EXHIBIT 10.42
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AMENDED AND RESTATED
CREDIT AGREEMENT
among
PHYSICIAN HEALTH CORPORATION,
PHC HOLDING CORPORATION,
VARIOUS BANKS
and
BANQUE PARIBAS,
as Agent
$62,500,000
________________________________________________
Dated as of October 27, 1997
and
Amended and Restated as of December 11, 1997
________________________________________________
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TABLE OF CONTENTS
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Section 1. Amount and Terms of Credit.................................... 1
1.01 The Commitments............................................. 1
1.02 Minimum Amount of Each Borrowing............................ 5
1.03 Notice of Borrowing......................................... 5
1.04 Disbursement of Funds....................................... 6
1.05 Notes....................................................... 7
1.06 Conversions................................................. 8
1.07 Pro Rata Borrowings......................................... 9
1.08 Interest.................................................... 9
1.09 Interest Periods............................................ 11
1.10 Increased Costs, Illegality, etc............................ 12
1.11 Compensation................................................ 14
1.12 Replacement of Banks........................................ 15
Section 2. Letters of Credit............................................. 16
2.01 Letters of Credit........................................... 16
2.02 Minimum Stated Amount....................................... 17
2.03 Letter of Credit Requests................................... 17
2.04 Letter of Credit Participations............................. 18
2.05 Agreement to Repay Letter of Credit Drawings................ 20
2.06 Increased Costs............................................. 20
Section 3. Fees; Reductions of Commitment................................ 21
3.01 Fees........................................................ 21
3.02 Voluntary Termination of Unutilized Commitments............. 22
3.03 Mandatory Reduction of Commitments.......................... 23
Section 4. Prepayments; Payments; Taxes.................................. 25
4.01 Voluntary Prepayments....................................... 25
4.02 Mandatory Repayments and Commitment Reductions.............. 27
4.03 Method and Place of Payment................................. 33
4.04 Net Payments................................................ 33
Section 5. Conditions Precedent to Loans on the Initial Borrowing Date... 35
5.01 Execution of Agreement; Notes............................... 35
5.02 Officer's Certificate....................................... 35
(i)
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5.03 Opinions of Counsel......................................... 36
5.04 Corporate Documents; Proceedings............................ 36
5.05 Plans; Shareholders' Agreements; Management Agreements;
Employment Agreements; Collective Bargaining Agreements;
Debt Agreements; Affiliate Contracts; Tax Sharing
Agreements and Material Contracts......................... 36
5.06 Consummation of the Acquisitions............................ 38
5.07 Pledge Agreement............................................ 39
5.08 Security Agreement.......................................... 39
5.09 Subsidiaries Guaranty....................................... 40
5.10 Material Adverse Change, etc................................ 40
5.11 Litigation.................................................. 40
5.12 Fees, etc................................................... 40
5.13 Solvency Certificate; Insurance Analyses.................... 40
5.14 Approvals................................................... 41
5.15 Financial Statements; Projections; Management Letter
Reports.................................................... 41
5.16 Refinancing................................................. 42
5.17 Issuance of Senior Subordinated Notes....................... 43
5.18 Consent Letter.............................................. 43
5.19 Borrowing Base Certificate.................................. 44
5.20 Equity Amendments........................................... 44
5.21 Subordinated Debt........................................... 44
Section 6. Conditions Precedent to All Credit Events..................... 44
6.01 No Default; Representations and Warranties.................. 44
6.02 Material Adverse Change, etc................................ 44
6.03 Litigation.................................................. 45
6.04 Notice of Borrowing; Letter of Credit Request............... 45
6.05 Acquisition/Term Loans...................................... 45
6.06 Additional Conditions....................................... 45
Section 7. Representations, Warranties and Agreements.................... 46
7.01 Corporate Status............................................ 46
7.02 Corporate Power and Authority............................... 46
7.03 No Violation................................................ 47
7.04 Governmental Approvals...................................... 47
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc.............................. 47
7.06 Litigation.................................................. 49
7.07 True and Complete Disclosure................................ 49
7.08 Use of Proceeds; Margin Regulations......................... 49
(ii)
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7.09 Tax Returns and Payments.................................... 50
7.10 Compliance with ERISA....................................... 50
7.11 The Security Documents...................................... 51
7.12 Representations and Warranties in Documents................. 52
7.13 Properties.................................................. 52
7.14 Capitalization.............................................. 52
7.15 Subsidiaries................................................ 53
7.16 Compliance with Statutes, etc............................... 53
7.17 Investment Company Act...................................... 53
7.18 Public Utility Holding Company Act.......................... 54
7.19 Environmental Matters....................................... 54
7.20 Labor Relations............................................. 55
7.21 Patents, Licenses, Franchises and Formulas.................. 55
7.22 Indebtedness................................................ 56
7.23 Restrictions on or Relating to Subsidiaries................. 56
7.24 The Transaction............................................. 56
7.25 Material Contracts.......................................... 57
7.26 Senior Subordinated Notes................................... 57
7.27 Defaults.................................................... 57
7.28 Unwind Provisions........................................... 57
7.29 Practice Management Agreements.............................. 57
7.30 Contemporaneous Acquisitions................................ 57
7.31 Post-Closing Acquisitions................................... 58
7.32 Repurchase Obligations...................................... 58
Section 8. Affirmative Covenants......................................... 58
8.01 Information Covenants....................................... 58
8.02 Books, Records and Inspections.............................. 62
8.03 Maintenance of Property, Insurance.......................... 62
8.04 Corporate Franchises........................................ 63
8.05 Compliance with Statutes, etc............................... 63
8.06 Compliance with Environmental Laws.......................... 63
8.07 ERISA....................................................... 64
8.08 End of Fiscal Years; Fiscal Quarters........................ 65
8.09 Performance of Obligations.................................. 65
8.10 Payment of Taxes............................................ 65
8.11 Interest Rate Protection.................................... 66
8.12 Use of Proceeds............................................. 66
8.13 UCC Searches................................................ 66
8.14 Intellectual Property Rights................................ 66
8.15 Permitted Acquisitions and Repayment of DVI Indebtedness.... 67
(iii)
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8.16 Registry.................................................... 72
8.17 Further Actions............................................. 72
8.18 Concentration Account....................................... 73
8.19 Subsidiary Metroplex Note................................... 74
8.20 Assignment of Practice Management Agreement................. 74
8.21 Corporate Separateness...................................... 74
8.22 MHOA Pledged Securities..................................... 74
Section 9. Negative Covenants........................................... 74
9.01 Liens....................................................... 74
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc...... 76
9.03 Dividends................................................... 77
9.04 Leases...................................................... 78
9.05 Indebtedness................................................ 78
9.06 Advances, Investments and Loans............................. 79
9.07 Transactions with Affiliates................................ 80
9.08 Capital Expenditures........................................ 81
9.09 Fixed Charge Coverage Ratio................................. 81
9.10 Interest Coverage Ratio..................................... 82
9.11 Leverage Ratios 82
9.12 Minimum Consolidated Net Worth.............................. 84
9.13 Minimum EBITDA.............................................. 84
9.14 Accounts Receivable Days.................................... 84
9.15 Limitation on Voluntary Payments and Modification;
Limitation on Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements; etc.. 84
9.16 Limitation on Certain Restrictions on Subsidiaries.......... 85
9.17 Limitation on Issuance of Capital Stock..................... 85
9.18 Business.................................................... 86
9.19 Limitation on Creation of Subsidiaries...................... 86
9.20 Concentration Account....................................... 86
9.21 Unwind Provisions........................................... 87
Section 10. Events of Default............................................ 87
10.01 Payments.................................................... 87
10.02 Representations, etc........................................ 87
10.03 Covenants................................................... 87
10.04 Default Under Other Agreements.............................. 87
10.05 Bankruptcy, etc............................................. 88
10.06 ERISA....................................................... 88
10.07 Security Documents.......................................... 89
(iv)
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10.08 Guaranties.................................................. 89
10.09 Judgments................................................... 89
10.10 Event Constituting a Material Adverse Change................ 90
10.11 Physician Turnover.......................................... 90
10.12 Change in Control........................................... 90
Section 11. Definitions and Accounting Terms............................. 91
11.01 Defined Terms............................................... 91
Section 12. The Agent.................................................... 120
12.01 Appointment................................................. 120
12.02 Nature of Duties............................................ 121
12.03 Lack of Reliance on the Agent............................... 121
12.04 Certain Rights of the Agent................................. 122
12.05 Reliance.................................................... 122
12.06 Indemnification............................................. 122
12.07 The Agent in Its Individual Capacity........................ 122
12.08 Holders..................................................... 123
12.09 Resignation by the Agent.................................... 123
Section 13. Guaranty..................................................... 123
13.01 The Guaranty................................................ 123
13.02 Bankruptcy.................................................. 124
13.03 Nature of Liability......................................... 124
13.04 Guaranty Absolute........................................... 125
13.05 Independent Obligation...................................... 125
13.06 Authorization............................................... 125
13.07 Reliance.................................................... 126
13.08 Subordination............................................... 126
13.09 Waiver...................................................... 126
13.10 Guaranty Continuing......................................... 127
13.11 Binding Nature of Guaranties................................ 128
13.12 Judgments Binding........................................... 128
Section 14. Miscellaneous................................................ 128
14.01 Payment of Expenses, etc.................................... 128
14.02 Right of Setoff............................................. 129
14.03 Notices..................................................... 129
14.04 Benefit of Agreement........................................ 130
14.05 No Waiver; Remedies Cumulative.............................. 131
14.06 Payments Pro Rata........................................... 132
(v)
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14.07 Calculations; Computations.................................... 132
14.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL.................................................... 132
14.09 Counterparts.................................................. 134
14.10 Effectiveness................................................. 134
14.11 Headings Descriptive.......................................... 135
14.12 Amendment or Waiver........................................... 135
14.13 Survival...................................................... 137
14.14 Domicile of Loans............................................. 137
14.15 Post-Closing Obligations...................................... 137
14.16 Addition of New Banks; Original Notes......................... 137
SCHEDULE I Commitments
SCHEDULE II Insurance
SCHEDULE III Financial Statements
SCHEDULE IV Intentionally Omitted
SCHEDULE V Real Property
SCHEDULE VI ERISA
SCHEDULE VII Capitalization
SCHEDULE VIII Subsidiaries
SCHEDULE IX Existing Indebtedness
SCHEDULE X Material Contracts
SCHEDULE XI Unwind Provisions and Mandatory Distributions
SCHEDULE XII Practice Management Agreements
SCHEDULE XIII Pre-Closing Acquisitions
SCHEDULE XIV Contemporaneous Acquisitions
SCHEDULE XV Post-Closing Acquisitions
SCHEDULE XVI Existing Liens
SCHEDULE XVII Acquisitions
SCHEDULE XVIII Dividend Restrictions
SCHEDULE XIX Outstanding Indebtedness Evidenced by Capital Lease Obligations
EXHIBIT A-1 Notice of Borrowing
EXHIBIT A-2 Notice of Conversion
EXHIBIT B-1 Term Note
EXHIBIT B-2 Acquisition Note
EXHIBIT B-3 Revolving Note
EXHIBIT B-4 Swingline Note
EXHIBIT C Letter of Credit Request
(vi)
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.P.
EXHIBIT F Officers' Certificate of Credit Parties
EXHIBIT G-1 Form of Corporate Pledge Agreement
EXHIBIT G-2 Form of LLC Pledge Agreement
EXHIBIT H Form of Security Agreement
EXHIBIT I Subsidiaries Guaranty
EXHIBIT J Consent Letter
EXHIBIT K Borrowing Base Certificate
EXHIBIT L Bank Assignment and Assumption Agreement
EXHIBIT M Cash Collateral Agreement
EXHIBIT N Solvency Certificate
(vii)
CREDIT AGREEMENT, dated as of October 27, 1997, and amended and
restated as of December 12, 1997, among PHYSICIAN HEALTH CORPORATION, a
corporation organized and existing under the laws of Delaware ("Holdings"), PHC
Holding Corporation, a corporation organized and existing under the laws of
Georgia and a Wholly-Owned Subsidiary of Holdings (the "Borrower"), the
financial institutions party hereto from time to time (each a "Bank" and,
collectively, the "Banks"), and BANQUE PARIBAS, as agent (the "Agent"). Unless
other wise defined herein, all capitalized terms used herein and defined in
Section 11 are used herein as therein defined.
W I T N E S S E T H:
WHEREAS, Holdings, the Borrower, the Original Bank and the Agent are
parties to a Credit Agreement, dated as of October 27, 1997 (as the same has
been amended, modified or supplemented to, but not including, the Restatement
Effective Date, the "Original Credit Agreement");
WHEREAS, the Borrower has requested that the Original Credit Agreement
be amended and restated and the Banks and the Agent are willing to amend and
restate the same upon the terms and conditions set forth below;
NOW, THEREFORE, the parties hereto agree that the Original Credit
Agreement shall be and hereby is amended and restated in its entirety as
follows:
Section 1. Amount and Terms of Credit.
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1.01 The Commitments. (a) Subject to and upon the terms and
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conditions set forth herein, each Bank with a Term Loan Commitment severally
agrees to make, on the Initial Borrowing Date and on the DVI Payment Date (so
long as the DVI Payment Date occurs prior to the Term Loan Commitment
Termination Date), a term loan (each, a "Term Loan" and, collectively, the "Term
Loans") to the Borrower, which Term Loans (i) shall be Base Rate Loans or
Eurodollar Loans; provided that (x) except as otherwise specifically provided in
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Section 1.10(b), all Term Loans comprising the same Borrowing shall at all times
be of the same Type and (y) no Eurodollar Loans may be incurred prior to the
Syndication Termination Date and (ii) shall not exceed for any Bank, in initial
aggregate principal amount, that amount which equals the Term Loan Commitment of
such Bank on such date (before giving effect to any reductions thereto on such
date pursuant to Section 3.03(b)(i), 3.03(b)(iii) and 3.03(b)(v) but after
giving effect to any reductions thereto on
or prior to such date pursuant to Section 3.03(b)(ii) and 3.03(b)(iv)) less such
Bank's Term Loan Commitment Percentage of the Blocked Commitment; provided,
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however that Term Loans made after the Initial Borrowing Date shall be made from
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the Blocked Commitment for each Bank and shall be in an amount equal to such
Bank's Term Loan Commitment Percentage of the Blocked Commitment. Once repaid,
Term Loans incurred hereunder may not be reborrowed. In addition, on the
Restatement Effective Date, the Borrower and Banque Paribas agree that $2
million of the Acquisition Loans which had been made pursuant to the Original
Credit Agreement prior to the Restatement Effective Date shall be deemed
automatically converted into an additional Borrowing of Term Loans.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with an Acquisition Loan Commitment severally agrees to make, at any
time and from time to time after the Acquisition Loan Commencement Date and
prior to the Acquisition Loan Termination Date, a loan or loans (each an
"Acquisition Loan" and, collectively, the "Acquisition Loans") to the Borrower,
which Acquisition Loans (i) shall, at the option of the Borrower, be Base Rate
Loans or Eurodollar Loans; provided that (x) except as otherwise specifically
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provided in Section 1.10(b), all Acquisition Loans comprising the same Borrowing
shall at all times be of the same Type and (y) no Eurodollar Loans may be
incurred prior to the Syndication Termination Date and (ii) shall not exceed for
any Bank, in initial aggregate principal amount, that amount which equals the
Acquisition Loan Commitment of such Bank at such time (before giving effect to
any reductions thereto on such date pursuant to Section 3.03(c)(i) or Section
3.03(c)(ii) but after giving effect to any reductions thereto on or prior to
such date pursuant to Section 3.03(c)(iii)). Once repaid, Acquisition Loans
incurred may not be reborrowed; provided, however that the $2 million of
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Acquisition Loans converted to Term Loans or Revolving Loans in accordance with
the next succeeding sentence and any Acquisition Loans repaid in accordance with
Section 4.02(A)(e)(i) from the proceeds of the initial public offering of common
equity of Holdings shall be permitted to be reborrowed. After giving effect to
the conversion of $2 million of the Acquisition Loans to Term Loans in
accordance with Section 1.01(a) on the Restatement Effective Date, Acquisition
Loans in an amount set forth on Part B of Schedule I shall be outstanding on the
Restatement Effective Date. No Acquisition Loans may be incurred on the
Restatement Effective Date.
(c) Subject to and upon the terms and conditions set forth herein,
each Bank with a Revolving Loan Commitment severally agrees at any time and from
time to time after the Initial Borrowing Date and prior to the Revolving Loan
Maturity Date, to make a loan or loans (each a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower, which Revolving Loans (i)
shall, at the option of the Borrower, be Base Rate Loans or Eurodollar Loans;
provided that (x) except as otherwise specifically provided in Section 1.10(b),
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all Revolving Loans comprising the same Borrowing shall at all times be of the
same Type and (y) no Eurodollar Loans may be incurred prior to the Syndication
Termination Date, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed for any Bank at any time outstanding
that aggregate principal
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amount which, when added to the product of (x) such Bank's Percentage and (y)
the sum of (I) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) and (II) the aggregate principal amount of all Swingline Loans then
outstanding (exclusive of Swingline Loans which are repaid with the proceeds of,
and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans), equals the Revolving Loan Commitment of such Bank at such time
and (iv) shall not exceed for all Banks at any time that aggregate principal
amount which, when added to the aggregate principal amount of all Swingline
Loans then outstanding and the aggregate amount of all Letter of Credit
Outstandings at such time, equals the Borrowing Base at such time.
(d) Subject to and upon the terms and conditions herein set forth,
the Swingline Bank agrees to make at any time and from time to time after the
Initial Borrowing Date and prior to the Swingline Expiry Date, a loan or loans
to the Borrower (each a "Swingline Loan," and collectively, the "Swingline
Loans"), which Swingline Loans (i) shall be made and maintained as Base Rate
Loans; (ii) may be repaid and reborrowed in accordance with the provisions
hereof; (iii) shall not exceed in aggregate principal amount at any time
outstanding, when combined with the aggregate principal amount of (x) all
Revolving Loans then outstanding and (y) all Letter of Credit Outstandings at
such time (exclusive of Unpaid Drawings which are repaid with the proceeds of,
and simultaneously with the incurrence of, the respective incurrence of
Swingline Loans), an amount equal to the lesser of (A) the Total Revolving Loan
Commitment at such time (after giving effect to any reductions to the Total
Revolving Loan Commitment on such date) and (B) the Borrowing Base at such time;
and (iv) shall not exceed in aggregate principal amount at any time outstanding
the Maximum Swingline Amount. The Swingline Bank shall not be obligated to make
any Swingline Loans at a time when a Bank Default exists unless the Swingline
Bank has entered into arrangements satisfactory to it and the Borrower to
eliminate the Swingline Bank's risk with respect to the Defaulting Bank's or
Banks' participation in such Swingline Loans, including by cash collateralizing
such Defaulting Bank's or Banks' Percentage of the outstanding Swingline Loans.
The Swingline Bank shall not make any Swingline Loan after receiving a written
notice from the Borrower or the Required Banks stating that a Default or an
Event of Default exists and is continuing until such time as the Swingline Bank
shall have received written notice of (i) rescission of all such notices from
the party or parties originally delivering such notice, (ii) the waiver of such
Default or Event of Default by the Required Banks, (iii) the Agent in good faith
believes that such Default or Event of Default has ceased to exist or (iv) the
consent of the Required Banks to make Swingline Loans notwithstanding the
existence of such Default or Event of Default.
(e) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the Banks that its outstanding Swingline Loans shall
be funded with a
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Borrowing of Revolving Loans, provided that such notice shall be deemed to have
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been automatically given upon the occurrence of a Default or an Event of Default
under Section 10.05 or upon the exercise of any of the remedies provided in the
last paragraph of Section 10, in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day from all Banks with a
Revolving Loan Commitment (without giving effect to any terminations and/or
reductions thereto pursuant to the last paragraph of Section 10) pro rata on the
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basis of their respective Percentages (determined before giving effect to any
termination of the Revolving Loan Commitments pursuant to the last paragraph of
Section 10) and the proceeds thereof shall be applied directly to the Swingline
Bank to repay the Swingline Bank for such outstanding Swingline Loans. Each such
Bank hereby irrevocably agrees to make Revolving Loans upon one Business Day's
notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by the
Swingline Bank notwithstanding (i) the amount of the Mandatory Borrowing may not
comply with the minimum amount for Borrowings otherwise required hereunder, (ii)
whether any conditions specified in Section 6 are then satisfied, (iii) whether
a Default or an Event of Default then exists, (iv) the date of such Mandatory
Borrowing and (v) any reduction in the Total Revolving Loan Commitment after any
such Swingline Loans were made. In the event that any Mandatory Borrowing cannot
for any reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code with respect to the Borrower), then each such Bank hereby agrees that it
shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Swingline Bank (without
recourse or warranty) such participations in the outstanding Swingline Loans as
shall be necessary to cause such Banks to share in such Swingline Loans ratably
based upon their respective Percentages (determined before giving effect to any
termination of the Revolving Loan Commitments pursuant to the last para graph of
Section 10); provided that (x) all interest payable on the Swingline Loans shall
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be for the account of the Swingline Bank until the date as of which the
respective participation is required to be purchased and, to the extent
attributable to the purchased participation, shall be payable to the participant
from and after such date and (y) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Bank shall be
required to pay the Swingline Bank interest on the principal amount of
participation purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the rate otherwise applicable to Revolving
Loans maintained as Base Rate Loans here under for each day thereafter.
(f) (i) Each New Bank shall purchase by assignment and assumption
from Banque Paribas on the Restatement Effective Date (without recourse to,
representation or warranty by (other than as expressly provided in this Section
1.01(f)), Banque Paribas),
-4-
outstanding Loans made by Banque Paribas to the Borrower pursuant to the
Original Credit Agreement, with each New Bank to purchase Loans in an aggregate
principal amount so that after giving effect to all such assignments the
outstanding principal amount of Loans of each Bank under each facility shall be
as set forth on Part B of Schedule I. Each of the Banks hereby further agree
that such assignments shall be effected on the Restatement Effective Date as a
result of the New Banks making to Agents for the account of Banque Paribas
payments in an amount equal to the total outstanding amount of Loans of such
Bank as set forth on Part B of Schedule I.
(ii) (x) on the Restatement Effective Date all accrued (but
theretofore unpaid) interest with respect to all outstanding Loans under the
Original Credit Agreement immediately prior to the Restatement Effective Date
shall be paid by the Borrower and (y) all Fees under, and as defined in, the
Original Credit Agreement (including, without limitation, Commitment Commissions
(as defined in the Original Credit Agreement)) accrued prior to the Restatement
Effective Date shall be paid on the Restatement Effective Date by the Borrower.
(iii) Banque Paribas hereby represents and warrants to each New Bank
purchasing Loans from Banque Paribas by way of assignment pursuant to this
Section that it is the legal and beneficial owner of such Loans being assigned
by it under this Section to such New Bank and that such Loans are free and clear
of any adverse claim with respect to its legal and beneficial ownership thereof.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
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amount of each Borrowing under a Facility hereunder shall not be less than the
Minimum Borrowing Amount for such Facility and, if greater, shall be in integral
multiples of $100,000 in the case of all Loans (other than Swingline Loans) and
$50,000 in the case of Swingline Loans. More than one Borrowing may occur on
the same date, but at no time shall there be outstanding more than five
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make
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a Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Agent at its Notice Office, prior to 11:00 A.M.
(New York time) at least one Business Day's prior written notice (or telephonic
notice promptly confirmed in writing) of each Borrowing of Base Rate Loans and
at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of Eurodollar Loans. Each such
notice (each a "Notice of Borrowing"), except as otherwise expressly provided in
Section 1.10, shall be irrevocable and shall be given by the Borrower in the
form of Exhibit A-1, appropriately completed to specify (i) the aggregate
principal amount of the Loans to be made pursuant to such Borrowing, (ii) the
date of such Borrow ing (which shall be a Business Day), (iii) whether the Loans
being made pursuant to such Borrowing shall constitute Term Loans, Revolving
Loans or Acquisition Loans and (iv)
-5-
whether the Loans being made pursuant to such Borrowing are to be initially
maintained as Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the
initial Interest Period to be applicable thereto. Any notice received after
11:00 A.M. (New York time) shall be deemed to be received on the next succeeding
Business Day. The Agent shall promptly give each Bank which is required to make
Loans of the Tranche specified in the respective Notice of Borrowing notice of
such proposed Borrowing, of such Bank's proportionate share thereof and of the
other matters specified in the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give the Swingline Bank not later than 11:00
A.M. (New York time) on the date that the Swingline Loan is to be made, written
notice (or telephonic notice confirmed in writing) of each Swingline Loan to be
made hereunder. Each such notice shall be irrevocable and specify in each case
(A) the date of Borrowing (which shall be a Business Day) and (B) the aggregate
principal amount of Swingline Loans to be made pursuant to such Borrowing.
(ii) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Agent, the respective Issuing Bank (in the case of Letters of Credit) or the
Swingline Bank, as the case may be, may, prior to receipt of written
confirmation, act without liability upon the basis of telephonic notice believed
by the Agent, the respective Issuing Bank (in the case of Letters of Credit) or
the Swingline Bank, as the case may be, in good faith to be from the Chief
Executive Officer, President, Chief Financial Officer or Controller of the
Borrower. In each such case, the Agent's, such Issuing Bank's or the Swingline
Bank's record of the terms of such telephonic notice shall be conclusive absent
manifest error.
(iii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(e), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(e).
1.04 Disbursement of Funds. No later than 12:00 Noon (New York time)
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on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, no later than the close of business on the date specified
pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not
later than 12:00 Noon (New York time) on the date specified in Section 1.01(e)),
each Bank with a Commitment of the respective Tranche will make available its
pro rata portion (determined in accordance with Section 1.07) of each such
--- ----
Borrowing requested to be made on such date (or in the case of Swingline Loans,
the Swingline Bank shall make available the full amount thereof). All such
amounts shall be made available in Dollars and in immediately available funds at
the Payment Office, and the Agent will immediately make available to the
Borrower at the Payment Office the aggregate of the amounts so made available by
the Banks. Unless the Agent shall have been notified in writing by any Bank
prior to the date of Borrowing that
-6-
such Bank does not intend to make available to the Agent such Bank's portion of
any Borrowing to be made on such date, the Agent may assume that such Bank has
made such amount available to the Agent on such date of Borrowing and the Agent
may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Bank, the Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent shall
promptly notify the Borrower, and Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
on demand from such Bank or Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to such Borrower, until the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to (i)
if recovered from such Bank, the Federal Funds Rate and (ii) if recovered from
either Borrower, the rate of interest applicable to the respective Borrowing,
as determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Bank from its obligation to make Loans hereunder or to
prejudice any rights which Borrower may have against any Bank as a result of any
failure by such Bank to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
-----
and interest on, the Loans made by each Bank shall be evidenced (i) if Term
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1 with blanks appropriately completed in
conformity herewith (each, a "Term Note" and, collectively, the "Term Notes"),
(ii) if Acquisition Loans, by a promissory note duly executed and delivered by
the Borrower substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (each an "Acquisition Note" and collectively,
the "Acquisition Notes"), (iii) if Revolving Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit B-3,
with blanks appropriately completed in conformity herewith (each a "Revolving
Note" and, collectively, the "Revolving Notes"), and (iv) if Swingline Loans, by
a promissory note duly executed and delivered by the Borrower substantially in
the form of Exhibit B-4, with blanks appropriately completed in conformity
herewith (the "Swingline Note").
(b) The Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank or its registered assigns
and be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the Term Loan Commitment of such Bank on the Initial Borrowing Date and
be payable in the principal amount of the Term Loans evidenced thereby, (iv)
mature on the Term Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary repayment as provided in Section 4.01, and mandatory repayment as
-7-
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the Guaranties and be secured by the Security Documents.
(c) The Acquisition Note issued to each Bank with an Acquisition Loan
Commitment shall (i) be executed by the Borrower, (ii) be payable to the order
of such Bank or its registered assigns and be dated the Initial Borrowing Date,
(iii) be in a stated principal amount equal to the Acquisition Loan Commitment
of such Bank and be payable in the principal amount of the Acquisition Loans
evidenced thereby, (iv) mature on the Acquisition Loan Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary repayment as provided in Section 4.01, and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the Guaranties and be secured by the Security
Documents.
(d) The Revolving Note issued to each Bank with a Revolving Loan
Commitment shall (i) be executed by the Borrower, (ii) be payable to the order
of such Bank or its registered assigns and be dated the Initial Borrowing Date,
(iii) be in a stated principal amount equal to the Revolving Loan Commitment of
such Bank and be payable in the principal amount of the Revolving Loans
evidenced thereby, (iv) mature on the Revolving Loan Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary repayment as provided in Section 4.01, and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the Guaranties and be secured by the Security
Documents.
(e) The Swingline Note issued to the Swingline Bank shall (i) be
executed by the Borrower, (ii) be payable to the order of the Swingline Bank or
its registered assigns and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Maximum Swingline Amount and be payable in
the principal amount of the outstanding Swingline Loans evidenced thereby from
time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans evidenced thereby, (vi) be subject to voluntary repayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the Guaranties and be secured by
the Security Documents.
(f) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or the making of an incorrect notation shall not affect the Borrower's
obligations in respect of such Loans.
-8-
1.06 Conversions. The Borrower shall have the option to convert, on
-----------
any Business Day, all or a portion at least equal to the applicable Minimum
Borrowing Amount for such Tranche of the outstanding principal amount of the
Loans (other than Swingline Loans, which may not be converted pursuant to this
Section 1.06), made pursuant to one or more Borrowings (so long as of the same
Tranche) of one Type of Loan into a Borrowing or Borrowings (of the same
Tranche) of the other Type of Loan; provided that:
--------
(i) except as otherwise provided in Section 1.10(b), Eurodollar
Loans may be converted into Base Rate Loans only on the last day of an
Interest Period applicable to the Loans being converted and no such partial
conversion of Eurodollar Loans shall reduce the outstanding principal
amount of such Eurodollar Loans made pursuant to a single Borrowing to less
than the applicable Minimum Borrowing Amount for such Tranche applicable
thereto;
(ii) Base Rate Loans may only be converted into Eurodollar Loans
if no Default or Event of Default is in existence on the date of the
conversion;
(iii) no conversion pursuant to this Section 1.06 shall result in
a greater number of Borrowings than is permitted under Section 1.02; and
(iv) prior to the Syndication Termination Date, no Loan may be
converted into Eurodollar Loans.
Each such conversion shall be effected by the Borrower by giving the Agent at
its Notice Office prior to 12:00 Noon (New York time) at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
(each a "Notice of Conversion") which notice shall be in the form of ▇▇▇▇▇▇▇ ▇-
▇, appropriately completed to specify the Loans to be so converted, the
Borrowing(s) pursuant to which such Loans were made and, if to be converted into
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall give each Bank prompt notice of any such proposed conversion
affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Loans (other than
-------------------
Swingline Loans) under this Agreement shall be incurred from the Banks pro rata
--- ----
on the basis of their respective Term Loan Commitments, Acquisition Loan
Commitments or Revolving Loan Commitments, as the case may be; provided that all
--------
Borrowings of Revolving Loans made pursuant to a Mandatory Borrowing shall be
incurred by the Borrower from the Banks pro rata on the basis of their
--- ----
Percentages. It is understood that no Bank shall be responsible for any default
by any other Bank of its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans provided to be made by it hereunder
regardless of the failure of any other Bank to make its Loans hereunder.
-9-
1.08 Interest. (a) The Borrower agrees to pay interest in respect
--------
of the unpaid principal amount of each Base Rate Loan made to it from the date
of the Borrowing thereof (or with respect to Loans incurred prior to the
Restatement Effective Date, from the Restatement Effective Date,) until the
earlier of (i) the maturity thereof (whether by acceleration or otherwise) of
such Base Rate Loan and (ii) the conversion of such Base Rate Loan to a
Eurodollar Loan pursuant to Section 1.06, at a rate per annum which shall at all
times be equal to the sum of the Applicable Margin plus the Base Rate in effect
from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to it from the date of the
Borrowing thereof (or with respect to Loans incurred prior to the Restatement
Effective Date, from the Restatement Effective Date) until the earlier of (i)
the maturity thereof (whether by acceleration or otherwise) of such Eurodollar
Loan and (ii) the conversion of such Eurodollar Loan to a Base Rate Loan
pursuant to Section 1.06, 1.09 or 1.10(b), as applicable, at a rate per annum
which shall, during each Interest Period applicable thereto, be equal to the sum
of the Applicable Margin plus the Quoted Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) 2% per annum in excess of the rate otherwise applicable to Base Rate Loans
of the respective Tranche of Loans from time to time and (y) the rate which is
2% in excess of the rate borne by such Loans. Interest which accrues under this
Section 1.08(c) shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Day, (ii) in respect of each Eurodollar Loan on (x) the date of any prepayment
or repayment thereof (on the amount prepaid or repaid), (y) the date of any
conversion into a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as
applicable (on the amount converted) and (z) on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
Notwithstanding anything to the contrary in this Agreement or in the Original
Credit Agreement, all accrued (but theretofore unpaid) interest with respect to
Loans which were outstanding prior to the Restatement Effective Date shall be
payable on the Restatement Effective Date.
(e) Upon each Interest Determination Date, the Agent shall determine
the Quoted Rate for the Interest Period applicable to Eurodollar Loans and shall
promptly notify the Borrower and the Banks thereof. Each such determination
shall, absent manifest error, be final and conclusive and binding on all parties
hereto.
-10-
(f) All computations of interest hereunder shall be made in
accordance with Section 14.07(b).
1.09 Interest Periods. At the time it gives any Notice of Borrowing
----------------
or Notice of Conversion in respect of the making of, or conversion into, a
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or prior to 11:00 A.M. (New York time) on the third Business Day prior to the
expiration of an Interest Period applicable to such Eurodollar Loan (in the case
of any subsequent Interest Period), the Borrower shall have the right to elect,
by giving the Agent notice thereof, the interest period (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Borrower, be a one, two, three or six-month period; provided that:
--------
(i) all Eurodollar Loans comprising a single Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Loan (including the date of any
conversion thereto from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Loan shall commence on the
day on which the next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for
-------- -------
a Eurodollar Loan would otherwise expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(v) no Interest Period for a Borrowing under a Tranche shall be
selected which extends beyond the respective Maturity Date of such Tranche;
(vi) no Interest Period may be selected at any time when any
Default or Event of Default is then in existence;
(vii) no Interest Period in respect of any Borrowing of Term Loans
or Acquisition Loans, as the case may be, shall be selected which extends
beyond any date upon which a mandatory repayment of such Term Loans or
Acquisition Loans
-11-
will be required to be made under Section 4.02(A)(c) or (d), as the case
may be, if, after giving effect to the selection of such Interest Period,
the aggregate principal amount of such Term Loans or Acquisition Loans, as
the case may be, maintained as Eurodollar Loans which have Interest Periods
expiring after such date will be in excess of the aggregate principal
amount of such Term Loans or Acquisition Loans, as the case may be, then
outstanding less the aggregate amount of such required prepayment; and
(viii) no Interest Period may be selected prior to the Syndication
Termination Date.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans the Borrower has failed to elect a new Interest Period to be
applicable to such Eurodollar Loans as provided above or a Default or Event of
Default then exists, the Borrower shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
---------------------------------
Bank shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Quoted Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to: (A) a change in the basis of
taxation of payments to any Bank of the principal of or interest on the
Notes or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or profits of
such Bank imposed by the jurisdiction in which its principal office or
applicable lending office is located) or (B) a change in official reserve
requirements (but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Quoted Rate)
and/or (y) other circumstances since the date of this Agreement
-12-
affecting such Bank or the interbank Eurodollar market or the position of
such Bank in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good faith
with any governmental request (whether or not having the force of law) or
(z) impracticable as a result of a contingency occurring after the date of
this Agreement which materially and adversely affects the interbank
Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case of clause (i)
above) shall promptly give notice (if by telephone, promptly confirmed in
writing) to the Borrower, and, except in the case of clause (i) above, to the
Agent of such determination (which notice the Agent shall promptly transmit to
each of the other Banks). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the Agent
notifies the Borrower and the Banks that the circumstances giving rise to such
notice by the Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to
such Bank, upon written demand therefor, such additional amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding on all the parties hereto)
and (z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (i) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, by giving the Agent telephonic
notice (confirmed in writing) on the same date that such Borrower was notified
by the affected Bank or the Agent pursuant to Section 1.10(a)(ii) or (iii),
cancel the respective Borrowing or conversion, or (ii) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days' written
notice to the Agent, require the affected Bank to convert such Eurodollar Loan
into a Base Rate Loan; provided that if more than one Bank is affected at any
--------
time, then all affected Banks must be treated the same pursuant to this Section
1.10(b).
-13-
(c) If any Bank shall have determined that after the date hereof, the
adoption or effectiveness of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank or any corporation controlling such Bank with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's or such other corporation's
capital or assets as a consequence of such Bank's Commitment or Commitments
hereunder or its obligations hereunder to a level below that which such Bank or
such other corporation could have achieved but for such adoption, effectiveness,
change or compliance (taking into consideration such Bank's or such other
corporation's policies with respect to capital adequacy), then from time to
time, upon written demand by such Bank (with a copy to the Agent), accompanied
by the notice referred to in the second to the last sentence of this clause (c),
the Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank or such other corporation for such reduction. In
determining such additional amounts, each Bank will act reasonably and in good
faith and will use reasonable averaging and attribution methods. Each Bank,
upon determining that any additional amounts will be payable pursuant to this
Section 1.10(c), will give prompt written notice thereof to the Borrower (a copy
of which shall be sent by such Bank to the Agent), which notice shall set forth
the basis of the calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 1.10(c) upon the subsequent
receipt of such notice. A Bank's reasonable good faith determination of
compensation owing under this Section 1.10(c) shall, absent manifest error, be
final and conclusive and binding on all the parties hereto.
1.11 Compensation. The Borrower shall compensate each Bank, upon its
------------
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Bank to fund its Eurodollar Loans) which such Bank may sustain: (i) if for
any reason (other than a default by such Bank or the Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by such Borrower or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any repayment (including any repayment made pursuant to Section 4.02 or
as a result of an acceleration of the Loans pursuant to Section 10 or as a
result of the replacement of a Bank pursuant to Section 1.12) or conversion of
any of its Eurodollar Loans occurs on a date which is not the last day of an
Interest Period with respect thereto; (iii) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by such Borrower; or (iv) as a consequence of (x) any other default by the
Borrower
-14-
to repay its Loans when required by the terms of this Agreement or any Note held
by such Bank or (y) any election made pursuant to Section 1.10(b). A Bank's
basis for requesting compensation pursuant to this Section, and a Bank's
calculations of the amount thereof, shall, absent manifest error, be final and
conclusive and binding on all the parties hereto.
1.12 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank
--------------------
or otherwise defaults in its obligations to make Loans or fund Unpaid Drawings,
or (y) if any Bank (other than the Agent) refuses to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Banks as provided in Section 14.12(b),
then the Borrower shall have the right, if no Default or Event of Default then
exists, to replace such Bank (the "Replaced Bank") with any other Bank or with
one or more Eligible Transferee or Transferees, none of whom shall constitute a
Defaulting Bank or shall be in default in its obligations to make Loans or fund
Unpaid Drawings at the time of such replacement (collectively, the "Replacement
Banks") reasonably acceptable to the Agent, the Swingline Bank and each Issuing
Bank with outstanding Letters of Credit (unless the respective Replacement Bank
is not acquiring any Revolving Loan Commitment); provided that:
--------
(i) at the time of any replacement pursuant to this Section 1.12,
the Replacement Bank shall enter into one or more assignment agreements
pursuant to Section 14.04(b) (and with all fees payable pursuant to said
Section 14.04(b) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire all of the Commitments and outstanding Loans
of, and participations in Letters of Credit by, the Replaced Bank and, in
connection therewith, shall pay to (x) the Replaced Bank in respect thereof
an amount equal to the sum of (A) an amount equal to the principal of, and
all accrued interest on, all outstanding Loans of the Replaced Bank, and
(B) an amount equal to such Replaced Bank's Percentage of all Unpaid
Drawings that have been funded by (and not reimbursed to) such Replaced
Bank, together with all then unpaid interest with respect thereto at such
time and (C) an amount equal to all accrued, but theretofore unpaid, Fees
owing to the Replaced Bank pursuant to Section 3.01 hereof, (y) the Issuing
Bank or Banks an amount equal to such Replaced Bank's Percentage of any
Unpaid Drawing (which at such time remains an Unpaid Drawing) to the extent
such amount was not theretofore funded by such Replaced Bank and (z) the
Swingline Bank an amount equal to such Bank's Percentage of any Mandatory
Borrowing to the extent such amount was not theretofore funded by such
Replaced Bank; and
(ii) all obligations of the Borrower owing to the Replaced Bank
(other than those specifically described in clause (i) above in respect of
which the assignment purchase price has been, or is concurrently being,
paid) shall be paid in full by the Borrower to such Replaced Bank
concurrently with such replacement.
-15-
Upon the execution of the respective assignment documentation, the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the Register by the Agent pursuant to Section 8.16 and, if so requested by
the Replacement Bank, delivery to the Replacement Bank of the appropriate Notes
executed by the Borrower, the Replacement Bank shall become a Bank hereunder
and the Replaced Bank shall cease to constitute a Bank hereunder with respect to
the Loans and Commitments so transferred, except with respect to indemnification
provisions under this Agreement, which shall survive as to such Replaced Bank
and the Percentages of the Banks shall be automatically adjusted at such time to
the extent necessary to give effect to such replacement.
Section 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower may request any Issuing Bank at any
time and from time to time after the Initial Borrowing Date and prior to the
tenth Business Day immediately preceding the Revolving Loan Maturity Date to
issue, for the account of the Borrower and for the benefit of any holder (or any
trustee, agent or other similar representative for any such holders) of L/C
Supportable Indebtedness, an irrevocable standby letter of credit in a form
customarily used by such Issuing Bank or in such other form as has been approved
by such Issuing Bank in support of said L/C Supportable Indebtedness (each such
letter of credit, a "Letter of Credit" and, collectively, the "Letters of
Credit"). All Letters of Credit shall be denominated in Dollars.
(b) Each Issuing Bank (other than Banque Paribas) may agree in its sole
discretion and Banque Paribas hereby agrees that it will (subject to the terms
and conditions contained herein), at any time and from time to time after the
Initial Borrowing Date and prior to the Revolving Loan Maturity Date, following
its receipt of the respective Letter of Credit Request, issue for the account of
the Borrower one or more Letters of Credit in support of such L/C Supportable
Indebtedness as is permitted to remain outstanding without giving rise to a
Default or Event of Default hereunder; provided that the respective Issuing Bank
--------
shall be under no obligation to issue any Letter of Credit if at the time of
such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over such Issuing Bank shall prohibit, or request that such Issuing Bank
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon such Issuing Bank with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for which such Issuing Bank is not otherwise compensated) not in effect on
the date
-16-
hereof, or any unreimbursed loss, cost or expense which was not applicable,
in effect or known to such Issuing Bank as of the date hereof and which
such Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) such Issuing Bank shall have received a notice of the type
described in the second sentence of Section 2.03(b) from any Bank prior to
the issuance of such Letter of Credit; or
(iii) a Bank Default exists, unless such Issuing Bank has entered
into arrangements satisfactory to it and the Borrower to eliminate such
Issuing Bank's risk with respect to the Bank which is the subject of the
Bank Default, including by cash collateralizing such Bank's Percentage of
the Letter of Credit Outstandings.
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of,
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed (x) $2,000,000 or (y) when added to the aggregate principal amount of all
Revolving Loans then outstanding and Swingline Loans then outstanding, the
lesser of (A) the Total Revolving Loan Commitment then in effect (after giving
effect to any reductions to the Total Revolving Loan Commitment on such date) or
(B) the Borrowing Base at such time and (ii) each Letter of Credit shall by its
terms terminate on or before the earlier of (x) the date which occurs 12 months
after the date of the issuance thereof (although the Letter of Credit issued in
connection with the acquisition of the Greater Cincinnati Gastro-Intestinal
Medical Practice may terminate 18 months after the date of the issuance thereof
and any other Letter of Credit may be renewable for successive periods of up to
12 months, but not beyond the Revolving Loan Maturity Date, on terms acceptable
to the Issuing Bank) and (y) the tenth Business Day immediately preceding the
Revolving Loan Maturity Date.
2.02 Minimum Stated Amount. The Stated Amount of each Letter of
---------------------
Credit shall be not less than $100,000 or such lesser amount as is acceptable to
the Issuing Bank and in no event shall there be more than five Letters of Credit
outstanding at any time or such greater amount as is acceptable to the Issuing
Bank.
2.03 Letter of Credit Requests. (a) Whenever the Borrower desires
-------------------------
that a Letter of Credit be issued for its account, the Borrower shall give the
Agent and the respective Issuing Bank at least 10 Business Days' (or such
shorter period as is acceptable to the respective Issuing Bank in any given
case) written notice prior to the proposed date of issuance (which shall be a
Business Day). Each notice shall be in the form of Exhibit C (each a "Letter of
Credit Request").
-17-
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(c). Unless the Issuing Bank has received notice from any Bank before it
issues a Letter of Credit that one or more of the conditions specified in
Section 6 are not then satisfied, or that the issuance of such Letter of Credit
would violate Section 2.01(c), then such Issuing Bank may issue the requested
Letter of Credit for the account of the Borrower in accordance with the Issuing
Bank's usual and customary practices.
2.04 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by the respective Issuing Bank of any Letter of Credit, such Issuing
Bank shall be deemed to have sold and transferred to each Bank with a Revolving
Loan Commitment, other than such Issuing Bank (each such Bank, in its capacity
under this Section 2.04, a "Participant"), and each such Participant shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Percentage in such Letter of
Credit, each substitute letter of credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments of the Banks pursuant to Section 14.04 or on the
Restatement Effective Date, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 2.04 to reflect the
new Percentages of the assignor and assignee Bank or of all Banks with Revolving
Loan Commitments, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall not have any obligation relative to the respective
Participants other than to confirm that any documents required to be delivered
under such Letter of Credit appear to have been delivered and that they appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by any Issuing Bank under or in connection
with any Letter of Credit if taken or omitted in the absence of gross negligence
or willful misconduct, shall not create for such Issuing Bank any resulting
liability to the Borrower, any Bank, any Participant or any other Person.
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Bank pursuant to Section 2.05(a), such Issuing Bank shall
promptly notify the Agent, which shall promptly notify each Participant of such
failure, and each Participant shall promptly and unconditionally pay to the
Agent for the account of such Issuing Bank the amount of such Participant's
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Agent so notifies, prior to 11:00 A.M. (New York time) on any Business Day, any
Participant required to fund a payment under a Letter of Credit, such
Participant
-18-
shall make available to the Agent at the Payment Office of the Agent for the
account of such Issuing Bank in Dollars such Participant's Percentage of the
amount of such payment on such Business Day in same day funds. If and to the
extent such Participant shall not have so made its Percentage of the amount of
such payment available to the Agent for the account of such Issuing Bank, such
Participant agrees to pay to the Agent for the account of such Issuing Bank,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Agent for the account
of such Issuing Bank at the Federal Funds Rate. The failure of any Participant
to make available to the Agent for the account of such Issuing Bank its
Percentage of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the Agent for the
account of such Issuing Bank its Percentage of any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to the Agent for the account
of such Issuing Bank such other Participant's Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which the Agent has received for the account of such Issuing
Bank any payments from the Participants pursuant to clause (c) above, such
Issuing Bank shall pay to the Agent and the Agent shall promptly pay each
Participant which has paid its Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based on the proportionate
aggregate amount funded by such Participant to the aggregate amount funded by
all Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to the Agent
for the account of each Issuing Bank with respect to Letters of Credit issued
shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against a beneficiary named in a Letter
of Credit, any transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), the Agent, any Participant, or any
other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
-19-
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
--------------------------------------------
hereby agrees to reimburse the respective Issuing Bank, by making payment to the
Agent in immediately available funds at the Payment Office (or by making the
payment directly to such Issuing Bank at such location as may otherwise have
been agreed upon by the Borrower and such Issuing Bank), for any payment or
disbursement made by such Issuing Bank under any Letter of Credit (each such
amount so paid until reimbursed, an "Unpaid Drawing"), immediately after, and in
any event on the date of, notification by the Issuing Bank to the Borrower of
such payment or disbursement, with interest on the amount so paid or disbursed
by such Issuing Bank, to the extent not reimbursed prior to 12:00 Noon (New York
time) on the date of such payment or disbursement, from and including the date
paid or disbursed to but excluding the date such Issuing Bank is reimbursed by
the Borrower therefor at a rate per annum which shall be the Base Rate in effect
from time to time plus 1-3/4% until the date on which the Borrower is so
notified and 3-3/4% thereafter, in each case with such interest to be payable on
demand.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse the respective Issuing Bank with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against any Bank
(including in its capacity as Issuing Bank or as Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "Drawing") to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
-------- -------
obligated to reimburse any Issuing Bank for any wrongful payment made by such
Issuing Bank under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Issuing
Bank.
2.06 Increased Costs. If at any time after the date hereof any
---------------
Issuing Bank or any Participant determines that the introduction of or any
change in any applicable law, rule, regulation, order, guideline or request or
in the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by such
Issuing Bank or any Participant, or any corporation controlling such
-20-
Person, with any request or directive by any such authority (whether or not
having the force of law), shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by such Issuing Bank or participated in by any Participant, or
(ii) impose on such Issuing Bank or any Participant, or any corporation
controlling such Person, any other conditions relating, directly or indirectly,
to this Agreement or any Letter of Credit; and the result of any of the
foregoing is to increase the cost to such Issuing Bank or any Participant of
issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by such Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit, then, upon demand to the Borrower by such Issuing Bank or any
Participant (a copy of which demand shall be sent by such Issuing Bank or such
Participant to the Agent), the Borrower shall pay to such Issuing Bank or such
Participant such additional amount or amounts as will compensate such Bank for
such increased cost or reduction in the amount receivable or reduction on the
rate of return on its capital. Such Issuing Bank or any Participant, upon
determining that any additional amounts will be payable pursuant to this
Section 2.06, will give prompt written notice thereof to the Borrower, which
notice shall include a certificate submitted to the Borrower by such Issuing
Bank or such Participant (a copy of which certificate shall be sent by such
Issuing Bank or such Participant to the Agent), setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate such Issuing Bank or such Participant, although failure
to give any such notice shall not release or diminish the Borrower's obligations
to pay additional amounts pursuant to this Section 2.06. The certificate
required to be delivered pursuant to this Section 2.06 shall, absent manifest
error, be final, conclusive and binding on Holdings.
Section 3. Fees; Reductions of Commitment.
------------------------------
3.01 Fees. (a) The Borrower agrees to pay to the Agent for
----
distribution to each Bank with a Revolving Loan Commitment, a Term Loan
Commitment or an Acquisition Loan Commitment a commitment commission (the
"Commitment Commission") for the period from and including the Restatement
Effective Date to and excluding the Revolving Loan Maturity Date (or such
earlier date as the Total Commitment shall have been terminated) computed at a
rate for each day equal to 1/2 of 1% per annum with respect to the Revolving
Loan Commitment and the Acquisition Loan Commitment and 3% per annum with
respect to the Term Loan Commitment on the daily Aggregate Unutilized Commitment
of such Bank. Accrued Commitment Commission shall be due and payable quarterly
in arrears on each Quarterly Payment Date and on the Revolving Loan Maturity
Date or such earlier date upon which the Total Commitment is terminated.
(b) The Borrower agrees to pay to each Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued by such Issuing
Bank hereunder (the
-21-
"Facing Fee"), for the period from and including the date of issuance of such
Letter of Credit to and including the date of termination of such Letter of
Credit, equal to 1/4 of 1% per annum of the daily Stated Amount of such Letter
of Credit; provided that in no event shall the annual Facing Fee with respect to
each Letter of Credit be less than $1,000. Accrued Facing Fees shall be due and
payable in arrears to the Issuing Bank in respect of each Letter of Credit
issued by it on each Quarterly Payment Date and the first date after the
termination of the Total Revolving Loan Commitment on which no Letters of Credit
remain outstanding.
(c) The Borrower agrees to pay to the Agent for distribution to each
Bank with a Revolving Loan Commitment a fee in respect of each Letter of Credit
issued hereunder (the "Letter of Credit Fee"), for the period from and
including the date of issuance of such Letter of Credit to and including the
date of termination of such Letter of Credit, computed at a rate per annum equal
to the Applicable Margin for Revolving Loans which are maintained as Eurodollar
Loans of the daily Stated Amount of such Letter of Credit. Letter of Credit
Fees shall be distributed by the Agent to the Banks on the basis of the
respective Percentages as in effect from time to time. Accrued Letter of Credit
Fees shall be due and payable quarterly in arrears on each Quarterly Payment
Date and on the first date after the termination of the Total Revolving Loan
Commitment on which no Letters of Credit remain outstanding.
(d) The Borrower hereby agrees to pay in immediately available funds
directly to the Issuing Bank upon each issuance of, drawing under, and/or
amendment of, a Letter of Credit issued by the Issuing Bank such amount as shall
at the time of such issuance, drawing or amendment be the administrative charge
which the Issuing Bank is customarily charging for issuances of, drawings under
(including wire charges) or amendments of, letters of credit issued by it or
such alternative amounts as may have been agreed upon in writing by the Borrower
and the Issuing Bank.
(e) The Borrower shall pay to the Agent when and as due, for its own
account, such fees as may be agreed to in writing from time to time between the
Borrower and the Agent.
(f) Notwithstanding anything to the contrary contained in this
Agreement or in the Original Credit Agreement, all unpaid Fees under, and as
defined in, the Original Credit Agreement (including, without limitation,
Commitment Commissions (as defined in the Original Credit Agreement)) accrued
prior to the Restatement Effective Date shall be payable on the Restatement
Effective Date.
(g) All computations of Fees shall be made in accordance with Section
14.07(b).
-22-
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at
-----------------------------------------------
least three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) to the Agent at its Notice Office (which notice the Agent
shall promptly transmit to each of the Banks), the Borrower shall have the
right, without premium or penalty, to terminate or reduce the Total Acquisition
Loan Commitment and/or the Total Revolving Loan Commitment, in whole or in part;
provided that (i) each such reduction shall apply proportionately to reduce the
--------
Acquisition Loan Commitment or Revolving Loan Commitment, as the case may be, of
each Bank with such a Commitment and (ii) any partial reduction pursuant to
this Section 3.02 shall be in integral multiples of at least $500,000.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
14.12(b), the Borrower shall have the right, upon five Business Days' prior
written notice to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), to terminate all of the Acquisition
Loan Commitment and/or the Revolving Loan Commitment of such Bank, so long as
all Loans, together with accrued and unpaid interest, Fees and all other
amounts, owing to such Bank (other than amounts owing in respect of any Tranche
of Term Loans or Acquisition Loans maintained by such Bank, if such Term Loans
or Acquisition Loans are not being repaid pursuant to Section 14.12(b)) are
repaid concurrently with the effectiveness of such termination pursuant to
Section 4.01(b) and the Borrower shall pay to the Agent at such time an amount
in cash and/or Cash Equivalents equal to such Bank's applicable Percentage of
the outstanding Letters of Credit (which cash and/or Cash Equivalents shall be
held by the Agent as security for the obligations of the Borrower hereunder in
respect of the outstanding Letters of Credit pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Agent (at which time Part A of Schedule I shall be deemed modified to
reflect such changed amounts), and at such time, unless the respective Bank
continues to act as a Bank with respect to any Tranche of Term Loans or
Acquisition Loans or has a Revolving Loan Commitment, or Acquisition Loan
Commitment hereunder, such Bank shall no longer constitute a "Bank" for purposes
of this Agreement, except with respect to indemnifications and similar
provisions under this Agreement, which shall survive as to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment
----------------------------------
(and the Term Loan Commitment, the Revolving Loan Commitment and the Acquisition
Loan Commitment of each Bank with such a Commitment) shall terminate on November
15, 1997 unless the Initial Borrowing Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Bank with such a Commitment) shall (i) be reduced on the
Initial Borrowing Date
-23-
(after giving effect to the making of the Term Loans on such date) by an amount
equal to the amount of such Borrowing of Term Loans made on such date, (ii)
prior to the reduction of the Total Term Loan Commitment as provided in clause
(i) of this Section 3.03(b), be reduced from time to time to the extent required
by Section 4.02, (iii) be reduced on the Initial Borrowing Date (after giving
effect to all other reductions on such date) to an amount not to exceed the
amount of the Blocked Commitment, (iv) on each date on which any payment of
principal is made on the DVI Indebtedness, be reduced in an amount equal to the
amount of such payment, and (v) terminates in its entirety on the Term Loan
Commitment Termination Date (after giving effect to the making of Term Loans on
such date). Notwithstanding anything to the contrary contained in this
Agreement, after giving effect to the Restatement Effective Date and the
conversion of Acquisition Loans to Term Loans the Total Term Loan Commitment
shall be $8 million.
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Acquisition Loan Commitment (and the Acquisition
Loan Commitment of each Bank with such a Commitment) shall (i) be reduced on
each date on which a Borrowing of Acquisition Loans is effected by an amount
equal to the amount of such Borrowing of Acquisition Loans made on such date,
(ii) terminate in its entirety on the Acquisition Loan Termination Date (after
giving effect to the making of Acquisition Loans on such date) and (iii) prior
to the termination of the Total Acquisition Loan Commitment as provided in
clause (ii) of this Section 3.03(c), be reduced from time to time to the extent
required by Section 4.02; provided, however notwithstanding any mandatory
-------- -------
commitment reductions pursuant to this Section 3.03, the Total Acquisition Loan
Commitment on the Restatement Effective Date shall be $32.5 million. In
addition, notwithstanding any other mandatory commitment reduction pursuant to
this Section 3.03, on the date that Holdings applies any proceeds from the
initial public offering of common equity of Holdings to repay Acquisition Loans,
the Total Acquisition Loan Commitment (and the Acquisition Loan Commitment of
each Bank with such a Commitment) shall be increased by an amount equal to the
amount of Acquisition Loans repaid on such date.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank) shall terminate on the Revolving Loan Maturity
Date.
(e) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank with such a Commitment) shall be reduced at the
time any payment is required to be made on the principal amount of Revolving
Loans (or would be required to be made if Revolving Loans were then outstanding)
pursuant to Section 4.02(B)(a) (except in the case of proceeds from the initial
public offering of Holdings common stock), by an amount equal to the maximum
amount of Revolving Loans that would be required to be repaid pursuant to
Section 4.02(B)(a) assuming that Revolving
-24-
Loans were outstanding in an aggregate principal amount equal to the Total
Revolving Loan Commitment.
(f) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Acquisition Loan Commitment (and the Acquisition
Loan Commitment of each Bank with such a Commitment) shall be reduced at the
time any payment is required to be made on the principal amount of Acquisition
Loans (or would be required to be made of Acquisition Loans then outstanding)
pursuant to Section 4.02(B)(a) (except in the case of proceeds from the initial
public offering of Holdings common stock), by an amount equal to the maximum
amount of Acquisition Loans that would be required to be repaid pursuant to
Section 4.02(B)(a) assuming that Acquisition Loans were outstanding in an
aggregate principal amount equal to the Total Acquisition Loan Commitment.
(g) Each reduction (or increase in accordance with Section in 3.03)
to the Total Term Loan Commitment, the Total Acquisition Loan Commitment and the
Total Revolving Loan Commitment, pursuant to this Section 3.03 shall be applied
proportionately to reduce (or increase, as the case may be) the Term Loan
Commitment, the Acquisition Loan Commitment or the Revolving Loan Commitment, as
the case may be, of each Bank with such a Commitment.
Section 4. Prepayments; Payments; Taxes.
----------------------------
4.01 Voluntary Prepayments. (a) The Borrower shall have the right
---------------------
to prepay Loans, without premium or penalty, in whole or in part from time to
time on the following terms and conditions:
(i) the Borrower shall give the Agent prior to 11:00 A.M. (New
York time) at its Notice Office at least three Business Days' prior written
notice in the case of Eurodollar Loans and one Business Day's prior written
notice in the case of Base Rate Loans (and on the date of such prepayment
in the case of Swingline Loans) of its intent to prepay the Loans, whether
Term Loans, Acquisition Loans, Revolving Loans or Swingline Loans shall be
prepaid, the amount of such prepayment and the Types of Loans to be prepaid
and, in the case of Eurodollar Loans, the specific Borrowing or Borrowings
pursuant to which made, which notice the Agent shall promptly transmit to
each of the Banks;
(ii) each prepayment shall be in an aggregate principal amount of
at least $250,000 and, if greater, in integral multiples of $100,000, in
the case of all Loans (other than Swingline Loans), and $50,000, in the
case of Swingline Loans; provided that no partial prepayment of Eurodollar
--------
Loans made pursuant to any
-25-
Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount;
(iii) no prepayments of Eurodollar Loans made pursuant to this
Section 4.01 may be made on a day other than the last day of an Interest
Period applicable thereto;
(iv) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied (I) if made prior to the earlier of (x) the
Acquisition Loan Termination Date and (y) the date on which the Total
Acquisition Loan Commitment is zero, at the option of the Borrower, to the
Term Loans, the Acquisition Loans, the Revolving Loans or the Swingline
Loans and (II) if made on or after the earlier of (x) the Acquisition Loan
Termination Date and (y) the date on which the Total Acquisition Loan
Commitment is zero, at the option of the Borrower, either (A) to repay Term
Loans or Acquisition Loans in accordance with Section 4.01(a)(v), or (B) to
repay Revolving Loans or Swingline Loans;
(v) each prepayment of Term Loans or Acquisition Loans made on
or after the earlier of (x) the Acquisition Loan Termination Date and (y)
the date on which the Total Acquisition Loan Commitment is zero pursuant to
this Section 4.01 must consist of a prepayment of Term Loans (in an amount
equal to the Term TL Percentage of such prepayment) and Acquisition Loans
(in an amount equal to the Acquisition TL Percentage of such prepayment);
and
(vi) each prepayment of Term Loans pursuant to this Section 4.01
and each prepayment of Acquisition Loans shall be applied to reduce the
then remaining Scheduled Repayments of the respective Tranche being repaid
on a pro rata basis (based upon the then remaining principal amount of each
--- ----
such Scheduled Repayment); provided that the amount of the reduction to
each Scheduled Repayment of Acquisition Loans shall not be determined until
the earlier of (x) the Acquisition Loan Termination Date and (y) the date
on which the Total Acquisition Loan Commitment is zero and shall then be
based on the amount of each Scheduled Repayment at such time (after giving
effect to the incurrence of Acquisition Loans on such date) and provided
further that the amount of the reduction to each Scheduled Repayment of
Terms Loans shall not be determined until the earlier of the (x) Term Loan
Commitment Termination Date and (y) the date on which the Total Term Loan
Commitment is zero and shall then be based on the amount of each Scheduled
Repayment at such time (after giving effect to the incurrence of Term Loans
on such date).
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have
-26-
been approved by the Required Banks as provided in Section 14.12(b), the
Borrower shall have the right, upon five Business Days' prior written notice to
the Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Banks) to repay all Loans, together
with accrued and unpaid interest, Fees and all other amounts owing to such Bank
(or owing to such Bank with respect to each Tranche which gave rise to the need
to obtain such Bank's individual consent) in accordance with said Section
14.12(b) so long as (A) in the case of the repayment of Revolving Loans of any
Bank with a Revolving Loan Commitment pursuant to this clause (b) the Revolving
Loan Commitment of such Bank is terminated concurrently with such repayment
pursuant to Section 4.02(b) (at which time Part A of Schedule I shall be deemed
modified to reflect the changed Commitments), and (B) in the case of the
repayment of Loans of any Bank the consents required by Section 14.12(b) in
connection with the repayment pursuant to this clause (b) shall have been
obtained.
4.02 Mandatory Repayments and Commitment Reductions.
----------------------------------------------
(A) Requirements:
------------
(a) If any Borrowing Base Certificate shall disclose the existence
of a Borrowing Base Deficiency, the Borrower shall on the date of delivery of
the Borrowing Base Certificate in accordance with Section 8.01(k), repay the
principal of the Swingline Loans outstanding in an aggregate amount equal to the
Borrowing Base Deficiency and, to the extent such Swingline Loans have been
repaid in full and, to the extent such Borrowing Base Deficiency continues to
exist after such repayment, the Borrower shall repay the principal of the
Revolving Loans outstanding in an aggregate amount equal to the remaining
Borrowing Base Deficiency and, to the extent such Swingline and Revolving Loans
have been repaid in full, and, to the extent such Borrowing Base Deficiency
continues to exist after such repayments, the Borrower shall pay to the
Administrative Agent at the Payment Office an amount of cash or Cash Equivalents
equal to such excess, such cash or Cash Equivalents to be held as security for
all Obligations of the Borrower hereunder with respect to the Letter of Credit
Outstandings in a cash collateral account established and maintained (including
the investments made pursuant thereto) by the Administrative Agent pursuant to a
cash collateral agreement in form and substance satisfactory to the
Administrative Agent (the "Letter of Credit Cash Collateral Account").
(b) On any day on which the sum of (x) the aggregate outstanding
principal amount of the Revolving Loans, (y) the aggregate amount of all
Swingline Loans and (z) Letter of Credit Outstandings at such time, exceeds the
Total Revolving Loan Commitment as then in effect, the Borrower shall prepay the
principal of Swingline Loans and after the Swingline Loans have been repaid in
full, the principal of Revolving Loans in an amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the aggregate amount of the Letter of Credit Outstandings
-27-
exceeds the Total Revolving Loan Commitment as then in effect, the Borrower
shall pay to the Agent at its Payment Office on such date an amount of cash or
Cash Equivalents equal to the amount of such excess, such cash or Cash
Equivalents to be held as security for all Obligations of the Borrower hereunder
in the Letter of Credit Cash Collateral Account.
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02(A), the Borrower shall be required to
repay on each date set forth below the principal amount of Term Loans set forth
opposite the dates set forth below, to the extent such Term Loans are then
outstanding (provided, however Term Loans incurred to repay the DVI Indebtedness
-------- -------
shall amortize at the same rate as the DVI Indebtedness which was repaid would
have amortized in accordance with the DVI Debt Documents; provided, further,
-------- -------
however, to the extent the DVI Indebtedness matures after the Term Loan Maturity
-------
Date then all Loans made to refinance the DVI Indebtedness still outstanding on
that date shall be repaid on that date; provided, however, if Term Looans are
incurred to epay DVI Indebtedness then the payment set forth below shall be
reduced on a pro rata basis (based on the remaining Scheduuled Term Loan
--- ----
Repayments) in an aggregate amount equal to the amount of such Term Loans (each
such repayment as the same may be reduced as provided in Sections 4.01 and
4.02(B), a "Scheduled Term Loan Repayment"):
Fiscal Year Amount
----------- ------
Each Quarterly Payment Date in 1998 $ 250,000
Each Quarterly Payment Date in 1999 $ 500,000
Each Quarterly Payment Date in 2000 $ 750,000
Each Quarterly Payment Date in 2001, $1,000,000
The First Quarterly Payment Date in
2002 and the Term Loan Maturity Date $5,000,000
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02(A), the Borrower shall be required to
repay on each date set forth below a principal amount of Acquisition Loans, to
the extent then outstanding, equal to (i) the aggregate principal amount of the
maximum amount of Acquisition Loans outstanding at any time on or prior to the
Acquisition Loan Termination Date (after giving effect to any Acquisition Loans
made on such date) multiplied by (ii) the percentage set forth below opposite
such date (each such repayment as the same may be reduced as provided in
Sections 4.01 and 4.02(B), a "Scheduled Acquisition Loan Repayment" and the
Scheduled Term Loan Repayments, together with the Scheduled Acquisition Loan
Repayments, collectively referred to as the "Scheduled Repayments"):
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Scheduled Acquisition Loan Repayment Dates Percentage
------------------------------------------ ----------
Each Quarterly Payment Date 5.00%
occurring during the 12 month period
commencing on the second anniversary of the
Initial Borrowing Date
Each Quarterly Payment Date 7.50%
occurring during the 12 month period
commencing on the third anniversary of the
Initial Borrowing Date
Each Quarterly Payment Date 12.50%
occurring during the 12 month period
commencing on the fourth anniversary of the
Initial Borrowing Date (with the fourth such
payment during such period to be on the
Acquisition Loan Maturity Date)
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on the date of the receipt thereof by
Holdings or any of its Subsidiaries, an amount equal to:
(i) 100% of the cash proceeds (net of underwriting discounts and
commissions and all other reasonable costs associated with such
transaction) from any sale or issuance on or after the Effective Date of
equity of Holdings or any Subsidiary of Holdings (other than (a) equity
issued by Holdings on the Initial Borrowing Date, (b) equity issued after
the Initial Borrowing Date as consideration to be paid for Post-Closing
Acquisitions, (c) Permitted Equity Issuances, (d) the equity issued under
the Equity Call Agreement and (e) Excluded Public Offering Proceeds); and
(ii) 100% of the cash proceeds (net of underwriting discounts and
commissions, loan fees and all other reasonable costs associated with such
transaction) from any incurrence of any Indebtedness by Holdings or any
Subsidiary of Holdings (other than Indebtedness permitted by Section 9.05
as said Section is in effect on the Effective Date),
shall be applied as provided in Section 4.02(B).
(f) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, no later than 90 days after the last
day of each fiscal
-29-
year of Holdings (beginning with fiscal year 1998), an amount equal to 75% of
Excess Cash Flow of Holdings and its Subsidiaries for the relevant Excess Cash
Flow Payment Period shall be applied as provided in Section 4.02(B).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date on which Holdings or any Subsidiary of Holdings receives cash proceeds from
any sale of assets or other dispositions (including capital stock and securities
other than capital stock the proceeds from the sale of which is recaptured under
Section 4.02(A)(e) or would be recaptured but for the exclusions contained
therein, but excluding (1) sales of inventory in the ordinary course of business
and (2) other sales of assets so long as the aggregate amount of Net Sale
Proceeds excluded pursuant to this clause (2) does not exceed $100,000 in the
aggregate for all such asset sales in any fiscal year of the Borrower), an
amount equal to 100% of the Net Sale Proceeds thereof shall be applied as
provided in Section 4.02(B); provided that such proceeds not in excess of
--------
$500,000 in the aggregate for all dispositions occurring during one fiscal year
of Holdings shall not be required to be so applied on such date to the extent
that Holdings delivers a certificate to the Agent on or prior to such date
stating that such proceeds shall be used to replace or restore any properties or
assets in respect of which such proceeds were paid within a period specified in
such certificate not to exceed 180 days after the date of receipt of such
proceeds (which certificate shall set forth estimates of the proceeds to be so
expended); and provided further, that if all or any portion of such proceeds not
----------------
so applied pursuant to Section 4.02(B) are not so used within the period
specified in the proviso, such remaining portion shall be applied on the last
day of such specified period as provided in Section 4.02(B).
(h) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date of the receipt thereof by Holdings or any Subsidiary of Holdings, an amount
equal to 100% of the cash proceeds of any Recovery Event (net of reasonable
costs incurred in connection with such Recovery Event (including the estimated
marginal increase in income taxes which will be payable as a result of such
Recovery Event by Holdings or any Subsidiary of Holdings)) shall be applied as
provided in Section 4.02(B); provided that such proceeds not in excess of
--------
$250,000 in the aggregate for all Recovery Events occurring during one fiscal
year of Holdings shall not be required to be so applied on such date to the
extent that Holdings delivers a certificate to the Agent on or prior to such
date stating that such proceeds shall be used to replace or restore any
properties or assets in respect of which such proceeds were paid within a period
specified in such certificate not to exceed 180 days after the date of receipt
of such proceeds (which certificate shall set forth estimates of the proceeds to
be so expended); and provided further, that if all or any portion of such
----------------
proceeds not so applied pursuant to Section 4.02(B) are not so used within the
period specified in the proviso, such remaining portion shall be applied on the
last day of such specified period as provided in Section 4.02(B).
-30-
(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02(A), on each date upon which Holdings or
any of its Subsidiaries receives cash proceeds pursuant to any Acquisition
Agreement or any other agreement or understanding relating to any Acquisition
or Permitted Acquisition, including, without limitation, indemnification or
similar payments and post-closing adjustments, but excluding in each case (i)
reimbursement of out-of-pocket costs and expenses, an amount equal to 100% of
such proceeds (net of reasonable expenses incurred in connection with obtaining
such proceeds and the estimated marginal increase in income taxes payable in
respect thereof) and (ii) up to $100,000 of such proceeds received per annum,
shall be applied as provided in Section 4.02(B).
(j) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date upon which Holdings or
any of its Subsidiaries receives cash proceeds from any physician or physician
practice group pursuant to the termination of personal guarantees, the leaving
of or termination of employment or any unwind agreement of the type described in
Section 7.28, an amount equal to 100% of such proceeds (net of reasonable
expenses incurred in connection with obtaining such proceeds) shall be applied
as provided in Section 4.02(B).
(k) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, all then outstanding Loans of a Tranche shall be repaid in full
on the Maturity Date for such Tranche.
(B) Application:
-----------
(a) Each mandatory repayment of Loans pursuant to Section 4.02(A)(e)
through (j), inclusive, shall be applied:
(i) first, to prepay the principal of outstanding Term Loans and
Acquisition Loans on a pro rata basis, with the Term Loan Facility to
--- ----
receive the Term TL Percentage and the Acquisition Loan Facility to receive
the Acquisition TL Percentage, in each case, of the total amount to be
applied as a mandatory repayment of Term Loans and Acquisition Loans
pursuant to this Section 4.02(B), and which prepayments of such Term Loans
and Acquisition Loans shall be applied to reduce the then remaining
Scheduled Repayments of the respective Tranche pro rata (based on the then
--- ----
remaining Scheduled Repayments of the respective Tranche); provided that
the amount of the reduction to each Scheduled Repayment of Acquisition
Loans shall not be determined until the earlier of (x) the Acquisition Loan
Termination Date and (y) the date on which the Total Acquisition Loan
Commitment is zero and shall then be based on the amount of each Scheduled
Repayment at such time (after giving effect to the incurrence of
Acquisition Loans on such date); provided further that the amount of the
reduction to each Scheduled
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Repayment of Term Loans shall not be determined until the earlier of (x)
the Term Loan Commitment Termination Date and (y) the date on which the
total Term Loan Commitment is zero and shall then be based on the amount of
each Scheduled Repayment at such time (after giving effect to the
incurrence of Term Loans on such date); provided, however, that prior to
-------- -------
the earlier of (x) the Acquisition Loan Termination Date and (y) the date
on which the Total Acquisition Loan Commitment is zero, the Borrower may
elect whether such mandatory repayments of Loans shall be applied to the
Acquisition Loan Facility or the Term Loan Facility and the amounts, if
any, which shall be applied to such Facilities; provided further, however,
-------- ------- -------
if there shall be no Term Loans outstanding or no Acquisition Loans
outstanding, then the Borrower shall apply such mandatory repayments to the
Facility with respect to which there are outstanding Loans; provided,
--------
further, however, that with respect to Term Loans, application of
------- -------
prepayments shall not be applied against the last two $5,000,000 Scheduled
Term Loan Repayments unless and to the extent that the DVI Indebtedness has
been funded;
(ii) second, to reduce the Total Acquisition Loan Commitment (it
being understood and agreed that the amount of such reduction shall be
deemed to be an application of proceeds for purposes of this Section
4.02(B)(a)(ii) even though cash is not actually applied); provided,
--------
however, that the proceeds from the initial public offering of Holdings
-------
common stock shall not reduce the Total Acquisition Loan Commitment
(although such proceeds shall be applied as set forth in clauses (iii)
through (vi) of this Section 4.02(B)(a)
(iii) third, to prepay the principal of outstanding Swingline Loans
(with, except in the case of proceeds from the initial public offering of
Holdings common stock, a corresponding reduction to the Total Revolving
Loan Commitment);
(iv) fourth, to prepay the principal of outstanding Revolving
Loans (with, except in the case of proceeds from the initial public
offering of Holdings common stock, a corresponding reduction to the Total
Revolving Loan Commitment);
(v) fifth, to cash collateralize Letter of Credit Outstandings by
depositing cash in the Letter of Credit Cash Collateral Account in an
amount equal to such Letter of Credit Outstandings (it being understood
that the Total Revolving Loan Commitment shall be reduced by the amount of
cash collateral required to be deposited by this clause (v) except to the
extent that the amount of cash collateral deposited relates to proceeds
from the initial public offering of Holdings common stock); and
(vi) sixth, to reduce the remaining (i.e., after giving effect to
---
all prior reductions thereto, including, without limitation, to the
reductions theretofore
-32-
effected pursuant to the preceding clauses (iii), (iv) and (v)) Total
Revolving Loan Commitment (it being understood and agreed that the amount
of such reduction shall be deemed to be an application of proceeds for
purposes of this Sections 4.02(B)(a)(vi) even though cash is not actually
applied); provided, however, that proceeds from the initial public offering
-------- -------
of Holdings common stock shall not reduce the Total Revolving Loan
Commitment.
(b) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans which are to be repaid and,
in the case of Eurodollar Loans, the specific Borrowing or Borrowings of the
respective Tranche pursuant to which made; provided that: (i) repayments of
--------
Eurodollar Loans pursuant to this Section 4.02 may only be made on the last day
of an Interest Period applicable thereto unless all Eurodollar Loans of the
respective Tranche with Interest Periods ending on such date of required
repayment and all Base Rate Loans of the respective Tranche have been paid in
full; (ii) if any repayment of Eurodollar Loans made pursuant to a single
Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to such
Borrowing to an amount less than the applicable Minimum Borrowing Amount, such
Borrowing shall immediately be converted into Base Rate Loans; and (iii) each
repayment of any Loans made pursuant to a single Borrowing shall be applied pro
---
rata among such Loans. In the absence of a designation by such Borrower as
----
described in the preceding sentence, the Agent shall, subject to the above, make
such designation in its sole discretion.
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement or any Note shall be made to
the Agent for the account of the Bank or Banks entitled thereto not later than
12:00 Noon (New York time) on the date when due and shall be made in Dollars in
immediately available funds at the Payment Office of the Agent. Whenever any
payment to be made hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable at the applicable rate during such extension.
4.04 Net Payments. (a) All payments made by Holdings or the
------------
Borrower hereunder, or by the Borrower under any Note, will be made without
setoff, counterclaim or other defense. Except as provided in Section 4.04(b),
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or here after imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net income of
a Bank pursuant to the laws of the jurisdiction or any political subdivision or
taxing authority thereof or therein in which the principal office or applicable
lending office of such Bank is located) and all interest, penalties or similar
liabilities with respect thereto (collectively, "Taxes").
-33-
If any Taxes are so levied or imposed, the Borrower and Holdings jointly and
severally agree to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due hereunder
or under any Note, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such Note. If
any amounts are payable in respect of Taxes pursuant to the preceding sentence,
then the Borrower and Holdings shall jointly and severally be obligated to
reimburse each Bank, upon the written request of such Bank, for taxes imposed on
or measured by the net income of such Bank pursuant to the laws of the
jurisdiction or any political subdivision or taxing authority thereof or therein
in which the principal office or applicable lending office of such Bank is
located as such Bank shall determine are payable by such Bank in respect of such
amounts so paid to or on behalf of such Bank pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of such Bank pursuant to this
sentence. The Borrower or Holdings, as the case may be, will furnish to the
Agent within 45 days after the date of the payment of any Taxes due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrower or Holdings. The Borrower and Holdings jointly and severally agree to
indemnify and hold harmless each Bank, and reimburse such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Agent on or prior to the Effective Date, or in the case of a Bank that
is an assignee or transferee of an interest under this Agreement pursuant to
Section 14.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Bank agrees that from time to time after the
Effective Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to Holdings and the Agent two new accurate and complete original signed
copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement
-34-
and any Note, or it shall immediately notify Holdings and the Agent of its
inability to deliver any such Form or Certificate, in which case such Bank shall
not be required to deliver any such form of certificate pursuant to this Section
4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Bank which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Bank has not provided
to the Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not be
obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to
a Bank in respect of income or similar taxes imposed by the United States if (I)
such Bank has not provided the Borrower the Internal Revenue Service Forms
required to be provided the Borrower pursuant to this Section 4.04(b) or (II) in
the case of a payment, other than interest, to a Bank described in clause (ii)
above, to the extent that such forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 4.04, the Borrower agrees to
pay additional amounts and to indemnify each Bank in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any changes
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of income or similar Taxes.
Section 5. Conditions Precedent to Loans on the Initial Borrowing
------------------------------------------------------
Date. The obligation of each Bank to make Loans on the Initial Borrowing Date
----
is subject at the time of such Loan to the satisfaction of the following
conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
-----------------------------
Borrowing Date (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Agent for the account of each of the Banks the
appropriate Term Note, Acquisition Note or Revolving Note executed by the
Borrower and for the account of the Swingline Bank, the Swingline Note executed
by the Borrower, in each case in the amount, maturity and as otherwise provided
herein.
5.02 Officer's Certificate. On the Initial Borrowing Date, the Agent
---------------------
shall have received a certificate dated the Initial Borrowing Date signed on
behalf of Holdings by the Chief Executive Officer, President, Chief Financial
Officer or any Vice President of Holdings stating that all of the conditions in
Sections 5.06, 5.10, 5.11, 5.14, 5.16, 5.17,
-35-
5.20, 5.21, 6.01, 6.02 and 6.03 have been satisfied on such date; provided the
--------
certificate shall not be required to certify as to the acceptability of any
items to the Agent and/or the Banks or as to whether the Agent and/or the Banks
are satisfied with any of the matters described in said Sections.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the Agent
-------------------
shall have received from (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P., counsel to Holdings and its
Subsidiaries, an opinion addressed to the Agent, the Collateral Agent and each
of the Banks and dated the Initial Borrowing Date covering the matters set forth
in Exhibit E and (ii) counsel rendering such opinions, reliance letters
addressed to the Agent, the Collateral Agent and each of the Banks dated the
Initial Borrowing Date with respect to all legal opinions delivered in
connection with the Acquisitions, which legal opinions and reliance letters
shall be in form and substance satisfactory to the Agent.
5.04 Corporate Documents; Proceedings. (a) On the Initial Borrowing
--------------------------------
Date, the Agent shall have received a certificate, dated the Initial Borrowing
Date, signed by the Chief Executive Officer, President, Chief Financial Officer,
President or any Vice President of each Credit Party, and, to the extent
required by the Agent, attested to by the Secretary or any Assistant Secretary
of such Credit Party, in the form of Exhibit F with appropriate insertions,
together with copies of the Certificate of Incorporation and By-Laws of such
Credit Party and the resolutions of such Credit Party referred to in such
certificate, and the foregoing shall be acceptable to the Agent and the Required
Banks in their sole discretion.
(b) All corporate and legal proceedings and all instruments and
agreements relating to the transactions contemplated by this Agreement and the
other Documents shall be satisfactory in form and substance to the Agent and the
Required Banks, and the Agent shall have received all information and copies of
all documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and bring-down telegrams, if
any, which the Agent or the Required Banks may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate or governmental authorities.
5.05 Plans; Shareholders' Agreements; Management Agreements;
------------------------------------------------------
Employment Agreements; Collective Bargaining Agreements; Debt Agreements;
-------------------------------------------------------------------------
Affiliate Contracts; Tax Sharing Agreements and Material Contracts. On or
------------------------------------------------------------------
prior to the Initial Borrowing Date, there shall have been delivered to the
Agent true and correct copies, certified as true and complete by an appropriate
officer of Holdings or the Borrower of:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report (including, to the extent required, the related
financial and actuarial
-36-
statements and opinions and other supporting statements, certifications,
schedules and information), required by the Agent and for each such Plan
that is a "single-employer plan," as defined in Section 4001(a)(15) of
ERISA, the most recently prepared actuarial valuation therefor) and any
other "employee benefit plans," as defined in Section 3(3) of ERISA, and
any other material agreements, plans or arrangements, with or for the
benefit of current or former employees of Holdings or any of its
Subsidiaries or any ERISA Affiliate (provided that the foregoing shall
apply in the case of any multiemployer plan, as defined in 4001(a)(3) of
ERISA, only to the extent that any document described therein is in the
possession of Holdings or any Subsidiary of Holdings or any ERISA Affiliate
or reasonably available thereto from the sponsor or trustee of any such
plan) (collectively, the "Employee Benefit Plans");
(ii) all agreements entered into by Holdings or any Subsidiary of
Holdings governing the terms and relative rights of its capital stock and
any agreements entered into by shareholders relating to any such entity
with respect to their capital stock (collectively, the "Shareholders'
Agreements");
(iii) all agreements with members of, or with respect to the,
management of Holdings or any Subsidiary of Holdings other than Employment
Agreements (collectively, the "Management Agreements");
(iv) any employment agreements entered into by Holdings or any
Subsidiary of Holdings with any physician or with any officer or director
of Holdings, or any Subsidiary of Holdings (collectively, the "Employment
Agreements");
(v) all collective bargaining agreements applying or relating to
any employee of Holdings or any Subsidiary of Holdings (collectively, the
"Collective Bargaining Agreements");
(vi) all agreements evidencing or relating to Indebtedness of
Holdings or any Subsidiary of Holdings in excess of $100,000 whether or not
such agreement is to remain outstanding after giving effect to the
incurrence of Loans on the Initial Borrowing Date (collectively, the "Debt
Agreements");
(vii) all tax sharing, tax allocation and other similar agreements
entered into by Holdings or any Subsidiary of Holdings (collectively, the
"Tax Sharing Agreements");
-37-
(viii) all contracts, agreements or understandings entered into
between Holdings or any of its Subsidiaries on the one hand, and any of its
Affiliates, on the other hand (collectively, the "Affiliate Contracts");
and
(ix) all material contracts and licenses of Holdings or any of
its Subsidiaries that are to remain in effect after giving effect to the
consummation of the Transaction, including, without limitation, all
material management service contracts, practice management agreements, and
all personal guarantees from physicians guaranteeing the revenues of their
practices and all material securities purchase agreements (collectively,
the "Material Contracts");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Debt
Agreements, Tax Sharing Agreements, Affiliate Contracts and Material Contracts
shall be in form and substance satisfactory to the Agent and the Required Banks
and shall be in full force and effect on the Initial Borrowing Date.
5.06 Consummation of the Acquisitions. (a) On or prior to the
--------------------------------
Initial Borrowing Date, there shall have been delivered to the Banks true and
correct copies of all Acquisition Documents and all terms and provisions of such
Acquisition Documents shall be in form and substance satisfactory to the Agent
and the Required Banks andshall not have been amended without the consent of
the Agent and the Required Banks; provided, however, in the case of the
-------- -------
Acquisition Documents relating to Post-Closing Acquisitions, there shall have
been delivered to the Banks true and correct copies of substantially final forms
of the Acquisition Documents and the final forms of such Acquisition Documents
shall not vary materially therefrom. Each Acquisition, including all of the
terms and conditions thereof, shall have been duly approved by the board of
directors and (if required by applicable law) the shareholders of the parties
thereto, and all Acquisition Documents shall have been duly executed and
delivered by the parties thereto and shall be in full force and effect. The
representations and warranties set forth in the Acquisition Documents shall be
true and correct in all material respects as if made on and as of the Initial
Borrowing Date. Each of the conditions precedent to Holdings' and the
Borrower's obligations to consummate each Pre-Closing Acquisition and each
Contemporaneous Acquisition as set forth in the applicable Acquisition Documents
shall have been satisfied to the satisfaction of the Agent and the Required
Banks or waived with the consent of the Agent and the Required Banks, and each
Pre-Closing Acquisition and each Contemporaneous Acquisition shall have been
consummated in accordance with all applicable law and the respective Acquisition
Documents and the consideration payable in connection therewith shall not exceed
the Purchase Price for such Acquisition.
(b) On the Initial Borrowing Date after giving effect to the
Transaction, the ownership and capital structure (including, without limitation,
the terms of any capital
-38-
stock, options, warrants or other securities issued or to be issued by Holdings
or any of its Subsidiaries) as of the Initial Borrowing Date and management of
Holdings and its Subsidiaries shall be in form and substance satisfactory to the
Agent and the Required Banks.
5.07 Pledge Agreement. On the Initial Borrowing Date, each Credit
----------------
Party (other than Immaterial Subsidiaries) shall have duly authorized, executed
and delivered a Pledge Agreement substantially in the form of Exhibit G-1
(together with the Pledge Agreement in the form of Exhibit G-2 referred to in
Section 8.22 as modified, supplemented or amended from time to time,
collectively, the "Pledge Agreement") and shall have delivered to the Collateral
Agent, as Pledgee thereunder, all of the Pledged Securities referred to therein
then owned by Holdings and each Subsidiary of Holdings (x) endorsed in blank in
the case of promissory notes constituting Pledged Securities and (y) together
with executed and undated irrevocable stock powers, in the case of capital stock
constituting Pledged Securities; provided, however, Pledged Securities of
-------- -------
Immaterial Subsidiaries and of MHOA Texas I, L.L.C. shall not be required to be
pledged.
5.08 Security Agreement. On the Initial Borrowing Date, each Credit
------------------
Party (other than the Immaterial Subsidiaries) shall have duly authorized,
executed and delivered a Security Agreement in the form of Exhibit H (as
modified, supplemented or amended from time to time, the "Security Agreement")
covering all of such Credit Party's present and future Security Agreement
Collateral, together with:
(i) proper financing statements (Form UCC-1 or such other financing
statements or similar notices as shall be required by local law) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the opinion of the Collateral
Agent, desirable to perfect the security interests purported to be created
by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all judgment liens, tax liens or
effective financing statements that name Holdings or any of its
Subsidiaries, or a division or other operating unit of any such Person, as
debtor and that are filed in the jurisdictions referred to in said clause
(i), together with copies of such other financing statements (none of which
shall cover the Collateral except to the extent evidencing Permitted Liens
or for which the Collateral Agent shall receive termination statements
(Form UCC-3 or such other termination statements as shall be required by
local law) fully executed for filing);
(iii) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be necessary
or, in the opinion of
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the Collateral Agent, desirable to perfect the security interests intended
to be created by such Security Agreement; and
(iv) evidence that all other actions necessary or, in the opinion
of the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the Security Agreement have been
taken.
5.09 Subsidiaries Guaranty. On the Initial Borrowing Date, each
---------------------
Subsidiary of Holdings (other than the Borrower and Immaterial Subsidiaries)
shall have duly authorized, executed and delivered a Guaranty in the form of
Exhibit I (as modified, supplemented or amended from time to time, the
"Subsidiaries Guaranty").
5.10 Material Adverse Change, etc. Since June 30, 1997, nothing
----------------------------
shall have occurred (and the Banks shall have become aware of no facts or
conditions not previously known) which the Agent or the Required Banks shall
determine (a) could reasonably be expected to have a material adverse effect on
the rights or remedies of the Banks or the Agent, or on the ability of Holdings
or any of its Subsidiaries to perform their obligations to the Agent and the
Banks under this Agreement or any other Credit Document, (b) could reasonably be
expected to have a materially adverse effect on the performance, business,
assets, nature of assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken as
a whole or (c) indicates the inaccuracy in any material respect of the
information previously provided to the Agent or the Banks (taken as a whole) in
connection with their analysis of the transactions contemplated hereby or
indicates that the information previously provided omitted to disclose any
material information.
5.11 Litigation. On the Initial Borrowing Date, no litigation by
----------
any entity (private or governmental) shall be pending or threatened with respect
to this Agreement, any other Document or any documentation executed in
connection herewith or with respect to the transactions contemplated hereby, or
which the Agent or Required Banks shall determine could reasonably be expected
to have a materially adverse effect on the Transaction or on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole.
5.12 Fees, etc. On the Initial Borrowing Date, the Borrower shall
----------
have paid in full to the Agent and the Banks all costs, fees and expenses
(including, without limitation, all reasonable legal fees and expenses) payable
to the Agent to the extent then due pursuant hereto or as otherwise agreed
between Holdings and the Agent.
5.13 Solvency Certificate; Insurance Analyses. On the Initial
----------------------------------------
Borrowing Date, Holdings shall cause to be delivered to the Agent and the Banks:
(i) a solvency
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certificate from the Chief Financial Officer of Holdings, in the form of Exhibit
N hereto, which shall be addressed to the Agent and each of the Banks and dated
the Initial Borrowing Date and in form and substance satisfactory to the Agent
and the Required Banks, setting forth the conclusion that, after giving effect
to the Transaction and the incurrence of all financings contemplated herein,
each of Holdings and its Subsidiaries (on a consolidated basis) and each
subsidiary of the Borrower and its Subsidiaries (on a consolidated basis), are
not insolvent and will not be rendered insolvent by the Indebtedness incurred in
connection herewith, will not be left with unreasonably small capital with which
to engage in their respective businesses and will not have incurred debts beyond
their ability to pay such debts as they mature and become due and (ii) evidence
(including, without limitation, certificates with respect to each insurance
policy listed on Schedule II) of insurance, complying with the requirements of
Section 8.03, with respect to the business and properties of Holdings and its
Subsidiaries, in scope, form and substance satisfactory to the Agent and the
Required Banks and naming each of the Collateral Agent, the Agent and the Banks
as an additional insured and the Collateral Agent as loss payee and stating that
such insurance shall not be cancelled or revised without 30 days' prior written
notice by the insurer to the Collateral Agent.
5.14 Approvals. All necessary governmental and third party approvals
---------
in connection with the Transaction and the transactions contemplated by the
Documents and otherwise referred to herein or therein (including, but not
limited to, those approvals required in respect of existing permits, landlord
consents and transfers of contract rights) shall have been obtained and remain
in effect, and all applicable waiting periods shall have expired without any
action being taken by any competent authority which restrains, prevents or
imposes, in the sole judgment of the Agent or the Required Banks, adverse
conditions upon the consummation of the Transaction or the other transactions
contemplated by the Documents and otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunction relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction, the transactions
contemplated by the Documents, the making of the Loans or the issuance of
Letters of Credit.
5.15 Financial Statements; Projections; Management Letter Reports.
------------------------------------------------------------
(a) On or prior to the Initial Borrowing Date, the Banks shall have received:
(i) the audited consolidated balance sheets of the Holdings for the
fiscal years, ended December 31, 1995 and December 31, 1996 and the audited
consolidated balance sheet of Holdings at June 30, 1997 and the related
consolidated statements of operations and cash flows of Holdings for the
fiscal year or six month period, as the case may be, ended as of such dates
and consolidated balance sheet of each of the Companies as at the
respective dates set forth on Schedule III annexed hereto and the related
statements of earnings and stockholders' equity and
-41-
cash flows of each of such companies (or similar financial statements as
specified on such Schedule), as applicable for the fiscal periods ended as
of the dates specified in such Schedule, which, in the case of the annual
statements, have been audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P., in the case of the
financial statements of Holdings and have been examined or reviewed by the
independent certified public accountants as specified on such Schedule in
the case of the other financial statements, who delivered unqualified
opinions in respect thereto except as specified on such Schedule; and
(ii) the pro forma (after giving effect to the Transaction and the
related financing thereof) consolidated balance sheet of Holdings as at the
Initial Borrowing Date, all of which financial statements in clauses (i)
and (ii) shall be prepared in accordance with generally accepted accounting
principles consistent with past practices and shall be in form and
substance satisfactory to the Agent and the Required Banks, and shall not
disclose any material adverse differences in the business, properties,
assets, liabilities, results of operations, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole
from that previously disclosed to the Agent and the Required Banks.
(b) On the Initial Borrowing Date, the Banks shall have received
detailed consolidated financial projections, certified by the Chief Financial
Officer of Holdings, for Holdings and its Subsidiaries, which include the
projected results of the Borrower, after giving effect to the Transaction and
the other transactions contemplated herein, for the period commencing on the
Initial Borrowing Date and ending after the fifth anniversary of the Initial
Borrowing Date (the "Projections"), which Projections, and the supporting
assumptions and explanations thereto, and the accounting practices and
procedures to be utilized by Holdings following the Initial Borrowing Date,
shall be satisfactory in form and substance to the Agent and the Required Banks.
(c) On or prior to the Initial Borrowing Date, the Agent shall
have received a copy of any "management letter" received by the Borrower or any
of its Subsidiaries from its certified public accountants.
5.16 Refinancing. (a) On the Initial Borrowing Date and after
-----------
giving effect to the Loans incurred on the Initial Borrowing Date, the
Acquisitions and the other transactions contemplated hereby, neither Holdings
nor any of its Subsidiaries shall have any Indebtedness or preferred stock
outstanding except for the Loans, the Existing Indebtedness, which Existing
Indebtedness shall not exceed $26,565,002 and the Holdings Preferred Stock set
forth on Schedule VII. All of the Existing Indebtedness shall remain
outstanding after the transactions contemplated hereby without any defaults or
events of default existing thereunder or arising as a result of the transactions
contemplated hereby. None of the
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Existing Indebtedness shall have been incurred in anticipation of the
transactions contemplated hereby, except to finance the Acquisitions.
(b) The Agent and the Required Banks shall be reasonably satisfied
with the amount of and the terms and conditions of the repayment of, and
termination of all commitments and documentation relating to, all Indebtedness
repaid by Holdings or its Subsidiaries, in connection with the transactions
contemplated hereby (collectively, the "Refinanced Indebtedness") and the amount
of all accrued interest, premiums, fees, commissions and expenses owing in
connection with the repayment of such Refinanced Indebtedness. In no event
shall the aggregate amount paid pursuant to the preceding sentence exceed
$29,565,002. All Liens arising in connection with such Refinanced Indebtedness
shall have been terminated (and all appropriate releases, termination statements
or other instruments of assignment with respect thereto shall have been obtained
and filed promptly), in each case to the satisfaction of the Agent and the
Required Banks.
(c) The Agent shall have received copies, certified as true and
complete by an appropriate officer of Holdings, of all documents executed in
connection with the repayment and termination of the Refinanced Indebtedness
and the release of the Liens thereunder (the "Debt Termination Documents") all
of which shall be in form and substance satisfactory to the Agent and the
Required Banks.
5.17 Issuance of Senior Subordinated Notes. On the Initial Borrowing
-------------------------------------
Date and prior to the Acquisitions, (a) Holdings shall have received gross cash
proceeds of at least $9,000,000 from the issuance of the Senior Subordinated
Notes and the Borrower shall have utilized the full amount of such cash
consideration to make payments owing in connection with the Transaction prior to
utilizing any proceeds of any Loans for such purpose and (b) Holdings shall have
received a binding commitment from the purchaser of the Senior Subordinated
Notes to purchase up to an additional $6,000,000 of Senior Subordinated Notes.
On or prior to the Initial Borrowing Date, there shall have been delivered to
the Banks true and correct copies of all Senior Subordinated Loan Documents
(certified as such by an appropriate officer of Holdings), and all of the terms
and conditions of such Senior Subordinated Loan Documents (including, without
limitation, the maturity, subordination provisions, covenants, events of
default, interest rate and limitations on cash interest payable and conditions
pursuant to which the additional Senior Subordinated Notes are required to be
issued) shall be in form and substance satisfactory to the Agent and the
Required Banks.
5.18 Consent Letter. The Agent shall have received a letter from CT
--------------
Corporation System, presently located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, substantially in the form of Exhibit J hereto, indicating its consent to
its appointment by Holdings and its Subsidiaries as their agent to receive
service of process as specified in Section 14.08 of this Agreement and Section
21 of the Subsidiaries Guaranty.
-43-
5.19 Borrowing Base Certificate. On the Initial Borrowing Date, the
--------------------------
Borrower shall have delivered to each Bank its initial Borrowing Base
Certificate meeting the requirements of Section 8.01(k).
5.20 Equity Amendments. Holdings shall obtain amendments to the
-----------------
terms of its capital stock (the "Equity Amendments"), in form and substance
satisfactory to the Agent and the Required Banks, subordinating any put rights,
mandatory redemption provisions or similar provisions which require the payment
by Holdings or any of its Subsidiaries of any amounts with respect to such
capital stock while any "senior debt" (to be defined in a manner acceptable to
the Agent) remains outstanding and such other amendments as may be reasonably
requested by the Agent.
5.21 Subordinated Debt. All indebtedness of any subsidiary of
-----------------
Holdings required by the Agent to be subordinated to the Loans (the "Other
Subordinated Debt") shall have been amended (the "Subordinated Debt Amendments")
to provide that such Subsidiary shall be released from all of its obligations
under such indebtedness and such indebtedness is assumed by Holdings and shall
be subordinated to all indebtedness under this Agreement and refinancings
thereof and under Interest Rate Protection or Other Hedging Agreements with such
subordination provisions to be in form and substance satisfactory to the
Required Banks.
Section 6. Conditions Precedent to All Credit Events. The obligation
-----------------------------------------
of each Bank to make Loans (including Loans made on the Initial Borrowing Date)
and the obligation of an Issuing Bank to issue any Letter of Credit and the
occurrence of the Restatement Effective Date, is subject, at the time of each
such Credit Event or at the time of the Restatement Effective Date, as the case
may be, (except as hereinafter indicated), to the satisfaction of the following
conditions:
6.01 No Default; Representations and Warranties. On the Restatement
------------------------------------------
Effective Date and at the time of each such Credit Event and also after giving
effect thereto (i) there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on the date
of the Restatement Effective Date and/or the date of making of such Credit Event
except for representations and warranties expressly stated to relate to a
specific earlier date, which shall be true and correct in all material respects
as of such date.
6.02 Material Adverse Change, etc. Nothing shall have occurred since
-----------------------------
June 30, 1997 (and the Banks shall have become aware of no facts or conditions
not previously known) which the Agent or the Required Banks shall determine (i)
could reasonably be expected to have a material adverse effect on the rights or
remedies of the Banks or the
-44-
Agent, or on the ability of Holdings or any Subsidiary of Holdings to perform
its obligations to the Banks under this Agreement or any other Credit Document
or (ii) which could reasonably be expected to have a materially adverse effect
on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole.
6.03 Litigation. At the time of each such Credit Event and also
----------
after giving effect thereto, no litigation by any entity (private or
governmental) shall be pending or threatened with respect to this Agreement or
any other Credit Document executed in connection herewith or the transactions
contemplated hereby or which the Required Banks shall determine could reasonably
be expected to have a materially adverse effect on the performance, business,
assets, nature of assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken as
a whole.
6.04 Notice of Borrowing; Letter of Credit Request. (a) Prior to
---------------------------------------------
the making of each Loan (other than a Swingline Loan or a Mandatory Borrowing),
the Agent shall have received a Notice of Borrowing meeting the requirements of
Section 1.03. Prior to the making of each Swingline Loan, the Swingline Bank
shall have received the notice referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Issuing Bank
shall have received a Letter of Credit Request meeting the requirements of
Section 2.03.
6.05 Acquisition/Term Loans. Prior to the making of each Acquisition
----------------------
Loan and each Term Loan after the Initial Borrowing Date, all conditions to the
Permitted Acquisition or the repayment of the DVI Indebtedness to be funded with
the proceeds of such Loans set forth in Section 8.15 and, in the case of
Permitted Acquisitions, in the definition thereof, shall have been satisfied and
the president or any other senior executive officer of Holdings shall have
delivered an officer's certificate certifying that such conditions have been
met.
6.06 Additional Conditions. Prior to the making of each Loan after
---------------------
the Initial Borrowing Date, all conditions to Borrowing contained in Section 5
which, in the Agent's judgement, had not previously been adequately satisfied,
shall have been satisfied in the judgment of the Agent.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Banks that all the
conditions specified in Section 5 and in this Section 6 and applicable to such
Credit Event exist as of that time. All of the Notes, certificates, legal
opinions and other documents and papers referred to in Section 5 and in this
Section 6, unless otherwise specified, shall be delivered to the Agent at the
Notice Office for the account of each of the Banks and, except for the Notes,
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in sufficient counterparts for each of the Banks and, unless otherwise
specified, shall be in form and substance satisfactory to the Banks.
Section 7. Representations, Warranties and Agreements. In order to
------------------------------------------
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, each of Holdings
and the Borrower makes the following representations, warranties and agreements
as to itself and as to each of its Subsidiaries, as of the Initial Borrowing
Date (both before and after giving effect to the Credit Events occurring on such
date, the Transaction and the other transactions contem plated by the Documents,
and all references to Holdings and the Borrower herein and elsewhere in this
Agreement, shall, unless otherwise specifically indicated, be references to
Holdings and the Borrower after giving effect to the Transaction) and as of the
date of each subsequent Credit Event which representations, warranties and
agreements shall sur vive the execution and delivery of this Agreement and the
Notes and any subsequent Credit Event, with the occurrence of each Credit Event
on or after the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in this Section 7 are
true and correct on and as of the Initial Borrowing Date and on the date of each
such Credit Event:
7.01 Corporate Status. Each of Holdings and its Subsidiaries (other
----------------
than Physician Network of Brevard Inc., a Florida corporation) (i) is a duly
organized and validly existing corporation (or a limited liability company or
partnership if so designated in Schedule VIII) in good standing under the laws
of the jurisdiction of its organization, (ii) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in each jurisdiction where
the ownership, leasing or operation of property or the conduct of its business
requires such qualifications except for failures to be so qualified which, in
the aggregate, could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole.
7.02 Corporate Power and Authority. Each of Holdings and its
-----------------------------
Subsidiaries has the corporate power to execute, deliver and perform the terms
and provisions of each of the Documents to which it is party and has taken all
necessary corporate action (or limited liability company or partnership action,
as applicable) to authorize the execution, delivery and performance by it of
each of such Documents. Each of Holdings and its Subsidiaries has duly executed
and delivered each of the Documents to which it is party, and each of such
Documents constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, reorganization, moratorium or similar laws relating to or
limiting creditors'
-46-
rights generally or by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by
------------
Holdings or any of its Subsidiaries of the Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene any
provision of any applicable law, statute, rule or regulation or any order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
will conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the property or assets
of Holdings or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement or loan agreement, or any other
agreement, contract or instrument to which Holdings or its Subsidiaries is a
party or by which it or any of its property or assets is bound or to which it
may be subject or (iii) will violate any provision of the Certificate of
Incorporation or By-Laws (or similar organizational documents) of Holdings or
any of its Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
----------------------
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made on or prior to the Initial Borrowing Date
and are in full force and effect), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance of any
Document or (ii) the legality, validity, binding effect or enforceability of any
such Document.
7.05 Financial Statements; Financial Condition; Undisclosed
------------------------------------------------------
Liabilities; Projections; etc. (a) (i) The audited consolidated balance sheets
------------------------------
of Holdings for the fiscal years ended December 31, 1995 and December 31, 1996
and the audited consolidated balance sheet of Holdings at June 30, 1997 and the
related consolidated statements of operations and cash flows of Holdings for the
fiscal year or six month period, as the case may be, ended as of such dates, and
the financial statements of each Company listed on Schedule III at the dates
listed on Schedule III and for the fiscal periods ended as of the dates listed
on Schedule III, which, in the case of the annual statements, have been audited
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P., in the case of the financial statements of Holdings
and have been examined or reviewed by the independent certified public
accountants listed on Schedule III, in the case of the other financial
statements, who delivered unqualified opinions in respect thereto and (ii) the
pro forma (after giving effect to the Transaction and the related financing
thereof) consolidated balance sheet of Holdings as at the Initial Borrowing
Date, copies of all of which financial statements referred to in the preceding
clauses (i) and (ii) have heretofore been furnished to the Agent, present fairly
the financial position of the respective entities at the dates of said
statements and the results of operations for the period covered thereby (or, in
the case of the pro forma balance sheet, present a
-47-
good faith estimate of the pro forma financial condition of Holdings and its
Subsidiaries (after giving effect to the Transaction) on a consolidated basis at
the date thereof). All such financial statements have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied except to the extent provided in the notes to said
financial statements and with respect to interim financial statements, subject
to normal year end adjustments. Since June 30, 1997, there has been no material
adverse change in the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
(b) On and as of the Initial Borrowing Date, on a pro forma basis
after giving effect to the Transaction and all other transactions contemplated
by the Documents as of such date and to all Indebtedness (including, without
limitation, the Loans) being incurred in connection with the Transaction, and
Liens created, and to be created, by each Credit Party in connection therewith:
(a) the sum of the assets (including all contribution and subrogation rights and
other intangible assets), at a fair valuation, of each Credit Party will exceed
its debts; (b) no Credit Party has incurred or intends to, or believes that it
will, incur debts beyond its ability to pay such debts as such debts mature; and
(c) each Credit Party will have sufficient capital with which to conduct its
business. For purposes of this Section 7.05(b) "debt" means any liability on a
claim, and "claim" means (i) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or
(ii) right to an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, subordinated, disputed,
undisputed, secured or unsecured.
(c) Except as fully reflected in the financial statements and the
notes related thereto described in Section 7.05(a), there were as of the Initial
Borrowing Date (and after giving effect to the Transaction and the other
transactions contemplated hereby and by the Documents) no liabilities or
obligations with respect to Holdings or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in aggregate, could reasonably be
expected to be material to Holdings and its Subsidiaries taken as a whole. As
of the Initial Borrowing Date, neither Holdings nor any of its Subsidiaries
knows of any basis for the assertion against Holdings or any of its Subsidiaries
of any liability or obligation of any nature whatsoever that is not fully
reflected in the financial statements and the notes related thereto described in
Section 7.05(a) which, either individually or in the aggregate, could reasonably
be expected to be material to Holdings and its Subsidiaries taken as a whole.
As of the Initial Borrowing Date (and after giving effect to the Transaction)
none of Holdings or any of its Subsidiaries will have any outstanding
Indebtedness or preferred stock other than (i)
-48-
the Loans, (ii) the Existing Indebtedness, (iii) the Senior Subordinated Notes
and (iv) Holdings Preferred Stock set forth on Schedule VII.
(d) On and as of the Initial Borrowing Date, the Projections have
been prepared in good faith by Holdings and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to Holdings or the Borrower to be misleading or which fail to
take into account material information regarding the matters reported therein.
On the Initial Borrowing Date, each of Holdings and the Borrower believes that
the Projections were reasonable and attainable (although actual results may
differ from the Projections and no representation is made that the Projections
will in fact be attained).
7.06 Litigation. There are no actions, suits or proceedings pending
----------
or, to the best knowledge of Holdings, threatened (i) with respect to any
Document, or (ii) that are reasonably likely to materially and adversely affect
the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) heretofore or contemporaneously furnished by or on behalf of Holdings
or any Subsidiary of Holdings in writing to any Bank (including, without
limitation, all information contained in the Documents) for purposes of or in
connection with this Agreement or any transaction contemplated herein is, and
all other such factual information (taken as a whole with all information
previously furnished) hereafter furnished by or on behalf of Holdings or any
Subsidiary of Holdings in writing to any Bank will be, true and accurate in all
material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
-----------------------------------
Term Loans incurred on the Initial Borrowing Date shall be used to finance, in
part, the Purchase Price of the Contemporaneous Acquisitions, directly or
indirectly to repay the Indebtedness of the Companies incurred to finance the
Pre-Closing Acquisitions and to pay Transaction Fees and Expenses. All proceeds
of the Term Loans incurred on a DVI Payment Date shall be used to repay DVI
Indebtedness. In addition, proceeds of the Term Loans incurred on the Initial
Borrowing Date in excess of the amounts used in accordance with the first
sentence of this Section 7.08 shall be deposited in the Cash Collateral Account
to be utilized solely to pay the Purchase Price and closing costs with respect
to the Post-Closing Acquisitions or other acquisitions approved by the Required
Banks or to pay amounts owing pursuant to the DVI Revolver in accordance with
the terms of the Cash Collateral Agreement.
-49-
(b) All proceeds of Revolving Loans and Swingline Loans shall be used
by the Borrower for general corporate and working capital purposes of the
Borrower and its Subsidiaries but shall not be permitted to be used to effect
Permitted Acquisitions.
(c) All proceeds of Acquisition Loans shall be used by the Borrower
only to effect Permitted Acquisitions and to pay fees, costs and expenses
related to such acquisitions; provided, however, proceeds of Acquisition Loans
may be dividended by the Borrower to Holdings to be used by Holdings to effect
Permitted Acquisitions.
(d) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event will violate or
be inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Each of Holdings and its Subsidiaries
------------------------
has timely filed or caused to be timely filed (including pursuant to any valid
extensions of time for filing) with the appropriate taxing authority, all
material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of Holdings and/or any of its Subsidiaries. The Returns accurately reflect in
all material respects all liability for taxes of Holdings and its Subsidiaries
as a whole for the periods covered thereby. Each of Holdings and its
Subsidiaries have paid all material taxes payable by them which have become due
other than those contested in good faith and for which adequate reserves have
been established in accordance with generally accepted accounting principles.
There is no material action, suit, proceeding, investigation, audit, or claim
now pending or, to the best knowledge of Holdings or any of its Subsidiaries,
threatened by any authority regarding any taxes relating to Holdings or any of
its Subsidiaries. As of the Initial Borrowing Date, neither Holdings nor any of
its Subsidiaries has entered into an agreement or waiver or been requested to
enter into an agreement or waiver extending any statute of limitations relating
to the payment or collection of taxes of Holdings or any of its Subsidiaries, or
is aware of any circumstances that would cause the taxable years or other
taxable periods of Holdings or any of its Subsidiaries not to be subject to the
normally applicable statute of limitations. Neither Holdings nor any of its
Subsidiaries has provided, with respect to themselves or property held by them,
any consent under Section 341 of the Code. None of Holdings or any of its
Subsidiaries has incurred, or will incur, any material tax liability in
connection with the Transaction or any other transactions contemplated hereby
(it being understood that the representation contained in this sentence does not
cover any future tax liabilities of Holdings or any of its Subsidiaries arising
as a result of the operation of their businesses in the ordinary course of
business).
7.10 Compliance with ERISA. Schedule VI sets forth each Plan; each
---------------------
Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its
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terms and with all applicable laws, including, without limitation, ERISA and the
Code; each Plan (and each related trust, if any) which is intended to be
qualified under Section 401(a) of the Code has received a determination letter
from the Internal Revenue Service to the effect that it meets the requirements
of Sections 401(a) and 501(a) of the Code; no Reportable Event has occurred; no
Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA)
is insolvent or in reorganization; no Plan has an Unfunded Current Liability; no
Plan which is subject to Section 412 of the Code or Section 302 of ERISA has an
accumulated funding deficiency, within the meaning of such sections of the Code
or ERISA, or has applied for or received a waiver of an accumulated funding
deficiency or an extension of any amortization period, within the meaning of
Section 412 of the Code or Section 303 or 304 of ERISA; all contributions
required to be made with respect to a Plan have been timely made; neither
Holdings nor any Subsidiary of Holdings nor any ERISA Affiliate has incurred any
material liability (including any indirect, contingent or secondary liability)
to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or
4975 of the Code or expects to incur any such liability under any of the
foregoing sections with respect to any Plan; no condition exists which presents
a material risk to Holdings or any Subsidiary of Holdings or any ERISA Affiliate
of incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate or appoint a trustee to administer any Plan which is subject to Title
IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of any Plan
(other than routine claims for benefits) is pending, expected or threatened;
using actuarial assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the aggregate liabilities of Holdings and its
Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer plans
(as defined in Section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not
exceed $100,000; each group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) which covers or has covered employees or
former employees of Holdings, any Subsidiary of Holdings, or any ERISA Affiliate
has at all times been operated in compliance with the provisions of Part 6 of
subtitle B of Title I of ERISA and Section 4980B of the Code; no lien imposed
under the Code or ERISA on the assets of Holdings or any Subsidiary of Holdings
or any ERISA Affiliate exists or is likely to arise on account of any Plan; and
Holdings and its Subsidiaries may cease contributions to or terminate any
employee benefit plan maintained by any of them without incurring any material
liability.
7.11 The Security Documents. (a) The provisions of the Security
----------------------
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the respective Credit Parties in
the Collateral described therein and the Collateral
-51-
Agent, for the benefit of the Secured Creditors, has a fully perfected Lien on,
and security interest in, all right, title and interest of the respective Credit
Parties, in all of the Collateral described therein, subject to no other Liens
other than Permitted Liens. The recordation of the Security Agreement in the
United States Patent and Trademark Office together with filings on Form UCC-1
made pursuant to the Security Agreement will be effective, under federal and
state law, to perfect the security interest granted to the Collateral Agent in
the trademarks and patents, if any, covered by the Security Agreement and the
filing of the Security Agreement with the United States Copyright Office
together with filings on Form UCC-1 made pursuant to the Security Agreement will
be effective under federal and state law to perfect the security interest
granted to the Collateral Agent in the copyrights covered by the Security
Agreement. Each of the Credit Parties party to the Security Agreement has good
and merchantable title to all Collateral described therein, free and clear of
all Liens except those described above in this clause (a).
(b) The security interests created in favor of the Collateral Agent,
as Pledgee for the benefit of the Secured Creditors, under the Pledge Agreement
constitute first perfected security interests in the Pledged Securities
described in the Pledge Agreement, subject to no security interests of any other
Person. No filings or recordings are required in order to perfect (or maintain
the perfection or priority of) the security interests created in the Pledged
Securities and the proceeds thereof under the Pledge Agreement.
7.12 Representations and Warranties in Documents. All
-------------------------------------------
representations and warranties set forth in the Documents are true and correct
in all material respects at the time as of which such representations and
warranties were made and on the Initial Borrowing Date.
7.13 Properties. Each of Holdings and its Subsidiaries has good and
----------
merchantable title to all properties owned by them, including all property
reflected in the consolidated pro forma balance sheet (after giving effect to
the Transaction) referred to in Section 7.05(a) (except as sold or otherwise
disposed of since the date of such balance sheet in the ordinary course of
business or as permitted by Section 9.02), free and clear of all Liens, other
than (i) as referred to in the consolidated balance sheet or in the notes
thereto or in the pro forma balance sheet or (ii) otherwise permitted by Section
9.01. Schedule V contains a true and complete list of each parcel of Real
Property owned or leased by Holdings and each of its Subsidiaries on the Initial
Borrowing Date, and the type of interest therein held by Holdings and/or its
Subsidiaries.
7.14 Capitalization. On the Initial Borrowing Date, after giving
--------------
effect to the Transaction, the authorized capital stock of Holdings consists of
(i) 100,000,000 shares of common stock, $.0025 par value per share ("Holdings
Common Stock"), 4,968,572 of which shares are issued and outstanding; (ii)
40,000,000 shares of Non-Voting Common
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Stock, $.0025 par value, of which no shares are issued and outstanding; (iii)
20,000,000 shares of Prime Common Stock, $.0025 par value ("Holdings Prime
Stock"), of which 4,955,904 shares are issued and outstanding; (iv) 500,000
shares of Class A Stock, $0.01 par value, of which 200,000 shares are issued and
outstanding; and (v) 18,000,000 shares of preferred stock, $0.01 par value per
share ("Holdings Preferred Stock"), of which 9,000,000 shares consist of Series
B Redeemable Convertible Preferred Stock of which 3,460,362 shares are issued
and outstanding, and of which 6,000,000 shares consist of Series B Non-Voting
Redeemable Convertible Preferred Stock of which 917,814 shares are issued and
outstanding. All outstanding shares of capital stock of Holdings are owned by
the persons and in the amounts set forth on Schedule VII. On the Initial
Borrowing Date, the authorized capital stock of the Borrower consists of 10,000
shares of common stock, $.01 par value per share ("Borrower Common Stock"), of
which 1,000 shares are issued and outstanding and are owned solely by Holdings.
All of such outstanding shares have been duly and validly issued, are fully paid
and nonassessable, and have not been issued in violation of any preemptive
rights. Except as set forth in Schedule VII, VIII, X (limited only to the
documents indicated by an asterisk) and XI, on the Initial Borrowing Date,
neither Holdings nor any of its Subsidiaries has outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreements providing the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock.
7.15 Subsidiaries. On the Initial Borrowing Date, the corporations,
------------
limited liability companies and partnerships listed on Schedule VIII are the
only Subsidiaries of Holdings. Schedule VIII correctly sets forth, as of the
Initial Borrowing Date, the percentage ownership (direct and indirect) of
Holdings in each class of capital stock (or other equity interests) of each of
its Subsidiaries and also identifies the direct owner thereof.
7.16 Compliance with Statutes, etc. Each of Holdings and its
------------------------------
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls and relating
to the prohibition on the corporate practice of medicine), except with respect
to each of the foregoing such noncompliance as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.17 Investment Company Act. None of Holdings nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
-53-
7.18 Public Utility Holding Company Act. None of Holdings nor any of
----------------------------------
its Subsidiaries is 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.
7.19 Environmental Matters. (a) Holdings and each of its
---------------------
Subsidiaries is in compliance with, in all respects, all applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws except such noncompliances which, in the aggregate, could not
reasonably be expected to have a material adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole. There are no past, pending or, to the best knowledge of
Holdings or the Borrower, threatened material Environmental Claims against
Holdings or any of its Subsidiaries or any Real Property currently owned or
operated by Holdings or any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences concerning the business or operations
of Holdings or any of its Subsidiaries or any Real Property owned or operated at
any time by Holdings or any of its Subsidiaries or, to the knowledge of Holdings
any property adjoining any such Real Property that could reasonably be expected
(i) to form the basis of an Environmental Claim against Holdings or any of its
Subsidiaries or any Real Property owned or operated by Holdings or any of its
Subsidiaries or (ii) to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property under any Environmental Law except such Environmental Claims and
restrictions which individually or in the aggregate could not reasonably be
expected to have a material adverse effect on the performance, business, assets,
nature of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
(b) Neither Holdings nor any of its Subsidiaries has, at any time,
generated, used, treated, stored, transported or released Hazardous Materials
on, to or from any Real Property at any time owned, leased or at any time
operated by Holdings or any of its Subsidiaries, except for such Hazardous
Material of a type and only in a quantity used in the normal course of business
of Holdings or its Subsidiaries (or the physician practices) which Hazardous
Material is being held, stored, used and disposed of in accordance with
applicable law.
(c) To the best knowledge of Holdings, there are not now and never
have been any underground storage tanks located on any Real Property owned or
operated by Holdings or any of its Subsidiaries.
(d) To the best knowledge of Holdings, no Real Property at any time
owned or at any time operated by Holdings or any of its Subsidiaries is located
in any site listed
-54-
on, or proposed in the Federal Register for listing on, the Superfund National
Priorities List, or listed on the Comprehensive Environmental Response
Compensation and Liability Information System or their state equivalent.
7.20 Labor Relations. Neither Holdings nor any of its Subsidiaries
---------------
is engaged in any unfair labor practice that could reasonably be expected to
have a material adverse effect on Holdings and its Subsidiaries taken as a
whole. There is (i) no significant unfair labor practice complaint pending
against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings or the Borrower, threatened against any of them, before the National
Labor Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings or the Borrower, threatened against any of them and (ii) no significant
strike, labor dispute, slowdown or stoppage pending against Holdings or any of
its Subsidiaries or, to the best knowledge of Holdings or the Borrower,
threatened against Holdings or any of its Subsidiaries.
7.21 Patents, Licenses, Franchises and Formulas. (a) Holdings,
------------------------------------------
together with its Subsidiaries, has a license to use or otherwise has the right
to use, free and clear of pending or threatened Liens, all the material patents,
patent applications, trademarks, service marks, trade names, trade secrets,
copyrights, proprietary information, computer programs, data bases, licenses,
franchises and formulas, or rights with respect to the foregoing (collectively,
"Intellectual Property"), and has obtained all licenses and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, could reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole.
(b) Holdings, together with its Subsidiaries, has the right to
practice under and use all of its Intellectual Property.
(c) Neither Holdings nor any of its Subsidiaries has knowledge of any
claim by any third party contesting the validity, enforceability, use or
ownership of the Intellectual Property, or of any existing state of facts that
would support a claim that use by Holdings or any of its Subsidiaries of any
such Intellectual Property has infringed or otherwise violated any Intellectual
Property right of any other Person and that to the best knowledge of Holdings
and its Subsidiaries no claim is threatened except for such claims that could
not individually or in the aggregate reasonably be expected to have a material
adverse affect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
-55-
7.22 Indebtedness. Schedule IX sets forth a true and complete list
------------
of all Indebtedness (other than the Loans and the Senior Subordinated Notes) and
preferred stock of Holdings and each of its Subsidiaries as of the Initial
Borrowing Date after giving effect to the Transaction and the other transactions
contemplated hereby (the "Existing Indebtedness"), in each case showing the
aggregate amount thereof and the name of the respective obligor and any other
entity which directly or indirectly guaranteed such debt. None of the Existing
Indebtedness was incurred in connection with, or in contemplation of, the
Transaction or the other transactions contemplated hereby except to finance the
Pre-Closing Acquisitions.
7.23 Restrictions on or Relating to Subsidiaries. Except as set
-------------------------------------------
forth on Schedule XVIII, there does not exist any encumbrance or restriction on
the ability of (i) any Subsidiary of Holdings to pay dividends or make any other
distributions on its capital stock or any other interest or participation in its
profits owned by Holdings or any Subsidiary of Holdings or to pay any
Indebtedness owed to Holdings or a Subsidiary of Holdings, (ii) any Subsidiary
of Holdings to make loans or advances to Holdings or any of Holdings'
Subsidiaries or (iii) Holdings or any Subsidiary of Holdings to transfer any of
its properties or assets to Holdings or any Subsidiary of Holdings, except for
such encumbrances or restrictions existing under or by reason of (x) applicable
law, (y) this Agreement and the other Credit Documents or (z) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of Holdings or a Subsidiary of the Borrower.
7.24 The Transaction. All aspects of the Transaction have been
---------------
effected in accordance with the Documents and all applicable law. At the time
of consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to consummate the
Transaction shall have been obtained, given, filed or taken and are in full
force and effect (or effective judicial relief with respect thereto has been
obtained). All applicable waiting periods with respect thereto have or, prior
to the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents or
imposes material adverse conditions upon the consummation of the Transaction.
Additionally, at the time of consummation thereof, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the consummation of the Transaction. The Physician Practice
Groups being acquired pursuant to the Acquisitions have aggregate pro forma
Revenues and EBITDA of at least $46.9 million and $6.2 million, respectively.
The Purchase Price (and the components of such Purchase Price) for each
Acquisition is as set forth in Schedule XVII. All of the pro forma EBITDA
referred to in the second preceding sentence is personally guaranteed by the
selling physicians. Set forth on Schedule XVII are the names of the individuals
providing personal guarantees (the "Personal Guarantees") and a description of
such guarantees. Each of the Personal Guarantees constitute the legal, valid
and binding obligation of each of the guarantors enforceable in accordance with
its terms,
-56-
except as the enforceability thereof may be limited by bankruptcy,
reorganization, moratorium or similar laws relating to creditors' rights
generally or by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
7.25 Material Contracts. All Material Contracts of Holdings and each
------------------
of its Subsidiaries as of the Initial Borrowing Date are listed on Schedule X.
7.26 Senior Subordinated Notes. The subordination provisions of the
-------------------------
Senior Subordinated Notes and the senior subordinated guaranties relating to
such notes and the subordination provisions of the Other Subordinated Debt are
enforceable against Holdings and its Subsidiaries and the holders thereof, as
the case may be, and the Loans and other Obligations hereunder (including,
without limitation, pursuant to the Guaranties) and obligations arising pursuant
to the Interest Rate Protection or Other Hedging Agreements are within the
definition of "Senior Debt" included in such subordination provisions.
7.27 Defaults. As of the Initial Borrowing Date, neither Holdings
--------
nor any of its Subsidiaries is in, nor has Holdings or any of its Subsidiaries
received any notices alleging any, breach or default by Holdings or any of its
Subsidiaries under any contract with a doctor or medical practice group or under
any other Material Contract.
7.28 Unwind Provisions. Except as set forth on Schedule XI as of the
-----------------
Initial Borrowing Date, neither Holdings nor any of its Subsidiaries is party to
an agreement of any nature which allows any party to such agreement, upon the
happening or non-happening of an event, to repurchase the stock or assets it
sold to Holdings or its Subsidiary in the original sale of such parties medical
practice or put such party in the position or a similar position to that the
party maintained prior to entering into such agreement.
7.29 Practice Management Agreements. As of the Initial Borrowing
------------------------------
Date, all of the Practice Management Agreements or similar agreements with
physicians or physician entities to which Holdings or its Subsidiaries are
directly or indirectly parties to are set forth on Schedule XII. All of the
rights and interest, including the ability to collect proceeds, of Holdings and
its Subsidiaries under the agreements set forth on Schedule XII are assignable
to the Collateral Agent and the Banks, as collateral, without the consent or
approval of any third party.
7.30 Contemporaneous Acquisitions. All of the Acquisitions that the
----------------------------
Borrower or its Subsidiaries will effect on the Initial Borrowing Date are set
forth on Schedule XIV (the "Contemporaneous Acquisitions).
-57-
7.31 Post-Closing Acquisitions. All of the Acquisitions that the
-------------------------
Borrower or its Subsidiaries will effect after the Initial Closing Date with the
proceeds of the Loans or the Senior Subordinated Notes deposited in the Cash
Collateral Account are set forth on Schedule XV (the "Post-Closing
Acquisitions").
7.32 Repurchase Obligations. As of the Initial Borrowing Date, no
----------------------
Material Contract requires Holdings or any of its Subsidiaries to repurchase,
purchase or otherwise acquire or make distributions with respect to, its capital
stock (or with respect to rights, options or warrants with respect to its
capital stock) other than as set forth on Schedule XI.
Section 8. Affirmative Covenants. Each of Holdings and the Borrower
---------------------
covenants and agrees that on and after the Effective Date and until the Total
Commitment and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to the Agent:
---------------------
(a) Monthly Reports. Within 30 days after the end of each fiscal
---------------
month, the consolidated and consolidating balance sheets of Holdings and
its Subsidiaries as at the end of such month and the related consolidated
and consolidating statements of earnings for such month and for the elapsed
portion of the fiscal year ended with the last day of such month, setting
forth comparative figures for the corresponding month and elapsed portion
of such fiscal year for the prior fiscal year and comparable budgeted
figures for such period, all of which shall be certified by the chief
financial officer or controller of Holdings, subject to normal year-end
audit adjustments and shall be accompanied by a management discussion and
analysis of the results of operations and financial condition with respect
to such period.
(b) Quarterly Financial Statements. Within 45 days after the close
------------------------------
of each of the first three quarterly accounting periods in each fiscal year
of Holdings the consolidated and consolidating balance sheets of Holdings
and its Subsidiaries as at the end of such quarterly period and the related
consolidated and consolidating statements of earnings and stockholders'
equity and statement of cash flows for such quarter, in each case for such
quarterly period and for the elapsed portion of the fiscal year ended with
the last day of such quarterly period, in each case, setting forth
comparative figures for the related periods in the prior fiscal year and
comparable budgeted figures for such period, all of which shall be
certified by the chief financial officer or controller of Holdings, subject
to normal year-end audit
-58-
adjustments and shall be accompanied by a management discussion and
analysis of the results of operations and financial condition with respect
to such period.
(c) Annual Financial Statements. Within 90 days after the close of
---------------------------
each fiscal year of Holdings, the consolidated and consolidating balance
sheets of Holdings and its Subsidiaries as at the end of such fiscal year
and the related consolidated and consolidating statements of earnings and
stockholders' equity and statement of cash flows for such fiscal year and
setting forth comparative figures for the preceding fiscal year and
comparable budgeted figures for such period and certified, (x) in the case
of the consolidating statements, by the chief financial officer of Holdings
and (y) in the case of the consolidated financial statements of Holdings
and its Subsidiaries, by any of the "big six" or other independent
certified public accountants of recognized national standing reasonably
acceptable to the Required Banks, together with a signed opinion of such
accounting firm (which opinion shall not be qualified in any respect)
stating that in the course of its regular audit of the financial statements
of Holdings which audit was conducted in accordance with generally
accepted auditing standards, such accounting firm obtained no knowledge of
any Default or Event of Default which has occurred and is continuing or, if
in the opinion of such accounting firm such a Default or Event of Default
has occurred and is continuing, a statement as to the nature thereof and
shall be accompanied by a management discussion and analysis of the results
of operations and financial condition with respect to such period.
(d) Management Letters. Promptly after the receipt thereof by
------------------
Holdings or any of its Subsidiaries, a copy of any "management letter"
received by Holdings or any of its Subsidiaries from its certified public
accountants.
(e) Budgets. As soon as available but in no event later than 30 days
-------
after the first day of the applicable fiscal year of Holdings, a budget for
Holdings and its Subsidiaries in form customarily prepared by Holdings
(including budgeted statements of earnings, sources and uses of cash, cash
flow statements and balance sheets) prepared by Holdings for each calendar
month of such fiscal year and on an annual basis for the next succeeding
fiscal year prepared in reasonable detail with appropriate presentation and
discussion of the principal assumptions upon which such budgets are based,
accompanied by the statement of the chief financial officer or controller
of Holdings to the effect that, to the best of his knowledge, the budget is
a reasonable estimate for the periods covered thereby.
(f) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Section 8.01(a), (b) and (c), a
certificate of the chief financial officer, chief executive officer,
president or controller of the Borrower to the effect that no Default or
Event of Default has occurred and is continuing or, if
-59-
any Default or Event of Default has occurred and is continuing, specifying
the nature and extent thereof, which certificate, (x) in the case of
certificates delivered pursuant to Section 8.01(b) or (c), shall set forth
the calculations required to establish whether Holdings was in compliance
with the provisions of Sections 3.03, 4.02, 8.15, 9.01, 9.02, 9.04, 9.05,
9.06 and 9.08 through 9.14 inclusive, at the end of such fiscal quarter or
year, as the case may be, and (y) in the case of certificates delivered
pursuant to Section 8.01(c), the amount of Excess Cash Flow for the
relevant Excess Cash Flow Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within two Business Days after an officer of Holdings or any of its
Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of
any event which constitutes a Default or Event of Default, (ii) any
litigation or governmental investigation or proceeding pending (x) against
Holdings or its Subsidiaries which could reasonably be expected to
materially and adversely affect the performance, business, assets, nature
of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole
or (y) with respect to any Document, (iii) any other event which could
reasonably be expected to materially and adversely affect the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole and (iv) any default or breach by Holdings or
any of its Subsidiaries under any contract or agreement with any doctor or
medical practice or any other Material Contract or receipt of any notice of
such default or breach received from any doctor or medical practice or any
party to any other Material Contract.
(h) Other Reports and Filings. Promptly upon transmission thereof,
-------------------------
copies of any financial information, proxy materials and other information
and reports, if any, which the Borrower or any of its Subsidiaries (x) has
filed with the Securities and Exchange Commission (the "SEC ") or (y) has
delivered to holders of, or any agent or trustee with respect to,
Indebtedness of the Borrower or any of its Subsidiaries in its capacity as
such a holder, agent, or trustee.
(i) Environmental Matters. Promptly upon, and in any event within
---------------------
two Business Days after an officer of Holdings or of any of its
Subsidiaries obtaining knowledge thereof, notice of any of the following
environmental matters (i) any pending or threatened material Environmental
Claim against Holdings or any of its Subsidiaries or any Real Property
owned or operated at any time by Holdings or any of its Subsidiaries; (ii)
any condition or occurrence on or arising from any Real Property owned or
operated at any time by Holdings or any of its Subsidiaries that (a) could
reasonably be anticipated to result in a material noncompliance by Holdings
or any of its Subsidiaries with any applicable Environmental Law, or (b)
-60-
could reasonably be anticipated to form the basis of a material
Environmental Claim against Holdings or any of its Subsidiaries or any Real
Property owned or operated by Holdings or any of its Subsidiaries; (iii)
any condition or occurrence on any Real Property owned or operated by
Holdings or any of its Subsidiaries or any property adjoining such Real
Property that could reasonably be anticipated to cause such Real Property
to be subject to any material restrictions on the ownership, occupancy, use
or transferability of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to a material
Release or material threatened Release or the actual or alleged presence of
any Hazardous Material on or from any Real Property owned or operated at
any time by Holdings or any of its Subsidiaries in each case as required by
any Environmental Law or any governmental or other administrative agency.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and Holdings or such Subsidiary's response thereto. In addition, Holdings
will provide the Banks with copies of all material communications with any
government or governmental agency relating to material Environmental
Claims, all material communications with any person relating to material
Environmental Claims, and such detailed reports of any Environmental Claim
as may reasonably be requested by the Required Banks.
(j) Annual Meetings with Banks. Within 120 days after the close of
--------------------------
each fiscal year of Holdings, Holdings shall, at the request of the Agent,
hold a meeting (at a mutually agreeable location and time) with all Banks
who choose to attend such meeting at which meeting shall be reviewed the
financial results of the previous fiscal year and the financial condition
of Holdings and its Subsidiaries and the budgets presented for the current
fiscal year of the Holdings and its Subsidiaries.
(k) Borrowing Base Certificates. (i) On the Initial Borrowing Date
---------------------------
and (ii) no later than 11:00 A.M. (New York time) on the thirtieth day
after each calendar month, a borrowing base certificate of the Borrower in
the form of Exhibit K (each a "Borrowing Base Certificate"), with respect
to the Eligible Receivables and Eligible Inventory of the Borrower and its
Subsidiaries as of (x) in the case of clause (i), August 30, 1997 (after
giving effect to the Transaction) and (y) in the case of clause (ii), the
last day of the immediately preceding month, and in all such cases,
certified by the chief financial officer, chief executive officer or
controller of the Borrower.
(l) Other Information. From time to time, such other information or
-----------------
documents (financial or otherwise) with respect to any Credit Party or any
of its Subsidiaries, as the Agent or the Required Banks may reasonably
request.
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8.02 Books, Records and Inspections. Holdings will, and will cause
------------------------------
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries, in conformity with United States generally
accepted accounting principles and all requirements of law, shall be made of all
dealings and transactions in relation to its business and activities. The
Holdings will, and will cause each of its Subsidiaries to, permit officers and
designated representatives of the Agent or any Bank to visit and inspect, under
guidance of officers of Holdings or of such Subsidiary, any of the properties of
Holdings or such Subsidiary, and to examine the books of account of Holdings or
such Subsidiary and discuss the affairs, finances and accounts of Holdings or
of such Subsidiary with, and be advised as to the same by, its and their
officers, all at such reasonable times and intervals and to such reasonable
extent as the Agent or such Bank may request.
8.03 Maintenance of Property, Insurance. (a) Schedule II sets forth
----------------------------------
a true and complete listing of all insurance maintained by Holdings and each of
its Subsidiaries as of the Effective Date. Holdings will, and will cause each
of its Subsidiaries to, (i) keep all material property useful and necessary in
its business in good working order and condition (ordinary wear and tear
excepted), (ii) maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts and against at
least such risks as are described on Schedule II, and (iii) furnish to each
Bank, upon written request, full information as to the insurance carried. The
provisions of this Section 8.03 shall be deemed to be supplemental to, but not
duplicative of, the provisions of any of the Security Documents that require the
maintenance of insurance.
(b) Holdings will at all times keep, and will cause each of its
Subsidiaries to keep, its property insured in favor of the Collateral Agent, and
all policies (including mortgage policies) or certificates (or certified copies
thereof) with respect to such insurance (and any other insurance maintained by
Holdings or its Subsidiaries (other than employee benefit insurance)) (i) shall
be endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as loss payee and naming the Collateral Agent, the Agent and each Bank as an
additional insured) with respect to Collateral, (ii) shall state that such
insurance policies shall not be cancelled or revised without 30 days' prior
written notice thereof by the respective insurer to the Collateral Agent, (iii)
shall provide that the respective insurers irrevocably waive any and all rights
of subrogation with respect to the Collateral Agent, (iv) shall contain the
standard noncontributory mortgagee clause endorsement in favor of the Collateral
Agent with respect to hazard insurance coverage, (v) shall provide that any
losses shall be payable notwithstanding (A) any act or neglect of Holdings or
any of its Subsidiaries, (B) the occupation or use of the properties for
purposes more hazardous than those permitted by the terms of the respective
policy if such coverage is obtainable at commercially reasonable rates and is of
the kind from time to time customarily insured against by Persons owning or
using similar property and in such amounts as are customary, (C) any foreclosure
or other proceeding relating to the insured properties or (D) any change in the
title to or
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ownership or possession of the insured properties and (vi) shall be deposited
with the Collateral Agent. If Holdings or any of its Subsidiaries shall fail to
insure its property in accordance with this Section 8.03, or if Holdings or any
of its Subsidiaries shall fail to endorse and deposit all policies or
certificates with respect thereto, the Collateral Agent shall have the right
(but shall be under no obligation) to procure such insurance and the Borrower
agrees to reimburse the Collateral Agent for all costs and expenses of procuring
such insurance.
8.04 Corporate Franchises. Holdings will do, and will cause each of
--------------------
its Subsidiaries (other than Immaterial Subsidiaries) to do or cause to be done,
all things necessary to preserve and keep in full force and effect its existence
and its rights, franchises, licenses and patents; provided, however, that
-------- -------
nothing in this Section 8.04 shall prevent the withdrawal by Holdings or any
Subsidiary of Holdings of its qualification as a foreign corporation in any
jurisdiction where such withdrawal could not reasonably be expected to have a
material adverse effect on the performance, business, assets, nature of assets,
liabilities, properties, operations, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. Holdings will, and will cause
------------------------------
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property except such noncompliances as could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. (a) Holdings will comply,
----------------------------------
and will cause each of its Subsidiaries to comply, in all material respects with
all Environmental Laws applicable to ownership or use of the Real Property, will
promptly pay or cause Holdings to pay all costs and expenses incurred in such
compliance, and will keep or cause to be kept all such Real Properties free and
clear of any Liens imposed pursuant to such Environmental Laws. Neither
Holdings nor any Subsidiary of Holdings will generate, use, treat, store,
release or dispose of, or permit the generation, use, treatment, storage,
Release or disposal of Hazardous Materials on any Real Property, or transport or
permit the transportation of Hazardous Materials to or from any Real Property,
other than in compliance with applicable law.
(b) At the request of the Agent or the Required Banks at any time and
from time to time during the existence of this Agreement: (i) if an Event of
Default exists under this Agreement, (ii) upon the reasonable belief by the
Agent that Holdings or any of its Subsidiaries has breached any representation
or covenant herein with respect to any
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environmental matters and such breach is continuing, or (iii) in the event
notice is provided under Section 8.01(i) herein, Holdings will provide, at its
sole cost and expense (or will cause Holdings to provide at its sole cost and
expense), an environmental site assessment report reasonable in scope concerning
any Real Property of Holdings or its Subsidiaries, prepared by an environmental
consulting firm approved by the Agent and the Required Banks, indicating the
presence or Release of Hazardous Materials on or from any of the Real Property
and the potential cost of any removal or remedial action in connection with any
Hazardous Materials on such Real Property. If Holdings fails to provide the
same after thirty days' notice, the Agent may order the same, and Holdings shall
grant and hereby grants to the Agent and the Banks and their agents access to
such Real Property and specifically grants the Agent and the Banks an
irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment all at Holdings' expense, which assessments, if
obtained, will be provided to Holdings.
8.07 ERISA. As soon as possible and, in any event, within ten (10)
-----
days after Holdings, any Subsidiary of Holdings or any ERISA Affiliate knows or
has reason to know of the occurrence of any of the following, Holdings will
deliver to each of the Banks a certificate of the chief financial officer of
Holdings setting forth the full details as to such occurrence and the action, if
any, that Holdings, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by Holdings, the Subsidiary, the ERISA Affiliate, the PBGC, a
Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred (except to the extent that Holdings has previously
delivered to the Banks a certificate and notices (if any) concerning such event
pursuant to the next clause hereof); that a contributing sponsor (as defined in
Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject
to the advance reporting requirement of PBGC Regulation Section 4043.61 (without
regard to subparagraph (b)(1) thereof), and an event described in subsection
.62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is
reasonably expected to occur with respect to such Plan within the following 30
days; that an accumulated funding deficiency, within the meaning of Section 412
of the Code or Section 302 of ERISA, has been incurred or an application may be
or has been made for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code or Section 303 or 304 of ERISA
with respect to a Plan; that any contribution required to be made with respect
to a Plan has not been timely made; that a Plan has been or may be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA; that a
Plan has an Unfunded Current Liability; that proceedings may be or have been
instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; that
Holdings, any Subsidiary of Holdings or any ERISA Affiliate will or may incur
any liability (including any indirect, contingent, or secondary liability) to or
on account of the termination of or withdrawal from a Plan under Section
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4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan
under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or
502(i) or 502(l) of ERISA or with respect to a group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B
of the Code; or that Holdings or any Subsidiary of Holdings may incur any
material liability pursuant to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any Plan.
Holdings will deliver to each of the Banks (i) a complete copy of the annual
report (on Internal Revenue Service Form 5500-series) of each Plan (including,
to the extent required, the related financial and actuarial statements and
opinions and other supporting statements, certifications, schedules and
information) required to be filed with the Internal Revenue Service and (ii)
copies of any records, documents or other information that must be furnished to
the PBGC with respect to any Plan pursuant to Section 4010 of ERISA. In
addition to any certificates or notices delivered to the Banks pursuant to the
first sentence hereof, copies of annual reports and any records, documents or
other information required to be furnished to the PBGC, and any material notices
received by Holdings, any Subsidiary of Holdings or any ERISA Affiliate with
respect to any Plan shall be delivered to the Banks no later than ten (10) days
after the date such annual report has been filed with the Internal Revenue
Service or such records, documents and/or information has been furnished to the
PBGC or such notice has been received by Holdings, the Subsidiary or the ERISA
Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Holdings will cause its,
------------------------------------
and each of its Subsidiaries', fiscal years to end on December 31 and each of
its, and each of its Subsidiaries', first three fiscal quarters to end on March
31, June 30 and September 30.
8.09 Performance of Obligations. Holdings will, and will cause each
--------------------------
of its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement and other debt instrument by which it is
bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
8.10 Payment of Taxes. Holdings will pay and discharge, and will
----------------
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties would
otherwise attach thereto, and all lawful claims which, if unpaid, might become a
lien or charge upon any properties of Holdings or any of its Subsidiaries not
otherwise permitted under Section 9.01; provided that neither Holdings nor any
--------
of its Subsidiaries shall be required to pay any such tax, assessment, charge,
levy or claim which is being contested in good faith and by proper
-65-
proceedings if it has maintained adequate reserves with respect thereto in
accordance with generally accepted accounting principles.
8.11 Interest Rate Protection. The Borrower shall no later than 120
------------------------
days following the Initial Borrowing Date enter into arrangements acceptable to
the Agent establishing a fixed or maximum interest rate acceptable to the Agent
for an aggregate notional amount of at least 50% of the principal amount of the
Borrower's Term Loans outstanding on such date for a period of at least three
years. The Borrower shall no later than 180 days following each drawing under
the Acquisition Loan Facility and each drawing under the Term Loan Facility
enter into arrangements reasonably acceptable to the Agent establishing a fixed
or maximum interest rate acceptable to the Agent for an aggregate notional
amount of at least 50% of the outstanding principal amount of the Borrower's
Acquisition Loans and additional Term Loans (after giving effect to such
borrowing) for a period of at least three years.
8.12 Use of Proceeds. All proceeds of the Loans shall be used as
---------------
provided in Section 7.08.
8.13 UCC Searches. At the request of the Agent, Holdings shall
------------
deliver to the Agent (at the Borrower's own cost) copies of Request for
Information or Copies (UCC-11), or equivalent reports for the purpose of
verifying that all financing statements necessary or, in the opinion of the
Collateral Agent reasonably desirable, to perfect the security interests
purported to be created by the Security Agreement shall have been properly
recorded and filed.
8.14 Intellectual Property Rights. Holdings will, and will cause
----------------------------
each of its Subsidiaries to, make all filings in connection with the transfer of
the Intellectual Property rights in the Acquisitions. Holdings will, and will
cause each of its Subsidiaries to, maintain in full force and effect any and all
Intellectual Property rights necessary or appropriate to the business of
Holdings or any Subsidiary of Holdings and take no action (including, without
limitation, the licensing of Intellectual Property), or fail to take an action,
as the case may be, in connection with such Intellectual Property rights which
could reasonably be expected to result in a material adverse effect on the
performance, business, assets, nature of assets, liabilities, properties,
operations, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole. Holdings will, and will cause each of its
Subsidiaries to, diligently prosecute any and all pending applications filed in
connection with seeking or seeking to perfect the Intellectual Property rights
and take all other reasonable actions necessary for the protection and
maintenance of the Intellectual Property rights necessary or appropriate to the
business of Holdings or any Subsidiary of Holdings at all times from and after
the Initial Borrowing Date other than any such actions the failure of which, in
the aggregate, could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations,
-66-
properties, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
8.15 Permitted Acquisitions and Repayment of DVI Indebtedness. (a)
--------------------------------------------------------
Subject to the remaining provisions of this Section 8.15 applicable thereto and
the requirements contained in the definition of Permitted Acquisition, the
Borrower and its Subsidiaries may from time to time after the Initial Borrowing
Date effect Permitted Acquisitions or repay the DVI Indebtedness, so long as
with respect to each Permitted Acquisition and the repayment of the DVI
Indebtedness, to the extent provided below:
(i) no Default or Event of Default or default or event of
default under the Senior Subordinated Notes is in existence at the time of
the consummation of such Permitted Acquisition or repayment of the DVI
Indebtedness or would exist after giving effect thereto, all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties were made on and as of
the date of such Permitted Acquisition or date of repayment of the DVI
Indebtedness (both before and after giving effect thereto) and no other
agreement, contract or instrument to which the Borrower or any of its
Subsidiaries is a party restricts such Permitted Acquisition or repayment
of DVI Indebtedness;
(ii) the Borrower shall have given the Agent and the Banks at
least 30 days (or ten Business Days, in the case of clause (s) below) prior
written notice of any such Permitted Acquisition (each such notice, a
"Permitted Acquisition Notice") or proposed repayment of the DVI
Indebtedness, which notice shall (r) contain the estimated date such
Permitted Acquisition is scheduled to be consummated or date of repayment
of the DVI Indebtedness, (s) attach a true and correct copy of the draft
purchase agreement, letter of intent, description of material terms or
similar agreement executed by the Borrower or one of its Subsidiaries and
the seller in connection with such Permitted Acquisition, (t) contain the
estimated aggregate purchase price of such Permitted Acquisition and the
amount of related costs and expenses and the intended method of financing
thereof, (u) contain the estimated amount of Acquisition Loans required to
effect such Permitted Acquisition, (v) contain a description of any
Permitted Earn-Out Debt or Permitted Seller Notes to be incurred by
Holdings in connection with such Permitted Acquisition and the maximum
potential liability of Holdings with respect thereto, and (w) contain a
description of the Permitted Equity Issuances to be effected by Holdings in
connection with such Permitted Acquisition;
(iii) the Borrower shall have provided the Banks with all
information provided to its Board of Directors or any of its shareholders
with respect to such Permitted Acquisition, including without limitation,
all information required
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pursuant to the Securities Purchase Agreement and such other information
related to the Person or business, division or product line being acquired
and the Permitted Acquisition as the Agent shall reasonably request,
including without limitation expert reports prepared by such accounting,
environmental, and/or other experts as the Agent shall reasonably request;
(iv) (I) as soon as available but not less than the earlier of
three days after the execution thereof, a copy of the executed purchase
agreement and all related agreements, schedules and exhibits with respect
to such Permitted Acquisition and (II) at the time of delivery of the
purchase agreement, certification from the Borrower as to the purchase
price for the acquisition and the estimated amount of all related costs,
fees and expenses and that, except as described, there are no other amounts
which will be payable in connection with the respective Permitted
Acquisition;
(v) with respect to the Permitted Acquisitions effected during
any twelve month period, the sum (without duplication) of (I) Acquisition
Loans incurred by the Borrower, (II) the fair market value (as determined
in good faith by the Board of Directors of Holdings) of Holdings Common
Stock issued as consideration in such Permitted Acquisitions, (III) the
aggregate amount (determined by using the face amount of the debt or the
amount payable at maturity, whichever is greater) of Permitted Seller Notes
issued by Holdings in connection with such Permitted Acquisitions and (IV)
the maximum potential liability of Holdings with respect to all Permitted
Earn-Out Debt issued in connection with such Permitted Acquisitions, shall
not exceed $15,000,000 during any twelve month period with the first such
period commencing on the Initial Borrowing Date;
(vi) calculations are made by the Borrower of the Consolidated
EBITDA of the Person or business, division or product line being acquired
pursuant to the respective Permitted Acquisition (determined in accordance
with the definition of Consolidated EBITDA contained herein, but treating
references therein and in any other defined terms used in determining
Consolidated EBITDA to "Holdings" to instead be references to the Person or
business, division or product line being acquired pursuant to the
respective Permitted Acquisition), and the amount thereof shall exceed zero
for the period of four consecutive fiscal quarters (taken as one accounting
period) most recently ended prior to the date of the Permitted Acquisition
(the "Calculation Period"); provided, however, in the case of calculations
-------- -------
based on financial statements not audited by a "big-six accounting firm" or
other nationally recognized accounting firm reasonably acceptable to the
Agent, the Agent and the Required Banks shall be satisfied that the
Consolidated EBITDA of such Person or business, division or product line
being acquired pursuant to the respective Permitted Acquisition exceeds
zero for the Calculation Period;
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(vii) the Agent shall be satisfied in its reasonable discretion
that the proposed Permitted Acquisition will not be reasonably likely to
result in materially increased liabilities (contingent or otherwise) of
Holdings or any of its Subsidiaries other than Permitted Seller Notes and
Permitted Earn-Out Debt incurred in accordance with the provisions of this
Agreement (including, without limitation, tax, ERISA or environmental
liabilities);
provided that, so long as the Permitted Acquisition Notice has been given
--------
as required above and so long as Holdings has furnished each Bank,
following request by the Agent, information with respect to liabilities of
the type described in this clause with all information so requested, if the
Agent has not notified the Borrower on or prior to the tenth day prior to
the consummation of the Permitted Acquisition that Agent has not yet been
satisfied that the proposed Permitted Acquisition would not be reasonably
likely to result in materially increased liabilities of the Borrower or any
of its Subsidiaries, such Bank shall be deemed for purposes of this clause
(vii) to be so satisfied;
(viii) in the case of both Permitted Acquisitions and repayment
of DVI Indebtedness, after giving effect to any additional indebtedness to
be incurred in connection therewith and, in the case of Permitted
Acquisitions only, the Consolidated EBITDA of the Person or business,
division or product line being acquired pursuant to the respective
Permitted Acquisition determined in accordance with clause 8.15(a)(vi)
above for the Calculation Period, (I) the ratio of Consolidated
Indebtedness on the last day of the Calculation Period to Consolidated
EBITDA of Holdings and its Subsidiaries for the Calculation Period, on a
Pro Forma Basis shall be equal to or less than 3.50:1 and (II) the ratio of
Consolidated Senior Indebtedness on the last day of the Calculation Period
to Consolidated EBITDA of Holdings and its Subsidiaries for the Calculation
Period, on a Pro Forma Basis shall be equal to or less than the lesser of
2.50:1;
(ix) in the case of both Permitted Acquisitions and repayment
of DVI Indebtedness, recalculations are made by the Borrower of compliance
with the covenants contained in Sections 9.09 through 9.13, inclusive, for
the Calculation Period in a Pro Forma Basis, and such recalculations shall
show that all such covenants would have been complied with throughout the
Calculation Period on a Pro Forma Basis;
(x) in the case of both Permitted Acquisitions and repayment
of DVI Indebtedness, the Borrower in good faith believes, on a Pro Forma
Basis (as if the Calculation Period were the one-year period following the
date of the consummation of the respective Permitted Acquisition) that the
financial covenants contained in such Sections 9.09 through 9.13,
inclusive, will continue to be met for the one year period following the
date of the consummation of the respective Permitted Acquisition;
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(xi) in the case of a repayment of the DVI Indebtedness, the
consent of the Required Banks shall have been obtained; provided, however,
-------- -------
this restriction shall not prevent any mandatory payments on the DVI
Indebtedness from sources other than Term Loans;
(xii) in the case of Permitted Acquisitions, the purchase price
for any Permitted Acquisition may not exceed ten times the Consolidated
EBITDA of the Person or business, division or product line being acquired
for the Calculation Period;
(xiii) in the case of Permitted Acquisitions, the Borrower shall
not draw more than $2 million from the Acquisition Loan Facility to be used
to purchase any one Person or business, division or product line;
(xiv) in the case of Permitted Acquisitions, the sum of the
items described in clauses (I) - (IV) of Section 8.15(a)(v) in connection
with each Permitted Acquisition shall not exceed $5 million;
(xv) with respect to the Permitted Acquisitions effected
during a twelve month period, the Borrower shall not draw more than $7
million from the Acquisition Loan Facility during any twelve month period;
(xvi) the aggregate amount (determined by using the face amount
of the debt or the amount payable at maturity, whichever is greater) of
Permitted Seller Notes and Permitted Earn-Out Debt issued by Holdings after
the date hereof shall not exceed $19.5 million and (A) such Indebtedness
shall have an average maximum current pay interest of no more than 8% per
annum, with no single item of Indebtedness bearing interest at a rate
greater than 10% per annum, (B) no single item of Indebtedness shall have a
final maturity of less than two years and (C) all such Indebtedness shall
have an average weighted-life to maturity of not less than 2.5 years.
(xvii) in the case of Permitted Acquisitions, the Borrower shall
only include for any Person or business, division or product line acquired,
100% of audited financial statement based Consolidated EBITDA calculated on
a Pro Forma Basis and 75% of personally guaranteed unaudited financial
statement based Consolidated EBITDA calculated on a Pro Forma Basis with
respect to calculation made in connection with the covenants contained in
this Section 8.15 and Sections 9.09 through 9.13, inclusive; and
(xviii) prior to the consummation of the respective Permitted
Acquisition or repayment of DVI Indebtedness, as the case may be, the
Borrower shall furnish
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the Agent and the Banks an officer's certificate executed by the chief
financial officer of Holdings, certifying as to compliance with the
requirements of the applicable preceding clauses (i) through (xvii) and
containing the calculations required by preceding clauses (v), (vi),
(viii), (ix), (xii), (xiv), (xv) and (xvi). The consummation of each
Permitted Acquisition or the repayment of the DVI Indebtedness, as the case
may be, shall be deemed to be a representation and warranty by Holdings
that all conditions thereto have been satisfied and that same is permitted
in accordance with the terms of this Agreement, which representation and
warranty shall be deemed to be a representation and warranty for all
purposes hereunder, including, without limitation, Sections 6 and 10;
(b) At the time of each Permitted Acquisition involving the creation
or acquisition of a Subsidiary, not less than 100% of the capital stock of such
Subsidiary shall be directly owned by the Borrower and such 100% owned by the
Borrower shall be pledged for the benefit of the Secured Creditors pursuant to
the Pledge Agreement or pursuant to a similar agreement satisfactory to the
Agent; provided, however, for up to three (3) Business Day after such Permitted
-------- -------
Acquisition, Holdings may own such Subsidiary.
(c) The Borrower shall cause each Subsidiary which is formed to
effect, or is acquired pursuant to, a Permitted Acquisition to execute and
deliver, prior to the date of the respective Permitted Acquisition, the
Subsidiaries Guaranty (or by an amendment thereto pursuant to which it shall be
a party thereto) or a substantially similar guaranty, in either case with the
documentation to be in form and substance satisfactory to the Agent.
(d) The Borrower shall on the date of a Permitted Acquisition cause
the respective Subsidiary of the Borrower to, grant to the Collateral Agent, for
the benefit of the Secured Creditors, first priority perfected security
interests in all property of the Borrower or such Subsidiaries (whether real,
personal or otherwise) acquired in connection with the Permitted Acquisition and
to take, or cause such Subsidiary to take, all actions requested by the Agent or
the Required Banks (including, without limitation, the obtaining of UCC-11's,
the filing of UCC-1's and the obtaining of mortgage policies, title surveys and
real estate appraisals) in connection with the granting of such security
interests. All security interests required to be granted pursuant to this
Section 8.15(d) shall be granted pursuant to such security documentation (which
shall be substantially similar to the analogous Security Documents already
executed and satisfactory in form and substance to the Agent) and shall (except
as otherwise consented to by the Agent and the Required Banks) constitute valid
and enforceable perfected security interests prior to the rights of all third
Persons and subject to no other Liens except Permitted Liens. The security
documents and other instruments related thereto shall be duly recorded or filed
in such manner and in such places as are required by law to establish, perfect,
preserve and protect the Liens, in favor of the Collateral Agent for the benefit
of the Secured Creditors, required to be granted pursuant to the respective
Additional Security Documents and all taxes, fees
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and other charges payable in connection therewith shall be paid in full by the
Borrower. At the time of the execution and delivery of Additional Security
Documents, the Borrower shall cause to be delivered to the Collateral Agent such
opinions of counsel, mortgage policies, environmental appraisals, surveys and
other related documents as may be reasonably requested by the Collateral Agent
or the Required Banks to assure themselves that this Section has been complied
with. All actions required to be taken by this Section 8.15(d) with respect to
the Additional Collateral shall be completed no later than the date on which the
Permitted Acquisition is effected.
8.16 Registry. The Borrower hereby designates the Agent to serve as
--------
the Borrower's agent, solely for purposes of this Section 8.16, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
the Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of the Commitments of such Bank and the rights to the principal of,
and interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Agent with respect to ownership of such Commitments and Loans and prior to such
recordation all amounts owing to the transferor with respect to such Commitments
and Loans shall remain owing to the transferor. The registration of an
assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Agent on the Register only upon the acceptance by the Agent of a
properly executed and delivered assignment and assumption agreement pursuant to
Section 14.04(b). Coincident with the delivery of such an assignment and
assumption agreement to the Agent for acceptance and registration of assignment
or transfer of all or part of a Loan, or as soon thereafter as practicable, the
assigning or transferor Bank shall surrender the Note evidencing such Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Bank and/or the new Bank. The Borrower
agrees to indemnify the Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Agent in performing its duties under this Section
8.16.
8.17 Further Actions. (a) Each Credit Party shall grant to the
---------------
Collateral Agent, for the benefit of the Secured Creditors, at the request of
the Agent or the Required Banks, at any time, a security interest in any Real
Property or vehicles owned by any such Credit Party and any other assets of such
Credit Party not already subject to a Mortgage or other Security Document. Each
Credit Party shall take all actions requested by the Agent or the Required Banks
(including, without limitation, the obtaining of mortgage policies, title
surveys and real estate appraisals satisfying the requirements of all applicable
laws) in connection with the granting of such security interests; provided,
--------
however, in no event shall the Agent or the Required Banks request a security
-------
interest in any Leaseholds
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unless the Agent or the Required Banks has reasonably determined that such
Leasehold has material value.
(b) The security interests required to be granted pursuant to clause
(a) above shall be granted pursuant to mortgages, deeds of trust and security
agreements, in each case satisfactory in form and substance to the Agent and the
Required Banks, which mortgages and security agreements shall create valid and
enforceable perfected security interests prior to the rights of all third
Persons and subject to no other Liens except Permitted Liens. The mortgages and
other instruments related thereto and security agreements shall be duly recorded
or filed in such manner and in such places and at such times as are required by
law to establish, perfect, preserve and protect the Liens, in favor of the
Collateral Agent for the benefit of the Secured Creditors, required to be
granted pursuant to such documents and all taxes, fees and other charges payable
in connection therewith shall be paid in full by the Borrower. At the time of
the execution and delivery of the additional documents, the Borrower shall cause
to be delivered to the Collateral Agent such opinions of counsel, mortgage
policies, title surveys, real estate appraisals, certificates of title and other
related documents as may be reasonably requested by the Agent or the Required
Banks to assure themselves that this Section 8.17 has been complied with.
(c) Each Credit Party agrees that each action required by Section
8.17(a), or (b) shall be completed within 60 days of the date such action is
requested to be taken.
8.18 Concentration Account. Within ninety days after the Initial
---------------------
Borrowing Date, Holdings shall, and shall have caused each of its Subsidiaries
to, have duly authorized, executed and delivered a Concentration Account Consent
Letter in such form as approved by the Collateral Agent (each as modified,
amended or supplemented from time to time in accordance with the terms thereof
and hereof, a "Concentration Account Consent Letter") with the Collateral Agent
and the Concentration Account Bank, acknowledging that the Concentration Account
listed on a notice sent by Holdings or any of its Subsidiaries to the Collateral
Agent at the time of creation of such account maintained at the Concentration
Account Bank is under the exclusive dominion and control of the Collateral Agent
and that all moneys, instruments and other securities deposited in such
Concentration Account are to be held by the Concentration Account Bank for the
benefit of the Collateral Agent subject to the right of the account parties to
utilize such deposited amounts in accordance with the Concentration Deposit
Account Consent Letter. Each of Holdings and its Subsidiaries represents and
warrants that it does not now maintain, and will not in the future maintain, any
other Concentration Account with any Concentration Account Bank other than the
applicable Concentration Account; provided, however, that Holdings and its
-------- -------
Subsidiaries shall be permitted to establish new Concentration Accounts pursuant
to the terms of the Security Agreement.
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8.19 Subsidiary Metroplex Note. In connection with any payment with
-------------------------
respect to the Subsidiary Metroplex Note, Holdings shall make the necessary
requests under the Equity Call Agreement in order to obtain all funds necessary
to make such payment from the shareholders of Holdings party to the Equity Call
Agreement unless the funds necessary to make such payment consist of Excluded
Public Offering Proceeds; provided, however, in the event that Holdings does not
-------- -------
make the necessary requests under the Equity Call Agreement, then the Agent
shall be entitled to make such request.
8.20 Assignment of Practice Management Agreement. Holdings will, and
-------------------------------------------
will cause each of its Subsidiaries a party to any agreement set forth on
Schedule XII to, assign all rights and interest, including the ability to
collect proceeds, that it may have under such agreements to the Collateral Agent
for the benefit of the Secured Creditors pursuant to the Security Agreement.
8.21 Corporate Separateness. Holdings and each of its Subsidiaries
----------------------
will take all such action as is necessary to keep the operations of each such
Person separate and apart from those of each such other Person, including,
without limitation, ensuring that all customary corporate formalities, including
the maintenance of corporate records and holding regular meetings of
shareholders and directors are followed. None of Holdings or any of its
Subsidiaries shall take any action, or conduct its affairs in a manner, which is
likely to result in the corporate existence of Holdings or any of its
Subsidiaries being disregarded, or in the assets and liabilities of Holdings or
any of its Subsidiaries being substantively consolidated with those of Holdings
or any of its Subsidiaries in a bankruptcy, reorganization or other insolvency
proceeding.
8.22 MHOA Pledged Securities. Immediately following the repayment of
-----------------------
the DVI Indebtedness and the DVI Revolver, the applicable Credit Parties shall
duly authorize, execute and deliver a Pledge Agreement substantially in the form
of Exhibit G-2 and shall deliver to the Collateral Agent, as Pledgee thereunder,
all of the Pledged Securities referred to therein then owned by Holdings and
each Subsidiary of Holdings together with executed and undated irrevocable stock
powers.
Section 9. Negative Covenants. Holdings hereby covenants that on and
------------------
after the Effective Date and until the Total Commitment and all Letters of
Credit have terminated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder and thereunder, are
paid in full:
9.01 Liens. Holdings will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an
-74-
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to Holdings or
any of its Subsidiaries), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute; provided that the provisions
--------
of this Section 9.01 shall not prevent Holdings or any of its Subsidiaries from
creating, incurring, assuming or permitting the existence of the following
(liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens with respect to Holdings or any of its
Subsidiaries for taxes not yet due or Liens for taxes being contested in
good faith and by appropriate proceedings for which adequate reserves have
been established in accordance with generally accepted accounting
principles;
(ii) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money, such
as carriers', ▇▇▇▇ housemen's, materialmen's, mechanics' and landlords'
liens and other similar Liens arising in the ordinary course of business,
and (x) which do not in the aggregate materially detract from the value of
the Borrower's or any of its Subsidiaries' property or assets or materially
impair the use thereof in the operation of the business of the Borrower or
its Subsidiaries or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the property or assets subject to any such Lien;
(iii) Liens of the Borrower or its Subsidiaries in existence on
the Effective Date which are listed, and the property subject thereto
described, on Schedule XVI, but only to the respective dates, if any, set
forth in such Schedule XVI for the removal and termination of any such
Liens;
(iv) inchoate Liens (where there has been no execution or levy
and no pledge or delivery of collateral) arising from and out of judgments
or decrees in existence at such time not constituting an Event of Default;
(v) Liens created pursuant to the Security Documents;
(vi) easements, rights-of-way, restrictions, covenants,
encroachments and other similar charges or encumbrances on the property of
Holdings or any of its Subsidiaries arising in the ordinary course of
business and not materially interfering with the conduct of the business of
Holdings or any of its Subsidiaries;
(vii) Liens on property of the Borrower and its Subsidiaries
subject to, and securing only, Capitalized Lease Obligations to the extent
such Capitalized
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Lease Obligations are permitted by Section 9.05(iii); provided that such
--------
Liens only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation and the Lien encumbering the asset giving rise
to the Capitalized Lease Obligation does not encumber any other asset of
Holdings or any of its Subsidiaries;
(viii) Liens (other than any Lien imposed by ERISA) on property
of Holdings or any of its Subsidiaries incurred or deposits made in the
ordinary course of business in connection with (x) workers' compensation,
unemployment insurance and other types of social security or (y) to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money); provided that the aggregate
--------
amount of cash and the fair market value of the property encumbered by
Liens described in this clause (viii)(y) shall not exceed $100,000;
(ix) Liens placed upon equipment or machinery used in the
ordinary course of the business of the Borrower or any of its Subsidiaries
within 60 days following the time of purchase thereof by the Borrower or
any of its Subsidiaries and improvements and accretions thereto to secure
Indebtedness incurred to pay all or a portion of the purchase price thereof
or any Indebtedness incurred to refinance such Indebtedness, provided that
--------
(x) the aggregate principal amount of all Indebtedness secured by Liens
permitted by this clause (ix) does not exceed at any one time outstanding
the amounts permitted pursuant to 9.05 (iii) with respect to all machinery
and equipment and (y) in all events, the Lien encumbering the equipment or
machinery so acquired and improvements and accretions thereto does not
encumber any other asset of Holdings or any of its Subsidiaries;
(x) Liens arising from precautionary UCC-1 financing statement
filings regarding operating leases entered into by Holdings or any of its
Subsidiaries in the ordinary course of business; and
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
-------------------------------------------------------
Holdings will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or enter into any partnerships, joint ventures or sale-leaseback
transactions, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property or assets (other than purchases or other
acquisitions by the Borrower or any of its Subsidiaries of inventory, materials
and equipment in the ordinary course of business) of any Person, except that:
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(i) Capital Expenditures by the Borrower and its Subsidiaries
shall be permitted to the extent not in violation of Section 9.08;
(ii) the Borrower and its Subsidiaries may sell assets so long
as the aggregate amount of Net Sale Proceeds from such sales pursuant to
this clause (ii) in any one fiscal year does not exceed $600,000;
(iii) each of Holdings and its Subsidiaries may lease (as
lessee) real or personal property to the extent permitted by Sections 9.04
and 9.08;
(iv) investments may be made to the extent permitted by
Section 9.06;
(v) each of the Borrower and its Subsidiaries may make sales
of inventory in the ordinary course of business;
(vi) the Transaction shall be permitted as contemplated by the
Documents;
(vii) Permitted Acquisitions may be effected in accordance with
the requirements of Section 8.15;
(viii) Dividends permitted under Section 9.03 shall be permitted
hereunder; and
(ix) the Designated Assets shall be permitted to be resold to
the original sellers thereof pursuant to, and in accordance with, the
repurchase provisions of the Designated Agreements.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral (to the extent the Required Banks are
permitted to waive such provisions in accordance with Section 14.12), or any
Collateral is sold as permitted by this Section 9.02, such Collateral shall be
sold free and clear of the Liens created by the Security Documents, and the
Agent and Collateral Agent shall be authorized to take any actions deemed
appropriate in order to effect the foregoing.
9.03 Dividends. Holdings will not, nor will Holdings permit any
---------
of its Subsidiaries to, declare or pay any Dividends with respect to Holdings or
any of its Subsidiaries, except that any Subsidiary of the Borrower may pay
Dividends to the Borrower or any Wholly-Owned Subsidiary of the Borrower (other
than Immaterial Subsidiaries) and the Borrower may pay Dividends to Holdings (a)
with the proceeds of Acquisition Loans so long as contemporaneously with its
receipt thereof, Holdings uses such proceeds to effect Permitted Acquisitions
and (b) with the proceeds of the Senior
-77-
Subordinated Notes so long as contemporaneously with its receipt thereof,
Holdings uses such proceeds to repay amounts owing with respect to the Company
Metroplex Notes.
9.04 Leases. Holdings will not incur any expense (including, without
------
limitation, any property taxes paid as additional rent or lease payments) under
any agreement to rent or lease any real or personal property (or any extension
or renewal thereof) (excluding Capitalized Lease Obligations) and Holdings will
not permit the aggregate expense (including, without limitation, any property
taxes paid as additional rent or lease payments) incurred by Holdings and its
Subsidiaries on a consolidated basis under any agreement to rent or lease any
real or personal property (or any extension or renewal thereof) (excluding
Capitalized Lease Obligations) to exceed $4 million for the period commencing on
the Initial Borrowing Date and ending on December 31, 1997 or to exceed $8
million for fiscal year 1998, $10 million for fiscal year 1999, $12 million for
fiscal year 2000 and $14 million for any fiscal year thereafter.
9.05 Indebtedness. Holdings will not, and will not permit any of its
------------
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Indebtedness of the Borrower or any of its Subsidiaries
under any Interest Rate Protection or Other Hedging Agreement or under any
similar type of agreement to the extent such is entered into to satisfy the
requirements of Section 8.11;
(iii) Indebtedness of the Borrower and its Subsidiaries
evidenced by Capitalized Lease Obligations incurred to the extent permitted
pursuant to Section 9.08 and Indebtedness secured by Liens permitted by
Section 9.01(ix); provided that the aggregate amount of Indebtedness
--------
evidenced by Capitalized Lease Obligations under all Capital Leases when
aggregated with the amount of Indebtedness secured by Liens permitted by
Section 9.01(ix) (I) incurred during any one year shall not exceed $1
million (except for 1998 when it shall not exceed $1.25 million) and (II)
outstanding at any one time shall not exceed $5 million plus the amounts
outstanding on the Initial Borrowing Date as set forth on Schedule XIX;
(iv) Existing Indebtedness of Holdings or any of its
Subsidiaries listed on Schedule IX but without giving effect to any
refinancing, renewal or extension in the principal amount thereof or
drawing of funds under the DVI Revolver;
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(v) Indebtedness of Holdings evidenced by Permitted Seller
Notes or constituting Permitted Earn-Out Debt issued in amounts not to
exceed, and in accordance with, the requirements of Section 8.15;
(vi) The Borrower or any of its Wholly-Owned Subsidiaries may
make intercompany loans to any domestic Wholly-Owned Subsidiaries of the
Borrower (other than Immaterial Subsidiaries), provided that such loans are
evidenced by an intercompany master note in form and substance satisfactory
to the Agent and such note is pledged to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Pledge Agreement; and
(vii) Indebtedness evidenced by the Senior Subordinated Notes in
an aggregate principal amount originally issued not to exceed $9,000,000;
provided, however, up to an additional $6,000,000 of additional Senior
Subordinated Notes shall be permitted to be issued so long as both before
and after giving effect to such issuance there shall exist no Default or
Event of Default and so long as the interest rate applicable to such notes
does not exceed 14%.
9.06 Advances, Investments and Loans. Holdings will not, and
-------------------------------
will not permit any of its Subsidiaries to, directly or indirectly lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents, except that the following shall be permitted:
(i) the Borrower and its Subsidiaries (other than Immaterial
Subsidiaries) may acquire and hold receivables owing to any of them
(including, without limitation, through the indirect acquisition thereof
through a security interest), if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
terms;
(ii) the Borrower and its Subsidiaries may acquire and hold cash
and Cash Equivalents; provided that all such cash or Cash Equivalents shall
--------
be held by the Borrower or such Subsidiary in the Concentration Account in
accordance with the terms of the Concentration Account Consent Letter
except Subsidiaries of the Borrower may maintain cash in bank accounts of
each such Subsidiary so long as the aggregate amount contained in all
accounts of the Subsidiaries does not exceed one million dollars and;
provided further, that at any time that any Revolving Loans or Swingline
----------------
Loans are outstanding, the aggregate amount of cash and Cash Equivalents
permitted to be held by Holdings and its Subsidiaries shall not exceed
$3,500,000 for any period of five consecutive days;
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(iii) the Borrower may enter into interest rate protection
agreements to the extent such is entered into to satisfy the requirements
of Section 8.11;
(iv) the Borrower and its Subsidiaries may make Capital
Expenditures to the extent permitted by Section 9.08;
(v) the Transaction shall be permitted in accordance with the
provisions of Section 5;
(vi) the Borrower and its Subsidiaries may endorse negotiable
instruments for collection in the ordinary course of business;
(vii) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business consistent with past practices
to their respective employees for moving, travel and emergency expenses and
other similar expenses and may make advances to doctors for the purpose of
allowing the doctors to make tax payments, so long as the aggregate
principal amount thereof at any one time outstanding (determined without
regard to any write-downs or write-offs of such loans and advances) shall
not exceed $500,000; and
(viii) the Borrower or any Wholly-Owned Subsidiary may make
intercompany loans permitted pursuant to Section 9.05(vi).
9.07 Transactions with Affiliates. Holdings will not, and will
----------------------------
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any Affiliate of Holdings' Subsidiaries unless (a)
such transaction or series of related transactions is in writing and on terms
that are no less favorable to Holdings or such Subsidiary, as the case may be,
than those that would be available in a comparable transaction in arm's-length
dealings with an unrelated third party, (b) with respect to any transaction or
series of related transactions involving aggregate value in excess of $50,000,
Holdings delivers an officers' certificate to the Agent certifying that such
transaction or series of related transactions complies with clause (a) above and
such transaction or series of related transactions has been approved by a
majority of the disinterested members of the board of directors of Holdings and
(c) with respect to any transaction or series of related transactions involving
aggregate payments in excess of $500,000, such transaction or series of related
transactions has been approved by the disinterested directors of Holdings (or in
the event there is only one disinterested director, by such disinterested
director) and Holdings delivers to the Agent a written opinion of an investment
banking firm of national standing or other recognized independent expert with
experience appraising the terms and conditions of the type of transaction or
series of related transactions for which an opinion is required stating that the
transaction or series of related transactions is fair to Holdings
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or such Subsidiary from a financial point of view; except that (i) Holdings and
its Subsidiaries may effect the Transaction, and (ii) loans and advances made in
accordance with Section 9.06(vii) shall be permitted.
9.08 Capital Expenditures. (a) Holdings will not and will not
--------------------
permit any of its Subsidiaries to, make any expenditure for fixed or capital
assets (including, without limitation, expenditures for maintenance and repairs
which should be capitalized in accordance with generally accepted accounting
principles and including Capitalized Lease Obligations) (collectively, "Capital
Expenditures"), except that (x) during the period (taken as one accounting
period) commencing on November 1, 1997 and ending on December 31, 1997 the
Borrower and its Subsidiaries may make Capital Expenditures (other than in
connection with Permitted Acquisitions) so long as the aggregate amount thereof
does not exceed the greater of (x) the amount permitted pursuant to the
Securities Purchase Agreement and (y) $1,000,000 during such period and (y)
during any calendar year thereafter the Borrower and its Subsidiaries may make
Capital Expenditures (other than in connection with Permitted Acquisitions) so
long as the aggregate amount thereof does not exceed the greater of (x) the
amount permitted pursuant to the Securities Purchase Agreement and (y) the
amount set forth opposite such fiscal year below, such amounts set forth below
will be adjusted upward by $25,000 for each physician employed directly or
indirectly by any company acquired pursuant to each Permitted Acquisition;
provided that 80% of the allowable Capital Expenditures not spent in 1997 may be
--------
carried over into 1998.
Fiscal Year Amount
----------- ------
1998 $5,000,000
1999 5,000,000
2000 5,000,000
2001 5,000,000
2002 5,000,000
(b) In addition to the Capital Expenditures permitted above, the
Borrower and its Subsidiaries may make Permitted Acquisitions in accordance with
Section 8.15 in an amount not to exceed the amounts permitted thereby.
9.09 Fixed Charge Coverage Ratio. Holdings will not permit the
---------------------------
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
(or, if shorter, the period beginning on November 1, 1997 and ending on the last
day of a fiscal quarter of Holdings ended after November 1, 1997), in each case
taken as one accounting period, to be less than 1.05:1.00 for the fiscal quarter
ending on December 31, 1997, 1.10:1.00
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for the fiscal quarter ending on March 31, 1998, 1.15:1.00 for the fiscal
quarter ending on June 30, 1998 and 1.20:1:00 for all fiscal quarters ending
thereafter.
9.10 Interest Coverage Ratio. Holdings will not permit the ratio of
-----------------------
its Consolidated EBITDA to its Consolidated Interest Expense for any period of
four consecutive fiscal quarters (or, if shorter, the period beginning on
November 1, 1997 and ending on the last day of a fiscal quarter of Holdings
ended after November 1, 1997), in each case taken as one accounting period,
ending on a date set forth below to be less than the ratio set forth opposite
such date:
Fiscal Quarter
Ended Ratio
-------------- -----
December 31, 1997 3.25:1.00
March 31, 1998 3.50:1.00
June 30, 1998 3.75:1.00
September 30, 1998 4.00:1.00
December 31, 1998 4.00:1.00
March 31, 1999 4.50:1.00
June 30, 1999 4.50:1.00
September 30, 1999 4.50:1.00
December 31, 1999 4.50:1.00
March 31, 2000 5.00:1.00
June 30, 2000 5.00:1.00
September 30, 2000 5.00:1.00
December 31, 2000 5.00:1.00
March 31, 2001 5.00:1.00
June 30, 2001 5.00:1.00
September 30, 2001 5.00:1.00
December 31, 2001 5.00:1.00
March 31, 2002 5.00:1.00
June 30, 2002 5.00:1.00
9.11 Leverage Ratios. (A) Consolidated Indebtedness to Consolidated
--------------- -----------------------------------------
EBITDA. Holdings will not permit the ratio of Consolidated Indebtedness as at
------
the end of any fiscal quarter ended on a date set forth below to Consolidated
EBITDA for any period of four consecutive fiscal quarters (or, if shorter, the
period beginning on the Initial Borrowing Date and ending on the last day of a
fiscal quarter ended after the Initial Borrowing Date), in each case taken as
one accounting period, ending on a date set forth below to be greater than the
ratio set forth opposite such date below:
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Fiscal Quarter
Ended Ratio
-------------- -----
December 31, 1997 4.00:1.00
March 31, 1998 4.00:1.00
June 30, 1998 4.00:1.00
September 30, 1998 4.00:1.00
December 31, 1998 4.00:1.00
March 31, 1999 3.50:1.00
June 30, 1999 3.50:1.00
September 30, 1999 3.50:1.00
December 31, 1999 3.50:1.00
March 31, 2000 3.50:1.00
June 30, 2000 3.50:1.00
September 30, 2000 3.50:1.00
December 31, 2000 3.50:1.00
March 31, 2001 3.00:1.00
June 30, 2001 3.00:1.00
September 30, 2001 3.00:1.00
December 31, 2001 3.00:1.00
March 31, 2002 2.00:1.00
June 30, 2002 2.00:1.00
(B) Consolidated Senior Indebtedness to Consolidated EBITDA.
-------------------------------------------------------
Holdings will not permit the ratio of Consolidated Senior Indebtedness as at the
end of any fiscal quarter ended on a date set forth below to Consolidated EBITDA
for any period of four consecutive fiscal quarters (or, if shorter, the period
beginning on the Initial Borrowing Date and ending of the last day of a fiscal
quarter ended after the Initial Borrowing Date), in each case taken as one
accounting period, ending on a date set forth below to be greater than the ratio
set forth opposite such date:
Fiscal Quarter
Ended Ratio
-------------- -----
December 31, 1997 3.00:1.00
March 31, 1998 3.00:1.00
June 30, 1998 3.00:1.00
September 30, 1998 3.00:1.00
December 31, 1998 2.50:1.00
March 31, 1999 2.50:1.00
June 30, 1999 2.50:1.00
September 30, 1999 2.50:1.00
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December 31, 1999 2.50:1.00
March 31, 2000 2.00:1.00
June 30, 2000 2.00:1.00
September 30, 2000 2.00:1.00
December 31, 2000 2.00:1.00
March 31, 2001 1.50:1.00
June 30, 2001 1.50:1.00
September 30, 2001 1.50:1.00
December 31, 2001 1.50:1.00
March 31, 2002 1.00:1.00
June 30, 2002 1.00:1.00
9.12 Minimum Consolidated Net Worth. Holdings will not permit its
------------------------------
Consolidated Net Worth (exclusive of write offs attributable to goodwill during
the first six months after the Initial Borrowing Date) at any time to be less
than the sum of (x) $12,000,000 plus (y) an amount equal to 85% of the increase
to the Consolidated Net Worth of Holdings from each issuance after the Effective
Date of capital stock of Holdings or any of its Subsidiaries.
9.13 Minimum EBITDA. Holdings will not permit its Consolidated
--------------
EBITDA for any period of four consecutive fiscal quarters (or, if shorter, the
period beginning on the Initial Borrowing Date and ending on the last day of a
fiscal quarter of Holdings ended after the Initial Borrowing Date), in each case
taken as one accounting period, to be less than the sum of (x) $5,800,000 and
(y) an amount equal to 75% of the Consolidated EBITDA of each company acquired
after the Initial Borrowing Date for the twelve month period immediately
preceding the date of each such company's acquisition.
9.14 Accounts Receivable Days. Holdings will not permit the number
------------------------
of Accounts Receivable Days on the last day of any fiscal quarter to be greater
than 75.
9.15 Limitation on Voluntary Payments and Modification; Limitation on
----------------------------------------------------------------
Modifications of Certificate of Incorporation, By-Laws and Certain Other
------------------------------------------------------------------------
Agreements; etc. Holdings will not, and will not permit any of its Subsidiaries
----------------
to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption (including pursuant to any
change of control provision) or acquisition for value of (including,
without limitation, by way of depositing with the trustee with respect
thereto money or securities before due for the purpose of paying when due),
any Existing Indebtedness, Senior Subordinated Notes, Permitted Earn-Out
Debt or Permitted Seller Notes or make (or give any notice in respect of)
any payment pursuant to Section 2.02(a) or (d) of the Senior Subordinated
Loan Agreement;
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(ii) amend or modify, or permit the amendment or modification of,
any material provision of the Documents, the Existing Indebtedness,
Permitted Earn-Out Debt, Permitted Seller Notes, the Senior Subordinated
Notes or any agreement relating to any of the foregoing;
(iii) amend, modify or change its Certificate of Incorporation
(including, without limitation, by the filing or modification of any
certificate of designation) or By-Laws, in a manner adverse to the Banks or
any agreement entered into by it, with respect to its capital stock, or
enter into any new agreement with respect to its capital stock;
(iv) amend, modify or change, terminate, or enter into any new
Shareholders' Agreement or amend, modify or change the Securities Purchase
Agreement;
(v) amend, modify or change, terminate or enter into any new Tax
Sharing Agreement; or
(vi) amend, modify or change, or enter into any new Management
Agreement, Employee Benefit Plan or Employment Agreement except if the
aggregate cost to Holdings and its Subsidiaries as a result of such
amendments, modifications, changes to such plans and agreements and new
plans and agreements is not reasonably likely to have a material adverse
effect on the performance, business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of Holdings
and its Subsidiaries taken as a whole.
9.16 Limitation on Certain Restrictions on Subsidiaries. Except
--------------------------------------------------
as set forth on Schedule XVIII, Holdings will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or restriction on the ability of
any Subsidiary of Holdings to (i) pay dividends or make any other distributions
on its capital stock or any other interest or participation in its profits owned
by Holdings or any Subsidiary of Holdings, or pay any Indebtedness owed to
Holdings or a Subsidiary of Holdings, (ii) make loans or advances to Holdings or
any of Holdings's Subsidiaries or (iii) transfer any of its properties or assets
to Holdings, except for such encumbrances or restrictions existing under or by
reason of (w) applicable law, (x) this Agreement and the other Credit Documents
and (y) customary provisions restricting subletting or assignments of any lease
governing a leasehold interest of Holdings or a Subsidiary of Holdings.
9.17 Limitation on Issuance of Capital Stock. (a) Holdings will
---------------------------------------
not permit any of its Subsidiaries to issue any capital stock (including by way
of sales of treasury stock) or any options or warrants to purchase, or
securities convertible into, capital stock,
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except (i) for transfers and replacements of then outstanding shares, (ii) for
stock splits, stock dividends and similar issuances which do not decrease the
percentage ownership of any person in any class of the capital stock of Holdings
or such Subsidiary, and (iii) upon the formation of any new Subsidiary as
permitted by this Agreement in connection with Permitted Acquisitions. Any stock
issued as permitted by this Section 9.17, if owned by Holdings or any of
Holdings's Subsidiaries, shall be immediately pledged as Collateral and
delivered pursuant to the Pledge Agreement.
(b) Holdings will not issue any capital stock, except for (i) shares
of capital stock issued upon conversion of any stock issued or authorized to be
issued under its Certificate of Incorporation as of the Effective Date, (ii)
shares of capital stock issued upon the exercise of any warrants of Holdings
outstanding as of the Effective Date, (iii) stock dividends and stock splits,
and (iv) issuances of Holdings Common Stock or Holdings Prime Stock (including,
without limitation, Permitted Equity Issuances) for cash (except that Permitted
Equity Issuances in connection with Permitted Acquisitions shall be permitted in
accordance with Section 8.15), where, after giving effect to all such issuances,
the proceeds therefrom are applied in accordance with Section 4.02(A)(e) and no
Default or Event of Default would exist under Section 10.12.
9.18 Business. On and after the tenth Business Day following the
--------
Initial Borrowing Date, Holdings will not conduct any business or own any assets
other than the stock of the Borrower (and other than immaterial assets and
leasehold interests), and for one Business Day after the acquisition thereof,
stock of Subsidiaries acquired or formed in connection with Permitted
Acquisitions. The Borrower will not, and will not permit any of its
Subsidiaries, to engage (directly or indirectly) in any business other than a
Permitted Business.
9.19 Limitation on Creation of Subsidiaries. Holdings will not, and
--------------------------------------
will not permit any of its Subsidiaries to, establish, create or acquire any new
Subsidiaries, except (a) Subsidiaries of the Borrower may be acquired or formed
in connection with Permitted Acquisitions to the extent otherwise permitted by
this Agreement and direct Subsidiaries of Holdings may be acquired or formed in
connection with Permitted Acquisitions so long as within one Business Day of the
acquisition thereof the stock of such Subsidiary is transferred to the Borrower
or (b) other Subsidiaries of the Borrower may be formed so long as in connection
with such formation such Subsidiary executes pledge agreements, security
agreements and guaranties in form and substance reasonably satisfactory to the
Agent and all capital stock of such Subsidiary is pledged to the Collateral
Agent for the benefit of the Secured Creditors pursuant to a pledge agreement
reasonably satisfactory to the Agent.
9.20 Concentration Account. Holdings will not, and will not permit
---------------------
any of its Subsidiaries to, directly or indirectly, open, maintain or otherwise
have any checking,
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savings or other deposit accounts at any bank or other financial institution
where cash or Cash Equivalents is or may be deposited or maintained with any
Person, other than (i) the bank deposit accounts of Subsidiaries of Holdings or
(ii) the Concentration Account.
9.21 Unwind Provisions. Neither Holdings nor any of its or its
-----------------
Subsidiaries will enter into any agreement of any nature of the type described
in Section 7.28 except for agreements substantially in the same form as the
agreements which are in effect on the Initial Borrowing Date, so long as any
"unwind provisions" or similar provisions arising in the case of any event other
than a breach under such agreement by Holdings or any of its Subsidiaries shall
not be effective prior to the 65th month anniversary of the Initial Borrowing
Date.
Section 10. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when
--------
due of any principal of any Loan or any Note or any Unpaid Drawing or (ii)
default, and such default shall continue unremedied for two or more Business
Days, in the payment when due of any interest on any Loan or Note or Unpaid
Drawing, or any Fees or any other amounts owing by it hereunder or thereunder;
or
10.02 Representations, etc. Any representation, warranty or
---------------------
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(g)(i), 8.08, 8.11, 8.15, 8.16, 8.17, 8.19, 9 or 14.15, or (ii)
default in the due performance or observance by it of any other term, covenant
or agreement contained in this Agreement, and such default shall continue
unremedied for a period of 30 days after written notice thereof to the Borrower
by the Agent; or
10.04 Default Under Other Agreements. Holdings or any of its
------------------------------
Subsidiaries shall (i) default in any payment of any Indebtedness (other than
the Indebtedness referred to in Section 10.01) beyond the period of grace (not
to exceed 10 days), if any, provided in the instrument or agreement under which
such Indebtedness was created, (ii) default in the observance or performance of
any agreement or condition relating to any Indebtedness (other than the
Indebtedness referred to in Section 10.01) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause,
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or to permit the holder or holders of such Indebtedness (or a trustee or agent
on behalf of such holder or holders) to cause (determined without regard to
whether any notice is required), any Indebtedness to become due prior to its
stated maturity and such default shall not have been cured or waived, or (iii)
any Indebtedness (other than the Indebtedness referred to in Section 10.01) of
Holdings or any of its Subsidiaries shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof; provided that it shall not constitute an
--------
Event of Default pursuant to this Section 10.04 unless the aggregate amount of
all Indebtedness referred to in the preceding clauses (i) through (iii) above
exceeds $250,000 at any one time; or
10.05 Bankruptcy, etc. Holdings or any of its Subsidiaries shall
----------------
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
Holdings or any of its Subsidiaries and the petition is not controverted within
10 days, or is not dismissed or discharged, with in 60 days, after commencement
of the case; or a custodian (as defined in the Bankruptcy Code) is appointed
for, or takes charge of, all or substantially all of the property of Holdings or
any of its Subsidiaries, or Holdings or any of its Subsidiaries commences any
other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Holdings or any of
its Subsidiaries, or there is commenced against Holdings or any of its
Subsidiaries any such proceeding which remains undismissed or undischarged for a
period of 60 days, or Holdings or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or Holdings or any of its Subsidiaries suffers
any appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of 60 days; or
Holdings or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
-----
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days; any Plan which is
subject to Title IV of
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ERISA shall have had or is likely to have a trustee appointed to administer such
Plan, any Plan which is subject to Title IV of ERISA is, shall have been or is
likely to be terminated or to be the subject of termination proceedings under
ERISA, any Plan shall have an Unfunded Current Liability, a contribution
required to be made with respect to a Plan has not been timely made, Holdings or
any Subsidiary of Holdings or any ERISA Affiliate has incurred or is likely to
incur any liability to or on account of a Plan under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or on account of a group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code, or the Holdings or any Subsidiary of Holdings has
incurred or is likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) that provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or Plans; (b) there shall result from any such event or
events the imposition of a lien, the granting of a security interest, or a
liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Banks, has had, or could reasonably be expected to have,
a material adverse effect upon the business, operations, condition (financial
or otherwise) or prospects of Holdings or any Subsidiary of Holdings; or
10.07 Security Documents. At any time after the execution and
------------------
delivery thereof, any of the Security Documents shall cease to be in full force
and effect or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral), in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 7.11), and subject to no other Liens (except as permitted by Section
7.11), or any Credit Party shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any of the Security Documents and such default shall continue beyond any
grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
10.08 Guaranties. At any time after the execution and delivery
----------
thereof, any Guaranty or any provision thereof shall cease to be in full force
or effect as to any Guarantor, or any Guarantor or any Person acting by or on
behalf of any Guarantor shall deny or disaffirm such Guarantor's obligations
under the respective Guaranty, or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the respective Guaranty and such default shall
continue beyond any grace period specifically applicable thereto; or
10.09 Judgments. One or more judgments or decrees shall be entered
---------
against Holdings or any of its Subsidiaries involving in the aggregate for
Holdings and its
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Subsidiaries a liability (not paid or fully covered by a reputable insurance
company) in excess of $250,000 for all such judgments and decrees and any such
judgments or decrees shall not be satisfied, vacated, discharged or stayed or
bonded pending appeal for any period of 30 consecutive days; or
10.10 Event Constituting a Material Adverse Change. The occurrence
--------------------------------------------
of an event, fact, circumstance or other matter the occurrence of which could
reasonably be expected to have a materially adverse effect on the performance,
business, assets, nature of assets, liabilities, properties, condition,
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken as
a whole.
10.11 Physician Turnover. The occurrence of greater than 15% of the
------------------
Designated Physicians terminating his or her employment (exclusive of death,
disability or retirement) with Holdings and its Subsidiaries.
10.12 Change in Control. There shall be a Change in Control; then,
-----------------
and in any such event, and at any time thereafter, if any Event of Default shall
then be continuing, the Agent, upon the written request of the Required Banks,
shall by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Agent, any Bank or the holder of
any Note to enforce its claims against any Credit Party (provided that, if an
--------
Event of Default specified in Section 10.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Agent to the Borrower as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon all Commitments of each Bank shall forthwith
terminate immediately and any Fees shall forthwith become due and payable
without any other notice of any kind; (ii) declare the principal of and any
accrued interest in respect of all Loans and the Notes and all Obligations owing
hereunder and thereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Credit Party; (iii) terminate any Letter
of Credit which may be terminated in accordance with its terms; (iv) direct the
Borrower to pay (and the Borrower agrees that upon receipt of such notice, or
upon the occurrence of an Event of Default specified in Section 10.05, it will
pay) to the Collateral Agent at the Payment Office such additional amount of
cash, to be held as security by the Collateral Agent for the benefit of the
Banks in a cash collateral account established and maintained by the Collateral
Agent pursuant to a cash collateral agreement in form and substance satisfactory
to the Collateral Agent, as is equal to the aggregate Stated Amount of all
Letters of Credit then outstanding; (v) exercise any rights or remedies under
any of the Guaranties; and (vi) enforce, as Collateral Agent, all of the Liens
and security interests created pursuant to the Security Documents.
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Section 11. Definitions and Accounting Terms.
--------------------------------
11.01 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Account Receivable Days" shall mean, as of the last day of any fiscal
quarter, the number of account receivable days determined by multiplying (i) the
quotient obtained by dividing (x) the total face amount of the net account
receivables balance of the Borrower and its Subsidiaries as of such last day by
(y) the net revenues of the Borrower and its Subsidiaries for such quarter by
(ii) 90 days.
"Acknowledgements" shall have the meaning provided in Section 14.10.
"Acquisition Agreements" shall mean each Agreement listed on Schedule
XVII pursuant to which each of the Acquisitions was, is or will be, effected in
each case as the same may be supplemented, modified, amended or restated from
time to time in accordance with Section 9.15.
"Acquisition Documents" shall mean the Acquisition Agreements and all
other documents entered into or delivered in connection with the Acquisitions as
the same may be supplemented, modified, amended or restated from time to time in
accordance with Section 9.15 provided therein.
"Acquisition Loan" shall have the meaning provided in Section 1.01(b).
"Acquisition Loan Commencement Date" shall mean the date on which the
proceeds of Term Loans and Senior Subordinated Notes deposited in the Cash
Collateral Account on the Initial Borrowing Date have been utilized to effect
Post-Closing Acquisitions.
"Acquisition Loan Commitment" shall mean, with respect to each Bank,
the amount set forth opposite such Bank's name in Part A of Schedule I hereto
directly below the column entitled "Acquisition Loan Commitment," as the same
may be (x) reduced or terminated from time to time pursuant to Section 3.03,
4.02 and/or 10 or (y) adjusted from time to time as a result of assignments to
or from such Bank pursuant to Section 1.12 or 14.04.
"Acquisition Loan Facility" shall mean the facility evidenced by the
Total Acquisition Loan Commitment.
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"Acquisition Loan Maturity Date" shall mean the four year and six
month anniversary of the Initial Borrowing Date.
"Acquisition Loan Termination Date" shall mean the second anniversary
of the Initial Borrowing Date.
"Acquisition Notes" shall have the meaning provided in Section
1.05(a)(ii).
"Acquisition TL Percentage" shall mean a fraction (expressed as a
percentage), the numerator of which is equal to the aggregate principal amount
of all Acquisition Loans outstanding at such time and the denominator of which
is equal to the aggregate principal amount of all Term Loans and Acquisition
Loans outstanding at such time.
"Acquisitions" shall mean and include each of the Pre-Closing
Acquisitions, the Contemporaneous Acquisitions and the Post-Closing
Acquisitions.
"Additional Collateral" shall mean all property (whether real or
personal) in which security interests are granted (or purported to be granted)
(and continue to be in effect at the time of determination) pursuant to Section
8.15 or 8.17.
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 8.15 or 8.17 with respect to Additional Collateral.
"Adjusted Consolidated Net Income" for any period shall mean
Consolidated Net Income for such period plus the sum of the amount of all net
non-cash charges (including, without limitation, depreciation, amortization,
deferred tax expense, non-cash interest expense and other non-cash charges)
included in arriving at Consolidated Net Income for such period less the sum of
the amount of all net non-cash gains or losses (exclusive of items reflected in
Adjusted Working Capital) and gains or losses from sales of assets (other than
sales of inventory in the ordinary course of business) included in arriving at
Consolidated Net Income for such period.
"Adjusted Working Capital" shall mean Consolidated Current Assets
(excluding cash and Cash Equivalents) minus Consolidated Current Liabilities.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person; provided, however, that for purposes of Section 5.05
-------- -------
and 9.07, an Affiliate of Holdings shall include any Person that directly or
indirectly (including through limited partner or
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general partner interests) owns more than 5% of any class of the capital stock
of Holdings or any of its Subsidiaries and for all purposes of this Agreement,
neither the Agent, the Collateral Agent, any Bank or any of their respective
Affiliates, shall be considered an Affiliate of Holdings or any of its
Subsidiaries. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.
"Affiliate Contracts" shall have the meaning provided in Section 5.05.
"Agent" shall mean Banque Paribas in its capacity as Agent for the
Banks hereunder, and shall include any successor to the Agent appointed pursuant
to Section 12.09.
"Aggregate Unutilized Commitment" with respect to any Bank at any time
shall mean the sum of (i) such Bank's Unutilized Revolving Loan Commitment at
such time, plus (ii) such Bank's Acquisition Loan Commitment at such time plus
(iii) such Bank's Term Loan Commitment at such time.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"Applicable Margin" shall mean a percentage per annum equal to (i) in
the case of Base Rate Loans, 1 3/4% and (ii) in the case of Eurodollar Loans,
3.00%.
"Bank" shall mean each financial institution listed on Part A of
Schedule I, as well as any institution which becomes a "Bank" hereunder pursuant
to Section 14.04.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 2.04(c) or (ii) a Bank
having notified in writing the Borrower and/or the Agent that it does not intend
to comply with its obligations under Section 1.01 or 2, including in either case
as a result of any takeover of such Bank by any regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Banque Paribas" shall mean Banque Paribas, a French banking
organization acting through its New York Branch.
"Base Rate" shall mean the higher of (i) 1/2 of 1% in excess of the
Federal Funds Rate and (ii) the Prime Lending Rate.
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"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) any Loan
designated or deemed designated as such by the Borrower at the time of the
incurrence thereof or conversion thereto.
"Blocked Commitment" shall mean an amount equal to $8,000,000 reduced
by any principal repayment of the DVI Indebtedness.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower Common Stock" shall have the meaning provided in Section
7.14.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having Commitments with respect to such Tranche (or
from the Swingline Bank in the case of Swingline Loans) on a pro rata basis on a
--- ----
given date (or resulting from a conversion or conversions on such date) having
in the case of Eurodollar Loans the same Interest Period; provided that Base
--------
Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of the
related Borrowing of Eurodollar Loans.
"Borrowing Base" shall mean, as at any date of which the amount
thereof is being determined, an amount equal to 75% of Eligible Receivables and
60% of Eligible Inventory each as determined from the Borrowing Base Certificate
most recently delivered pursuant to Section 8.01(k).
"Borrowing Base Certificate" shall have the meaning provided in
Section 8.01(k).
"Borrowing Base Deficiency" shall mean, at any time, the amount, if
any, by which (A) the sum of (x) the aggregate principal amount of outstanding
Revolving Loans and Swingline Loans at such time and (y) the total Letter of
Credit Outstandings at such time exceeds (B) the Borrowing Base.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and
between banks in the New York interbank Eurodollar market.
"Calculation Period" shall have the meaning provided in Section
8.15(a).
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"Capital Expenditures" shall have the meaning provided in Section
9.08.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with generally accepted accounting principles, is accounted for as a
capital lease on the balance sheet of that Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations under Capital Leases, in each case taken at the amount thereof
accounted for as Indebtedness in accordance with such principles.
"Cash Collateral Account" shall mean a cash collateral account
maintained with Banque Paribas, as Collateral Agent for the benefit of Secured
Creditors, pursuant to the Cash Collateral Agreement.
"Cash Collateral Agreement" shall mean a Cash Collateral Agreement in
the form of Exhibit M to this Agreement.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
--------
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank organized under the laws of the United States,
any State thereof or the District of Columbia having, or which is the principal
banking subsidiary of a bank holding company organized under the laws of the
United States, any State thereof, or the District of Columbia having, capital,
surplus and undivided profits aggregating in excess of $200,000,000 and having a
long-term unsecured debt rating of at least "A" or the equivalent thereof from
Standard & Poor's Corporation ("S&P") or "A2" or the equivalent thereof from
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), with maturities of not more than
six months from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clause (i) above entered into with any bank meeting
the qualifications specified in clause (ii) above, (iv) commercial paper issued
by any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's
and in each case maturing not more than six months after the date of acquisition
by such Person, (v) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (i) through
(iv) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. (S) 9601 et seq.
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"Change in Control" means the occurrence of one or more of the
following: (i) any Person, entity or "group" (within the meaning of Section
13(d) and 14(d) of the Securities Exchange Act) (other than the Investor Group)
obtains the power to elect a majority of the Board of Directors of Holdings,
(ii) either Weston and its Affiliates, ▇▇▇▇▇ ▇▇▇▇▇▇ or the Investor Group shall
cease to have record and beneficial ownership of at least 75% of the number of
shares of Holdings Common Stock owned by such Persons on the Effective Date,
(iii) any Person, entity or "group" (within the meaning of Section 13(d) and
14(d) of the Securities Exchange Act) (other than the Investor Group) shall
become the "beneficial owner" (as defined in Rules 13(d) and 13(d)-5 under the
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time) of 20%
or more of any outstanding class of capital stock of Holdings having ordinary
voting power in the election of directors of Holdings, (iv) the Board of
Directors of Holdings shall cease to consist of a majority of Continuing
Directors, or (v) ▇▇▇▇▇ ▇▇▇▇▇▇ shall cease to serve (except in the cases of
death or disability) as President and Chief Executive Officer of Holdings,
except if any time after an initial public offering of Holdings Common Stock,
Holdings shall replace ▇▇▇▇▇ ▇▇▇▇▇▇ within 180 days of her ceasing to serve as
President and Chief Executive Officer of Holdings with an individual approved by
the Agent.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purport to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Additional
Collateral and all cash and Cash Equivalents delivered as collateral pursuant to
this Agreement or any other Credit Document.
"Collateral Agent" shall mean the Agent acting as collateral agent for
the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.05.
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"Commitment" shall mean, with respect to each Bank, such Bank's Term
Loan Commitment, Acquisition Loan Commitment and Revolving Loan Commitment, if
any.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Companies" means each of the Companies identified on Schedule XVII.
"Company Metroplex Note" shall mean the Promissory Note dated June 16,
1997 in the original principal amount of $6,460,000 from Holdings payable to
Metroplex Hematology/Oncology Associates, L.L.P.
"Concentration Account" shall mean a separate account which shall be
established and maintained with the Concentration Account Bank for the benefit
of the Secured Creditors by Holdings and each of its Subsidiaries and in which
the Collateral Agent has a security interest pursuant to the Concentration
Account Consent Letter.
"Concentration Account Bank" shall mean NationsBank or such other bank
that may become a Concentration Account Bank in accordance with the provisions
of the Security Agreement.
"Concentration Account Consent Letter" shall have the meaning provided
in Section 8.18.
"Consolidated Current Assets" shall mean the consolidated current
assets of Holdings and its Subsidiaries.
"Consolidated Current Liabilities" shall mean the consolidated current
liabilities of Holdings and its Subsidiaries, but excluding the current portion
of any long-term Indebtedness which would otherwise be included therein.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income before interest income, Consolidated Interest Expense and provision for
taxes and without giving effect to any extraordinary gains or losses, gains or
losses from sales of assets (other than inventory sold in the ordinary course of
business) or unrealized foreign exchange gains or losses.
"Consolidated EBITDA" for any period shall mean Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation that were deducted in arriving at Consolidated Net Income for such
period; provided that for purposes of Section 9.11 and Section 8.15(viii), to
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the extent Consolidated EBITDA is
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being determined, for any period of less than four consecutive fiscal quarters,
the amount of Consolidated EBITDA to be used for purposes of calculations being
made pursuant to such Section for the period of determination shall be equal to
the product of the amount of Consolidated EBITDA for such period and a fraction,
the numerator of which is 365 and the denominator of which is the number of days
elapsed during such period and to the extent Consolidated EBITDA includes
companies acquired during the immediately preceding twelve month period for
which such financial covenants are being calculated, the Consolidated EBITDA
shall be calculated in accordance with Section 8.15 (xvii) for that portion of
such twelve month period occurring prior to the date of such acquisition and
actual results shall be used for that portion of such twelve month period
occurring after the date of such acquisition.
"Consolidated Indebtedness" shall mean, at any time, all Indebtedness
of Holdings and its Subsidiaries determined on a consolidated basis (excluding
the Promissory Note dated June 16, 1997 in the original principal amount of
$6,200,000 from MHOA Texas I, L.L.C. payable to Metroplex Hematology/Oncology
Associates, L.L.P. so long as the obligations of the shareholders of PHC under
the Equity Call Agreement are in full force and effect and no shareholder is in
breach thereof and all Indebtedness of the type described in clause (vii) of the
definition thereof, except to the extent amounts are owing with respect thereto
upon the termination of the respective agreement constituting such Indebtedness)
plus any original issue discount attributable to such Indebtedness less the
amount of cash and Cash Equivalents in the Cash Collateral Account.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of Holdings and its Subsidiaries for such period
(calculated without regard to any limitations on the payment thereof) payable
during such period in respect of all Indebtedness of Holdings and its
Subsidiaries, on a consolidated basis, for such period (including, without
duplication, that portion of Capitalized Lease Obligations of Holdings and its
Subsidiaries representing the interest factor for such period).
"Consolidated Net Income" shall mean, for any period, net income of
Holdings and its Subsidiaries for such period determined on a consolidated basis
(after provision for taxes); provided, however, (a) the net income of any
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Subsidiary of Holdings, which is not a Wholly-Owned Subsidiary, shall have its
net income included in the Consolidated Net Income of Holdings and its
Subsidiaries only to the extent of the ownership interest of Holdings and its
Wholly-Owned Subsidiaries in such non-Wholly-Owned Subsidiaries and only so long
as such Subsidiary is not party to any contract or other agreement of the type
described in Section 9.16, except in the case of MHOA Texas, L.L.C., the DVI
Debt Documents and (b) the net income of any Immaterial Subsidiary and of the
Designated Companies shall not be included in the Consolidated Net Income of
Holdings and its Subsidiaries.
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"Consolidated Net Worth" shall mean, as to any Person, the sum of its
capital stock, capital in excess of par or stated value of shares of its capital
stock, retained earnings and any other account which, in accordance with
generally accepted accounting principles in the United States, constitutes
stockholders equity.
"Consolidated Senior Indebtedness" shall mean, at any time, an amount
equal to the amount of all Consolidated Indebtedness at such time less the
outstanding principal amount of Senior Subordinated Notes at such time and less
the outstanding principal amount of all other subordinated Indebtedness of
Holdings.
"Contemporaneous Acquisitions" shall have the meaning provided in
Section 7.30.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
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that the term Contingent Obligation should not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean, with respect to Holdings, the
directors of Holdings on the Initial Borrowing Date and each other director, if
such other director's nomination for election to the board of directors of
Holdings is recommended by a majority of the then Continuing Directors.
"Credit Documents" shall mean this Agreement, each Note, each Notice
of Borrowing, each Notice of Conversion, each Letter of Credit, each Letter of
Credit Request, the Subsidiaries Guaranty and each Security Document.
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"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
"Credit Party" shall mean Holdings and each of its Subsidiaries.
"Debt Agreements" shall have the meaning provided in Section 5.05.
"Debt Termination Documents" shall have the meaning provided in
Section 5.16(c).
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is then in effect.
"Designated Agreements" shall mean the (i) Practice Repurchase
Agreement by and among the Borrower, ▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
M.D., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., M.D., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
M.D., C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., Antonio Caos, M.D.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., ▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D., and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
pertaining to the Designated Assets of Internal Medicine Specialists, Inc.; (ii)
Practice Repurchase Agreement by and among the Borrower, ▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇,
M.D., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D., ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D. pertaining to the Designated Assets of Primary Care
Specialists, Inc.; (iii) and Practice Repurchase Agreement by and among the
Borrower and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, M.D., and ▇▇▇▇▇▇
▇▇▇▇▇▇▇, M.D. pertaining to the Designated Assets of Larach, ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, Inc, as each such agreement is in effect on the Effective Date.
"Designated Assets" shall mean the assets of the Designated Companies
defined and described as the "Company Assets" in the Designated Agreements as
initially executed.
"Designated Companies" shall mean each of Primary Care Specialists,
Inc., Internal Medicine Specialists, Inc. and Larach ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc.
"Designated Physicians" shall mean the physicians set forth on a
Schedule to be delivered to the Agent within 30 days of the Initial Borrowing
Date which are the physicians employed directly or indirectly (including through
a Practice Management Agreement or similar agreement) who received any
consideration in the form of cash payment, stock or seller note in connection
with the Acquisitions.
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"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock of such Person) or cash to its stockholders in their
capacity as stockholders, or redeemed, retired, purchased or otherwise acquired,
directly or indirectly, for a consideration any shares of any class of its
capital stock outstanding on or after the Effective Date (or any options or
warrants issued by such Person with respect to its capital stock), or set aside
any funds for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of such Person outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock). Without limiting the foregoing, "Dividends" with respect to
any Person shall also include all cash payments made or required to be made by
such Person with respect to any stock appreciation rights, equity incentive
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Documents" shall mean the Credit Documents, the Acquisition
Documents, the Debt Termination Documents, the Equity Amendments, the Senior
Subordinated Loan Documents, the Subordinated Debt Amendments and the
Acknowledgements.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Drawing" shall have the meaning provided in Section 2.05(b).
"DVI Debt Documents" shall mean Loan and Security Agreement No. 1
among MHOA Texas I, L.L.C., as Borrower, Physician Health Corporation, as
Guarantor, and DVI Financial Services Inc., as Lender, dated as of June 16,
1997, the Loan and Security Agreement No. 2 among MHOA Texas I, L.L.C., as
Borrower, Physician Health Corporation, as Guarantor, and DVI Financial Services
Inc., as Lender, dated as of June 16, 1997, the Loan and Security Agreement No.
3 among MHOA Texas I, L.L.C., as Borrower, Physician Health Corporation, as
Guarantor, and DVI Financial Services Inc., as Lender, dated as of June 16,
1997, the Loan and Security Agreement No. 4 among MHOA Texas I, L.L.C., as
Borrower, Physician Health Corporation, as Guarantor, and DVI Financial Services
Inc., as Lender, dated as of June 16, 1997, the Loan and Security Agreement No.
5 among MHOA Texas I, L.L.C., as Borrower, Physician Health Corporation, as
Guarantor, and DVI Financial Services Inc., as Lender, dated as of June 16,
1997, the Loan and Security Agreement No. 6 among MHOA Texas I, L.L.C., as
Borrower, Physician Health Corporation, as Guarantor, and DVI Financial Services
Inc., as Lender, dated as of June 16, 1997, and all documents related to any of
the foregoing, including, without limitation, guarantees, security agreements
and pledge agreements, as such agreements are in effect on the Effective Date
hereof.
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"DVI Indebtedness" shall mean indebtedness of MHOA Texas I, L.L.C.
owing to DVI Financial Services Inc. in an amount not to exceed $8,000,000 under
the DVI Debt Documents.
"DVI Payment Date" shall mean the single date on which all then
outstanding DVI Indebtedness is repaid in full.
"DVI Revolver" shall mean the indebtedness incurred pursuant to the
Loan and Security Agreement among MHOA Texas I, L.L.C. and DVI Business Credit
Corporation, dated as of June 16, 1997.
"Effective Date" shall have the meaning provided in Section 14.10.
"Eligible Inventory" shall mean the gross dollar value (valued at the
lower of cost (determined on a first in first out basis) or market value) of the
inventory of the Borrower and its Subsidiaries, which conforms to the
representations and warranties contained in the Security Agreement and at all
times continues to be acceptable to the Collateral Agent in its reasonable
judgment, less (i) any supplies (other than raw materials) spare parts, goods
returned or rejected (except to the extent that such returned or rejected goods
continue to conform to the representations and warranties contained in the
Security Agreement and continue to be acceptable to the Collateral Agent in its
reasonable judgment) by customers and goods returned to suppliers, (ii) any
advance payments made by customers with respect to inventory of the Borrower and
its Subsidiaries, (iii) inventory subject to any Lien other than Liens created
under the Security Agreement, (iv) any market reserves maintained by the
Borrower and its Subsidiaries and (v) any reserves required by the Collateral
Agent in its reasonable judgment for a special order of goods, market value
declines and ▇▇▇▇ and hold (deferred shipments) sales.
"Eligible Receivables" shall mean the total face amount of the
receivables of the Borrower and its Subsidiaries and other Subsidiaries of
Holdings arising in the ordinary course of business (including, without
limitation, all receivables owing to the Borrower or any of its Subsidiaries
pursuant to practice management agreements) which conform to the representations
and warranties contained in the Security Agreement (including, without
limitation, that the Collateral Agent shall have and maintain a first priority
perfected security interest in all such receivables) and at all times continue
to be acceptable to the Collateral Agent in its reasonable judgment less any
returns, discounts, claims, credit and allowances of any nature (whether issued,
owing, granted or outstanding) and less all allowances (including contractual
allowances) on the books of the Borrower and its Subsidiaries and less reserves
for any other matter affecting the creditworthiness of account debtors owing the
receivables and excluding (i) ▇▇▇▇ and hold (deferred shipment) and consignment
transactions, (ii) contracts or sales to any Affiliate, (iii) all receivables
which are not due by their terms or have not been paid in full within 120 days
of the
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invoice date thereof or which have been disputed or made subject to set-off,
(iv) all receivables from departments or instrumentalities or from any party
subject to any bankruptcy, receivership insolvency or like proceedings by the
account debtor, and (v) sales to account debtors outside the United States.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution, other "accredited investor" (as defined in Regulation D
of the Securities Act) other than individuals, or a "qualified institutional
buyer" as defined in Rule 144A of the Securities Act.
"Employee Benefit Plans" shall have the meaning provided in Section
5.05.
"Employment Agreements" shall have the meaning provided in Section
5.05.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any violation of, or liability under, any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, policy and rule of common law
now or hereafter in effect (including, without limitation, the EPA guidance on
asbestos abatement and removal) and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. (S) 1251 et seq.; the Toxic
-- ----
Substances Control Act, 15 U.S.C. (S) 7401 et seq.; the Clean Air Act, 42 U.S.C.
-- ----
(S) 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. (S) 3803 et seq.; the
-- ---- -- ----
Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et seq.; the Occupational Safety
-- ----
and Health Act, 29 U.S.C. (S) 651 et seq.; and any applicable state and local or
-- ----
foreign counterparts or equivalents.
"Equity Amendments" shall have the meaning provided in Section 5.20.
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"Equity Call Agreement" shall mean the Equity Call Agreement dated as
of June 16, 1997 among the Company, Metroplex Hematology/Oncology Associates,
L.L.P. and Weston and the other investors party thereto as in effect on the date
hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement, and to any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or a Subsidiary of Holdings would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of Holdings or a Subsidiary of
Holdings being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any period, the remainder of (i)
the sum of (a) Adjusted Consolidated Net Income for such period, and (b) the
decrease, if any, in Adjusted Working Capital from the first day to the last day
of such period, minus (ii) the sum of (a) the amount of cash Capital
Expenditures (to the extent not financed with Indebtedness and excluding
Permitted Acquisitions) but not in excess of the amounts permitted pursuant to
Section 9.08 and the amount of cash expended on Permitted Acquisitions (to the
extent not financed with Indebtedness or equity), made by the Borrower on a
consolidated basis during such period, (b) the amount of permanent principal
payments of Indebtedness for borrowed money of the Borrower (other than
repayments of Loans); provided that repayments of Loans shall be deducted in
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determining Excess Cash Flow if such repayments were applied to Scheduled
Repayments required to be made during such period, were made as a voluntary
prepayment with internally generated funds (but in the case of a voluntary
prepayment of Revolving Loans or Swingline Loans, only to the extent accompanied
by a voluntary reduction to the Total Revolving Loan Commitment) during such
period, and (c) the increase, if any, in Adjusted Working Capital from the first
day to the last day of such period. In making the foregoing determinations
under clause (i)(b) or (ii)(c) of the immediately preceding sentence, the amount
of the Adjusted Working Capital acquired as a result of each Permitted
Acquisition which occurred during the respective period for which Excess Cash
Flow is being determined shall have been deemed to have been acquired on the
first day of such period.
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"Excess Cash Flow Payment Period" shall mean each fiscal year of
Holdings.
"Excluded Public Offering Proceeds" shall mean (i) proceeds from the
issuance of common equity by Holdings in the initial public offering of common
equity of Holdings used to repurchase up to 40,000 shares of common stock (or
warrants exercisable into 40,000 shares of common stock) at a purchase price per
share not to exceed the initial public offering price and (ii) 100% of all
proceeds from the initial public offering of common equity of Holdings up to an
aggregate of $40 million.
"Existing Indebtedness" shall have the meaning provided in Section
7.22.
"Facility" shall mean any of the credit facilities established under
this Agreement, i.e., the Term Loan Facility, the Acquisition Loan Facility or
----
the Revolving Loan Facility.
"Facing Fee" shall have the meaning provided in Section 3.01(b).
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds Brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Fixed Charge Coverage Ratio" for any period shall mean the ratio of
(x) Consolidated EBITDA for such period less Capital Expenditures made by
Holdings and its Subsidiaries during such period to (y) Fixed Charges for such
period.
"Fixed Charges" for any period shall mean the sum of (i) Consolidated
Interest Expense for such period, (ii) the aggregate principal amount of all
scheduled payments of Indebtedness (including the principal portion of rentals
under Capitalized Lease Obligations but excluding repayment of Revolving Loans
and Swingline Loans not accompanied by a permanent reduction to the Total
Revolving Loan Commitment) required to be made during such period, (iii)
payments on Holdings Preferred Stock and (iv) taxes paid by Holdings and its
Subsidiaries for such period.
-105-
"Guaranties" shall mean and include each of the Subsidiary Guaranties
executed by the Subsidiaries of Holdings (other than the Borrower and the
Immaterial Subsidiaries) and the Holdings Guaranty.
"Guarantor" shall mean Holdings and each Subsidiary of Holdings (other
than the Immaterial Subsidiaries).
"Hazardous Materials" means (a) petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain,
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," "toxic substances,"
"toxic pollutants," "contaminants," or "pollutants," or words of similar meaning
and regulatory effect, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated under applicable Environmental Laws.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Additional Convertible Securities" shall have the meaning
provided in Section 7.14.
"Holdings Common Stock" shall have the meaning provided in Section
7.14.
"Holdings Guaranty" shall mean the guaranty of Holdings contained in
Section 13 hereof.
"Holdings Preferred Stock" shall have the meaning provided in Section
7.14.
"Holdings Prime Stock" shall have the meaning provided in Section
7.14.
"Immaterial Subsidiaries" shall mean Subsidiaries of Holdings which
have assets with a book value and fair market value of less than $20,000 (and
the aggregate amount of assets of all such Subsidiaries does not exceed
$100,000) and are not party to any material contracts and Central Florida
Medical Management Services Organization as long as it continues in its present
business and does not enter into any other business.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services other than trade payables
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and accrued expenses arising in the ordinary course of business, (ii) the
maximum amount available to be drawn under all letters of credit issued for the
account of such Person and all unpaid drawings in respect of such letters of
credit, (iii) all Indebtedness of the types described in clause (i), (ii), (iv),
(v), (vi) or (vii) of this definition secured by any Lien on any property owned
by such Person, whether or not such Indebtedness has been assumed by such
Person, (iv) all Capitalized Lease Obligations of such Person, (v) all
obligations of such person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., take-or-pay and similar
----
obligations, (vi) all Contingent Obligations of such Person and (vii) all
obligations under any Interest Rate Protection or Other Hedging Agreement or
under any similar type of agreement entered into with a Person not a Bank.
"Indemnified Matters" shall have the meaning provided in Section
14.01.
"Indemnitees" shall have the meaning provided in Section 14.01.
"Initial Borrowing Date" shall mean the date on which the initial
Credit Event occurs.
"Intellectual Property" shall have the meaning provided in Section
7.21.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection or Other Hedging Agreements" shall have the
meaning provided in the Security Documents.
"Investor Group" shall mean Weston Presidio Capital II, L.P.; Mercury
Asset Management plc, on behalf of Rowan Nominees Limited; NatWest Ventures
Investments Limited c/o EGL Holdings; St. ▇▇▇▇ Venture Capital IV, LLC; Partech
U.S. Partners III C.V.; U.S. Growth Fund Partners C.V.; Axa U.S. Growth Fund
LLC; Double Black Diamond II LLC; Almanori Limited; Multinvest Limited;
BancBoston Investments Inc.; National City Venture Corporation; ▇▇▇▇▇ ▇▇▇▇▇▇;
▇▇▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇;
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; Guaranty & Trust Co. c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ (No. 410-66530-1-9-390); ▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇▇ ▇▇▇▇▇;
▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇▇ Nominees c/o Mercury Asset Management Ltd.; and Natwest
Ventures, Ltd.
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"Issuing Bank" shall mean Banque Paribas and any Bank which at the
request of the Borrower agrees, in such Bank's sole discretion, to become an
Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section 2.
The sole Issuing Bank on the Initial Borrowing Date is Banque Paribas.
"L/C Supportable Indebtedness" shall mean (i) obligations of the
Borrower or any of its Subsidiaries incurred in the ordinary course of business
with respect to workers compensation, surety bonds and other similar statutory
obligations and (ii) such other obligations of the Borrower or any of its
Subsidiaries as are reasonably acceptable to the Issuing Bank and otherwise
permitted to exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Cash Collateral Account" shall have the meaning
provided in Section 4.02(A)(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Term Loan, each Revolving Loan, each Swingline
Loan and each Acquisition Loan.
"Management Agreements" shall have the meaning provided in Section
5.05.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(e).
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"Margin Stock" shall have the meaning provided in Regulation U.
"Material Contracts" shall have the meaning provided in Section 5.05.
"Maturity Date" with respect to a Tranche shall mean either the Term
Loan Maturity Date, the Acquisition Loan Maturity Date, the Revolving Loan
Maturity Date or the Swingline Expiry Date, as the case may be.
"Maximum Swingline Amount" shall mean $2,000,000.
"Minimum Borrowing Amount" shall mean (i) with respect to the Term
Loan Facility (other than Term Loans incurred after the Initial Borrowing Date),
$5,000,000, (ii) with respect to Term Loans incurred after the Initial Borrowing
Date, zero, (iii) with respect to the Acquisition Loan Facility, $500,000 and
(iv) with respect to the Revolving Loan Facility (other than Swingline Loans),
$1,000,000 and for Swingline Loans, $250,000.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale, net of reasonable transaction costs (including, without
limitation, attorneys' fees), the amount of such gross cash proceeds required to
be used to permanently repay any Indebtedness which is secured by the respective
assets which were sold, and the estimated marginal increase in income taxes
which will be payable by Holdings' consolidated group as a result of such sale.
"New Bank" shall mean each Bank which is not an Original Bank.
"Note" shall mean each Term Note, each Acquisition Note, each
Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Agent located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇ or such other office as the Agent may hereafter designate in
writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Agent, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
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"Original Bank" shall mean Banque Paribas who is the only bank under
the Original Credit Agreement immediately prior to the Restatement Effective
Date.
"Original Credit Agreement" shall have the meaning provided in the
first WHEREAS clause.
"Other Subordinated Debt" shall have the meaning provided in Section
5.21.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Agent located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ or such other office as the Agent may hereafter designate in
writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Revolving Loan Commitment of such
Bank at such time and the denominator of which is the Total Revolving Loan
Commitment at such time; provided that if the Percentage of any Bank is to be
--------
determined after the Total Revolving Loan Commitment has been terminated, then
the Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Acquisition" shall mean the acquisition by the Borrower or
any of its Subsidiaries of assets constituting all or substantially all of a
business, business unit, division or product line of any Person not already a
Subsidiary of the Borrower or 100% of the capital stock of any such Person,
although any such acquisition shall only be a Permitted Acquisition so long as
(A) the consideration therefor consists solely of the proceeds of Acquisition
Loans, Permitted Equity Issuances, Permitted Seller Notes and Permitted Earn-Out
Debt; (B) the assets acquired, or the business of the Person whose stock is
acquired, shall be in a Permitted Business; (C) those acquisitions that are
structured as asset acquisitions shall be consummated by the Borrower through a
new United States Subsidiary formed by the Borrower, which shall be a Wholly-
Owned Subsidiary of the Borrower, to effect such acquisition and (D) those
acquisitions that are structured as stock acquisitions shall be effected through
a purchase of 100% of the capital stock of such Person by the Borrower or
through a merger between such Person and a newly-formed direct Wholly-Owned
Subsidiary of the Borrower, as the case may be, so that after giving effect to
such merger 100% of the capital stock of the surviving corporation of such
merger is owned by the Borrower; provided, however, a Subsidiary of Holdings may
effect the Permitted Acquisition so long as the stock of such Subsidiary is
transferred to the Borrower within
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three Business Day of the acquisition thereof. Notwithstanding anything to the
contrary contained in the immediately preceding sentence, an acquisition shall
be a Permitted Acquisition only if all requirements of Section 8.15 with respect
to Permitted Acquisitions are met with respect thereto.
"Permitted Acquisition Notice" shall have the meaning provided in
Section 8.15(a).
"Permitted Business" shall mean a line of business in which the
Borrower and its Subsidiaries is engaged on the Initial Borrowing Date and
reasonably related extensions thereof.
"Permitted Earn-Out Debt" shall mean Indebtedness of Holdings incurred
in connection with a Permitted Acquisition and in accordance with Section 8.15,
which Indebtedness is not secured by any assets of Holdings or any of its
Subsidiaries (including, without limitation, the assets so acquired) and is only
payable by Holdings upon the passage of time (e.g., non-compete payments) or in
----
the event certain future performance goals are achieved with respect to the
assets acquired; provided that such Indebtedness shall only constitute Permitted
--------
Earn-Out Debt to the extent the terms of such Indebtedness expressly limit the
maximum potential liability of Holdings with respect thereto and all such other
terms shall be in form and substance reasonably satisfactory to the Agent.
"Permitted Equity Issuances" shall mean issuances of Holdings Common
Stock or Holdings Prime Stock by Holdings as consideration in Permitted
Acquisitions, but only to the extent permitted pursuant to Section 8.15.
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Permitted Seller Notes" shall mean notes issued by Holdings to
sellers of stock or assets in a Permitted Acquisition and issued in accordance
with Section 8.15, which notes shall be unsecured and unguaranteed, and shall
otherwise be in form and substance reasonably satisfactory to the Agent.
"Person" shall mean any individual, partnership, joint venture, firm,
coporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Personal Guarantees" shall have the meaning provided in Section 7.24.
"Plan" shall mean any pension plan, as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Holdings, a Subsidiary of Holdings or an ERISA
Affiliate, and each such plan for the
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five year period immediately following the latest date on which Holdings, a
Subsidiary of Holdings or an ERISA Affiliate maintained, contributed to or had
an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.07.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
"Pledged Securities" shall have the meaning assigned that term in the
Pledge Agreement.
"Pledged Stock" shall have the meaning assigned that term in the
Pledge Agreement.
"Post-Closing Acquisitions" shall have the meaning proved in Section
7.31.
"Pre-Closing Acquisitions" shall mean the acquisitions set forth on
Schedule XIII.
"Prime Lending Rate" shall mean the rate which The Chase Manhattan
Bank announces from time to time as its prime lending rate, the Prime Lending
Rate to change when and as such prime lending rate changes. The Prime Lending
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer by Banque Paribas or The Chase Manhattan
Bank, who may make commercial loans or other loans at rates of interest at,
above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, with respect to any Permitted
Acquisition or repayment of DVI Indebtedness, the calculation of the
consolidated results of Holdings and its Subsidiaries otherwise determined in
accordance with this Agreement as if the respective Permitted Acquisition or
repayment of DVI Indebtedness (and all other Permitted Acquisitions and
repayments consummated during the respective Calculation Period or thereafter
and prior to the date of determination pursuant to Section 8.15 or other
applicable provision of this Agreement) had been effected on the first day of
the respective Calculation Period; provided that all calculations shall take
--------
into account the following assumptions:
(i) with respect to Consolidated Interest Expense or Consolidated
Indebtedness, if any Indebtedness is incurred pursuant to the respective
Permitted Acquisition or repayment of DVI Indebtedness (or was incurred in
any other Permitted Acquisition or other repayment of DVI Indebtedness
which occurred during the relevant Calculation Period or thereafter and
prior to the date of determination) then all such Indebtedness shall be
deemed to have been outstanding
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from the first day of the respective Calculation Period (and the interest
expense associated with such Indebtedness, shall be determined at the
actual rates applicable thereto or which would have been applicable had
such debt been outstanding for the whole such period and shall be included
in determining Consolidated Interest Expense on such Pro Forma Basis) and
all Indebtedness that was outstanding during the Calculation Period or
thereafter and prior to the date of the Permitted Acquisition or repayment
of DVI Indebtedness but not outstanding on the date of the Permitted
Acquisition or repayment of DVI Indebtedness shall be deemed to have been
repaid in full on the first day of the Calculation Period; and
(ii) if all or any portion of the respective Calculation Period
occurs before November 1, 1997, then compliance with Section 8.15(a) and
Sections 9.09 through 9.13, inclusive on a Pro Forma Basis, shall only be
required to be established for the period beginning on the Initial
Borrowing Date and ending on the last day of the respective Calculation
Period; provided that to the extent a financial covenant calculation
--------
compares a balance sheet item to an income statement item, all calculations
relating to the financial results of the Person or business, division or
product line being acquired pursuant to the Permitted Acquisition shall, to
the extent that such results relate to income statement items, be
multiplied by a fraction (x) the numerator of which shall be the number of
days from the Initial Borrowing Date to the end of the Calculation Period
and (y) the denominator of which shall be the number of days in the
Calculation Period without giving effect to this clause (iii) which
provides that the Calculation Period commences on the Initial Borrowing
Date (and is therefore less than four fiscal quarters).
"Projections" shall have the meaning provided in Section 5.15.
"Purchase Price" shall mean the aggregate purchase price for each
Acquisition and the amount and form of each type of consideration payable with
respect thereto as set forth on Schedule XVII hereto and the applicable
Acquisition Documents.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December of each calendar year.
"Quoted Rate" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by the Agent for U.S. dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of the Agent for which an interest rate
is then being determined with maturities comparable to the Interest Period
applicable to such Eurodollar Loan determined as of 10:00 A.M. (New York time)
on the date which is two Business Days prior to the commencement of such
Interest Period, divided (and rounded upward to the next whole multiple of 1/16
of 1%) by (b) a percentage equal to 100% minus the then stated maximum rate of
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all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable to any member
bank of the Federal Reserve System in respect of Eurocurrency funding or
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. (S) 6901 et seq.
-- ----
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Holdings or any Subsidiary
of Holdings of any cash insurance proceeds payable by reason of theft, physical
destruction or damage or any other similar event with respect to any properties
or assets of Holdings or any Subsidiary of Holdings (including, without
limitation, business interruption insurance).
"Refinanced Indebtedness" shall have the meaning provided in Section
5.16(b).
"Register" shall have its meaning provided in Section 8.16.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
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"Related Fund" shall mean, with respect to any Bank that is a fund
that invests in loans and is managed by the same investment advisor as such Bank
or by an Affiliate of such investment advisor.
"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.12.
"Replacement Bank" shall have the meaning provided in Section 1.12.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Acquisition Facility Banks" shall mean Banks the sum of
whose Acquisition Loan Commitments and Acquisition Loans represent an amount
greater than 50% of the Total Acquisition Loan Commitment and Acquisition Loans
of all Banks.
"Required Banks" shall mean Banks the sum of whose outstanding Term
Loans, Term Loan Commitments, Acquisition Loan Commitments, outstanding
Acquisition Loans and Revolving Loan Commitments (or after the termination
thereof, the sum of outstanding Revolving Loans and Percentages of Swingline
Loans and Letter of Credit Outstandings), represent an amount greater than 50%
of the sum of all outstanding Term Loans, the Total Term Loan Commitments, the
Total Acquisition Loan Commitment, all outstanding Acquisition Loans and the
Total Revolving Loan Commitment (or after the termination thereof, the sum of
the then total outstanding Revolving Loans and the aggregate Swingline Loans and
Letter of Credit Outstandings).
"Required Term Facility Banks" shall mean Banks the sum of whose
outstanding Term Loans represent an amount greater than 50% of all outstanding
Term Loans of all Banks.
"Restatement Effective Date" shall have the meaning provided in
Section 14.10.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name on Part A of Schedule I hereto directly below
the column
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entitled "Revolving Loan Commitment," as same may be (x) reduced or terminated
from time to time pursuant to Section 3.02, 3.03, 4.02 and/or 10 or (y) adjusted
from time to time as a result of assignments to or from such Bank pursuant to
Section 1.12 or 14.04.
"Revolving Loan Facility" shall mean the Facility evidenced by the
Total Revolving Loan Commitment.
"Revolving Loan Maturity Date" shall mean the four year and six month
anniversary of the Initial Borrowing Date.
"Revolving Loans" shall have the meaning provided in Section 1.01(c).
"Revolving Notes" shall have the meaning provided in Section
1.05(a)(iii).
"Scheduled Acquisition Loan Repayment" shall have the meaning provided
in Section 4.02(A)(d).
"Scheduled Repayment" shall have the meaning provided in Section
4.02(A)(d).
"Scheduled Term Loan Repayment" shall have the meaning provided in
Section 4.02(A)(c).
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall mean (x) the Banks, the Agent, the
Collateral Agent and (y) any Bank which on the date hereof is, or subsequently
becomes, party to any Interest Rate Protection or Other Hedging Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Purchase Agreement" shall mean the Securities Purchase
Agreement, dated as of June 16, 1997 among the Company, Weston and certain other
investors.
"Security Agreement" shall have the meaning provided in Section 5.08.
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"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the Security
Agreement, the Cash Collateral Agreement, the Concentration Account Consent
Letter and each Additional Security Document.
"Senior Subordinated Loan Agreement" shall mean the Senior
Subordinated Loan Agreement, dated as of October 27, 1997, among the Borrower,
Paribas Capital Funding, as agent, and the lenders listed on the signature pages
thereof.
"Senior Subordinated Loan Documents" shall mean and include each of
the documents and other agreements entered into in connection with the issuance
by the Borrower of the Senior Subordinated Notes (including, without limitation,
the Senior Subordinated Loan Agreement and all guarantees related thereto), as
in effect on the Initial Borrowing Date and as the same may be entered into,
modified, supplemented or amended from time to time pursuant to the terms hereof
and thereof.
"Senior Subordinated Notes" shall mean the Borrower's unsecured Senior
Subordinated Notes due 2005, as in effect on the Initial Borrowing Date and as
the same may be modified, amended or supplemented from time to time in
accordance with the terms hereof and thereof, including Senior Subordinated
Notes issued after the Initial Borrowing Date in accordance with the terms
hereof and thereof.
"Shareholders' Agreements" shall have the meaning provided in Section
5.05.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder at such time (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Subordinated Debt Amendments" shall have the meaning provided in
Section 5.21.
"Subsidiaries Guaranty" shall have the meaning provided in Section
5.09.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association,
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joint venture or other entity in which such Person and/or one or more
Subsidiaries of such Person has more than a 50% equity interest at the time.
"Subsidiary Metroplex Note" shall mean the Promissory Note dated June
16, 1997 in the original amount of $6,210,000 from Physicians Health Corporation
payable to Metroplex Hematology Oncology Associates, L.L.P. which Note was
assumed by MHOA Texas I, LLC.
"Swingline Bank" shall mean Banque Paribas, in its capacity as the
maker of Swingline Loans.
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the Revolving Loan Maturity Date.
"Swingline Loans" shall have the meaning provided in Section 1.01(d).
"Swingline Note" shall have the meaning provided in Section
1.05(a)(iv).
"Syndication Termination Date" shall mean the earlier of (x) 180 days
after the Initial Borrowing Date or (y) the date on which the Agent, in its sole
discretion, determines (and notifies the Borrower) that the primary syndication
(and the resultant addition of institutions as Banks pursuant to Section 14.04)
has been completed.
"Tax Sharing Agreements" shall have the meaning provided in Section
5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Part A of Schedule I directly
below the column entitled "Tranche Term Loan Commitment," as the same may be (x)
reduced or terminated pursuant to Section 3.03, 4.02 and/or 10 or (y) adjusted
from time to time as a result of assignments to or from such Bank pursuant to
Section 1.12 or 14.04.
"Term Loan Commitment Percentage" shall mean, with respect to each
Bank, a fraction (expressed as a percentage), the numerator of which is equal to
the Term Loan Commitment of such Bank at such time and the denominator of which
is equal to the Term Loan Commitments of all Banks at such time.
"Term Loan Commitment Termination Date" shall mean the four year and
six month anniversary of the Initial Borrowing Date.
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"Term Loan Facility" shall mean the facility evidenced by Total Term
Loan Commitment.
"Term Loan Maturity Date" shall mean the four year and six month
anniversary of the Initial Borrowing Date.
"Term Note" shall have the meaning provided in Section 1.05(a)(i).
"Term TL Percentage" shall mean, at any time, a fraction (expressed as
a percentage), the numerator of which is equal to the aggregate principal amount
of all Term Loans outstanding at such time, and the denominator of which is
equal to the aggregate principal amount of all Term Loans outstanding at such
time and the aggregate principal amount of all Acquisition Loans outstanding at
such time.
"Total Acquisition Loan Commitment" shall mean, at any time, the sum
of the Acquisition Loan Commitments of each of the Banks.
"Total Commitment" shall mean, at any time, the sum of the Commitments
of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Term Loan Commitment of each of the Banks.
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being four separate Tranches, i.e.,
----
whether Term Loans, Acquisition Loans, Revolving Loans or Swingline Loans.
"Transaction" shall mean collectively, (i) the incurrence of Loans
hereunder on the Initial Borrowing Date, (ii) the consummation of the
Acquisitions, (iii) the issuance of the Senior Subordinated Notes, (iv) the
issuance of capital stock of Holdings in connection with the transactions
contemplated hereby, (v) the repayment of all Refinanced Indebtedness, together
with all accrued interest, premiums, fees, commissions and expenses owing in
connection therewith, and the termination of all commitments thereunder, (vi)
the payment of the Transaction Fees and Expenses in connection therewith, and
(vii) the entering into of the Equity Amendments and the Subordinated Debt
Amendments.
"Transaction Fees and Expenses" shall mean all fees and expenses
incurred in connection with and arising out of the Transaction and the
transactions contemplated
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thereby and hereby; provided, however, that the aggregate amount of such fees
-------- -------
and expenses shall not exceed $2.0 million in the aggregate.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
----
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unutilized Revolving Loan Commitment" for any Bank, at any time,
shall mean the Revolving Loan Commitment of such Bank at such time less the sum
of (i) the aggregate principal amount of Revolving Loans made by such Bank and
then outstanding and (ii) such Bank's Percentage of the Letter of Credit
Outstandings.
"Weston" shall mean Weston Presidio Capital Partners II, L.P.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
Section 12. The Agent.
---------
12.01 Appointment. The Banks hereby designate Banque Paribas as
-----------
Agent (for purposes of this Section 12, the term "Agent" shall include Banque
Paribas in its capacity as Collateral Agent pursuant to the Security Documents)
to act as specified herein and in the other Credit Documents. Each Bank hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, the Agent to take such action on
its behalf under the provisions of this Agreement, the
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other Credit Documents and any other instruments and agreements referred to
herein or therein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Agent may perform any of its duties hereunder by or
through its officers, directors, agents or employees.
12.02 Nature of Duties. The Agent shall have no duties or
----------------
responsibilities except those expressly set forth in this Agreement and the
Security Documents. Neither the Agent nor any of its officers, directors,
agents or employees shall be liable for any action taken or omitted by it or
them hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Agent shall be mechanical and administrative in nature; the
Agent shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Bank or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied,
is intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein.
12.03 Lack of Reliance on the Agent. Independently and without
-----------------------------
reliance upon the Agent, each Bank and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making and the continuance of the Loans and
the participation in Letters of Credit and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of Holdings and its Subsidiaries and, except as expressly provided in this
Agreement, the Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans, the participation in the Letters of
Credit or at any time or times thereafter. The Agent shall not be responsible
to any Bank or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, priority or sufficiency of
this Agreement or any other Credit Document or the financial condition of
Holdings or its Subsidiaries or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Credit Document, or the financial
condition of Holdings or its Subsidiaries or the existence or possible existence
of any Default or Event of Default. In no event shall the Agent be required in
contravention of applicable law or if such action would cause it, in its sole
determination, to incur any risk or liability for which it is not adequately
indemnified for to its satisfaction.
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12.04 Certain Rights of the Agent. If the Agent shall request
---------------------------
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Agent shall be entitled to refrain from such act or taking such
action unless and until the Agent shall have received instructions from the
Required Banks; and the Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Banks.
12.05 Reliance. The Agent shall be entitled to rely, and shall be
--------
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or facsimile message, cablegram,
radiogram, legal opinion, order or other document or telephone message signed,
sent or made by any Person that the Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of counsel
selected by it.
12.06 Indemnification. (a) To the extent the Agent is not
---------------
reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify the Agent, in proportion to their respective "percentages" as used in
determining the Required Banks, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, expenses or disbursements of whatsoever kind or nature which may be
imposed on, asserted against or incurred by the Agent in performing its duties
hereunder or under any other Credit Document, in any way relating to or arising
out of this Agreement or any other Credit Document; provided that no Bank shall
--------
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct.
(b) The Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Credit Document (except actions
expressly required to be taken by it hereunder or under the Credit Documents)
unless it shall first be indemnified to its satisfaction by the Banks pro rata
--- ----
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.
12.07 The Agent in Its Individual Capacity. With respect to its
------------------------------------
obligation to make Loans under this Agreement, the Agent shall have the rights
and powers specified herein for a "Bank" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Banks," "Required Banks," "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to,
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and generally engage in any kind of banking, trust or other business with any
Credit Party or any Affiliate of any Credit Party as if it were not performing
the duties specified herein, may hold equity interests in the Borrower or any of
its Affiliates and may accept fees and other consideration from the Borrower or
any other Credit Party for services in connection with this Agreement and
otherwise without having any liability to, and without having to account for the
same to, the Banks.
12.08 Holders. The Agent may deem and treat the payee of any Note as
-------
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Agent. Any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
12.09 Resignation by the Agent. (a) The Agent may resign from the
------------------------
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 15 Business Days' prior written notice to
the Borrower and the Banks. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Agent hereunder or thereunder who shall be a commercial bank
or trust company reasonably acceptable to the Borrower.
(c) If a successor Agent shall not have been so appointed within such
15 Business Day period, the Agent, with the consent of the Borrower, shall then
appoint a successor Agent who shall serve as Agent hereunder or thereunder
until such time, if any, as the Banks appoint a successor Agent as provided
above.
(d) If no successor Agent has been appointed pursuant to clause (b)
or (c) above by the 30th Business Day after the date such notice of resignation
was given by the Agent, the Agent's resignation shall become effective and the
Banks shall thereafter perform all the duties of the Agent hereunder and/or
under any other Credit Document until such time, if any, as the Banks appoint a
successor Agent as provided above.
Section 13. Guaranty.
--------
13.01 The Guaranty. In order to induce the Banks to enter into this
------------
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Loans and the
issuance of the Letters of
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Credit, Holdings hereby agrees with the Banks as follows: Holdings hereby
unconditionally and irrevocably guarantees as primary obligor and not merely as
surety the full and prompt payment when due, whether upon maturity, by
acceleration or otherwise, of any and all indebtedness of the Borrower to the
Banks under this Agreement and the other Credit Documents and under each
Interest Rate Protection or Other Hedging Agreement entered into by a Bank or an
affiliate of a Bank with the Borrower. If any or all of the indebtedness of the
Borrower to the Banks becomes due and payable hereunder or under such other
Credit Documents or Interest Rate Protection or Other Hedging Agreements,
Holdings unconditionally promises to pay such indebtedness to the Banks, or
order, on demand, together with any and all expenses which may be incurred by
the Agent or the Banks in collecting any of the indebtedness. The word
"indebtedness" is used in this Section 13 in its most comprehensive sense and
means any and all advances, debts, obligations and liabilities of the Borrower
arising in connection with this Agreement or any other Credit Documents or under
any Interest Rate Protection or Other Hedging Agreement with a Bank or an
affiliate of the Bank, in each case, heretofore, now, or hereafter made,
incurred or created, whether voluntarily or involuntarily, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether or
not such indebtedness is from time to time reduced, or extinguished and
thereafter increased or incurred, whether the Borrower may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.
13.02 Bankruptcy. Additionally, Holdings unconditionally and
----------
irrevocably guarantees the payment of any and all indebtedness of the Borrower
to the Banks whether or not due or payable by the Borrower upon the occurrence
of any of the events specified in Section 10.05, and unconditionally and
irrevocably promises to pay such indebtedness to the Banks, or order, on demand,
in lawful money of the United States.
13.03 Nature of Liability. The liability of Holdings hereunder is
-------------------
exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower whether executed by Holdings, any other guarantor
or by any other party, and the liability of Holdings hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Agent or the Banks on the indebtedness which the Agent or such Banks repay the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and Holdings waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding.
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13.04 Guaranty Absolute. No invalidity, irregularity or
-----------------
unenforceability of all or any part of the indebtedness guaranteed hereby or of
any security therefor shall affect, impair or be a defense to this Guaranty, and
this Guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which might
constitute a legal or equitable discharge of a surety or guarantor except
payment in full of the indebtedness guaranteed herein.
13.05 Independent Obligation. The obligations of Holdings hereunder
----------------------
are independent of the obligations of any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against Holdings
whether or not action is brought against any other guarantor or the Borrower and
whether or not any other guarantor or the Borrower be joined in any such action
or actions. Holdings waives, to the fullest extent permitted by law, the
benefit of any statue of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to Holdings.
13.06 Authorization. Holdings authorizes the Agent and the Banks
-------------
without notice or demand to Holdings, and without affecting or impairing its
liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the indebtedness (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the Guaranty herein made
shall apply to the indebtedness as so changed, extended, renewed or
altered;
(b) take and hold security for the payment of the indebtedness and
sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged
or mortgaged to secure, or howsoever securing, the indebtedness or any
liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
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(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate
the payment of all or any part thereof to the payment of any liability
(whether due or not) of the Borrower to its creditors other than the Banks;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Banks regardless of what
liability or liabilities of Holdings or the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this Agreement
or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Section 13.
13.07 Reliance. It is not necessary for the Agent or the Banks to
--------
inquire into the capacity or powers of the Borrower or its Subsidiaries or the
officers, directors, partners or agents acting or purporting to act on its
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
13.08 Subordination. Any indebtedness of the Borrower now or
-------------
hereafter held by Holdings is hereby subordinated to the indebtedness of the
Borrower to the Agent and the Banks; and such indebtedness of the Borrower to
Holdings, if the Agent (at the direction of the Required Banks), after an Event
of Default has occurred, so requests, shall be collected, enforced and received
by Holdings as trustee for the Banks and be paid over to the Banks on account of
the indebtedness of the Borrower to the Banks, but without affecting or
impairing in any manner the liability of Holdings under the other provisions of
this Guaranty. Prior to the transfer by Holdings of any note or negotiable
instrument evidencing any indebtedness of the Borrower to Holdings, Holdings
shall ▇▇▇▇ such note or negotiable instrument with a legend that the same is
subject to this subordination.
13.09 Waiver. (a) Holdings waives any right to require the Agent or
------
the Banks to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in the
Agent's or the Banks' power whatsoever. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party other than payment in full of the indebtedness (other than
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payment), including, without limitation, any defense based on or arising out of
the disability of the Borrower, any other guarantor or any other party, or the
unenforceability of the indebtedness or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower other than to the
extent of payment in full of the indebtedness. The Agent and the Banks may, in
accordance with the Credit Documents, at their election, foreclose on any
security held by the Agent, the Collateral Agent or the Banks by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Agent and the Banks may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of Holdings hereunder except to the extent
the indebtedness has been paid. Holdings waives any defense arising out of any
such election by the Agent and the Borrower, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other right
or remedy of Holdings against the Borrower or any other party or any security.
(b) Except as otherwise specifically required hereunder, Holdings
waives all presentments, demands for performance, protests and notices,
including, without limitation, notices of nonperformance, notices of protest,
notices of dishonor, notices of acceptance of this Guaranty, and notices of the
existence, creation or incurring of new or additional indebtedness. Holdings
assumes all responsibility for being and keeping itself informed of the
Borrower's financial condition and assets, and of all other circumstances
bearing upon the risk of non-payment of the indebtedness and the nature, scope
and extent of the risks which Holdings assumes and incurs hereunder, and agrees
that the Agent and the Banks shall have no duty to advise Holdings of
information known to them regarding such circumstances or risks.
13.10 Guaranty Continuing. This Guaranty is a continuing one and all
-------------------
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of any Bank, of any holder of any Note, or issuer of, or
participant in, any Letter of Credit in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein expressly specified are cumulative and not
exclusive of any rights or remedies which any Bank or any subsequent holder of a
Note, or issuer of, or participant in, a Letter of Credit would otherwise have.
No notice to or demand on Holdings in any case shall entitle Holdings to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Bank or any holder, creator or
purchaser to any other or further action in any circumstances without notice or
demand.
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13.11 Binding Nature of Guaranties. This Guaranty shall be binding
----------------------------
upon Holdings and its successors and assigns and shall inure to the benefit of
the Bank and their successors and assigns.
13.12 Judgments Binding. If claim is ever made upon any Bank, any
-----------------
subsequent holder of a Note or issuer of, or participant in, any Letter of
Credit for repayment or recovery of any amount or amounts received in payment or
on account of any of the indebtedness and any of the aforesaid payees repays all
or part of said amount by reason of (a) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property, or (b) any settlement or compromise of any such claim effected by such
payee with any such claimant (including the Borrower) then and in such event
Holdings agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon Holdings, notwithstanding any revocation hereof or the can
cellation of any Note, or other instrument evidencing any liability of the
Borrower, and Holdings shall be and remain liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee.
Section 14. Miscellaneous.
-------------
14.01 Payment of Expenses, etc. Each of Holdings and the Borrower,
-------------------------
jointly and severally, agree to: (i) whether or not the transactions herein
contemplated are consummated, pay all out-of-pocket costs and expenses of the
Agent (including, without limitation, the fees and disbursements of White & Case
and local counsel) in connection with the preparation, execution and delivery of
this Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein and any amendment, waiver or consent relating
hereto or thereto, of the Agent in connection with its syndication efforts with
respect to this Agreement (including, without limitation, the fees and
disbursements of White & Case) and of the Agent and each of the Banks in
connection with the enforcement of this Agreement and the other Credit Documents
and the documents and instruments referred to herein and therein (including,
without limitation, the fees and disbursements of counsel for the Agent and for
each of the Banks); (ii) pay and hold each of the Banks harmless from and
against any and all present and future stamp, excise and other similar taxes
with respect to the foregoing matters and save each of the Banks harm less from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Bank) to pay such
taxes; and (iii) defend, protect, indemnify and hold harmless the Agent and each
Bank, and each of their respective officers, directors, employees,
representatives, attorneys and agents (collectively called the "Indemnitees")
from and against any and all liabilities, obligations (including removal or
remedial actions), losses, damages (including foreseeable and unforeseeable
consequential damages and punitive damages), penalties, claims, actions,
judgments, suits,
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costs, expenses and disbursements (including reasonable attorneys' and
consultants fees and disbursements) of any kind or nature whatsoever that may at
any time be incurred by, imposed on or assessed against the Indemnitees directly
or indirectly based on, or arising or resulting from, or in any way related to,
or by reason of (a) any investigation, litigation or other proceeding (whether
or not the Agent, the Collateral Agent or any Bank is a party thereto and
whether or not any such investigation, litigation or other proceeding is between
or among the Agent, the Collateral Agent, any Bank, Holdings or any third person
or otherwise) related to the entering into and/or performance of this Agreement
or any other Credit Document or the use of any Letter of Credit or the proceeds
of any Loans hereunder or the consummation of any transactions contemplated
herein (including, without limitation, the Transaction) or in any other Credit
Document or the exercise of any of their rights or remedies provided herein or
in the other Credit Documents; or, (b) the actual or alleged generation,
presence or Release of Hazardous Materials on or from, or the transportation of
Hazardous Materials to or from, any Real Property owned or at any time operated
by Holdings or any of its Subsidiaries or; (c) any Environmental Claim relating
to Holdings or any of its Subsidiaries or any Real Property owned or at any time
operated by Holdings or any of its Subsidiaries or; (d) the exercise of the
rights of the Agent and of any Bank under any of the provisions of this
Agreement or any other Credit Document or any Letter of Credit or any Loans
hereunder; or (e) the consummation of any transaction contemplated herein
(including, without limitation, the Transaction) or in any other Credit Document
(the "Indemnified Matters") regardless of when such Indemnified Matter arises;
but excluding any such Indemnified Matter based solely on the gross negligence
or willful misconduct of any Indemnitee.
14.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any Credit
Party or to any other Person, any such notice being hereby expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of each Credit Party against and on account of
the Obligations and liabilities of such Credit Party to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Bank pursuant to
Section 14.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Bank shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
14.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic,
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telex, facsimile or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered: if to Holding or the Borrower, at its address
specified opposite its signature below; if to any Bank, at its address specified
opposite its name below; and if to the Agent, at its Notice Office; or, as to
any Credit Party or the Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each Bank,
at such other address as shall be designated by such Bank in a written notice to
each Borrower and the Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, facsimiled, or cabled or sent by overnight
courier, be effective three Business Days after deposited in the mails,
certified, return receipt requested, when delivered to the telegraph company,
cable company or one day following delivery to an overnight courier, as the case
may be, or sent by telex or facsimile device, except that notices and
communications to the Agent shall not be effective until received by the Agent.
14.04 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, no Credit Party may assign
-------- -------
or transfer any of its rights, obligations or interest hereunder or under any
other Credit Document without the prior written consent of the Banks; and
provided further, that although any Bank may transfer, assign or grant
----------------
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitments or Loans hereunder except as provided in Section 14.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Bank" hereunder; and provided further, that no Bank shall transfer or grant any
----------------
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Revolving Loan Maturity Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the Commitments in which such participant is participating over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Total Commitment shall
not constitute a change in the terms of any Commitment, and that an increase in
any Commitment shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof), (ii) consent
to the assignment or transfer by any Credit Party of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all
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amounts payable by the Borrower hereunder shall be determined as if such Bank
had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) (A) pledge its Loans and/or Notes
hereunder to a Federal Reserve Bank in support of borrowings made by such Bank
from such Federal Reserve Bank or (B) assign all or a portion of its Loans or
Commitments and related outstanding Obligations hereunder to its parent company,
principal office and/or any Affiliate of such Bank which is at least 50% owned
by such Bank or its parent company or to one or more other Banks or to a Related
Fund or (y) assign all or a portion equal to at least $5,000,000, of such Loans
or Commitments and related outstanding Obligations hereunder to one or more
Eligible Transferees each of which assignees shall become a party to this
Agreement as a Bank by execution of an assignment and assumption agreement
substantially in the form of Exhibit L (appropriately completed); provided that:
--------
(i) at such time Part A of Schedule I shall be deemed modified to reflect the
Commitments of such new Bank and of the existing Banks; (ii) new Notes will be
issued to such new Bank and to the assigning Bank upon the request of such new
Bank or assigning Bank, such new Notes to be in conformity with the requirements
of Section 1.05 to the extent needed to reflect the revised Commitments; (iii)
the consent of the Agent, which consent shall not be unreasonably withheld,
shall be required in connection with any assignment (provided, however, that no
-------- -------
such consent shall be required in the case of any assignment to another Bank,
any Bank's Affiliate or a Related Fund); and (iv) the Agent shall receive at the
time of each such assignment, from the assigning Bank, the payment of a non-
refundable assignment fee of $3,000. To the extent of any assignment pursuant
to this Section 14.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitments. No transfer or
assignment under this Section 14.04(b) will be effective until recorded by the
Agent on the Register pursuant to Section 8.16. At the time of each assignment
pursuant to this Section 14.04(b) to a Person which is not already a Bank
hereunder and which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall provide to Holdings and the Agent the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 4.04(b)(ii) Certificate)
required by Section 4.04(b).
14.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Agent or any Bank or any holder of any Note in exercising any right,
power or privilege hereunder or under any other Credit Document and no course
of dealing between Holdings or any other Credit Party and the Agent or any Bank
or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
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which the Agent or any Bank or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Agent or any Bank or the holder of
any Note to any other or further action in any circumstances without notice or
demand.
14.06 Payments Pro Rata. (a) The Agent agrees that promptly after
-----------------
its receipt of each payment from or on behalf of either Borrower in respect of
any Obligations hereunder, it shall distribute such payment to the Banks pro
---
rata based upon their respective shares, if any, of the Obligations with respect
----
to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall result in a
proportional participation by all the Banks in such amount; provided that if all
--------
or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
14.07 Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Borrower to the
Banks); provided that, except as otherwise specifically provided herein, all
--------
computations of Excess Cash Flow and all computations determining compliance
with Sections 9.04 and 9.08 through 9.13, inclusive, including the definitions
used therein, shall utilize accounting principles and policies in conformity
with those used to prepare the historical financial statements delivered to the
Banks pursuant to Section 5.15.
(b) All computations of interest and Fees hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or Fees are payable.
14.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
-----------------------------------------------------------
JURY TRIAL. (A) THIS AGREEMENT AND THE OTHER
----------
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CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF HOLDINGS AND THE BORROWER
HEREBY IRREVOCABLY ACCEPT FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH
OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY DESIGNATE, APPOINT AND EMPOWER
CT CORPORATION SYSTEM WITH OFFICES ON THE DATE HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, AS THEIR DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT
AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED
IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE
AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, AND EACH OF HOLDINGS AND
THE BORROWER AGREE TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT ON THE TERMS
AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT UNDER THIS
AGREEMENT. EACH OF HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENT TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO HOLDINGS OR THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE
ITS SIGNATURES BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS
AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHER WISE PROCEED
AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
(B) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVE ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER
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IRREVOCABLY WAIVE AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(C) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Agent.
14.10 Effectiveness. (a) This Agreement shall become effective on
-------------
the date (the "Restatement Effective Date") on which (i) each of Holdings, the
Borrower, each of the Original Banks and each New Bank shall have signed a copy
hereof (whether the same or different copies) and shall have delivered the same
to the Agent at its Notice Office or, in the case of the Original Banks and each
New Bank, shall have given to the Agent telephonic (confirmed in writing),
written or facsimile transmission notice (actually received) at such office that
the same has been signed and mailed to it and (ii) the conditions contained in
Section 6 (to the extent applicable) and 14.10(b) are met. Unless the Agent has
received actual notice from any Bank that the conditions described in clause
(ii) of the preceding sentence have not been met to its satisfaction, upon the
satisfaction of the condition described in clause (i) of the immediately
preceding sentence and upon the Agent's determination that the conditions
described in clause (ii) of the immediately preceding sentence have been met and
upon the payment of all amounts required to be paid on the Restatement Effective
Date pursuant to Section 1.01(f), then the Restatement Effective Date shall be
deemed to have occurred, regardless of any subsequent determination that one or
more of the conditions thereto have not been met (although the occurrence of the
Restatement Effective Date shall not release the Borrower from any liability for
failure to satisfy one or more of the applicable conditions contained Sections 6
or 14.10(b).
(b) The occurrence of the Restatement Effective Date is subject to
the satisfaction of the following additional conditions:
(i) the delivery of all Notes by the Borrower to the Agent;
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(ii) each Credit Party shall have executed and delivered to the Agent
the Acknowledgment;
(iii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P. shall have executed and delivered to the
Agent a legal opinion in form and substance satisfactory to the Agent;
(iv) the Senior Subordinated Loan Documents shall have been amended
in a manner satisfactory to the Agent;
(v) all necessary third-party consents to the transaction
contemplated hereby shall have been obtained and all necessary corporate
proceedings to authorize the transactions contemplated hereby shall have
been taken; and
(vi) on the Restatement Effective Date, each Credit Party shall have
duly authorized, executed and delivered an acknowledgement and agreement in
form satisfactory to the Agent (the "Acknowledgements"), which
acknowledgment and agreement, among other things, (i) acknowledges this
Agreement and the transactions contemplated hereby, (ii) acknowledges and
agrees that, after giving effect to the Restatement Effective Date, all
Documents executed by such party shall remain in full force and effect in
accordance with the terms thereof and (iii) acknowledges and agrees that
the term Obligations (when used in any Document to which such Credit Party
is a party including, without limitation, the Security Documents and the
Guaranties) includes all of the Obligations under this Agreement after
giving effect to the Restatement Effective Date and any increase in the
amounts owing to the Banks or the Agent under this Agreement.
14.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
14.12 Amendment or Waiver. (a) Neither this Agreement nor any other
-------------------
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks; provided that no such change, waiver, discharge or termination
--------
shall, without the consent of each Bank (with Obligations of the respective
types being directly affected thereby): (i) extend the final scheduled maturity
of any Loan or Note or extend the stated maturity of any Letter of Credit or
Unpaid Drawing beyond the Revolving Loan Maturity Date, or reduce the rate or
extend the time of payment of interest or Fees thereon (except in connection
with a waiver of applicability of any post-default increase in interest rates),
or reduce the principal amount thereof, or increase the Commitments of any Bank
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a
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mandatory reduction in the Total Commitment or a mandatory prepayment shall not
constitute an increase of the Commitment of any Bank, and that an increase in
the available portion of any Commitment of any Bank shall not constitute an
increase in the Commitment of such Bank); (ii) release all or substantially all
of the Collateral (except as expressly provided in the relevant Credit
Documents); (iii) amend, modify or waive any provision of this Section 14.12;
(iv) reduce the percentage specified in, or otherwise modify, the definition of
Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the same
basis as the extensions of Term Loans, Acquisition Loans, Acquisition Loan
Commitments and Revolving Loan Commitments are included on the Effective Date);
or (v) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement; provided further, that no such
----------------
change, waiver, discharge or termination shall: (s) without the consent of the
Swingline Bank, amend, modify or waive any provision relating to Swingline Loans
or the rights or obligations of the Swingline Bank; or (t) increase the
Commitments of any Bank over the amount thereof then in effect (it being
understood that a waiver of any conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Commitment or of a
mandatory prepayment shall not constitute an increase of the Commitment of any
Bank, and that an increase in the available portion of any Commitment of any
Bank shall not constitute an increase in the Commitment of such Bank) without
the consent of such Bank; or (u) without the consent of the Issuing Bank, amend,
modify or waive any provision of Section 2 or alter its rights or obligations
with respect to Letters of Credit; or (v) without the consent of the Agent,
amend, modify or waive any provision of Section 12 or any other provision
relating to the rights or obligations of the Agent; or (w) without the consent
of the Collateral Agent, amend, modify or waive any provision of Section 12 or
any other provision relating to the rights or obligations of the Collateral
Agent; or (x) without the consent of the Required Term Facility Banks (A) amend,
modify or waive any of the terms contained in (I) Sections 4.01(iv), 4.01(v),
4.01(vi), 4.02(B)(a)(i) or the definitions of Term TL Percentage or Acquisition
TL Percentage to the extent that, in any such case, such amendment, modification
or waiver would alter the application of prepayments or repayments as between
Term Loans and Acquisition Loans in a manner adverse to the Term Loans or (II)
Section 4.02(A)(c) or the definition of Required Term Facility Banks; or (y)
without the consent of the Required Acquisition Facility Banks (A) amend, modify
or waive any of the terms contained in (I) Section 4.01(iv), 4.01(v), 4.01(vi),
4.02(B)(a)(i) or the definitions of Term TL Percentage or Acquisition TL
Percentage to the extent that, in any such case, such amendment, modification or
waiver would alter the application of prepayments or repayments as between Term
Loans and Acquisition Loans in a manner adverse to the Acquisition Loans or (II)
Section 4.02(A)(d), the definition of Required Acquisition Facility Banks or the
definition of Acquisition Loan Termination Date.
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(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by clause
(a)(i) through (v), inclusive, of the first proviso to Section 14.12(a), the
consent of the Required Banks is obtained but the consent of one or more of such
other Banks whose consent is required is not obtained, then the Borrower shall
have the right to replace each such non-consenting Bank or Banks (so long as all
non-consenting Banks are so replaced) with one or more Replacement Banks
pursuant to Section 1.12 so long as at the time of such replacement, each such
Replacement Bank consents to the proposed change, waiver, discharge or
termination, provided that the Borrower shall not have the right to replace a
--------
Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to clauses (s)-(y) of
the second proviso to Section 14.12(a).
(c) Notwithstanding anything to the contrary contained above in this
Section 14.12, the Collateral Agent may (i) enter into amendments to the
Subsidiaries Guaranty and the Security Documents for the purpose of adding
additional Subsidiaries of Holdings (or other Credit Parties) as parties thereto
and (ii) enter into security documents to satisfy the requirements of Sections
8.15 and 8.17, in each case without the consent of the Required Banks.
14.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 14.01 shall survive
the execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans.
14.14 Domicile of Loans. Each Bank may transfer and carry its Loans
-----------------
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
14.15 Post-Closing Obligations. The Borrower hereby acknowledge that
------------------------
in connection with certain assignments hereof, the Agent or any of the Banks may
be required to obtain a rating of the Obligations and Commitments hereunder of
the Borrower and the Borrower hereby consent to such Agent or Bank providing to
the respective rating agency such information regarding the Obligations and
creditworthiness of the Borrower as is customary practice of such rating agency.
14.16 Addition of New Banks; Original Notes. (a) On and as of the
-------------------------------------
occurrence of the Restatement Effective Date, in accordance with Section 14.10
hereof, each New Bank shall become a "Bank" under, and for all purposes of, this
Agreement and the other Credit Documents.
(b) On the Restatement Effective Date, immediately after giving
effect thereto, all outstanding Notes (as defined in the Original Credit
Agreement) issued by the Borrower to Banque Paribas under the Original Credit
Agreement shall be deemed cancelled.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
-------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇ PHYSICIAN HEALTH CORPORATION
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
By:___________________________________
Title:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
By:___________________________________
Title:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ BANQUE PARIBAS,
Suite 3300 Individually and as Agent
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ By:___________________________________
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
By:___________________________________
Title:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By:___________________________________
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
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Healthcare Financial Division FINOVA CAPITAL CORPORATION
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:___________________________________
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
Facsimile: (312) 322-3553
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ IMPERIAL BANK
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By:___________________________________
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
c/o ING Capital Advisors, Inc. ARCHIMEDES FUNDING, L.L.C.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ By: ING Capital Advisors, Inc.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By:___________________________________
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BANK OF ST.LOUIS
St. Louis, MO 63110-3498
Attention: ▇▇▇▇▇▇▇ Mclandless, III
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By:___________________________________
Title:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ By:___________________________________
Title:
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