of, or at the direction of,
the Borrower or any other Loan Party ("Projections") have been or will be
prepared in good faith based on reasonable assumptions. Except for general
economic and industry conditions (as opposed to economic or industry conditions
uniquely applicable to the Borrower and its Subsidiaries because of the nature
of the business in which they engage), no fact is known to the Borrower which
has had, or which would reasonably be expected in the future to have (so far as
the Borrower can reasonably foresee), a Material Adverse Effect which has not
been set forth in the financial statements, information, reports or other papers
or data furnished to, or otherwise disclosed in writing to, the Agent, the
Lenders and the Swingline Lender prior to the Effective Date. No document
furnished or written statement made to the Agent, any Lender or the Swingline
Lender in connection with the negotiation, preparation of execution of this
Agreement or any of the other Loan Documents contains or will contain any untrue
statement of a fact material to the creditworthiness of the Borrower or any
other Loan Party or omits or will omit to state a material fact necessary in
order to make the statements contained therein not misleading.
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(bb) Year 2000. The Borrower reasonably believes that the "Year 2000
Problem" (that is, the inability of computers, as well as embedded microchips in
non-computing devices, to perform properly, including performance of
date-sensitive functions with respect to certain dates prior to and after
December 31, 1999), including costs of remediation, could not reasonably be
expected to result in a Default or Event of Default or to have a Material
Adverse Effect. The computer systems of the Borrower and its Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for the term
of this Agreement to be, sufficient for the conduct of their business as
currently conducted.
SECTION 6.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.
All statements contained in any certificate, financial statement or
other instrument delivered by or on behalf of any Loan Party to the Agent, any
Lender or the Swingline Lender pursuant to or in connection with this Agreement
or any of the other Loan Documents (including, but not limited to, any such
statement made in or in connection with any amendment thereto or any statement
contained in any certificate, financial statement or other instrument delivered
by or on behalf of any Loan Party prior to the Agreement Date and delivered to
the Agent, any Lender or the Swingline Lender in connection with closing the
transactions contemplated hereby) shall constitute representations and
warranties made by the Borrower under this Agreement. All representations and
warranties made under this Agreement shall be deemed to be made at and as of the
Agreement Date, the Effective Date and at and as of the date of the occurrence
of any Credit Event, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances specifically
permitted hereunder.
SECTION 6.3. REPRESENTATIONS REGARDING ACQUISITIONS
To the extent any representation or warranty contained in this
Agreement or any other Loan Document relates to an Acquisition and the
Transactions relating thereto, such representation or warranty shall be deemed
made only on and as of (a) the date such Acquisition has been consummated and
(b) the date of the making of a Loan any of the proceeds of which are used in
whole or in part to finance such Acquisition.
SECTION 6.4. REPRESENTATIONS AND WARRANTIES IN ACQUISITION DOCUMENTS
Each representation and warranty made or deemed made by any Loan Party
in any of the other Loan Documents or the Acquisition Documents is hereby deemed
made to and for the benefit of the Agent, the Lenders and the Swingline Lender
as if the same were set forth herein in full. Except as disclosed by the
Borrower to the Agent, the Lenders and the Swingline Lender in writing, the
Borrower is not aware, and the Borrower has no reason to be aware, that any
representation or warranty by any other party to an Acquisition Document
contained in such Acquisition Document is or was untrue in any material respect
at the time made or deemed made.
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ARTICLE VII. AFFIRMATIVE COVENANTS
For so long as any of the Obligations remains outstanding, unpaid or
unperformed, or this Agreement is in effect, unless the Requisite Lenders (or,
if required pursuant to Section 12.7., all of the Lenders) shall otherwise
consent in the manner provided for in Section 12.7., the Borrower shall:
SECTION 7.1. PRESERVATION OF EXISTENCE AND SIMILAR MATTERS.
Preserve and maintain, and cause each other Loan Party to preserve and
maintain, its respective existence, and those of its rights, franchises,
licenses and privileges which are necessary to the conduct of its business, in
the jurisdiction of its formation and qualify and remain qualified and
authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification and
authorization, except those jurisdictions where the failure to be so qualified
or authorized could not reasonably be expected to have a Material Adverse
Effect.
SECTION 7.2. COMPLIANCE WITH APPLICABLE LAW AND MATERIAL CONTRACTS.
Comply, and cause each other Loan Party to comply, with (a) all
Applicable Law, including the obtaining of all Governmental Approvals and (b)
all terms and conditions of all Material Contracts to which it is a party,
except in each case in which the failure to so comply could not reasonably be
expected to have a Material Adverse Effect.
SECTION 7.3. MAINTENANCE OF PROPERTY.
In addition to, and not in derogation of, the requirements of any of
the other Loan Documents, (a) protect and preserve, and cause each other Loan
Party to protect and preserve, all of its material properties, including, but
not limited to, all Intellectual Property (and in the case of Intellectual
Property, shall cause such Intellectual Property, in accordance with prudent
business practices, to be fully protected and/or duly and properly registered,
filed or issued in the appropriate office and jurisdictions for such
registrations, filings and issuance), and maintain in good repair, working order
and condition all tangible properties, allowing for ordinary wear and tear, and
(b) from time to time make or cause to be made all needed and appropriate
repairs, renewals, replacements and additions to such properties, so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.
SECTION 7.4. CONDUCT OF BUSINESS.
At all times carry on, and cause each other Loan Parties to carry on,
its respective businesses in the same fields as engaged in on the Agreement Date
and not enter, and prohibit its Subsidiaries and the other Loan Parties from
entering, into any field of business other than the fields of (and the
management of other Persons engaged in the business of) Otolaryngology, the
Related Subspecialties and the Complementary Specialties, and ancillary services
thereto.
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SECTION 7.5. INSURANCE.
(a) Property and Casualty. In addition to, and not in derogation of,
the requirements of any of the other Loan Documents, maintain, and cause each
other Loan Party to maintain, insurance with financially sound and reputable
insurance companies acceptable to the Agent against such risks and in such
amounts as is customarily maintained by similar businesses, as may be required
by Applicable Law, or as may be satisfactory to the Agent. From time to time the
Borrower will deliver to the Agent or any Lender upon its request a reasonably
detailed list, together with copies of all policies of insurance then in effect,
stating the names of the insurance companies, the amounts and rates of the
insurance, the dates of the expiration thereof and the properties and risks
covered thereby. Without limiting the obligations of the Borrower and the other
Loan Parties under the foregoing provisions of this Section or under any other
Loan Document, if the Borrower or any of the other Loan Parties shall fail to
maintain insurance as required by the foregoing provisions of this Section or
any of the other Loan Documents, then the Agent may upon notice to the Borrower
or such other Loan Party, but shall have no obligation to, procure insurance
covering the interests of the Agent, the Lenders and the Swingline Lenders in
such amounts and against such risks as the Requisite Lenders shall deem
appropriate in their sole but reasonable discretion, and the Borrower shall
reimburse the Agent and the Lenders in respect of any premiums paid by the Agent
or the Lenders as provided in Section 12.2.
(b) Key Man Life Insurance. Maintain a key man life insurance policy a
with financially sound and reputable insurance company on the life of Xxxxx X.
Xxxxx, M.D., in the amount of $2,500,000, naming the Borrower as beneficiary.
Within one year after the Effective Date, the Requisite Lenders will, at the
request of the Borrower, evaluate the required amount of such life insurance.
The Requisite Lenders may, but shall have no obligation to, reduce the amount of
such required coverage.
SECTION 7.6. PAYMENT OF TAXES AND CLAIMS.
Pay or discharge, and cause each Subsidiary and other Loan Party to pay
and discharge, when due (a) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or upon any properties
belonging to it, and (b) all lawful claims of materialmen, mechanics, carriers,
warehousemen and landlords for labor, materials, supplies and rentals which, if
unpaid, might become a Lien on any properties of such Person; provided, however,
that this Section shall not require the payment or discharge of any such tax,
assessment, charge, levy or claim which is being contested in good faith by
appropriate proceedings which operate to suspend the collection thereof and for
which adequate reserves have been established on the books of the Borrower or
such other Loan Party, as applicable, in accordance with GAAP.
SECTION 7.7. VISITS AND INSPECTIONS.
Permit, and cause each other Loan Party to permit, representatives or
agents of the Agent or any Lender, from time to time, as often as may be
reasonably requested, but only during normal business hours, to: (a) visit and
inspect all properties of the Borrower or such other Loan Party; (b) inspect and
make extracts from their respective relevant books and records, including but
not limited to management letters prepared by independent accountants; and (c)
discuss with
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its principal officers, and its independent accountants, the status of the
business, assets, liabilities, financial conditions, results of operations and
business prospects. If requested by the Requisite Lenders, the Borrower shall
execute an authorization letter addressed to its accountants authorizing the
Agent and the Lenders to discuss the financial affairs of the Borrower and any
Subsidiary with its accountants.
SECTION 7.8. USE OF PROCEEDS.
(a) Use the proceeds of Loans only (i) to finance Acquisitions by the
Borrower or any of its Subsidiaries of Persons engaged in, or equipment or other
assets utilized by Persons engaged in, Otolaryngology practices as well as
Related Subspecialties and Complementary Specialties and ancillary services
thereto, as well as Persons engaged in, or assets of Persons engaged in, the
physician practice management business of managing Otolaryngology practices and
Related Subspecialties and Complimentary Specialties; (ii) to refinance existing
Funded Debt; (iii) to finance the making of Investments by the Borrower and its
Subsidiaries to the extent permitted to be made under Section 9.4. and (iv) for
the working capital and general corporate purposes of, and to finance capital
expenditures by, the Borrower and its Subsidiaries; and (b) not use any part of
such proceeds to purchase or carry, or to reduce or retire or refinance any
credit incurred to purchase or carry, any margin stock (within the meaning of
Regulations U and X of the Board of Governors of the Federal Reserve System) or
to extend credit to others for the purpose of purchasing or carrying any such
margin stock. The proceeds of the initial Loans hereunder shall be used to pay
in full all amounts owing under the Existing Credit Agreement.
SECTION 7.9. ENVIRONMENTAL MATTERS.
Comply, and cause all of the other Loan Parties to comply with all
Environmental Laws, other than those the failure to comply with which could not
reasonably be expected to have a Material Adverse Effect. If the Borrower or any
other Loan Party shall (a) receive notice that any violation of any
Environmental Law may have been committed or is about to be committed by such
Person, (b) receive notice that any administrative or judicial complaint or
order has been filed or is about to be filed against the Borrower or any other
Loan Party alleging violations of any Environmental Law or requiring the
Borrower or any other Loan Party to take any action in connection with the
release of Hazardous Materials or (c) receive any notice from a Governmental
Authority or private party alleging that the Borrower or any other Loan Party
may be liable or responsible for costs associated with a response to or cleanup
of a release of a Hazardous Materials or any damages caused thereby, and the
same could reasonably be expected to have a Material Adverse Effect, the
Borrower shall provide the Agent with a copy of such notice within 30 days after
the receipt thereof by the Borrower or any of the other Loan Parties. The
Borrower and the other Loan Parties shall promptly take all actions necessary to
prevent the imposition of any Liens on any of their respective properties
arising out of or related to any Environmental Laws.
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SECTION 7.10. BOOKS AND RECORDS.
Maintain, and cause each of the other Loan Parties to maintain, books
and records pertaining to its business operations in such detail, form and scope
as is consistent with good business practice.
SECTION 7.11. ENFORCEMENT OF REMEDIES UNDER ACQUISITION DOCUMENTS
If the Borrower becomes aware of any material claim for indemnification
from any party under any Acquisition Document, assert or cause the assertion of
such claim against such party before the date on which such claim may no longer
be made under such Acquisition Document if, in the Borrower's reasonable
business judgment, asserting such claim is deemed appropriate, and in asserting
any such claim shall comply with all requirements for asserting such claims
under the Acquisition Documents.
SECTION 7.12. DEPOSIT AND COLLECTION PROCEDURES
Cause PSC Management and each Other Manager to establish and maintain
an operating account (each a "Management Account") with the Agent. The Borrower
shall cause PSC Management and each Other Manager to take all acts and execute
all documents necessary to ensure that all Receivables, other than Governmental
Receivables, remitted to any "Practice," "Physician Shareholder" and "Practice
Employee" (as such terms are defined in each Management Services Agreement) are
deposited directly to the appropriate Management Account promptly upon such
Person's receipt thereof in accordance with the terms and conditions and the
procedures set forth in the applicable Management Services Agreement. If and to
the extent permitted under the applicable Management Services Agreement, the
proceeds of any Receivables, other than Governmental Receivables, are deposited
into any deposit account not maintained with the Agent, the Borrower shall cause
PSC Management and each Other Manager to take all acts and execute all documents
necessary to ensure that all collected funds on deposit in such deposit accounts
are swept daily (to the extent automated clearing house mechanisms are
available) but in any event no less frequently than weekly, and deposited in the
appropriate Management Account. The Borrower also shall cause PSC Management and
each Other Manager to take all acts and execute all documents necessary to
ensure that all Governmental Receivables remitted to any "Practice," "Physician
Shareholder" and "Practice Employee" (as such terms are defined in each
Management Services Agreement) are deposited directly to a deposit account
controlled and directed by such Person and that all collected funds on deposit
in such accounts are swept daily and deposited in the appropriate Management
Account, all in accordance with the terms and conditions and the procedures set
forth in the applicable Management Services Agreement.
SECTION 7.13. MANAGEMENT SERVICES AGREEMENTS.
Cause PSC Management or an Other Manager to serve as the sole manager
under any and all Management Services Agreements.
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SECTION 7.14. ADDITIONAL MATERIAL SUBSIDIARIES.
Within 10 Business Days of any Person becoming a Material Subsidiary
after the Agreement Date, the Borrower shall deliver to the Agent each of the
items that would be required to be delivered under Section 9.6. if such Material
Subsidiary were a New Subsidiary being acquired pursuant to an Acquisition (but
only to the extent such items have not otherwise been delivered to the Agent
under such Section or otherwise). Notwithstanding any provision of this
Agreement or any other Loan Document, (a) no Foreign Subsidiary shall be
required to execute and deliver a Guaranty and (b) a Loan Party shall only be
obligated to pledge under the Pledge Agreement the maximum amount of the total
combined voting power of all classes of stock entitled to vote of its respective
Foreign Subsidiaries that it may so pledge without such Foreign Subsidiary being
deemed to be holding United States property by virtue of 26 C.F.R. ss.
1.956-2(c)(2).
ARTICLE VIII. INFORMATION
For so long as any of the Obligations remains outstanding, unpaid or
unperformed, or this Agreement is in effect, unless the Requisite Lenders (or,
if required pursuant to Section 12.7., all of the Lenders) shall otherwise
consent in the manner set forth in Section 12.7., the Borrower shall furnish to
each Lender (or to the Agent if so provided below) at its Lending Office:
SECTION 8.1. QUARTERLY FINANCIAL STATEMENTS.
As soon as available and in any event within 45 days after the close of
each of the first, second and third fiscal quarters of the Borrower, the
consolidated balance sheets of the Borrower and its Subsidiaries as at the end
of such period and the related consolidated statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for such period,
setting forth in each case in comparative form the figures for the corresponding
periods of the previous fiscal year and comparable budgeted figures for the
previous year, all of which shall be certified by the chief financial officer of
the Borrower, in his or her opinion, to present fairly, in accordance with GAAP,
the consolidated financial position of the Borrower and its Subsidiaries as at
the date thereof and the results of operations for such period (subject to
normal year-end audit adjustments).
SECTION 8.2. YEAR-END STATEMENTS.
As soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower, the consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and
the related consolidated and consolidating statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for such fiscal
year, setting forth in comparative form the figures as at the end of and for the
previous fiscal year, which shall be certified by (a) the chief financial
officer of the Borrower, in his or her opinion, to present fairly, in accordance
with GAAP, the consolidated and consolidating financial position of the Borrower
and its Subsidiaries as at the date thereof and the result of operations for
such period and (b) in the case of the consolidated financial statements, Xxxxxx
Xxxxxxxx, LLP, or other independent certified public accountants of recognized
national standing acceptable to
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the Requisite Lenders, whose certificate shall be in scope and substance
satisfactory to the Requisite Lenders and who shall have authorized the Borrower
to deliver such financial statements and certification thereof to the Agent and
the Lenders pursuant to this Agreement.
SECTION 8.3. COMPLIANCE CERTIFICATE
At the time the financial statements are furnished pursuant to Sections
8.1. and 8.2., a certificate substantially in the form of Exhibit O (a
"Compliance Certificate"): (i) setting forth in reasonable detail as at the end
of such quarterly accounting period or fiscal year, as the case may be, the
calculations required to establish whether or not the Borrower, and when
appropriate its consolidated Subsidiaries, were in compliance with the covenants
contained in Section 9.1.; and (ii) stating that, to the best of his or her
knowledge, information and belief, no Default or Event of Default exists, or, if
such is not the case, specifying such Default or Event of Default and its
nature, when it occurred and whether it is continuing and the steps being taken
by the Borrower with respect to such event, condition or failure.
SECTION 8.4. ACCOUNTANTS' LETTERS AND BUDGETS.
In addition to the financial information to be provided to the Agent
and the Lenders under Sections 8.1. through 8.3.:
(a) promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors by its independent public
accountants including, without limitation, any management reports; and
(b) within 30 days prior to the end of each fiscal year of the
Borrower, (i) an operating budget and (ii) a capital expenditure budget for the
immediately succeeding fiscal year of the Borrower.
SECTION 8.5. NOTICE OF LITIGATION AND OTHER MATTERS.
Prompt notice of:
(a) to the extent the Borrower is aware of the same, the commencement
of any proceeding or investigation by or before any Governmental Authority and
any action or proceeding in any court or other tribunal or before any arbitrator
against or in any other way relating adversely to, or adversely affecting, the
Borrower, any other Loan Party or any other Subsidiary or any of their
respective properties, assets or businesses which, if determined or resolved
adversely to such Person, could reasonably be expected to have a Material
Adverse Effect;
(b) any amendment to the articles of incorporation, articles of
organization, certificate of limited partnership, partnership agreement,
operating agreement or other comparable organizational instrument of the
Borrower or any other Loan Party which could reasonably be expected to have a
Material Adverse Effect;
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(c) any change in the senior management of the Borrower or any other
Loan Party or any change in the management succession plan delivered under
Section 5.1.;
(d) any change in the business, assets, liabilities, financial
condition, or results of operations of the Borrower or any other Loan Party
which could reasonably be expected to have Material Adverse Effect;
(e) the occurrence of any Default or Event of Default or any event
which constitutes or which with the passage of time, the giving of notice, or
both, would constitute a default or event of default by the Borrower or any
other Loan Party under any Material Contract to which any such Person is a party
or by which any such Person or any of its respective properties may be bound,
and of which any officer of the Borrower has actual knowledge;
(f) any order, judgment or decree in excess of $100,000 having been
entered against the Borrower or any other Loan Party or any of their respective
properties or assets;
(g) any notification of a violation of any law or regulation or any
inquiry shall have been received by the Borrower or any other Loan Party from
any Governmental Authority which violation could reasonably be expected to have
a Material Adverse Effect;
(h) promptly upon receipt thereof, copies of any notification or other
communication given or received by any Loan Party with respect to any Management
Services Agreement regarding (i) any alleged failure on the part of any party to
such Management Services Agreement to comply with the terms thereof in any
material respect or (ii) any event or condition which would permit the
termination of such Management Services Agreement; and
(i) promptly upon discovery thereof, notice and a written description
of all claims or potential claims asserted against the Borrower or any other
Loan Party for indemnification under the Acquisition Documents, which claims or
potential claims are in an aggregate amount in excess of $100,000 (which amount
shall be calculated irrespective of any deductible or similar "carve out" from
indemnity that may be granted under the terms of the applicable Acquisition
Documents).
SECTION 8.6. ERISA.
The following information at the times specified below:
(a) Together with the financial statements required to be delivered
pursuant to Section 8.1. and 8.2., notice of (i) the establishment of any new
Pension Plan (which notice shall include a copy of such plan), (ii) the
commencement of contributions to any Pension Plan or Multiemployer Plan to which
the Borrower, any Subsidiary or any of its ERISA Affiliates was not previously
contributing, (iii) any material increase in the benefits of any existing
Pension Plan or Multiemployer Plan, (iv) each funding waiver request filed with
respect to any Pension Plan or Multiemployer Plan and all communications
received or sent by the Borrower, any Subsidiary or any ERISA Affiliate with
respect to such request and (v) the failure of the
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Borrower, any Subsidiary or any ERISA Affiliate to make a required installment
or payment under Section 302 of ERISA or Section 412 of the Code by the due
date;
(b) Promptly and in any event within thirty (30) days of becoming aware
of the occurrence of any (i) Termination Event or (ii) nonexempt "prohibited
transaction," as such term is defined in Section 406 of ERISA or Section 4975 of
the Code, in connection with any Pension Plan or any trust created thereunder, a
notice specifying the nature thereof, what action the Borrower, any Subsidiary
or any ERISA Affiliate has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the Internal Revenue
Service, the Department of Labor or the PBGC with respect thereto; and
(c) With reasonable promptness (but in any event within 20 days of
receipt thereof for purposes of the following clauses (i) and (ii)), copies of
(i) any unfavorable determination letter from the Internal Revenue Service
regarding the qualification of an Employee Benefit Plan under Section 401(a) of
the Code, (ii) all notices received by the Borrower, any Subsidiary or any ERISA
Affiliate of the PBGC's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, and (iii) all notices received
by the Borrower, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA. The Borrower will notify the Agent in writing within 5
Business Days of the Borrower, any Subsidiary or any ERISA Affiliate obtaining
knowledge that the Borrower, any Subsidiary or any ERISA Affiliate has filed or
intends to file a notice of intent to terminate any Pension Plan under a
distress termination within the meaning of Section 4041(c) of ERISA.
SECTION 8.7. COPIES OF OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors by its independent public
accountants including, without limitation, any management report;
(b) Promptly upon their becoming available, copies of all financial
statements or other financial information, all registration statements and other
periodic or special reports, if any, which the Borrower shall file with the
Securities and Exchange Commission (or any Governmental Authority substituted
therefor) or any national securities exchange; and
(c) Promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed.
SECTION 8.8. OTHER INFORMATION.
From time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents or further
information regarding the business, assets, liabilities, financial condition,
results of operations or business prospects of the Borrower, its Subsidiaries
and the other Loan Parties as the Agent or any Lender may reasonably request.
The rights of the Agent and the Lenders under this Section are in addition to
and not in limitation of their rights under any other provision of this
Agreement or any of the other Loan Documents.
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ARTICLE IX. NEGATIVE COVENANTS
For so long as any of the Obligations remains outstanding, unpaid or
unperformed, or this Agreement is in effect, unless the Requisite Lenders (or,
if required pursuant to Section 12.7., all of the Lenders) shall otherwise
consent in the manner set forth in Section 12.7., the Borrower shall not,
directly or indirectly:
SECTION 9.1. FINANCIAL COVENANTS.
(a) Senior Funded Debt to EBITDA. Permit the ratio of (i) Senior Funded
Debt of the Borrower and its Subsidiaries determined on a consolidated basis to
(ii) the sum of (A) Borrower's EBITDA for the period of four consecutive fiscal
quarters most recently ended plus (B) Acquisition EBITDA for such period not
otherwise included in the calculation of the Borrower's EBITDA, at any time to
exceed 3.0 to 1.0.
(b) Funded Debt to EBITDA. Permit the ratio of (i) Funded Debt of the
Borrower and its Subsidiaries determined on a consolidated basis to (ii) the sum
of (A) Borrower's EBITDA for the period of four consecutive fiscal quarters most
recently ended plus (B) Acquisition EBITDA for such period not otherwise
included in the calculation of the Borrower's EBITDA, at any time to exceed 4.0
to 1.0.
(c) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio
at any time to be less than 1.5 to 1.0.
(d) Net Worth. Permit the Borrower's Net Worth to be less than (i)
$39,900,000 plus (ii) 75% of Consolidated Net Income of the Borrower (only if
greater than $0) for each fiscal quarter of the Borrower ending after March 31,
1998 plus (iii) any and all increases in the Borrower's Net Worth resulting from
Equity Issuances occurring after the date hereof.
SECTION 9.2. INDEBTEDNESS.
Create, incur, assume, or permit or suffer to exist, or permit or other
Loan Party to create, incur, assume, or permit or suffer to exist, any
Indebtedness other than the following:
(a) the Obligations;
(b) Funded Debt evidenced by Seller Notes, but only to the extent such
Funded Debt is Subordinated Debt;
(c) trade payables incurred by the Borrower and its Subsidiaries in the
ordinary course of business;
(d) Funded Debt secured by Purchase Money Liens; provided, however,
that the aggregate principal amount of such Funded Debt at any one time
outstanding shall not exceed $3,000,000;
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(e) Capitalized Lease Obligations in an aggregate principal amount not
to exceed $3,000,000 at any one time outstanding; and
(f) Indebtedness owing from one Loan Party to another Loan Party.
SECTION 9.3. CONTINGENT OBLIGATIONS.
Become or remain liable, or permit any other Loan Party to become or
remain liable, on or under any Contingent Obligation other than Contingent
Obligations in existence as of the Agreement Date and set forth in Schedule 9.3.
and then only in an aggregate amount not to exceed $500,000.
SECTION 9.4. INVESTMENTS.
(a) Acquire or purchase, or permit any other Loan Party to acquire or
purchase, after the Agreement Date, all or substantially all of the assets
constituting the business or a division or an operating unit of any Person, (b)
acquire, make or purchase, or permit any Subsidiary or any other Loan Party to
acquire, make or purchase, after the Agreement Date, any Investment or (c)
permit any Investment of the Borrower or any Subsidiary or any other Loan Party
to be outstanding on and after the Agreement Date, other than the following:
(i) Investments in Subsidiaries in existence on the Agreement Date
and disclosed on Schedule 6.1.(b);
(ii) Investments in Cash Equivalents;
(iii) Investments in existence on the Agreement Date and set forth on
Schedule 9.4.;
(iv) Acquisitions of all or substantially all of the assets of any
Person or division or Asset Group thereof permitted under Section 9.6. and
Acquisitions of Investments in New Subsidiaries acquired in connection with
Acquisitions permitted under Section 9.6.;
(v) Loans and advances to employees for moving, entertainment, travel
and other similar expenses in the ordinary course of business consistent with
past practices;
(vi) Receivables created, and prepaid expenses incurred, in the
ordinary course of business consistent with past practices;
(vii) Loans to physicians affiliated with and providing medical
services through Persons with whom the Borrower or any of its Subsidiaries has
entered into a Management Services Agreement in an aggregate amount to all such
physicians not to exceed $1,500,000 at any one time outstanding and which loans
(x) are evidenced by promissory notes and (y) are required to be repaid no later
than two years after the making thereof; and
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(viii) Investments in other Persons that are not Subsidiaries in an
aggregate amount not to exceed (x) $10,000,000 at any time outstanding in the
case of Investments relating to ambulatory surgery centers in Atlanta, Georgia
and (y) $5,500,000 at any time outstanding in the case of all other such
Investment in Persons engaged in any business in which the Borrower and its
Subsidiaries are permitted to engage under Section 7.4.
SECTION 9.5. LIENS; AGREEMENTS REGARDING LIENS; OTHER MATTERS.
(a) Create, assume, incur or permit or suffer to exist, or permit any
Subsidiary or any other Loan Party to create, assume, incur or permit or suffer
to exist, any Lien upon any of its properties, assets, income or profits of any
character whether now owned or hereafter acquired, other than Permitted Liens;
(b) Enter into or assume any agreement (other than the Loan Documents),
or permit any Subsidiary or any other Loan Party to enter into or assume any
agreement (other than the Loan Documents), prohibiting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired; provided, however, that this clause (b) shall not apply to
any provisions contained in an agreement evidencing Funded Debt secured by a
Purchase Money Lien which provision prohibits the creation of a Lien upon any
property subject to such Purchase Money Lien; or
(c) Create or otherwise cause or suffer to exist or become effective,
or permit any Subsidiary or any other Loan Party to create or otherwise cause or
suffer to exist or become effective, any consensual encumbrance or restriction
of any kind on the ability of any Subsidiary or any other Loan Party to: (i) pay
dividends or make any other distribution on any of the capital stock or other
equity interests in such Subsidiary or Loan Party owned by any Loan Party; (ii)
pay any Indebtedness owed to the Borrower or any other Loan Party; (iii) make
loans or advances to the Borrower or any other Loan Party; or (iv) transfer any
of its property or assets to the Borrower or any other Loan Party.
SECTION 9.6. ACQUISITIONS.
Consummate, and shall not permit any Subsidiary or other Loan Party to
consummate, an Acquisition unless:
(a) No Default. After giving effect thereto, no Default or Event of
Default shall have occurred and be continuing;
(b) Consent if Required. If the aggregate cash portion of the
Acquisition Consideration payable by the Borrower and its Subsidiaries in
connection with such Acquisition exceeds $10,000,000, all of the Lenders shall
have given their prior written consent to such Acquisition, which consent shall
not be arbitrarily withheld. The Lenders shall respond to the Borrower's request
for any such consent within 4 Business Days following receipt by the Agent and
the Lenders of all of the items to be delivered under the immediately following
subsection (c).
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(c) Documentation to Agent and Lenders Prior to Acquisition Requiring
Approval. The Borrower shall have caused to be delivered to the Agent (and each
Lender only in the case of the immediately following clauses (i), (iii), and
(iv)) on a timely basis prior to the date of consummation of an Acquisition
requiring the consent of the Lenders under the immediately preceding subsection
(b) (an "Approved Acquisition"), each of the following:
(i) Acquisition Certificate. A completed Acquisition
Certificate substantially in the form of Exhibit P-1;
(ii) Acquisition Documents. A copy of the most current letter
of intent relating to such Acquisition, and the current draft (or
executed copies if then available) of such other Acquisition Documents
relating to such Acquisition as the Requisite Lenders may request
through the Agent;
(iii) Historical Financial Statements. Unaudited balance
sheets, statements of operations and, if available, statements of cash
flows for such Target (if assets which do not constitute an Asset Group
are being acquired from a Person, such financial statement shall be
with respect to such Person) for the two fiscal years most recently
ended (the "Acquisition Historical Financial Statements"). If the
Acquisition was or is to be financed in whole or in part with proceeds
of a Loan, then the Acquisition Historical Financial Statements must be
audited financial statements;
(iv) Pro Forma Financial Statements. Pro forma financial
statements in form reasonably satisfactory to the Agent reflecting the
financial condition and results of operations of the Borrower and the
Target on a combined basis for the prior 12-month period (the "Combined
Financial Statements"), such financial statements to detail calculation
of the Borrower's EBITDA and Acquisition EBITDA as separate items; and
(v) Other Documents. Such other documents, instruments,
agreements and certifications as the Agent or the Requisite Lenders may
reasonably and in good faith request and which request will not result
in undue expense to the Borrower.
(d) Documentation to Agent Following Closing of Each Acquisition. The
Borrower shall cause to be delivered to the Agent not more than 10 Business Days
after the date of consummation of any Acquisition, each of the following:
(i) Acquisition Certificate. In the case of any Acquisition
other than an Approved Acquisition, a completed Acquisition Certificate
substantially in the form of Exhibit P-2;
(ii) Corporate Documents. If such Acquisition involves any New
Subsidiary that is a Material Subsidiary:
(A) a copy of the articles of incorporation, articles
of organization, certificate of limited partnership or other
comparable organizational instrument (if
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any) of such New Subsidiary, certified as of a recent date by
the Secretary of State of the jurisdiction of its formation,
and a certificate as of a recent date from such Secretary of
State as to the good standing of such New Subsidiary;
(B) certificates of qualification to transact
business or other comparable certificates issued by each
Secretary of State (and any state department of taxation, as
applicable) of each state in which such New Subsidiary is
required to be so qualified, or, if unavailable, evidence
satisfactory to the Agent that such New Subsidiary has taken
appropriate steps to so qualify;
(C) a certificate of the Secretary or Assistant
Secretary (or other individual performing similar functions)
of such New Subsidiary, dated the date of such Acquisition and
certifying (1) that attached thereto is a true and complete
copy of the by-laws of such New Subsidiary, if a corporation,
the operating agreement, if a limited liability company, the
partnership agreement, if a limited or general partnership, or
other comparable document in the case of any other form of
legal entity, as in effect on the date of such certificate,
(2) that attached thereto is a true and complete copy of all
corporate, partnership, member or other necessary action taken
by such New Subsidiary to authorize the execution, delivery
and performance of the Loan Documents to which such New
Subsidiary is or is to be a party, (3) that such New
Subsidiary's articles of incorporation, articles of
organization, certificate of limited partnership or other
comparable organizational instrument has not been amended
since the date of the certification thereto furnished pursuant
to subsection (A) above, and (4) as to the incumbency and
specimen signature of each of such New Subsidiary's officers
(or other individual authorized to execute on its behalf)
executing each of such Loan Documents (and the Agent and the
Lenders may conclusively rely on such certificate until the
Agent receives notice in writing from such New Subsidiary, to
the contrary);
(iii) Management Services Agreement. The Management Services
Agreement entered into in connection with such Acquisition, which
Management Services Agreement must contain language regarding the
assignability thereof to the Agent in form and substance satisfactory
to the Agent;
(iv) Management Agreement Financing Statements. A copy of
each Uniform Commercial Code financing statement naming PSC Management
(or any applicable New Subsidiary to be an Other Manager) as secured
party, the "Practice" (as that term is defined in such Management
Services Agreement) to such Management Services Agreement as debtor and
the Agent as assignee filed in connection with the sale of Receivables
to PSC Management (or such Other Manager) under such Management
Services Agreement;
(v) Lien Searches. UCC, tax, judgment and lien search reports
in form and substance satisfactory to the Agent with respect to the
Target and each New Subsidiary
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that is a Material Subsidiary in all necessary jurisdictions indicating
that there are no prior Liens on any of the Collateral other than
Permitted Liens or Liens to be released prior to or at the time of the
consummation of such Acquisition;
(vi) Accession Agreement. An Accession Agreement executed by
each New Subsidiary to make it a party to (A) the Guaranty and the
Security Agreement (but only if such New Subsidiary is a Material
Subsidiary); (B) the Pledge Agreement (but only if such New Subsidiary
owns or is to own any outstanding equity interest in another New
Subsidiary that will be a Material Subsidiary upon the consummation of
such Acquisition or in any Loan Party); and (C) the Collateral
Assignment of Management Services Agreement (but only if such New
Subsidiary is to be an Other Manager). Together with such Accession
Agreement, the Borrower shall also deliver to the Agent each of the
following:
(1) UCC Financing Statements. Such UCC financing
statements executed by any New Subsidiary becoming a party to
any Security Document as the Agent may reasonably request to
perfect any Lien granted by such New Subsidiary under such
Security Document; and
(2) Stock Certificates and Powers. From each New
Subsidiary becoming a party to the Pledge Agreement: (I) all
certificates, if any, representing all equity interests in
other New Subsidiaries or Loan Parties owned or to be owned by
such New Subsidiary and (II) stock powers duly endorsed in
blank by such New Subsidiary relating to all such
certificates; and
(vii) From each Loan Party already a party to the Pledge
Agreement and which owns or is to own any equity interests of any New
Subsidiary that will be a Material Subsidiary upon the consummation of
such Acquisition, (1) all certificates, if any, representing all of
such equity interests and (2) stock powers duly endorsed in blank by
such Loan Party relating to all such certificates.
SECTION 9.7. RESTRICTED DISTRIBUTIONS AND PURCHASES.
Declare or make, or permit any Subsidiary or other Loan Party to
declare or make, any Restricted Payment if a Default or Event of Default has
occurred or would occur as a result of such Restricted Payment; provided,
however, that Subsidiaries may pay Restricted Payments to the Borrower.
SECTION 9.8. MERGER, CONSOLIDATION, SALES OF ASSETS AND OTHER ARRANGEMENTS.
(a) Enter into, or permit any Subsidiary or any other Loan Party to
enter into, any transaction of merger or consolidation; (b) liquidate, wind-up
or dissolve itself (or suffer any liquidation or dissolution) or permit any
Subsidiary to do any of the foregoing; or (c) convey, sell, lease, sublease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business or assets, or the
capital stock of or other equity interests in any of its Subsidiaries, whether
now owned or hereafter acquired or permit any
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Subsidiary to do any of the foregoing; provided, however, that if no Default or
Event of Default exists or would result therefrom:
(i) the Borrower may merge or consolidate with any other
Person so long as the Borrower is the surviving corporation;
(ii) any Subsidiary of the Borrower may be merged or
consolidated with or into: (x) the Borrower if the Borrower shall be
the continuing or surviving corporation or (y) any other Person so long
as the Person surviving such merger or consolidation is a Wholly Owned
Subsidiary of the Borrower; and
(iii) any such Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or a Wholly-Owned Subsidiary
of the Borrower.
SECTION 9.9. FISCAL YEAR.
Change its fiscal year from that in effect as of the Agreement Date.
SECTION 9.10. MODIFICATIONS TO CERTAIN CONTRACTS.
(a) Enter into, or permit any Subsidiary or other Loan Party to enter
into, any amendment or modification to (i) any Material Contract, (ii) the asset
purchase agreement, stock purchase agreement, merger agreement or other primary
agreement to which the Borrower and/or one or more of its Subsidiaries is a
party relating to an Approved Acquisition or (iii) any Management Services
Agreement, in each case without the prior written consent of the Requisite
Lenders, other than amendments or modifications that do not, in any adverse way,
alter in any significant manner or to any significant degree the rights or
obligations of the parties thereto; (b) default in the performance of any
obligations of the Borrower or any Subsidiary in any Material Contract or
Management Services Agreement except where such default could not reasonably be
expected to have a Material Adverse Effect; or (c) permit any Material Contract
or Management Services Agreement to be canceled or terminated prior to its
stated maturity.
SECTION 9.11. TRANSACTIONS WITH AFFILIATES.
Permit to exist or enter into, and will not permit any of its
Subsidiaries or any of the other Loan Parties to enter into or permit to exist,
any transaction (including the purchase, sale, lease or exchange of any property
or the rendering of any service) with any Affiliate of the Borrower or with any
director, officer or employee of any Loan Party, except transactions set forth
on Schedule 6.1.(r) and other transactions (a) in the ordinary course of and
pursuant to the reasonable requirements of the business of the Borrower or any
of its Subsidiaries and (b) which (i) were approved of by a disinterested board
of directors (or other group of individuals performing similar duties) of the
Borrower or such Subsidiary or (ii) are on fair and reasonable terms which are
no less favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arm's length transaction with a Person that is not an Affiliate of
the Borrower;
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provided, however, that this Section 9.11. shall not apply to any transactions
between or among the Borrower and any of its Wholly-Owned Subsidiaries.
SECTION 9.12. BANK ACCOUNTS.
Establish, or permit any other Loan Party to establish, any new bank
accounts unless and until the Agent receives written notice thereof.
ARTICLE X. DEFAULT
SECTION 10.1. EVENTS OF DEFAULT.
The occurrence of each of the following shall constitute an Event of
Default, whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of Applicable Law or pursuant to any
judgment or order of any Governmental Authority:
(a) Default in Payment. (i) The Borrower shall fail to pay when due
(whether upon demand, at maturity, by reason of acceleration or otherwise) the
principal of any of the Loans, or (ii) the Borrower shall fail to pay when due
any interest on any of the Loans or any of the other payment Obligations owing
by the Borrower under this Agreement or any other Loan Document or (iii) any
other Loan Party shall fail to pay when due any other payment Obligation owing
by such Loan Party under any Loan Document to which it is a party and, in the
case of clause (ii) or (iii), such failure shall continue for a period of 10
days.
(b) Default in Performance. (i) The Borrower shall fail to perform or
observe any term, covenant, condition or agreement contained in Sections 7.12.,
9.1., 9.5., 9.6., 9.7., 9.8., or 9.9. or (ii) the Borrower or any other Loan
Party shall fail to perform or observe any term, covenant, condition or
agreement contained in this Agreement or any other Loan Document to which it is
a party and not otherwise mentioned in this Section and, in the case of clause
(ii), such failure shall continue for a period of 30 days after the earlier of
(x) the date upon which the Borrower or such Loan Party obtains knowledge of
such failure or (y) the date upon which the Borrower has received written notice
of such failure from the Agent.
(c) Misrepresentations. Any statement, representation or warranty made
or deemed made by or on behalf of the Borrower or any other Loan Party under
this Agreement or under any other Loan Document, or any amendment hereto or
thereto, or in any other writing or statement at any time furnished or made or
deemed made by or on behalf of the Borrower or any other Loan Party to the
Agent, any Lender or the Swingline Lender, shall at any time prove to have been
incorrect or misleading in any material respect when furnished or made.
(d) Indebtedness Cross-Default.
(i) The Borrower or any other Loan Party shall fail to pay
when due and payable the principal of, or interest on, any Indebtedness
other than the Loans or any Contingent Obligations having an aggregate
outstanding principal amount of $1,500,000 or more (any such
Indebtedness or Contingent Obligation, a "Material Obligation"); or
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(ii) the maturity of any such Material Obligation shall have
(A) been accelerated in accordance with the provisions of any
indenture, contract or instrument evidencing, providing for the
creation of or otherwise concerning such Material Obligation or (B)
been required to be prepaid prior to the stated maturity thereof; or
(iii) any other event shall have occurred and be continuing
which, with or without the passage of time, the giving of notice, or
both, would permit any holder or holders of such Material Obligation,
any trustee or agent acting on behalf of such holder or holders or any
other Person, to accelerate the maturity of any such Material
Obligation or require any such Material Obligation to be prepaid prior
to its stated maturity and such Person shall not have waived its right
to so accelerate or require prepayment with respect to such event.
(e) Voluntary Bankruptcy Proceeding. The Borrower or any other Loan
Party shall: (i) commence a voluntary case under the Bankruptcy Code of 1978, as
amended or other federal bankruptcy laws (as now or hereafter in effect); (ii)
file a petition seeking to take advantage of any other Applicable Laws, domestic
or foreign, relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts; (iii) consent to, or fail to contest in a
timely and appropriate manner, any petition filed against it in an involuntary
case under such bankruptcy laws or other Applicable Laws or consent to any
proceeding or action described in the immediately following subsection; (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign; (v) admit in writing its inability to pay its debts as they
become due; (vi) make a general assignment for the benefit of creditors; (vii)
make a conveyance fraudulent as to creditors under any Applicable Law; or (viii)
take any corporate or partnership action for the purpose of effecting any of the
foregoing.
(f) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against the Borrower or any other Loan Party, in any court of
competent jurisdiction seeking: (i) relief under the Bankruptcy Code of 1978, as
amended or other federal bankruptcy laws (as now or hereafter in effect) or
under any other Applicable Laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts;
or (ii) the appointment of a trustee, receiver, custodian, liquidator or the
like of such Person, or of all or any substantial part of the assets, domestic
or foreign, of such Person and such case or proceeding shall continue
undismissed or unstayed for a period of 60 consecutive calendar days, or an
order granting the relief requested in such case or proceeding against the
Borrower or such other Loan Party (including, but not limited to, an order for
relief under such Bankruptcy Code or such other federal bankruptcy laws) shall
be entered.
(g) Litigation. The Borrower or any other Loan Party shall disavow,
revoke or terminate any Loan Document to which it is a party or shall otherwise
challenge or contest in any action, suit or proceeding in any court or before
any Governmental Authority the validity or enforceability of this Agreement, any
Note or any other Loan Document.
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(h) Judgment. A judgment or order for the payment of money shall be
entered against the Borrower or any Loan Party by any court or other tribunal
which exceeds, individually or together with all other such unpaid judgments or
orders entered against the Borrower and the Loan Parties, $500,000 in amount (or
which shall otherwise have a Material Adverse Effect) and such judgment or order
shall continue for a period of 30 days without being stayed or dismissed through
appropriate appellate proceedings.
(i) Attachment. A warrant, writ of attachment, execution or similar
process shall be issued against any property of the Borrower or any other Loan
Party which exceeds, individually or together with all other such warrants,
writs, executions and processes, $500,000 in amount and such warrant, writ,
execution or process shall not be discharged, vacated, stayed or bonded for a
period of 30 days; provided, however, that if a bond has been issued in favor of
the claimant or other Person obtaining such warrant, writ, execution or process,
the issuer of such bond shall execute a waiver or subordination agreement in
form and substance satisfactory to the Requisite Lenders pursuant to which the
issuer of such bond subordinates its right of reimbursement, contribution or
subrogation to the Obligations and waives or subordinates any Lien it may have
on the assets of any Loan Party.
(j) ERISA. (i) The occurrence of any Termination Event which would
result in a liability on the part of the Borrower or any ERISA Affiliate to the
PBGC; (ii) the present value of all benefit liabilities under all Pension Plans
shall exceed by more than $500,000 the current value of the assets of such
Pension Plans allocable to such benefit liabilities; (iii) the occurrence of any
accumulated funding deficiency (as defined in Section 302 of ERISA and Section
412 of the Internal Revenue Code) with respect to any Pension Plan, whether or
not waived; (iv) the Borrower, any Subsidiary or any other ERISA Affiliate shall
fail to make any contribution or payment to any Multiemployer Plan which is
required to make under any agreement relating to such Multiemployer Plan, or any
Applicable Law; or (v) the Borrower, any Subsidiary or any other ERISA Affiliate
shall engage in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Internal Revenue Code for which a civil penalty pursuant to
Section 502(I) of ERISA or a tax pursuant to Section 4975 of the Internal
Revenue Code is imposed and the amount of such civil penalty or tax is in excess
of $500,000 and has not been discharged, vacated, stayed or bonded for a period
of 30 days.
(k) Loan Documents. An Event of Default (as defined therein) shall
occur under any of the other Loan Documents.
(l) Change of Control/Change in Management.
(i) (A) If any Person (or two or more Persons acting in
concert) (other than Xxxxx X. Xxxxx, M.D., Xxxx Xxxxxxxx & Co.
Partners, L.P., or any Family Member) shall acquire "beneficial
ownership" within the meaning of Rule 13d-3 of the Securities Exchange
Act of 1934, as amended, of the capital stock or securities of the
Borrower representing 35% or more of the aggregate voting power of all
classes of capital stock and securities of the Borrower entitled to
vote for the election of directors or (B) during any
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twelve-month period (commencing both before and after the Agreement
Date), a majority of the Board of Directors of the Borrower shall no
longer be composed of individuals (I) who were members of such Board of
Directors on the first date of such period, (II) whose election or
nomination to such Board of Directors was approved by individuals
referred to in clause (I) above constituting at the time of such
election or nomination at least a majority of such Board of Directors
or (III) whose election or nomination to such Board of Directors was
approved by individuals referred to in clauses (I) and (II) above
constituting at the time of such election or nomination at least a
majority of such Board of Directors; or
(ii) If two or more members of the Management Group shall
terminate their employment with the Borrower or otherwise cease to be
principally involved in the executive and strategic management of the
Borrower and within 120 days after the second such member shall
terminate his employment or shall otherwise cease to be so involved,
the Borrower shall fail to replace all such members with individuals
having comparable industry experience.
(m) Injunction. The Borrower or any of its Subsidiaries is enjoined,
restrained or in any way prevented by the order of any Governmental Authority
from conducting all or any material part of its business and such order
continues for more than 5 days.
(n) Licenses and Permits. The loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by the
Borrower or any of its Subsidiaries, if such loss, suspension, revocation or
failure to renew could reasonably be expected to have a Material Adverse Effect.
(o) Failure of Security. The Agent does not have or ceases to have a
valid and perfected first priority security interest in the Collateral (subject
to Permitted Liens), in each case, for any reason other than the failure of the
Agent to take any action within its control.
(p) Dissolution. Any order, judgment or decree is entered against the
Borrower or any other Loan Party decreeing the dissolution or split up of the
Borrower or that Subsidiary and such order remains undischarged or unstayed for
a period in excess of 30 days.
(q) Suspension of Business. The cessation or substantial curtailment of
revenue producing activities of the Borrower or any other Loan Party shall occur
(whether as a result of strike, lockout, labor dispute, embargo, condemnation,
force majeure or otherwise) and continue for a period in excess of 20
consecutive days.
SECTION 10.2. REMEDIES UPON EVENT OF DEFAULT.
Upon the occurrence and during the continuation of an Event of Default
the following provisions shall apply:
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(a) Acceleration; Termination of Facilities.
(i) Automatic. Upon the occurrence of an Event of Default
specified in Sections 10.1.(e) or 10.1.(f), (A)(i) the principal of,
and all accrued interest on, the Loans and the Notes at the time
outstanding and (ii) all of the other Obligations of the Borrower,
including, but not limited to, the other amounts owed to the Lenders,
the Agent and the Swingline Lender under this Agreement, the Notes or
any of the other Loan Documents shall become immediately and
automatically due and payable by the Borrower without presentment,
demand, protest, or other notice of any kind, all of which are
expressly waived by the Borrower and (B) the Commitments and the
Swingline Commitment shall immediately and automatically terminate.
(ii) Optional. If any other Event of Default shall have
occurred and be continuing, the Agent may, and at the written direction
of the Requisite Lenders shall: (A) declare (1) the principal of, and
accrued interest on, the Revolving Loans and the Revolving Notes at the
time outstanding and (2) all of the other Obligations owing to the
Agent and the Lenders, to be forthwith due and payable, whereupon the
same shall immediately become due and payable without presentment,
demand, protest or other notice of any kind, all of which are expressly
waived by the Borrower and (B) terminate the Commitments. If the Agent
has exercised any of the rights provided under the preceding sentence,
the Swingline Lender shall: (x) declare the principal of, and accrued
interest on, the Swingline Loans and the Swingline Note at the time
outstanding, and all of the other Obligations owing to Swingline
Lender, to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest
or other notice of any kind, all of which are expressly waived by the
Borrower and (y) terminate the Swingline Commitment.
(b) Loan Documents. The Requisite Lenders may direct the Agent to, and
the Agent if so directed shall, exercise any and all of its rights under any and
all of the other Loan Documents.
(c) Applicable Law. The Requisite Lenders may direct the Agent to, and
the Agent if so directed shall, exercise all other rights and remedies it may
have under any Applicable Law.
(d) Appointment of Receiver. To the extent permitted by Applicable Law,
the Agent and the Lenders shall be entitled to seek the appointment of a
receiver for the assets and properties of the Borrower and its Subsidiaries,
without notice of any kind whatsoever and without regard to the adequacy of any
security for the Obligations or the solvency of any party bound for its payment,
to take possession of all or any portion of the Collateral and/or the business
operations of the Borrower and its Subsidiaries and to exercise such power as
the court shall confer upon such receiver.
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SECTION 10.3. ALLOCATION OF PROCEEDS.
If an Event of Default shall have occurred and be continuing and
maturity of any of the Obligations has been accelerated, all payments received
by the Agent under any of the Loan Documents, in respect of any principal of or
interest on the Obligations or any other amounts payable by the Borrower
hereunder or thereunder, shall be applied in the following order and priority:
(a) amounts due to Agent, and the Lenders in respect of
Fees and expenses due under Sections 3.6. and 12.2., ratably in
accordance with the amounts then payable;
(b) payments of interest on Swingline Loans;
(c) payments of principal on Swingline Loans;
(d) payments of interest on Loans, to be applied for the
ratable benefit of Lenders;
(e) payments of principal of Loans, to be applied for the
ratable benefit of Lenders;
(f) amounts due the Agent and the Lenders pursuant to
Sections 11.7. and 12.9., ratably in accordance with such amounts then
payable;
(g) payments of all other amounts due under any of the
Loan Documents, if any, to be applied for the ratable benefit of
Lenders; and
(h) any amount remaining after application as provided
above, shall be paid to whomever may be legally entitled thereto.
SECTION 10.4. PERFORMANCE BY AGENT.
If the Borrower shall fail to perform any covenant, duty or agreement
contained in any of the Loan Documents, the Agent may perform or attempt to
perform such covenant, duty or agreement on behalf of the Borrower after the
expiration of any cure or grace periods set forth herein. In such event, the
Borrower shall, at the request of the Agent, promptly pay any amount reasonably
expended by the Agent in such performance or attempted performance to the Agent,
together with interest thereon at the applicable Post-Default Rate from the date
of such expenditure until paid. Notwithstanding the foregoing, neither the Agent
nor any Lender shall have any liability or responsibility whatsoever for the
performance of any obligation of the Borrower under this Agreement or any other
Loan Document.
SECTION 10.5. RIGHTS CUMULATIVE.
The rights and remedies of the Agent and the Lenders under this
Agreement and each of the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies which
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any of them may otherwise have under Applicable Law. In exercising their
respective rights and remedies the Agent and the Lenders may be selective and no
failure or delay by the Agent or any Lender in exercising any right shall
operate as a waiver of it, nor shall any single or partial exercise of any power
or right preclude its other or further exercise or the exercise of any other
power or right.
ARTICLE XI. THE AGENT
SECTION 11.1. AUTHORIZATION AND ACTION.
Each Lender hereby appoints and authorizes the Agent to take such
action as contractual representative on such Lender's behalf and to exercise
such powers under this Agreement and the other Loan Documents as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto. Nothing herein shall be
construed to deem the Agent a trustee or fiduciary for any Lender nor to impose
on the Agent duties or obligations other than those expressly provided for
herein. At the request of a Lender, the Agent will forward to such Lender copies
or, where appropriate, originals of the documents delivered to the Agent
pursuant to this Agreement or the other Loan Documents. The Agent will also
furnish to any Lender, upon the request of such Lender, a copy of any
certificate or notice furnished to the Agent by the Borrower, any Loan Party or
any other Affiliate of the Borrower, pursuant to this Agreement or any other
Loan Document not already delivered to such Lender pursuant to the terms of this
Agreement or any such other Loan Document. As to any matters not expressly
provided for by the Loan Documents (including, without limitation, enforcement
or collection of any of the Obligations), 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 Requisite Lenders (or all of the
Lenders if explicitly required under any other provision of this Agreement), and
such instructions shall be binding upon all Lenders and all holders of any of
the Obligations; provided, however, that, notwithstanding anything in this
Agreement to the contrary, the Agent shall not be required to take any action
which exposes the Agent to personal liability or which is contrary to this
Agreement or any other Loan Document or Applicable Law. Not in limitation of the
foregoing, the Agent shall not exercise any right or remedy it or the Lenders
may have under any Loan Document upon the occurrence of a Default or an Event of
Default unless the Requisite Lenders have so directed the Agent to exercise such
right or remedy.
SECTION 11.2. AGENT'S RELIANCE, ETC.
Notwithstanding any other provisions of this Agreement or any other
Loan Documents, neither the Agent nor any of its directors, officers, agents,
employees or counsel 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 limiting the
generality of the foregoing, the Agent: (a) may treat the payee of any Note as
the holder thereof until the Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory to the Agent; (b)
may consult with legal counsel (including its own counsel or counsel for the
Borrower or any Loan Party), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken
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in good faith by it in accordance with the advice of such counsel, accountants
or experts; (c) makes no warranty or representation to any Lender or any other
Person and shall not be responsible to any Lender or any other Person for any
statements, warranties or representations made by any Person in or in connection
with this Agreement or any other Loan Document; (d) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of any of this Agreement or any other Loan Document or
the satisfaction of any conditions precedent under this Agreement or any Loan
Document on the part of the Borrower or other Persons or inspect the property,
books or records of the Borrower or any other Person; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document, any other instrument or document furnished pursuant thereto or
any Collateral covered thereby or the perfection or priority of any Lien in
favor of the Agent on behalf of the Lenders in any such Collateral; and (f)
shall incur no liability under or in respect of this Agreement or any other Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telephone or telecopy) believed by it to be genuine and
signed, sent or given by the proper party or parties.
SECTION 11.3. NOTICE OF DEFAULTS.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received notice
from a Lender or the Borrower referring to this Agreement, describing with
reasonable specificity such Default or Event of Default and stating that such
notice is a "notice of default." If any Lender becomes aware of any Default or
Event of Default, it shall promptly send to the Agent such a "notice of
default." Further, if the Agent receives such a "notice of default", the Agent
shall give prompt notice thereof to the Lenders.
SECTION 11.4. NATIONSBANK AS LENDER.
NationsBank, as a Lender, shall have the same rights and powers under
this Agreement and any other Loan Document as any other Lender and may exercise
the same as though it were not the Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include NationsBank in each case in
its individual capacity. NationsBank and its affiliates may each accept deposits
from, maintain deposits or credit balances for, invest in, lend money to, act as
trustee under indentures of, serve as financial advisor to, and generally engage
in any kind of business with the Borrower, any other Loan Party or any other
affiliate thereof as if it were any other bank and without any duty to account
therefor to the other Lenders. Further, the Agent and any affiliate may accept
fees and other consideration from the Borrower for services in connection with
this Agreement and otherwise without having to account for the same to the other
Lenders.
SECTION 11.5. APPROVALS OF LENDERS.
All communications from the Agent to any Lender requesting such
Lender's determination, consent, approval or disapproval (a) shall be given in
the form of a written notice to such Lender, (b) shall be accompanied by a
description of the matter or issue as to which such
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determination, approval, consent or disapproval is requested, or shall advise
such Lender where information, if any, regarding such matter or issue may be
inspected, or shall otherwise describe the matter or issue to be resolved, (c)
shall include, if reasonably requested by such Lender and to the extent not
previously provided to such Lender, written materials and a summary of all oral
information provided to the Agent by the Borrower in respect of the matter or
issue to be resolved, and (d) shall include the Agent's recommended course of
action or determination in respect thereof. Each Lender shall reply promptly,
but in any event within 10 Business Days (or such lesser period as may be
required under the Loan Documents for the Agent to respond). Unless a Lender
shall give written notice to the Agent that it objects to the recommendation or
determination of the Agent (together with a written explanation of the reasons
behind such objection) within the applicable time period for reply, such Lender
shall be deemed to have conclusively approved of or consented to such
recommendation or determination.
SECTION 11.6. LENDER CREDIT DECISION, ETC.
Each Lender expressly acknowledges and agrees that neither the Agent,
NMS nor any of their respective officers, directors, employees, agents, counsel,
attorneys-in-fact or other affiliates has made any representations or warranties
as to the financial condition, operations, creditworthiness, solvency or other
information concerning the business or affairs of the Borrower, any other Loan
Party, any Subsidiary or other Person to such Lender and that no act by the
Agent hereinafter taken, including any review of the affairs of the Borrower,
shall be deemed to constitute any such representation or warranty by the Agent
to any Lender. Each Lender acknowledges that it has, independently and without
reliance upon the Agent, NMS, any other Lender or counsel to the Agent or any of
their respective officers, directors, employees and agents, and based on the
financial statements of the Borrower, the Subsidiaries or any other Affiliate
thereof, and inquiries of such Persons, its independent due diligence of the
business and affairs of the Borrower, the Loan Parties, the Subsidiaries and
other Persons, its review of the Loan Documents, the legal opinions required to
be delivered to it hereunder, the advice of its own counsel and such other
documents and information as it has deemed appropriate, made its own credit and
legal analysis and decision to enter into this Agreement and the transaction
contemplated hereby. Each Lender also acknowledges that it will, independently
and without reliance upon the Agent, NMS, any other Lender or counsel to the
Agent or any of their respective officers, directors, employees and agents, and
based on such review, advice, documents and information as it shall deem
appropriate at the time, continue to make its own decisions in taking or not
taking action under the Loan Documents. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent under this Agreement or any of the other Loan Documents, the Agent
shall have no duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, financial and
other condition or creditworthiness of the Borrower, any other Loan Party or any
other Affiliate thereof which may come into possession of the Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or other
Affiliates. Each Lender acknowledges that the Agent's legal counsel in
connection with the transactions contemplated by this Agreement is only acting
as counsel to the Agent and is not acting as counsel to such Lender.
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SECTION 11.7. INDEMNIFICATION OF AGENT.
Each Lender agrees to indemnify the Agent (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so)
pro rata in accordance with such Lender's respective Commitment Percentage, 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 at any time be imposed on, incurred by, or asserted
against the Agent (in its capacity as Agent but not as a Lender) in any way
relating to or arising out of the Loan Documents, any transaction contemplated
hereby or thereby or any action taken or omitted by the Agent under the Loan
Documents (collectively, "Indemnifiable Amounts"); provided, however, that no
Lender shall be liable for any portion of such Indemnifiable Amounts to the
extent resulting from the Agent's gross negligence or willful misconduct or if
the Agent fails to follow the written direction of the Requisite Lenders unless
such failure is pursuant to the advice of counsel of which the Lenders have
received notice. Without limiting the generality of the foregoing, each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees of the counsel(s) of the Agent's
own choosing) incurred by the Agent in connection with the preparation,
execution, administration, or enforcement of, or legal advice with respect to
the rights or responsibilities of the parties under, the Loan Documents, any
suit or action brought by the Agent to enforce the terms of the Loan Documents
and/or collect any Obligations, any "lender liability" suit or claim brought
against the Agent and/or the Lenders, and any claim or suit brought against the
Agent and/or the Lenders arising under any Environmental Laws, to the extent
that the Agent is not reimbursed for such expenses by the Borrower. Such
out-of-pocket expenses (including counsel fees) shall be advanced by the Lenders
on the request of the Agent notwithstanding any claim or assertion that the
Agent is not entitled to indemnification hereunder upon receipt of an
undertaking by the Agent that the Agent will reimburse the Lenders if it is
actually and finally determined by a court of competent jurisdiction that the
Agent is not so entitled to indemnification. The agreements in this Section
shall survive the payment of the Loans and all other amounts payable hereunder
or under the other Loan Documents and the termination of this Agreement. If the
Borrower shall reimburse the Agent for any Indemnifiable Amount following
payment by any Lender to the Agent in respect of such Indemnifiable Amount
pursuant to this Section, the Agent shall share such reimbursement on a ratable
basis with each Lender making any such payment.
SECTION 11.8. COLLATERAL MATTERS.
(a) The Agent is authorized on behalf of all of the Lenders, without
the necessity of any notice to or further consent from any Lender, from time to
time prior to an Event of Default, to take any action with respect to any
Collateral or Loan Documents which may be necessary to perfect and maintain
perfected the Liens upon the Collateral granted pursuant to any of the Loan
Documents.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment and satisfaction
of all of the Obligations at any time arising under or in respect of this
Agreement or the Loan Documents or the transactions contemplated hereby or
thereby; (ii) as explicitly permitted by, but only in accordance with, the terms
of the applicable
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Loan Document; or (iii) if approved, authorized or ratified in writing by the
Requisite Lenders, unless such release is required to be approved by all of the
Lenders hereunder. Upon request by the Agent at any time, the Lenders will
confirm in writing the Agent's authority to release particular types or items of
Collateral pursuant to this Section.
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Agreement, or consented to in writing by
the Requisite Lenders or all of the Lenders, as applicable, and upon at least 5
Business Days' prior written request by the Borrower, the Agent shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of the Liens granted to the Agent for the
benefit of the Lenders herein or pursuant hereto upon the Collateral that was
sold or transferred; provided, however, that (i) the Agent shall not be required
to execute any such document on terms which, in the Agent's opinion, would
expose the Agent to liability or create any obligation or entail any consequence
other than the release of such Liens without recourse or warranty; and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens upon (or obligations of the Borrower or any Loan Party in respect of)
all interests retained by the Borrower or any Subsidiary, including (without
limitation) the proceeds of the sale, all of which shall continue to constitute
part of the Collateral. In the event of any sale or transfer of Collateral, or
any foreclosure with respect to any of the Collateral, the Agent shall be
authorized to deduct all of the expenses reasonably incurred by the Agent from
the proceeds of any such sale, transfer or foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders or to
any other Person to assure that the Collateral exists or is owned by the
Borrower or any Subsidiary or is cared for, protected or insured or that the
Liens granted to the Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care, disclosure or fidelity any of
the rights, authorities and powers granted or available to the Agent in this
Section or in any of the Loan Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto, the
Agent may act in any manner it may deem appropriate, in its sole discretion,
given the Agent's own interest in the Collateral as one of the Lenders and that
the Agent shall have no duty or liability whatsoever to the Lenders, except for
its gross negligence or willful misconduct.
SECTION 11.9. SUCCESSOR AGENT.
The Agent may resign at any time as Agent under the Loan Documents by
giving written notice thereof to the Lenders and the Borrower. Upon any such
resignation or removal, the Requisite Lenders shall have the right to appoint a
successor Agent which appointment shall, provided no Default or Event of Default
shall have occurred and be continuing, be subject to the Borrower's approval,
which approval shall not be unreasonably withheld or delayed (except that
Borrower shall, in all events, be deemed to have approved each Lender as a
successor Agent). If no successor Agent shall have been so appointed by the
Requisite Lenders, and shall have accepted such appointment, within 30 days
after the resigning Agent's giving of notice of resignation or the Requisite
Lenders' removal of the resigning Agent, then the resigning or
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removed Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a Lender, if any Lender shall be willing to serve, and otherwise shall
be a commercial bank having total combined assets of at least $50,000,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning Agent, and the retiring
Agent shall be discharged from its duties and obligations under the Loan
Documents. After any resigning Agent's resignation or removal hereunder as
Agent, the provisions of this Article XI. shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under the Loan
Documents.
ARTICLE XII. MISCELLANEOUS
SECTION 12.1. NOTICES.
Unless otherwise provided herein, communications provided for hereunder
shall be in writing and shall be mailed, telecopied or delivered as follows:
If to the Borrower:
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopy Number: (000) 000-0000
Telephone Number: (000) 000-0000
If to the Agent:
NationsBank, N.A.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy Number: (000) 000-0000
Telephone Number: (000) 000-0000
with a copy to:
NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Agency Services,
Corporate Credit Services
Telecopy Number: (000) 000-0000
Telephone Number: (000) 000-0000
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If to a Lender:
To such Lender's address or telecopy number, as applicable,
set forth on its signature page hereto or in the applicable
Assignment and Acceptance Agreement.
or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section. All such notices and other communications shall be effective only when
actually received. Neither the Agent, any Lender, nor the Swingline Lender shall
incur any liability to the Borrower for acting upon any telephonic notice
referred to in this Agreement which the Agent, such Lender or Swingline Lender
believes in good faith to have been given by a Person authorized to deliver such
notice or for otherwise acting in good faith under hereunder.
SECTION 12.2. EXPENSES.
The Borrower will pay all present and future reasonable expenses of the
Agent in connection with the negotiation, preparation, execution and delivery of
each of the Loan Documents, whenever the same shall be executed and delivered,
including appraisers' fees, search fees, recording fees and the fees and
disbursements of each special and local counsel retained by the Agent, subject,
however to the limitation contained in the letter agreement dated May 15, 1998
among the Borrower, the Agent and NMS. Further, the Borrower shall pay all
future reasonable costs and expenses (a) of the Agent in connection with the
negotiation, preparation, execution and delivery of any waiver, amendment or
consent by the Agent and the Lenders relating to any of the Loan Documents; (b)
of the Agent and the Lenders in connection with any restructuring, refinancing
or "workout" of the transactions contemplated by this Agreement and the other
Loan Documents, including the reasonable fees and disbursements of counsel to
the Agent and each Lender; (c) of the Agent and the Lenders in connection with
the collection or enforcement of the obligations of the Borrower or any Loan
Party under this Agreement, the Notes or any other Loan Document, including the
reasonable fees and disbursements of counsel to the Agent and each Lender if
such collection or enforcement is done by, through or with the assistance of an
attorney; (d) of the Agent and the Lenders in connection with prosecuting or
defending any claim in any way arising out of, related to, or connected with
this Agreement or any of the other Loan Documents, which expenses shall include
the reasonable fees and disbursements of counsel to the Agent and each Lender
and of experts and other consultants retained by the Agent or the Requisite
Lenders, except to the extent any such claim resulted from the gross negligence
or wilful misconduct of the Agent or a Lender, as the case may be, or a breach
of this Agreement by the Agent or a Lender, as the case may be; (e) of the Agent
and the Lenders in connection with the exercise by the Agent and the Lenders of
any right or remedy granted to it or them under this Agreement or any of the
other Loan Documents, including the reasonable fees and disbursements of counsel
to the Agent and each Lender if such exercise is done by, through or with the
assistance of any attorney; (f) of the Agent in connection with gaining
possession of, maintaining, handling, preserving, storing, shipping, appraising,
selling, preparing for sale and advertising to sell any Collateral, whether or
not a sale is consummated; and (g) to the extent not already covered by any of
the preceding subsections, of the Agent and the Lenders in connection with any
bankruptcy or other proceeding of the type
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described in Section 10.1.(e) or 10.1.(f), and the reasonable fees and
disbursements of counsel to the Agent and each Lender incurred in connection
with the representation of the Agent or such Lender in any matter relating to or
arising out of any such proceeding including, without limitation (i) any motion
for relief from any stay or similar order, (ii) the negotiation, preparation,
execution and delivery of any document relating to the Obligations and (iii) the
negotiation and preparation of any debtor-in-possession financing or any plan of
reorganization of the Borrower or any other Loan Party, whether proposed by a
Loan Party, the Agent, any Lender or any other Person, and whether such fees and
expenses are incurred prior to, during or after the commencement of such
proceeding or the confirmation or conclusion of any such proceeding. The
Borrower shall pay all amounts owing under this Section within 10 days of
demand. As used in this Section and in Section 12.9., the term "reasonable fees"
of legal counsel shall mean the reasonable fees of such legal counsel actually
incurred.
SECTION 12.3. STAMP, INTANGIBLE AND RECORDING TAXES.
The Borrower will pay any and all stamp, intangible, registration,
recordation and similar taxes, fees or charges and shall indemnify the Agent and
each Lender against any and all liabilities with respect to or resulting from
any delay in the payment or omission to pay any such taxes, fees or charges,
which may be payable or determined to be payable in connection with the
execution, delivery, recording, performance or enforcement of this Agreement,
the Notes and any of the other Loan Documents or the perfection of any rights or
Liens thereunder.
SECTION 12.4. SETOFF.
Subject to Section 3.3. and in addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
the Agent and each Lender is hereby authorized by the Borrower, at any time or
from time to time, without notice to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set-off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by the Agent, such Lender
or any affiliate of the Agent or such Lender, to or for the credit or the
account of the Borrower against and on account of any of the Obligations,
irrespective of whether or not any or all of the Loans and all other Obligations
have been declared to be due and payable as permitted by Section 10.2.
SECTION 12.5. LITIGATION; JURISDICTION; OTHER MATTERS; WAIVERS.
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY
BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON
DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND
EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE LENDERS, THE AGENT AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR
TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO
ARISING OUT OF THIS AGREEMENT, THE NOTES,
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OR ANY OTHER LOAN DOCUMENT OR IN CONNECTION WITH ANY COLLATERAL OR ANY LIEN OR
BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR
AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE.
(b) EACH OF THE BORROWER, THE AGENT AND EACH LENDER HEREBY AGREES
THAT THE FEDERAL DISTRICT COURT OF THE NORTHERN DISTRICT OF GEORGIA OR, AT THE
OPTION OF THE AGENT, ANY STATE COURT LOCATED IN XXXXXX COUNTY, GEORGIA SHALL
HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG
THE BORROWER, THE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY
TO THIS AGREEMENT, THE LOANS, THE NOTES OR ANY OTHER LOAN DOCUMENT OR TO ANY
MATTER ARISING HEREFROM OR THEREFROM OR THE COLLATERAL. THE BORROWER AND EACH OF
THE LENDERS EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS.
(c) EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH
AGREES NOT TO PLEAD OR CLAIM THE SAME.
(d) THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE AGENT OR ANY LENDER OR THE
ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN
ANY OTHER APPROPRIATE JURISDICTION.
SECTION 12.6. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement without the prior written consent of all of the
Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an affiliate of such
Lender except to the extent such transfer would result in increased costs to the
Borrower.
(c) Any Lender may at any time grant to one or more banks or other
financial institutions (each a "Participant") participating interests in its
Commitment or the Obligations owing to such Lender; provided, however, (i) any
such participating interest must be for a constant and not a varying percentage
interest, and (ii) after giving effect to any such participation by a Lender,
the amount of its Commitment, or if the Commitments have been terminated, the
aggregate outstanding principal balance of the Note held by it, in which it has
not
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granted any participating interests must be at least $5,000,000. Except as
otherwise provided in Section 12.4., no Participant shall have any rights or
benefits under this Agreement or any other Loan Document. In the event of any
such grant by a Lender of a participating interest to a Participant, such Lender
shall remain responsible for the performance of its obligations hereunder, and
the Borrower and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided, however, such Lender may
agree with the Participant that it will not, without the consent of the
Participant, agree to (i) increase, or extend the term or extend the time or
waive any requirement for the reduction or termination of, such Lender's
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the Loans or portions thereof owing to such Lender, (iii) reduce the
amount of any such payment of principal, (iv) reduce the rate at which interest
is payable thereon or (v) any release of all or substantially all of the
Collateral. An assignment or other transfer which is not permitted by subsection
(d) or (f) below shall be given effect for purposes of this Agreement only to
the extent of a participating interest granted in accordance with this
subsection (c). The selling Lender shall notify the Agent and the Borrower of
the sale of any participation hereunder and the terms thereof.
(d) Any Lender may with the prior written consent of the Agent and
the Borrower (which consent, in each case, shall not be unreasonably withheld)
assign to one or more Eligible Assignees (each an "Assignee") all or a portion
of its Commitment and its other rights and obligations under this Agreement and
the Notes; provided, however, (i) no such consent by the Borrower shall be
required in the case of any assignment to another Lender or any affiliate of
such Lender or another Lender or if an Event of Default shall have occurred and
be continuing; (ii) any partial assignment shall be in an amount at least equal
to $5,000,000 and after giving effect to such assignment the assigning Lender
retains Commitment, or if the Commitments have been terminated, holds a Note
having an aggregate outstanding principal balance, of at least $5,000,000; and
(iii) each such assignment shall be effected by means of an Assignment and
Acceptance Agreement. Upon execution and delivery of such instrument and payment
by such Assignee to such transferor Lender of an amount equal to the purchase
price agreed between such transferor Lender and such Assignee, such Assignee
shall be deemed to be a Lender party to this Agreement as of the effective date
of the Assignment and Acceptance Agreement and shall have all the rights and
obligations of a Lender with a Commitment as set forth in such Assignment and
Acceptance Agreement, and the transferor Lender shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (d), the transferor Lender, the Agent and the
Borrower shall make appropriate arrangements so that new Notes are issued to the
Assignee and such transferor Lender, as appropriate. In connection with any such
assignment, the transferor Lender shall pay to the Agent an administrative fee
for processing such assignment in the amount of $3,500.
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(e) The Agent shall maintain at the Principal Office a copy of
each Assignment and Acceptance Agreement delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment of each Lender from time to time (the "Register"). The Agent shall
give each Lender and the Borrower notice of the assignment by any Lender of its
rights as contemplated by this Section. The Borrower, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register and copies of each
Assignment and Acceptance Agreement shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice to the Agent. Upon its receipt of an Assignment and
Acceptance Agreement executed by an assigning Lender, together with each Note
subject to such assignment (the "Surrendered Note"), the Agent shall, if such
Assignment and Acceptance Agreement has been completed and if the Agent receives
the processing and recording fee described in subsection (d) above, (i) accept
such Assignment and Acceptance Agreement, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.
(f) In addition to the assignments and participations permitted
under the foregoing provisions of this Section, any Lender may assign and pledge
all or any portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular issued
by such Federal Reserve Bank, and such Loans and Notes shall be fully
transferable as provided therein. No such assignment shall release the assigning
Lender from its obligations hereunder.
(g) A Lender may furnish any information concerning the Borrower,
any other Loan Party or any of their respective Subsidiaries in the possession
of such Lender from time to time to Assignees and Participants (including
prospective Assignees and Participants) subject to compliance with Section 12.8.
(h) Anything in this Section to the contrary notwithstanding, no
Lender may assign or participate any interest in any Loan held by it hereunder
to the Borrower, any other Loan Party or any of their respective Affiliates or
Subsidiaries.
(i) Each Lender agrees that, without the prior written consent of
the Borrower and the Agent, it will not make any assignment hereunder in any
manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Loan or Note under the
Securities Act or any other securities laws United States of America or of any
other jurisdiction.
SECTION 12.7. AMENDMENTS.
Except as otherwise provided in this Agreement, any consent or approval
required or permitted by this Agreement or in any Loan Document to be given by
the Lenders may be given, and any term of this Agreement or of any other Loan
Document may be amended, and the performance or observance by the Borrower or
any Loan Party or Subsidiary of any terms of this Agreement or such other Loan
Document or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either retroactively or
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prospectively) with, but only with, the written consent of the Requisite Lenders
(and, in the case of an amendment to any Loan Document, the written consent of
the Borrower). Notwithstanding the foregoing, no amendment, waiver or consent
shall, unless in writing, and signed by all of the Lenders (or the Agent at the
written direction of the Lenders), do any of the following: (i) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations;
(ii) reduce the principal of, or interest rates that have accrued or that will
be charged on the outstanding principal amount of, any Loans or other
Obligations; (iii) reduce the amount of any fees payable hereunder; (iv)
postpone any date fixed for any payment of any principal of, interest on, or
fees with respect to, any Loans or any other Obligations; (v) amend this Section
or amend the definitions of the terms used in this Agreement or the other Loan
Documents insofar as such definitions affect the substance of this Section; (vi)
modify the definition of the terms "Commitment Percentage" or "Requisite
Lenders" or modify in any other manner the number or percentage of the Lenders
required to make any determinations or waive any rights hereunder or to modify
any provision hereof; (vii) modify, or waive any Default or Event of Default
resulting from the Borrower's failure to comply with, any of the terms of
Section 9.1.; and (viii) release any Guarantor from its obligations under its
Guaranty. Further, no amendment, waiver or consent unless in writing and signed
by the Agent, in addition to the Lenders required hereinabove to take such
action, shall affect the rights or duties of the Agent under this Agreement or
any of the other Loan Documents. Any amendment, waiver or consent relating to
Section 2.10. or the obligations of Swingline Lender under this Agreement or any
other Loan Document shall, in addition to Lenders required hereinabove to take
such action, require the written consent of Swingline Lender. Further, no
Collateral shall be released or disposed of by the Agent unless all of the
Lenders so direct the Agent or unless released or disposed of as permitted by,
and in accordance with, Section 11.8. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon and any
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose set forth therein. No course of dealing or delay or
omission on the part of the Agent or any Lender in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. Except as
otherwise explicitly provided for herein or in any other Loan Document, no
notice to or demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.
SECTION 12.8. CONFIDENTIALITY.
Except as otherwise provided by Applicable Law, the Agent and each
Lender shall utilize all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as confidential or
proprietary by the Borrower in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe and
sound banking practices, but in any event may make disclosure: (a) to any of its
affiliates (provided they shall agree to keep such information confidential in
accordance with the terms of this Section); (b) as reasonably required by any
bona fide Assignee, Participant or other transferee in connection with the
contemplated transfer of any Commitment or participations therein as permitted
hereunder (provided such Assignee, Participant or other transferee shall agree
in writing to keep such information confidential on the same terms and
conditions of this Section); (c) as required by any Governmental Authority or
representative thereof or pursuant to
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legal process; (d) to the Agent's or such Lender's independent auditors and
other professional advisors (provided they shall be notified of the confidential
nature of the information); and (e) after the happening and during the
continuance of an Event of Default, to any other Person, in connection with the
exercise by the Agent or the Lenders of rights hereunder or under any of the
other Loan Documents.
SECTION 12.9. INDEMNIFICATION.
The Borrower agrees to indemnify the Agent, NMS and each Lender and its
respective directors, officers, employees and agents for, and hold each of them
harmless against, any and all losses, liabilities, claims, damages or expenses
incurred by any of them arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened investigation or
litigation or other proceedings) relating to the extensions of credit hereunder
or any actual or proposed use by the Borrower or any other Loan Party of the
proceeds of any of the extensions of credit hereunder or the past, present or
future business activities of the Borrower or any other Loan Party, including
without limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent resulting from (i) the gross negligence or willful misconduct of the
Person to be indemnified, or (ii) in the case of the Agent or any Lender, a
breach of this Agreement).
SECTION 12.10. SURVIVAL.
Notwithstanding any termination of this Agreement, or of the other Loan
Documents, the indemnities to which the Agent and the Lenders are entitled under
the provisions of Sections 11.7., 12.2. and 12.9. and any other provision of
this Agreement and the other Loan Documents, and the waivers of jury trial and
submission to jurisdictions contained in Section 12.5., shall continue in full
force and effect and shall protect the Agent, the Lenders and the Swingline
Lender against events arising after such termination as well as before.
SECTION 12.11. SEVERABILITY OF PROVISIONS.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction 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 or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 12.12. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE
FULLY PERFORMED, IN SUCH STATE.
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SECTION 12.13. COUNTERPARTS.
This Agreement and any amendments, waivers, consents or supplements may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto.
SECTION 12.14. OBLIGATIONS WITH RESPECT TO LOAN PARTIES.
The obligations of the Borrower to direct or prohibit the taking of
certain actions by the other Loan Parties as specified herein shall be absolute
and not subject to any defense the Borrower may have that the Borrower does not
control such Loan Parties.
SECTION 12.15. ENTIRE AGREEMENT.
This Agreement, the Notes, and the other Loan Documents referred to
herein embody the final, entire agreement among the parties hereto and supersede
any and all prior commitments, agreements, representations, and understandings,
whether written or oral, relating to the subject matter hereof and may not be
contradicted or varied by evidence of prior, contemporaneous, or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto.
SECTION 12.16. CONSTRUCTION.
The Agent, the Borrower and each Lender acknowledge that each of them
has had the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Agreement and the other Loan Documents with its legal
counsel and that each of the Agent, each Lender and the Borrower have
participated in negotiating the terms and conditions of this Agreement and the
other Loan Documents.
SECTION 12.17. NO NOVATION; EFFECT OF AMENDMENT AND RESTATEMENT.
THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT SOLELY TO AMEND AND
RESTATE THE TERMS OF THE EXISTING CREDIT AGREEMENT. THE PARTIES DO NOT INTEND
THIS AGREEMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS
AGREEMENT AND THE TRANSACTION CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE,
A NOVATION OF ANY OF THE OBLIGATIONS OWING BY THE BORROWER UNDER OR IN
CONNECTION WITH THE EXISTING CREDIT AGREEMENT. FURTHER, THE PARTIES DO NOT
INTEND THIS AGREEMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO AFFECT THE
PERFECTION OR PRIORITY OF ANY LIEN OF AGENT (INCLUDING ANY LIEN PREVIOUSLY HELD
BY NATIONSBANK BUT NOW HELD BY THE AGENT) IN ANY OF THE COLLATERAL IN ANY WAY
WHATSOEVER. THE PARTIES ACKNOWLEDGE AND AGREE THAT ANY LIEN HELD BY NATIONSBANK
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IN ANY OF THE COLLATERAL (AS DEFINED HEREIN) PURSUANT TO ANY OF THE LOAN
DOCUMENTS (AS DEFINED IN THE EXISTING CREDIT AGREEMENT) CONTINUES IN SUCH
COLLATERAL BUT SHALL BE DEEMED TO BE HELD BY NATIONSBANK IN ITS CAPACITY AS
AGENT FOR THE BENEFIT OF THE LENDERS AND THE SWINGLINE LENDER. THE AMENDMENT AND
RESTATEMENT OF THE EXISTING CREDIT AGREEMENT EFFECTED BY THIS AGREEMENT SHALL BE
DEEMED TO HAVE PROSPECTIVE APPLICATION ONLY UNLESS OTHERWISE SPECIFICALLY STATED
HEREIN.
[Signatures on Following Pages]
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be executed by their authorized officers all as of
the day and year first above written.
PHYSICIANS' SPECIALTY CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------------------
Title: CHIEF EXECUTIVE OFFICER
-------------------------------------
[Signatures Continued on Next Page]
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[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF
JULY 31, 1998 WITH PHYSICIANS' SPECIALTY CORP.]
NATIONSBANK, N.A., individually, as Swingline
Lender and as Agent
By: /s/ J. Xxxxxx Xxxxx
----------------------------------------
Name: J. Xxxxxx Xxxxx
-------------------------------------
Title: VICE PRESIDENT
-------------------------------------
COMMITMENT AMOUNT:
$25,000,000
LENDING OFFICE (ALL TYPES OF LOANS)
NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Agency Services
Corporate Credit Services
Telecopy Number: (000) 000-0000
Telephone Number: (000) 000-0000
[Signatures Continued on Next Page]
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[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF
JULY 31, 1998 WITH PHYSICIANS' SPECIALTY CORP.]
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A., "RABOBANK,
NEDERLAND", NEW YORK BRANCH
By: /s/ Michel de Ronkoby Thege
----------------------------------------
Name: Michel de Ronkoby Thege
-------------------------------------
Title: SVP
-------------------------------------
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------------
Title: Vice President
-------------------------------------
COMMITMENT AMOUNT:
$10,000,000
LENDING OFFICE (ALL TYPES OF LOANS):
Rabobank Nederland New York Branch
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Services
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
[Signatures Continued on Next Page]
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[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF
JULY 31, 1998 WITH PHYSICIANS' SPECIALTY CORP.]
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President
-------------------------------------
COMMITMENT AMOUNT:
$10,000,000
LENDING OFFICE (ALL TYPES OF LOANS):
PNC Bank, N.A.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx/Xxxxxx Xxxxxxxx
Telecopier: 000-000-0000
Telephone: 000-000-0000/000-000-0000
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EXHIBIT A
FORM OF ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT dated as of ______________ executed and
delivered by ______________________, a _____________ (the "New Subsidiary") in
favor of (a) NATIONSBANK, N.A., in its capacity as Agent (the "Agent") for the
financial institutions a party to the Credit Agreement (as defined below) and
their assignees under Section 12.6 thereof (the "Lenders") and (b) the Lenders
and the Swingline Lender.
WHEREAS, Physicians' Specialty Corp. (the "Borrower"), the Lenders and
the Agent entered into that certain Amended and Restated Credit Agreement dated
as of July 31, 1998 (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the "Credit Agreement") pursuant to which
the Lenders and the Swingline Lender have agreed to extend certain financial
accommodations to the Borrower subject to the terms thereof;
WHEREAS, the New Subsidiary is a Subsidiary of the Borrower;
WHEREAS, the Borrower has agreed to make available to New Subsidiary
from time to time some of the proceeds of the Loans pursuant to intercompany
loans and otherwise;
WHEREAS, it is a condition precedent to the Lenders' continued
extension of such financial accommodations to the Borrower that the New
Subsidiary become a party to the following Loan Documents: (a) that certain
Guaranty dated as of July 31, 1998 (as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms, the "Guaranty") executed by certain Subsidiaries of the Borrower in favor
of the Agent, the Lenders and the Swingline Lender [and]; (b) that certain
Security Agreement dated as of July 31, 1998 (as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with its terms, the "Security Agreement") by and among the Borrower, certain
Subsidiaries of the Borrower and the Agent; [[; (c) that certain Pledge
Agreement dated as of July 31, 1998 (as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms, the "Pledge Agreement") by and among the Borrower, certain Subsidiaries
of the Borrower and the Agent; (d) and (d) that certain Collateral Assignment of
Management Services Agreement dated as of July 31, 1998 (as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with its terms, the "Collateral Assignment of Management Services
Agreement") by and among PSC Management, certain other Subsidiaries of the
Borrower and the Agent].
WHEREAS, the Borrower, the New Subsidiary and the other Subsidiaries of
the Borrower, though separate legal entities, are mutually dependent on each
other in the conduct of their respective businesses and have determined it to be
in their mutual best interests to obtain financing from the Lenders and the
Swingline Lender through their collective efforts;
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WHEREAS, the New Subsidiary acknowledges that it will receive direct
and indirect benefits from the Lenders making such financial accommodations
available to the Borrower under the Credit Agreement and, accordingly, the New
Subsidiary is willing to become a party to the above Loan Documents on the terms
and conditions contained herein;
NOW, THEREFORE, in consideration of the above premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the New Subsidiary, the New Subsidiary hereby agrees as follows:
SECTION 1. ACCESSION TO GUARANTY. The New Subsidiary hereby agrees that
it is a "Guarantor" under the Guaranty and assumes all obligations of a
"Guarantor" thereunder, all as if the New Subsidiary had been an original
signatory to the Guaranty. Without limiting the generality of the foregoing, the
New Subsidiary hereby:
(a) irrevocably and unconditionally guarantees the due and punctual
payment and performance when due, whether at stated maturity, by acceleration or
otherwise, of all Guarantied Obligations;
(b) makes to the Agent and the Lenders as of the date hereof each of
the representations and warranties contained in Section 5 of the Guaranty and
agrees to be bound by each of the covenants contained in Section 6 of the
Guaranty; and
(c) consents and agrees to each provision set forth in the Guaranty.
SECTION 2. ACCESSION TO SECURITY AGREEMENT; GRANT OF SECURITY INTEREST.
The New Subsidiary agrees that it is a "Debtor" under the Security Agreement and
assumes all obligations of a "Debtor" thereunder, all as if the New Subsidiary
had been an original signatory to the Security Agreement. Without limiting the
generality of the foregoing, the New Subsidiary hereby:
(a) collaterally assigns and pledges to the Agent for its benefit and
the benefit of the Lenders and the Swingline Lender, and grants to the Agent for
its benefit and the benefit of the Lenders and the Swingline Lender, a security
interest in the Collateral (as defined in the Security Agreement) as security
for the prompt and complete payment, observance and performance when due
(whether at stated maturity, by acceleration or otherwise) of all of the
Obligations (as defined in the Security Agreement);
(b) makes to the Agent, the Lenders and the Swingline Lender as of the
date hereof each of the representations and warranties contained in Section 2 of
the Security Agreement, as supplemented by Schedule I attached hereto, and
agrees to be bound by each of the covenants contained in Section 4 of the
Security Agreement;
(c) agrees that the Agent, the Lenders and the Swingline Lender shall
have the rights and remedies in respect of the New Subsidiary and the Collateral
as set forth in Section 8 of the Security Agreement; and
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00
(x) consents and agrees to each other provision set forth in the
Security Agreement.
[INCLUDE FOLLOWING SECTION IF NEW SUBSIDIARY HAS MATERIAL SUBSIDIARIES]
[SECTION 3. ACCESSION TO PLEDGE AGREEMENT; GRANT OF SECURITY INTEREST. The New
Subsidiary agrees that it is a "Pledgor" under the Pledge Agreement and assumes
all obligations of a "Pledgor" thereunder, all as if the New Subsidiary had been
an original signatory to the Pledge Agreement. Without limiting the generality
of the foregoing, the New Subsidiary hereby:
(a) pledges, hypothecates, assigns, transfers, sets over and delivers
unto the Agent for its benefit and the benefit of the Lenders and the Swingline
Lender, and grants to the Agent for its benefit and the benefit of the Lenders
and the Swingline Lenders a security interest in, all of the New Subsidiary's
right, title and interest in, to and under the Pledged Collateral (as defined in
the Pledge Agreement as supplemented by Schedule I attached hereto), including
the Securities (as defined in the Pledge Agreement) of each Person described on
Schedule I attached hereto;
(b) makes to the Lender as of the date hereof each of the
representations and warranties contained in Section 3 of the Pledge Agreement
and agrees to be bound by each of the covenants contained in Section 4 of the
Pledge Agreement;
(c) agrees that the Agent and Lenders shall have the rights and
remedies in respect of the New Subsidiary and the Pledged Collateral as set
forth in Section 6 of the Pledge Agreement; and
(d) consents and agrees to each other provision set forth in the Pledge
Agreement.]
[INCLUDE FOLLOWING SECTION IF NEW SUBSIDIARY IS AN OTHER MANAGER]
[SECTION 4. ACCESSION TO COLLATERAL ASSIGNMENT OF MANAGEMENT SERVICES AGREEMENT;
GRANT OF SECURITY INTEREST. The New Subsidiary agrees that it is a "Assignor"
under the Collateral Assignment of Management Services Agreement and assumes all
obligations of a "Assignor" thereunder, all as if the New Subsidiary had been an
original signatory to the Collateral Assignment of Management Services
Agreement. Without limiting the generality of the foregoing, the New Subsidiary
hereby:
(a) collaterally assigns to the Agent for its benefit and the benefit
of the Lenders and the Swingline Lender, and grants to the Agent for its benefit
and the benefit of the Lenders and the Swingline Lender a security interest in,
all of the New Subsidiary's right, title and interest in, to and under the
Collateral (as defined in the Collateral Assignment of Management Services
Agreement);
(b) makes to the Agent, the Lenders and the Swingline Lender as of the
date hereof each of the representations and warranties contained in Section 2 of
the Collateral Assignment of Management Services Agreement and agrees to be
bound by each of the covenants contained in Section 3 of the Collateral
Assignment of Management Services Agreement;
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(c) agrees that the Agent, the Lenders and the Swingline Lender shall
have the rights and remedies in respect of the New Subsidiary and the Collateral
as set forth in Sections 4, 5 and 6 of the Collateral Assignment of Management
Services Agreement; and
(d) consents and agrees to each other provision set forth in the
Collateral Assignment of Management Services Agreement.
SECTION #. GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Georgia.
SECTION #. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have their respective defined meanings given them in the
Credit Agreement.
[Signatures on Following Page]
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IN WITNESS WHEREOF, the New Subsidiary has caused this Accession
Agreement to be duly executed and delivered under seal by its duly authorized
officers as of the date first written above.
[NEW SUBSIDIARY]
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
ATTEST:
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
(CORPORATE SEAL)
Address for Notices:
c/o Physicians' Specialty Corp.
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopy No: (000) 000-0000
Accepted:
NATIONSBANK, N.A., as Agent
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
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100
SCHEDULE I
[To be completed if acceeding to Pledge Agreement]
Pledged Shares:
------------------------------------------ ----------------------- -------------------------- ----------------------------
Issuer No. of Securities Type of Securities Certificate Nos.
------ ----------------- ------------------ ----------------
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
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EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
Reference is made to that certain Amended and Restated Credit Agreement
dated as of July 31, 1998 (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement"; capitalized terms used
herein, and not otherwise defined herein, shall have their respective defined
meanings as set forth in the Credit Agreement) by and among Physicians'
Specialty Corp. (the "Borrower"), each of the financial institutions initially a
signatory thereto and their assignees pursuant to Section 12.6 thereof (the
"Lenders") and NationsBank, N.A., as Agent (the "Agent").
The "Assignor" and the "Assignee" referred to on Schedule 1 attached
hereto agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents as of the date hereof equal to the
percentage interest specified on Schedule 1 attached hereto of all outstanding
rights and obligations under the Credit Agreement and the other Loan Documents.
After giving effect to such sale and assignment, the Assignee's Commitment and
the amount of the Loans owing to the Assignee will be as set forth on Schedule 1
attached hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by it; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any other instrument or document
furnished pursuant thereto; (iii) 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 the Loan Documents or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Revolving Note held by the
Assignor and requests that the Agent exchange such Revolving Note for a new
Revolving Notes payable to the order of the Assignee in an amount equal to the
Commitment assumed by the Assignee pursuant hereto and to the Assignor in an
amount equal to the Commitment retained by the Assignor, if any, as specified on
Schedule 1 attached hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Sections 8.1. and 8.2. thereof and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance Agreement; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Lender and
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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 the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as contractual
representative on its behalf and to exercise such powers and discretion under
the Credit Agreement as are specifically delegated to the Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto and (v) agrees that it will perform in accordance with their terms all
of the obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender.
4. Following the execution of this Assignment and Acceptance Agreement,
it will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance Agreement (the "Effective
Date") shall be the date of acceptance hereof by the Agent, unless otherwise
specified on Schedule 1 attached hereto.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be "Lender" party to the Credit Agreement and, to
the extent provided in this Assignment and Acceptance Agreement, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance Agreement, relinquish its
rights and be released from its obligations under the Credit Agreement and the
other Loan Documents.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Revolving Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and Fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Revolving Notes for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance Agreement shall be governed by, and
construed in accordance with, the laws of the State of Georgia.
8. This Assignment and Acceptance 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. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance Agreement
by telecopier shall be effective as delivery of a manually executed counterpart
of this Assignment and Acceptance Agreement.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance Agreement to be executed by their officers
thereunto duly authorized as of the date specified thereon.
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SCHEDULE 1
to
ASSIGNMENT AND ASSUMPTION AGREEMENT
Percentage interest assigned: ________%
Assignee's Commitment: $_______
Aggregate outstanding principal amount
of Revolving Loans assigned: $_______
Principal amount of Revolving Note payable to Assignee: $_______
Principal amount of Revolving Note payable to Assignor: $_______
Effective Date (if other than date
of acceptance by Agent): *_______, ____
[NAME OF ASSIGNOR], as Assignor
By:_____________________________________
Name:________________________________
Title:_______________________________
Dated: _________, ___
[NAME OF ASSIGNEE], as Assignee
By:_____________________________________
Name:________________________________
Title:_______________________________
Lending Office (for all Types of Loans):
________________________________________
________________________________________
________________________________________
________________________
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance Agreement to the Agent.
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Accepted and Approved
this ___ day of ___________, ___
NATIONSBANK, N.A., as Agent
By:_____________________________________
Name:________________________________
Title:_______________________________
Consented to this ____ day
of ____________, ____
PHYSICIANS' SPECIALTY CORP.
By:_____________________________________
Name:________________________________
Title:_______________________________
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EXHIBIT C
FORM OF AMENDED, RESTATED AND CONSOLIDATED
COLLATERAL ASSIGNMENT OF
MANAGEMENT SERVICES AGREEMENTS
THIS AMENDED, RESTATED AND CONSOLIDATED COLLATERAL ASSIGNMENT OF
MANAGEMENT SERVICES AGREEMENTS dated as of July 31, 1998 (this "Assignment"),
executed by each of the undersigned "Assignors" and the other Persons from time
to time party hereto pursuant to the execution and delivery of an Accession
Agreement in the form of Exhibit A to the Credit Agreement (as defined below)
(all of such undersigned, together with such other Persons each an "Assignor"
and collectively, the "Assignors"), in favor of NATIONSBANK, N.A., successor to
NationsBank, N.A. (South), as Agent, as assignee (the "Agent").
WHEREAS, Physicians' Specialty Corp. (the "Borrower"), the financial
institutions initially party thereto and their assignees under Section 12.6
thereof (the "Lenders"), and the Agent have entered into that certain Amended
and Restated Credit Agreement dated as of the date hereof (as amended,
supplemented, restated or otherwise modified from time to time pursuant to its
terms, the "Credit Agreement"), pursuant to which the Lenders and the Swingline
Lender have agreed, subject to the terms thereof, to make certain financial
accommodations available to the Borrower;
WHEREAS, the Borrower owns, directly or indirectly, all of the
outstanding capital stock and other equity interests of the other Assignors;
WHEREAS, the Borrower, the other Assignors and the other Subsidiaries
of the Borrower, though separate legal entities, are mutually dependent on each
other as an integrated operation in the conduct of their respective businesses
and have determined it to be in their mutual best interests to obtain financing
from the Lenders and the Swingline Lender through their collective efforts;
WHEREAS, each Assignor other than the Borrower acknowledges that it
will receive direct and indirect benefits from the Lenders and the Swingline
Lender making such financial accommodations available to the Borrower under the
Credit Agreement and, accordingly, each Assignor guarantied the Borrower's
obligations to the Lenders and the Swingline Lender on the terms and conditions
contained in that certain Guaranty dated as of the date hereof (as the same may
be amended, supplemented, restated or otherwise modified from time to time in
accordance with its terms, the "Guaranty"), executed by each such Assignor in
favor of the Agent, the Lenders and the Swingline Lender;
WHEREAS, as a condition to extending such financial accommodations, the
Lenders have required, among other things, that each Assignor assign to the
Agent for its benefit and the benefit of the Lenders and the Swingline Lender
all of such Assignor's rights and remedies under
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and with respect to all Management Services Agreements to which such Assignor is
a party in accordance with the terms hereof;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
SECTION 1. ASSIGNMENT. As security for the prompt payment and
performance of the Obligations, each Assignor hereby collaterally assigns to the
Agent for its benefit and the benefit of the Lenders and the Swingline Lender,
and grants to the Agent for its benefit and the benefit of the Lenders and the
Swingline Lender a security interest in, all of the following (collectively the
"Collateral"): (a) all of such Assignor's right, title and interest in, to and
under all Management Services Agreements, together with all other documents,
instruments, agreements, certificates and opinions delivered in connection with
any of the Management Services Agreements, all as the same may be amended,
supplemented, restated or otherwise modified from time to time (the "Management
Agreement Documents"), including without limitation, (i) all rights of such
Assignor to receive moneys due and to become due to it thereunder or in
connection therewith; (ii) all rights of such Assignor to damages arising out
of, or for, breach or default in respect thereof and (iii) all rights of such
Assignor to perform and exercise all rights and remedies thereunder, including
without limitation, (x) all of such Assignor's rights under or in respect of any
covenant not to compete, covenant regarding confidentiality, covenant not to
solicit, and any other similar covenant, (y) all rights of such Assignor to
damages arising out of, or for, breach or default in respect thereof and (z) all
rights of such Assignor to seek specific performance of the terms thereof; (b)
all of such Assignor's books and records in any way relating to the Management
Agreement Documents and (c) any and all products and proceeds of any of the
foregoing in whatever form, including, but not limited to, cash, instruments,
general intangibles, accounts, goods, documents and chattel paper. The term
"Practice," as used herein, means a Person offering medical services in the
field of Otolaryngology, Related Subspecialties or Complementary Subspecialties
pursuant to the Management Services Agreements.
SECTION 2. REPRESENTATIONS AND WARRANTIES. Each Assignor
represents and warrants to the Agent, each Lender and the Swingline Lender as
follows:
(a) None of the Collateral is subject to any Lien, except
Permitted Liens.
(b) A true, correct and complete copy of each Management Services
Agreement to which such Assignor is a party (including all amendments,
supplements and modifications thereto), has been delivered to the Agent.
(c) Each Management Agreement Document to which such Assignor is a
party is in full force and effect and is the legal, valid and binding obligation
of such Assignor and each other Person a party thereto, enforceable against such
Assignor and each such Person in accordance with its respective terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the rights of creditors
generally and by general principles of equity (regardless of whether enforcement
thereof is sought in a
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proceeding at law or in equity); provided, however, no representation or
warranty is being made with respect to the enforceability of provisions of any
Management Agreement Documents against such other Persons which, if not
enforceable, (i) would not permit the termination of the applicable Management
Services Agreement or (ii) could not reasonably be expected to have a Material
Adverse Effect.
(d) Neither such Assignor nor any other Person a party to any
Management Agreement Document is in default under any of the terms, covenants or
conditions of any Management Agreement Document nor, to such Assignor's
knowledge, does there exist any event of default or any state of facts which
would, with the passage of time or the giving of notice, or both, constitute a
default or event of default on the part of such Assignor or any such other
Person under any of said terms, covenants or conditions, which, in either case,
could reasonably be expected to have a Material Adverse Effect.
(e) Such Assignor has taken all steps necessary or appropriate to
protect and preserve its rights under the Management Agreement Documents,
including without limitation, the filing of financing statements under the
Uniform Commercial Code as in effect in all applicable jurisdictions.
(f) Such Assignor has not assigned any of its right, title or
interest in, to or under any of the Collateral to any Person.
(g) Such Assignor has full authority and the legal right to assign
to the Agent, and to grant to the Agent a security interest in, the Management
Agreement Documents and the other Collateral and such Assignor has obtained all
consents necessary for the valid and binding assignment of and the effectiveness
and enforceability of such security interest under this Agreement.
(h) All of the Collateral is free and clear of all Liens other
than Permitted Liens.
SECTION 3. COVENANTS. Each Assignor covenants and agrees as to
each Management Agreement Document as follows:
(a) Such Assignor will not sell, assign, xxxxx x Xxxx in, suffer
to exist any Lien in, or otherwise transfer to any Person any of such Assignor's
right, title or interest in, to or under any of the Collateral.
(b) Anything herein to the contrary notwithstanding, (i) such
Assignor shall remain liable under all Management Agreement Documents to the
extent set forth therein to perform its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (ii) the exercise by the
Agent of any of its rights hereunder shall not release such Assignor from any of
its duties or obligations under any of the Management Agreement Documents, and
(iii) neither the Agent, any Lender nor the Swingline Lender shall have any
duties, obligations or liability under any of the Management Agreement Documents
or duties by reason of this Agreement, nor shall the Agent, any Lender or the
Swingline Lender be obligated to perform any
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of the duties or obligations of such Assignor thereunder, to make any payment,
to make any inquiry as to the nature or sufficiency of any payment received by
such Assignor or the sufficiency of any performance by any party under any such
contract or agreement, or to take any action to collect or enforce any claim for
payment assigned hereunder.
(c) Such Assignor shall at its sole cost and expense:
(i) Perform and observe all the terms and provisions of
the Management Agreement Documents to be performed or observed by it,
maintain the Management Agreement Documents in full force and effect,
and enforce the Management Agreement Documents in accordance with their
terms, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect; and
(ii) From time to time (A) furnish to the Agent such
information and reports regarding the Management Agreement Documents as
the Agent may reasonably request and (B) upon request of the Agent and
upon the occurrence and during the continuation of an Event of Default,
make to each other party to the Management Agreement Documents such
demands and request for information and reports or for action as such
Assignor is entitled to make under the Management Agreement Documents.
SECTION 4. PAYMENTS. So long as no Event of Default shall have
occurred and be continuing, each Assignor shall have the right to receive all
amounts paid or payable in connection with the Management Agreement Documents.
Upon and after the occurrence and continuation of any Event of Default, all
rights of any Assignor to receive any of the payments pursuant to the
immediately preceding sentence shall cease, and all such rights shall thereupon
become vested in the Agent, and the Agent shall have the sole and exclusive
right to receive and retain the payments which any Assignor would otherwise be
authorized to receive and retain pursuant to such sentence.
SECTION 5. ASSIGNOR'S RIGHT TO ENFORCE. So long as no Event of
Default shall have occurred and be continuing, the Agent will not exercise or
enforce, or seek to exercise or enforce, or avail itself of, any of the rights,
powers, privileges, authorizations and benefits assigned and transferred to the
Agent pursuant to this Agreement, and each Assignor may exercise or enforce, or
seek to exercise or enforce, such rights, powers, privileges, authorizations and
benefits in conformity with the provisions of this Agreement. If any Assignor
shall fail to perform or comply with any term or condition imposed upon such
Assignor under any of the Management Agreement Documents, or any Assignor shall
fail to exercise any right or remedy of such Assignor thereunder, and in either
such case either (a) such failure could reasonably be excepted to have a
Material Adverse Effect or (b) an Event of Default shall have occurred and be
continuing, then, without waiving or releasing such Assignor from any of its
obligations hereunder or under such Management Agreement Document, the Agent may
(but shall not obligated to) take any action the Agent deems necessary or
desirable to preserve and protect any of such Assignor's rights thereunder or
the Agent's rights thereunder.
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SECTION 6. REMEDIES. Upon the occurrence and during the
continuation of an Event of Default, the Agent shall, at its election, without
notice of election and without demand, have the right to do any one or more of
the following acts, all of which are hereby authorized by each Assignor: (a)
exercise any or all of the rights available to a secured party under the UCC or
any other Applicable Law; and (b) exercise any or all of its rights and remedies
under the Credit Agreement and the other Loan Documents.
SECTION 7. AGENT AND LENDERS NOT OBLIGATED. Notwithstanding any
other provision of this Assignment to the contrary, each Assignor expressly
acknowledges and agrees that it shall continue to observe and perform in
accordance with the terms of the Management Agreement Documents all of the
conditions and obligations therein contained to be observed and performed by it,
and that neither this Assignment, nor any action taken pursuant hereto, shall
cause the Agent, any Lender or the Swingline Lender to be under any obligation
or liability in any respect whatsoever to any party to any of the Management
Agreement Documents or to any other Person for the observance or performance of
any of the representations, warranties, conditions, covenants, agreements or
terms contained in any of the Management Agreement Documents or any other
document, instrument or agreement relating thereto.
SECTION 8. FURTHER ASSURANCES. At any time and from time to time,
upon the written request of the Agent, and at the sole expense of the Assignors,
each Assignor will promptly execute and deliver such further instruments and
documents and take such further action as the Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted.
SECTION 9. RIGHTS CUMULATIVE. The rights and remedies of the
Agent, the Lenders and the Swingline Lender under this Agreement are cumulative
and not exclusive of any rights or remedies which any of them would otherwise
have. In exercising their rights and remedies the Agent, the Lenders and the
Swingline Lender may be selective and no failure or delay by the Lender in
exercising any right shall operate as a waiver of it, nor shall any single or
partial exercise of any power or right preclude its other or further exercise or
the exercise of any other power or right.
SECTION 10. AGENT APPOINTED ATTORNEY-IN-FACT. Each Assignor hereby
irrevocably appoints the Agent as such Assignor's attorney-in-fact, with full
authority in the place and stead of such Assignor and in the name of such
Assignor or otherwise, from time to time upon the occurrence and during the
continuation of an Event of Default in the Agent's discretion, to take any
action and to execute any instrument or document which the Agent may deem
necessary or advisable to accomplish the purposes of this Agreement and to
exercise any rights and remedies the Agent, the Lenders and the Swingline Lender
may have under this Agreement or Applicable Law, including, without limitation:
(i) to ask, demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral; (ii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper in connection with clause (i) above and
(iii) to file any claims or take any action or institute any proceedings which
the Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Agent with respect
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to any of the Collateral. The power-of-attorney granted hereby is irrevocable
and coupled with an interest.
SECTION 11. EXPENSES. Each Assignor will pay, within 10 days of
demand, all reasonable fees and expenses actually incurred by the Agent in
connection with (a) the collection or enforcement of the Obligations including
the reasonable fees and disbursements of counsel to the Agent actually incurred
by the Agent and (b) the exercise by the Agent of any right or remedy granted to
it under this Agreement if such exercise is done by, through or with the
assistance of any attorney.
SECTION 12. NOTICES. Notices, requests and other communications
required or permitted hereunder shall be given in accordance with the applicable
terms of the Guaranty.
SECTION 13. TERMINATION. Upon indefeasible payment in full of all
of the Obligations, this Agreement shall terminate.
SECTION 14. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which, taken
together, shall constitute but one and the same instrument.
SECTION 15. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by any Assignor
herefrom, shall in any event be effective unless the same shall be done in
accordance with the applicable provisions of the Credit Agreement.
SECTION 16. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under Applicable Law, but if any provision of this Agreement shall be prohibited
by or invalid under Applicable Law, such provisions shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Agreement.
SECTION 17. GOVERNING LAW. THIS ASSIGNMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 18. BENEFITS. This Assignment shall be binding on, and
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns.
SECTION 19. NO THIRD-PARTY BENEFICIARIES. This Assignment is solely
for the benefit of the parties hereto and their respective successors and
permitted assigns. There are no other Persons who are intended to be benefited
in any way whatsoever by this Assignment.
SECTION 20. DEFINITIONS. As used herein, the term "Obligations"
shall mean: (a) all Obligations (as defined in the Credit Agreement); (b) all
obligations and indebtedness of each Assignor owing to the Agent, any Lenders or
the Swingline Lender of every kind, nature and description, under or with
respect to the Credit Agreement, the Guaranty, this Assignment or any
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of the other Loan Documents, whether direct or indirect, absolute or contingent,
due or not due, contractual or tortious, liquidated or unliquidated, and whether
or not evidenced by any note; (c) all renewals, modifications, extensions and
supplements to any of the foregoing; and (d) any reasonable costs or expenses
actually incurred by the Agent or Agent's counsel in connection with the
realization of the security for which this Assignment provides, including,
without limitation, any reasonable costs or expenses of any proceedings to which
this Assignment may give rise. All other capitalized terms used herein and not
otherwise defined herein shall have the definitions given them in the Credit
Agreement.
SECTION 21. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF THE
ASSIGNORS HEREUNDER SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH ASSIGNOR
CONFIRMS THAT IT IS LIABLE FOR ALL OF THE OBLIGATIONS AND LIABILITIES OF THE
OTHER ASSIGNORS HEREUNDER.
SECTION 22. AMENDMENT, RESTATEMENT AND CONSOLIDATION. PRIOR TO THE
DATE HEREOF, THE UNDERSIGNED ASSIGNOR (THE "EXISTING ASSIGNOR") EXECUTED AND
DELIVERED COLLATERAL ASSIGNMENTS OF MANAGEMENT SERVICES AGREEMENTS IN FAVOR OF
NATIONSBANK IN CONNECTION WITH THE EXISTING CREDIT AGREEMENT (THE "EXISTING
COLLATERAL ASSIGNMENTS OF MANAGEMENT SERVICES AGREEMENTS"). THE EXISTING
ASSIGNOR AND THE AGENT ARE ENTERING INTO THIS AGREEMENT SOLELY TO AMEND, RESTATE
AND CONSOLIDATE IN THEIR ENTIRETY THE TERMS OF, AND THE OBLIGATIONS OWING UNDER
AND IN CONNECTION WITH, THE EXISTING COLLATERAL ASSIGNMENTS OF MANAGEMENT
SERVICES AGREEMENTS. THE PARTIES DO NOT INTEND THIS AGREEMENT NOR THE
TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL NOT BE DEEMED OR CONSTRUED TO BE, A NOVATION OF ANY OF
THE OBLIGATIONS OWING BY THE EXISTING ASSIGNOR UNDER OR IN CONNECTION WITH ANY
OF THE EXISTING COLLATERAL ASSIGNMENTS OF MANAGEMENT SERVICES AGREEMENTS.
FURTHER, THE PARTIES DO NOT INTEND THIS AGREEMENT NOR THE TRANSACTIONS
CONTEMPLATED HEREBY TO AFFECT THE PERFECTION OR PRIORITY OF ANY LIEN (INCLUDING
ANY LIEN PREVIOUSLY HELD BY NATIONSBANK BUT NOW HELD BY THE AGENT) HELD BY THE
AGENT IN ANY OF THE COLLATERAL IN ANY WAY WHATSOEVER.
[Signatures on Following Page]
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IN WITNESS WHEREOF, each Assignor has executed and delivered this
Amended, Restated and Consolidated Collateral Assignment of Management Services
Agreements under seal as of the date first written above.
ASSIGNORS:
PSC MANAGEMENT CORP.
By:__________________________________
Name:_____________________________
Title:____________________________
ATTEST:
By:__________________________________
Name:_____________________________
Title:____________________________
Agreed to and Accepted:
NATIONSBANK, N.A., as Agent
By:___________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT D
FORM OF AMENDED, RESTATED AND CONSOLIDATED GUARANTY
THIS AMENDED, RESTATED AND CONSOLIDATED GUARANTY dated as of July 31,
1998 (this "Guaranty"), executed by each of the undersigned "Guarantors" and the
other Persons from time to time party hereto pursuant to the execution and
delivery of an Accession Agreement in the form of Exhibit A to the Credit
Agreement (as defined below) (all of the undersigned, together with such other
Persons each a "Guarantor" and collectively, the "Guarantors"), in favor of (a)
NATIONSBANK, N.A., successor to NationsBank, N.A. (South), in its capacity as
Agent (the "Agent") for the Lenders under that certain Amended and Restated
Credit Agreement dated as of the date hereof (as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with its terms, the "Credit Agreement") by and among Physicians' Specialty Corp.
(the "Borrower"), the financial institutions initially party thereto and their
assignees under Section 12.6 thereof (the "Lenders") and the Agent and (b) the
Lenders and the Swingline Lender.
WHEREAS, pursuant to the Credit Agreement the Lenders and the Swingline
Lender have agreed to make available to the Borrower certain financial
accommodations on the terms and conditions set forth in the Credit Agreement;
WHEREAS, all of the Guarantors are Subsidiaries of the Borrower;
WHEREAS, the Borrower, each of the Guarantors and the other
Subsidiaries of the Borrower, though separate legal entities, are mutually
dependent on each other in the conduct of their respective businesses as an
integrated operation and have determined it to be in their mutual best interests
to obtain financing from the Lenders and the Swingline Lender through their
collective efforts;
WHEREAS, each Guarantor acknowledges that it will receive direct and
indirect benefits from the Lenders and the Swingline Lender making such
financial accommodations available to the Borrower under the Credit Agreement
and, accordingly, each Guarantor is willing to guaranty the Borrower's
obligations to the Agent, the Lenders and the Swingline Lender on the terms and
conditions contained herein;
WHEREAS, it is a condition precedent to the continued extension of such
financial accommodations to the Borrower by the Lenders and the Swingline Lender
that each Guarantor execute and deliver this Guaranty.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each Guarantor, each Guarantor
agrees as follows:
SECTION 1. GUARANTY. Each Guarantor hereby absolutely, irrevocably and
unconditionally guaranties the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all of the
following (collectively referred to as the "Guarantied Obligations"): (a) all
indebtedness and obligations owing by the Borrower to the
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Agent, the Lenders or the Swingline Lender under or in connection with the
Credit Agreement and any other Loan Document to which the Borrower is a party,
including without limitation, the repayment of all principal of the Revolving
Loans and the Swingline Loans and the payment of all interest, fees, charges,
reasonable attorneys' fees and other amounts payable to the Agent, the Lenders
or the Swingline Lender thereunder or in connection therewith; (b) any and all
extensions, renewals, modifications, amendments or substitutions of the
foregoing; (c) all expenses, including without limitation, reasonable attorneys'
fees and disbursements, that are actually incurred by the Agent, the Lenders or
the Swingline Lender in the enforcement of any of the foregoing or any
obligation of such Guarantor hereunder; and (d) all other Obligations of the
Borrower.
SECTION 2. GUARANTY OF PAYMENT AND NOT OF COLLECTION. This Guaranty is
a guaranty of payment, and not of collection, and a debt of each Guarantor for
its own account. Accordingly, none of the Agent, the Lenders or the Swingline
Lender shall be obligated or required before enforcing this Guaranty against any
Guarantor: (a) to pursue any right or remedy the Agent, any Lender or the
Swingline Lender may have against any other Loan Party or any other Person or
commence any suit or other proceeding against any other Loan Party or any other
Person in any court or other tribunal; (b) to make any claim in a liquidation or
bankruptcy of any other Loan Party or any other Person; or (c) to make demand of
any other Loan Party or any other Person or to enforce or seek to enforce or
realize upon any collateral security held by the Agent, any Lender or the
Swingline Lender which may secure any of the Guarantied Obligations. In this
connection, each Guarantor hereby waives the right of such Guarantor to require
any holder of the Guarantied Obligations to take action against the Borrower as
provided in Official Code of Georgia Annotated ss.10-7-24.
SECTION 3. GUARANTY ABSOLUTE. Each Guarantor guarantees that the
Guarantied Obligations will be paid strictly in accordance with the terms of the
documents evidencing the same, regardless of any Applicable Law now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Agent, the Lenders or the Swingline Lender with respect thereto. The liability
of each Guarantor under this Guaranty shall be absolute and unconditional in
accordance with its terms and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever, including
without limitation, the following (whether or not such Guarantor consents
thereto or has notice thereof):
(a) (i) any change in the amount, interest rate or due date or
other term of any of the Guarantied Obligations, (ii) any change in the time,
place or manner of payment of all or any portion of the Guarantied Obligations,
(iii) any amendment or waiver of, or consent to the departure from or other
indulgence with respect to, the Credit Agreement, any other Loan Document, or
any other document or instrument evidencing or relating to any Guarantied
Obligations, or (iv) any waiver, renewal, extension, addition, or supplement to,
or deletion from, or any other action or inaction under or in respect of, the
Credit Agreement, any of the other Loan Documents, or any other documents,
instruments or agreements relating to the Guarantied Obligations or any other
instrument or agreement referred to therein or evidencing any Guarantied
Obligations or any assignment or transfer of any of the foregoing;
X-0
000
(x) any lack of validity or enforceability of the Credit
Agreement, any of the other Loan Documents, or any other document, instrument or
agreement referred to therein or evidencing any Guarantied Obligations or any
assignment or transfer of any of the foregoing;
(c) any furnishing to the Agent, any Lender or the Swingline
Lender of any security for the Guarantied Obligations, or any sale, exchange,
release or surrender of, or realization on, any collateral securing any of the
Guarantied Obligations;
(d) any settlement or compromise of any of the Guarantied
Obligations, any security therefor, or any liability of any other party with
respect to the Guarantied Obligations, or any subordination of the payment of
the Guarantied Obligations to the payment of any other liability of the Borrower
or any other Loan Party;
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to such
Guarantor, the Borrower, any other Loan Party or any other Person, or any action
taken with respect to this Guaranty by any trustee or receiver, or by any court,
in any such proceeding;
(f) any act or failure to act by the Borrower, any other Loan
Party or any other Person which may adversely affect such Guarantor's
subrogation rights, if any, against the Borrower to recover payments made under
this Guaranty;
(g) any application of sums paid by any other Loan Party or any
other Person with respect to the liabilities of the Borrower to the Agent, the
Lenders or the Swingline Lender, regardless of what liabilities of such Borrower
remain unpaid;
(h) any defect, limitation or insufficiency in the borrowing
powers of the Borrower or in the exercise thereof; or
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, such Guarantor hereunder.
SECTION 4. ACTION WITH RESPECT TO GUARANTIED OBLIGATIONS. Each of the
Agent, the Lenders and the Swingline Lender may, at any time and from time to
time, without the consent of, or notice to, any Guarantor, and without
discharging any Guarantor from its obligations hereunder take any and all
actions described in Section 3. and may otherwise: (a) amend, modify, alter or
supplement the terms of any of the Guarantied Obligations, including, but not
limited to, extending or shortening the time of payment of any of the Guarantied
Obligations or changing the interest rate that may accrue on any of the
Guarantied Obligations; (b) amend, modify, alter or supplement the Credit
Agreement or any other Loan Document; (c) sell, exchange, release or otherwise
deal with all, or any part, of any collateral securing any of the Guarantied
Obligations; (d) release any Loan Party or other Person liable in any manner for
the payment or collection of the Guarantied Obligations; (e) exercise, or
refrain from exercising, any rights against any other Loan Party or any other
Person; and (f) apply any sum, by whomsoever paid or however realized,
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to the Guarantied Obligations in such order as the Agent, the Lenders or the
Swingline Lender shall elect.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby makes
to the Agent, the Lenders and the Swingline Lender all of the representations
and warranties made by the Borrower with respect to or in any way relating to
such Guarantor in the Credit Agreement and the other Loan Documents, as if the
same were set forth herein in full.
SECTION 6. COVENANTS. Each Guarantor will comply with all covenants
which the Borrower is to cause such Guarantor to comply with under the terms of
the Credit Agreement or any of the other Loan Documents.
SECTION 7. WAIVER. Each Guarantor, to the fullest extent permitted by
Applicable Law, hereby waives notice of acceptance hereof or any presentment,
demand, protest or notice of any kind, and any other act or thing, or omission
or delay to do any other act or thing, which in any manner or to any extent
might vary the risk of such Guarantor or which otherwise might operate to
discharge such Guarantor from its obligations hereunder.
SECTION 8. INABILITY TO ACCELERATE. If the Agent, any Lender or the
Swingline Lender is prevented under Applicable Law or otherwise from demanding
or accelerating payment of any of the Guarantied Obligations by reason of any
automatic stay or otherwise, the Agent, such Lender or the Swingline Lender
shall be entitled to receive from such Guarantor, upon demand therefor, the sums
which otherwise would have been due had such demand or acceleration occurred.
SECTION 9. REINSTATEMENT OF OBLIGATIONS. If claim is ever made on the
Agent, any Lender or the Swingline Lender for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guarantied
Obligations, and the Agent, such Lender or the Swingline Lender repays all or
part of said amount by reason of (a) any judgment, decree or order of any court
or administrative body of competent jurisdiction, or (b) any settlement or
compromise of any such claim effected by the Agent, such Lender or the Swingline
Lender with any such claimant (including the Borrower or a trustee in bankruptcy
for the Borrower), then and in such event such Guarantor agrees that any such
judgment, decree, order, settlement or compromise shall be binding on it,
notwithstanding any revocation hereof or the cancellation of the Credit
Agreement, any of the other Loan Documents, or any other instrument evidencing
any liability of the Borrower, and, except as expressly provided otherwise in
such judgment, decree, order, settlement or compromise, such Guarantor shall be
and remain liable to the Agent, such Lender and the Swingline Lender for the
amounts so repaid or recovered to the same extent as if such amount had never
originally been paid to the Agent, such Lender or the Swingline Lender.
SECTION 10. SUBROGATION. Upon the making by any Guarantor of any
payment hereunder for the account of the Borrower, such Guarantor shall be
subrogated to the rights of the payee against such Borrower; provided, however,
that such Guarantor shall not enforce any right or receive any payment by way of
subrogation or otherwise take any action in respect of any other claim or cause
of action such Guarantor may have against the Borrower arising by reason of any
payment or performance by such Guarantor pursuant to this Guaranty, unless and
until all of the
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Guarantied Obligations have been indefeasibly paid and performed in full. If any
amount shall be paid to such Guarantor on account of or in respect of such
subrogation rights or other claims or causes of action, such Guarantor shall
hold such amount in trust for the benefit of the Agent, the Lenders and the
Swingline Lender and shall forthwith pay such amount to the Agent, the Lenders
and the Swingline Lender to be credited and applied against the Guarantied
Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Agreement or to be held by the Agent, the Lenders or the Swingline Lender
as collateral security for any Guarantied Obligations existing.
SECTION 11. PAYMENTS FREE AND CLEAR. All sums payable by each Guarantor
hereunder, whether of principal, interest, fees, expenses, premiums or
otherwise, shall be paid in full, without set-off or counterclaim or any
deduction or withholding whatsoever (including any Taxes), and if a Guarantor is
required by Applicable Law or by any Governmental Authority to make any such
deduction or withholding, such Guarantor shall pay to the Agent, the Lenders or
the Swingline Lender such additional amount as will result in the receipt by the
Agent, the Lenders or the Swingline Lender of the full amount payable hereunder
had such deduction or withholding not occurred or been required.
SECTION 12. SET-OFF. In addition to any rights now or hereafter granted
under any of the other Loan Documents or Applicable Law and not by way of
limitation of any such rights, each Guarantor hereby authorizes each of the
Agent, the Lenders and the Swingline Lender, at any time or from time to time,
without any prior notice to such Guarantor or to any other Person, any such
notice being hereby expressly waived, but subject to receipt of the Agent's
prior written consent, to set-off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Agent, the Lenders or the
Swingline Lender, or any affiliate of the Agent, the Lenders or the Swingline
Lender, to or for the credit or the account of such Guarantor against and on
account of any of the Guarantied Obligations, although such obligations shall be
contingent or unmatured.
SECTION 13. SUBORDINATION. Each Guarantor hereby expressly covenants
and agrees for the benefit of the Agent, the Lenders and the Swingline Lender
that all obligations and liabilities of the Borrower to such Guarantor of
whatever description, including without limitation, all intercompany receivables
of such Guarantor from the Borrower (collectively, the "Junior Claims") shall be
subordinate and junior in right of payment to all Guarantied Obligations. If an
Event of Default shall have occurred and be continuing, then no Guarantor shall
accept any direct or indirect payment (in cash, property, securities by setoff
or otherwise) from the Borrower on account of or in any manner in respect of any
Junior Claim until all of the Guarantied Obligations have been indefeasibly paid
in full.
SECTION 14. AVOIDANCE PROVISIONS. It is the intent of each Guarantor,
the Agent, each Lender and the Swingline Lender that in any Proceeding, such
Guarantor's maximum obligation hereunder shall equal, but not exceed, the
maximum amount which would not otherwise cause the obligations of such Guarantor
hereunder (or any other obligations of such Guarantor to the Agent, the Lenders
or the Swingline Lender) to be avoidable or unenforceable against such
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Xxxxxxxxx in such Proceeding as a result of Applicable Law, including without
limitation, (a) Section 548 of the Bankruptcy Code of 1978, as amended (the
"Bankruptcy Code") and (b) any state fraudulent transfer or fraudulent
conveyance act or statute applied in such Proceeding, whether by virtue of
Section 544 of the Bankruptcy Code or otherwise. The Applicable Laws under which
the possible avoidance or unenforceability of the obligations of such Guarantor
hereunder (or any other obligations of such Guarantor to the Agent, the Lenders
or the Swingline Lender) shall be determined in any such Proceeding are referred
to as the "Avoidance Provisions". Accordingly, to the extent that the
obligations of any Guarantor hereunder would otherwise be subject to avoidance
under the Avoidance Provisions, the maximum Guarantied Obligations for which
such Guarantor shall be liable hereunder shall be reduced to that amount which,
as of the time any of the Guarantied Obligations are deemed to have been
incurred under the Avoidance Provisions, would not cause the obligations of such
Guarantor hereunder (or any other obligations of such Guarantor to the Agent,
the Lenders or the Swingline Lender), to be subject to avoidance under the
Avoidance Provisions. This Section is intended solely to preserve the rights of
the Agent, the Lenders and the Swingline Lender hereunder to the maximum extent
that would not cause the obligations of any Guarantor hereunder to be subject to
avoidance under the Avoidance Provisions, and no Guarantor or any other Person
shall have any right or claim under this Section as against the Agent, the
Lenders or the Swingline Lender that would not otherwise be available to such
Person under the Avoidance Provisions.
SECTION 15. INFORMATION. Each Guarantor assumes all responsibility for
being and keeping itself informed of the financial condition of the Borrower and
the other Loan Parties, and of all other circumstances bearing upon the risk of
nonpayment of any of the Guarantied Obligations and the nature, scope and extent
of the risks that such Guarantor assumes and incurs hereunder, and agrees that
neither the Agent, the Lenders nor the Swingline Lender nor any Lender shall
have any duty whatsoever to advise any Guarantor of information regarding such
circumstances or risks.
SECTION 16. GOVERNING LAW. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of Georgia.
SECTION 17. LITIGATION; JURISDICTION; OTHER MATTERS; WAIVERS.
(a) EACH GUARANTOR AND THE AGENT, AND EACH LENDER AND THE
SWINGLINE LENDER BY ACCEPTING THE BENEFITS HEREOF, ACKNOWLEDGES THAT ANY DISPUTE
OR CONTROVERSY BETWEEN OR AMONG A GUARANTOR, THE AGENT, ANY OF THE LENDERS OR
THE SWINGLINE LENDER WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND
FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE GUARANTORS, THE AGENT, THE
LENDERS AND THE SWINGLINE LENDER HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH
AN ACTION MAY BE COMMENCED BY OR AGAINST ANY SUCH PARTY ARISING OUT OF THIS
GUARANTY, OR ANY OTHER
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LOAN DOCUMENT OR IN CONNECTION WITH ANY COLLATERAL OR ANY LIEN OR BY REASON OF
ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG A
GUARANTOR, THE AGENT, ANY LENDER OR THE SWINGLINE LENDER OF ANY KIND OR NATURE.
(b) EACH GUARANTOR AND THE AGENT, AND EACH LENDER AND THE
SWINGLINE LENDER BY ACCEPTING THE BENEFITS HEREOF, HEREBY AGREES THAT THE
FEDERAL DISTRICT COURT OF THE NORTHERN DISTRICT OF GEORGIA OR, AT THE OPTION OF
THE AGENT, ANY STATE COURT LOCATED IN XXXXXX COUNTY, GEORGIA, SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG EACH
GUARANTOR, THE AGENT, ANY LENDER OR THE SWINGLINE LENDER, PERTAINING DIRECTLY OR
INDIRECTLY TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING
HEREFROM OR THEREFROM OR ANY OF THE COLLATERAL. EACH GUARANTOR, THE AGENT AND
EACH LENDER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS.
(c) EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH
AGREES NOT TO PLEAD OR CLAIM THE SAME.
(d) THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY ANY GUARANTOR, THE AGENT, ANY
LENDER OR THE SWINGLINE LENDER OR THE ENFORCEMENT BY ANY GUARANTOR, THE AGENT,
ANY LENDER OR THE SWINGLINE LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY
OTHER APPROPRIATE JURISDICTION.
SECTION 18. LOAN ACCOUNTS. The Agent may maintain books and accounts
setting forth the amounts of principal, interest and other sums paid and payable
with respect to the Guarantied Obligations, and in the case of any dispute
relating to any of the outstanding amount, payment or receipt of any of the
Guarantied Obligations or otherwise, the entries in such books and accounts
shall, absent manifest error, constitute conclusive evidence of the outstanding
amount of such Guarantied Obligations and the amounts paid and payable with
respect thereto. The failure of the Agent to maintain such books and accounts
shall not in any way relieve or discharge any Guarantor of any of its
obligations hereunder.
SECTION 19. WAIVER OF REMEDIES. No delay or failure on the part of the
Agent, any Lender or the Swingline Lender in the exercise of any right or remedy
it may have against any Guarantor hereunder or otherwise shall operate as a
waiver thereof, and no single or partial exercise by the Agent, any Lender or
the Swingline Lender of any such right or remedy shall preclude other or further
exercise thereof or the exercise of any other such right or remedy.
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SECTION 20. TERMINATION. This Guaranty shall remain in full force and
effect until the indefeasible payment in full of the Guarantied Obligations and
the termination or cancellation of the Credit Agreement.
SECTION 21. SUCCESSORS AND ASSIGNS. Each reference herein to the Agent,
any Lender or the Swingline Lender shall be deemed to include the permitted
successors and assigns of the Agent, such Lender and the Swingline Lender
(including, but not limited to, any holder of any of the Guarantied Obligations)
in whose favor the provisions of this Guaranty also shall inure, and each
reference herein to each Guarantor shall be deemed to include such Guarantor's
successors and assigns, upon whom this Guaranty also shall be binding. The
Lenders and the Swingline Lender may, in accordance with the applicable
provisions of the Credit Agreement, assign, transfer or sell any Guarantied
Obligations, or grant or sell participations in any Guarantied Obligations, to
any Person without the consent of, or notice to, any Guarantor and without
releasing, discharging or modifying any Guarantor's obligations hereunder. Each
Guarantor hereby consents to the delivery by the Agent, the Lenders or the
Swingline Lender to any Assignee or Participant (or any prospective Assignee or
Participant) of any financial or other information regarding any Guarantor to
the extent permitted by and in accordance with the Credit Agreement, including,
without limitation, the confidentiality provisions therein. A Guarantor may not
assign or transfer its obligations hereunder to any Person.
SECTION 22. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF THE
GUARANTORS HEREUNDER SHALL BE JOINT AND SEVERAL AND ACCORDINGLY, EACH GUARANTOR
CONFIRMS THAT IT IS LIABLE FOR THE FULL AMOUNT OF THE "GUARANTEED OBLIGATIONS"
AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER GUARANTORS
HEREUNDER.
SECTION 23. AMENDMENTS. This Guaranty may not be amended, and the
application of the terms hereof may not be waived, except as provided under the
applicable provisions of the Credit Agreement.
SECTION 24. PAYMENTS. All payments to be made by any Guarantor pursuant
to this Guaranty shall be made in Dollars, in immediately available funds to the
Agent at its Principal Office, not later than 11:00 a.m., on the date 10 days
after demand therefor.
SECTION 25. NOTICES. All notices, requests and other communications
hereunder shall be in writing (including facsimile transmission or similar
writing) and shall be given (a) to each Guarantor at its address set forth below
its signature hereto, (b) to the Agent, each Lender or the Swingline Lender at
its address for notices provided for in the Credit Agreement, or (c) as to each
such party at such other address as such party shall designate in a written
notice to the other parties. Each such notice, request or other communication
shall be effective (i) if mailed, when received; (ii) if telecopied, when
transmitted; or (iii) if hand delivered, when delivered; provided, however, that
any notice of a change of address for notices shall not be effective until
received.
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SECTION 26. SEVERABILITY. In case any provision of this Guaranty shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 27. HEADINGS. Section headings used in this Guaranty are for
convenience only and shall not affect the construction of this Guaranty.
SECTION 28. EXPENSES. Each Guarantor will pay, within 10 days of
demand, all reasonable fees and expenses actually incurred by the Agent, any
Lender or the Swingline Lender in connection with (a) the collection or
enforcement of the Guarantied Obligations including the reasonable fees and
disbursements of counsel to the Agent, such Lender or the Swingline Lender
actually incurred by the Agent, such Lender or the Swingline Lender and (b) the
exercise by the Agent, any Lender or the Swingline Lender of any right or remedy
granted to it under this Guaranty if such exercise is done by, through or with
the assistance of any attorney.
SECTION 29. COUNTERPARTS. This Assignment may be executed in several
counterparts, each of which shall be an original and all of which, taken
together, shall constitute but one and the same instrument.
SECTION 30. DEFINITIONS. (a) For the purposes of this Guaranty:
"Proceeding" means any of the following: (i) a voluntary or involuntary
case concerning any Guarantor shall be commenced under the Bankruptcy Code of
1978, as amended; (ii) a custodian (as defined in such Bankruptcy Code or any
other applicable bankruptcy laws) is appointed for, or takes charge of, all or
any substantial part of the property of any Guarantor; (iii) any other
proceeding under any Applicable Law, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up or composition for adjustment
of debts, whether now or hereafter in effect, is commenced relating to any
Guarantor; (iv) any Guarantor is adjudicated insolvent or bankrupt; (v) any
order of relief or other order approving any such case or proceeding is entered
by a court of competent jurisdiction; (vi) any Guarantor makes a general
assignment for the benefit of creditors; (vii) any Guarantor shall fail to pay,
or shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; (viii) any Guarantor shall call a meeting of its
creditors with a view to arranging a composition or adjustment of its debts;
(ix) any Guarantor shall by any act or failure to act indicate its consent to,
approval of or acquiescence in any of the foregoing; or (x) any corporate action
shall be taken by any Guarantor for the purpose of effecting any of the
foregoing.
(b) Terms not otherwise defined herein are used herein with the
respective meanings given them in the Credit Agreement.
SECTION 31. AMENDMENT, RESTATEMENT AND CONSOLIDATION. PRIOR TO THE DATE
HEREOF, CERTAIN OF THE GUARANTORS EXECUTED AND DELIVERED GUARANTIES IN FAVOR OF
NATIONSBANK IN CONNECTION WITH THE EXISTING CREDIT AGREEMENT (THE "EXISTING
GUARANTIES"). SUCH GUARANTORS ARE ENTERING INTO THIS GUARANTY SOLELY TO AMEND,
X-0
000
XXXXXXX AND CONSOLIDATE IN THEIR ENTIRETY THE TERMS OF, AND THE OBLIGATIONS
OWING UNDER AND IN CONNECTION WITH, THE EXISTING GUARANTIES. THE PARTIES DO NOT
INTEND THIS GUARANTY NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS
GUARANTY AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE DEEMED OR
CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY ANY SUCH
GUARANTOR UNDER OR IN CONNECTION WITH ANY OF THE EXISTING GUARANTIES. FURTHER,
THE PARTIES DO NOT INTEND THIS GUARANTY NOR THE TRANSACTIONS CONTEMPLATED HEREBY
TO AFFECT THE PERFECTION OR PRIORITY OF ANY LIEN HELD BY THE AGENT, THE LENDERS
OR THE SWINGLINE LENDER IN ANY OF THE COLLATERAL IN ANY WAY WHATSOEVER.
[Signatures on Following Page]
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IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this
Amended, Restated and Consolidated Guaranty as of the date and year first
written above.
GUARANTORS:
[GUARANTOR 1]
[GUARANTOR 2]
By:_________________________________
Name:____________________________
Title:___________________________
Address for Notices:
c/o Physicians' Specialty Corp.
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopy No: (000) 000-0000
Agreed to and Accepted:
NATIONSBANK, N.A., as Agent
By:__________________________________
Name:_____________________________
Title:____________________________
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EXHIBIT E
FORM OF NOTICE OF BORROWING
___________,______
NationsBank, N.A., as Agent
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Agency Services, Corporate Credit Services
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of July 31, 1998 (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement"; capitalized terms used
herein, and not otherwise defined herein, shall have their respective defined
meanings as set forth in the Credit Agreement) by and among Physicians'
Specialty Corp. (the "Borrower"), each of the financial institutions initially a
signatory thereto and their assignees pursuant to Section 12.6 thereof (the
"Lenders") and NationsBank, N.A., as Agent (the "Agent").
1. Pursuant to Section 2.1 of the Credit Agreement, the Borrower
hereby requests that the Lenders make Revolving Loans to the
Borrower in an aggregate amount equal to $___________________.
2. The Borrower requests that the proceeds of such Revolving
Loans be made available to the Borrower on ____________,
_____.
3. The Borrower hereby requests that such Revolving Loans all be
of the following Type:
[CHECK ONE BOX ONLY]
Base Rate Loan
LIBOR Loan, with an initial Interest Period for a
duration of:
[CHECK ONE BOX ONLY] one month
two months
three months
six months
X-0
000
0. The Agent is instructed to make such proceeds available to the
Borrower as follows:____________________________.
5. The Borrower represents and warrants to the Agent and the
Lenders that the proceeds of the Loan requested hereby are to
be used in accordance with Section 7.8 of the Credit
Agreement.
6. The Borrower further represents and warrants that as of the
date hereof, the statements set forth in Section 5.2(a) and
(b) of the Credit Agreement are true and correct.
If notice of the requested borrowing of Revolving Loans has been given
previously by telephone, then this notice should be considered a written
confirmation of such telephone notice as required by Section 2.1(b) of the
Credit Agreement.
PHYSICIANS' SPECIALTY CORP.
By:______________________________
Name:_________________________
Title:________________________
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126
EXHIBIT F
FORM OF NOTICE OF CONTINUATION
______________, _____
NationsBank, N.A., as Agent
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Agency Services, Corporate Credit Services
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of July 31, 1998 (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement"; capitalized terms used
herein, and not otherwise defined herein, shall have their respective defined
meanings as set forth in the Credit Agreement) among Physicians' Specialty Corp.
(the "Borrower"), each of the financial institutions initially a signatory
thereto and their assignees pursuant to Section 12.6 thereof (the "Lenders") and
NationsBank, N.A., as Agent (the "Agent").
Pursuant to Section 2.6 of the Credit Agreement, the Borrower hereby
gives notice, irrevocably, that the Borrower hereby requests a Continuation of a
borrowing of LIBOR Loans under the Credit Agreement, and in that connection sets
forth below the information relating to such Continuation as required by Section
2.6 of the Credit Agreement:
1. The requested date of such Continuation is ___________, _____.
2. The aggregate principal amount of Revolving Loans subject to
the requested Continuation is $________________________ and
the portion of such principal amount subject to such
Continuation is $__________________________.
3. The current Interest Period for each of the Revolving Loans
subject to such Continuation ends on ________________, _____.
4. The duration of the Interest Period for each of the Revolving
Loans or portion thereof subject to such Continuation is:
[CHECK ONE BOX ONLY] one month
two months
three months
six months
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127
5. The Company further represents and warrants that as of the
date hereof, the statements set forth in Sections 5.2(a) and
(b) of the Credit Agreement are true and correct.
If notice of this Continuation has been given previously by telephone,
then this notice should be considered a written confirmation of such telephone
notice as required by Section 2.6 of the Credit Agreement.
PHYSICIANS' SPECIALTY CORP.
By:______________________________
Name:_________________________
Title:________________________
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EXHIBIT G
FORM OF NOTICE OF CONVERSION
____________, _____
NationsBank, N.A., as Agent
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Agency Services, Corporate Credit Services
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of July 31, 1998 (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement"; capitalized terms used
herein, and not otherwise defined herein, shall have their respective defined
meanings as set forth in the Credit Agreement) among Physicians' Specialty Corp.
(the "Borrower"), each of the financial institutions initially a signatory
thereto and their assignees pursuant to Section 12.6 thereof (the "Lenders") and
NationsBank, N.A., as Agent (the "Agent").
Pursuant to Section 2.7 of the Credit Agreement, the Borrower hereby
gives you notice, irrevocably, that the Borrower hereby requests a Conversion of
a borrowing of Revolving Loans of one Type into Revolving Loans of another Type
under the Credit Agreement, and in that connection sets forth below the
information relating to such Conversion as required by Section 2.7 of the Credit
Agreement:
1. The requested date of such Conversion is ____________, _____.
2. The Revolving Loans to be Converted pursuant hereto are
currently:
[CHECK ONE BOX ONLY] Base Rate Loans
LIBOR Loans
3. The aggregate principal amount of Revolving Loans subject to
the requested Conversion is $________________________ and the
portion of such principal amount subject to such Conversion is
$__________________________.
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4. The amount of each such Revolving Loan to be so Converted is
to be converted into a Revolving Loan of the following Type:
[CHECK ONE BOX ONLY]
Base Rate Loan
LIBOR Loan, with an initial Interest Period for a
duration of:
[CHECK ONE BOX ONLY] one month
two months
three months
six months
5. The Company further represents and warrants that as of the
date hereof, the statements set forth in Sections 5.2(a) and
(b) of the Credit Agreement are true and correct.
If notice of this Conversion has been given previously by telephone,
then this notice should be considered a written confirmation of such telephone
notice as required by Section 2.7 of the Credit Agreement.
PHYSICIANS' SPECIALTY CORP.
By:______________________________
Name:_________________________
Title:________________________
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EXHIBIT H
FORM OF NOTICE OF SWINGLINE BORROWING
___________, _____
NationsBank, N.A., as Agent
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Agency Services, Corporate Credit Services
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of July 31, 1998 (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement"; capitalized terms used
herein, and not otherwise defined herein, shall have their respective defined
meanings as set forth in the Credit Agreement) by and among Physicians'
Specialty Corp. (the "Borrower"), each of the financial institutions initially a
signatory thereto and their assignees pursuant to Section 12.6 thereof (the
"Lenders") and NationsBank, N.A., as Agent (the "Agent").
1. Pursuant to Section 2.10 of the Credit Agreement, the Borrower
hereby requests that the Swingline Lender make a Swingline
Loan to the Borrower in an amount equal to
$___________________.
2. The Borrower requests that the Swingline Loan be made
available to the Borrower on _____________, _____.
3. The Swingline Lender is instructed to make such proceeds
available to the Borrower as
follows:____________________________.
4. The Borrower represents and warrants to the Agent, the Lenders
and the Swingline Lender that the proceeds of the Swingline
Loan requested hereby are to be used in accordance with
Section 7.8 of the Credit Agreement.
6. The Borrower further represents and warrants that as of the
date hereof, the statements set forth in Section 5.2(a) and
(b) of the Credit Agreement are true and correct.
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If notice of this Swingline Loan has been given previously by
telephone, then this notice should be considered a written confirmation of such
telephone notice as required by Section 2.10(b) of the Credit Agreement.
PHYSICIANS' SPECIALTY CORP.
By:______________________________
Name:_________________________
Title:________________________
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EXHIBIT I
FORM OF SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT dated as of __________ by and among
__________________ (the "Junior Creditor") and NATIONSBANK, N.A., as Agent (the
"Agent").
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement
dated as of July 31, 1998 (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement") by and among Physicians'
Specialty Corp. (the "Borrower"), each of the financial institutions initially a
signatory thereto and their assignees pursuant to Section 12.6 thereof (the
"Lenders") and the Agent the Lenders have agreed to make available to the
Borrower a $45,000,000 credit facility;
WHEREAS, [PSC Management Corp.] (the "Debtor") has guarantied the
Borrower's obligations to the Agent, the Lenders and NationsBank, N.A., as
Swingline Lender (the "Swingline Lender") on the terms and conditions contained
in that certain Guaranty dated as of July 31, 1998 (as the same may be amended,
supplemented, restated or otherwise modified from time to time in accordance
with its terms, the "Guaranty"), executed by the Debtor, and certain other
Subsidiaries of the Borrower in favor of the Agent, the Lenders and the
Swingline Lenders;
WHEREAS, the Junior Creditor has extended certain financial
accommodations to the Debtor as evidenced by that certain [Promissory Note]
dated ________, _____ executed by the Debtor, payable to the order of the Junior
Creditor and in the original principal amount of $__________ (as the same may be
amended, supplement, restated or otherwise modified from time to time in
accordance with its terms, and all notes or other instruments given in
replacement or substitution thereof, the "Subordinated Note"); and
WHEREAS, it is a condition precedent to the Lenders' continued
extension of credit to the Borrower under the Credit Agreement that the Debtor
and the Junior Creditor execute and deliver this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree as follows:
Section 1. Subordination of Debt. The Junior Creditor agrees and
covenants that, to the extent set forth herein and on the terms and conditions
set forth herein, the Subordinated Debt is and shall be subordinate in right of
payment and collection to the payment in full of all of the Senior Debt. The
Debtor shall not make, and the Junior Creditor shall not accept, any payment
with respect to, or on account of, any of the Subordinated Debt; provided,
however, so long as the Creditor shall have not received a notice from the Agent
that an Event of Default under and as defined in the Credit Agreement has
occurred and is continuing, the Debtor may pay, and the Creditor may receive,
regularly scheduled payments of interest and principal on the Subordinated
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Note, as such Subordinated Note may be amended with the consent of the Agent. In
no event shall the Junior Creditor be entitled to receive any prepayments of
principal or interest in respect of any of the Subordinated Debt.
Section 2. No Action. Unless and until the Senior Debt shall have been
paid in full, the Junior Creditor shall not, without the prior written consent
of the Agent and whether or not an Event of Default under and as defined in the
Credit Agreement shall have occurred and be continuing, commence any action or
proceeding seeking in any way to collect on the Subordinated Debt, or commence,
or join with any other creditor (other than the Agent) in commencing, a
Bankruptcy Proceeding and if taken any such action shall be ineffective or if in
process of being taken shall be terminated and rescinded.
Section 3. Bankruptcy of Debtor. In the event of any Bankruptcy
Proceeding, the Junior Creditor will, at the request of the Agent, file any
claim, proof of claim, or other instrument of similar character necessary to
enforce the obligations of the Debtor in respect of the Subordinated Debt and
will hold in trust for the Agent and assign, transfer and pay over to the Agent,
in the form received, to be applied on the Senior Debt, any and all monies,
dividends or other assets received in any such Bankruptcy Proceeding on account
of the Subordinated Debt, unless and until the Senior Debt shall have been paid
in full. If the Junior Creditor shall fail to take such action requested by the
Agent, the Agent may, as attorney-in-fact for the Junior Creditor, take such
action on behalf of the Junior Creditor, and the Junior Creditor hereby appoints
the Agent and any of its officers as attorney-in-fact for the Junior Creditor to
demand, xxx for, collect and receive any and all such monies, dividends or other
assets and give acquittance therefor and to file any claim, proof of claim or
other instrument of similar character and to take any such action in any
Bankruptcy Proceeding in the Agent's own name or in the name of the Junior
Creditor as the Agent may deem necessary or advisable for the enforcement of
this Agreement. The Junior Creditor will execute and deliver to the Agent such
other and further powers of attorney or other instruments as the Agent may
request in order to accomplish the foregoing. The Junior Creditor further grants
to the Agent an irrevocable proxy to exercise any voting rights the Junior
Creditor may have with respect to the approval or disapproval of a plan of
reorganization of the Debtor proposed by any person or class of persons in any
Bankruptcy Proceeding.
Section 4. Warranties and Representations of the Junior Creditor. The
Junior Creditor represents and warrants to the Agent, the Lenders and the
Swingline Lender that: (a) no part of the Subordinated Debt is evidenced by any
instrument other than the Subordinated Note; (b) none of the Subordinated Debt
is secured by any security interest, lien or other encumbrance in any of the
assets of the Debtor or any other person or entity; (c) the Junior Creditor is
the lawful owner of the Subordinated Debt; (d) the Junior Creditor has not
assigned or transferred any of the Subordinated Debt, or any interest therein;
(e) the Junior Creditor has not given any subordination in respect of the
Subordinated Debt; and (f) no default is in existence with respect to the
Subordinated Debt.
Section 5. Covenants. For so long as this Agreement is in effect the
Junior Creditor agrees that it will not: (a) accept any instrument, security or
other writing evidencing any part of the Subordinated Debt other than the
Subordinated Note, (b) amend, alter or modify any
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provision of the Subordinated Note without the prior written consent of the
Agent or (c) accept any security interest, lien or other encumbrance in any of
the assets of the Debtor or any other person or entity as security for any of
the Subordinated Debt.
Section 6. Turnover of Prohibited Transfers. If the Junior Creditor
shall receive any payment or other transfer of property which it is not entitled
to receive or accept under the terms hereof, the Junior Creditor shall forthwith
deliver same to the Agent in the form received (together with any endorsement
necessary to effect a transfer of all rights therein to the Agent) for
application to the Senior Debt. The Junior Creditor irrevocably authorizes the
Agent to supply any required endorsement or assignment which may have been
omitted. Until so delivered any such payment or property shall be held by the
Junior Creditor in trust for the Agent and shall not be commingled with other
funds or property of the Junior Creditor.
Section 7. Waivers. To the fullest extent permitted by law, the Junior
Creditor each hereby waives the right to require the Agent, any Lender or the
Swingline Lender to marshal any assets, or to enforce any security interest or
lien the Agent may now or hereafter have in any collateral securing the Senior
Debt or to pursue any claim it may have against any guarantor of the Senior
Debt, as a condition to the Agent's entitlement to receive any payment on
account of the Subordinated Debt. The Agent, the Lenders and the Swingline
Lender each may, at any time and from time to time, without the consent of or
notice to the Junior Creditor and without incurring any responsibility or
liability to the Junior Creditor and without impairing or releasing the
obligations of the Junior Creditor hereunder: (a) change the manner, place or
terms of payment or change or extend the time of payment of or renew or alter
the Senior Debt or any portion thereof; (b) sell, exchange, release or otherwise
deal with any collateral or any other property by whomsoever at any time pledged
or mortgaged to secure, or however securing, the Senior Debt or any portion
thereof; (c) release anyone liable in any manner for the payment or collection
of the Senior Debt or any portion thereof; (d) exercise or refrain from
exercising any rights against the Debtor and others; and (e) apply any sums by
whomsoever paid or however realized to the Senior Debt or any portion thereof.
Section 8. Validity of Subordinated Debt. This Agreement defines the
relative rights of the Junior Creditor, the Agent, the Lenders and the Swingline
Lender. Nothing in this Agreement shall impair, as between the Debtor and the
Junior Creditor, the obligation of the Debtor, which is absolute and
unconditional, to pay the Subordinated Debt in accordance with its terms, except
as payment thereof may be postponed or otherwise directed in accordance with
this Agreement.
Section 9. Specific Performance. In addition to any other remedies
available to the Agent, any Lender or the Swingline Lender hereunder or
otherwise, at any time the Junior Creditor fails to comply with any provision of
this Agreement applicable to the Junior Creditor, the Agent may, on its behalf
or on behalf of the Lenders and the Swingline Lender, demand specific
performance of this Agreement. The Junior Creditor hereby irrevocably waives any
defense based on the adequacy of a remedy at law that might be asserted as a bar
to such remedy of specific performance. If the Junior Creditor, in violation of
this Agreement, shall institute or participate in any action suit or proceeding
against the Debtor, the Debtor may interpose as a
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defense or dilatory plea this Agreement and the Agent is irrevocably authorized
to intervene and to interpose such defense or plea in the Debtor's name.
Section 10. Indulgences Not Waivers. Neither the failure nor any delay
on the part of the Agent, any Lender or the Swingline Lender to exercise any
right, remedy, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver by a
party hereunder shall be effective unless it is in writing and signed by the
party making such waiver, and then only to the extent specifically stated in
such writing.
Section 11. Duration. This Agreement shall become effective when
executed by the Debtor and the Junior Creditor and accepted by the Agent, and,
when so accepted, shall constitute a continuing agreement of subordination, and
shall remain in effect until all of the Senior Debt has been paid in full.
Section 12. LITIGATION. IN THE EVENT OF ANY LITIGATION WITH RESPECT TO
ANY MATTER CONCERNED WITH THIS AGREEMENT OR THE SENIOR DEBT, THE JUNIOR
CREDITOR, THE AGENT, ANY LENDER AND THE SWINGLINE LENDER EACH HEREBY WAIVES ALL
RIGHTS TO A TRIAL BY JURY. THE JUNIOR CREDITOR HEREBY IRREVOCABLY CONSENTS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF GEORGIA AND OF ANY FEDERAL COURT
LOCATED IN THE STATE OF GEORGIA, IN CONNECTION WITH ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY OR ALL OF THE SENIOR DEBT OR THIS AGREEMENT.
Section 13. Adequate Assurances. The Junior Creditor agrees to execute
any further documents, instruments and agreements and take such other actions as
may be necessary to effect the purposes of this Agreement, including the filing
of any financing statements or other instruments in any applicable public
records, all as directed by the Agent. The Junior Creditor agrees that it shall
cause to be added to the Subordinated Note, and each other document evidencing
the Subordinated Debt, the following legend:
"The rights and remedies of [Junior Creditor], and its successors and
assigns, under this instrument are subject to the terms and conditions
of that certain Subordination Agreement dated as of _____________,
199_, as amended from time to time, by and between [Junior Creditor]
and NationsBank, N.A., as Agent."
Section 14. Notices. All notices and other communications provided for
hereunder shall be in writing and shall be mailed, telecopied or delivered, as
follows:
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(a) If to the Agent:
NationsBank, N.A.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy Number: (000) 000-0000
Telephone Number: (000) 000-0000
(b) If to the Junior Creditor:
_________________________________
_________________________________
_________________________________
Attention:___________________________
Telecopy Number: (___) ___-_______
Telephone Number: (___) ___-_______
All such notices and communications shall be effective upon receipt thereof. Any
party may alter the address to which notices are to be sent by giving notice to
the other parties hereto of such change of address in conformity with the
provisions of this Section.
Section 15. Successors and Assigns. This Agreement shall inure to the
benefit of the Agent, each Lender and the Swingline Lender and their respective
successors and assigns, and shall be binding upon the Junior Creditor and its
successors and assigns.
Section 16. Acknowledgment. The Junior Creditor acknowledges that the
Agent, the Lenders and the Swingline Lender, in continuing to make Loans and
other financial accommodations under the Credit Agreement, has relied upon the
terms of this Agreement.
Section 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
Section 18. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall constitute an original but which together
shall constitute one instrument.
Section 19. Definitions. In addition to such other terms as are
elsewhere defined herein, as used in this Agreement the following terms shall
have the following meanings:
"Bankruptcy Proceeding" means any receivership, insolvency, bankruptcy
proceeding under the Bankruptcy Code of 1978, as amended or other bankruptcy or
reorganization law, assignment for the benefit of creditors, reorganization or
other arrangement with creditors, sale of all or substantially all of the assets
of the Debtor, or any other marshaling of the assets or liabilities of the
Debtor.
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"Payment in full" or "paid in full" shall mean, with respect to the
Agent, the Lenders and the Swingline Lender, the indefeasible payment in full in
cash or cash equivalents of the entire amount of the Senior Debt in the manner
provided under the terms of the Guaranty.
"Senior Debt" means all obligations and liabilities at any time owed by
the Debtor or the Borrower to the Agent, the Lenders or the Swingline Lender,
whether direct or indirect, absolute or contingent, secured or unsecured, due or
to become due, now existing or hereafter arising, including, without limitation,
any and all liabilities and obligations now or hereafter owing (a) by the
Borrower to the Agent, the Lenders or the Swingline Lender under or in
connection with the Credit Agreement or any other document, instrument or
agreement executed by the Borrower in connection with any of the foregoing and
(b) by the Debtor to the Agent, the Lenders and the Swingline Lender under the
Guaranty, in all cases together with all interest, fees, charges, expenses and
attorney's fees for which the Borrower or the Debtor is now or hereafter becomes
liable to pay to the Agent, the Lenders or the Swingline Lender under any
agreement or by law.
"Subordinated Debt" means all principal, interest and all other amounts
at any time owing by the Debtor to the Junior Creditor under or in respect of
the Subordinated Note, whether direct or indirect, absolute or contingent,
secured or unsecured, due or to become due, now existing or hereafter arising.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Subordination
Agreement to be signed, sealed and delivered as of the date first above written.
THE JUNIOR CREDITOR:
_________________________________
By:______________________________
Name:_________________________
Title:________________________
THE AGENT:
NATIONSBANK, N.A. ,as Agent
By:______________________________
Name:_________________________
Title:________________________
The undersigned acknowledges and consents to the
foregoing Subordination Agreement and confirms
that it is not a party thereto.
[PSC MANAGEMENT CORP.]
By:_________________________________________
Name:____________________________________
Title:___________________________________
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EXHIBIT J
FORM OF SWING LINE NOTE
$2,500,000 July 31, 1998
FOR VALUE RECEIVED, the undersigned, PHYSICIANS' SPECIALTY CORP., a
corporation organized under the laws of the State of Delaware (the "Borrower"),
promises to pay to the order of NATIONSBANK, N.A. (the "Swingline Lender") in
care of NationsBank, N.A., as Agent (the "Agent") at its office located at 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, or at such other location
as the Agent shall notify the Borrower in writing, in lawful money of the United
States of America and in immediately available funds, the principal amount of
TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($2,500,000), or such
lesser principal amount, as may then constitute the unpaid aggregate principal
amount of the Swingline Loans made by the Swingline Lender to the Borrower
pursuant to the Credit Agreement (as defined below) on the Termination Date.
The Borrower agrees to pay principal at said office, in like money,
from time to time on the dates and at the times specified in the Credit
Agreement. The Borrower further agrees to pay interest at said office, in like
money, on the unpaid principal amount owing hereunder from time to time on the
dates and at the rates and at the times specified in the Credit Agreement.
The date and amount of each Swingline Loan made by the Swingline Lender
to the Borrower under the Credit Agreement, each payment of principal in respect
thereof and the accrual of interest under this Swingline Note, shall be recorded
by the Swingline Lender on its books; provided, however, that the failure of the
Swingline Lender to make any such recordation shall not affect the obligation of
the Borrower to make a payment when due of any amount owing under this Swingline
Note. Any such recordations made by the Swingline Lender on its books shall be
prima facie evidence of the amounts recorded therein.
This Swingline Note is the "Swingline Note" referred to in that certain
Amended and Restated Credit Agreement dated as of July 31, 1998 (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), by and among the Borrower, each of the financial institutions
initially a signatory thereto and their assignees pursuant to Section 12.6
thereof (the "Lenders") and the Agent, and is subject to, and entitled to, all
provisions and benefits thereof. Capitalized terms used herein and not defined
herein shall have the respective meanings given to such terms in the Credit
Agreement. The Credit Agreement, among other things, (a) provides for the making
of Swingline Loans by the Swingline Lender to the Borrower from time to time in
an aggregate amount not to exceed at any time outstanding the Dollar amount
first above-mentioned, (b) permits the prepayment of the Swingline Loans by the
Borrower subject to certain terms and conditions and (c) provides for the
acceleration of the Swingline Loans upon the occurrence of certain specified
events.
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This Swingline Note is secured by the Collateral and the holder hereof
shall be entitled to the benefits thereof and to the other Loan Documents (to
the extent and with the effect as therein provided).
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
THIS SWINGLINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF GEORGIA.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Swingline Note under seal as of the date written above.
PHYSICIANS' SPECIALTY CORP.
By:______________________________
Name:_________________________
Title:________________________
ATTEST:
By:______________________________
Name:_________________________
Title:________________________
(CORPORATE SEAL)
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EXHIBIT K
FORM OF REVOLVING NOTE
$______________ ________ ___, ____
FOR VALUE RECEIVED, the undersigned, PHYSICIANS' SPECIALTY CORP., a
corporation organized under the laws of the State of Delaware (the "Borrower"),
promises to pay to the order of ___________________ (the "Lender") in care of
NationsBank, N.A., as Agent (the "Agent") at its office located at 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, or at such other location as the
Agent shall notify the Borrower in writing, in lawful money of the United States
of America and in immediately available funds, the principal amount of
__________________________ AND NO/100 DOLLARS ($___________), or such lesser
principal amount, as may then constitute the unpaid aggregate principal amount
of the Revolving Loans made by the Lender to the Borrower pursuant to the Credit
Agreement (as defined below) on the Termination Date.
The Borrower agrees to pay principal at said office, in like money,
from time to time on the dates and at the times specified in the Credit
Agreement. The Borrower further agrees to pay interest at said office, in like
money, on the unpaid principal amount owing hereunder from time to time on the
dates and at the rates and at the times specified in the Credit Agreement.
The date and amount of each Revolving Loan made by the Lender to the
Borrower under the Credit Agreement, each payment of principal in respect
thereof and the accrual of interest under this Note, shall be recorded by the
Lender on its books; provided, however, that the failure of the Lender to make
any such recordation shall not affect the obligation of the Borrower to make a
payment when due of any amount owing under this Note. Any such recordations made
by the Lender on its books shall be prima facie evidence of the amounts recorded
therein.
This Note is one of the "Revolving Notes" referred to in that certain
Amended and Restated Credit Agreement dated as of July 31, 1998 (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), by and among the Borrower, each of the financial institutions
initially a signatory thereto and their assignees pursuant to Section 12.6
thereof (the "Lenders") and the Agent, and is subject to, and entitled to, all
provisions and benefits thereof. Capitalized terms used herein and not defined
herein shall have the respective meanings given to such terms in the Credit
Agreement. The Credit Agreement, among other things, (a) provides for the making
of Revolving Loans by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the Dollar amount first
above-mentioned, (b) permits the prepayment of the Revolving Loans by the
Borrower subject to certain terms and conditions and (c) provides for the
acceleration of the Revolving Loans upon the occurrence of certain specified
events.
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This Note is secured by the Collateral and the holder hereof shall be
entitled to the benefits thereof and to the other Loan Documents (to the extent
and with the effect as therein provided).
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF GEORGIA.
[THE FOLLOWING TEXT IS TO BE INCLUDED IN ONLY THE NOTE EXECUTED IN
FAVOR OF NATIONSBANK--This Note amends, restates, consolidates and replaces that
certain Revolving Note dated April 30, 1997 in the original principal amount of
$5,000,000 executed and delivered by the Borrower, payable to the order of the
Lender and that certain Term Note dated April 30, 1997 in the original principal
amount of $20,000,000 executed and delivered by the Borrower, payable to the
order of the Lender. THIS NOTE IS NOT INTENDED TO BE, AND SHALL NOT BE CONSTRUED
TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING UNDER OR IN CONNECTION WITH
SUCH OTHER NOTES.]
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Revolving Note under seal as of the date written above.
PHYSICIANS' SPECIALTY CORP.
By:______________________________
Name:_________________________
Title:________________________
ATTEST:
By:______________________________
Name:_________________________
Title:________________________
(CORPORATE SEAL)
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EXHIBIT L
FORM OF AMENDED, RESTATED AND CONSOLIDATED PLEDGE AGREEMENT
THIS AMENDED, RESTATED AND CONSOLIDATED PLEDGE AGREEMENT is dated as of
July 31, 1998 (this "Pledge Agreement"), and executed and delivered by each of
the undersigned "Pledgors" and the other Persons from time to time a party
hereto (all of such undersigned and each such other Person, a "Pledgor" and
collectively, the "Pledgors"), in favor of NATIONSBANK, N.A., successor to
NationsBank, N.A. (South), as Agent (the "Pledgee").
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement
dated as of July 31, 1998 (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the "Credit Agreement") among Physicians'
Specialty Corp. (the "Borrower"), each of the financial institutions initially
party thereto and their assignees pursuant to Section 12.6 thereof (the
"Lenders") and the Pledgee, the Lenders and the Swingline Lenders have agreed to
extend certain financial accommodations to the Borrower subject to the terms
thereof;
WHEREAS, the Borrower owns, directly or indirectly, all of the
outstanding capital stock and other equity interests of the other Pledgors;
WHEREAS, the Pledgors and the other Subsidiaries of the Borrower,
though separate legal entities, are mutually dependent on each other in the
conduct of their respective businesses as an integrated operation and have
determined it to be in their mutual best interests to obtain financing from the
Lenders and the Swingline Lender through their collective efforts;
WHEREAS, each Pledgor (other than the Borrower) acknowledges that it
will receive direct and indirect benefits from the Lenders and the Swingline
Lender making such financial accommodations available to the Borrower under the
Credit Agreement and, accordingly, each such Pledgor agreed to guaranty the
Borrower's obligations to the Pledgee on the terms and conditions contained in
that certain Guaranty dated as of the date hereof (as the same may be amended,
supplemented, restated or otherwise modified from time to time in accordance
with its terms, the "Guaranty") executed by the Pledgors and certain other
Subsidiaries of the Borrower in favor of the Pledgee;
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the Lenders' continued extension of such financial accommodations
under the Credit Agreement that the Pledgors execute and deliver this Pledge
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. PLEDGE. Each Pledgor hereby pledges, hypothecates, assigns,
transfers, sets over and delivers unto the Pledgee for its benefit and the
benefit of the Lenders and the
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Swingline Lender, and grants to the Pledgee for its benefit and the benefit of
the Lenders and the Swingline Lender a security interest in, all of such
Pledgor's right, title and interest in, to and under the following
(collectively, the "Pledged Collateral"): (a) all of the common stock, shares,
equity interest and other securities (collectively, "Securities") of each Person
(each an "Issuer") described in Schedule I attached hereto or in Schedule I to
the Accession Agreement by which such Pledgor became a party to this Agreement;
(b) any additional Securities of any of such Issuers as may from time to time be
issued to such Pledgor or otherwise acquired by such Pledgor; (c) any additional
Securities of any Issuer as may hereafter at any time be delivered to the
Pledgee by or on behalf of such Pledgor; (d) any cash or additional Securities
or other property at any time and from time to time receivable or otherwise
distributable in respect of, in exchange for, or in substitution of, any of the
property referred to in any of the immediately preceding clauses (a) through
(c); and (e) any and all products and proceeds of any of the foregoing, together
with any and all other rights, titles, interests, powers, privileges and
preferences pertaining to said property.
SECTION 2. OBLIGATIONS SECURED. This Agreement is made, and the
security interest created hereby is granted to the Pledgee for the benefit of
the Lenders and the Swingline Lender, to secure the prompt performance and
payment in full of the following (collectively, the "Secured Obligations"): (a)
all Obligations (as defined in the Credit Agreement); (b) all obligations and
indebtedness of each Pledgor owing to the Pledgee, any Lender or the Swingline
Lender of every kind, nature and description, under or with respect to the
Credit Agreement, the Guaranty, this Pledge Agreement or any of the other Loan
Documents, whether direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by a note; (c) all renewals, modifications, extensions and supplements
to any of the foregoing; and (d) any reasonable costs or expenses actually
incurred by the Pledgee or Pledgee's counsel in connection with the realization
of the security for which this Pledge Agreement provides, including, without
limitation, any reasonable costs or expenses of any proceedings to which this
Pledge Agreement may give rise.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Each Pledgor hereby
represents and warrants to the Pledgee, the Lenders and the Swingline Lender as
follows:
(a) Validly Issued, etc. All of the Securities of each Issuer
pledged by such Pledgor hereunder have been validly issued and are fully paid
and nonassessable.
(b) Title and Liens. Such Pledgor is, and will at all times
continue to be, the legal and beneficial owner of the Pledged Collateral in
which it has rights and none of such Pledged Collateral is subject to any Lien
other than Permitted Liens. No financing statement under the Uniform Commercial
Code of any jurisdiction which names such Pledgor as debtor or covers any of
such Pledged Collateral, or any other notice filed in the public records
indicating the existence of a Lien thereon, has been filed and is still
effective in any state or other jurisdiction, other than Uniform Commercial Code
financing statements filed in favor of the Pledgee, and such Pledgor has not
signed any such financing statement or notice or any security agreement
authorizing the filing of any such financing statement or notice, other than
Uniform Commercial Code financing statements filed in favor of the Pledgee.
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(c) Name; Chief Executive Office; Taxpayer ID Number. The correct
corporate name of such Pledgor is set forth on the signature page to this Pledge
Agreement or the applicable Accession Agreement. The chief executive office and
principal place of business of such Pledgor and the location of such Pledgor's
books and records relating to its Pledged Collateral are located at the address
set forth on the signature page hereto or as set forth in the applicable
Accession Agreement. The Internal Revenue Service taxpayer identification number
of such Pledgor is set forth on Schedule I attached hereto or in the applicable
Accession Agreement.
(d) Authority, etc. Such Pledgor (i) has the power and authority
to pledge the Pledged Collateral in the manner hereby done or contemplated and
(ii) will defend its title or interest thereto or therein against any and all
Liens (other than the Lien created by this Pledge Agreement and Permitted
Liens), however arising, of all persons.
(e) No Approval. No consent or approval of any Governmental
Authority or any securities exchange was or is necessary to the validity of the
pledge effected hereby.
(f) Outstanding Shares. The Securities pledged by such Pledgor
hereunder constitute [____%] of the issued and outstanding equity interests of
each Issuer.
SECTION 4. COVENANTS. Each Pledgor hereby unconditionally covenants and
agrees as follows:
(a) No Liens; No Sale of Pledged Collateral. Such Pledgor will not
create, assume, incur or permit or suffer to exist or to be created, assumed or
incurred, any Lien on any of the Pledged Collateral (or any interest therein),
other than Permitted Liens, and will not, without the prior written consent of
the Pledgee, sell, lease, assign, transfer or otherwise dispose of all or any
portion of the Pledged Collateral (or any interest therein).
(b) Change of Locations, Name, Etc. Without giving the Pledgee at
least sixty-day's prior written notice, such Pledgor will not (i) change such
Pledgor's chief executive office, principal place of business, or the location
of its books and records relating to the Pledged Collateral or (ii) change its
name, identity or structure.
SECTION 5. ADDITIONAL SHARES.
(a) During the period this Pledge Agreement is in effect, no
Pledgor shall permit any Issuer of Securities pledged by such Pledgor hereunder
to issue any additional shares of capital stock or other equity securities or
interests to any Person other than such Pledgor. Further, no Pledgor shall
permit any such Issuer to amend or modify its articles or certificate of
incorporation in a manner which would affect the voting, liquidation, preference
or other rights of a holder of the shares of stock pledged hereunder.
(b) Each Pledgor agrees that, until this Pledge Agreement has
terminated in accordance with its terms, any additional Securities of an Issuer
at any time issued to such
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Pledgor or otherwise acquired by such Pledgor shall be promptly delivered or
otherwise transferred to the Pledgee as additional Pledged Collateral and shall
be subject to the Lien of, and the terms and conditions of, this Pledge
Agreement.
SECTION 6. REGISTRATION IN NOMINEE NAME, DENOMINATIONS. The Pledgee, on
behalf of itself, the Lenders and the Swingline Lender, shall have the right (in
its sole and absolute discretion) to hold the Pledged Securities in its own name
as pledgee, the name of its nominee (as Pledgee or as sub-agent) or the name of
the applicable Pledgor, endorsed or assigned in blank or in favor of the
Pledgee. Each Pledgor will promptly give to the Pledgee copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Pledgor. The Pledgee shall at all times have the
right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger numbers of shares for any purpose consistent
with this Pledge Agreement.
SECTION 7. VOTING RIGHTS; DIVIDENDS, ETC.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) each Pledgor shall be entitled to exercise any and all
voting and/or consensual rights and powers accruing to an owner of the
Pledged Collateral or any part thereof for any purpose not inconsistent
with the terms and conditions of this Pledge Agreement or any agreement
giving rise to or otherwise relating to any of the Secured Obligations;
provided, however, that such Pledgor shall not exercise, or refrain
from exercising, any such right or power if any such action would have
a materially adverse effect on the value of such Pledged Collateral in
the reasonable judgment of the Pledgee;
(ii) each Pledgor shall be entitled to retain and use any and
all cash dividends paid on the Pledged Collateral, but any and all
stock and/or liquidating dividends, other distributions in property,
return of capital or other distributions made on or in respect of
Pledged Securities, whether resulting from a subdivision, combination
or reclassification of outstanding Securities of an Issuer which are
pledged hereunder or received in exchange for Pledged Collateral or any
part thereof or as a result of any merger, consolidation, acquisition
or other exchange of assets or on the liquidation, whether voluntary or
involuntary, of an Issuer, or otherwise, shall be and become part of
the Pledged Collateral pledged hereunder and, if received by such
Pledgor, shall forthwith be delivered to the Pledgee to be held as
collateral subject to the terms and conditions of this Pledge
Agreement.
The Pledgee agrees to execute and deliver to each Pledgor, or cause to be
executed and delivered to such Pledgor, as appropriate, at the sole cost and
expense of such Pledgor, all such proxies, powers of attorney, dividend orders
and other instruments as such Pledgor may reasonably request for the purpose of
enabling such Pledgor to exercise the voting and/or consensual rights and powers
which such Pledgor is entitled to exercise pursuant to clause (i) above and/or
to receive the dividends which such Pledgor is authorized to retain pursuant to
clause (ii) above.
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(b) Upon the occurrence and during the continuation of an Event of
Default, all rights of such Pledgor to exercise the voting and/or consensual
rights and powers which such Pledgor is entitled to exercise pursuant to
subsection (a)(i) above and/or to receive the dividends which such Pledgor is
authorized to receive and retain pursuant to subsection (a)(ii) above shall
cease, and all such rights thereupon shall become immediately vested in the
Pledgee, which shall have, to the extent permitted by law, the sole and
exclusive right and authority to exercise such voting and/or consensual rights
and powers which such Pledgor shall otherwise be entitled to exercise pursuant
to subsection (a)(i) above and/or to receive and retain the dividends which such
Pledgor shall otherwise be authorized to retain pursuant to subsection (a)(ii)
above. Any and all money and other property paid over to or received by the
Pledgee pursuant to the provisions of this subsection (b) shall be retained by
the Pledgee as additional collateral hereunder and shall be applied in
accordance with the provisions of Section 10. If such Pledgor shall receive any
dividends or other property which it is not entitled to receive under this
Section, such Pledgor shall hold the same in trust for the Pledgee, without
commingling the same with other funds or property of or held by such Pledgor,
and shall promptly deliver the same to the Pledgee upon receipt by such Pledgor
in the identical form received, together with any necessary endorsements.
SECTION 8. EVENT OF DEFAULT DEFINED. For purposes of this Pledge
Agreement, "Event of Default" shall mean:
(a) Any Pledgor shall fail to observe or perform any covenant or
agreement contained in Sections 4(a), 5, or 7(b) hereof;
(b) Any Pledgor shall fail to observe or perform any covenant or
agreement contained in this Pledge Agreement (other than those covered by the
immediately preceding clause (a)) for a period of 30 days after written notice
thereof has been given to such Pledgor by the Pledgee; and
(c) an Event of Default under and as defined in the Credit
Agreement shall occur.
SECTION 9. REMEDIES UPON DEFAULT.
(a) In addition to any right or remedy that the Pledgee may have
under the Credit Agreement, the other Loan Documents or otherwise under
Applicable Law, if an Event of Default shall have occurred and be continuing,
the Pledgee may exercise any and all the rights and remedies of a secured party
under the Uniform Commercial Code as in effect in any applicable jurisdiction
(the "Code") and may otherwise sell, assign, transfer, endorse and deliver the
whole or, from time to time, any part of the Pledged Collateral at a public or
private sale or on any securities exchange, for cash, upon credit or for other
property, for immediate or future delivery, and for such price or prices and on
such terms as the Pledgee in its discretion shall deem appropriate. The Pledgee
shall be authorized at any sale (if it deems it advisable to do so) to restrict
the prospective bidders or purchasers to Persons who will represent and agree
that they are purchasing the Pledged Collateral for their own account in
compliance with the Securities Act and upon consummation of any such sale the
Pledgee shall have the right to assign, transfer, endorse and deliver to the
purchaser or purchasers thereof the Pledged Collateral so sold. Each
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purchaser at any sale of Pledged Collateral shall take and hold the property
sold absolutely free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives (to the fullest extent permitted by Applicable Law)
all rights of redemption, stay and/or appraisal which such Pledgor now has or
may at any time in the future have under any Applicable Law now existing or
hereafter enacted. Each Pledgor agrees that, to the extent notice of sale shall
be required by Applicable Law, at least ten days' prior written notice to such
Pledgor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification, but notice
given in any other reasonable manner or at any other reasonable time shall
constitute reasonable notification. Such notice, in case of public sale, shall
state the time and place for such sale, and, in the case of sale on a securities
exchange, shall state the exchange on which such sale is to be made and the day
on which the Pledged Collateral, or portion thereof, will first be offered for
sale at such exchange. Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the Pledgee may
fix and shall state in the notice or publication (if any) of such sale. At any
such sale, the Pledged Collateral, or portion thereof to be sold, may be sold in
one lot as an entirety or in separate parcels, as the Pledgee may determine in
its sole and absolute discretion. The Pledgee shall not be obligated to make any
sale of the Pledged Collateral if it shall determine not to do so regardless of
the fact that notice of sale of the Pledged Collateral may have been given. The
Pledgee may, without notice or publication, adjourn any public or private sale
or cause the same to be adjourned from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice, be made at
the time and place to which the same was so adjourned. In case the sale of all
or any part of the Pledged Collateral is made on credit or for future delivery,
the Pledged Collateral so sold may be retained by the Pledgee until the sale
price is paid by the purchaser or purchasers thereof, but the Pledgee shall not
incur any liability to any Pledgor in case any such purchaser or purchasers
shall fail to take up and pay for the Pledged Collateral so sold and, in case of
any such failure, such Pledged Collateral may be sold again upon like notice. At
any public sale made pursuant to this Pledge Agreement, the Pledgee, to the
extent permitted by Applicable Law, may bid for or purchase, free from any right
of redemption, stay and/or appraisal on the part of any Pledgor (all said rights
being also hereby waived and released to the extent permitted by Applicable
Law), any part of or all the Pledged Collateral offered for sale and may make
payment on account thereof by using any claim then due and payable to the
Pledgee from such Pledgor as a credit against the purchase price, and the
Pledgee may, upon compliance with the terms of sale and to the extent permitted
by Applicable Law, hold, retain and dispose of such property without further
accountability to such Pledgor therefor. For purposes hereof, a written
agreement to purchase all or any part of the Pledged Collateral shall be treated
as a sale thereof; the Pledgee shall be free to carry out such sale pursuant to
such agreement and no Pledgor shall be entitled to the return of any Pledged
Collateral subject thereto, notwithstanding the fact that after the Pledgee
shall have entered into such an agreement all Events of Default may have been
remedied or the Secured Obligations may have been paid in full as herein
provided. Each Pledgor hereby waives any right to require any marshaling of
assets and any similar right.
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(x) In addition to exercising the power of sale herein conferred
upon it, the Pledgee shall also have the option to proceed by suit or suits at
law or in equity to foreclose this Pledge Agreement and sell the Pledged
Collateral or any portion thereof pursuant to judgment or decree of a court or
courts having competent jurisdiction.
(c) The rights and remedies of the Pledgee under this Pledge
Agreement are cumulative and not exclusive of any rights or remedies which it
would otherwise have.
SECTION 10. APPLICATION OF PROCEEDS OF SALE AND CASH. The proceeds of
any sale of the whole or any part of the Pledged Collateral, together with any
other moneys held by the Pledgee under the provisions of this Pledge Agreement,
shall be applied as provided for under the applicable provisions of the Credit
Agreement. Each Pledgor shall remain liable and will pay, on demand, any
deficiency remaining in respect of the Secured Obligations.
SECTION 11. PLEDGEE APPOINTED ATTORNEY-IN-FACT. Each Pledgor hereby
constitutes and appoints the Pledgee as the attorney-in-fact of such Pledgor
upon the occurrence and during the continuation of an Event of Default with full
power of substitution either in the Pledgee's name or in the name of such
Pledgor to do any of the following: (a) to perform any obligation of such
Pledgor hereunder in such Pledgor's name or otherwise; (b) to ask for, demand,
xxx for, collect, receive, receipt and give acquittance for any and all moneys
due or to become due under and by virtue of any Pledged Collateral; (c) to
prepare, execute, file, record or deliver notices, assignments, financing
statements, continuation statements, applications for registration or like
papers to perfect, preserve or release the Pledgee's security interest in the
Pledged Collateral or any of the documents, instruments, certificates and
agreements described in Section 13(b); (d) to verify facts concerning the
Pledged Collateral in its own name or a fictitious name; (e) to endorse checks,
drafts, orders and other instruments for the payment of money payable to such
Pledgor, representing any interest or dividend or other distribution payable in
respect of the Pledged Collateral or any part thereof or on account thereof and
to give full discharge for the same; (f) to exercise all rights, powers and
remedies which such Pledgor would have, but for this Pledge Agreement, under the
Pledged Collateral; and (g) to carry out the provisions of this Pledge Agreement
and to take any action and execute any instrument which the Pledgee may deem
necessary or advisable to accomplish the purposes hereof, and to do all acts and
things and execute all documents in the name of such Pledgor or otherwise,
deemed by the Pledgee as necessary, proper and convenient in connection with the
preservation, perfection or enforcement of its rights hereunder. Nothing herein
contained shall be construed as requiring or obligating the Pledgee to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice, or to take any action
with respect to the Pledged Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby, and no action
taken by the Pledgee or omitted to be taken with respect to the Pledged
Collateral or any part thereof shall give rise to any defense, counterclaim or
offset in favor of any Pledgor or to any claim or action against the Pledgee.
The power of attorney granted herein is irrevocable and coupled with an
interest.
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SECTION 12. REIMBURSEMENT OF PLEDGEE. Each Pledgor agrees to pay upon
demand to the Pledgee the amount of any and all reasonable expenses, including
the reasonable fees disbursements and other charges of its counsel and of any
experts or agents, that the Pledgee may incur in connection with (i) the
administration of this Pledge Agreement, (ii) the custody or preservation of, or
any sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of the
Pledgee hereunder, or (iv) the failure by such Pledgor to perform or observe any
of the provisions hereof. Any such amounts payable as provided hereunder shall
be additional obligations secured hereby and by the other Security Documents.
SECTION 13. FURTHER ASSURANCES. Each Pledgor shall, at its sole cost
and expense, take all action that may be necessary or desirable in the Pledgee's
sole but reasonable discretion, so as at all times to maintain the validity,
perfection, enforceability and priority of the Pledgee's security interest in
the Pledged Collateral, or to enable the Pledgee to exercise or enforce its
rights hereunder, including without limitation (a) delivering to the Pledgee,
endorsed or accompanied by such instruments of assignment as the Pledgee may
specify, any and all chattel paper, instruments, letters of credit and all other
advices of guaranty and documents evidencing or forming a part of the Pledged
Collateral and (b) executing and delivering financing statements, pledges,
designations, notices and assignments, in each case in form and substance
satisfactory to the Pledgee, relating to the creation, validity, perfection,
priority or continuation of the security interest granted hereunder. Each
Pledgor agrees to take, and authorizes the Pledgee to take on such Pledgor's
behalf, any or all of the following actions with respect to any Pledged
Collateral as the Pledgee shall deem necessary to perfect the security interest
and pledge created hereby or to enable the Pledgee to enforce its rights and
remedies hereunder: (i) to register on the books of the Issuer in the name of
the Pledgee any Pledged Collateral in certificated or uncertificated form; (ii)
to endorse in the name of the Pledgee any Pledged Collateral issued in
certificated form; and (iii) by book entry or otherwise, identify as belonging
to the Pledgee a quantity of securities that constitutes all or part of the
Pledged Collateral registered in the name of the Pledgee. Notwithstanding the
foregoing each Pledgor agrees that Pledged Collateral which is not in
certificated form or is otherwise in book-entry form shall be held for the
account of the Pledgee. Each Pledgor hereby authorizes the Pledgee to execute
and file in all necessary and appropriate jurisdictions (as determined by the
Pledgee) one or more financing or continuation statements (or any other document
or instrument referred to in the immediately preceding clause (b)) in the name
of such Pledgor and to sign such Pledgor's name thereto. Each Pledgor authorizes
the Pledgee to file any such financing statement, document or instrument without
the signature of such Pledgor to the extent permitted by applicable law. To the
extent permitted by Applicable Law, a carbon, photographic, xerographic or other
reproduction of this Pledge Agreement or any financing statement is sufficient
as a financing statement. Any property comprising part of the Pledged Collateral
required to be delivered to the Pledgee pursuant to this Pledge Agreement shall
be accompanied by proper instruments of assignment duly executed by each Pledgor
and by such other instruments or documents as the Pledgee may reasonably
request.
SECTION 14. SECURITIES ACT. In view of the position of each Pledgor in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act or any similar
Applicable Law hereafter enacted analogous in purpose or
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effect (such Act and any such similar Applicable Law as from time to time in
effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Pledgee if the Pledgee were to attempt to
dispose of all or any part of the Pledged Collateral in accordance with the
terms hereof, and might also limit the extent to which or the manner in which
any subsequent transferee of any Pledged Collateral could dispose of the same.
Similarly, there may be other legal restrictions or limitations affecting the
Pledgee in any attempt to dispose of all or part of the Pledged Collateral in
accordance with the terms hereof under applicable Blue Sky or other state
securities laws or similar Applicable Law analogous in purpose or effect. Each
Pledgor recognizes that in light of the foregoing restrictions and limitations
the Pledgee may, with respect to any sale of the Pledged Collateral, limit the
purchasers to those who will agree, among other things, to acquire such Pledged
Collateral for their own account, for investment, and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges and agrees that in
light of the foregoing restrictions and limitations, the Pledgee, in its sole
and absolute discretion, may, in accordance with Applicable Law, (a) proceed to
make such a sale whether or not a registration statement for the purpose of
registering such Pledged Collateral or part thereof shall have been filed under
the Federal Securities Laws and (b) approach and negotiate with a single
potential purchaser to effect such sale. Each Pledgor acknowledges and agrees
that any such sale might result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions. In the
event of any such sale, the Pledgee shall incur no responsibility or liability
for selling all or any part of the Pledged Collateral in accordance with the
terms hereof at a price that the Pledgee, in its sole and absolute discretion,
may in good xxxxx xxxx reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been realized if the
sale were deferred until after registration as aforesaid or if more than a
single purchaser were approached. The provisions of this Section will apply
notwithstanding the existence of public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Pledgee sells.
SECTION 15. INDEMNIFICATION. Each Pledgor agrees to indemnify and hold
the Pledgee, each Lender, the Swingline Lender, any corporation controlling,
controlled by, or under common control with, the Pledgee, a Lender or the
Swingline Lender and any officer, attorney, director, shareholder, agent or
employee of the Pledgee, a Lender or the Swingline Lender or any such
corporation (each an "Indemnified Person"), harmless from and against any claim,
loss, damage, action, cause of action, liability, cost and expense or suit of
any kind or nature whatsoever (each an "Indemnified Claim"), brought against or
incurred by an Indemnified Person, in any manner arising out of or, directly or
indirectly, related to or connected with this Pledge Agreement, including
without limitation, the exercise by the Pledgee of any of its rights and
remedies under this Pledge Agreement or any other action taken by the Pledgee
pursuant to the terms of this Pledge Agreement; provided, however, no Pledgor
shall be obligated to indemnify or hold harmless an Indemnified Person for an
Indemnified Claim to the extent that such Indemnified Claim resulted from the
gross negligence or willful misconduct of such Indemnified Person. Each
Pledgor's obligations under this section shall survive the termination of this
Pledge Agreement and the payment in full of the Secured Obligations.
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SECTION 16. CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall remain in full
force and effect until it terminates in accordance with its terms. Each Pledgor
and the Pledgee hereby agree that the security interest created by this Pledge
Agreement in the Pledged Collateral shall not terminate and shall continue and
remain in full force and effect notwithstanding the transfer to such Pledgor or
any person designated by it of all or any portion of the Pledged Collateral.
SECTION 17. NO WAIVER. Neither the failure on the part of the Pledgee,
any Lender or the Swingline Lender to exercise, nor the delay on its part in
exercising any right, power or remedy hereunder, nor any course of dealing
between the Pledgee, any Lender or any Swingline Lender, on the one hand and
such Pledgor on the other hand shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power, or remedy hereunder
preclude any other or the further exercise thereof or the exercise of any other
right, power or remedy.
SECTION 18. NOTICES. Notices, requests and other communications
required or permitted hereunder shall be given in accordance with the applicable
terms of the Credit Agreement or Guaranty, as applicable (or at such other
address a party may specify to the other party by like notice. All such notices
and other communications shall be effective (i) if mailed, when received; (ii)
if telecopied, when transmitted; or (iii) if hand delivered, when delivered.
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 20. AMENDMENTS. No amendment or waiver of any provision of this
Pledge Agreement nor consent to any departure by each Pledgor herefrom shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 21. BINDING AGREEMENT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, except that no Pledgor shall be permitted to
assign this Pledge Agreement or any interest herein or in the Pledged
Collateral, or any part thereof, or any cash or property held by the Pledgee as
collateral under this Pledge Agreement.
SECTION 22. TERMINATION. Upon indefeasible payment in full of all of
the Secured Obligations, this Pledge Agreement shall terminate. Upon termination
of this Pledge Agreement in accordance with its terms the Pledgee agrees to take
such actions as any Pledgor may reasonably request, and at the sole cost and
expense of such Pledgor, (a) to return the Pledged Collateral to such Pledgor,
and (b) to evidence the termination of this Pledge Agreement, including, without
limitation, the filing of any releases or any termination statements under the
Uniform Commercial Code.
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SECTION 23. SEVERABILITY. Whenever possible, each provision of this
Pledge Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under applicable law, such provisions shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Pledge Agreement.
SECTION 24. HEADINGS. Section headings used herein are for convenience
only and are not to affect the construction of or be taken into consideration in
interpreting this Pledge Agreement.
SECTION 25. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and all of which
shall constitute but one agreement.
SECTION 26. EXPENSES. Each Pledgor will pay, within 10 days of demand,
all reasonable fees and expenses actually incurred by the Pledgee in connection
with (a) the collection or enforcement of the Obligations including the
reasonable fees and disbursements of counsel to the Pledgee actually incurred by
the Pledgee and (b) the exercise by the Pledgee of any right or remedy granted
to it under this Agreement if such exercise is done by, through or with the
assistance of any attorney.
SECTION 27. DEFINITIONS. Terms not otherwise defined herein are used
herein with the respective meanings given to them in the Credit Agreement.
SECTION 28. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF THE
PLEDGORS HEREUNDER SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH PLEDGOR
CONFIRMS THAT IT IS LIABLE FOR ALL OF THE OBLIGATIONS AND LIABILITIES OF THE
OTHER PLEDGORS HEREUNDER.
SECTION 29. AMENDMENT, RESTATEMENT AND CONSOLIDATION. PRIOR TO THE DATE
HEREOF, CERTAIN OF THE PLEDGORS EXECUTED AND DELIVERED PLEDGE AGREEMENTS IN
FAVOR OF NATIONSBANK IN CONNECTION WITH THE EXISTING CREDIT AGREEMENT (THE
"EXISTING PLEDGE AGREEMENTS"). SUCH PLEDGORS AND THE PLEDGEE ARE ENTERING INTO
THIS PLEDGE AGREEMENT SOLELY TO AMEND, RESTATE AND CONSOLIDATE IN THEIR ENTIRETY
THE TERMS OF, AND THE OBLIGATIONS OWING UNDER AND IN CONNECTION WITH, THE
EXISTING PLEDGE AGREEMENTS. THE PARTIES DO NOT INTEND THIS PLEDGE AGREEMENT NOR
THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS PLEDGE AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE DEEMED OR CONSTRUED TO BE, A
NOVATION OF ANY OF THE OBLIGATIONS OWING BY ANY SUCH PLEDGOR UNDER OR IN
CONNECTION WITH ANY OF THE EXISTING PLEDGE AGREEMENTS. FURTHER, THE PARTIES DO
NOT INTEND THIS PLEDGE AGREEMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO
AFFECT THE PERFECTION OR
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PRIORITY OF ANY LIEN (INCLUDING ANY LIEN PREVIOUSLY HELD BY NATIONSBANK BUT NOW
HELD BY THE PLEDGEE) HELD BY THE PLEDGEE IN ANY OF THE PLEDGED COLLATERAL IN ANY
WAY WHATSOEVER.
[Signatures on Following Page]
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IN WITNESS WHEREOF, each Pledgor has executed and delivered this
Amended, Restated and Consolidated Pledge Agreement under seal as of this the
date first written above.
PLEDGORS:
PHYSICIANS' SPECIALITY CORP.
PSC ACQUISITION CORP.
By:______________________________
Name:_________________________
Title:________________________
Agreed to and Accepted:
NATIONSBANK, N.A., as Agent
By:_________________________________
Name:____________________________
Title:___________________________
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SCHEDULE 1 TO PLEDGE AGREEMENT
PLEDGED SHARES
[PLEDGOR 1]
------------------------------------------ ----------------------- -------------------------- ----------------------------
Issuer No. of Securities Type of Securities Certificate Nos.
------ ----------------- ------------------ ----------------
------------------------------------------ ----------------------- -------------------------- ----------------------------
------------------------------------------ ----------------------- -------------------------- ----------------------------
------------------------------------------ ----------------------- -------------------------- ----------------------------
[PLEDGOR 2]
------------------------------------------ ----------------------- -------------------------- ----------------------------
Issuer No. of Securities Type of Securities Certificate Nos.
------ ----------------- ------------------ ----------------
------------------------------------------ ----------------------- -------------------------- ----------------------------
------------------------------------------ ----------------------- -------------------------- ----------------------------
------------------------------------------ ----------------------- -------------------------- ----------------------------
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EXHIBIT M
FORM OF AMENDED, RESTATED AND CONSOLIDATED SECURITY AGREEMENT
THIS AMENDED, RESTATED AND CONSOLIDATED SECURITY AGREEMENT is dated as
of July 31, 1998 (this "Security Agreement"), and executed and delivered by each
of the undersigned "Debtors" and the other Persons from time to time party
hereto pursuant to the execution and delivery of an Accession Agreement in the
form of Exhibit A to the Credit Agreement (as defined below) (all of such
undersigned, together with such other Persons each an "Debtor" and collectively,
the "Debtors"), in favor of NATIONSBANK, N.A., successor to NationsBank, N.A.
(South), as Agent (the "Secured Party").
WHEREAS, Physicians' Specialty Corp. (the "Borrower"), the financial
institutions initially party thereto and their assignees under Section 12.6
thereof (the "Lenders") and the Secured Party have entered into that certain
Amended and Restated Credit Agreement dated as of the date hereof (as the same
may be amended, supplemented, restated or otherwise modified from time to time,
the "Credit Agreement") pursuant to which the Lenders and the Swingline Lender
have agreed to extend certain financial accommodations to the Borrower subject
to the terms thereof;
WHEREAS, the Borrower owns directly or indirectly, all of the
outstanding capital stock and other equity interests of the other Debtors;
WHEREAS, the Borrower, the other Debtors and the other Subsidiaries of
the Borrower, though separate legal entities, are mutually dependent on each
other in the conduct of their respective businesses as an integrated operation
and have determined it to be in their mutual best interests to obtain financing
from the Lenders and the Swingline Lender through their collective efforts;
WHEREAS, each Debtor other than the Borrower acknowledges that it will
receive direct and indirect benefits from the Lenders and the Swingline Lender
making such financial accommodations available to the Borrower under the Credit
Agreement and, accordingly, each such Debtor guarantied the Borrower's
obligations to the Lenders and the Swingline Lender on the terms and conditions
contained in that certain Guaranty dated as of the date hereof (as the same may
be amended, supplemented, restated or otherwise modified from time to time in
accordance with its terms, the "Guaranty") executed by each such Debtor in favor
of the Secured Party, the Lenders and the Swingline Lender;
WHEREAS, it is a condition precedent to the extension of such financial
accommodations by the Lenders and the Swingline Lender under the Credit
Agreement that the Debtors execute and deliver this Security Agreement;
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NOW, THEREFORE, in consideration of the above premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each Debtor, each Debtor hereby agrees as follows:
SECTION 1. GRANT OF SECURITY. To secure the prompt and complete
payment, observance and performance when due (whether at stated maturity, by
acceleration or otherwise) of all of the Obligations, each Debtor hereby
collaterally assigns and pledges to the Secured Party for its benefit and the
benefit of the Lenders and the Swingline Lender, and grants to the Secured Party
for its benefit and the benefit of the Lenders and the Swingline Lender a
security interest and lien in and upon, the Collateral.
SECTION 2. REPRESENTATIONS AND WARRANTIES. Each Debtor represents and
warrants to the Secured Party, the Lenders and the Swingline Lender as follows:
(a) Name; Taxpayer ID Number. The exact legal name of each Debtor
is set forth on the signature page hereto or to the Accession Agreement by which
such Debtor became a party to this Agreement , and such Debtor does not conduct
and, during the five-year period immediately preceding the date of this Security
Agreement (or since the date of its formation if sooner), has not conducted,
business under any trade name or other fictitious name other than those set
forth on Schedule 2(a) attached hereto or Schedule I to the Accession Agreement
by which such Debtor became a party to this Agreement. The Internal Revenue
Service taxpayer identification number of such Debtor is set forth on such
Schedule.
(b) Liens. None of the Collateral or other properties of such
Debtor is, as of the date hereof, subject to any Lien, except Permitted Liens.
(c) Chief Executive Office. The chief executive office and
principal place of business of such Debtor and the books and records relating to
the Receivables and the other Collateral are located at such Debtor's address
set forth on Schedule 2(c) hereto or on Schedule I to the Accession Agreement by
which such Debtor became a party to this Agreement, and have been located there
for the five-year period immediately preceding the date hereof (or since the
date of its formation if sooner or as otherwise described on such Schedule
2(c)). During such period, such Debtor has not changed its name, identity or
corporate structure in any way.
(d) Places of Business. The states in which any place of business
of such Debtor are set forth on Schedule 2(c) attached hereto or on Schedule I
to the Accession Agreement by which such Debtor became a party to this
Agreement.
(e)______Security Interest. It is the intent of each Debtor that this
Security Agreement create a valid and perfected first-priority security interest
in the Collateral (subject only to Permitted Liens), securing the payment of the
Obligations, and all filings and other actions necessary or desirable to perfect
such security interest under the Uniform Commercial Code as enacted in any
relevant jurisdiction have been duly taken.
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SECTION 3. CONTINUED PRIORITY OF SECURITY INTEREST.
(a) The Security Interest shall at all times be valid, perfected
and of first priority and enforceable against each Debtor and all other Persons,
in accordance with the terms of this Security Agreement, as security for the
Obligations.
(b) Each Debtor shall, at its sole cost and expense, take all
action that may be necessary or desirable, or that the Secured Party may
request, so as at all times to maintain the validity, perfection, enforceability
and priority of the Security Interest in the Collateral in conformity with the
requirements of Section 3(a), or to enable the Secured Party to exercise or
enforce its rights hereunder including, without limitation:
(i) Paying all taxes, assessments and other claims
lawfully levied or assessed on any of the Collateral, except to the
extent that such taxes, assessments and other claims constitute
Permitted Liens;
(ii) Delivering to the Secured Party, endorsed or
accompanied by such instruments of assignment as the Secured Party may
specify, any and all chattel paper, instruments, letters of credit and
all other advices of guaranty and documents evidencing or forming a
part of the Collateral;
(iii) At the request of the Secured Party, marking
conspicuously each document included in the Collateral and marking all
chattel paper and each of its records pertaining to the Collateral,
with a legend, in form and substance satisfactory to the Secured Party,
indicating that such document, chattel paper, or Collateral is subject
to the Security Interest; and
(iv) Executing and delivering financing statements,
pledges, designations, hypothecations, notices and assignments, in each
case in form and substance satisfactory to the Secured Party, relating
to the creation, validity, perfection, priority or continuation of the
Security Interest under the Uniform Commercial Code or other Applicable
Law.
(c) The Secured Party is hereby authorized to execute and file in
all necessary and appropriate jurisdictions (as determined by the Secured Party)
one or more financing or continuation statements (or any other document or
instrument referred to in Section 3(b)(iv) above) in the name of each Debtor and
to sign each Debtor's name thereto. Each Debtor authorizes the Secured Party to
file any such financing statement, document or instrument without the signature
of such Debtor to the extent permitted by Applicable Law. Further, to the extent
permitted by Applicable Law, a carbon, photographic, xerographic or other
reproduction of this Security Agreement or of any Financing Statement is
sufficient as a financing statement.
(d) Each Debtor shall xxxx its books and records as may be
necessary or appropriate to evidence, protect and perfect the Security Interest
and shall cause its financial statements to reflect the Security Interest.
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SECTION 4. COVENANTS REGARDING COLLATERAL GENERALLY.
(a) Verification. The Secured Party shall have the right at any
time and from time to time, in its name in the name of a Debtor, to verify the
validity, amount or any other matter relating to any Receivables by mail,
telephone or otherwise.
(b) Delivery of Instruments. In the event any of the Collateral
becomes evidenced by a promissory note, trade acceptance or any other instrument
in favor of a Debtor, such Debtor will immediately thereafter deliver such
instrument to the Secured Party, appropriately endorsed to the Secured Party.
(c) Defense of Title. Each Debtor shall at all times be the sole
owner, sole lessee or licensee, as applicable, of each and every item of its
Collateral and shall defend, at its sole cost and expense, its title in and to,
and the Security Interest in, the Collateral against the claims and demands of
all Persons.
(d) Maintenance of Collateral. Each Debtor shall maintain all
physical property that constitutes its Collateral in good and workable
condition, with reasonable allowance for wear and tear, and shall exercise
proper custody over all such property.
(e) Insurance. Each Debtor shall maintain, or cause to be
maintained, such insurance, if any, as may be required under Section 7.5 of the
Credit Agreement.
(f) Location of Office. Each Debtor's chief executive office,
principal place of business, and its books and records relating to the
Collateral will continue to be kept at the address set forth on Schedule 2(c) of
this Security Agreement or on Schedule I of the Accession Agreement by which
such Debtor became a party to this Agreement and such Debtor will not change the
location of such office and place of business or such books and records without
giving the Secured Party at least 30 days' prior written notice thereof.
(g) Change of Name, Structure, Etc. Without giving the Secured
Party at least 30 days' prior written notice, no Debtor will (i) change its
name, identity or structure or (ii) conduct business under any trade name or
other fictitious name other than those set forth on Schedule 2(a) hereto or on
Schedule I of the Accession Agreement by which such Debtor became a party to
this Agreement.
(h) Records Relating to Collateral. Each Debtor will at all times
keep complete and accurate records of all other Collateral.
(i) Inspection. The Secured Party (by any of its officers,
employees or agents) shall have the right, to the extent that the exercise of
such right shall be within the control of a Debtor, at any time or times during
normal business hours: (i) to inspect all files relating to the Collateral and
the premises upon which any information relating to the Collateral is located,
(ii) to discuss such Debtor's affairs and finances, insofar as the same are
reasonably related to the rights of the Secured Party hereunder with any Person,
to verify the amount, quantity, value and condition of,
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or any other matter relating to, any of the Collateral and (iii) to review,
audit and make extracts from all records and files related to any of the
Collateral.
(j) Other Information. Each Debtor shall furnish to the Secured
Party such other information with respect to the Collateral as the Secured Party
may reasonably request from time to time.
(k) Payments Directly to Secured Party. The Secured Party may at
any time and from time to time after the occurrence and during continuation of a
Default or Event of Default notify, or request any Debtor to notify, in writing
or otherwise, any account debtor or other obligor with respect to any one or
more of the Receivables to make payment to the Secured Party or any agent or
designee of the Secured Party directly, at such address as may be specified by
the Secured Party. If, notwithstanding the giving of any notice, any account
debtor or other such obligor shall make payment to a Debtor, such Debtor shall
hold all such payments it receives in trust for the Secured Party, without
commingling the same with other funds or property of or held by such Debtor, and
shall promptly deliver the same to the Secured Party or any such agent or
designee immediately upon receipt by such Debtor in the identical form received,
together with any necessary endorsements.
(l) Sale of Collateral. Except as permitted under the terms of the
Credit Agreement, no Debtor shall sell, transfer, convey or dispose of any
Collateral outside the ordinary course of its business. The inclusion of
"proceeds" of the Collateral under the Security Interest shall not be deemed a
consent by the Secured Party, any Lender or the Swingline Lender to any other
sale or other disposition of any part or all of the Collateral.
(m) Proceeds of Collateral. Each Debtor shall account fully and
faithfully for, and upon the Secured Party's request during the continuance of
an Event of Default, promptly pay or turn over to the Secured Party, proceeds in
whatever form received in disposition in any manner of any of the Collateral. To
the extent practicable, each Debtor shall at all times keep its Collateral and
proceeds thereof separate and distinct from other property of such Debtor and
shall keep accurate and complete records of such Collateral and proceeds
thereof.
SECTION 5. THE SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Each Debtor
hereby irrevocably appoints the Secured Party as such Debtor's attorney-in-fact,
with full authority in the place and stead of such Debtor and in the name of
such Debtor or otherwise, from time to time upon the occurrence and during the
continuance of a Default or Event of Default in the Secured Party's discretion
to take any action and to execute any instrument or document which the Secured
Party may deem necessary or advisable to accomplish the purposes of this
Security Agreement and to exercise any rights and remedies the Secured Party may
have under this Security Agreement or Applicable Law, including, without
limitation: (i) to obtain and adjust insurance required to be maintained
pursuant to Section 5(e) hereof; (ii) to ask, demand, collect, xxx for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral including any
Receivable; (iii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (i) or (ii)
above; (iv) to sell or assign any Receivable upon such terms, for such
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amount and at such time or times as the Secured Party deems advisable, to
settle, adjust, compromise, extend or renew any Receivable or to discharge and
release any Receivable; and (v) to file any claims or take any action or
institute any proceedings which the Secured Party may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of the Secured Party with respect to any of the Collateral. The
power-of-attorney granted hereby shall be irrevocable and coupled with an
interest.
SECTION 6. THE SECURED PARTY MAY PERFORM. If a Debtor fails to perform
any agreement contained herein, the Secured Party may, with notice to such
Debtor, itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Secured Party incurred in connection therewith shall
be payable by each Debtor under Section 12 hereof; provided, however, the
Secured Party's failure to give such notice shall not in any way affect the
validity of any action taken by the Secured Party under this Section.
SECTION 7. THE SECURED PARTY'S DUTIES. The powers conferred on the
Secured Party hereunder are solely to protect its interest in the Collateral and
shall not impose any duty upon the Secured Party to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Secured Party shall
have no duty as to any Collateral. The Secured Party shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which the
Secured Party accords its own property; it being understood that the Secured
Party shall be under no obligation to take any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral,
but may do so at its option, and all reasonable expenses incurred in connection
therewith shall be for the sole account of the Debtors and shall be added to the
Obligations.
SECTION 8. REMEDIES. The Secured Party may take any or all of the
following actions upon the occurrence and during the continuation of an Event of
Default.
(a) Use of Premises and Patents. The Secured Party may:
(i) without notice, demand or other process, and without
payment of any rent or any other charge enter any of a Debtor's
premises and, without breach of the peace, until the Secured Party
completes the enforcement of its rights in the Collateral, take
possession of such premises or place custodians in exclusive control
thereof, remain on such premises and use the same and any of such
Debtor's equipment; and
(ii) in the exercise of the rights of the Secured Party
under this Security Agreement, without payment or compensation of any
kind, use any and all trademarks, trade styles, trade names, patents,
patent applications, licenses, franchises and the like to the extent of
the rights of any Debtor therein, and each Debtor hereby grants a
license to the Secured Party for this purpose.
(b) Rights as a Secured Creditor. The Secured Party may exercise
all of the rights and remedies of a secured party under the Uniform Commercial
Code and under any other Applicable
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Law, including, without limitation, the right, without notice except as
specified below and with or without taking possession thereof, to sell the
Collateral or any part thereof in one or more parcels at public or private sale
at any location chosen by the Secured Party, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the Secured
Party may deem commercially reasonable. Each Debtor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to such
Debtor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification, but notice
given in any other reasonable manner or at any other reasonable time shall
constitute reasonable notification. The Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given. The
Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. The
Secured Party may bid all or any portion of the Obligations at any such sale.
(c) Waiver of Marshaling. Each Debtor hereby waives any right to
require any marshaling of assets and any similar right.
(d) Appointment of Receiver. The Secured Party shall be entitled
to the appointment of a receiver, without notice of any kind whatsoever and
without regard to the adequacy of any security for the Obligations or the
solvency of any party bound for its payment, to take possession of all or any
portion of the Collateral and/or the business operations of any Debtor and to
exercise such power as the court shall confer upon such receiver.
(e) Receivables. The Secured Party shall have the exclusive right
to assert, either directly or on behalf of any Debtor, any and all rights and
claims such Debtor may have under any Receivables as the Secured Party may deem
proper and to receive and collect any and all Receivables and any and all fees,
damages, awards and other monies arising thereunder or resulting therefrom and
to apply the same on account of any of the Obligations.
SECTION 9. APPLICATION OF PROCEEDS. All proceeds from each sale of, or
other realization upon, all or any part of the Collateral following the
occurrence and continuation of an Event of Default, and all insurance proceeds
payable following the occurrence and continuation of an Event of Default by
reason of any damage or destruction of any of the Collateral, shall be applied
or paid over as provided in the applicable provisions of the Credit Agreement.
Each Debtor shall remain liable and shall pay, on demand, any deficiency
remaining in respect of the Obligations, together with interest thereon at a
rate per annum equal to the Post-Default Rate then payable hereunder on such
Obligations, which interest shall constitute part of the Obligations. So long as
no Event of Default shall have occurred and be continuing, a Debtor may receive
any insurance proceeds payable by reason of any damage or destruction of any of
the Collateral. If the Secured Party shall receive any such insurance proceeds
which it is not otherwise entitled to retain, the Secured Party shall promptly
turn over such proceeds to the applicable Debtor or to whomsoever may be legally
entitled thereto.
SECTION 10. RIGHTS CUMULATIVE. The rights and remedies of the Secured
Party, each Lender and the Swingline Lender under this Security Agreement, the
Credit Agreement and each
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other document or instrument evidencing or securing the Obligations shall be
cumulative and not exclusive of any rights or remedies which any of them would
otherwise have, including, but not limited to, those rights afforded by the
Uniform Commercial Code and other Applicable Laws. In exercising its respective
rights and remedies the Secured Party, each Lender and the Swingline Lender may
be selective and no failure or delay in exercising any right shall operate as a
waiver of it, nor shall any single or partial exercise of any power or right
preclude its other or further exercise or the exercise of any other power or
right.
SECTION 11. EXPENSES. Each Debtor will pay, within 10 days of demand,
all reasonable fees and expenses actually incurred by the Secured Party in
connection with (a) the collection or enforcement of the Obligations including
the reasonable fees and disbursements of counsel to the Secured Party actually
incurred by the Secured Party and (b) the exercise by the Secured Party of any
right or remedy granted to it under this Agreement if such exercise is done by,
through or with the assistance of an attorney.
SECTION 12. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Security Agreement nor consent to any departure by any Debtor herefrom
shall in any event be effective unless the same shall be made in accordance with
the applicable provisions of the Credit Agreement.
SECTION 13. NOTICES. Unless otherwise provided herein, communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered, in accordance with the notice provision set forth in the Credit
Agreement in the case of the Borrower or the Guaranty in the case of any other
Debtor.
SECTION 14. CONTINUING SECURITY INTEREST. This Security Agreement shall
create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until indefeasible payment in full of the Obligations,
(ii) be binding upon each Debtor, its successors and assigns and (iii) inure the
benefit of the Secured Party, the Lenders and the Swingline Lender, and their
respective successors and assigns. A Debtor's successors and assigns shall
include, without limitation, a receiver, trustee or debtor-in-possession thereof
or therefore.
SECTION 15. APPLICABLE LAW; SEVERABILITY. THIS SECURITY AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
GEORGIA. Whenever possible, each provision of this Security Agreement shall be
interpreted in such a manner as to be effective and valid under Applicable Law,
but if any provision of this Security Agreement shall be prohibited by or
invalid under Applicable Law, such provisions shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Security Agreement. The
Secured Party, each Lender and the Swingline Lender may assign, transfer or sell
any of the Obligations, or grant or sell participation interests in any of the
Obligations, to any Person pursuant to the terms of the Credit Agreement.
SECTION 16. INDEMNIFICATION. Each Debtor agrees to indemnify and hold
the Secured Party, each Lender, the Swingline Lender, any corporation
controlling, controlled by, or under
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common control with, the Secured Party, a Lender or the Swingline Lender and any
officer, attorney, director, shareholder, agent or employee of the Secured
Party, a Lender or the Swingline Lender or any such corporation (each an
"Indemnified Person"), harmless from and against any claim, loss, damage,
action, cause of action, liability, cost and expense or suit of any kind or
nature whatsoever (each an "Indemnified Claim"), brought against or incurred by
an Indemnified Person, in any manner arising out of or, directly or indirectly,
related to or connected with this Agreement, including without limitation, the
exercise by the Secured Party of any of its rights and remedies under this
Agreement or any other action taken by the Secured Party pursuant to the terms
of this Agreement; provided, however, no Debtor shall be obligated to indemnify
or hold harmless an Indemnified Person for any Indemnified Claim to the extent
that such Indemnified Claim resulted from the gross negligence or willful
misconduct of such Indemnified Person. Each Debtor's obligations under this
section shall survive the termination of this Agreement and the payment in full
of the Obligations.
SECTION 17. COUNTERPARTS. This Security Agreement may be executed in
several counterparts, each of which shall be an original and all of which, taken
together, shall constitute but one and the same instrument.
SECTION 18. DEFINITIONS. (a) For the purposes of this Security
Agreement:
"Collateral" means, with respect to a Debtor, all of such Debtor's
right, title and interest in and to each of the following, wherever located and
whether now or hereafter existing, or now owned or hereafter acquired or
arising:
(a) all Receivables of such Debtor;
(b) all books, records, files, computer programs, data processing
records, computer software, documents, correspondence and other information at
any time evidencing, describing or pertaining to or in any way related to any of
the foregoing or otherwise pertaining or relating to the business or operations
of such Debtor;
(c) any and all balances, credits, deposits, accounts, items and
monies of such Debtor now or hereafter with the Secured Party, any or any
affiliate of the Secured Party or deposited with the Secured Party or any
financial institution selected by the Secured Party pursuant to any lock box,
deposit, escrow or other collection agreement or otherwise, and all property of
such Debtor of every kind and description now or hereafter in the possession or
control of the Secured Party for any reason; and
(d) any and all products and proceeds of any of the foregoing
(including, but not limited to, any claims to any items referred to in this
definition, and any claims of such Debtor against third parties for loss of,
damage to or destruction of, any or all of the Collateral or for proceeds
payable under, or unearned premiums with respect to, policies of insurance) in
whatever form, including, but not limited to, cash, instruments, general
intangibles, accounts, equipment, inventory, farm products, other goods,
documents and chattel paper and all proceeds of such proceeds.
M-9
166
"Debtor" has the meaning set forth in the first paragraph hereof.
"Financing Statements" means any and all financing statements executed
and delivered by or on behalf of a Debtor in connection with the perfection of
the Security Interest, together with any amendments thereto and any
continuations thereof.
"Obligations" means (a) all Obligations (as defined in the Credit
Agreement); (b) all obligations and indebtedness of each Debtor owing to the
Secured Party, any Lender or the Swingline Lender of every kind, nature and
description, under or with respect to the Credit Agreement, the Guaranty, this
Agreement or any of the other Loan Documents, whether direct or indirect,
absolute or contingent, due or not due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any note; (c) all renewals,
modifications, extensions and supplements to any of the foregoing; and (d) any
reasonable costs or expenses actually incurred by the Secured Party or Secured
Party's counsel in connection with the realization of the security for which
this Agreement provides, including, without limitation, any reasonable costs or
expenses of any proceedings to which this Agreement may give rise.
"Security Agreement" means this Security Agreement, as the same may be
amended, supplemented, restated or otherwise modified from time to time.
"Security Interest" means the Lien of the Lender upon, and the
collateral assignments to the Lender of, the Collateral effected hereby or
pursuant to the terms hereof.
(b) Unless otherwise set forth herein to the contrary, all terms
not otherwise defined herein and which are defined in the Uniform Commercial
Code are used herein with the meanings ascribed to them in the Uniform
Commercial Code.
(c) Capitalized terms used herein and not defined herein are used
herein with the meaning ascribed to them in the Credit Agreement.
SECTION 19. AMENDMENT, RESTATEMENT AND CONSOLIDATION. PRIOR TO THE DATE
HEREOF, CERTAIN OF THE DEBTORS EXECUTED AND DELIVERED SECURITY AGREEMENTS IN
FAVOR OF NATIONSBANK IN CONNECTION WITH THE EXISTING CREDIT AGREEMENT (THE
"EXISTING SECURITY AGREEMENTS"). SUCH DEBTORS AND THE SECURED PARTY ARE ENTERING
INTO THIS SECURITY AGREEMENT SOLELY TO AMEND, RESTATE AND CONSOLIDATE IN THEIR
ENTIRETY THE TERMS OF, AND THE OBLIGATIONS OWING UNDER AND IN CONNECTION WITH,
THE EXISTING SECURITY AGREEMENTS. THE PARTIES DO NOT INTEND THIS SECURITY
AGREEMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS SECURITY
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE DEEMED OR
CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY ANY SUCH DEBTOR
UNDER OR IN CONNECTION WITH ANY OF THE EXISTING SECURITY AGREEMENTS. FURTHER,
THE PARTIES DO NOT INTEND
M-10
167
THIS SECURITY AGREEMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO AFFECT THE
PERFECTION OR PRIORITY OF ANY LIEN (INCLUDING ANY LIEN PREVIOUSLY HELD BY
NATIONSBANK BUT NOW HELD BY THE SECURED PARTY) HELD BY THE SECURED PARTY IN ANY
OF THE PLEDGED COLLATERAL IN ANY WAY WHATSOEVER.
[Signature on Following Page]
M-11
168
IN WITNESS WHEREOF, each Debtor has caused this Amended, Restated and
Consolidated Security Agreement to be duly executed and delivered under seal by
its duly authorized officers as of the day first above written.
DEBTORS:
PHYSICIANS' SPECIALTY CORP.
[OTHER DEBTORS]
By:______________________________
Name:_________________________
Title:________________________
ATTEST:
By:______________________________
Name:_________________________
Title:________________________
Agreed to and Accepted:
NATIONSBANK, N.A., as Agent
By:_____________________________________
Name:________________________________
Title:_______________________________
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169
SCHEDULE 2(a)
Trade Names and Tax ID Numbers
(To be Completed by Debtors
[DEBTOR 1]
Tradenames:
Taxpayer Indentification Number:___________________
[DEBTOR 2]
Tradenames:
Taxpayer Indentification Number:___________________
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170
SCHEDULE 2(c)
Places of Business
(To be Completed by Debtors)
[DEBTOR 1]
Chief Executive Office and Principal Place of Business:________________
Other Places of Business:______________________________________________
[DEBTOR 2]
Chief Executive Office and Principal Place of Business:________________
Other Places of Business:______________________________________________
M-14
171
EXHIBIT O
FORM OF COMPLIANCE CERTIFICATE
For the quarter ending _________, _____
NationsBank, N.A., as Agent
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of July 31, 1998 (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement"; capitalized terms used
herein, and not otherwise defined herein, shall have their respective defined
meanings as set forth in the Credit Agreement) among Physicians' Specialty Corp.
(the "Borrower"), each of the financial institutions initially a signatory
thereto and their assignees pursuant to Section 12.6 thereof (the "Lenders") and
NationsBank, N.A., as Agent (the "Agent").
Pursuant to Section 8.3 of the Credit Agreement, the undersigned hereby
certifies to the Agent, the Lenders and the Swingline Lender as follows:
(1) The undersigned is the [Treasurer/Chief Financial
Officer/independent public accountant] of the Borrower.
(2) The undersigned has examined the books and records of the
Borrower and has conducted such other examinations and investigations as are
reasonably necessary to provide this Compliance Certificate.
(3) The Borrower is in compliance with the provisions of Section
9.1 of the Credit Agreement and no Default or Event of Default has occurred and
is continuing [for Compliance Certificate delivered by Treasurer or Chief
Financial Officer only].
The undersigned hereby further certifies to the Agent, the Lenders and
the Swingline Lender that the financial information of the Borrower attached
hereto as Schedule 1 is true and correct as of the date hereof.
O-1
172
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
the date first above written.
_________________________________
Name:_________________________
Title:________________________
O-2
173
EXHIBIT P-1
FORM OF ACQUISITION CERTIFICATE
[For "Approved Acquisitions"]
This ACQUISITION CERTIFICATE ("Certificate") is delivered pursuant to
Section 9.6 of that certain Amended and Restated Credit Agreement dated as of
July 31, 1998 (as it may be amended, modified, restated or supplemented from
time to time, the "Credit Agreement"; capitalized terms used herein, and not
otherwise defined herein, shall have their respective defined meanings as set
forth in the Credit Agreement) among Physicians' Specialty Corp. (the
"Borrower"), each of the financial institutions initially a signatory thereto
and their assignees pursuant to Section 12.6 thereof (the "Lenders") and
NationsBank, N.A., as Agent (the "Agent").
I. This Certificate is submitted with respect to an Acquisition for which
the Lenders' approval is required under the Credit Agreement because the cash
portion of the Acquisition Consideration equals or exceeds $10,000,000.
II. Borrower certifies and submits the following:
A. Not Hostile. The Acquisition is not opposed by the management
and the holders of the majority of the Target's voting shares or partnership
units.
B. New Subsidiary. The Acquisition ___ does ____ does not involve
the acquisition of, or the creation of, a corporate entity or other entity that
will be a New Subsidiary.
C. No Default. After giving effect to the Acquisition, no Default
or Event of Default will occur or be continuing.
D. Description of Acquisition. The following is a brief
description of the Acquisition including a description of (A) the purchase price
of such Acquisition (expressed as a multiple of the management fee to be paid as
a result of such Acquisition [both gross and net of accounts receivable]), (B)
the method and structure of payment thereof and (C) the other parties to such
Acquisition:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
P-1-1
174
E. Description of Target. The following is a brief description of
the Target of such Acquisition, including (A) the Target's historical revenues
and (B) the management fee anticipated to be payable as a result of such
Acquisition:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
F. Acquisition Documents. Attached hereto as Exhibit A is a copy
of the signed letter of intent relating to the Acquisition.
G Historical Financial Statements. Attached hereto as Exhibit B
are the balance sheets, statements of operations and, if available, statements
of cash flows for such Target (if assets which do not constitute an Asset Group
are being acquired from a Person, such financial statement shall be with respect
to such Person) for the two fiscal years most recently ended (the "Acquisition
Historical Financial Statements").
H. Pro Forma Compliance Certificate. Attached hereto as Exhibit C
is a certificate of the chief financial officer of the Borrower setting forth in
reasonable detail the pro forma computations necessary to determine whether the
Borrower would have been in compliance with the covenants contained in Sections
9.1(a) through (c). of the Credit Agreement determined on a combined basis with
the Target as of the end of the fiscal quarter most recently ended.
I. Pro Forma Financial Statements. Attached hereto as Exhibit D
are the pro forma financial statements in form reasonably satisfactory to the
Agent reflecting the financial condition and results of operations of the
Borrower and the Target on a combined basis for the prior 12-month period (the
"Combined Financial Statements"), such financial statements to detail
calculation of the Borrower's EBITDA and Acquisition EBITDA as separate items.
[Signatures on Following Page]
P-1-2
175
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
the date first above written.
PHYSICIANS' SPECIALTY CORP.
By:______________________________
Name:_________________________
Title:________________________
P-1-3
176
EXHIBIT P-2
FORM OF ACQUISITION CERTIFICATE
[For Acquisitions Not Requiring Approval]
This ACQUISITION CERTIFICATE ("Certificate") is delivered pursuant to
Section 9.6 of that certain Amended and Restated Credit Agreement dated as of
July 31, 1998 (as it may be amended, modified, restated or supplemented from
time to time, the "Credit Agreement"; capitalized terms used herein, and not
otherwise defined herein, shall have their respective defined meanings as set
forth in the Credit Agreement) among Physicians' Specialty Corp. (the
"Borrower"), each of the financial institutions initially a signatory thereto
and their assignees pursuant to Section 12.6 thereof (the "Lenders") and
NationsBank, N.A., as Agent (the "Agent").
I. This Certificate is submitted with respect to an Acquisition for which
the Lenders' approval is not required under the Credit Agreement because the
cash portion of the Acquisition Consideration is less $10,000,000.
II. Borrower certifies and submits the following:
A. Not Hostile. The Acquisition is not opposed by the management
and the holders of the majority of the Target's voting shares or partnership
units.
B. New Subsidiary. The Acquisition ___ does ____ does not involve
the acquisition of, or the creation of, a corporate entity or other entity that
will be a New Subsidiary.
C. No Default. After giving effect to the Acquisition, no Default
or Event of Default will occur or be continuing. If the Acquisition
Consideration payable by the Borrower and its Subsidiaries in connection with
such Acquisition exceeds $2,000,000, then attached hereto as Exhibit A is a
certificate of the chief financial officer of the Borrower setting forth in
reasonable detail the pro forma computations necessary to determine whether the
Borrower would have been in compliance with the covenants contained in Section
9.1(a) through (c) of the Credit Agreement determined on a combined basis with
the Target as of the end of the fiscal quarter most recently ended.
D. Description of Acquisition and Target. The following is a
brief description of the Acquisition including a description of (A) the purchase
price of such Acquisition (expressed as a multiple of the management fee to be
paid as a result of such Acquisition [both gross and net of accounts
receivable), (B) the method and structure of payment thereof, (C) the other
parties to such Acquisition, (D) the Target's historical revenues and (E) the
management fee anticipated to be payable as a result of such Acquisition:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
P-2-1
177
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
the date first above written.
PHYSICIANS' SPECIALTY CORP.
By:______________________________
Name:_________________________
Title:________________________
P-2-2